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Minos Moisis: Bankassurance Is the Most Suitable Model for the Insurance Market in Bulgaria

19 July 2010 / 13:07:13  GRReporter
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- There is some degree of uncertainty on the Greek insurance market. Six insurance companies closed recently, others are preparing to leave Greece. And because the crisis is serious, it would not be a surprise if other companie close. What happens to the personal records of insured persons in these cases?

- First, let me tell you that as chairman of the Association of Insurance Companies in Greece I do not have any information that some companies are preparing to leave the Greek market. This is a rumor as there is no official information. Now that some companies were closed resulted from the fact that there was strict control on private insurance in recent years. Unfortunately, it lacked in the past years to the extent that it is exerted in recent years. And it put on the surface problems that existed before. Unfortunately, for the first time in Greece it happens to be closed a company that had a significant life insurance portfolio for its clients. And this is a serious problem. When a company is closed and has car insurances the damages of its clients are covered by the Auxiliary Insurance Fund. Such a fund has been operating smoothly in Greece for many years and in all European countries too. Now, on the issue of life insurance. A new law is being developed now which will be presented in the Parliament the next week. It provides the establishment of a guarantee fund, which will be funded with payments from insurance companies and clients. It will undertake to cover clients to a certain limit if another life insurance company happens to be closed, something I do not think very likely. There is a problem with what have already occurred and it is very difficult to solve it because a lot of money is involved.

- It is known that Greek banks will have to undergo a stress test in September. Something similar is expected to happen with insurance companies, the so-called Solvency II. Could you tell us what it means and what will happen to companies that fail this test?

- You see, this is a big change in Europe as a whole and does not affect only Greece. The information we receive from all European countries is that the preparation for Solvency II is a very difficult and cumbersome process for the companies. In practice, Solvency II is a new mechanism that allows us to measure the risks we have taken and which are insurance, operational, investment, ie any risks, using different tools. And the size, quality and extent of these risks will determine the necessary capital. The assessment is, now we can speak only of assessments, the assessment is that this system, which is the same in Europe, will necessarily lead to significant increases in capital, ie more capital will be required, which can often be a serious amount. We can not say more because we do not know the figures. All companies are preparing for the steps to follow. We will have a clearer picture after the end of summer, when these stress tests provided for Solvency II will have been started. Nor it is decided whether the requirements of Solvency II will be those we know today or they will differentiate and become more flexible to a certain extent. There is a serious discussion in Europe currently between supervisors and the Union of Insurance Companies. All this will be considered, and ultimately this system will lead to something concrete. Companies that fail to adapt, because of inability to find new capital or to adjust to other things, not only to capital but also to the way of operation, the internal company organization, etc., will need to gradually prepare to find some kind of cooperation, consolidation, merger, according to me. I believe this will make and push the market to change and focus on a smaller number of companies that will be able to respond to the capital requirements of Solvency II.

- The National Insurance Company is present on the Bulgarian market. Can you compare   the development of the both markets in Bulgaria and Greece?

- The National Insurance Company has been on the Bulgarian market for several years now in a joint venture with the company ING. We are very pleased with this collaboration and with our presence on the Bulgarian market. We have already acquired significant market share. The activities we develop in Bulgaria are carried out entirely by UBB Bank. We follow the bankassurance model through UBB Bank. Both markets have different features. The Bulgarian market as a fresh market, not as mature as the Greek one, offers greater opportunities for development and that’s why we are there. We have an exclusive basis for development. The bank, which is implementing the bankassurance scheme, is the largest bank in Bulgaria. Therefore we have a very good set up to develop very dynamically on the Bulgarian market. We must realize the model we have. Things are different in Greece, the market is more mature. There are other systems and ways to collect insurances, there are various channels for selling insurances, the model is quite different. I am convinced that the development model we have chosen is very suitable for markets such as the Bulgarian, in which we strongly believe.

Tags: Minos MoisisPrivate insuranceNational Insurance CompanyEconomy
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