Bulgaria-based Euroins Insurance Group (EIG) is one of the largest independent groups operating on the insurance markets in Central, East and Southeast Europe. EIG has more than 7% market share in the region, over 2 million clients, 1,600 employees and annual revenues of 300 million euro. It is focused on providing a full range of products in the areas of general, health and life insurance. EIG operates in 7 European countries, with subsidiaries in 4 of them – Bulgaria, Romania, Macedonia and Ukraine. It is a subsidiary of Eurohold Bulgaria – a leading company, listed in Sofia and Warsaw, which operates across CEE and SEE, focused on non-banking financial services and asset management.
EIG operates on several markets in Southeast Europe (SEE). What is the development potential of those markets? What are the market opportunities and challenges faced by EIG on the SEE insurance markets?
We see very good opportunities for growth. The SEE countries are still with low penetration on almost all insurance segments. The demand for our services has been growing, driven by the pick-up in the regional economy. EIG registered a double-digit growth in premium income for 2015 and is excellently positioned to take advantage of the longterm growth opportunities in a region with over 100 million people. Certainly, the SEE insurance markets are at their early stage of development and are still extremely pricedriven. The dominating lines of business in the region are the motor segments and especially the obligatory motor third party liability insurance (MTPL). This brings some risks to the outlook of the market. Nevertheless, we expect customers to become more demanding on their choice of insurers and predict sustainable growth in Euroins’ premium income in the coming years.
EIG has been expanding aggressively in SEE over the past few years. What are the results of this expansion strategy so far and how do you plan to develop it in the near to medium term?
Our main goal is to make Euroins the leading independent insurance player in its core markets in SEE. In the last three years, the company purchased the business of Germany-based TALANX Group in Bulgaria and Ukraine (HDI Zastrahovane and HDI Strakhuvannya), the businesses of QBE in Bulgaria and Romania and Interamerican in Bulgaria. EIG is currently reaping the benefits of these acquisitions through portfolio diversification and shared best practices. We cover now all insurance segments – general, life and health. Our market share in Romania is almost 15%, in Bulgaria – about 7%, and in Macedonia – 9%. We are looking to make more acquisitions, which are part our way of live. Along with strengthening the group’s position on the insurance market in SEE via acquisitions, we have also been growing at a fast pace organically.
What are the competitive advantages of EIG’s strategy for expansion in SEE?
While large financial groups have been withdrawing from SEE for the last couple of years, Euroins has been going against the stream and has been broadening its network. We are an example for an expanding business that grows much more rapidly than the average GDP growth of the region and this growth is being derived from immense managerial and organizational efforts. The expansion helped us diversify and improve the quality of our insurance portfolio in order to increase the share of the non-motor segments and achieve a more precise and detailed segmentation. Last but not least, the company is headquartered in Sofia, Bulgaria. With its stable economy, transparent administrative procedures, business-friendly environment, low cost for doing business, low tax base and talented employees, Bulgaria is a perfect hub for a regional expansion.
How does EIG adapt to the Solvency II rules? What is the impact of the new regulations on EIG’s business model?
The complex Solvency II system was successfully embedded in EIG. We took steps to comply with the new rules in advance in 2014-2015 when we raised around 120 million euro. We used the funds to support EIG’s subsidiaries and finance the regional expansion of the group. The present capital level of EIG is adequately above the risk level assumed by the group and thereby provides for strong financial and solvency positions of our business.