Newspaper Insurer Press Issue no 9 (13 - 27 May 2009) with an accent put on the highlights, hot topics and comments

Newspaper Insurer Press Issue no 9 (13 - 27 May 2009) with an accent put on the highlights, hot topics and comments

Newspaper Insurer Press Issue no 9

 (13 - 27 May 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.

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 latest news from FSC, reflected in the column Between Two Issues /page 2/:

·         Insurance Supervision Directorate, Financial Supervision Commission, announced the data about the financial performance of the Bulgarian insurance market for FY 2008.

Data show that the gross premium income of the insurers in 2008 is BGN1,804,642 thousand, compared to BGN1,505,070 thousand as at the end of FY 2007 г., which stands for 19,9% nominal annual growth.

• In 2008 FSC has issued 302 penal notifications at the total fines amount of BGN 1,675,880. 248 of them were for fines of insurers. 
• The Social Insurance Supervision Division of FSC announced  the final results from  the performance of the Supplementary Pension Insurance Market for. FY 2008.

 

On the same page we read that the Center for Economic Development forecasted economic growth within the limits of 2% and minus 2% for the FY 2009. The forecast has two variants – optimistic and pessimistic.

 

On page 3 we carry the material „Despite the temporary slum, the construction insurance products would report higher premium income”. Nedialko Chandarov, Chair of the Board and Senior Executive Manager of Insurance Company DZI and of DZI-General Insurance stated that the recent indications show a serious slump in the sales of these policies.  Although they have not justified the hopes for a higher growth, i.e. of 30% and showed instead 10 per cent only, and  difficult situation in the construction industry in the country and the suffering collateral branches, Mr. Cholakov and his colleagues have seen a good potential for development just of the property insurance products.

 

On pages 4, 9 and 18 we carry the Cover Story of this issue ” THIEF IS CRYING THIEF”.

Staging of burglary is not a precedent, quite the contrary – this is one of the most frequent insurance frauds in the last ten years, explained some insurers.

However the financial crisis boosted insurance fraud cases and this confirmed the predictions of the insurers, expressed as long ago as at the end of the last year, when Stefan Sofianski, CEO, Insurance Company Lev Ins, made it plain that at the time when the increased interest rates and leasing repayments, and the so called price of the credits for new car purchase become unachievable for payment for some of the clients, they would try to transfer this payment to the insurer, and to trick him into paying compensation for suffered damage.

 

According to Rumen Georgiev, Executive Director, Insurance Company Armeets, a bigger problem appear to be the small car accidents, since there is no need to call the Road Police.

 

The only insurance company which changed the conditions of the so called CASCO Motor Insurance, and as long ago as last autumn, was Insurance Company Generali Bulgaria. In October last year the company took measures against the development of the Motor Insurance portfolio risk of the company.

 

The boom in the thefts of luxury jeeps and limousines of the brands “AUDI”, “BMW”, “MERCEDES BENZ” and “VOLKSWAGEN” made the insurers to make serious improvement of the criteria for Casco insurance. During the last year, the number of insurance frauds with purchased on leasing expensive cars, has increased 5 to 7 times.

According to data, reported by Asen Hristov, CEO, Insurance Company Euroins AD, for the last year, there are 500 to 700 purchased on leasing luxury cars, which were taken out of the territory of Bulgaria and announced for stolen. Their total price is about BGN70 million. This money should be paid by the insurers, and is translated in big losses. .

 

However, Plamen Yalamov, First Executive Vice-President of Allianz Bulgaria Holding disproved the opinion for car-theft boom. According to him, the real problem is the drastically decreased number of new car purchases, which resulted in decreased number of purchased Motor insurances.

 

Especially for the Insurance Press newspaper, Jivko Vironov, Director, Insurance Company Bulins AD, gave more details about the problems with the cars, purchased on credit. The market price of those cars is getting cheaper because of the due repayments and the maturity profile.

In this column you can find more information what to do in case your car was stolen.

 

On pages 6 and 7, in the column Analyses: Insurance, Albena Alexieva and Kalin Dimitrov examine the Bulgarian Insurance business under the conditions of the global financial crisis.  The motor insurances are like a millstone hanging on the neck of the branch. Some companies make a balance this loss with the profit from the financial insurance products.

The Gross Premium income of the Bulgarian Insurance companies for the FY 2008 came up to BGN1.804 billion, reported few days ago the Financial Supervision Commission (FSC).  The analyses have indicated a growth of the assets of 21,5% on year-on-year basis, and  11,5% for the General and  Life Insurance companies, respectively. The data are presented in tables.

 

On page 9, Yuri Todorov, Chair of INSURANCE SECURITY ASSOCIATION, discovers some of the main aspects of the insurance frauds. Which are the main Casco Insurance fraud schemes?

 

On pages 11 and 18 we publish the article by Dr. Vasil Dimitrov „The Swiss Rule and the Pensions Update”.

Prof. Neno Pavlov, is describing the picture of the Pension Reform, noting that in the end of 90s in the last century there was a critical drop of the net pension replacement ratio, worsened buying power of the middle, minimum, maximum and the social pension, which resulted in the ill-founded, differentiation and finally worsened the quality of life of the beneficiaries.

 

On page 12 we carry the interview with Petar Avramov, Chair of the Board and CEO of HDI Insurance. He shared that HDI Insurance has closed the FY 2008 with Insurance premiums earnings growth of 36% and a profit of BGN199 thousand. HDI follows the sustainable upward trend of continuous growth of premium income, concomitant with positive financial result.

 

On page 13 we are talking with Zlatolina Mukova – Executive Director of Euroins Insurance Group EAD and Chair of the Board of Insurance Company Euroins AD. Mrs Mukova emphasized that the FY 2008 was very dynamic. „Our conservative investment policy has proved to be very judicious and we managed to get under control its negative  impact on the results of our companies. Another serious challenge we met, are the occurred important changes in the legislative framework, both in Bulgaria and in the other countries, where the company is presented”, she shared.

In the column Analyses on page 14 we examine one more time Pension Insurance issues. The Net Assets of the Bulgarian pension funds have decreased. The FY 2008 is the first negative year for the branch, reckoned from the time of  their creation.

The companies closed the FY 2008 with an aggregate income of BGN71.478, which is translated as a drop by 14.94 % compared to the FY 2007 results, read the consolidated data reported by the Financial Supervision Commission (FSC).  The decrease of the earnings of the pension companies in the last year is for the account of the own funds management revenue . The income from pension insurance activities kept the same level as in FY 2007.

 

Page 15 os dedicated to Generali Group. Very calm and perfectly organized was the general annual Meeting of Shareholders of “Generali”, hold in the Italian city of Trieste.  The material of Yoana Stephanova, reflecting this event, entitled „Soft perfection, which is inspiring trust and reliability”

Establishe in 1831, in Trieste, today Generali has 476 companies in 64 countries on the four continents – Europe, Asia, North and South America. 178-years history of the Group reflected not only on the good financial results and the corporative stability, but also to the approach to the 500 minority shareholders of Generali. Each year most of them convene in Trieste for the consecutive Genral Meeting of the Group. The management of the company is following closely the shareholders’ speeches and answer to all asked questions. Despite the financial perturbations in the whole  civilized world, Generali managed to improve its FY 2008 total gross premiums by 3,9% , compared to FY 2007. In FY 208 the Group managed to collect premiums amounting at EUR 68,81 billion – EUR 22 in the general and EUR 46,81 in the life business, and reported consolidated net profit of EUR861 million. The crisis costs  Generali EUR 5 billion. However Generali  demonstrated the strength of its capital position, one

of the best in the industry. This enabled the company to combine operational growth with capital strength.

 

On pages 16 and 18, in the column Meetings, Dr. Mitko Dimitrov, Senior Research Associate, Director of the Institute of Economics in the Bulgarian Academy of Sciences, shared his opinion that the crisis was triggered both by foreign factors, imported from abroad and the accumulated internal contradictions.

In this connection is the material we carry on page 19 THE MANAGING ELITE IS HUSHED UP INTERNAL FACTORS AND REASONS FOR THE FINANCIAL CRISIS. Are there internal and reasons for the financial and economic crisis in Bulgaria? The usual answer of the governors is that the current financial crisis in the country has been imported from abroad. But the true answer is that: Yes, there is (a crisis). And the reasons must be identified in order to schedule specific measures for their neutralization and removal. This is the opinion of the economic elite of scientists from the Institute of Economics in the Bulgarian Academy of Sciences.

We are finishing our overview with the publication which is reflecting the General Meeting of the  Association of the Insurance Brokers in Bulgaria (AIBB). The brokers are holding 40% of the insurance market in the country. In the FY they have sold policies at the aggregate amount of BGN 631,5 .

 

Selection: Vania Petrova

Translation: Albena Dimitrova