Last year's consumer lending boom helped those insurers tightly connected with the banks to rake in tens of millions of dollars. Asiban, controlled by four banks, and BCR Asigurari, founded by the Romanian Commercial Bank, are among the winners: both companies saw their businesses triple in 2003 and came to control almost 10% of the insurance market.
Until last year, it had probably never dreamt of soaring so high: it was among the market's top ten companies, but had no top three aspirations. However, its tight connection with banks proved to be a winning card in 2003. With a business worth $44m last year (triple the 2002 figures), Asiban was propelled among the biggest players, turning the general insurance market ranking upside down.
This evolution came as a surprise, even to the company's managers who had to hold on tight when the frenzy began: the sales of policies went through the roof in early 2003, due to the lending boom.
"When we drafted the budget, we forecast a 53% turnover increase for 2003. Could anyone have estimated the 2003 lending boom back in October-November 2002?" says Mugurel Ceraceanu, the company's general manager.
Consumer lending in ROL (short-term) doubled between November 2002-November 2003, according to National Bank of Romania data, up to $272 million. Medium- and long-term ROL loans went even higher: from $240 million to $1.15 billion in November 2003. Foreign-currency loans to natural persons also surged at a dizzying pace: from $153 million to $600m.
In fact, Asiban entered the market in 1997 to deal with the insurance contracts of the clients of the company's four founding banks: BCR (Romanian Commercial Bank), BRD (Romanian Development Bank)-SocGen, CEC (Savings Bank) and Banca Transilvania.
The company has done its best to become increasingly independent in the meantime, especially since BCR established its own insurer (BCR Asigurari, also playing a big card now). BRD, under the influence of its new owners, is also working with other firms, whereas Banca Tansilvania has created its own insurance firm - SAR Transilvania.
Consequently, the company's value may have doubled or tripled last year. Market rumours have repeatedly pointed to the possible sale of the insurer, whereas AIG Romania (branch of the world's biggest financial services group) has said it is closely monitoring Asiban's performances.
BCR Asigurari has even managed to outpace Asiban. Established in 2001, the company fully benefited from the lending growth, but also from the parent bank's renown (BCR accounts for half of the Romanian banking market). The company posted $22m in underwritten premiums last year, up from $6 million in 2002.
"We are certainly witnessing the influence of the lending boom, but it must be said that car insurance accounts for 50% of our portfolio. This growth pace is normal, because we are at the beginning," said Romeo Jantea, the company's general manager.
The insurance market went up 40% in ROL and US dollars last year, up to some $720 million, mainly due to the consumer lending boom.
sorin.pislaru@zf.ro
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