Dinu Gherasim: "The insurance market of Moldova is in the “standby” mode.

Dinu Gherasim: "The insurance market of Moldova is in the “standby” mode.

 InfoMarket agency interview:

Insurance company Donaris Vienna Insurance Group in October 2015 completed its capitalization, increasing equity of more than three-fold from 15.1 million leis (at 09/30/2014) to 50.69 million leis. Today - this is the fourth component of the share capital in the insurance market of Moldova (Sigur Asigur - 67,4 million leis; Moldasig – 60 million leis; Grawe Carat Asigurari - 57,4 million leis). In October, the head office was moved to the new building in the capital sector Riscani.

In April 2014, the Austrian company Vienna Insurance Group AG Wiener Versicherung Gruppe acquired the stake Donaris Group in the amount of 93.786%; later by purchasing other shares it has increased its stake up to 93.829% and the company was renamed in Donaris Vienna Insurance Group. In autumn 2014, when the board member of Vienna Insurance Group Franz Fuchs has come to Moldova at the shareholders meeting, it was decided to increase the equity of  Donaris VIG by 2.5 million euro. The increase was made in three stages, and in October of this year, the NCFM registered last issue and capital increase up to 50.69 million leis. So this was told by the Austrian shareholder in Moldova commenting on the situation in the insurance market of the country to InfoMarket agency Dinu GHERASIM:

Dinu GHERASIM: The company's capitalization is, first of all, its liquidity and financial stability. We also had to bring all the indicators in line with current legislation and the requirements of the NCFM. But most importantly, if the company does not have sufficient capital, attracting large volumes of insurance premiums, it is compelled to share them with others and to reinsure the risk to comply with the applicable standards and requirements. The more capital - especially large insurance portfolio can be kept at home.

 InfoMarket: A year ago, when Franz Fuchs came here, it was announced that Donaris VIG will seek to diversify services and at the same time to have the share of "Green card", is dominated at the market.

 Dinu GHERASIM: We do not focus on the compulsory insurance, the more that the "Green card" has its own reinsurance program, which is centrally managed by the National Bureau of Auto Insurers (BNAA). Donaris VIG is one of the most advanced companies in terms of the network coverage area, our representative offices and branches operating in every region of the country.  That is high for compulsory sales are directly related to the development of territorial network. «Insurance market of Moldova in standby regime»

 Major efforts we aim at the development of voluntary types of insurance - property, health, personal, professional liability, CASCO by the way CASCO this year registered growth of 25% and people are accustomed to this product. In the I half we collected 21.84% million leis of the insurance premiums on CASCO - 19.42% of the market share. The "Green Card" sales is not more than 24.62 million leis (market share - 19.96%) and have a growing volume of medical insurance for traveling abroad (2,73 million lei with a market share of 13.1%).

 InfoMarket: As the Chairman of the Council of Administration BNAA, please tell how great the threat of exclusion from the system of Moldova "Green Card" from April 1, 2016 will expire when our regular "trial period"?

 Dinu GHERASIM: The thopic is still painful. There are problems we have to resolve. We recently elected a new director of BNAA - Alina Osoianu, former director of the NCFM management with extensive experience. I think that until April 1, 2016, under her leadership of BNAA perform the proposed Council Office in Brussels a plan of action, and the Moldovan insurers will continue to issue "Green Cards".

 InfoMarket: How, in your opinion, this year the insurance market of Moldova  will exist ?

 Dinu GHERASIM: You can say that the insurance market now is in “standby” mode. The economic crisis - is the most important aspect that hinders development, as voluntary insurance depends on the financial capacity and economic well-being of population.

 InfoMarket: Three years ago, the market in terms of insurance companies, their shareholders and the regulator, was another, perhaps even more clearly. How the situation at the market is now?

 Dinu GHERASIM: Firmly I can say that we have not yet grown up, did not reach the healthy competition that should exist in the insurance business. Everyone has heard of the struggle in the policies about the "Green Card". Certain companies would like to have a bigger share of the market and, of course, tried different ways to limit the possibility of other players in this business. Now the situation has changed, no longer have the right to sell the green cards.

 However, there are other problems. Many players of the insurance market practice dumping, even in compulsory types, in spite of all the prohibitions of the NCFM and legislation to limit the cost of doing business and commissions. There are players who manage to encourage customers additional tools, thus increasing their costs ... But it has been proved not only in Moldova, sooner or later lead to the bankruptcy of the insurance companies. Unfortunately, there are players who look only at the cash flow, in order not to get money now, not worrying about the future, but they are very harmful to the entire market.

 InfoMarket: 16 of the Moldovan insurance companies account for 72 brokers. Do we need these intermediaries, whether they have an unnecessary link between the insurer and the insured?

 Dinu GHERASIM: As of the compulsory moments, I can say so. After all, these products do not require additional effort for the sale or some skills of a broker to convince the customer to buy, for example, "green card" insurance. These policies are sold when they are required. Companies and brokers are often organized in terms of sales at the stations testing, registration of vehicles, at the border crossings - and the necessity to earn. Unfortunately, most brokers do not realize that the efforts should be directed to the optional views that the results will give much better return.

 InfoMarket: Many companies complain that the insurer in order to collect premiums often forms the large debts.

 Dinu GHERASIM: By the law, the broker receives premium and he must fully submit to the insurance company, and it must list broker commissions specially created for this account. Unfortunately, this mechanism does not work, and many brokers received money from the client properly dispose of them often "lend" the insurer for their own account. Control over the brokers’ activities should be toughened.

First, it is necessary to increase the capital requirements - not authorized but which could be spent. Today the authorized capital for the broker is 25 thousand leis. If the law required obtaining a brokerage license the presence of a reserve fund, deposit, the broker cannot spend 300-500 thousand leis. I think it would change the market situation to the better. There can happen cases when the broker, collected premiums of 200 thousand lei, disappears from the country. Brokers in the market are necessary, but the rules of the game shall be tougher. At least our brokers, which have bank, insured guarantee.

InfoMarket: Now the National Commission shall intervene into situation…

Dinu GHERASIM: In my opinion during the crisis, when you have to quickly adapt to the situation, to look for the new ideas, in general, when you have to work, not to sit and wait for the result of the thumb scheme. I am not afraid of the coming year. But the political instability in the country affects all sectors of life for every citizen of the country.

InfoMarket reference: According to the preliminary data for 9 months of 2015 the volume of insurance premiums collected by Donaris VIG has exceeded 120 million leis; mandatory quota  (OSAGO and ZK) in the total portfolio made up 53%; quota of the property insurance - in the range of 9% (until the end of the year the goal is - 10%); quota of the personal insurance: exceeded 7%. The company employs 120 people, 50 of which - in the head office.

The main shareholder Donaris VIG - Vienna Insurance Group - is a leading insurance company in Austria and in Central and Eastern Europe. The company operates in the insurance market of about 190 years. Currently, the group VIG is represented by 50 companies in 25 countries and employs 23 thousand people. VIG's shares are listed on the stock exchanges in Vienna and Prague.

 

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