Assen CHRISTOV, Chairman of the Supervisory Board, EUROHOLD
The economic environment and the insurance market are fully correlated. Healthy growth of the insurance business is hardly possible without economic growth. Of course, we have been an example of an expanding business in the times of economic downturn, but this expansion also comes along immense managerial and organizational efforts.
is the importance of EUROINS - the insurance business - within the
activity of EUROHOLD? How did it evolve over the past few years?
EUROHOLD is a leading company in Bulgaria and CEE, focused on the
non-banking financial services, asset management, insurance and vehicle
distribution and sales. The range of investments of EUROHOLD makes it a
unique regional holding company, which strives for operational
excellence and constant improvement and innovation at the level of its
subsidiaries. Approximately 65% of the investments of EUROHOLD are in
the insurance field and approximately 71% of its revenues are derived
from the general and life insurance subsidiaries. The importance of the
insurance business of EUROHOLD has been constantly evolving. In 2009 for
example, the revenues from insurance activities amounted to EUR 95
million, compared to EUR 159 million, in 2014, an increase stemming both
through organic growth and important acquisitions of key local players
in the regional markets. The mere goal of EUROINS Insurance Group,
however, is not to achieve revenue growth, if this does not come along
with high levels of customer satisfaction and permanent improvement in
the services and product lines.
XPRIMM: Which are the regions and the main business lines EUROINS focuses on?
EIG has subsidiaries in Bulgaria, Romania and Macedonia. It recently
signed a SPA (sale and purchase agreement) for the acquisition of a life
insurance entity from Greece, and prior to this, from TALANX Group (a
major German insurance player) its subsidiaries in Bulgaria and Ukraine
which are on the way to full legal and operational integration. EUROINS
Bulgaria also operates in Greece, and its parent EIG is foreseeing
expansion in 2015 in Central Europe (Czech Republic, Poland). A year
ago, EUROINS acquired the businesses of QBE in Bulgaria and Romania and
INTERAMERICAN in Bulgaria, and is currently reaping the benefits of
these acquisitions through portfolio diversification and shared best
XPRIMM: How dependent on one another is the economic environment and the insurance market?
The economic environment and the insurance market are fully correlated.
Healthy growth of the insurance business is hardly possible without
economic growth. Of course, we have been an example of an expanding
business in the times of economic downturn, but this expansion also
comes along immense managerial and organizational efforts.
XPRIMM: How would you characterize the markets you are active in? Is competition an issue? Do they still have room for development?
A. C.: The
markets in which we operate are similar with respect to their stage of
development, which, frankly speaking is not very advanced. The clients
in Bulgaria, Macedonia and Romania are all extremely price driven and
one cannot blame them for this. This is applicable to all product lines.
The preferred and dominating lines of business are the motor segments
and especially, of course, in the obligatory MTPL. Competition is also
predominantly led by prices (excluding the MTPL in Macedonia - a non-EU
state - where the MTPL prices are fixed by the regulator) and few
companies can demonstrate visible competitive advantages. Where one
company can win customers by its reputation and name, another one can do
it through more flexibility, better sales network and lower
administrative costs. We are trying to follow all of the latter, being a
local player, but most of all we are focusing on our innovative product
solutions and our highlight - the extremely detailed segmentation in
the motor insurances.
EUROINS made some important acquisitions. Was that a part of an older
strategy? Do you plan on making other acquisitions in the near future if
the opportunity reveals itself? Are there any other countries you plan
A. C.: Yes, EUROINS proved that for us,
crisis means an opportunity (the same as the Chinese hieroglyph which is
the same for both). We did acquire businesses in the past few years and
we are looking to make more acquisitions. Acquisitions make part of our
way of life.
TPL plays an important part among the business lines of EUROINS. Which
are the main problems that come along with this type of insurance
A. C.: MTPL is an important product for all
markets in the region, and it naturally represents the biggest portion
of the general insurance. Problems do not naturally come merely from the
type of insurance policies but rather from the ways of handling of
these policies and sometimes from the regulations in place, MTPL being a
mandatory insurance. We have experienced problems in the past mostly
due to temporary pricing misjudgments or market pricing pressure and
also, due to imperfect claims handling, fraudulent attempts (including
in court cases) and lack of proper segmentation. With the experience
gained, we managed to overthrow the majority of these causes for bad
financial results and are now focusing especially on the customer
satisfaction, proper claims handling and mostly segmentation up to the
smallest possible detail. We see the efforts of this segmentation -
decreased number of reported claims, lower amount of reported and paid
claim, less customer complaints, even less fraud.
XPRIMM: Do you believe that price is an important factor when buying an insurance policy?
In the countries from the region it is, however, we expect with time
customers to become even more demanding on their choice of insurers. We
are trying to communicate with our customers and to get their feedback
on a daily basis - steps like this would make the difference. And of
course, we would expect some improvements in the overall economic,
market and regulatory environment. Mandatory insurance, such as MTPL
should not be the battlefield for price wars.
Do you see Solvency II as a threat for smaller companies in the region
you are active in? Which is your opinion on the Solvency II framework?
Solvency II is a framework, which most of all should provide better
corporate governance and customer satisfaction. These all come with the
preparedness of companies for Solvency II. It cannot be a threat for the
smaller companies, as long as it is not abused and wrongly read by
local regulators. We are working hard on a daily basis to be compliant
with the Solvency II framework and have gathered a great team of
experts, along with technical support from IBM.
XPRIMM: Which are your plans regarding the insurance business in Romania?
A. C.: EUROINS
Romania is an integral part of the business strategy of EUROHOLD and
EIG. We have demonstrated our financial and operational support and
intentions throughout the years and plan to continue to do so with more
emphasis on the compliance and customer satisfaction. There are a lot of
efforts that need to be done, in order for us to strengthen the
position and image of EUROINS Romania and a non-motor player, but we are
ready and willing to take every little step of the way.
XPRIMM: How would you describe the Romanian insurance market?
It is an interesting market from a size perspective, which through
major efforts from all players and the regulators can turn into one of
the most attractive markets in the region. It is still very price
sensitive with relatively low penetration on all segments. Highly
dependent on the sales force and intermediaries and with a lot of
efforts needed on the claims side in order to tackle fraud and pressures
related to the prices of claims. We are determined to take a positive
stance on the market and make everything possible to defend and grow the
position of EUROINS on the market.
XPRIMM: Which are the main objectives for the EUROHOLD group in 2015 and beyond?
The main strategic objective of EUROHOLD is to keep and grow (with a
pace significantly exceeding the economic growth in the area) its
position in the region in absolutely all of its investment directions.
Going beyond the region and establishing our name as a reputable player
on the markets of Greece and Central Europe is also our aim.
| Published on 27.07.2015