INTERVIEW Sinziana Maioreanu, Aegon Romania: The potential for long-term growth on the life insurance sector is huge

Aegon Romania aims to increase its 2020 sales volume, but also focuses on digitalization and financial education projects. Given the low market penetration rate, the company says that the potential for long-term growth on the life insurance sector is huge, but the industry is facing a series of threats such as the economic situation of Romania, the unpredictability of the business environment and the constantly changing legislation. The Diplomat-Bucharest talked to Sinziana Maioreanu, CEO Aegon Romania, to find out more about the company goals and its plans.  

What are the goals of Aegon Romania for 2020?

In 2020, we will focus on increasing the sales volume both through distribution with the help of our banking partners (bancassurance) and through brokers. We aim to increase by 15% the volume of gross premiums subscribed compared to 2019, and an important target will be the development of our online platform, whose number of users increased by 80% last year, compared to 2018. We will also invest in our online insurance store. Digitalization is an important direction that we will continue to pursue in 2020. This will be added to intensify our efforts for better communication of products and for educating the Romanian consumer regarding the need to save and secure their future: whether we are talking about life insurance with a saving component, used for important purposes such as the pension or studies of the child, or about health insurance. The financial education component will remain a priority on our agenda and we will continue to carry out campaigns to help children, and not only, to learn things in this area.

How do you see the evolution of the insurance market this year?

After a rather hectic climate in 2019, caused by changes in the legislative framework, we estimate that by 2020 the market will enter a stabilization process. Also, the upward trend will continue, even if the market growth will still be at a slower pace than we would like and what Romanians would need. Let us not forget that, according to official statistics, life insurance policies in Romania are ten times under the European Union average. At this moment, we forecast an increase of about 10%, due to the increasing interest of Romanians for life insurance and health insurance.

What are the portfolio products you are targeting for an increase in market share in 2020?

We expect an increase in the results achieved with our banking partners, Banca Transilvania and Alpha Bank, which distribute life insurance with a saving component. This type of insurance is generally chosen by people who want to start saving early for retirement, parents who put money aside for the education of their children or to provide them with financial support at maturity, but also for those who want to ensure a certain degree of financial independence.

Also, 2020 is the year in which we focus on strengthening relationships with our broker partners, including by expanding the internal team dealing with them.

What are your expectations regarding the life insurance sector?

A: Given the low market penetration rate, the potential for long-term growth is huge. It is necessary, however, for the Romanians to begin to become more aware of the need for long-term savings, to take their fate in their hands and to be held responsible for their well-being, without taking into account any potential help or possible support from the state. We are already discussing a difficult state pension system, we are already worried that there will no longer be anyone to pay us pensions, given the current pay-as-you-go type of system. To be able to change the way Romanian see things, all the players should get involved. We continue to face a series of threats such as the economic situation of Romania, the unpredictability of the business environment and the constantly changing legislation.

How has the behaviour of Romanians evolved towards life insurance?

In the last two years, the interest of Romanians for life insurance has increased. People really care more about their future, but the reluctance is not gone. Clients have become more aware of the need to conclude insurance policies and they want their insurers to better understand their needs. Also, people are looking for products whose mechanism is as simple to understand and as clearly presented. They need communication focused on their benefits and needs, rather than the technical or innovation characteristics of that product. Another evolution is the increase in the responsibility level of the clients, who have become much more careful in studying the contractual conditions and regarding the decision to choose one product or another.

However, Romanians still have a greater appetite for insuring goods, from houses and cars, to phones and other electrical and household appliances, than for health or life insurance. I believe that the solution is an intensified communication of the insurers, as well as many actions aiming at the financial education, in which to involve the authorities, at central level.

Have you noticed an improvement in the financial education of Romanians? What are the financial education projects in which Aegon is involved?

People are starting to become more informed, so regarding the situation from this perspective, the answer is yes: there is an improvement, but much below the optimal level. Financial education should be included in the compulsory school curriculum and taught in schools as early as the primary cycle. I also believe that national campaigns for educating and informing adults about the benefits of concluding life, health insurance, saving and retirement plans should be organized. A partnership between the main players in the industry and the authorities is necessary in order to build a coherent campaign in this respect, and Aegon Romania has been and is very open to getting involved in such an endeavour.

Financial education is an important part of our company’s strategy. One of the campaigns that we carried out in 2019 was “Financial education through play, for a secure future”, during which we created games through which parents can teach children about this field.

What are the challenges Aegon Romania is facing at the moment?

Our challenges are, in fact, similar to those of the entire insurance market. The low degree of understanding of the need to conclude an insurance is on this list. Financial education is an approach that can help a lot in this direction as well. It is essential for people to reach the point where they understand why they need life insurance, to understand it as a product, beyond the automatic association with death. No, life insurance is not only helpful when the insured person is no longer alive, but on the contrary, its role is to provide financial support in the event of unforeseen situations that occur throughout their life. In the case of life insurance with savings, their role is precisely to prepare us financially for important moments in life.