Is there anything left of Romania for PZU?
"If there was anything left for sale on the Romanian insurance market we would be very interested. But everything that was for sale has already been bought, and the groups that own these companies do not seem to be interested in giving up the new acquisitions, in the next period", Andrzej KLESYK, CEO of PZU Group, said, exclusively for XPRIMM Newsletters, at the "VIIIth Yalta Forum of Insurance Market Participants", organized by the Insurers League of Ukraine.
"However, we remain open to the possibility of doing an acquisition on the Romanian market", the official of the Polish group completed.
What will PZU direct towards?
"Currently, the main objective of PZU is expanding and consolidating the business in countries from Central and Eastern Europe. For that, we have a budget of 3-4 billion EUR, but it is an amount we intend to use only when we are absolutely convinced of the effectiveness of our investment..."
According to the PZU representative, the countries targeted for investment are those that have an annual growth of 30-40% and not those in which there are relatively developed markets and have reduced the pace of growth below 10 percent.
One of the countries that meet these criteria is Ukraine. In this respect, the PZU CEO present at the Yalta Forum underlined the fact that the Polish group will focus its attention on this market in the next period of time.
"We see Ukraine as an extraordinary opportunity and we (PZU) can contribute significantly to the development of this industry. Our company is of Polish origin, and we believe this is an advantage: we understand the market in Ukraine better than our competitors", the PZU representative stressed out.
"There are many similarities between the market in Poland and the Ukrainian one. We estimate that the evolution of the latter will be similar to the evolution already seen by the profile market in Poland", Andrzej KLESYK completed.
Still, the PZU manager noticed two major differences between the profile markets of the two states: a low concentration of the volume of gross written premiums in Ukraine (the first 10 players on the insurance market have "only" 27 percent, compared to the 46% of total underwritings held by PZU in Poland), but also a low efficiency of the Ukrainian industry, in terms of costs.
The PZU group owns two companies in Ukraine: PZU Ukraine and PZU Ukraine Life, with a territorial network of 84 offices in most regions of the country.
The PZU position in Central and Eastern Europe is very good, as the group occupies the number one place in terms of underwritings, with over USD 9.6 billion at the end of the previous year.
Furthermore, the profitability of PZU is also high, as the company recorded USD 1.3 billion profit in 2007. The representative of the Polish group attributes the very good results of the group to the fact that the decisions regarding the activity of the owned companies are taken in ECE and not in other countries of Western Europe. This approach, along with a better understanding of the markets, constitutes one of the premises for success.
Author: Vlad PANCIU, Oleg DORONCEANU
on 25.09.2008
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