Банкеръ Weekly



The first pension insurance companies to announce part of their 2002 results were Allianz Bulgaria pension insurance company, Sila (former Newton-Sila), Saglasie, Doverie, and ING.Todor Yovov, Sila Executive Director, told the BANKER weekly that the income to be distributed on individual accounts of citizens exceeds 10 per cent. The yield in the voluntary pension fund (VPF) is 10.4%, in the professional pension fund (PPF) - 10.7%, and in the universal one (UPF) - 14.2 per cent. 44,000 people are registered by Sila universal fund, 6,000 - by its professional fund (800 more than in 2001), and 17,000 - by the company's voluntary fund (16,670 in 2001). Assets run by the VPF have grown by 38% compared to 2001 (BGN2.11MN) and reached BGN2.9MN in 2002. The assets run by the universal and the professional funds are respectively BGN1.016MN and BGN2.19MN (BGN1.2MN in December 2001). Antoaneta Voutova, Sales Manager at Allianz Bulgaria pension insurance company, said that the voluntary pension fund of the company realized a 9.67% yield in 2002. The assets run by the fund amount to BGN105.3MN (BGN74.6MN in 2001). The number of people insured by the fund has not grown significantly - from 239.5,000 to 250,000.35,000 people are members of the obligatory professional fund (compared to 31,218 at the end of 2001). The fund's 2001 income is 9.83 per cent. Its assets have grown from BGN13.35MN to BGN25MN for twelve months. The universal pension insurance at Allianz reported a 9.38% income, BGN9.3MN assets, and 310,500 attracted customers.Penka Baranova, Saglasie Executive Director, announced that the 2002 gross income (before the management fee is deducted) is 7.53% for the voluntary fund, 11.9% - for the universal fund, and 9.68% - for the professional fund. The number of people insured by the voluntary fund is up from 26,500 to over 31,000. Only 500 people more have been insured by the professional fund of Saglasie in 2002. As far as the managed assets are concerned, however, there is considerable increase. The voluntary fund already controls three times more assets - BGN23.44MN, compared to BGN8.04MN as of December 31, 2001. The situation in the obligatory professional insurance fund is similar - its assets are up from BGN8.64MN to BGN17.5MN.The universal fund of Doverie has more than 610,000 customers and runs assets worth over BGN15MN. In 2002, the fund realized a 17.38% yield. The professional fund insures 59,000 people and holds assets of almost BGN35.5MN. The income attained from these assets management in 2002 is 11.59 per cent. 89,000 people chose the voluntary fund which reported a 12.30% yield and managed assets worth BGN29.3MN.The number of people insured by the professional fund at ING pension insurance company has grown from 4,780 to 6,700. Nearly 50% more customers chose ING voluntary fund - 15,000, and 126,000 preferred the universal one. The assets in the funds and the yield from their management is as follows: in the universal fund - BGN3.7MN (16.4%), in the voluntary - BGN12.7MN (11.5%), and in the professional - BGN2.26MN (11.9%).At the end of last week, Nikola Abadzhiev, Chairman of the Bulgarian Association of Additional Pension Insurance Companies, declared 2002 was the year of final etablishment of the new pension insurance system. In fact, there is no definite information yet about the results for the whole year 2002. Still, the results as of November 30, 2002 remain the most recent ones. The total number of people insured by professional pension funds is 154,846. There are more than 1.115 million Bulgarians insured by universal pension funds, and 478,521 - attracted by voluntary pension funds. Despite the critics at home, Mr. Abadzhiev underlined, foreign experts give positive assessment to the efficiency of the established insurance system. Some 2 million people will be submitted excerpts of their individual accounts in 2002, Nikola Abadzhiev added.The aggregate value of assets run by the three types of funds as of November 30, 2002 has increased by over 60 per cent, compared to December 2001. (In fact, there were only voluntary and professional pension funds operating in 2001, universal funds only appeared in 2002.)The assets distribution in terms of fund type is as following: BGN181.3MN compared to BGN135.4MN in 2001 (for voluntary pension funds); BGN91.8MN compared to BGN51.5MN in 2001 (for professional funds); and BGN37.19MN (for universal funds). The relative share of these assets in the amount of the Bulgarian gross domestic product is 0.78% (voluntary funds), 0.39% (professional funds), and 0.15% (universal funds).The assets accumulated per customer amounted to BGN357 (in voluntary funds), BGN588MN (in professional funds), and BGN33 (in universal funds). The average monthly insurance installment per customer amounted to BGN29.75MN (voluntary funds), BGN53.45MN (professional), and BGN3 (universal).The voluntary pension insurance registered permanent growth from December 2000 to September 2002. Net assets in these funds have increased in equal amounts from BGN80MN at the beginning of the period to nearly BGN170MN in September 2002. In professional pension funds, the net value of the assets is up from BGN20MN to BGN80MN.The association of the pension companies expects that voluntary pension funds attract 537,000 customers and manage assets worth BGN395.66MN in 2003. According to the forecasts, universal funds will attract 1.256 million people and will run assets worth BGN85.5MN. The number of people insured by professional funds will reach 1.950 million, and these funds will manage assets amounting to BGN200MN. According to Nikola Abadzhiev, all institutions that provide the operations and the regulation of the insurance system, as well as the necessary legislation, are already functioning. Still, he specified, possible changes in the amount of the insurance installments could have a positive effect on the condition of the funds. The rate should be increased gradually up to 5 or 7%, Nikola Abadzhiev said. In support of his viewpoint, he showed reports of the association on the effect of higher levels of insurance. The forecast refers to the period 2002-2010. If the amount of the installment remains at its current level of 2% of the insurance income, in 2010 universal pension funds will be managing assets exceeding BGN1.5BN. If the levels rise from 2 to 5%, the value of assets will go beyond BGN3.5BN, and in case of a 7% installment, the assets will exceed BGN4.5BN.Nikola Abadzhiev boasted of the fact that the pension industry has also contributed to the opening of new jobs - more than 38,000 permanent and temporary ones. Significant financial resources have been accumulated, too, and they will have a growing effect on the development of the capital markets and the country's economy.

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