The losses insurers are posting will become unsustainable as shareholders will no longer be able to pump tens of million euros to cover them and small firms are likely to experience the biggest problems, states Generali's new CEO, Marie Kovarova.
The financial crisis will put pressure on insurance companies to make a profit because shareholders will no longer be able to pump in money as in the past, she says. During the last two years, the insurance market has registered net losses worth 76m euros, and companies' shareholders have brought tens of million euros from home for capital increased, without exactly knowing when they can recoup these sums.
"I believe the insurance market will step into the black by 2010. Had it not been for this financial crisis, it would have probably taken more for this to happen," maintains Kovarova. Kovarova, 36, is Czech-born. Before coming to Romania, she was chief operating officer of with Ceska Pojistovna, the biggest company part of Generali PPF group, and of Generali in the Czech Republic. She has replaced Tudor Moldovan, who now coordinates Generali PPF's development projects in CEE. The new CEO plans to keep the company profitable and expand its operations in retail and countrywide, as its turnover is now largely generated by Bucharest-Ilfov area and corporate deals.
"We want to further focus on profit, because this is the only way to survive on the market. Also, we want a more balanced portfolio, meaning higher geographical diversification and a stronger focus on retail. For this, we must enhance our territorial visibility and strengthen our presence in the media, because this is how you get retail customers," Kovarova says. In late September, Generali's gross underwritten premiums hit 318.9m RON (over 87.6m euros), with around 73% of these coming from Bucharest.
Kovarova says Romania is a strategic loca
