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Newspaper Insurer Press Issue no 14 (29 12 2009) with an accent put on the highlights, hot topics and comments

14 2009 .,zastrahovatel.com
Newspaper Insurer Press Issue no 14 (29 12 2009) with an accent put on the highlights, hot topics and comments

Newspaper Insurer Press Issue no 14

(29 July 12 August 2009) with an accent put on the highlights, hot topics and comments


Dear readers, in the overview of the newspaper Insurer Press we put an accent on the highlights and hot topics news and events. We make you acquainted with the analyses and thoughts expressed by the leading insurers and also keep you informed about all that happened within the period between the last two issues of the newspaper.

            We start our overview with the news published on page 2

  • Petar Chobanov will attend an international business conference on emerging markets

Petar Chobanov, Chairman, Financial Supervision Commission will attend the Emerging Markets summit which will be held on 17 and 18 September in London. The organizer of this event is the authoritative magazine Economist. Established as a key global gathering on emerging markets, the summit will bring together five heads of state and over 350 business leaders and leading experts from all over the world. They will discuss and debate the latest issues for operating in emerging markets and provide cutting edge insights at the forefront of topical trends.  


  • Bulstrad Vienna Insurance Group AD got new member of the Supervisory Board

The extraordinary General Meeting of Shareholders of Bulstrad Vienna Insurance Group AD-Sofia was held on 15 July 2009, in Sofia, in compliance with the regulations of the Commerce Code and the Public Offering of Securities Act. The General Meeting of Shareholders (GMS) approved the changes within the Supervisory Board of the company and the election of an Audit Committee.  Gerhard Laner has been appointed new member of the Supervisory Board. Mr. Laner has graduated Vienna University of Economics and Business (known in German as Wirtschaftsuniversität Wien, or WU) as Master of Science, Business Administration - Finance and Accounting, and has held several high offices. /continuation on page 18.


  • Insurance Company Armeets AD  registered a 17% growth of premium incomes

As at 31 May 2009 the company reported BGN 57 million of premium income. The reports of FSC read that as at 31 May 2009 Armeets AD realized a growth of 17%, remarkably outstripping the growth of 4% of the General Insurance Market.


  • The Green Card issue in Serbia has been resolved. DZI General Insurance AD offers new facilities to their customers

In connection with the problems occurred with drivers crossing on transit the territory of the Republic of Serbia, the Border Police Directorate General announced that Serbia  shall recognize the Green Card international insurances marked with SCG, and issued before 11 July 2009, by the date of their expiry. The green cards issued after 10 July 2009 shall have the marking SRB. The marking SCG is both for Serbia and Montenegro, and SRB for Serbia only.


On page 3 we find the interview with Diana Stoynova, Director, Acquisitions, Product Development, Motor Insurance, Financial Risk and Liability, DZI General Insurance AD.  Mrs Stoynova discussed the Casco + Insurance Product. She emphasized that with Casco + the company offers the customer the option to choose the optimal coverage.


On pages 4,5 and 15 we carry the Cover Story: Credit Insurances. Among others it discovers an interesting fact, read in the Market report of FSC for the first Quarter of FY 2009 on the background of the 25% drop of the domestic Insurance Market on YoY basis, there is a striking 156% growth of Credit Insurances premium income. The Credit insurance products have 2% share of the market.

It stands to reason that the Bulgarians are hardly paying their credits and this fact invoked the high demand for credit insurance products.  According to the FY 2007 - 2008 data, the bad credits share of the Banks Portfolios marked a growth on yoy, compared with FY2009. However the ready acceptance of this insurance cuts both ways. There are predictions that the bad credits in the Banking Sector of Bulgaria for FY 2009 would be at an average of 20% as of the total volume of granted credits. These resulted from the analyses made by the International Monetary Fund (IMF), the World Bank and some Bulgarian macro-economists. This could be considered serious shortage. The levels of bad credits (including credits on watch, non-serviced and irregular) as at the end of May 2009 are between 4 and 6%.

According to the experts, the banks are well prepared for 7%-8% of bad credits scenario; however, at a level of 10% the situation would become very dangerous, while the 20 per cent would lead to crash those who have insured the bad credits on account of the attractive compensations.

It is strange that notwithstanding of its growth, the Credit Insurance market has only few participants: Lev Ins AD Insurance and Reinsurance company;  Bulgarian Export Insurance Agency /Baez/ EAD; Armeets AD ; DZI General Insurance AD; AIG Bulgaria AD Insurance and Reinsurance company; UNIQUA AD; Evroins AD .

However, the biggest insurers do not offer such insurance products and report zero values for the income thereof, and the financial groups as Allianz Bulgaria AD, OBB AIG and DSK Guarantee which are backed by big banks, even do not insure this risk at all.

According to Plamen Yalamov, First Executive Vice-President of Allianz Bulgaria Holding and CEO Allianz Bulgaria Insurance Company, every business has its specific risks which require extensive knowledge and focus on the deepest details.

Stafan Sofianski, Chairman of the Board of Directors and CEO, Lev Ins AD, shared: Lev Ins AD is the indisputable leader on the insurance market in the country for this type of insurance products. This is due mostly to the fact that we have started developing this segment many years ago and we invested a lot of resources in the development of our system for prevention and risk management, all this make us to consider that we offer quite attractive conditions for this type of products.

We are working with almost all banks and non-banking institutions. We offer insurance of investment portfolios, credit cards, etc.

The boom of the Credit Insurance market was in December 2008 the beginning of 2009 and was due to the fact that some insurance companies offered coverage with retroactive date explained Petrozar Petkov, General Director and Chair of the Board, Bul Ins AD. They insured the bed credits of the Banking Institutions and generated huge premium incomes.


On pages 6 and 7, in the column Analyses: Insurance and Voluntary Health Insurance,  we make an overview of the first five months of this FY2009, which were difficult for the insurers.

The growth of the Bulgarian insurance market in the first five months of 2009  , compared to the same period of the previous financial year , is merely 1 (one) percent: 4,2 % in the General Insurance and a drop of (-16,2 %) in the life-insurance, show the Financial Supervision Commission analyses.
The statistics reports read that the gross written premiums (GWP) for the first five months of the year totals BGN 617 255 thousand for non-life insurance and BGN 93 005 thousand for life-insurance.


On pages 8 and 16, in the column Hot Topics, we find the material by Dr. Petko Salchev, PhD, MD , with heading The Voluntary Health Funds Market in Bulgaria. Applicable benchmark approaches.


On pages 9 and 11, in the column Forum, we carry the materials from the VIII-th National conference with international participation Insurance and Social Security in the Conditions of the Global Financial and Economic Crisis solutions for Bulgaria and European Union. Continuation from issue 12/ 2009.

The conference was held on 11 and 12 June, 2009, at the building of the Higher School of Insurance and Finance (VUZF). On these two days the representatives of both insurance and social insurance business, of the State Financial Regulator and Scientific Circle, debated the themes which are of great importance for the Bulgarian society. The collection of all delivered reports will be published shortly. True to its principles, the Insurance press newspaper will present once again the real pattern of the forum as is. In this issue we publish the second part of the report, delivered by Prof. Garabed Minassyan, PHD, Institute of Economics at the Bulgarian Academy of Sciences Economic Boom and Recession Management, as well as some of the questions and discussions, provoked thereof.


On pages 10 and 16 we find the column Theme to be continued... There we talk with Rumen Galabinov,  Manager, EOS Risk Bulgaria EOOD, about the Risk Management.

The Risk Management consultations are already on demand by the companies. The companies are looking for advice on their assets what is the fair value of these assets, how to restructure their assets portfolio. Of course, such assets must always be insured, regardless of their nature real estate, machinery or equipment. In this sense the risk management can come in handy because it provides a correct assessment of the present value of the assets and liabilities of a company and help to optimize its balance.

            On pages 12, 19 and 20 - Hot Topics again: Five-judge body of the Supreme Court of Administration affirmed the  fines levied on a  charge on cartel agreement. Yes, but No!, said the state for one more time in a row, all but under crisis conditions. This is the heading of the retrospective material, published by Slavimir Genchev, Executive Editor:

Just on the day of the constitution of the 41st National Assembly of Bulgaria and the National Holiday of the oldest republics in Europe France, a five-judge body of the Supreme Court of Administration affirmed judgment pronounced by the Commission for Protection of Competition (KZK) in July 2008, which levied fines on 14 insurance companies, and separately on the Association of Bulgarian Insurers, totaling BGN 2,47 M because of their violation of the anti-cartel legislation.

The Commission ruled that the memorandum of the members of the Insurers' Association aimed at setting up a minimum premium for car insurance with all companies, and a maximum commission fees for the intermediaries

The newspaper Insurance Press was keeping abreast of this process and reacted with feedback and polls, reflecting the opinions of the leading insurers in the country.


On page 12, in the column Document, we publish the Opinion of the Association of Bulgarian Insurers the Commission for Protection of Competition disregarded the insurers opinion.


On page 24 we find the interview with Tzvetanka Krumova, Executive Director and Member of the Board, Armeets AD. Mrs Krumova emphasized The formula of our success is: Clear and precise definition of the goals and motivation of the team.


We finish our overview with the column Insurance and Personalities /p.23/.   The pop-singer Ilia Angelov known from the band Diana Express showed his sense of humor answering the question "Do you have insurance?" this way: Yes! I do! God preserve us!


Selection: Vania Petrova

Translation: Albena Dimitrova


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