Банкеръ Weekly

Briefs

THE PRICE OF DZI GOES UP

Insurance premiums of the companies within the group of the State Insurance Institute DZI rose more than 10 per cent in the first six months of 2001, Borislav Mihailov, Executive Director of DZI told the BANKER weekly. In the same period the amount of claimed and paid indemnities dropped almost 2-fold, the insurance manager boasted. The activities of DZI-General Insurance marked a 7-8% growth, those of Life Insurance Company ZDI EAD went up by 14-15%, and the Armeets company (also within the DZI group) registered an over 20% increase.
DZI's general insurance company has made profit for the first time over the last few years. The positive financial performance of the three insurance companies within the DZI group amount to some BGL5MN. The fact that the relative share of classical life insurances has picked up after dropping for several years, can be regarded as a success, too. All these results confirm the leading position which the State Insurance Company has gained on the local market. In the first quarter of this year the two general insurance companies within the DZI group held 19% of the domestic market, and the life insurance company's share was around 44.5 per cent.
According to experts, DZI's positions on the Bulgarian insurance market will increase tangibly. This would also raise the price of the insurance group, of course if the privatisation procedure for DZI's divestment is finalized. It was namely the difference between DZI's seller - the Privatisation Agency (PA) - and the candidate buyer regarding the price that delayed the purchase deal.
There are three possible options for DZI's future and the BANKER weekly has repeatedly written about them. The first one is to continue negotiations with TBI until a mutually acceptable compromise is reached. The second option is to initiate a new divestment procedure, and the third is to accept the proposal of the international company Ureco, which has offered to undertake DZI's management at terms which are very advantageous to the State.
Meanwhile, the 6-month validity of DZI's evaluation has expired and the PA may ask Deloitte Touche to update it. The auditing company had last evaluated DZI's assets at almost USD35MN. Most experts, however, estimate it higher at present.

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