The new entity, which will use the name Omniasig and issue policies under this brand, will climb directly to no. 1 on the local insurance market, with a share of around 20%, considering that the two insurers posted gross written premiums of RON.1.2 billion (EUR0.27 billion) last year.
Austria’s VIG, which last summer made the surprising decision to consolidate its local general insurance businesses, was rather reluctant to provide information on the structure of the future company, with the only official information in this regard being the name of the new company.
The name of the person who will run the new company has not been made public, but according to market information, Mihai Tecau, the president of the directorate of BCR Asigurari, will most likely be appointed to the helm of the new entity. Tecau has been at the helm of BCR Asigurari for six year and was previously a manager within the Insurance Supervisory Commission (CSA).
The Austrian group also holds Asirom and BCR Asigurari de Viata on the Romanian market and has so far insisted on the multibrand strategy it applies on all its markets, but decided to consolidate its businesses on the markets where it is under pressure to raise efficiency.
VIG is hoping to cut its costs by EUR10 million following the merger, amid a merger of the sales systems, as well as through cuts in staff numbers and in the number of territorial units. According to market sources, the Austrian group plan to cut employee numbers by 10%, i.e. by around 250 people. The two companies budgeted a 7% decline in operating expenses and a 4% decline in revenues from premiums. The business of Omniasig and BCR Asigurari fell by around 15% last year.
The employees who leave without the parties’ consent receive four months’ compensatory pay and those who leave with the parties’ consent receive six compensatory payments, according to the same sources.
BCR cut its number of employees to 880 at the end of last year, from over 1,000 in 2010, according to VIG’s annual report. At Omniasig the number of employees has remained steady at around 1,500. (EUR1=RON4.3741)
(English version by Daniela Stoican)