Q: Allianz-Tiriac ended 2013 with positive results compared to the previous year. Which were the main drivers for your activity?
Remi Vrignaud: Indeed, Allianz-Tiriac ended 2013 with positive results – with an improved level of the operational profit and a higher value of the gross written premiums as compared to the previous years. The increase of the gross written premiums came mainly from the non-life insurance segment, but the most positive result refers to the operational profit of 28 million lei (IFRS), a value three times higher than the one recorded in 2012. This is really a consequence of the improvement of the technical results on the motor lines, which was determined mainly by the prudential underwriting process which allows us to have a sustainable business development, and also by an improvement of our operational efficiency.
Allianz-Tiriac also recorded excellent results in respect to the financial safety indicators, which underlines the fact that we remain a solid company aiming for the ‘healthy’ development of its business. Moreover, we were happy to see we remained the loyalty leader on the insurance market, which really represents an acknowledgement of the quality of our products and services that we have been offering to our clients for 20 years.
Q: The insurance industry still faces a number of unsolved challenges. Which are, in your opinion, the biggest ones and which are the solutions?
Remi Vrignaud: Of course, the general economic reality influences the insurance industry as well. First of all, I have to mention a ‘paradox’ of the Romanian insurance market that we can still see: the high protection need and the (still) low penetration degree of the insurance, especially of the life insurance. If we take a look at the amounts allocated by a Romanian for insurance we will see these are lower as compared to other countries. Even if the purchasing power is lower as compared to other countries, the wage percentage allocated for insurance products is still extremely low.
This aspect is linked to one of the challenges the insurance companies have to face - the clients’ perception towards insurance products and their understanding regarding the need for insurance products. We have to understand, the insurance policies are not luxury products - they are made for people like you and me, for situations when one needs help. We only have to buy the coverage suitable to our own needs. And we really see the added value of an insurance policy when claims occur. Another challenge we have to face? The aggregated loss posted by the motor lines affecting the entire market which is still dominated by motor insurance. Although theoretically the aggregated loss in the market is considered a problem, there are still hesitations to act towards efficiency - and by that I am referring to the price level, especially on certain segments such as motor lines (MTPL) which is still not determined mainly on actuarial basis. In 2013 we could see a slight adjustment of MTPL tariffs, but this is an attempt that still has to be maintained on the medium term. Which is the possible solution? A more prudential underwriting process and adequate tariffs which allow a profitable growth and financial stability in the same time and reflect the service level towards the customers – one of the most important rules an insurer has to keep in mind on the long run. This is a sign of maturity for the market which has been recording aggregated loss for years, determined by the motor lines.
Q: How would you define the accomplishments and risks that you faced in 2013?
Remi Vrignaud: The most important good thing that happened this year is that Allianz-Tiriac remained the loyalty leader on the insurance market. This is an accomplishment which says a lot about the quality of our products and services and confirms that our efforts are heading in the right direction. We kept a fair price level and offered quality services – for 20 years this was a winning strategy demonstrating that we can grow without sacrificing the profitability or the financial stability of the company. The second good thing refers to household insurance. Following the clarification of the legal framework, starting with 2013, we are able to offer our clients complete solutions for their property-mandatory and facultative household insurance. We also remained leader on the MOD (Casco) segment, a positive sign (linked to what we said before about our loyalty leader position) that confirms once again, if needed, that we remain a trustworthy partner for our clients who choose quality products at fair prices.
There were challenges, as well. One of the greatest challenges is the market itself, a soft market, dominated by the motor lines which has been generating losses for many years and is really a test of maturity for the market and all its players. Of course the challenge for every company is higher in a soft market, especially considering the fact that we have always promoted the fair price for quality products. This is also about educating the market, the potential customers in order for them to be able to make the right choice for themselves.
Q: What about 2014?
Remi Vrignaud: Of course, there is always room for improvement regarding the business framework on the insurance market. What we expect from 2014 is what we have always expected: predictability, especially concerning the legislative framework. One of the important market accomplishments in 2013 was represented by the clarification of the legislative framework for the mandatory household insurance. It represented a very important step and we expect that the present legal framework be maintained and consolidated in order for the companies to be able to define coherent development strategies on the long term. This is what we expect in general from the legal framework (not only referring to the mandatory HH insurance) - predictability. It is one of the factors which can successfully contribute to a positive development of the insurance market, creating a stable frame for long term strategies.
Q: What are the main goals that you have set for this year?
Remi Vrignaud: What we aim for this year is to continue to maintain our prudential approach on all the business lines. Thus, we can maintain the financial stability and sustainability of our company and our business and we are able to remain a trustworthy partner for our clients and partners. This s a business principle we have been applying since the establishment of the company, for 20 years now, and on the long run it proved to be a very healthy one, ensuring the company’s sustainable performances through the years and one of our goals is to continue to carry out our activity based on it. Of course, one of our main goals is to grow, to develop our activity, but not at the cost of financial stability and profitability. Of course, our growth goal is certainly linked to an improvement of our services. We permanently strived to come up with innovative products and services – such as the on-line claims notification in 2013. There cannot be growth without a continuous improvement of the services (another priority for Allianz-Tiriac this year).
Q: What estimates do you have for your company in 2014?
Remi Vrignaud: What we aim for 2014 is to reach over 950 million lei in terms of premium income. Considering the high volatility degree of the market, this goal is conditioned by sustainability. Of course, we also aim to improve our profitability through an increase of our efficiency. We have made some important steps in this direction in 2013 and we will continue to focus our efforts in this area in 2014, as well.
Q: How did you (and do you) ‘fight’ the economic crisis and its consequences?
Remi Vrignaud: We have done many things differently in the past few years, but the most important thing is that we have always respected our ‘healthy’ business principles – to maintain the financial ‘soundness’ and stability of the company.
We do not want to grow if this means we have to sacrifice the financial stability. And we should not forget that this approach combined with our concern and focus on offering the best possible products and services helped our company through the economic crisis and will help it develop in the future.
Q: What is the most important element that makes you stand out among your business competitors?
Remi Vrignaud: There are some elements that have made Allianz-Tiriac stand out on the market in all the 20 years of activity. First of all, we have been permanently striving to offer flexible, performant products and innovative services that meet our clients’ needs. To give you just a few examples: Allianz-Tiriac was the first company to implement in 2006 a tendering system for MOD (Casco) which generates individualized premiums rigorously correlated with the client’s risk profile, with his claims history, with the technical specifications of the vehicle and the customer loyalty towards Allianz- Tiriac. This was a first on the market and we are proud to be the ones that implemented it for the first time and presents more advantages and accuracy for the client because it correlates the premium level with the individual risk profile and makes our offer accessible to a larger client base. This (together with the high quality services) is also one of the elements which contributed to maintaining Allianz- Tiriac in the leading position on the MOD segment. Last year, we were also the ones to implement a unique solution for the on-line claims notification (for household, MOD and MTPL claims) which allows the client to schedule the claims evaluation (for MOD and MTPL claims) in accordance with his own schedule, thus reducing the time the clients spends in the claims evaluation units. This was an innovative solution, highly appreciated by our clients since its implementation and used by an increasing number of customers for claims notification.
Q: On a more general note, how do you see the prospects of the Romanian economy in 2014?
Remi Vrignaud: One of the most important weaknesses of the economic environment might be considered the lack of predictability and stability, which are key ingredients needed in order for the companies on the market to be able to develop consistent medium and long term business strategies. Another key element is the long term view, which is closely linked to the predictability and stability of every market.
It is also true that the latest statistical data show a resumption of the economic growth cycle which certainly represents a positive sign. There are certain indicators supporting this trend and their confirmation would represent a positive signal for the insurance market as well. It is important for this growth trend to reach the mass consumption/ retail consumption.