Q: First of all, how was 2017 for Allianz-Tiriac Insurance, comparing to your expectations and what are your perspectives for 2018?
Virgil Soncutean: In the first 9 months of 2017, Allianz-Tiriac has registered positive results on all financial indicators, gross written premiums and profit and this proves that we are a resilient company in spite of the market volatility. The Life & Health segment exceeded our growth expectation while the P&C segment meets our expectation. To break down the P&C segment: CASCO will meet our aspirations, non-motor exceeding, while MTPL will close the year below our expectations.
Briefly, 2017 was a good year for Allianz-Tiriac, overall.
Regarding next year, I foresee a greater competition in providing better services to the consumers with less focus on price. This is a positive sign that the market begins to mature.
Q: Have you seen any structural changes in the Romanian insurance market in 2017? Do you expect such changes for 2018? Please detail.
VS: Yes, the exit from the capping period (on MTPL) is a good news with fair possibility to return to a free market environment. However according to the public market data, at 6 months, the MTPL is concentrated more than 70% around 3 players and this is a cause for concern.
Q: What are the latest news regarding the health insurance sector of Allianz-Tiriac Insurance? Is the storm over for car insurance products?
VS: From the health segment perspective, Allianz-Tiriac have exceeded 120.000 customers. Today, the health segment represents the 5th most important line of business in our portfolio. This year is the first year we will make a profit out of this line of business. On the long term a growth that will exceed 20% will be expected from Health sector.
Regarding the motor segment, there is a relative calm period on the market; I don’t know if this is the calm after or before the storm… but we will see what happens.
Q: How was the general economic growth of 5-6 percent translated into the insurance business?
VS: As the market results reveal at the first half of the year, the insurance market has registered a growth of 8%.
The PC segment is relatively flat, but the main driver of the overall results is the Life segment.
The drivers of the Life market growth are:
1: banc-assurance, as the loans market is growing
2: increased disposable income, wages have increased and this provides investment space in Life & Health insurance products
But, as you well know, the insurance market dynamics are not connected in real time with real economy development. In particular, the insurance industry follows the trends with an approximately 1 year delay of real economic growth so we will expect to see a greater impact in the insurance business next year.
Q: For the third year in a row, we have witnessed double digit annual wages growth. How much of this consistent growth was seen in new products and services of the insurance companies?
VS: As I have underlined previously, we see a positive impact in Life & Health segment. An important dilemma still remains in the customer’s mind: to use disposable income on short term needs or long term protection. And here we play an active role helping them take an educated decision.
Q: Probably the highest visible crisis in Romania NOW is related to the workforce scarcity, that adds to a high competition between companies. How does this manifest in the insurance sector?
VS: It is a war for talented people and this is probably happing not only in the insurance sector but in all other business sectors as well. Yes, is a great challenge to attract talented people. There are specific roles in our organization for which it is still difficult to find suitable candidates.
On the other hand, the digitization of the flows and processes are likely to release some amount of this pressure on the work force.
In given labor market context, retention of good people will become key – and for that it will become critical to set up a highly productive working environment, because good people are attracted by high productivity in order to better manage work-life balance.
Q: What’s your view on employment, trade and investment for Romania in 2018 and please give us your opinion about the evolution of your business sector in 2018, on different insurance segments.
VS: There are concerns regarding tax changes, the Pillar 2 (Pensions) and the transfer of contributions. Those concerns may delay or post pone important decisions of investors. But I really think that the Romanian market still remains an attractive one for investors.
Q: If you were to look back in the insurance market of almost 20 years ago, what would be your statement on ‘’Romania - then and now’’?
VS: Then: Traditional with high potential
Now: Traditional with high potential
In the next 20 years: A fundamental shift in products’ landscape, services and customer behavior.
Q: Do you have a final comment for our readers?
VS: The financial strength of a company provides the guaranty of the clients that the promise will be fulfilled. It is critical when you make a decision regarding your family, your health, your belongings and your business financial protection to prioritize the financial strength of the insurance company over the initial price.