Ivan Vodicka: Dumping harms insurance clients
It is currently facing decline interest in unit-linked life insurance and thinking on how to enhance the market share of mandatory liability. At the same time, he dumped in the minds of certain segments of insurance. “Detrimental not only to the market, but in the long term poses a threat to the customers,” he says.
The position of Director of the Czech insurance companies began last August just before the biggest declines in financial markets. In addition to the management of Czech insurance čtyřiačtyřicetiletý Ivan Vodicka is responsible for all activities of Generali PPF Holding in the Czech Republic.
Czech insurance year profit declined from 6.7 to 5.873 billion crowns. How do you assess this outcome?
It is a significantly high profits, which we have achieved over the financial crisis and slowing speeches to the world economy. Reflected in the consistent and cost control. Total premiums last year we increased by 600 million and reached 40.4 billion crowns.
What happens next?
Economic outlook, we can not comment on the firm because shareholders who are trading on international exchanges.
What manifestations of crisis in the insurance see the most?
The financial terms of course, the crisis of investment income, but we see that changes the income from insurance premiums. Since last year, seen clients move away from investment life insurance policies. This product now competing with time deposits and similar products in banks. People are also more vyzvedávají their money from life insurance policies, often even before they start earning investments. Non-life insurance fell mainly because of the large decline in sales of new cars. The automotive market is a market-linked insurance accidental highly. Partial change in the trend has change the law to allow businesses to deduct the VAT even in cars. From a financial stability perspective, however, even these fluctuations does not significantly Czech insurance. We have established long term reserves to safely cover all obligations.
What do they do this year’s floods to the prices of insurance policies?
This year’s floods in some places may change the flood map of the Czech Republic. So there will be slight adjustments in prices. But certainly this is so that we mnuli hand in the style of “the flood, well, we can rise.” With insurance prices are also not become nothing.
After floods in 2002 but prices increased.
Yes, about 10 to 15 percent. It was that insurance losses in the tens of billions of crowns and not only in the Czech Republic. Reinsurance, which assessed the whole Central European region, has led to change rates, which insurance companies to price premiums must reflect. It is, therefore, as the damage effect and abroad. So far, we think that the scope of this event makes the area too, we felt it important. But one never knows.
What are the latest estimates of damage, which will have Czech insurance company pay?
Estimates of the changes each moment. Now we expect the overall seven thousand damage. Insurance payments could exceed 300 million crowns. The idea for the floods in 2002, the Czech insurance company pay around nine billion crowns from 53 thousand damage. The floods have so far a wide range of property damage as seven years ago. The number of victims is not due entirely nestandardnímu during calamities unfortunately high.
It is said that prices of insurance risks are now too low. Is that true?
This area I did not say. It depends on the insurance segment. Rather, I see a problem that many people have podpojištěný property. You insure your household must be 15 years ago a hundred thousand crowns. When the house completely leached river, get hundred and this is a problem, because the assets for the period increased to three times and often more. We have a little bit concerned, because people tend to forget that it is their choice, on how to insure. They then feel that we have paid little. Moreover, now finds that the number was not affected by flood insurance. Some home owners who live far from major rivers were convinced that it is big water can reach. However, sudden torrential rain washed the village standing on a hill or in small streams.
But back to those low prices. Which segments are affected?
Many cost-intensive as insurance, car fleets. Competition in this field is now very hard. Insurance companies compete for large contracts, and cheaper, how far it goes.
Competition sharpens?
Some insurance companies, especially smaller, coming from abroad, set up dumped on the market to hold. Normally, competition-driven market, but recently přitvrzuje and sometimes is beyond economic viability. This is detrimental to the market and long term as well as customers.
What specifically is damaged?
Dumping prices for insurance in principle means that the premium paid does not allow the insurance company to cover its costs. People who insure it, find themselves in danger, that an undertaking situ.
