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A Word from the Expert
PRIMM: Just like in the other CEE countries that have joined the EU, shortly after our acceptance in the EU space the “notification race” started. European insurance companies, important or not, have announced their intention of operating on the Romanian market.
From your experience, how will this affect our market? Will we be confronted with an overwhelming offer or these notifications have,
for the time being, just the value of intentions, without any practical connotations?
A.T.: The Romanian insurance market steps up at this time, through
a “commercial paradox”: the growing interest of foreign operators
for collecting a relatively low volume of premiums, accompanied
by considerable costs and a huge organizational effort. In a number
of cases, the Romanian market as a whole cannot be even compared
to the turnover of a company from Hamburg or Cologne. Still,
the hypothetical “road to Canossa”, started to be interesting for German insurers. Thus any new player on the market is a step towards its rehabilitation and must be respected. Even if its current intention could be limited, for the time being, to a simple presence in Romania.
I will thus allow myself to talk about a “notifications road” not
a “notifications race”, paved by Romania’s EU accession. On this “road” that leads directly to the client, the European companies, either big or small, will obviously meet... the Insurance Supervisory Commission (ISC), a necessary institution, which started gaining a lot of credibility. Now, a new paradox arises, this time a “structural” one: the supervisory authority is confronted with notifications from
foreign companies, whose activity cannot be controlled by
the commission as thoroughly as previously possible.
Whilst in the case of the ISC, avoiding the authorization might give
an advantage to the companies that choose the notification path,
the Private Pension System Supervisory Commission (PPSSC) still deserves a chance. The administrative procedure of obtaining the authorization from the PPSSC could contribute to the level of trust that the citizens have in this authority that guarantees for the administrator of a private pension fund. The PPSSC activity could be in these first years of the developing pension market very important, a measuring unit for the public trust in the safety of the offers on the market. Thus the public’s appetite for insurance products, that are now more accessible, could rise.
PRIMM: Amongst the insurance companies that have stated their intention to operate on the Romanian market there are 4 German entities: ALLIANZ VERSICHERUNGS - AKTIENGESELLSCHAFT;
AXA VERSICHERUNGS AKTIENGESELLSCHAFT; EULER HERMES KREDITVERSICHERUNGS - AKTIENGESELLSCHAFT; VHV ALLGEMEINE
VER SICHERUNG AG. Do you feel there is a serious interest from German companies in the Romanian market? If yes, what are the
lines of business they are more likely to be interested in?
A.T.: I have been representing for the past six months an international consultancy and lobby company, EAPP Ltd. (www.eapp.biz), at different meetings with three companies from the German top ten. Together with Radu N. COCEA, representative for COCEA Attorneys at Law, a specialist from a well-known investment bank and an actuary from London, to present them the attractiveness of a rather unknown market to them. The newly appeared possibility of managing private pensions, especially the ones in pillar II, might become the 2007 spring hit, being regarded by the executives of these companies more like a marketing opportunity rather than like a real business opportunity, profitable and quantifiable. I am thus convinced that there is
a constant interest for Romania, for a market where local monopolies will disappear and the market will diversify itself.
The German companies’ list will not be limited to the ones mentioned above. We will probably see how the companies will focus on certain regions and will probably not coordinate their activity from Bucharest like they do now. I think that a city like Cluj for example, where there is a bank with exceptional results in the small to medium business segment, could easily compete with Bucharest for the management of private pension funds. EAPP Ltd. will have an international reunion in Cluj this summer. On a three to five year time span we might see some of the existing companies being taken over; such a change will allow the interest towards non-compulsory insurance products to grow. After an Austrian period I hope we will see a European one and, why not, increasing investment from German companies.
Daniela GHETU |
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| Dr. Alex TODERICIU, Certified Business Consultant by the city of Vienna, journalist for prestigious Austrian newspapers and magazines, has consulted insurance companies in Romania. For this activity he was awarded, in 2003, the Primm Insurance&Pensions Magazine special prize. Currently he is a collaborator for the Maltese management and consultancy company EAPP Ltd. (www.eapp.biz). |
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