“We want a business rise that allows us to make a profit. We are not relying on growth based on price aggressiveness,” the manager says.
In fact Allianz-Tiriac is among the insurers with tariffs above the market average.
A better control of claim settlements and a strict segmentation of clients are the main factors behind Allianz Tiriac improving its profit in the first nine months of the year.
“The profitability increase was due to control and to an improvement in the ratio of claims to premiums. On auto insurance, the ratio of claims to premiums fell by five percent to 77% at present,” explains the head of Allianz-Tiriac.
The insurer recorded a profit of 14 million lei (EUR3 million) in the January-September period of 2013, 40% more than in the similar period of last year. Few insurers managed to make profits in the past few years on a market that has constantly been loss-making.
Last year Allianz-Tiriac reported a loss of 43 million lei, according to data published by the Financial Supervisory Authority (ASF), but Vrignaud says the insurer made a profit both in 2012 and in 2013, according to international reporting standards (IFRS).
The head of Allianz-Tiriac admits the improvement in the claim settlement ratio is driven by Casco insurance (comprehensive car insurance).
Return to no. 2 on the insurance market
Allianz-Tiriac climbed to no. 2 in the general ranking of local insurers (life insurance and general insurance) with aggregate premiums written of 678 million lei (EUR154 million). The company’s business is mainly focused on general insurance, with only 10% of premiums written being generated by sale of life policies.
Auto policies are dominant on the general insurance market. Premiums written for auto insurance (comprehensive Casco and mandatory RCA) totaled RON427 million between January and September, i.e. 64% of the total general insurance market. Casco policies totaled RON269 million, i.e. 40% of the premiums written on the auto insurance market, with Allianz-Tiriac being leader of this segment with a 20% market share.
On the RCA segment of mandatory auto insurance, Allianz-Tiriac decided to narrow down its business, cut tariffs and make a more complex client segmentation.
“Tariffs for RCA policies went up by around 15% at market level, our increase was significantly higher, of around 30% against the similar period of last year. We also did a more rigorous segmentation of our client portfolio and the effects are now apparent.”
3,000 new clients after signing the agreement with PAID
The head of Allianz-Tiriac says the company’s partnership it signed in August with the Pool for Insurance against Natural Disasters (PAID) gave an impetus to sales of home insurance. In the past two months the number of clients climbed by 3,000.
About the life insurance market, Vrignaud says it remains difficult because the volume of premiums written is on the decline, but that the number of clients is stabilizing.
“On the life insurance market what lacks is long-term vision and this is seen in the large volume of redeemed policies.” The insurer wrote premiums of RON70 million on the life insurance segment in the first nine months of 2013, up by around 3% against last year, and reached a 6% market share. The market fell by 4.5% to RON1.23 billion (EUR280 million) in the first nine months.
(English version by Daniela Stoican)