Groupama Asigurari to make official entrance this fall

Since the very start, after it finalized the acquisition of the three players, Groupama announced it was not its intention to have three companies with three different names and three growth strategies.
“The strategy that we adopted in Romania aims at concentrating all our operations under one single brand, Groupama,, for reasons of efficiency. Nevertheless, the merger of the three entities we have acquired will naturally take longer, as it will follow the necessary procedures and be submitted for all the approvals by the supervisory and legal authorities. We assume that this process will be finished in 2009,” Rousset told Business Review.
As regards the rebranding process, it represents one of the Group's strategic objectives and has already started, based on rigorous planning.
“We are primarily focused on creating a strong brand Groupama, which does not exist on the Romanian market today, by capitalizing on the best practices and strongest values of the three different companies: BT Asigurari, OTP Garancia and Asiban,” said the CEO, adding that the brand will be officially launched on the Romanian market this autumn.
Consequently, the following period will be assigned to promoting the brand and the company, making it well known and modernizing the group's branch network in accordance with the new identity.
“The rebranding process of all our units, which number around 500, will be carried out throughout 2009 and will follow a definite timeline. We have already started to work on this project, however, we have to take into consideration all the legal regulations concerning this issue. […] We have not decided yet upon the exact figures, but we will certainly allocate a considerable amount of money,” said Rousset.
None of the three insurers' names will be part of the new company's identity.
“We have not officially decided upon the name of the future merged company, but we will definitely use the Groupama logo and name, because the Romanian subsidiary of Groupama has to affiliate to the brand policy at the level of the group. Most likely, our company's name will be Groupama Asigurari,” said Rousset.
The French manager also addressed the human resources issue: how many employees will be fired following the merger, if any, or how many new ones will join the
team? What will happen with the management teams of the three insurers now under Groupama's umbrella?
“The management teams are very competent, skilled, motivated and keen to work together in the future. I am confident that everyone will anyway have a suitable place in the company which will definitely offer personal opportunities to develop their own career within the group,” said Rousset.
He added: “It is not a matter of laying off. Our work will be project-based; there will be mixed workshops, including teams of employees of the three companies. Our main focus will be the well-being of our company through this merging process.”
Rousset went on to say that the group has always invested in human resources and will continue to do that, as it strongly believes that people are a valuable asset of the company.
As regards the changes brought on by rebranding in the company's product and service portfolio, the French CEO said Groupama has some innovative products in the making.
“We definitely need a set of innovative products to launch on this market, to develop valuable expertise in order to increase sales operations. We are now working on an innovating insurance products offer under the Groupama brand, which includes MTPL and motor hull insurance, property insurance for individuals, property and liability insurance for authorized individuals, agricultural insurance, life insurance and pension funds,” said Rousset.
“Groupama has got a lot of knowledge in every field all over the world, both in terms of innovative products and in terms of services and distribution processes. We have got innovative insurance products which we will be able to provide to the SMEs and to the
agricultural and industrial communities and therefore will be useful for the Romanian market,” added the CEO.
He also addressed the weaknesses of the local market, of which Groupama holds a significant share. Rousset estimated the total losses on the market last year stood at about EUR 75 million, but said he expects this year to be even worse and bring about losses which he called “historical.”
Groupama's current strategy of fighting this is manifold. “I think we can counteract the weakness of the local insurance system if we manage to contribute to the education of the market, by coordinating our sales operations in a responsible and professional way, to the benefit of our valuable clients. We need to be able to create low-risk communities of insured clients, willing to share our vision and to play an important role in this partnership,” said Rousset.
Groupama will also tap new market segments and go into agricultural insurance, as risky and unpredictable its performance might be.
“We need to be courageous in everything we do in order to be competitive on this market. We are studying the agricultural insurance environment in the country and all its specific risks at the moment. I am positive that we can develop a very good agricultural product in the near future,” said Rousset.
Taking a wider view, Groupama's main objective for the end of the year is to consolidate the three insurers' combined market share of around 12 percent at the moment, by tapping a local market described as “full of potential.” The long-term goal is, “to provide best services at the best price and cover a wide range of risks,” in Rousset's own words.
On the short term, Groupama will focus on diminishing the losses due to inefficiency and bad practice, through a more balanced portfolio and a more serious risk monitoring policy.
Ultimately, time will tell how Groupama will stand the test of competition and a quick-sand market, and this is exactly what the group is calling for.
“We need time to be able to make profit on the Romanian market,” concluded Rousset.
After all, it has been less than a year since the group set its sights on the market and made its first costly purchase of the three to come.
Groupama's setting foot on the Romanian market started off in December 2007, when it acquired BT Asigurari for what was then a record price: EUR 100 million. After that, the group went after the third largest insurer at that time, Asiban, in a neck-and-neck competition alongside a hoard of big international players.
The French insurer acquired Asiban in exchange for EUR 350 million, beating off competitors like the French company AXA, Aegon and Eureko from Holland, and the Italian group Generali. The competition was heated since the insurer was the last big-league player that could provide international operators with a key to a big entrance on the local market.
The deal overturned insurer rankings at the time, as Asiban controlled about 7.6 percent of the market according to statistics at the end of 2007. Groupama became the second largest insurer on the market, with a market share exceeding 11 percent.
With the acquisition of OTP Garancia back in February, its share of the market reached the 12 percent the group is now aiming to consolidate.

By Ana-Maria David