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Interview of the week


Mihai TECAU, President of the Directorate, BCR Asigurari VIG

At the beginning of 2007 we were planning to maintain among the first five non-life insurance companies in Romania. Not only we have met this target, but we have clearly excelled it. We went up one place in the Romanian insurance market - we are now placing the third position, according the estimations.

XPRIMM: How would you characterize, both quantitative and qualitative, the evolution of BCR Asigurari in 2007? What are the main objectives for 2008 set by the company you represent?
Mihail TECAU:
At the beginning of 2007 we were planning to maintain among the first five non-life insurance companies in Romania. Not only we have met this target, but we have clearly excelled it. We went up one place in the Romanian insurance market - we are now placing the third position, according the estimations.
Our plans for 2008 include continuing both our market position's consolidation process and the development of the companies' unique identity process, as expression of a dynamic, modern, reliable and stable personality.
In the context of an insurance market which battling for market share has sacrificed the main purpose of every business, the profit, in 2008 we will turn towards developing a healthy clients portfolio set to bring benefits both to our clients, through financial solidity and a fast claims settlement process, and to our company, by maintaining the claims rate within the normal parameters.
Other targets we have set for 2008 aim at growing the recognition and reliance rate of the BCR Asigurari brand; elaborating a communication platform with components for every target audience; gaining more clients and diversifying the products' portfolio with new products, adjusted to markets' conditions; maintaining in the first five companies on the Romanian insurance market.
We intend to grow the share of property insurance in our portfolio, maybe with the help of the introduction of the households' compulsory insurance and also the share of health, general liability, CARGO and motor insurance.
Regarding the motor hull insurance, which reports a reasonable claim rate, our main concernment will be keeping our clients and gaining more clients with the condition of a growing profitability for this insurance class, after the introduction of the Bonus-Malus system, the franchises and a more efficient claim settlement management.
However, the cautious follow up of the technical results of this insurance class and the pricing adjustment with the claim rate reported on different motor vehicles types will stand for our first challenge.

XPRIMM: What challenges do you expect this year at the insurance market level?
M. T.:
We expect an underwriting activity in profitability and solvency conditions, strongly connected with a healthy clients' portfolio and, respectively, the development of a viable and realistic communication platform with every type of clients BCR Asigurari has.

XPRIMM: BCR Asigurari had one of the most visible MTPL promotion campaigns. What was the budget allocated to this campaign?
M. T.:
The media channels we have chosen for spreading the BCR Asigurari's MTPL campaign have been selected taking into account also the general marketing strategy of the ERSTE-BCR Group: radio, written press, in store TV and product literature as well as an alternative media channel, namely a SMS campaign. This was supported also by offering a promotional product - a raincoat to offer you protection from bad weather.

XPRIMM: How do you think the application of the SOLVENCY II norms will affect the Romanian insurance market?
M. T.:
IFRS appliance by promoting an efficient financial management and a corporate governance culture among the insurance companies is an absolutely necessary premise for implementing, in optimum conditions, of SOLVENCY II Directive.
Presently, the whole European insurance market prepares itself for SOLVENCY II, reason for which the supervisory authorities from the member states, reunited through CEIOPS, are developing Impact Studies in order to predict and asses the economic consequences SOLVENCY II would have.
After these studies, the legislative project is modified as to fit the realities in the insurance sector and to benefit from the support of as many market players.
Applying this European Directive will influence all operational processes of the insurance industry as a whole, and by rapid correction of all solvency aspects it will radically change the general insurance supervision framework. As the regulation burdens' will transform into a competitive advantage.
Assuming this, we could consider Solvency II is one of the most important strategic projects of European insurers and reinsurers, wherefore the adoption deadline is 2012, as the identification of the most appropriate solution takes more time.

XPRIMM: How do you consider the competition pressure will influence the local hierarchy, provoked by the high interest of strategic investors in entering the Romanian insurance market?
M. T.:
Generally, the existence of competition generates a positive development of the insurance services in the clients' benefit, either individuals or companies. In every market, improving the services' and products' quality is stimulated by the growth of the competition.
On the other hand, taking into account that foreign insurance companies have already entered our market, the local companies will start applying the same principles and methods used in Europe, in order to raise the quality of insurance services. Otherwise, a predictable situation will be generated, namely a bigger risk of losing clients.
Both underwriting and especially post-sale services will be positively influenced.
As for the local hierarchy, it is not local anymore, as seen in the significant changes of the Top 10 companies' shareholders. However, we can appreciate the actual hierarchy might modify according to the following mergers and acquisitions. The moves on the market are interesting to watch and I think some concrete conclusion would be drawn by the half of this year.

XPRIMM: Thank you!

Editor: Mihaela CIRCU | Published on 28.02.2008

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