TBI THROWS THE GAUNTLET TO THE FINANCIAL MARKET
The companies within the TBI AD - Bulgaria group presented their 2002 financial results. The structuring of TBIH (the Dutch parent company of TBI) as a financial holding, completed last year, was nnounced as well. Within the group are: the insurance and reinsurance company Bulstrad, the insurance company Bulstrad DSK Life, the pension insurance company Doverie AD, TBI Leasing AD, Telervice Bulgaria EAD, TBI Asset Management EAD, and TBI Invest EAD. The international group TBI Financial Services announced the beginning of its expansion. Bulstrad's Executive Director Rumen Yanchev said that the group plans to set up a healthcare insurance fund in 2003. Currently, two such funds are operating on the Bulgarian market - Doverie and Zakrila - and Mr. Yanchev specified that the third one would be established by the end of the month. Its setting up has been delayed due to the changed terms for licensing. Now the licences are granted by the Agency for Insurance Supervision and not by the State Agency for Insurance Supervision. But this change will become senseless as the two agencies and the State Securities and Exchange Commission will merge into a Commission for Financial Supervision.One more fund of TBI's structure is preparing for a start. The Executive Director of TBI Asset Management Stoyan Toshev announced that an open type investment company would be set up. This will be the third financial holding of that kind in Bulgaria after Zlaten Lev and Elana Eurofund. The new investment company will be called TBI Eurobond. We should now realize our great advantage - the companies within the holding will cooperate, Rumen Yanchev said. Each company should also work for the interests of the others he added. Mr. Yanchev specified for the BANKER weekly that packages of services instead of combined products would be offered.Mr. Yanchev is sure that taxation amendments are neecssary for the successful operation of the insurers. According to him, legislation in that direction should be adapted to the European and world standards. Presently, insurance companies pay a single tax on their premium proceeds instead of a profit tax. Commenting on the 10-year decline in the insurance companies' proceeds Mr. Yanchev was not optimistic about the future if the tax regime remained unchanged. He pointed out that sooner or later the 18 companies in the sector will have to cover the European standards for the amount of equity capital. The European standards are in the range of EUR20MN. But who would invest in a sector which does not ensure returns, Mr. Yanchev asked almost rhetorically.However, Bulstrad's performance is not in support of his cautiousness. The company reported record high gross premium proceeds for the Bulgarian market. Their amount for 2002 was BGN101,036,000, the Executive Director Rumen Yanchev specified. This is almost BGN15MN up from the same period of 2001 when Bulstrad's premium proceeds totalled BGN85.15MN. This performance rates the company again first in the general insurance sector. The biggest share of proceeds - 30 per cent - is due to the Civil Liability when Travelling Abroad insurance (the so-called Green Card). Proceeds from that insurance are mainly a result of the sales on the Russian market, realized in Bulstrad's partnership with six Russian insurers.The compensations paid by the insurance and reinsurance company Bulstrad in 2002 amount to BGN39,766,000. A total of 884,000 insurance policies have been issued, which means that 25% of the active population has closed a contract with the company.The gross premium proceeds of Bulstrad DSK Life for 2002 amount to BGN10,418,000, which ensures it a market share of about 7 per cent. The company sold almost 600,000 insurance polices, which is a considerable increase from the previous year. According to the latest data, teh pension insurance company Doverie AD has already attracted 783,441 people as clients to its funds. If the customers of the Bulgarian Pension Insurance Company (BPIC), which is to merge into Doverie, are added, the number of ensured people will reach 954,643. The process of the merger, which has been going on for six months now, is unique: not only the BPIC but its three funds will join the respective structures of Doverie, i.e. eight juristic persons will unite. The merger is in its final stage, the managers of Doverie announced. In the words of the company's CEO Daniela Petkova, its market share is currently 35%, and will reach 42% after the merger of the BPIC. The assets, managed by Doverie at present are BGN79,487,000. The increase from 2001 is almost double - 84.24 per cent. The yield which Doverie distributes to the individual accounts of citizens exceeds 10% and in some of the funds is considerably higher, Ms. Petkova specified.Telervice Bulgaria, purchased by TBI in October 2002, is a leader on the market of consumer goods, offered on leasing. The company, in which there was Slovak participation before it was acquired by TBI, holds a 50% market share and includes about 200 shops in 50 population centres. Its clients exceeds 50,000 people. Telervice also finances distributors and trade representatives. Leasing contracts worth BGN19,220,000 were closed in 2002.The performance of the other leasing company - TBI Leasing AD (registered on February 11, 2002) - is more modest. It had closed 140 leasing contracts worth a total of BGN4,800,000 by the end of last year. Its clients are 125 and there are juristic persons among them.