Mr. General Manager, perhaps the most important recent action was the rebranding of ING Life Insurance and the transition to the NN brand. How do you appreciate the way this event was completed in Romania? Are you content?
Indeed, our efforts at the beginning of this year were focused on the successful completion of the brand equity transfer from the ING brand to NN Life Insurance, and also to NN Pensions. After the communication campaigns we performed (both direct marketing campaigns and mass-market campaigns), the figures referring to the present notoriety of the NN brand on the local market show very good results. At this time, the level of promted awareness for the NN brand is 64% in the insurance section and 65% in the pension section, and this index actually shows how many of the respondents to the study have mentioned NN Life Insurance when they were invited to choose a company they knew from a given list. At the same time, our logo enjoys a great popularity, as it was identified by 75% of the participants in the study on the insurance segment and by 72% on the pensions segment. Based on these results, we will continue to build preference for the NN brand in Romania. Thus, we launched a communication campaign to introduce the values of the brand and its positioning to the audience.
Why did the name of the life insurance, pensions and investments management businesses change into NN?
The change of the name and of the visual identity for the life insurance, pensions and investments management companies took place in order to indicate that they belong to the international group NN; this is a process that occurred in all the 18 countries the group is present in. Following the reorganization of ING Group, the three lines of business mentioned above were reunited as parts of NN Group, which became independent as a result of an initial public offer. In Romania, NN Group includes the activities of ING Life Insurances and ING Pensions, market leading companies, and ING Investment Management, the fourth player in the mutual funds operating market. In the past, as well, these divisions operated separately from the banking division and thus, the rebranding process involved no changes at the level of strategy or of customer relations.
According to FSA, NN Life Insurances and NN Pensions are leaders of both respective industries in Romania. Tell us more about this achievement.
In Romania, NN has reached the position of leader on the life insurance market ever since 1999, with a market share of 37.4 per cent by the end of the year 2014 (based on gross written premiums, according to FSA). At the same time, we are market leaders of private optional pensions with a market share of 48.7 per cent (based on assets, according to FSA) and also on the mandatory pensions segment NN Pensions is the leader ever since the system was launched, with a market share that has reached 37.4 per cent by the end of last year (based on assets, according to FSA). These figures may be explained, I think, by the trust our customers and general public invest us with and also by the acknowledgement of our initiatives to be close to our customers and to answer their needs, through all the solutions and services we offer. In the 18 years of our presence on the local market, we were focused on anticipating the needs and expectations of our audience and to innovate – the list of our premieres includes the launch of unit linked products (as early as in 1998) and other products with features adapted to present needs (e.g. UNA, the insurance product especially created for women), of modern instruments of interaction with the company (the NN Direct platform, available to all our customers since 2010 and which presently allows transactions to be completed), the digital application for the financial needs analysis, and so on. Similarly, we were permanently preoccupied to invest in the development of the markets we are activating in, through educational campaigns, both destined to increase the public understanding of the products and a better acknowledgment of needs related to the safety of financial future. We remain, in the future as well, involved in these directions – and the care for our customers is, actually, one of the key values of the NN brand, together with transparency and the responsibility we assume related to them.
Which is the trend of the Romanian insurance and private pensions markets, compared to other states in Central and Eastern Europe?
If we refer to life insurance industry, we can say that we have a solid market in Romania, with no structural issues; nonetheless, it still “suffers” of a consistent lag compared to other states in the region. In Romania, the density of life insurance is considerable lower, related to people’s actual needs of protection – we are still talking about approximately EUR 19 per capita, compared to the European average of EUR 200 per capita. Also considering the rate of penetration as percentage of the GDP, the gaps are obvious – if we compare it, by example, with the situation in Poland, as the percent is six times higher than the one in our country (1.7 – 1.8 per cent, compared to merely 0.3 per cent). The development potential is thus impressive, yet, an evolution in accordance to this potential was tremendously challenged by the unfavorable evolution of economy in the last few years. Continuing the comparison with other states, I think that of similar relevance is the fact that, in Romania, the actions of financial planning and saving money for major objectives in life is not a familiar custom to people, as the years that had preceded the crisis were mostly defined by consumption. The same premises act upon the development of the optional pensions industry. As far as the mandatory private pensions segment is concerned, after almost eight years from its launch, it has reached, at the end of 2014, a value of net assets of over RON 19 billion and approximately 6.3 million participants. The excellent performances (an average annual yield of 11.8 per cent since the launch until 2014) and the fact that, for the majority of the active population, it still is the only choice of saving money for pensions are arguments that, we think, should encourage a further development of this system.
What should be done additionally in these fields and by whom?
The development in a faster rhythm of these markets is a long term process, that must involve all players – companies, the industry overall, authorities, rulers. While the aspects related to the economic circumstances will gradually fade out, in order to generate a change in mentality of the public, there is still a need of constant and consequent education efforts. The cultural imprints that define us, that makes us rely mostly on “somebody else” to take care of us, is not easy to change and, therefore, efforts must continue, even if, during the last few years, people started to understand that they needed to be more responsible regarding their own financial future. Moreover, an important measure would be granting a certain level of tax cuts for premiums paid for life and health insurance, which would allow more people to enjoy financial protection. Last, but not least, if we refer to the private pensions system (but not exclusively), the stability and predictability of the legal and business environment would be essential for a further development.
What are the plans of the company you lead for 2015?
We plan to continue to develop a sustainable business on the local market in 2015 as well, following our objective to provide customers with an excellent experience and, at the same time, to keep our positions as market leaders. In order to achieve these purposes, we are building on four strategic directions: to offer our customers transparent products and to answer their needs throughout the relation, to be always close to our public, to increase the efficiency of our processes and operations and, last but not least, to build our activity on operation efficiency and on disciplined management of capital. Moreover, our present plans include expansion on additional markets, such as the one of health insurance.