Newspaper Insurer Press Issue no 23

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 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!

Newspaper Insurer Press Issue n^o 23

 (16 - 30 December 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 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 of the double issue with the hot news on page 2:

            In the column Between Two Issues, we read that at the session held on 27 November, 2009, Financial Supervision Commission (FSC) has decided to keep unchanged the amount of the Guarantee Fund deposit  due by all insurers, offering obligatory Motor Third Party Liability Insurance, as per with Art.  287, para. 1, section 1 of the Insurance Code, at BGN 8.50 for every MTPL insurance policy sold.

The amount of the deposit, due by insurers selling in Bulgaria the compulsory Accident insurance, in compliance with Art. 249, para. 2 of the Insurance Code, will be paying BGN 0.15 (also unchanged) for each seat but the driver's.

• Emil Atanassov, Deputy Chairman of FSC, Head of Insurance Supervision Division issued an approval decision for Andrei Boykov Alexandrov at the position of Company Executive Officer of Allianz Bulgaria Life Insurance AD (Joint Stock Company), Sofia.

Mr. Atanassov adopted a decision for dismissal of Iliyana Georgieva, who was acting as liquidator of the insurance company Sofia Ins, and appointed Nikolina Tsakovska-Tsvetkova. He also prolonged the term for the winding-up of Sofia Ins AD by 31 December, 2010.

Mr. Atanassov has also issued a decision for approval for the sort-term plan for the raise of share capital of KD Life AD insurance company.

• The applications for switch of the supplementary old age provision fund, and stakes transfer, counted 31,836 for the third  three-month period only. A total of 28,350 insured persons from those who submitted an application during Q3 of 2009, made change of their participation in the supplementary pension funds. The total amount of the transactions to another pension fund was BGN 21,957 thousand.  During the first nine months of 2009, there were 78 290 insured persons who have enjoyed their rights to transfer the amount accumulated in their individual accounts to a fund of the respective type managed by a different pension insurance company. The total number of the transferred funds from individual accumulations amounted BGN 57,620 thousand, as from the beginning of 2009.

Page 3 is dedicated to DZI. On 3 December 2009, the company with the longest tradition on the Bulgarian insurance market, celebrated the successful end of the financial year 2009 with stylish cocktail-party, held at the metropolitan Kempinski Hotel Zografski. The brokers, working actively with DZI, partners, journalists and employees, attended the party. The interview with Zdravko Shushkov, Deputy Executive Director of DZI Insurance (Joint Stock) Company and of DZI-General Insurance AD, is published under the same column. Mr. Shushkov stroke the balance for FY 2009: – The year is not finished yet, but the first 11 months have already elapsed and the reported results are showing hopeful prospects for DZI. On the gloomy background of slight growth of the general insurance market – only about 0,2%, „DZI-General Insurance” AD is outstanding with approximately 10% growth for the 10 months of FY2009. This is a success. We reported a drop in the life-insurance business. However, it should not be missed to note, that when the life insurance sector as a whole registers about 15% decline, the drop, registered by DZI, is 5-10%. This does not give cause for joy but is not a reason to worry, either.”

On pages 4 and 14 we carry the story „THE SPIRIT OF PROF. DR. VELESLAV GAVRIISKI IS STILL ALIVE”. The one-hundredth anniversary of the birth of Prof. Dr. Veleslav Gavriiski was celebrated with Scientific Round table, held on 25 November 2009, the Higher School of Insurance and Finance (VUZF). The event was also dedicated to the Student Day - 8 December. The event has been realized with the active support of VUZF and the newspaper Insurance Press. Few members of Prof. Dr. Veleslav Garviiski Foundation have also participated in the organization of the forum.

The theme of the forum was connected with both the anniversary and the education - “Challenges before the education and career development of Insurance & Social Security graduates” – and held under the patronage of Dr. Claus Junker, PhD, Chairman of Board of Directors Allianz Bulgaria Holding AD, Executive Vice-President of Allianz SE, Munich, Germany, and Doctor Honoris Causa of VUZF.

The event was attended by Docent Dr. Grigorii Vazov, PhD,  President of the  school, prof. Neno Pavlov, PhD, Chairman of Prof. Dr. Veleslav Garviiski Foundation and  Deputy Chairman, Head of Social Insurance Supervision Division, FSC.

On pages 5 and 6 we carry the interview with Dimitar Zhelev Chairman of the Executive Committee CEO of Allianz Bulgaria Holding AD CEO of ZPAD Allianz Bulgaria. Allianz never takes unmeasured risks, emphasized Mr. Zhelev.

In his opinion, the „idea” for “fast money” making is immoral; the Motor Third Party Liability insurance is not a field for competition.

The insurers should found clearing house to settle their obligations; He has an optimistic prognosis that FY2010 will be successful for the holding, and albeit the crisis the staff will be kept unchanged.

On page 7 we publish materials from the Discussion forum on the topic – “Financial Literacy of Consumers, how it influences the market of financial services and what are the possibilities for improvements”, which was held on 4 December 2009, at the VUZF University campus. The author of the publication, Yoanna Stefanova, has selected the witty heading “The emanation of the human greed and the price thereof”. The main conclusions are:

• $1,500,000,000,000,000 ($1.5 quadrillion) of losses globally;
• Just within an hour, any Bulgarian holder of bankcard and money is able to open an account and start trading at the New York Stock Exchange.

On page 8 and 9 we carry the Cover Story: Crisis triggers new insurance trends? Part of the individual clients are already saving from Avtocasco or purchasing just the Theft coverage”. 

Gergana Ivanova, Manager of the insurance broker FinSales EOOD explained why it is so important to never ignore the insurances, even during a financial crisis. Statistics showed that during the last few months Avtocasco and MTPL insurance indicate diverging trends.

In practice, the progressively getting poorer Bulgarian is faced with the dilemma to purchase the expensive MTPL insurance and to give up the Avtocasco, or to place an insurance, which is covering only the “Theft of vehicle” risk. The coverage, offered by the different companies varies between 2.5 % and 3.5% of the insured sum. There is also a requirement for a lump sum payment of the premium.

It is a time for the careful drivers to pay less money for insurance. The fight for clients resulted in conditions that are more attractive. Under the conditions of economic crisis, the insurance companies en masse started offering discounts to attract more clients.

On page 11, under the heading “Looking beyond the crisis”, we continue publishing the materials from the VIII^-th National conference with international participation “Insurance and Social Security in the Conditions of the Global Financial and Economic Crisis – solutions for Bulgaria and European Union. The conference was held in June 2009, at VUZF University.

In this issue we offer you the report „BANCASSURANCE: A WAY TO SURVIVE OR OPPORTUNITY FOR DEVELOPMENT?”, delivered by Dr. Stoyan Kirov, assistant professor, Economic University - Varna,  Finances and Credit Department.

„In order to survive in the conditions of financial crisis, both the commercial banks and the insurance companies have given a new meaning of their partnerships. As a whole, the banks are more aggressive towards the cross sales that makes them look like „financial supermarkets”.

The offering of „on stop shop” of deposit, credit, insurance and investment services makes the bank more versatile and competitive. As compared to them, the insurance companies are more cautious and not readily add bank services to their product mix. However, they are aware that the extensive network of banking offices could offer them a large access to the market and profitable opportunity to realize their products. These cross sales are known as Bancassurance”.

On page 12 and 13, both in text and pictures, we reflect the Student Day celebration ceremony at D.A.Tsenov Academy of Economics, Svishtov.

            On page 15 you can read in details about the solemn ceremony, held on 24 November 2009, Sheraton Sofia Hotel Balkan, and organized on the occasion of the retirement of Dr. Claus Junker, PhD, Chairman of Board of Directors Allianz Bulgaria Holding AD, Executive Vice-President of Allianz SE, Munich, Germany. During this ceremony Dr. Junker was conferred a title of Doctor Honoris Causa of VUZF. This doctorate was conferred on him by decision of the Academic Council of VUZF  for his contribution to the development of the insurance market in the Republic of Bulgaria.

Dr. Junker was also awarded the Prize of Prof. Dr. Veleslav Garviiski Foundation for his whole contribution to the insurance business. This prize had never before been awarded to a foreigner. 

We finish this overview of issue  n^o23 with the column Look back , Look forth, on page 20, and the conversation with Nikolay Logofetov, Chair of the Managing Board and Executive Manager of. Grave Bulgaria Life Insurance EAD and Grave Bulgaria General Insurance EAD. According to Mr. Logofetov, the life insurance investment is one of the few islands of stability in the uncertain times of today. He answered the question about the big decline in the life insurance this way: „..I consider the life insurance’s negative trend as temporary phenomenon and it would switch back to positive and a growth in 2011. It is even possible for certain companies to register a growth as early as the second half of 2010 on year-on-year basis. The expectations for an improvement of the economic life as a whole, and the formation of the so called “middle class” is a precondition for revival of the life insurance market, which is still underdeveloped compared to general insurance...

According the predictions, it will take two or three years to get out of the crisis, with heavier consequences for Eastern Europe and slower recovery. However, our market has bigger potential.”