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Interview of the week


Constantin TOMA, President - General Manager, OMNIASIG

Although I do not have the right to speak about the overall market and I would refer here to the non-life segment only, I anticipate the market will continue its growth. This particular statement is based on the big difference between the insurance penetration rate in Romania and the figures reported by developed countries.

XPRIMM: How do you envisage the Romanian insurance market development by 2010?
Constantin TOMA:
Although I do not have the right to speak about the overall market and I would refer here to the non-life segment only, I anticipate the market will continue its growth. This particular statement is based on the big difference between the insurance penetration rate in Romania and the figures reported by developed countries. If Romania oscillates at about 2% - insurance penetration in GDP, western European countries swing somewhere between 8% and 10%, while the former communist states that acceded to EU before us, as Hungary, Czech Republic, Slovakia, Poland, already reached 4-5%.
I earnestly believe Romania cannot be an exception. In my opinion, this lag we have today between Romania and the other developed countries as regards the insurance industry could be eliminated even faster, even in spectacular growing rates, if we could get over certain psychological deficiencies...
However the market presents some perturbations in several sectors, especially in what concerns pricing policies which do not conform neither to the calculations to underlie these prices, nor to costs' level every company has and bases its products and insurance policies on.
From this point of view it is regrettable hundreds of millions of euros are wasted in an industry that came to be very interesting. Many people crave to work as employees in insurance, mistaken insurance with banks or stock markets and see only white collars and millions of euros... Everybody is impressed when you say you are working in an insurance company because they already have in mind the image of West European insurance companies. They even look at you "through green glasses" or respect you, without knowing that, in fact, you are just an employee, engaged in a coal face.
In many economic sectors we are pretty close to those countries and we must stay in line with this continuous growth in insurance services so that in the next 10-20 years frame to get even closer.
In this context we trust that an annual growth rate of 25%-30% would be reasonable. The markets' development vehicle will still be motor insurance, as in Romania the car has a central role in every persons' life. Plus, these cars are bought either through a credit or in leasing - so they will be compulsory insured. The industry would be happy to provide them protection. However, I hope other classes of insurance would gradually balance the result. For the moment though, motor insurance are and will remain the first violin.

XPRIMM: How do you see OMNIASIG in 2008, in this coal face you referred to?
C. T.:
I would rely on the team I am leading, to continue the same miraculous activity, grounded on some very healthy principles, based on an adequately strategy and objectives and, once again, I would rely on the quality of this team and their commitment to carry this task forward. I trust we will someday decide to stop wasting money and to strengthen this industry and the company we represent, to make our shareholders content, and why not, our customers; they will certainly be more satisfied and trust us more if our companies will come out with results that won't dishonour us anymore.
The customers we serve must have the chance to see the financial results as they are, to see how many these people do, how we managed to obtain this profit. Nobody gives it to us. I have strived to make it and on the strength of my team we succeeded. I said it before, the apparent success is bitter indeed.
To answer the initial question, our objective for 2008 is to maintain our top position. We have an over EUR 300 million target to reach and a EUR 12 million profit. I hope I will have the chance to fulfil these targets. And I also trust my colleagues, the other companies, will approach more cautiously the pricing issues and that we will first of all interact more. Then things will get better.
I especially wish that OMNIASIG will maintain as a top three company; of course I would be very happy if we could keep our current position but this is a permanent and hard battle; I don't want to make any predictions, but I feel myself obliged to fight for making my point.

XPRIMM: From which business line would you expect to gain a significant profit?
C. T.:
I, like well as the other insurers in the market, am taking an interest in first priority classes in what concerns profit: big industrial risks, general liability, accident insurance and even the CARGO line where we make some pretty good business. For 2008 I sincerely hope we will start obtaining profit from motor hull insurance also. Regarding this matter, we have already introduced franchise for motor hull insurance. I know this acerb competition has made this instrument, so normal, so necessary in a well balanced industry, to either disappear or be provided from the zero level. OMNIASIG brought this franchise at a reasonable level for Romania. Even more, I hope this example will be followed also by the other players. The franchise makes the customer more careful with his goods.
Besides this franchise we are now working at a system that will allow differentiate pricing for drivers based on the risk profile which would be implemented in the beginning of this years' second half at the earliest. This project started some time ago but was somehow timed out by this business environment.

XPRIMM: How do you expect OMNIASIG partnerships with leasing companies and banks to evolve, and especially with ERSTE?
C. T.:
We are already winding off partnerships with many leasing companies, to whom I would like to thank for the trust they have in OMNIASIG. I trust even more leasing companies will make partnerships with us, taking into consideration both our services' quality and the fact that there's nothing more to do than for we to make them an offer and for they to include us on their co-operation insurers' list.
Regarding, our cooperation with ERSTE Bank, I would rather avoid making any comments. We will see if the two financial institutions will decide whether and how this partnership would be favourable for Romania.

XPRIMM: Thank you!

Editor: Mihaela CIRCU, Alexandru CIUNCAN | Published on 14.02.2008

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