Newspaper Insurer Press Issue no 4 (25 February- 11 March 2009) with an accent put on the highlights, hot topics and comments

Dear readers, in the overview 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.

Newspaper Insurer Press Issue n^o 4

 (25 February- 11 March 2009) with an accent put on the highlights, hot topics and comments

We offer our best wishes to our contributors, friends and well-wishers who celebrate their birthday in this period!

Happy new returns and all the best!

 We start our overview with the material, published on page  2 , with heading Allianz Bulgaria manages assets worth BGN3, and sub-heading The Holding will pursue the Double “R” policy– risk reduction and cost cutting. The article reflects the press conference held by Allianz Bulgaria on 17 February 2009 at the metropolitan hotel Radisson SAS Grand, where the management announced the FY 2008 financial results of the companies in the financial establishment. The press conference was attended by Dimitar Zhelev , Chief Executive Officer of the holding, Maxim Sirakov – First Executive Vice-President, Plamen Yalamov – First Executive Vice-President, Margarita Sergieva – General Secretary, Svetoslav Gavriyski , Senior Executive Director , Allianz Bank Bulgaria, Sophia Hristova,  Strahil Vidinov – Chief Executive Officers of  Pension Insurance Company Allianz Bulgaria AD, Andrey Alexandrov – Senior Business Director,  Allianz Bulgaria Life AD, Stoicho Krastev – Executive Director,  Allianz Leasing Bulgaria AD.

Besides the information and the analyses of the achieved financial results, the management of the holding announced their strategy for FY 2009 in the new reality conditions.

On page 2 we also offer the reported information that the Insurance Joint Stock Company Armeets posted growth of over 60 per cent for FY 2008. With its growth of 62% on year-to-year basis Armeets insurance company for second consecutive year left far behind the average growth of the total insurance market, which was estimated at 20% for FY 2008. 20%. The company posted premium income of BGN 146 million as at 31.12.2008, topping BGN 55 million over the premium income posted for the previous FY 2007. The FY 2008 market share of the company is 10% compared to the 7, 15% in the end of 2007. 

On the same page we are narrating about the celebration of the 15-anniversary of the oldest pension insurance company in the country – Pension Insurance Joint Stock Company “CCB Sila". The stylish party organized on 12 February at Sofia Grand Hotel, joined representatives of all pension insurance companies in the country, partners, experts, competitors, politicians, media and friends. On this occasion the company offered additional single pension to its pensioners.

On page 2 we announce the news that the Pension Insurance Company Doverie has already joined the United Nations Global Compact, which today stands as the largest corporate citizenship and sustainability initiative in the world -- with over 4700 corporate participants and stakeholders from over 130 countries. This is a unique strategic platform for businesses that are committed to aligning their operations and strategies with ten universally accepted principles of corporative social liability.  By doing so, business, as a primary agent driving globalization, can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere.

On page 2 we report that the additional (voluntary) pension funds squeezed with 15, 2 per cent for FY 2008.

As at 31.12.2008 the number of the insured person s in the four type funds reached 3,643,749 persons, which represents a growth by 202,935 or 5.90 per cent compared to the end of FY 2007. As at 31.12.2008 the met assets, accumulated at the voluntary pension funds reached BGN 2,299,154 thousand, which stands for drop of 0.83 per cent compared to the result as at 31.12.2007. The squeezed net assets of the voluntary pension funds are reflecting the impact of the global financial crisis on the sustainability of the voluntary pension insurance sector in the country. 

The profitability of the managed pension funds for 2008 is negative 2008. The weighted average profitability on net assets (unmodified)  of the universal pension funds is - 20,15 per cent, of the professional  - 23,13 per cent and of the voluntary  – 24,71 per cent.

On page 3 the engineer Tatiana Malasheva, Head of Technical Insurance Department, Central Office, DZI–Total Insurance AD is explaining the CONSTRUCTION AND ERECTION ACTIVITIES AS SUBJECT OF TECHNICAL INSURANCE

On pages 4, 8, 9 and 21 we carry the «Cover Story» with the witty heading «Is there a tic-tac mechanism in the bilateral findings reports?” with sub-heading „The insurers insist for elaboration of additional regulations, to precise clearly the rights and obligations of the parties». 

Reportedly on 30 January of the present year the Regulations  on the documents and the order of issuing documents in case of Road Traffic Accidents (RTA) and on the procedure of informing the Ministry of Internal Affairs, FAS  and the Information Center at the Guarantee Fund. It shall be introduced the European bilateral protocol, already adopted by European Insurers Association (CEA) and which can be used on the territory of the European economic area.

Because of the reasonably expressed fears whether the trigger mutual notification between the insurers and the authorities of the Ministry of Internal Affairs will be workable or not, the Deputy Chair of FSC and Head of Insurance Supervision Directorate, Ralitsa Again stated before media that there will be created unified data base for the light RTA.

We publish the opinions of few insurers and experts:

Rumen Yanchev, Chair of the board and CEO, Bulstrad: “The system is discredited already at the start”

Tsvetanka Krumova – Member of the Board and EO, Armeets Insurance Company: The problem is not in the presence, but in the practice /pages 2 and 9/

Plamen Yalamov – First Executive Vice-President of Allianz Bulgaria Holding and CEO Allianz Bulgaria Insurance Company: Rights and Obligations guidelines are required.

Stoyan Prodanov, Reader Dr., Deputy Chair and CEO, Insurance Company Bul Ins AD: We will meet the challenge with double administrative capacity.

Yuri Todorov – Chair of Insurance Security Association: There will be huge gaps and great possibilities for frauds.

In this connection is our conversation with Chief Inspector Stoicho Constantinov – Head of Department, Traffic Police, and Security Police General Directorate.  He considered that the insurers have not any reasonable reason to be embarrassed about the bilateral protocols.  Their implementation will provide more time for the peculiar activity of the traffic policemen. /page 8/

The lawyer Diana Dimitrova presents the bilateral protocols according to the current legislation (page 21)

On page 5 we summarize the news that „Allianz Bank Bulgaria” received second loan from the European Bank for Reconstruction and Development (EBRD)”. On 12 February 2009, at the Conference Room of the Insurance Company Joint Stock Company Allianz Bulgaria” – Motor Insurance, James Hyslop, EBRD country director for Bulgaria and the representatives of Allianz Bank Bulgaria Svetoslav Gavriiski – General Executive Director and Dorcho Ilchev – CEO, signed the contract for the lending of the second long-term loan which comes under the EU/EBRD SME Finance Facility and is being complemented by a grant from the European Commission including technical assistance.

On pages 6 and 19 we publish the continuation of the Theme of the last issue dedicated to the role of the human factor for the prosperity of the company. The high remuneration, the good team, the varied tasks and carrier possibilities are god motivation for the average Bulgarian.

Plamen Yalamov – First Executive Vice-President of Allianz Bulgaria Holding and CEO Allianz Bulgaria Insurance Company -

„If you have good team – you make good business. Almost 1/3 of our employees are making good proposals”.

Stefan Sofianski, Chair of the Board and CEO, Insurance Company Lev Ins AD -

„The most important thing are the kind, decent relations. If you offer a complex of measures, the employee will never quit for BGN 50-100 higher salary.

On page 7 in the column „Look back, look forth” we publish the interview with Svetla Nestorova, Chair of the Board and CEO of Insurance Company Bulstrad Life. She shared that “Notwithstanding the fluctuations, caused by the financial crisis, the life insurance business potential is still available. Thanks to the whole team and mostly to the clients we strengthened our position as one of the five leading companies on the market in the country”.  

On page 10 you can read the opinion of the Association of the Association of Licensed Voluntary Health Insurance. Companies (ALVHIC), that „The project of FSC will destroy the Voluntary Health Insurance system”.

On page 11 we publish the conversation with Bisser Petkov, FSC Deputy Chairman, Head of Pensions and Social Insurance Supervision department. Mr. Petkov emphasized that The temporary failures in the private pension insurance are not able to loosen the three-pillar pension model.

According to the data, reported by FSC, the FY 2008 gross earnings of the pension funds amount BGN732,403 thousand. Compared to FY2007 the earnings from old age provision deposits marked a growth of 9,39 per cent, while the highest growth is  reported in the universal pension funds – 33,91 per cent. Meanwhile the FY 2008 earnings from deposits in the supplementary pension funds dropped by 32,96 per cent.

On pages 12 and 13 we present Ruslan Vutsov from “Pfoe Agency” EOOD, licensed insurance broker. Mr. Vutsov shares: Our continuous goal is not to split  our clients to big and small clients but to pay attention and to be thoughtful to every one of them. I think that I am lucky to be working with colleagues of good quality and we made a successful team”.

On page 14 we continue our last issue’s theme for the Motor Insurance Pricing.

On pages 15 and 16 we publish the material from the conference "Crisis Hieroglyph Reads also Opportunity".

The conference was held on January 24 in Grand Hotel Bulgaria in Sofia.. Prof. PhD Garabed Minassyan from the Economic Institute of The Bulgarian Academy of Sciences made a deep macroeconomical analysis of the state of our economy during the crisis. According to the professor „The underlying potential problems will lead to squeezed foreign investments and spectacular reduction of the economic activity.  The gloomy scenario of the scientists would become true, in case of worsen relationships of Bulgaria with EC”.

In this connection the deputy Mariana Kostadinova  noted that Local financial experts estimated that the crisis in the country would finish by the end of this year, while the international ones – within five years in the earliest”.

On page 17  we carry the report of Yoto Yotov, Reader Dr. „General insurance principles”, delivered before the Seventh National Conference.

On page 18 we reflect the charity dinner and auction at which many ministers, journalists, businessmen and intellectuals were present, meant to raise funds for the rebuilding of the building  of the Union, which was burnt down last year. The insurers also contributed their mite for the noble cause.

On page 20 is the conversation with Hristo Sotirov, Director, Motor Insurance,  Insurance Company Euroins AD. According to Mr. Sotirov „The average price of the MTPL must raise gradually by the end of the year… The price criteria shall not be limited only to that whether the client is the defaulter in the road traffic accident. It shall be made an analysis of his behavior on the road as a whole….”

We are finishing our overview with the presentation Kaloyan Antov, Deputy Executive Director, AIG Life (Bulgaria) Life Insurance Company EAD./page 22/

Mr. Antov shared that, „FY 2008 was an excellent year for AIG Life Bulgaria. According to FSC official data our premium income as at November 2008 marled a growth of 37.5% compared to the same period of the previous year (2007), which is far on the top of the average growth of the market - 18.5% for the same period. Our market share  has grown from 9.5% in the end of November  2007 to 12.1%  at the end of November 2008. Together with OBB- AIG Life our market share reached 17%...I think that 2009 would be complicated, full of challenges and very interesting year”.

Selection: Vania Petrova

Translation: Albena Dimitrova