Mihai TECAU, President of the Directorate, BCR Asigurari VIG
We believe that the main threat for an insurance company, under a declining economic environment, may be associated with managerial decisions rather than with decreasing or increasing the percentage of indicators, and this risk is valid in any period of an economy, irrespective that is growing or in recession.
XPRIMM: How do you comment the austerity measures taken by the government?
Mihail TECAU: Consequences of latest measures adopted by the Government
have not yet been felt to their fullest potential, but certainly in the
near future we expect them to be also felt on the insurance market, affected
on one hand by the decrease of investments and of purchasing power, and
on the other hand by the increasing costs.
Our company is one of the important players on the insurance market and
we are very careful in assessing any consequences that the impact of
the economic measures decided by the Government may have, upon our customers.
BCR Asigurari VIG has already taken effective measures against austerity measures
and we believe that the solutions adopted will help us overcome this economic
XPRIMM: What will be the immediate impact of the VAT hike in terms
of insurance companies? What do you think will happen to prices charged
by insurers under these conditions?
M. T.: In the present context, the VAT hike to 24% will generally influence
the economic environment, by a rearrangement of prices and by replacing
the inflation target for 2010, from 3.5% to 7.9%.
Insurance market is not directly affected by the VAT increase, because
insurance premiums are exempted from VAT, but will be influenced indirectly
by the evolution of costs of related activities carried out by insurance
companies, related to: the amount of claims, administrative expenses
There may exist a certain fear in the insurance market that insurance
will become more expensive, but this cannot be confirmed now, as long
as, as we have shown before, the direct price of insurance is not influenced
by the increase in VAT.
XPRIMM: What are the main threats to an insurance company under the
circumstances of a declining economic environment?
M. T.: Insurance companies, by their nature and object of activity,
buy and manage risks caused by dangers. From this point of view, a "danger" caused
by an economic environment is not a novelty for us and cannot take
us by surprise.
We believe that the main threat to an insurance company, under a declining
economic environment, may be associated with managerial decisions rather
than with decreasing or increasing the percentage of indicators, and
this risk is valid in any period of an economy, irrespective that is
growing or in recession.
XPRIMM: How did the company evolve in the first six months of this
year compared with same period of 2009, in terms of sales, terminations,
new business etc.?
M. T.: Our company is careful to what is happening on the insurance
market, and statistics say that in 2009 on the Romanian profile market
there has been registered an 11% decrease in non-life insurance, and
a 5% drop in the first quarter of 2010 (according to data offered by
the Review INSURANCE Profile and by Media XPRIMM).
Evolution of sales indicators in the first six months of this year,
whether we mean portfolios or new business, is very closely linked
to other management measures taken, such as streamlining activities,
the quality of services offered to clients and others.
For this reason, comparison of an indicator from this period with the
one from the same period of last year must be analyzed also based on
strategic decisions, and from this point of view we can say that our
objective of maintaining business lines and improving the profitability
has been achieved.
XPRIMM: Do you have new plans regarding distribution channels?
M. T.: Of course. Our plans regarding the distribution channels have
in view the development of sales through bancassurance and of electronic
XPRIMM: What is the claims situation, especially on the motor segment,
how did the average claim evolve? Did you notice a change in terms
of claims when the bonus-malus system was introduced?
M. T.: In the context of implementing strategies of diminishing and
control of paid claims, the claims rate on the motor segment declined
slightly in 2010 compared to 2009.
During 2009, BCR Asigurari VIG has "cleaned" its motor
portfolio, removing clients with high claims rate. This action led
in 2010 to a decrease in claims frequency.
Also, the evolution of the average claim on the motor segment is almost
constant in the first months of 2010 compared to 2009, namely from
about RON 4,850 in 2009, to about RON 4,650 in 2010.
Following the VAT hike, we expect an increase of about 10% of average
XPRIMM: What is the strategy for 2010? What news will you bring on
the market this year?
M. T.: The strategy of BCR Asigurari VIG is to develop a partnership
between insurer - sales channel - client, so that on all business
lines and particularly on the motor car insurance segment, the financial
and economic calculation will be positive.
News that we bring to the market this year are those related to finding
appropriate solutions, molded on the needs of our customers, such as:
strengthening relationships with customers, setting prices carefully,
adopting new techniques and work strategies, products and services.
In 2010 we have adjusted and we will adjust the premium rates according
to existent current risks and for people affected by austerity measures,
such as pensioners and budget sector employees, we offer new facilities
for the insurance premiums.
Also, we have launched a new insurance product, CASCO Plus, unique
on the insurance market, which offers multiple protection (3 in 1)
for damages and theft, personal accident and technical assistance,
with a single premium - with extended territoriality.
XPRIMM: What do you expect from 2010 in terms of profit?
M. T.: Given the major changes from the last period, in the tax area
and not only, our expectations are not entirely satisfactory. A study
on planned data shows that the negative impact is over EUR 1 million.
XPRIMM: Thank you!
| Published on 27.08.2010