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Interview of the week

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Marie KOVAROVA, CEO and Chairman of the Management Board, GENERALI Asigurari


In 2009, we can forget about double digits growth that the Romanian insurance market experienced recently. On the other hand, on the long term, the Romanian insurance market has a very high potential. This is because Romania is one of the largest central European countries, but the least penetrated with insurance (measured either as GWP/inhabitant or GWP/GDP). Alas, people will be less and less focused on fast consuming and becoming more interested in securing their life standards long-term.

XPRIMM: How do you think Romanian insurance market will develop in 2009-2011? Which will be the most appropriate policies and strategies?
Marie KOVAROVA: In 2009, we can forget about double digits growth that the Romanian insurance market experienced recently.
On the other hand, on the long term, the Romanian insurance market has a very high potential. This is because Romania is one of the largest central European countries, but the least penetrated with insurance (measured either as GWP/inhabitant or GWP/GDP). Alas, people will be less and less focused on fast consuming and becoming more interested in securing their life standards long-term.
Now it's the time for the strong insurers to enforce their position within consumers minds, become more client oriented and offer them stability and trust. Keeping promises will be one of the most important selection criteria, even more important than unjustified discounts and on the spot decisions.
I suppose there will be lots of changes in the policies and strategies approaches of the major insurance companies from our local market.
This means that, as a whole, the local insurance market will become healthier in the near future. Those who will understand and apply this general principle will resist on the market and will have good results.The general tendency of local acquisitions and the fusion process will keep going; there will take place other merges on the Romanian market, in the sense that small companies will be bought by international insurance groups.

XPRIMM: Which could be the sources for insurance market development in 2009?
M. K.: In 2009, the insurance companies will be much more focused on financial healthiness than on obtaining market share for any price. They will have to deliver to their customer's reliable services, which means, among others, fast claims settlement and clear securing of financial stability.
Romania has a lot of potential sources for insurance market development, many channels being so far underexploited. We are planning to be there in the future period and to approach solutions that in fact will make the consumer's decisions easier and will help them understand the importance of insurance more than in the past.

XPRIMM: Which insurance market segments remain the most promising in the current economic conditions?
M. K.: Motor insurance will keep being key insurance business in retail, but also e.g. household insurance and life insurance will become more and more important. In non-retail segment, the SME sector will grow as well.

XPRIMM: Where can the cost-cuts be made first and where is cost reduction not advisable?
M. K.: Each insurer has its own development and efficiency improvement strategy and I don't think there are any general rules.
As far as we are concerned, we don't see cutting costs at any price as a solution. We are more focused on continuing the careful underwriting process on all insurance lines, increasing efficiency and maximum use of existing resources in the company (human, financial, administrative, IT etc.).
We are more focused on identifying and exploiting efficient communication channels and on maximizing internal efficiency.

XPRIMM: How did the consumers' perception regarding the insurance field change in the frame of economic crisis and how could insurers overcome such changes?
M. K.: At such a time, people feel very insecure about their jobs, their own businesses or their monthly budget. These things being considered, they want stability and safety. That's why I think that they will mostly turn towards the companies with positive reputation, that they can trust and that inspire safety.
I congratulate those who have become aware of the importance of building reputation and have invested in their image. Those who have ignored this process will definitely not be able to make these steps overnight, because reputation is built and consolidated over time.
The companies that have had a healthy growth during the last years, that are profitable and constant, will be perceived as the most trustful one.
In the next future, customers will not be oriented especially on low cost products, but on safe and constant insurance companies.
While in the last months all the heart was about financial companies' bankruptcy, customers will look over for stability and trust first of all.
As far as the GENERALI brand is concerned, it was built with great attention, both internationally, and in Romania. The clients choose us for stability, tradition and know-how and they trust that we will fully respect our promises. GENERALI has a constant platform as a sign of respect showed to its clients. Our portfolio is equilibrate and has grown with responsibility and moderation.

XPRIMM: As GENERALI PPF launched the public offer for ARDAF's minority stakes and wants to delist the company from the Bucharest Stock Exchange, what does the Holding plan regarding ARDAF in the next period?
M. K.: Through ARDAF we are planning to cover the market segments that were so far not present on GENERALI target.
ARDAF has a very good distribution component, especially within rural and small urban areas, which will continue to be our focus.
As a newly member of GENERALI group, I believe ARDAF will be given a positive image boost that we are planning to sustain by lining up the quality of services, and not only, to GENERALI standards.
We are not planning to merge brands as this is not our goal, but going for a multi brand approach in the nearest future.

XPRIMM: What does GENERALI PPF prepare for Romanian insurance market next, in terms of future projects, future products etc?
M. K.: In the nearest future we plan to ride a steady growth and follow our long term objectives without risky actions. GENERALI is a strong brand, with very deep tradition, and is planning to be the same in the nearest future.
We will continue therefore with our quality of services approach and launch of new products based on our client needs, trying in the same time to be up to the newest market trends.

XPRIMM: As GENERALI Asigurari had a very good evolution on life segment, how do you intend to at least maintain this growth pace and further develop this important segment in the company's portfolio, given the current economic conditions when Romanian clients are even less interested in life insurance?
M. K.: The drop in the GWP will lead to stagnation in the life insurance market in 2009. We will probably witness a very small growth, of 1-2%. Currently, we can speak of a growth tendency of traditional insurance, in the total market, and a drop in unit-linked insurance, compared to the previous years, as there will be short term lack of trust in capital market.

XPRIMM: Thank you!
Editor: Mihaela CIRCU | Published on 06.08.2009






















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