about us | newsletter | contact | archive | members area
Nicolae Ghibu, Certsign
Regulations will come gradually and will cover all areas»
  Features:      COUNTRY FOCUS   |   SECTOR ANALYSIS   |

Positive Signals on a difficult market

What does it take to set up an insurance company in Romania during a recession? Leslie Breer, president of the management board of Signal Iduna Asigurari de Viata, tells The Diplomat-Bucharest the company’s milestones, its results so far and where it will go from here. By Dana Verdes

September 2011 - From the Print Edition

German insurance company Signal Iduna came to Romania several years ago just before the crisis struck. “We began to go operational at the end of 2008, not exactly the best time. We were taken completely by surprise, just like everybody else, by the recession. We didn’t put full forces behind this opening, but immediately we backtracked into some investments that we had to do then, like setting up the sales forces in a larger way,” Leslie Breer, president of the management board of Signal Iduna Asigurari de Viata, tells The Diplomat-Bucharest of the beginning of the company’s operations on the local market.

First obstacles

“2009 was horrible for everybody. For us, it wasn’t that horrible, because we didn’t have much of a portfolio, but the business was quite slow and we said, ‘Let’s restart everything in 2010’,” says Breer.
Besides the slow start due to the effects of the worldwide crisis on Central and Eastern European states, the company had to deal with problems in establishing its operations in Romania.
“It took longer than we expected to set up the company and we don’t really know why. We had the capital money in very early for the start-up in February 2008 and money is usually the most important thing they look at. I would say that it was probably just a thorough check as Signal Iduna is not very well-known internationally, so it took time,” reflects Breer.

Investment commitment

His 20 years of experience in the insurance sector brings the necessary know-how to continue the local investment. “We have just finished the greenfield phase and we are now going through a regular administration period for the company. Currently half of our premiums are for health insurance. We did what we do best, meaning build up a very good health insurance company, as it is our major focus. We see Romania as a medium- to long-term market,” said Breer.
And the investment plans confirm the company’s long-term strategy. “We have a capital inflow of EUR 12 million which we have boosted in the meantime with an additional EUR 3 million, and we are planning our next capital inflow for the end of this year, of another EUR 3 million,” he added. In predicting the investment return, Breer is realistic. “In a few years, the investment will show. Insurance companies take a longer time to break-even but then again we are in the long-term business.”
According to him, the mother company had money to invest thanks to its prudence. “When everybody was investing in risky stocks, we played it safe. We do not experiment with people’s money.”
However, the first results did not take long to appear. “This year we managed to ink the largest health insurance contract with automotive supplier Takata Petri, a company with headquarters in Arad,” said Breer, adding that the insurer is currently negotiating another regular contract worth over EUR 1 million.

State’s contribution

Breer has found that since he arrived in Romania in 2007, nothing fundamental has happened in the health insurance sector. “You get at least 10 different opinions on different issues, as there is not a structured strategy in the health field,” says Breer.
He believes that the government’s timid measures are not enough to boost this sector. “The state has indeed given some incentives to take out private health insurance. One first good step was that companies would insure their employers for a sum from which EUR 250 per employee per year could be deducted. Another step was that, from this year, employer insurer didn’t have to go to the Health Insurance House (CAS). The deductibility of costs and other measures could be reflected in the medical services,” he added.
Another issue the Romanian authorities have to resolve – in his opinion – is the lack of specialist managers. “There are no medical economists with technical economic knowledge to understand what profit is about. It is very important to have medical people with an economic understanding to manage the hospitals. Also, there is a need to cut down the administration as it is much too bureaucratic,” he stressed.

The cost of health

The Signal Iduna official said that insurance costs are still low in Romania, compared to other European countries. “You can pay between EUR 35 and EUR 45 per month for a full insurance package in Romania, compared with the price of an equivalent package in Germany which starts at EUR 300 per month. The costs could go lower if there were a unique pricing catalogue for insured services. This doesn’t mean that it cannot be operated on the free market. The existence of such a catalogue could result in transparent costs in the relationship of the customer with his or her insurance company and the medical services provider, to better observe the costs of those services and act in the customer’s best interest,” says Breer.

Future plans

This year, the company targets subscribed premiums of EUR 11 million, five times more than last year’s results, as he considers the need for good medical services universal.
“We do not play all our cards on the agent network as in addition we have contracts with brokers and banks to sell our products. Our focus is to customize products and solutions according to individual consumers,” says Breer.
“For this year, we are also aiming to come up with lower priced products for a segment that has not been approached so far, low income consumers.”
Despite the rough start, the company has the chance to up its speed on a healthcare market growing at over 30 percent and above.

Who is Leslie Breer?

2010 – present
President of the management board of Signal Iduna Asigurari de Viata
2008 – 2010
Vice-president of the management board of Signal Iduna Asigurari de Viata
2007 – 2008
Leader of the set-up project of Signal Iduna in Romania
2001 – 2007
Member of the management board of Signal Iduna Polska Towarzystwo Ubezpieczen, Warsaw, Poland
1999
Administrator of Signal Iduna Insurance Services Poland, Warsaw, Poland
1989 – 1999
Coordinator of the following projects: set-up project for SIGNAL Hungary, M&A project, SIGNAL Universal Life, Dortmund Reinsurance Ireland, Dublin set-up project



COMMENTS
There are 0 comments:

 
ADD A COMMENT
 
Name
Email
Comment
Validation Code
   
 
 

0 Comments  |  11809 Views
Daily Info
OTP Bank Romania to double its IT team to support its digital development plans

OTP Bank Romania will double its IT team in order to support its digital development plans for next year.

Black Sea Oil & Gas signs the gas sales agreement with Engie for natural gas supply from the MGD project

Black Sea Oil & Gas together with its co-venture partners, Petro Ventures Resources and Gas Plus International, announced the signing of the gas sales agreement with Engie thr...

Bucharest Stock Exchange and other capital market representatives establish the Romanian Investor Relations Association

Companies listed on the Bucharest Stock Exchange (BVB), those with potential to become listed companies jointly with funds managers and Investor Relations (IR) professionals f...

GapMinder fund invests in FintechOS, a start-up that develops AI solutions for the financial services industry

FintechOS, a company specializing in accelerating the digital transformation of financial institutions, has attracted 600,000 Euro of funding from the GapMinder investment fun...

The Romanian labour market needs a well-thought approach, says FIC

The Foreign Investors Council (FIC) has signaled in the past 2-3 years that its members are anticipating increasing strains on the Romanian labour market because starting with...

 
 
   
advertising

advertising

advertising

advertising

advertising

advertising

More on Features
Cryptocurrency exchanges. The new outsourcing El Dorado?

Customer experience has become the new competitive battleground for crypto exchanges. Cryptocurrency exchanges seeking to maintain or gain an advantage in this highly comp...

Blockchain how it's made and what can we do with it

In the context of the "fourth industrial revolution" that everyone is talking about these days, The Diplomat - Bucharest analyses how an emerging technology like blockchain...

French investments at a glance: Interest still high

France, Romania's fourth largest foreign direct investor, has been around since the early 1990s, with flagship names the likes of Societe Generale or Groupe Renault taking ...

US calls for coherent, long-term strategy

As USA celebrates 4th of July, its eyes are wide open on the latest developments in Romania's ongoing struggle for the rule of law. Still, the country is one of the fastest...

Romanian energy industry: Challenges to Overcome

With a national strategy draft still to be approved, Romania faces many challenges, as the energy market is striving to find a way to attract major investments that are cri...

Romanian office market ripening, in both leasing and acquisition

From the investment standpoint, lower rates of return and increased liquidity lure the investors, Andreea Paun, Managing Partner, Griffes said in an interview for The Diplo...

ISS: External FM market volume will grow as more Western European FM companies open subsidiaries in Romania

In the last few years as well as in 2017, the Romanian FM market has been in the process of maturing, focusing more and more on quality, efficiency and added value, demandi...