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Newspaper Insurer Press Issue No 6

19 2010 .,zastrahovatel.com
31 March- 14 April 2010 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 or name-day.

Many happy returns!


We start with the review of the issue Intersection point. Material is unequivocally named Hit below the belt for the insurers and their clients


    Page 7  Here we comment on the most popular latest news.

One of the anti-crisis measures, agreed upon the National Council for Tripartite Cooperation directly affects insurance activity in Bulgaria, which is a very bad sign for the business, shareholders and investors. Taxation of  the income, not of the profit of the companies is foreseen, which represents a return to a previous situation against which insurers fight with different governments for a long time,  while the current model of taxation is reached, present also for other economic entities- taxation of profit ,not of the turnover or premium income. This return can be a very bad sign, because most of insurance companies in our country are with foreign capital.

On the other hand, to tie their balance sheets, insurers will be forced to raise tariffs, which will hit the pockets of their customers,which by itself will cause an outflow of customers and consequently this will lead to a decrease of the incomes and of the profits.

   On the same page in Document is placed the opinion of ABI to National Council for Tripartite Cooperation Budget, presented by Orlin Penev chairman of the Board, in which the following is said:

Let us keep in mind that only after the first year of introduction of such a tax, loss in the insurance market on the bases of data from 2008/2009 will exceed 120-130 million BGN. It is hard to understand for us the tax system, which will lead to loses of similar scale for the particular sector of economy of the country, at the expense of receipt of such amount in the budget.

    Mr. Penev adds to his official opinion only the following: This decision can not be commented. It is absolutely incorrect, because if it is implemented this means that the whole insurance market will collapse.

Under this issue Newspaper Insurer Press make a brief  blitz poll with leading insurers:

Rumen Yanchev, Chairman of the Board and Executive Director of Bulstrad Vienna Insurance Group: - before this decision is taken, even if such a proposal is made, firstly the opinion of the insurers must be heard.

Dancho Danchev- chief executive director of ZAD Victoria deputy chairman of ABI and chairman of the motor insurance commission.

.. I truly believe and hope that Prime Minister and financial minister will not allow the opportunity for such an insane decision to be taken.

Andrey Alexandrov, chief executive director of ZAD Allianz Bulgaria Life:

I think that taxation of turnover of insurance companies is a measure which will bring more negative than positive consequences.

   On page 2 is the material based on the data from the financial supervision commission concerning the condition of insurance market and the market for voluntary pension insurance for 2009. It is perfectly clear from it that there is a decrease of 6,3% in the insurance market and an increase of 26,8% in the voluntary health insurance.

According to preliminary data at the end of 2009 gross premium income generated by insurers, licensed in the Republic of Bulgaria amounted to 1 691 772 BGN. Gross premium income realized by insurers in general insurance for the period January to December 2009 was 1.47 billion BGN, a decrease was realized amounted to 4,2% annually. Gross premium income realized by life insurers to the end of 2009 according to the aggregated income statement is 221 627, which is a decline of 18% annually.

Paid sums and benefits of life insurers amounted to 91 112 thousand BGN and the decrese with 1,2% annually.

On the same page is the information:

        Against the abuse with total damages

At first presentation the project of the decree for modifying and amplifying the decree no I-41 From 12.01.2009 was adopted concerning the documents and the order of their creation at road accidents as well as the order for informing procedure between The Ministry of Internal Affairs, the Commission for Financial Supervision and the Information centre at the Guarantee fund.

        Introducing of compulsory agricultural insurances is being considered

After discussion with the insurance companies law changes will be undertaken about establishment of minimum compulsory insurance for agricultural produce, the minister of Agriculture and foods Miroslav  Naidenov stated on March 22 after a meeting with the Vice Prime Minister Simeon Diankov. Minister Naidenov explained that our country has the possibility to achieve resources from the European funds for insurance of the agricultural produce and should take the best of them.

        Between two issues focusing on the decisions of KFS

At a meeting on 24 March  2010 CFS took a decision to issue additional license for a new type of insurance Rail transport means every damage or loss caused on rail transport means, of ZAD Armeec, Sofia.

On pages 4 and 21 is The topic of the issue The planned changes in the insurance code. The article is titled The budget of the guarantee fund as the apple of discord, with subtitles:

        FSC insists to approve the revenue and the expenses of the fund

        This right may not be accepted by Parliament.

The reason for the introducing of the current planned changes in the code of insurance at the National Assembly was the necessity of conforming the activity of the insurers and reinsurers with the actualized demands of the European legislation about the minimum amount of the guarantee capital.

The good news is that the changes will affect only 12 from all 35 insurance companies, which are operating in our country., and only for 4 of them may be necessary  fresh funds to be added for the increase of their guarantee capital.

The planned changes initiators though have used the occasion to include in the document a text, which causes serious debates.

It is about the guarantee fund, which collects and directs millions of BGN. According to the creators of the law project: With the changes endorsement of the budget is envisaged and in this way a preventive mechanism for control  by the state will be formed over planning the expenditure of the Guarantee fund. The chairman of The Association of Bulgarian Insurers Orlin Penev and the executive manager of GF Borislav Mihailov defend different position. During the discussions of the project at the economic commission of Parliament, the two of them were against FSC to approve the budget of the Guarantee fund and emphasized that the motives of the supervision commission were groundless. Besides this they expressed the opinion that the adoption of this text will lead to direct interference of the state into the activity of the Guarantee Fund, which is neither state nor budget formation.

On page 6 in Analyses the summary data about the insurance agents for 2009 are listed. The agents realize more than 20% commission. The premium income, realized by the insurance agents during 2009 amounts to 688138 thousand BGN, of which 664475 thousand BGN in favor of insurers, staying in Bulgaria, 20488 thousand BGN in favor of foreign insurers and 3175 thousand BGN in favor of companies for voluntary health insurance. From the realized by insurance agents premium income in favor of insurers residing in Bulgaria 622 658 thousand BGN are realized in common insurance, 41 817 thousand BGN in life insurance. In comparison with 2008 the premium income, realized by insurance agents increases with 4,4% while in the common insurance a growth of 5,9% is reported and respectively a decrease of 13,3% in life insurance.

The first place is taken by I &G insurance agents OOD with premium income of 51 620 353 BGN.

Here is the interview with Radoslav Dikov, Executive manager of ZK Bulgarian properties Vienna Insurance Group AD in the column First Interview/page 20 and 21/

Mr. Dikov said: ZKBulgarian Properties Viena Insurance Group AD is a financially stable company, this is beyond any doubt we pay compensations on time, we have put aside enough reserves, we increase the number of our clients.

The company has several priority goals for 2010 profit, diminishing of operation expenditure and restructuring of the organizational structure and the activities of the company.

   On page 22 in the article A look backwards ,a look forwards we have a conversation with Nikolay Logofetov, chairman of the board an chief executive director of Grave Bulgaria Life Insurance Plc and Grave Bulgaria General Insurance Plc. Mr. Logofetov confess: On the background of the overall picture of the market our two companies are well developing. The observed results which are better than the average for the market are a good proof for this. We observe a 11% decrease in life insurance during 2009. On the other hand this means that we are 7-8 times better than the average rates in the market. The new business satisfies us, too. There are customers, who cancel payments for future bonuses or the want to buy bills no matter the incurred future losses. There are people who understand that they can postpone the payment on premiums, and after certain time to reactivate their bills or to take a loan for them.

    We conclude with the sincere words of Peter Andasarov, chairman of Newspaper Insurer Press, written in Along its own bridge between two crisis years/p.24/

There is nothing to be afraid of ,if we are together. These two things which are together for 16 years are Newspaper Insurer Press and The Insurers of Bulgaria. I know that they will never stop in front of difficulties and the dangerous situation which have come upon the world financial crisis. They will overwhelm it and continue the successful path of development.


Selection: Vanya Petrova

Translation: Magdalena Dimitrova




















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