ING Asigurari de Viata doubles profit

ING Asigurari de Viata, Romania”s biggest life insurance company, last year derived profit before taxes worth almost 10 million euros (34.5 million RON), twice the value reached during the previous year, amid the 40% increase in euros in gross underwritten premiums, to 108 million euros.

“The profit is largely due to investments,” explained Bram Boon, chief executive officer of the company, who reckoned that profits in this area would go down this year in the wake of the interest rate drop on the monetary market.

ING Asigurari registered total revenues worth 142 million euros last year, up 40% from 2004, with the plus against gross underwritten premiums mostly due to investment revenues.

The company”s total expenditures rose by 36% in euros, to 133 million euros, of which 108 million euros are underwriting expenses, including the increase of mathematical reserves (compulsory reserves in life insurance) and claims settled.

Operating expenses, including policy issue expenses, expenses linked to customers” medical investigations or fees paid to consultants, jumped 32%, to 25 million euros.

Fees life insurance companies pay to consultants generally amount to about 30% of the annual premium in the first year, and to below 10% in the following years. The company currently has around 2,100 consultants and 67 offices.

ING Asigurari de Viata last year settled claims of approximately 25 million euros, of which the majority were damages, and the rest were indemnities for due policies and repurchase values for policies annulled ahead of schedule. The biggest claim the company has settled so far was registered in 1998, standing at 100,000 euros, for a person who had several policies and had barely started paying the premiums, said Cornelia Coman, investment manager with the company. Last year”s claims settled were not so high, Coman also explained.

The company last year issued 59,311 policies, with the value of the annual premium for newly issued policies averaging at around 1,100 RON, namely 300 euros.

Bram Boon states the retention ratio, the ratio between non-cancelled policies and underwritten ones, considerably improved last year, rising above 90%, as a result of better training of consultants.

This training not only helped consultants choose the right policies to offer to customers, but also helped customers, making them aware that they are facing major losses should they cancel their policies during the first years.

The market share of ING Asigurari last year dropped to 37% from 40% in 2004, given the market grew at a more solid pace than the company, by 57% in euros, to almost 300 million euros. For this year, Bram Boon projects ING Asigurari de Viata will see its gross underwritten premiums rise by 20%, while the entire market will see a 30% growth. sorin.pislaru@zf.ro