Newspaper Insurer Press Issue no 23 (10 – 29 December 2008) with an accent put on the highlights, hot topics and comments

23 Декември 2008 г.,
Dear readers, in the overview of issue no 23 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!

         We are starting our overview with the regular column  «Between two issues» on page 2, where we give line on the latest news from the Financial Supervision Commission (FSC), among them is the one that on 3rd December 2008 the Commission passed at first reading Draft Regulation on Amendments and Supplements to Regulation on the Guarantee Fund Organization and Operation, regarding the insurance receivables, which shall be paid out to traders, as well as about the term within which the Guarantee Fund shall reimburse the National Bureau of Bulgarian Motor Insurers (NBBMI).

On the same page we also announce that the FSN specified the amount of the contributions which shall be made; the Prof. Dr. Veleslav Gavriiski. Foundation awarded three special bursaries for excellent results in the course Insurance and Social Security Course followed by Four Year  students in D.A. Tsenov Academy of Economics – Svishtov; ING Life Insurance offered new supplementary coverage to their Life insurance products;    Allianz Bank Bulgaria launched a new local-currency growing interest deposit with a return of 13%.

On page  2 you can find our regular column Insurance Press Review – an overview of the similar issues in the field of insurance and social security, made by Petar Andassarov. The overview covers the newspapers «Pari»(«Money»), «Banker»  and «Cash».

On page 3 we reflect the celebration of the consecutive successful year for the business of DZI . The opening speech was delivered by Nedialko Chandarov, Chair of the Board and Senior Executive Director of the both companies within DZI Group -  Insurance and Reinsurance:  «DZI – Total Insurance» and «DZI Insurance JJoint Stock Company».

« DZI will be the market leader even as early as in the year 2009!”, shared with our newspaper Zdravko Shushkov, Deputy Executive Director.

On page 4 in the column «Cover Story» we carry the article by Ileana Stoyanova «When the Earth starts to dance», which is devoted to the earthquakes hot topic.

On the Bulgarian market, there are different products that guarantee the calm and security to the owners of real estates and the property therein – electronics, furniture. The «earthquake» risk is not covered by a single policy unless you have main coverage of the property, i.e. fire, flood and(or) calamities is not covered by a single policy and there is an additional payment, which varies between  0,05 and 0,2% of the total amount of the insured property. That means that if the price of your real estate is BGN 100 thousand, the additional fee for earthquake coverage is between BGN 5 and 20, depending on the insurance company. Especially for Sofia, the companies are charging more money as far as the capital is Class III earthquake zone, i.e. with highest seismic hazard, and the insurers give an account on the highest risk.

            The duly licensed insurance companies in the country, insure buildings (houses, apartments, farm structures, others), equipment and furniture. You have to know that all insurers are listing the earthquake risk separately from the natural calamities and offer explicit conditions for its coverage. 

This theme continues on pages 8 and 21. The earthquake in Sofia in November 2008  remember us how vulnerable are we. The only escape is the reliable performance of the construction works and insurance coverage.   On page 5 we are relating with text and pictures the ended with big success project National Awards "Allianz Bulgaria 2008" for Painting, Sculpture and Graphic Arts.

         On pages 6 and 7 we carry the column «Analyses», where Albena Alexieva and Kalin Dimitrov, arrive at the conclusion that the losses sustained by the insurers, keep growing and many companies have posted negative results for the Motor Third Party Liability (MTPL) insurance.  We publish the tables for premium revenues per type of insurance for the first nine months of 2008.

         On pages 9 and 10 in  «Forum», we continue the publication are the materials from the  Seventh National Conference with international participation: „Social Security and Insurance in Bulgaria under the conditions of eurointegration: challenges before the yet continuing adaptation”.  In this issue we make acquaint with the speech, delivered by Reader Dr.  Irena Misheva, lecturer in the University of National and World Economy – Sofia. Dr. Misheva dwelling upon the  strategic approach for the dwelling of an insurance company.

         On page 11,  in the column «Theme to be continued»  Yoanna Stephanova examines the crisis as a challenge with bail-out effect.  

Because of the world financial crisis outbreak during the last few months the Bulgarian Pension funds have lost many clients, who preferred to prematurely withdraw their voluntary social insurances. Meanwhile the sharp drop of the prices of the marketable securities on the Bulgarian Stock Exchange (BSE) - Sofia drove the companies to report accounting loss from their investments.

The most important for the experts in the companies is not to give way to the fear, but to look for new possibilities for investment and to avoid any unjustified and too high risks.

In this connection we made an interview with Nikola Abadzhiev, Chairman of the Bulgarian Association of Supplementary Pension Security Companies (BASPSC). There Mr. Abadzhiev shared that the possible ban on early withdrawal of the money  from the voluntary pension funds is not yet discussed. The average profitability of the voluntary funds as from FY 2004, until now is 5%. The insured persons do not incur losses from the contributions they made. This money is immediately invested in shares or other financial instruments and this is a guarantee that they are secured and shall be realized after on. In case of missing pension funds the situation on the Stock Exchange would have been worse.

This subject is also the theme of the conversation with Milen Markov, Milen Markov, Chairman of Investments and Capital Markets Committee of BASPSC, Chair of the Board and General Executive Director of Saglasie Pension Insurance Company - page 15. Mr. Markov expressed his opinion that the profitability of the pension funds shall be with positive sign after the elections. «We do prefer for the money to stay in the Bulgarian Economy, but we will investigate the deposit interests, offered by the Greek banks».

         On pages 12, 13, 16, 19 and 21 in the column «Seminar» we give place of the materials from the seminar with international participation, held on 25 and 26 November in Plovdiv, with theme «Republic of Bulgaria – member-country of the European Union – the challenges of Motor Third Party Liability (MTPL) Insurance  issues.  The forum has been organized by the National Bureau of Bulgarian Motor Insurers (NBBMI), the Guarantee Fund (GF) and Bulgarian Insurers Association (BIA) and has been targeting the representatives of the insurance companies, the Finance Supervision Commission (FSC), brokers, companies which are specialized in insurance policies settlement, judges, lawyers,  others.

         The themes, which were examined at the seminar, were of great importance and were related mostly with the problems of the compulsory for the motorists MTPL insurance. The lecturers, who were invited to work up the questions and to hold a discussion, had been distinguished experts with good professional experience both in the field of MTPL insurance and the Green Card system as wellThe seminar was opened by Atanas Tabov – Chair of  BASPSC. Mr Tabov reminded that in connection with the accession of Bulgaria to the European Union as from  1 January 2007, the insurance companies, BASPSC,  and the GF underwent changes in their activity and behavior regarding „one big theme – the challenges of Motor Third Party Liability (MTPL) Insurance  issues. The adaptation of the institutions to the new moments and changes was indispensable. There were signed many new contracts and agreements that stipulated new conditions and criteria both from the part of the state and the institutions that touch the case of this insurance. There were improved the responsibilities of the insurance companies – sellers of this insurance, and those of the guarantying institutions as well. The behavior and the attitude of the state in the person of the insurance supervisor, Ministry of Internal Affairs and the Ministry of Finances, have changed. This became more apparent mostly during the period 1 January 2007 - 1 August 2007, when Bulgaria had to be ready as regards the re-registration of the motor vehicles and the scope of the insurance (more than 90 per cent of the registered motor vehicles).

 The Chair of the Board of BIA Orlin Penev addressed the attendants with welcoming speech, where he dwelled his satisfaction from the start of such a dialogue for solution of the problems related with the MTPL Insurance of the motorists. Mr. Penev expressed his firm belief that similar discussions would be organized also in the future, aiming the improvement and smooth functioning of the insurance market.

In his welcoming speech Mr. Penev puts an accent on the circumstances which have provoked problems for the offering and functioning of the Motor Third Party Liability insurance, as well as on the major changes of the economic environment of the Bulgarian companies, which offer this insurance.

Dancho Danchev, Chairman of the Motor Insurance Commission, BIA, made an analysis the Motor Third Party Liability insurance for 2007 and the first half of 2008.  We carry the first part of this analysis on  pages 12 and 13.

On page 14, we continue the publication of the material of Slavimir Genchev, headed  «The market dictates the prices, but which market?».  On 17 November 2008 at the metropolitanCentral Park Hotel”, was held one-day seminar   «Motor Insurance Pricing – science, art or just a business». The lecturer on this seminar was Georgy Matov, Certified Actuary, member of Bulgarian Actuarial Society (BAS).  In this issue, we publish the speech of Mr. Matov, he delivered at the third session, where he presented in details the so called generalized linear models. These models are the «bread and butter» (as English people use to say) of the actuary profession, especially in the case of pricing of the personal insurances - motor, property (household), health insurances, and lately for the life insurances.

On page 17,   «In the world» Iva Ivanova is discovering that the Middle East  is attracting foreigners by high growth. The insurance sector of the Middle East keeps growing, notwithstanding the tremors of the world financial markets. After long years of lag in different areas of the financial branch, the demand for insurances, including the types which are in conformity with the laws of Islam (aka takaful), is in vigorous growth. The factors, which are hidden behind this uplift, include the low start basis, the fast economic growth, in the general case due to the huge oil incomes, the measures taken by the governments that oblige the population to buy insurances and the compatibility of takaful with the religious commitments.

On page 22 you can read the wishes for the forthcoming Christmas and New Year holidays, offered by the leading insurers to their   colleagues, partners and friends.

On page 23, in the column «Insurance and Personalities», Maria Miteva meets you with the actress Koina Russeva.

We are finishing our overview with the interview of  Petar Andassarov with Tsvetanka Krumova, Executive Director  of Armeets Insurance Joint Stock Company. There Mrs Krumova shares:  (page 20)

«This year was successful because we have reached our goals and continued the trend in our dynamic development. This year we passed threshold of the income of BGN 100 million making this way our bid for the future and giving notification for business activity in the other European countries.»




selection: Vania Petrova

translation: Albena Dimitrova

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