Euroins Insurance Group AD (EIG), owned by Eurohold Bulgaria, is one of the largest independent insurance groups in Southeastern Europe (SEE). ЕIG operates in 11 countries, has more than 2.5 million clients and over 3000 employees. www.eig.bg
Could you give us more details about EIG’s financial performance and what is the impact of the company’s M&A operations?
Seventeen years ago Euroins was a relatively small insurer with offices in several Bulgarian cities. It had a capital of 5 million levs, assets of 15 million levs and gross premium income of around 23 million levs. Today, EIG is a large insurance group with great potential for growth which operates in eleven countries in SEE and has leading positions in two of them – Romania and Bulgaria. EIG’s capital reaches nearly 400 million levs and its assets surpass 1.1 billion levs. The gross premium income approaches 1 billion levs. We are also increasing our profitability. The group’s pre-tax profit for the last year nearly doubled. The recent years were dynamic and full of challenges for us, but we managed to achieve a rare growth for a company based in Sofia.
The newly acquired companies in Eastern Europe contribute significantly to the growth of EIG. The efforts and experience of our management teams were crucial to the acquisition process. Our ability to identify potential deals and extract maximum value from the acquisitions was very useful in integrating new companies into the holding’s structure and transferring the best practices from the other divisions of the holding.
Our regional focus also played a key role for the group’s growth. While many of our competitors sought to globalize their business and wasted their efforts and time around the world, we focused on a narrower, regional approach and targeted markets that were very close to our business culture. This turned out to be farsighted. We continue to develop and expand our business steadily in SEE and in the post-Soviet states.
How did the coronavirus pandemic affect EIG’s financial indicators so far this year and what are your expectations going forward?
We have been performing well taking into account the COVID-19 effect. Most of our divisions have been reporting small declines so far. Only one of our two companies in Ukraine, that is specialized in travel insurance, has posted a bigger decline. The reason was that the COVID-19 pandemic had completely blocked the tourism sector for some period of time. Now the market is slowly recovering. The coronavirus crisis has seriously affected our clients among the tour operators in Bulgaria. However, we have continued to support them. We are the only one insurance company in Bulgaria offering a new product that is aimed to help tourists with vouchers. Our insurance product guarantees the vouchers for postponed trips and brings additional security for everyone who is affected. In Romania, we offer Travel assistance insurance that is very affordable for households. It covers the COVID-19 risk for all family members in case they travel on holiday to neighboring Bulgaria too. In this way we are also encouraging tourism exchange in the region.
The coronavirus pandemic has served as the first real test of companies’ digitalisation efforts. How well did EIG handle the crisis and have you identified priority areas in need of improvement?
The quarantine measures in the context of COVID-19 accelerated the digitalisation of the insurance sector in general, including our group. Let me give you Romania as an example. We worked for 6 months on our project for digitalisation of the process of filing motor damages’ claims and completed 75% of it before imposing the restrictive measures in the country. After the start of the quarantine we completed the remaining 25% of the project just in 72 hours in order to be able to serve our customers online.
The crisis forced us to increase fivefold the group’s budget for digital solutions. We are currently implementing a project for digitalisation of 10 popular insurance products in three countries, including Bulgaria. We expect digital sales to increase in future.
Over the years, our insurance group has built financial stability by maintaining a solid investment portfolio, high liquidity and high capital buffer. The coverage of EIG’s Solvency Capital Requirement (SCR) is above the regulatory requirements. It gives us stability and predictability in the current recession.
Will EIG continue to pursue acquisitions regardless of the uncertainty caused by the pandemic, or will you focus on organic growth?
The main goal at the moment is to strengthen our position in every country in which we operate. Our strategic goal remains to make EIG a strong egional group. Apart from Eastern Europe and the post-Soviet states, we are also interested in acquisitions in the Western Balkans.