Newspaper Insurer Press Issue no 18 (24 September – 15 October 2008) with an accent put on the highlights, hot topics and comments

Dear readers, in the overview of issue no 18 of the newspaper «Insurer Press» we put an accent on the highlights and hot topics news and events. We make you acquainted with the analyses and thoughts expressed by the leading insurers and also keep you informed about all that happened within the period between the last two issues of the newspaper.

Happy new returns and best wishes to all who celebrate their birthday! Let’s wish all lots of love, good health and happiness to our contributors, friends and well-wishers!

On this page you can find the publication about the Q2 2008 Non-banking sector. The Finance Supervision Commission examines the 5 main aspects of this sector.

 There is also mentioned that a Certificate of qualification and professional experience in banking is granted to Mr. Orlin Penev as a member of the Managing Board and procurator of Allianz Bank Bulgaria AD.

On the same page 2 you can also find some comments of similar poblications, related to the latest insurance business events.

On page 3 Teodora Garneva , Head of Autoassistance when travelling Abroad Department , Motor Insurance Directorate, Insurance and Reinsurance "DZI  General Insurance" Plc, is giving explanations about the insurance“Medical expenses in case of illness an accident abroad with procured assistance”. Mrs Garneva makes more clear the importance of travel insurance.

On page 4, the Cover Story arte the materials about the Guarantee Fund and the Compensation Fund. The heading of article by Yoanna Stephanova is “The Compensation Fund to Start Payments in October”. In October the Compensation Fund will start through UniCredit Bulbank Plc the payments of the compensations to customers of the insurance services that would have been provided by Hildon (former Jupiter) Insurance Company and Evropa Insurance Company which gone bankrupt. In August the Managing Board of the Fund announced the two decisions they made about the payment of the compensations. There is stated that the customers of Evropa Insurance Company will start receiving their money after 01. 10. 2008 г., and those of Hildon Insurance Company – after 24 October. Before the newspaper Insurance Press Nikolay Sotirov, Executive Director, Guarantee Fund, specified that the Court has approved 278 compensation receivables at the total amount of BGN1,560,397. The ones to have suffered losses from Hildon and Europa companies will receive compensations amounting BGN 937,247, and BGN 623,150 respectively.

N.Sotirov	B.Mihailov

At the moment the Compensation fund stores BGN3,3 million, announced Sotirov. BGN1,3 million has been accumulated from the annual deposits made by the insurers, and the rest of BGN2 million were provided by the state budget in pursuance of the newly amended Insurance Code.

Some comments in this connection are made in the interview with Borislav Mihailov CEO, president of the managing board of the Guarantee Fund, by Slavimir Gentchev . Mr. Mihailov describes the work done until now. There are two main functions of the Guarantee Fund with respect to the Compensation Fund: collection of the annual deposits, made by the insurers and payment of the insurance receivables within the guaranteed amounts. We remind you that the resources accumulating in the Fund come from deposits made by the insurers; incomes from investments of the fund; incomes from sales of property of the insurance companies in questions as well as regression risk receipts, loans, donations, international aid etc. Each insurance company makes an annual deposit in the Fund; the amount for every MTPL insurance policy sold is BGN 1.50 and for every seat (not the driver's seat) insured against an accident is BGN 0.20. The money accumulating in the Fund is used for payments of the liability of the relevant insurer towards its customers after the ruling on declaration of bankruptcy of this insurer. In pursuance of the Insurance Code provisions, the Guarantee Fund shall pay the customers of the insurance services of IC Evropa – gone bankrupt and of IC Hildon Plc – gone bankrupt, the amount of insurance receivables, stated in the Final list of Approved Receivables, approved by the Court.

The list of the Insurance company Evropa (insolvent), approved by the court, contains 138 claims on MTPL mandatory insurances. The total amount of the insurance receivables, stated in the Final list of the approved receivables is BGN623,150. For IC Hildon Plc. the number of the approved claims is 140, and the total amount of the receivables, approved by the court is BGN937,247.

The coverage of the mandatory MTPL insurance toward 07.09.2008 is84.21%, Mr. Mihailov stated.

The Guarantee Fund financial capacity is BGN 41,544,914, forthcoming payments reserve included.

On pages 6 and 7 , under the column Analises: Insurance and the self explaining heading „The MTPL insurance - the millstone hanging about the insurers’ neck ” the autors Albena Alexieva and Kalin Dimitrov are making analysis of the results achieved by insurers for the first half of 2008.

The Insurance Sector collected BGN852,514 million revenues for the first half of FY 2008, announced the Financial Supervision Commission (FSC). In comparison with the FY 2007 results, when the insurance market generated a little bit more than BGN 1,5 billion of insurance premia, we shall say that this year’s figures are being within the expected frames. At moment, the growth rate in this branch is about 13 per cent, but we shall keep in mind that the second half of the financial year is traditionally stronger to mention that at the end of this year the growth shall be at the rate of 15%-20%. Therefore a result of BGN 1,75-1,8 billion in the branch shall not be surprise.

The companies, keeping the top 3 places in the rank by premium income, are holding 43,38% of the market.

On the negative side is the embarrassing Life Insurance’s negative technical result, totaling BGN 4,977 million, while for the same period of FY 2007 it was BGN 7,282 million.

The Gross Premium Income toward the end of the 1^st Half FY2008 is BGN129,218.

On page 7 you can find the information that Bulgaria is listed 68^th in the Economic Liberty Rank . Singapore and Hong Kong took the Top 2 places. The main criteria for economic liberty are the personal choice, the free exchange, the free competition and the security of people and their property.

On page 9 you can read the continuation of the lecture of Dochka Velkova, Institute of Economics, Bulgarian Academy of Sciences, delivered before the Seventh National Conference with international participation: „“Social Security and Insurance in Bulgaria under the conditions of eurointegration: challenges before the yet continuing adaptation”. The lecture is named “Changes in the Public Pension System and Their Impact on the Labor Market”. The objective of her study is to analyze and evaluate the impact on the labor market of the changes in the following parameters of the public pension insurance system in Bulgaria: a) conditions for access; (b) incomes from pension; and (c) pension insurance installment.

The formulated conclusions state that all measures for stabilization of the pension system and increase of the occupancy and work age will have the greatest impact provided the bigger confidence in the pension system and higher social insurance culture.

On page 11 is our “Theme to be continued” - In the name of equality”. In her material Yoanna Stephanova is examining the two variants for amendment of the Insurance Code, that were supplied by the Association of Bulgarian Insurers (ABI) and the requisition for equal treatment of all insurers on the Bulgarian Market, delivered by the official letter of Svetla Nestorova, Chair person of the Board and Executive Director of Insurance company Bulstrad Life . This requisition is supported by ABI. The Financial Supervision Commission has not yet announced their position on this proposal. (Sv.Nestorova)

The column Look back, Look forth, on pages 12 and 13 is dedicated to Eurolife. There is the conversation of Petar Andassarov and Slavimir Genchev with Michael Richter, General Manager of Eurolife International and Bozhidar Vassilev – Manager of Eurolife Bulgaria.

For long years, Eurilife Bulgaria is one of the most successful insurance brokers in the country. Now the company is a phase of change and transition. Any change is a challenge and any challenge is a chance.

For the last three years the Bulgarian market has became more mature and readjustment to this maturity is required.

Michael Richter is giving more detailed information about the new direction in the strategy of Eurolife – reinforcement of the advantages of the company on markets of operation instead of entering new territories.

Bozhidar Vassilev answers questions about the changes in Eurolife Bulgaria and their impact on the company’s operations.

Mr. Vassilev is talking also about the seminars with the consultants and his ambition to create better working conditions for them.

The main partner of Eurolife Bulgaria is Grawe Bulgaria.

Under the same column, but on page 20, you can read the conversation of Yoanna Stephanova with Mr. Nikolai Logofetov, Chair of the Board and CEO of Grawe Bulgaria Lifeinsurance EAD and Grawe Bulgaria General Insurance EAD.

 Mr. Logofetov shares that some of the life insurance products will be upgraded and no new product will be launched by the end of this year. The operations of the company are adjusted to the criteria and working model of the mother company. The Austrian know how is applied but there are also some typical Bulgarian peculiarities. The Bulgarian customer is very “difficult”.

Nikolay Logofetov also discovered the goals of Grawe Bulgaria Lifeinsurance EAD for 2008 and in log term prospect. The average annual profitability for the Life Insurance products with Saving Element is within the frame of 6 per cent (in Euro).

The conversation brings the matter about the difficulties before the life insurance companies now and the steps they shall make in the future. In conclusion Mr. Logofetof points at the advantages of Grawe Bulgaria that should answer the question why one would select Grawe Bulgaria namely.

 On page 16, under the column Women in the Insurance Business we meet you with Reader Dr Irena Misheva, lecturer, holder of a chair in Human Resources and Social Protection, University of National and World Economy

In her conversation with Petar Andassarov Mrs Musheva is talking about her path in both life and science.

In the column In the world on page 19 Iva Ivanova offers interesting materials from the financial world.

“MNIA to recover from surprise”, “The Insurance Branch is giving new meaning to the values. The Reinsurers anchor hopes to AIK.

Page 23 is dedicated IN MEMORIAM to George Kitov, Dr, Senior Research Associate, an archaeologist who was an expert on the treasure-rich Thracian culture of antiquity. He died while excavating a temple in central Bulgaria considered being one of his greatest discoveries.

In his memory, we publish the interview with him, being guest on our page Personalities in the insurance, issue 17/2001.

Selection: Vania Petrova

Translation: Albena Dimitrova