Newspaper Insurer Press Issue no 13(15 - 29 July 2009) with an accent put on the highlights, hot topics and comments

29 Юли 2009 г.,
Newspaper Insurer Press Issue no 13(15 - 29 July 2009) with an accent put on the highlights, hot topics and comments

Newspaper Insurer Press Issue no 13

(15 - 29 July 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 information, carried on page 2

  • Orlin Penev has been reappointed as Chairman of the Association of Bulgarian Insurers. The decision has been taken by the General Meeting of the Association, held on 23 July. Dancho Danchev, Executive Manager, Insurance Company Victoria AD, remains in office as Deputy Chairman of the Board of the Association of Bulgarian Insurers. The General Meeting elected new members of the Board.
  • For seventh year in a row the Ministry of Education and Science, the Financial Supervision Commission (FSC), and the Atanas Burov Foundation organized educational seminar “Non-banking Financial Sector in Bulgaria” for the students from the Vocational High Schools in Commerce and Economics. (30 June - 3 July 2009).
  • Forthcoming changes at Bulstrad Vienna Insurance Group AD – the Special/Extraordinary Shareholders Meeting shall consider the election of an Audit Committee and to approve the changes within the Supervisory Board of the company.
  • Adopted Guidelines for the bilateral statements of findings in vehicle road accidents.


It must be noticed that the National Health Insurance Fund (NHIF) reimburses medical treatment costs only provided the medical treatment has been performed by medical facilities and physicians financed by the public health insurance institutions in the country where the medical services are rendered. However, within the large tourist areas, seaside or mountain resorts in the EU member states, there are chiefly private networks of health centers and medical aid facilities, i.e. they are not linked to public health insurance institutions.

Unlike the NHIF’s obligation to pay or reimburse costs only for medical services rendered to Bulgarian citizens in the EU member states, the insurance Travel Insurance and Medical Assistance (depending on the Policyholder's sole discretion) is applicable to and enforceable in both the EU member states and rest of the world.

On pages 6 and 7, in the column Analyses: Insurance and Voluntary Health Insurance” we publish market data reported as at the end of April, 2009.

The heading of the material is „Growth of 3 per cent, but yet growth…”. Still,  in the first quarter autocasco has the biggest share of the aggregated portfolio of the companies with general insurance business - 40,4%, while the MTPL is holding 29,5% and this makes a total of 69,9% gross written premiums (GWP), realized in this sector. On the non-life insurance market leader in terms of premium income for the first quarter of 2009 is Bulstrad Vienna Insurance Group with its BGN 91,815,037 and market share of 18,18%.

The second place is kept by DZI General Insurance AD, reporting premium income of BGN 70,577,814 and market share of 13,98%.

The third place is for Insurance Company Lev Ins AD with its premium income of BGN 55,359,561 and market share of 10,96%.  

In the life insurance sector biggest share in gross premium income of the life insurance companies as at the end of April, 2009, is for the annuity product  and the extra life insurance. According to the regulator's data, the gross premium income amount to BGN 60,43 thousand - 75,4% share of the market. The fund-linked life insurance product has share of 4,4% of the life insurers’ aggregated portfolio and is amounting to BGN 3,542 thousand.

  • The first place is taken by Allianz Bulgaria Life AD
  • The second on the market is DZI AD
  • The third place is for UNIQUA Life AD.


On page 9, in the column Hot Topic, we found the continuation of the article by Vassil Vladimirov, PhD, „The Swiss Rule and the Pensions Update”. The update of the pensions must be performed as an expedient and intermittent process which shall be kept abreast both with the pace of the economic growth and the reference income of the employed persons. This shall lead to a new baseline of the pension income in the country.  
However, the foreseen update of the pensions has been performed through amendments to the Social Insurance Code. They stipulate update for pensions granted until 31 December 2007 using another formula for calculating the individual pension based on the average income in the country for 2007, namely 398,17 leva. There is another point that due to the relatively big, nine-month lag of time and the lack of dynamics of the average reference income, besides of the relatively small pensions “cap”, this recalculation affected too few of the pensioners.

The author suggests that the pension update shall be a recurrent, cyclic process which shall meet specific criteria.


On page 11 we invite you to join the discussion with Hristo Hristov, Chairman of the Commission on Budget and Finance at the 38th National Assembly, UDF, 25 Multiple Mandate Region, Sofia.

Mr. Hristov shared:”...To my opinion the current banking supervision model must be changed due to substantive rather than to formal reasons. Actually, the supervisory body is called Financial Supervision Commission but the banks and credit institutions are exempt from its jurisdiction. However there are necessitous circumstances calling for higher professionalism and deeper, extended specialization, for more closer  and competent relations with the supervised entities and their professional organizations; drop to the lowest level of the current consequential bureaucracy in the everyday running performance and  the making of important decisions.


On page 12 you will find the Cover Story: Risk Management – Under the conditions of crisis the provision of sufficient company’s reserves is a must. The technical reserves to premium income ratio became financial stability indicator for the companies. The correctly calculated and set aside provisions are one of the most important Risk Management aspects, especially when it refers to an insurance company. If the insurer makes a precise accessment of the assumed risk, he would set aside adequate reserves. Their role is to cover the future disbursements under the policies contracted by the company. The more reserves are set aside by the insurance company, the more financial stability it enjoys.


On pages 13 and 14 we carry some 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”, held on 11 and 12 June, 2009, at the building of the Higher School of Insurance and Finance (VUZF). In this issue we publish the presentation, delivered by Dr. Mimi Vitkova, MD,  Chairwoman of the association of licensed voluntary health insurance companies.

With the adoption of the Health Insurance Act in 1998 initiated the development of the health insurance model for funding of the Bulgarian health services. It created an option for parallel development of both mandatory and voluntary health insurance. The last has been offered to stock insurance companies whose scope has been legally outlined beyond the frame of the main package of health services, covered by the mandatory insurance, but with an option to offer the services of the main package as well.

While regulated by the law as from 1998, the voluntary health insurance failed to develop as a modern market of health services. It participates in the funding of the health services system with merely 0,8% while the public health expenses in 2008 account to BGN 2,7 billion.


Pages 20 and 22 are dedicated to Insurance Company Bul Ins AD .

In 2008 every fifth vehicle in Bulgaria was covered with autocasco by Insurance Company Bul Ins AD .  The General Meeting of the shareholders of Insurance Company Bul Ins AD was held on 7 July at the metropolitan hotel “Central Park”.

The company’s results for FY200, made public by the new management in the person of Petrozar Petkov in his capacity of General Director and Chair of the Board  2008 г. , and Stoyan Prodanov, CEO and member of the Board, reported high performance. The data has been announced at the press conference, called the same evening at the Conference Hall, Central Park Hotel in Sofia. Stoyan Prodanov emphasized that this year the company is covering three segments of the autoinsurance market with three new products. Petrozar Petkov shared that since the beginning of this year the sales of new and also of used cars have literary collapsed, which affected negatively the operations and results of the insurers.

82% of the annual gross written premiums (GWP) of our company are generated of this type of policies, Mr. Petkov said.


We finish our overview with the conversation with Radovan Pućnar, CEO, KD Life AD. KD Life has been on the Bulgarian Insurance Market since two years.

The company already has one per cent market share. Its restructuring is scheduled in a long-term plan. „At this stage we have made reorganization both in the regions and the network itself. We already opened an agency in Haskovo. The optimization is a broad concept. It comprises, amongst others, the performed reorganization and improved management of the expenses.  The situation both globally and on the insurance market in particular is serious from financial point of view. This year will be difficult for all in our branch. Those who manage to overcome the present difficulties would have stable and successful development in the future. 

In conclusion I will say that we are contented with our performance for these four months…”

This is to say that KD Group and the representatives of its business will stay in Bulgaria. Mr. Pućnar was also pleased to share that the company moved from third to second position among the companies offering Fondpolitsa – i.e. fund linked life insurance products, which is translated in positive evaluation by the customers.


Selection: Vania Petrova

Translation: Albena Dimitrova


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