Newspaper Insurer Press Issue no 24 (29 December 2008 – 14 January 2009) with an accent put on the highlights, hot topics and comments

13 Януари 2009 г.,zastrahovatel.com

Dear readers, in the overview of issue no 24 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!

Under the regular heading «Between two issues» on page 2 a place is given to the news from the Financial Supervision Commission (FSC). „Ralitsa Againe, Deputy Chairperson, Bulgarian Financial Supervision Commission Head of Insurance Supervision Directorate, approved Pressiana Nenkova for independent member of the Board of „AIG Bulgaria Insurance company” EAD; Hristo Dichovski and Dimitar Dimitrov – for independent members of the Supervisory Board of the insurance company „Uniqa” AD; Konstantin Velev and Tudor-Mircha Moldovan – for members of the Board and Executive Directors of „Generali Zakrila Health Insurance” AD; Todor Nedev - for independent member of the Supervisory Board of „OBB-AIG Life Insurance Company” AD, Sofia; Alexander Vladov – for manager of the special Internal Control Office in the insurance joint-stock company (IJSco) „DZI” and IJSco „DZI-general Insurance” AD; Ganka Avramova – for member of the Board and Executive Director of „Tokuda Health insurance fund” AD.

On the same page you can read about the activity of FSC in its capacity as single authority in Non-Banking Sector Regulation and Supervision. Throughout the year 2008 FSC have pursued a coherent policy, which was expressed in the Regulatory, Licensing and Control of the commission, while the efforts were directed towards the active analysis and monitoring of the market situation and market participants. This was announced in a press release of the Commission.

Slavimir Genchev gives line on the fact that more than 120 000 motor vehicles are found without Motor Third Party Liability (MTPL) insurance, and that the fines levied abroad now must be paid.

On page 4 you can find the cover story of this issue, with subject “Financial Risks Insurances”. Yoanna Stephanova gave her material a title, full of suggestion: “Golden goose or hot potato?”There are three types of financial risks insurances: credit insurances, guarantee insurances and financial loss insurances. Only for a year – as from 30 September 2007 by the end of the third trimester of 2008, the market share of these policies grew from 2,2% to 3,16 per cent (from the general insurance premium income). The reason for the reported growth is the brisk demand for these insurances. This is due to several factors. The first one is that in the presence of the continuously growing competition between the companies, an increasing number of them are offering their products under the terms of deferred payment to attract more clients. However in such cases, both producers and traders would feel easy, if they cover their receivables by an insurance protection. This way the Bulgarian economy’s growth during the last 2-3 years lead to significant increase of the market share of the insurances against market risks.

The market share of these policies is expected to grow further the beginning and deepening of the financial crisis.

On pages 4 and 8 we carry the opinions of leading insurers regarding this question:

Orlin Penev, Chairman, Bulgarian Insurers Association – It could come to collapse of an insurer within the next two years.

Rumen Yanchev, Chair of the Board and Executive Director of IJSco “Bulstrad” – The problem should not be transferred from the sick to the healthy head.

Petrozar Petkov – Chairman of the General Partnership and General Manager of “Bul Ins” AD insurance company, and Reader Doctor Stoyan Prodanov – Deputy Chairman of the General Partnership and Executive Manager of “Bul Ins” AD insurance company – These products are sophisticated, but their market share would grow.

Stefan Sofianski, Chair of the Board and Executive director of Insurance and reinsurance company „Lev Ins” AD – Things are still not out of control.

Yuriy Todorov, Chairman of the Association for Insurance Security – There are at least 15 groups, dealing only with insurance frauds.

On page 5, we carry the continuation from the issue 23 of the material of Slavimir Genchev about the ended with big success project National Awards "Allianz Bulgaria 2008" for Painting, Sculpture and Graphic Arts. Two of the prize winning authors - Angel Stanev and Prof. Dimitar Cholakov answer the questions how do they appraise the initiative of „Allianz Bulgaria”, how do they feel about their prizes and how would they present their works.

On pages 6 and 19 we publish the interview of Petar Andasarov and Slavimir Genchev with Rumen Yanchev, Chair of the Board and Executive Director of IJSco “Bulstrad”.

According to him “trust for trust – this is the right insurance success formula”. Mr. Yanchev described 2008 this way: I can say that 2008 was a very good year for our company. Three years ago in our company “Bulstrad” we started fulfilling a strategy for sustainable development. Its aim is just for us to understand what kind of tasks we are setting ourselves and how could we get them done. I want to make the reservation that we have always had high aims. We also take care to work in two directions: on the one hand – for market share and on the other hand – for positive results fro our activity,regardless of the difficultites. With respect of the market share, we have to our credit very good achievements. According to the official records, the market grows by 23 percent, while the growth of “Bulstrad” is 30 percent.

Regarding the next challenge they plan to meet, Roumen Yanchev shared: &nbs p; &nb sp; &n bsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; ; &nbs p; &nb sp; &n bsp; & nbsp; If you talk numbers, our next goal is to achieve premium income of BGN 300 million. We believe that we can reach that in the year 2011...

During the next 2-3 we will have good reason to show that one of the possible sales channels is connected with the internet technologies.

During the conversation, another case of point was the lack of maturity of the Bulgarian insurance market; and the fact that this market is mostly “motor” one. With a price of BGN 200 for MTPL insurance, no one of the insurers would have the accounts balanced.

In conclusion Mr. Yanchev shared his wishes for the New 2009. “Regarding the insurance business may we keep some growth in our development and let’s hope we would be more judicious in the management of the processes.”

On page 7 Ileanna Stoyanova reflects the bestowal of the annual prizes of the Prof. Dr. Veleslav. Gavriiski. Foundation. The awarded with the special prize "Insurer of the year” for the year 2008 are Atanas Tabov –Chairperson of the National Motor Insurers Bureau (NMIB) and reader doctor Yanaki Andreev, Chairman of Bulgarian Brokers Association. The prize is bestowed to distinguished Bulgarian insurers for full contribution to the development of the Bulgarian insurance business, and is a result of organized pool between representatives of the guild.

On page 9 and 16. Ileana Stoyanova and Petar Andasarov are reflecting the first briefing with the new management of the “Bul Ins”. There have been presented the new insurance products, therewith “Bul Ins” has started operating on the market as from the beginning of December 2008.

"Bul Ins" is a stable company, which is inspiring responsibility and we consider that this is a good rating in the condition of crisis – announced Stoyan Prodanov, Executive Director and member of the Board of the insurance company “Bul Ins”. Petrozar Petkov, Chairman of the General Partnership and General Director of the company, explained, that now is the time for the last year’s analyses and the company is going ahead.

Milena Parvanova, Director, General Third Party Liability Insurance, emphasized that the insurance company “BUL INS” enforced new area of development of the products “Professional insurances” and “General third Party Liability”.

On page 10 we are publishing the first interview with Alexander Lichev, Executive Director of Municipal Insurance Company. According to Mr. Lichev, The change of the ownership of the company from municipal to 100% private, would have positive effect. During the last few years we have direced our efforts in some fundamental changes of the company’s activities, namely: development of flexible product policy; investments in the information system, in the development and management of the human resources as one of the main activities of the company; we implemented completely new re-insurance program, which enabled us to develop our business on a strong track; client-oriented change of the organizational structure of the company, including constant development of our distribution network through different distribution channels.

On pages 11 and 17, in the column “Seminar” you can find the continuation (from issue n^o 23) of the report of Dancho Danchev, Chairman of the Motor Insurance Commission, Bulgarian Insurance Association, we continue the publication of the доклада на Данчо Данчев - председател на Комисията по автомобилно застраховане при АБЗ “ Motor Third Party Liability insurance Analysis for FY 2007 and the first half of FY 2008”.

The report of Mr. Danchev has been delivered during 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, and has been organized by the National Bureau of Bulgarian Motor Insurers (NBBMI), the Guarantee Fund (GF) and Bulgarian Insurers Association (BIA).

The main issues in this reports are: the high quota of damageability, unfair competition – the offers for bonuses, lotteries, oil and others; the low price of the insurance; the decrease of the relative part of the direct sales; the mandatory Motor Third Party Liability (MTPL) stickers; the handicaps during MTPL insurance’s claims settlement.

On pages 12 and 14 we reflect the national meeting of the Insurance Joint Stock Company (IJSco) „Bulstrad” with clients and partners. On St. Nicholas' Day itself - 6 December 2008, at Novotel Plovdiv, IJSco “Bulstrad” held its first of the kind national meeting, attended by 200 guests – representatives of general agencies, agencies, clients, partners – brokers and agents, and journalists.

There has been held also an informal press conference of the management of the company, for journalists and on the occasion of the close of the financial year, report and analysis of the results, prognoses and intentions about the future.

Rumen Yanchev reminded the IJSco “Bulstrad”’s history which was called, not without reason and proud, history of an unordinary company. In 2008, for the first time on the Bulgarian market, the company passed the threshold of BGN 200 million premium income. Mr. Yanchev set the next goal which is to be achieved by the company for the period 2009 – 2011 – to reach BGN 300 million premium income. Except Mr. Yanchev, the following managers took part to the press conference: Klaus Mueleder, Member of the Board and Executive manager, Ivo Gruev and Ivan Ivanov – Deputy Executive Managers, Rumiana Milanova, Member of the Board and Director “Reinsurance “ Directorate, Diana Evstatieva, Member of the Board and Director of the General Agency “Claims Settlement”, Svetla Nestorova, Executive Director, “Bulstrad Life”, Valentin Galabov, Executive Director “TBI credit” and “TBI Leasing”.

As may be supposed the interest of the journalists has been directed mainly to the hot problems with the MTPL insurance, the Motor Insurance as a whole, the Leasing market at this moment of drop of the sales of motor vehicles and the credit crunch, some normative changes – for example,the implementation of the bilateral protocols

We are finishing our overview with the column “Book shelf”, where Dr. Boyana Boyanova, Senior Assistant, is presenting the book by Dr. Atanas Tasev “Fundamentals of Insurance”.

The author offers an exceptionally comprehensive classification of all the types of insurances in the two main directions – mandatory and voluntary insurance.There are detailed analyses.

The presented book is very useful and will provoke the interest both of the students and the experts in the insurance sector.

Selection: Vania Petrova Translation: Albena Dimitrova

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