AIG Life, the Romanian life insurance unit of the world's largest financial services company in terms of market capitalisation, has reported profit for the first time since it entered the Romanian market, in 1999.
Following losses worth 121,500 euros (4.5 billion ROL) in 2003, AIG Life has turned gross profit worth 2 million euros (84.4 billion ROL) last year. Life insurance companies make profits after 5-6 years of activity, as their initial expenses are rather high.
According to the company officials, the profit will be destined to the future development of the distribution network.
The company cashed gross premiums worth 18.9 million euros (766.4 billion ROL), 38% higher as compared to the previous year. According to Theodor Alexandrescu, the new deputy general manager of AIG Life Asigurari Romania, gross premiums underwritten last year revolved around 800 billion ROL (19.7 million euros), 36.8% higher in euros as compared to the end of 2003.
The biggest surge was registered for employee benefits, which account for only 3% of the company's portfolio, though. On this segment, the insurer reported 96% growth, in domestic currency, against 2003. An 81% increase was posted by life insurance policies signed by banks for granted loans. Individual life insurance, which accounts for the main share of the product portfolio of AIG Life (78%), saw 45% growth in 2004 as compared to the previous year. According to company officials, settled claims revolved around 14 billion ROL (345,000 euros).
The company's assets reached 33 million euros (1,340.2 billion ROL) in 2004, up almost 50%. AIG Life late last year had a number of 170,000 policies, 30% more than at the end of 2003.
The company aims at a 32% turnover increase this year, with the same percentage being expected for the total amount of collected premiums. The profit target for 2005 is of 125 billion ROL (3.4 million euros). "These growth targets are a minimal value", said Martin Zonneveld, general manager of AIG Life. The company's share capital is worth 264.2 billion ROL (7.2 million euros). ioana.leaua@zf.ro
