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Interview of the week


Silvia SIRB, CEO, AEGON Asigurari de Viata

AEGON's market objectives for 2009 had in center the building of distribution partnerships. The principles were and are: quality, efficiency and faith in "win-win-win", not quantity. Therefore, my comment addresses this context from a higher level of perspective ("zoom out").

XPRIMM: AEGON Asigurari de Viata was launched in Romania in a time of maximum challenge for the profile market, and starting the activity on full speed was definitely an advantage. How would you characterize the evolution of AEGON Asigurari de Viata at a year after the launch, from this perspective?
Silvia SIRB:
AEGON's market objectives for 2009 had in center the building of distribution partnerships. The principles were and are: quality, efficiency and faith in "win-win-win", not quantity. Therefore, my comment addresses this context from a higher level of perspective ("zoom out"). Surprisingly for some, maybe, in this first year we had a revelation, we as insurance company - revelation offered by the business strategy chosen, created based on the over 160 years of experience of the group and on the lessons learned throughout our history in over 40 countries, and colored by the local needs identified in the market in the middle of the economic crisis. In conclusion, it was a fantastic year and the biggest plus for us as a team in Romania is that we proved that IT WAS POSSIBLE!

XPRIMM: At the beginning of this year you said that the stake must be placed on changing the approach of customers, on sales force training and on promotion. What strategies will you apply in this respect?
S. S.:
All our strategies have a common, central point: the customer. It's true that ALL insurance companies say this, but AEGON aims to give a new meaning to this statement, in all respects: brand communication, sales speach, methods of sale, support for our distributors before and after sale and, in particular, products and services offered to clients.

XPRIMM: How would you assess the development perspectives of life and health insurance in 2010?
S. S.:
I don't want to comment in this material on health insurance, in order not to bring negative feelings in these beautiful spring days. In life insurance area, we are still in an emerging stage in Romania. In 2010, I think the secret of success in insurance will depend on the way in which the sales channel architecture will be created - how the concept by which insurers will sell their products will look like and how the products will look like. AEGON is counting on high transparency and simplicity, both of a particular sales speach and of a product easy to be understood, everything in a familiar and natural context, in which the customer will feel good, comfortable and confident.

XPRIMM: How will the lapse rate and, respectively, the new-business volume evolve during 2010?
S. S.:
I said, since our launch on the market, and I repeat it whenever I have the chance that those customers who chose to be our partners in the difficult times of the year 2009 will not leave easily - we have a "deal". They chose AEGON in an informed manner and knowing what they are buying, and this brings us the greatest joy. As lapsing is concerned, we are therefore in a very comfortable position and we are pleased with the quality of our customers. And, as a specialist in sales that I often define myself to be, now it's time for some praise: I think, regarding the lapse rate as a relevant indicator of the insurance market, that AEGON will stay in the top of the statistics from this point of view. For AEGON, the real wave of customers will begin to be felt from the second half of 2010, moment in which our communication and sales strategies will be realized and implemented. 2010 will mean for AEGON an increase of the business volume of at least 3 times.

XPRIMM: How did the Romanians' behavior change in 2009, in the sense of the interest manifested for the protection and savings products, and how do you estimate it will change this year?
S. S.:
As expected, the Romanians' budgets were affected, maybe not as volume, but in terms of segmentation of family expences. The Romanian which in 2008 was a consumer of financial products, in 2009 intended to cut exactly on this chapter, in order to create the premises of a short-term comfort. If you want, it is a way to be cautious when it is not the case - at least if we refer to those who have called off their insurance contracts.
Fearful of "unrealized losses" which can result from the investment component of unit-linked insurance, they have canceled contracts in the most inopportune moment: in the very early stages of the contract and in a time when investment returns were negative due to the crisis. In 2009, Romanians were more cautious and more analytical about offers they had received. However, AEGON has signed about 2,200 contracts with high and very high premiums.

XPRIMM: Will conditions in 2010 provide a come-back for the employee benefits segment?
S. S.:
I think that only 2011 can be relevant for this segment, not 2010. And if someone/something can still do a great good to this area, this is the Legislative, with tax incentives - with or without chances of success in 2010.

XPRIMM: What strategies could the insurers adopt to counteract the negative perception about the efficiency and solidity of financial services?
S. S.:
The strategy that AEGON will adopt is to begin communication with an educative role, to really explain the meaning of quality financial services, starting from the public we will discuss with. We will be interested to also communicate with young people, who, although they are not yet consumers of such products, have a high potential of financial intelligence. We will make our presence felt in their environment and for sure we will understand eachother perfectly. The second big area is the products one. I think the only chance is that they are simple to understand, easy to buy, correctly and wisely managed by insurers.

XPRIMM: What measures should/could be taken by the state to support the development of life and health insurance in the current economic environment?
S. S.:
From our point of view, the list of equally important priorities includes:
1) deductibility for life and health - for both in a significantly higher amount than EUR 400;
2) communication through medium-long term programs nationwide, structured and continuously sustained;
3) real and constructive cooperation between the Legislative and the industry, as we really need each other: one cannot exist without the other and we cannot accede to a higher level.
Another personal dream that I have is creating a legislative basis for mandatory persons insurance. Although the word "mandatory" has a negative connotation in our vocabulary as individuals, I am convinced that this step would contribute greatly to creating a solid basis of financial culture.

XPRIMM: How profitable are, for insurers, the bancassurance partnerships and what did this alternative method of sale mean for the company you represent? Do you intend to further develop this segment?
S. S.:
We believe that bancassurance incorporates all types of benefits that the client can obtain from the relationship with the bank and with the insurer, buying life or goods insurance products directly from his banking adviser.
In the case of the tripartite relationships – client-bank-insurer –, the desired "win-win-win ", which is the de facto architect of success, is achieved more naturally, the balance of the relationship settling on three basic grounds, and all parties have something to gain.
Therefore, we see the development of this distribution channel in Romania as something positive and constructive and we believe in it.
The better the benefits are understood, the more widely used and appreciated distribution channel will bancassurance become, as it will become desired by all three participating parties: customer, bank and insurer.
We believe it's an appropriate context to focus on the banks at this time. On the Romanian market, there is a great opportunity for banks to supplement their income and offers in very advantageous conditions, satisfying their customer's needs, by bringing so close to him, in such a right formula, the best insurance products.
In Romania, currently, several banks have signed selling partnerships with insurance companies, but this regards especially life insurance products attached to loans. AEGON aims to develop the bancassurance activity, so the banks can sell any type of insurance policy, as it happens, for example, in France and Spain. This does not happen at local level and I will share with you, with pride and realism, that fact that AEGON has all the resources, capacity and confidence that, with our main partner, Banca TRANSILVANIA, will become the first insurance company that will develop a complete concept of bancassurance.
Finally, as sales strategy for 2010, AEGON aims to develop as much as possible the alternative sales channels. The partnership with Banca TRANSILVANIA opens for AEGON its presence in bancassurance in Romania. We believe this type of partnership will develop at a rapid pace, and AEGON has as strategic objective to be the national leader on this segment.

XPRIMM: What other projects does AEGON Asigurari de Viata have "in progress" regarding the alternative sales channels and the company's portfolio?
S. S.:
The most important novelty, not only for AEGON, but for the market itself, will be represented by the way of selling and by bringing to the market a new range of products created especially by AEGON for the Romanian public, simple and easy to understand products, as part of a communication campaign. I wish I could share more with you, but I think you agree with me that a little mystery is welcomed - even in business.

XPRIMM: Thank you!

Editor: Mihaela CIRCU | Published on 08.04.2010

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