VIG president Peter Hagen told a press conference Tuesday the group sees the Romanian economy recovering but cannot say when this will reflect on the insurance market.
VIG plans to be more disciplined in its underwriting activity and practice premium prices that match risks, said Hagen, adding the company will not lower its prices, a practice that has brought losses on the car insurance segment, but will use fair prices even though that may lead to a lowering in the volume of underwritten premiums.
He avoided giving an estimate for VIG’s underwritings in Romania this year.
The Austrian insurance group entered the Romanian market in 2001 and currently owns Omniasig, Asirom and BCR Asigurari Viata.
VIG Romania underwrote premiums of EUR361.8 million in 2013, down 11.5% on the year. Prepared to 2008, VIG’s underwritings in Romania declined 29.3%, from EUR515 million.
According to Hagen, VIG’s strategy in Romania will be to consolidate its profitable business lines (SMEs, non-auto insurance and unit-linked life insurance), select its clients depending on risk on less profitable business lines, halt underwritings for operating leasing clients and lower administrative expenses.
“In 2008, VIG had 5,000 employees in Romania. The three companies currently have around 2,500 employees. We do not have layoff plans this year. The question for VIG is how to survive fierce competition in Romania,” said Hagen.
Asked whether the group is looking to acquire more insurance companies in Romania, such as Astra or Carpatica Asigurari, the head of VIG said the group has no such plans. VIG also has no plans to merge its Romanian operations or sell any of them.
VIG is the leading insurer in Romania with a market share of 19.4%.