Are your for or against the marking and placing of stickers on vehicles with Motor Casco insurance? Why?

We are firmly against the marking and placing of stickers on vehicles with Motor Casco insurance. Can anyone give an example of a country in Western Europe which does such marking? And can somebody tell me why in Romania and Macedonia, where as you know we also operate, vehicles are not marked and despite that the phenomenon "theft" is almost unheard of? In my opinion the answers are clear. It is not the stickers and markings that help against theft but the effective work of the police and the insurers. As long as there are stickers and markings, there will always be suspicion that this is a way to give the thieves directions. Moreover, there are almost no cases where an insurer has managed to find a stolen vehicle because of the marking.

Which is the more appropriate payment method for liability insurance – a single bulk sum or in instalments?

Until the legislation in Bulgaria improves and the clients start using credit cards, the more appropriate method is the single payment.  What I have in mind is that in Spain we sell insurance in instalments but to clients who hold credit cards and who have credit history. At the same time in Bulgaria we sell insurance in instalments without following any credit control rules while in fact the payment in instalments is a type of credit. And taking into consideration the results of the insurers regarding this type of insurance, currently the better option is definitely the single payment.

Should the liability insurance cover the active driver or the vehicle?

Both alternatives have their advantages and disadvantages. In my opinion, the problem is not whether the insurance covers the vehicle or the driver. The problem is that we are one of the last countries in Europe where there is not yet a centralized system for issuance of motor third party liability insurance policies. In addition, we have no information about the claims history of each driver on the basis of which to determine the tariffs. Only after the introduction of the bonus-malus system we can expect both an improvement of the insurance results and an improvement of the behaviour of the drivers on the road.

How can the problem with the low coverage of the motor third party liability insurance be solved?

As I already said, the most important thing is to have a centralized system for issuance of policies, which in turn will allow for better control by the responsible state authorities. Changes in the legislation are necessary in order to ensure the possibility for imposing penal measures on the owners of motor vehicles without insurance solely on the basis of the data in the information system. With the elimination of the alternative for payment in instalments and with the option for termination of policies in case of non-payment, the coverage should increase as well.

Who and why practices "insurance tourism"? How does that affect the market?

I don’t think that the so-called “insurance tourism” by foreigners in Bulgaria has a material effect on the market because the frequency of this type of insurance is very low. What affects the business much more are the Bulgarian citizens who live and work abroad but make their insurance in Bulgaria. There is no way to track or avoid such cases. In this way they use the lower tariffs in Bulgaria but in case of an insurance event the legislation of the developed European countries applies.

Will the potential accession of Bulgaria to Schengen have any effect on the insurance market in Bulgaria?

The accession of Bulgaria to Schengen will result in the elimination of the border checkpoints to Schengen countries, which are member-states of the EU and several other European countries, however currently these checkpoints have no effect on the insurance market. Even now most insurers in Bulgaria do not require additional premiums for Schengen member states.

Which are the main trends for the insurance market which you expect for 2011? When can we expect a revival of the market?

I expect that towards the end of 2011 the drop in the amount of gross written premiums will come to an end and in 2012 the revenues will even begin to grow. It is still early to speak about matching pre-crisis levels. The realization of these expectations is, of course, directly dependent on the improvement of the macroeconomic situation in the country. We have already seen better indicators for the first quarter of 2011 and taking into consideration the fact that the insurance business usually lags behind these changes, we can expect an improvement of the insurance market towards the end of the year. In terms of the types of insurance, there is already a positive trend of increase of the insurance premiums for motor third party liability insurance, which was causing the highest losses for the insurers in past years.