The insurance company Groupama Garancia confirmed its market position in Hungary in 2010, following its well-defined strategy. Diplomacy and Trade asked CEO Yann Menetrier for an overview of the company’s situation, the business environment, and its plans.
What has been your experience on the Hungarian market, so far?
In order to strengthen our market position, we acquired the Insurance company OTP Garancia, a subsidiary of the OTP Group in 2008 and, following the merger with Groupama Insurance, implemented in March 2009, we have become the fourth largest provider of general insurance on the market. Despite a number of unpredictable events affecting the insurance industry – a period of serious economic crisis since 2008, the extra bank tax levied in July 2010 by the state administrative bodies which amounts to almost 50% the 2009 year net profit of the sector, as well as extraordinary damage in 2010 following record floods not seen for 20 years –, we managed to implement full integration into the Group, as well as achieve our long-term development strategy. During these two years, all our employees have demonstrated strong adaptability, while continuing to serve clients who are severely affected by the events listed.
What services does Groupama Garancia provide and who constitutes the target audience?
According to our European strategy, we wish to provide non-life insurance and life insurance product packages and services to our target audience that includes private individuals, small and medium sized enterprises and municipalities in Hungary. Groupama Garancia is open to a wide customer base of more than 1 million customers. The priority target groups include families, so for them, we have a particularly wide selection of offers.
We have modernized our home insurance offers and the modernization of our car insurance policies is also underway. We introduced a new home insurance product portfolio in 2009, after the merger, that allows our customers to choose from three insurance packages. Also, there have been additional services introduced for the basic fee in housing and motor insurance. These include insuring the person driving the vehicle, an assistance service in case of breakdown, and warranty service in case of damages. These all demonstrate our intention to develop the service.
Major natural disasters recently, the most recent pension reforms, and demographic trends have all drawn attention to the need for self-care. As a responsible company, we would also like to emphasize the importance of this particular area to families and young people, as well as to the ongoing modernization of our product portfolio, which aims to provide innovative solutions for these people. Therefore, as of early March, we launched our new pension program in which we train staff so that our network can offer the best solutions to our clients through personal advice and using retirement calculators.
What was the 2010 consolidation year like?
2010 was the first full business year for Groupama Garancia Insurance Company, and as such, also a year of consolidation. Following the merger, the Groupama Garancia Insurance Company streamlined operations and began radical changes to strengthen its operational effectiveness and make its network of sales agents, which is unique on the Hungarian market, more efficient. In 2010, Groupama Garancia Insurance Company achieved 4.9% growth, three times as high as that of the Hungarian insurance market.
Our income from fees amounted to HUF 91.3 billion, while our market share reached 10.82%. This contributed to the strengthening of third place position acquired in 2009, and to making a profit despite the bank tax.
I believe that in such a market environment, the results are satisfactory and prove the correctness of our strategic decisions.
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