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Interview of the week


Andreas BRANDSTETTER, Member of the Board, UNIQA Group Austria

The Austrian market has its limitations, as regards the number of population and market potential. Therefore UNIQA decided to expand its activities in the CEE region, where the potential in insurance is very high and the insurance penetration and density is still on a very low level.

XPRIMM: Austria is presently the most important investor in the Romanian insurance market and also the most significant player. How do you explain this and how do you think this tendency will evolve, particularly in the CEE region?
The Austrian market has its limitations, as regards the number of population and market potential.
Therefore UNIQA decided to expand its activities in the CEE region, where the potential in insurance is very high and the insurance penetration and density is still on a very low level.

XPRIMM: Can you share with us some features, particularities of the Austrian non-life market and how does UNIQA work there?
The Austrian insurance market is a more mature market, so that the motor insurance has only a 19 % contribution to the total GWP, comparing to the Romanian 61%.
In 2007, 41.7% of the premium volume was contributed by property and casualty insurance, (in the CEE & EEM regions the premium written in this line on business grew by 23%, thereby contributing 24% to the Group premiums in property and casualty insurance) 41,1% by life insurance and 17,2% by health insurance.
UNIQA Group obtained a very good core activity performance, by decreasing its combined ratio with 9%, to a very efficient 86,8% . This proves that despite the financial environment that it is not so favorable lately, our core activity is a solid an efficient one, giving us the security for our clients.

Wolfgang KINDL
Wolfgang KINDL
Managing Director
UNIQA International
XPRIMM: On what grounds have you taken the decision to take over UNITA and what is the development strategy of UNIQA in Romania from now on. What will make the difference between UNIQA and your competitors?
UNITA is the number 4 player in the non life insurance market, a very important insurance company in a core market for UNIQA. By acquiring UNITA, a 7% market share is also gained, which gives us the solid basis for a long term growth in Romania.
We differentiate by our client approach, which is going to be a long term partnership approach, offering comprehensive solutions for medium and long periods and, coming up in front in a very proactive way, with innovative answers to their insurance needs.

XPRIMM: When will you start the rebranding process, what costs it would imply and what is the brand orientation for the new UNITA?
The rebranding process will start in the first quarter 2009. The new UNIQA company will follow the corporate image of UNIQA Group, following the Group guidelines in this respect. We are proud with a brand that gained several times the "Most trusted brad" award by Reader's Digest. Also, after less than 10 years of existence of UNIQA brand, it has a he brand awareness of 90% on the Austrian market, and over 35% in most of the countries it entered. UNIQA stands for uniqueness: both in clients approach and in products and services solutions rendered.

XPRIMM: Regarding your strong cooperation with RAIFFEISEN Bank, what share in total business of UNITA do you expect bancassurance operations to have? What do you think about the potential of bancassurance as alternative distribution channel in the Romanian market?
Due to the preferred partnership UNIQA has all around Europe with its partner, RAIFFEISEN Bank, we expect a consistent growth of the bancassurance segment in UNITA. The partnership grants us the growth potential in this sector, in which we expect an over the market average increase.

XPRIMM: How do you appreciate ASTRA's performance in the recent period and what are your plans regarding this company? Are you going to sell the 27% stake you have in ASTRA?
We respect the company's business development, which is in accordance with the strategies set up together with UNIQA in our former years of collaboration.
Our participation in Astra will remain at 27% and we will no longer be involved in company's activity.

XPRIMM: What plans do you have for AGRAS, as you have now a majority stake of 92.31% in the company?
For the moment we are in the phase of evaluating our options regarding AGRAS and we will decide upon this issue in the next period.

XPRIMM: Romania is now the second market for UNIQA after the Austrian one in terms of business. How do you envisage the local insurance market development by 2010 and what are the plans UNIQA made for Romania for this three years period?
Although the economic crisis will lead to a relative slowing down of the market increase, it will for sure become profitable in the future years, as other voices in the market were saying. For the next 5 years the market will reach EUR 10 billion.
As UNIQA is regarded in Romania, we intend to develop our portfolio, from a very good base position that UNITA has, as a no. 4 company in the non life industry. Therefore, we intend to balance our portfolio with property, health and life insurance products.

XPRIMM: The lack of profit is the biggest problem of the Romanian insurance market. What strategic orientation will you adopt here - profit or market-share?
As compulsory products as MTPL are not a profit driver but a market share one, we will use the opportunity that UNITA gives us with its large MTPL clients database, by using it as a cross selling and up selling tool in order to implement the profitable lines of business.

XPRIMM: Given the co reorientation towards profit as pressure from shareholders grows when do you think the Romanian insurance market will return into the black? Are there any threats on this market?
In about 3 years, companies will go over the profit line, despite the present economic situation.

XPRIMM: Thank you!

| Published on 08.12.2008

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