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Interview of the week

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Liviu CHIRIC, President, UNIQA Asigurari de Viata


We consider the crisis as an opportunity, not just a challenge, in the idea that many successful businesses were launched and started during the crisis. On the other hand, we are not the only ones to start business in this period, but we can say we are unique, because we want to come up with an approach different from those which the Romanian market was used to.

XPRIMM: You are the leader of the newest company on the life insurance segment in our country. What is the strategy of UNIQA Asigurari de Viata, the more so as it was founded in a time of crisis?
Liviu CHIRIC:
The crisis period found us somewhat prepared, in the idea that the shareholder UNIQA Asigurari de Viata had the intention to enter the market since 2008-2009 and only now we passed well and we completed all stages and administrative and technical procedures.
We consider the crisis as an opportunity, not just a challenge, in the idea that many successful businesses were launched and started during the crisis. On the other hand, we are not the only ones to start business in this period, from our knowledge there are two more companies that received approval at the same time with us.
But we can say we are unique, because we want to come up with an approach different from those the Romanian market was used to.

XPRIMM: What does this new approach consist of?
L. C.:
First of all, I should mention that our shareholding consists of UNIQA International Beteiligungs-Verwaltungs GmbH and UNIQA Asigurari S.A. - this shareholding is the market leader in Austria, being specialized on life insurance and on health insurance.
We want to take advantage of this experience and to transpose (the model used there in the Romanian market. As it is known, the Austrian healthcare system and all the Western ones represent a quality model that we want to transpose to Romania, as well.
We have the know-how and we want to bring it, in a relatively short time, to the Romanian market, so that our future customers will benefit as soon as possible of higher quality services.

XPRIMM: Regarding the products that you want to bring on the market at the moment, can you tell us if they fit into the existing range from our market or if you intend to come up with something new, as well?
L. C.:
Unfortunately, the Romanian insurance market, especially the life insurance market, has stayed, in recent years, within a classical "frame". What I could notice, coming back after a longer period in which I had not been on the insurance market, was primarily a lack of imagination to generate new products more adapted to the mentality and needs of Romanians.
Obviously, they must be adjusted to the crisis period we are in, and therefore we turned to traditional protection insurance, insurance that we have shaped into an easier-to-sell and simpler form, and avoid those products that are complicated for the customer.

XPRIMM: Will you offer both traditional insurance and unit-linked policies?
L. C.:
In our study of feasibility, we also have unit-linked products, with the assumption that the Romanians appetite for risk continues to be high. According to the latest market developments, confirming the increase in life insurance, I believe that that appetite has not disappeared, even though many unit-linked products have been surrendered and the desire to "play" over a classic level in the risk zone remains high.
Much of the areas of risk investment - I am referring to stock exchanges and other areas in which it has been invested, with a pretty big risk - have "fallen" a lot, therefore I believe that the re-orientation of future customers will shift again to this area.
However, at present we have to prepare very carefully these high risk products, a matter of extreme importance being the strategy of approaching the problem and of launching them, under the circumstances in which the market has been, for many years, assaulted by such offers - basically, insurance mediaries have achieved peak efficiency by selling these hardly-marketable products.
But, perhaps in collaboration with insurance mediaries and considering other strategic partnerships, respectively in bancassurance, with RAIFFEISEN Bank, and seeking alternative channels, we will probably succeed, in late 2010 or early next year, to come up with something new and innovative on the market.

XPRIMM: What are your company's objectives by the end of the year? What can you tell us about your targets?
L. C.:
Firstly, I must point out that only on April 8th, 2010, we have obtained the effective functioning authorization. Therefore, we succeeded in a very short time to make our presence felt on the market, being accepted as full members of UNSAR on April 26th, and on July 1st we have already managed to issue our first policy.
In terms of gross premiums collected, that we forecast for the end of this year, it's pretty hard to create illusions that in six months we will be able to achieve our purpose - which, for the next period, respectively for next year, is to enter the Top 10 life insurance companies, but we are taking advantage of this "more relaxed" period to prepare the ground for what we are going to do in 2011 and in the following years.
We have to move on that path that will make us follow your business plan that we have proposed to the Insurance Supervisory Commission and to adapt as quickly as possible to a continuously moving market.

XPRIMM: What measures do you think the Romanian state should take at this moment in order to stimulate the life insurance segment? Could the much-discussed deductibility be a solution?
L. C.:
Deductibility is, by far, the easiest thing to do, from the state's point of view.
But the ground must be prepared, so that such an approach of the state to reach its initial goals and not be wasted in areas that, basically, lead to hinder or slowdown of the activity. Life insurance, as you know, is closely related to a major problem, that of medical services - health insurance. It is an area which, in my view, should be regarded with more interest, and that is exactly what we are doing now, by the products that we have promoted.
In this area, the state should really express an opinion, and start by increasing the deductibility of insurance costs, and especially for health insurance. I am referring here to a simple comparison: medical services market at the moment has reached a value of around EUR 60 million, compared with the health insurance market, which fell from EUR 6.5 million to EUR 4.5 million.
It's a fantastic difference, which insurers, along with private providers of medical services should recover and they should find a common point, for the clients' best interest, in particular, and hence for the benefit of insurers and healthcare services providers.

XPRIMM: What is, in your opinion, the most pressing problem that we are currently facing in the insurance market, in general, and in life insurance, in particular?
L. C.:
In my opinion, winning the trust of clients and finding new solutions that are not lacked of imagination and that are oriented strictly towards the clients, towards common people, as they are the ones insurance is addressed to. We clearly observed a loss of customer confidence, also caused by what is happening on the general insurance segment, but, overall, the existing declines are striclty the result of an existing lack of clients' confidence in life insurance products. It has been clearly proven that the existing surrenders have equally affected both insurers and insured, that those surrenders did not come on real basis, but were based on a lack of confidence in what was happening and in the guarantees offered by insurers, in conjunction with the existing situation of crisis.

XPRIMM: What is your message for the Romanian profile market?
L. C.:
It's hard for me to send a message, because I was away for a period, and when you are coming from outside the market things seem different and you think you can straighten them out or can help to straighten them out. Therefore, I will wait a while, to adjust, and only then will I be able to answer your question. In any case, as they say, "hope dies last", hence we must not lose hope that things will go in a better direction, starting from the premise that the "bottom of the ocean" (or the "maximum point of the crisis") has already been reached.

XPRIMM: Thank you!

| Published on 23.09.2010






















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