Union of Insurers sets objectives for year 2009

    At the end of December 2008 the Union of Insurers of Moldova approved its plan of activities for 2009. According to President of this professional association of insurers Mihai Manoli, the document includes some 50 items. Among the set objectives are establishment of cooperation with the Parliament, the Government, National Commission of Financial Market and a number of professional associations and unions, such as Association of Banks or Union of Carriers.  At the same time, the Union of Insurers promotes building close ties with similar foreign associations. Mihai Manoli mentioned that special attention will be paid to developing the home insurance market. With this purpose the Union intends to develop and implement a complex of actions to ensure application of the Law on Insurance and also participate in development of the necessary regulatory framework for implementation of the Law. The Law on Insurance adopted in 2006 was a new impulse for market development; however, implementation of certain provisions of the Law requires additional guidelines and explanations, said President of the Union. Particularly, it refers to articles on the role and status of insurance mediators, insurance companies, requirements for heads of insurance branches etc. Importance will also be given to determining priorities and factors of market development. Manoli emphasized that presently about 60% of insurance market belongs to car insurance. However, certain aspects of this sphere also need to be improved and optimized. This also refers to the role of Green Card Motor Insurers’ Bureau recently established in the country by three Moldovan companies: Moldasig, ASITO and Moldova-Astrovaz. By estimate, Moldova’s insurance market values approximately 73 million euros, while in Romania it exceeds 2 billion euros and in Hungary – 3.5 billion euros. Experts state that total volume of insurance market in Moldova may be compared to a single local mobile operator’s turnover. If we analyze such indicator as insurance services to number of population ratio, then compared to Moldova this coefficient will be 8 times higher in Romania, 30 times higher in Hungary, and 160 times higher in Belgium. The volume of insurance in our GDP made up 1.27% in 2006 and 1.36% in 2007. This indicator is expected to reach 2.5% of GDP within the following three to five years. For reference, in European countries this indicator makes up 8-10%, while in the US – 14%. Representatives of the Union of Insurers consider that these figures manifest the local insurance market development potential that could improve due to promotion of services offered by insurance companies as well as launch of new mandatory insurance services. Manoli referred particularly to last year’s floods that have made the issue of mandatory property insurance very topical. In his opinion, these contributions could serve as basis for a special foundation to accumulate funds meant for indemnities in case of natural disasters. The issue of mandatory farm land insurance remains just as topical. According to Manoli, introduction of mandatory insurance into the agricultural sector is one of EU requirements for the community’s countries and countries willing to join the European Community. Romania will be implementing this type of insurance starting with 2010. Experts estimate that implementation of mandatory insurance in farming will allow creating new warranties and determining certain durability factors for farmers and farms as well as for all other market participants. The experience of implementing mandatory health and auto insurance in Moldova attests that we will certainly have positive results in this sphere in a year. One of the most important directions of activity in 2009 for the Union of Insurers will be the creation of a special data base that will contain information on insurance agents’ registers and other data that can later be used for settlement of certain disputes and for development and adoption of insurance fees. According to Mihai Manoli, the end of year 2008 concurred with adoption of auto insurance tariffs. President of the Union of Insurers specified that the approved tariffs received different appreciation from the part of the insurers’ community. In his opinion, the existence of an appropriate data base would allow for a more well-founded support of insurers’ positions in future. Moreover, once the data bases of insurance companies become unified it will be possible to develop a single mechanism of damage indemnification. Particularly, this mechanism would be welcome in payment of car damages, especially since insurers are often limited by clients, on the one hand, and by companies providing services following an insurance event, on the other hand. At present, the driver monitors efficient use of indemnities paid by insurance companies, while car repair shops try to sell their services and goods for the highest possible price.

    As President of the Union of Insurers Mihai Manoli mentioned, the plan of activities for 2009 would benefit the Union’s members, but not less would it benefit the entire market. In his opinion, implementation of this document will serve as a new stimulus for the insurance sector of the Republic of Moldova.

 

 

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