EIG continues to expand its market share across CEE/SEE. What opportunities do you see in these markets?
EIG has followed a firm strategic path towards regional expansion which was initially and predominantly targeted at the Balkan countries. However, in the past years we saw our competencies and capacity grow, and that allowed us to look beyond – at Central Europe, the CIS countries and the Mediterranean. We learned to be successful in turbulent times and in a changing, evolving and sometimes insecure environment. More than 80% of the markets where we operate or where we plan to launch operations are characterized by low insurance density and penetration, much below the EU average. Bulgaria, Romania and Ukraine have a lot of catching up to do in order to reach even Poland and the Czech Republic where the insurance density and penetration is several times lower than in Austria, Germany or France. Naturally, we are dependent on the economic environment on the markets in which we do business and also on the level of the financial education of the population and the businesses. Economic growth has been around in the past few years and it had a positive influence on the overall levels of insurance premiums in the Balkans and CEE, but financial knowledge and digitalization have lagged behind. And it is in these areas precisely that we see potential for growth, through active promotion of the benefits of insurance, through the introduction of new, tailored and attractive products and through improvement of the reputation of the insurance companies.
What are your key competitive advantages?
We have been around for more than a decade and we know how to do business in SEE. I believe that we know our customers, but we are also trying to find unexplored niches and areas. We are a growing group of companies which requires a lot of corporate governance and organizational efforts. However, we have always tried to be an agile organization where decisions are taken rapidly and in interaction with our partners and customers. Certainly, like all insurers, we are risk adverse and compliant with the Solvency II directive that requires us to measure carefully the risks we are taking, both when we sell and invest, but we are not burdened with the rigidity of some other multinational insurers and I believe that our customers can see this. And what is most important, we try to constantly evolve and improve our services and the way we handle both our organization and our partners and clients.
How do you access EIG’s performance in the last year and what goals has the group set for the near future?
Our performance was remarkable. We registered record- high premiums exceeding 330 million euro in total and record-high net profits. At the same time, we and our teams are not blinded by that success. We know that this growth can be easily replaced by quicksand if we fail to be realistic, innovative and compliant, and all our efforts are concentrated in that direction. We want to continue our growth, both organically and through acquisitions, however, this should not be done at the expense of our bottom -line figures or a dramatic shift of our risk profile.
How is the insurance industry responding to the growing role of FinTech/InsurTech and how exactly will new technologies change the sector?
All incumbents and traditional insurers are exploring more and more the technology perspective and are increasing their R&D efforts. Digital transformation is here to stay and will reshape the way insurance works – Artificial Intelligence (AI), Internet of Things (IoT), blockchain, big data…. At the end of the day, technology is reflected in the way cars are built and being driven, in the way homes are built, protected, equipped – there should be an inevitable change in the way we insure things, especially that they begin to function or respond differently. The generations to come, the digital natives, already have different approaches to the financial services such as banking and insurance. This change will not happen overnight, though. Eighty percent of the consumers in the region, are not prepared for the digital transformation, and all insurers will not suddenly turn into tech companies (this will inevitably happen, but at a gradual pace). Insurance should remain our core competency, and we should leave the tech work to the tech people. I wouldn’t mind, of course, to see the tech company valuations being applied also to the insurance businesses, but unfortunately, we are still quite far from that. One thing is certain – we have to be aligned with the new trends, we have to learn from the InsurTech examples and leverage on their successes or failures, but we have to embrace the new realities without shifting our focus too far from the things which we know how to do best.