Tsvetanka Krumova analyzes the Bulgarian insurance market before Bulgariaon Air TV
The competition will increase and the industry will continue to grow at a steady pace
The Executive Director of Armeec Joint-stock Insurance Company, Tsvetanka Krumova commented in the weekly broadcast Invest/Or on Bulgaria ON AIR TV on the status and prospects of the Bulgarian insurance market.
Ms. Krumova summarized the market position of the insurance companies in the first five months of 2015. According to the data of Financial Supervision Commission as to May 2015, the total insurance market grew by 6.4% on annual base, indicating the beginning of a bullish period for the development of market. In life insurance, which is not very well developed in Bulgaria, the increase was with 20% compared to May 2014, but we are talking here about small numbers, summarized Krumova.
The expectations according to her are the stable growth to continue until the end of the year as processes in the economy that are currently positive have direct impact on the insurance market. The good thing we see from the data as at May, is the growth in car insurance, and the bad thing, or not so good news is the slow growth in property insurance, said Krumova. According to her, the increase in car insurance is due to the news for increase in the sales of new cars in the country since the beginning of the year and because of the movements in bank lending. In property insurance the increase is only by 0.23% on annual base.
Krumova pointed out that that the competition on the market is growing, and some insurance companies that previously only specialized in health insurance after their re-registration in insurers in 2014 have begun to specialize in new market niches.
There are still cases pending for payment of compensations after the adverse events during the last year, including the floods and hailstorms, she revealed, adding that concerning particularly the vehicle damages it proved that the car workshops did not have sufficient capacity to repair all cars on time.
Tsvetanka Krumova said that currently Armeec Joint-stock Insurance Company does not plan any transactions for mergers or acquisitions. Before the crisis, there was a very strong process of mergers and acquisitions. This process subsided during the crisis, but now we see it restarting, but quite on another level, said Krumova. According to her, the reasons that drive these processes are three – complying with regulations, reducing costs and because of the availability of technological advantage.
According to the Executive Director of Armeec Joint-stock Insurance Company the draft of the new Insurance Code, which was published for public consultation on the website of the Ministry of Finance is quite capacious. According to Krumova, a big part of it necessarily had to be made, and this is precisely the part concerning the introduction of Solvency II.
She said the insurers are aware that the European legislation in this area must be transposed to the local legislation, but as soon as possible.
Krumova believes that amendments in the Insurance Code concerning the insurance contract require a little more time because in the draft there are many new terms, new legal institutions, and it is better the wordings to be subjected to a thorough discussion and to study the European and international practices. But the most important thing, according to Ms. Krumova, is to assess the impact that the new regulations will have on our market.
The final deadlines for transposition of the Solvency II Directive expired this year, but she added that a number of Member States of the European Union, and outside it, have introduced the Directive earlier. However, our backlog is not so scary as the texts of the Directive and the technical specifications are known and we read them, said Krumova.
Each company that is preparing for the introduction of Solvency II Directive has made the necessary, Krumova said, adding that the amendments mainly concern the information systems of the insurers, since the directive sets out some very high demands on the quality of information.
The whole interview with the Executive Director of Armeec Joint-stock Insurance Company, Tsvetanka Krumova you can find here.