Private pension campaigns to increase life insurance policies

Life insurance policies will increase as privately administered pension funds begin to be promoted in Romania, according to officials in the profile market. 

AIG Life, leader on the Romanian insurance market, is preparing to apply for the authorization of a company operating strictly in the second pillar pension system, or mandatory pension funds.

‘‘There is no doubt that the marketing campaign will affect the life insurance segment,’‘ Mihai Coca-Cozma, Chief Operating Officer at AIG Life, told Business Standard. Cozma believes the company’s life insurance policies with cumulative premiums can be included among optional pension products. 

‘‘The products are very similar.
While legislation regarding private pensions was still being debated in Parliament, the Private Administered Pension Association in Romania (APAPR) requested that voluntary private pensions (third pillar) include life insurance,’‘ analyst Constantin Nastase told Business Standard.  He added that the differences are minor between life insurance with capitalization or investment and optional pension products.

Optional pension fund operators on the Romanian market, such as ING Asigurari de Viata, Allianz-Tiriac, Aviva Asigurari de Viata, and BCR Asigurari de Viata, will be making use of promotion campaigns with more than 6,000 of their marketing agents, who have already been authorized by the Private Pension Surveillance Commission (CSSPP). ‘‘In the life insurance segment, growth will depend very much on circumstances and aggressive advertising. Once the campaign is finished, life insurance policies will drop and pension products will increase.  A balance is expected in a year or two,’‘ said Nastase.

By the end of the first quarter of 2007 life insurance gross premiums exceeded €99 million, a 22.3 percent increase compared to Q1 2006.  The life insurance ratio in GDP was 0.4 percent in 2006 on a market worth over €300 million, compared to the 5 percent European average.

According to an analysis made by Interamerican, privately administered voluntary pension funds will attract over a quarter of a million participants in the first year, with contributions reaching €27 million, and assets €26 million. There are over 3,500 pension funds in Europe, both voluntary and mandatory, whose assets exceed €6,000 billion, or a quarter of Europe’s GDP of €24,000 billion.

 

‘‘There is no doubt that the marketing campaign will affect the life insurance segment''  Mihai Coca-Cozma  Chief Operating Officer, AIG Life