OREANDA-NEWS. May 06, 2010. The Ministry of Finance of Belarus suggests to give equal possibilities to the Belarus insurers without dependence from a pattern of ownership, reported the Official website government.by.

The first deputy of the Minister of Finance of Belarus Vladimir Amarin has informed on it on May, 4th at session of Council of Ministers Presidium where the course of performance of the Republican program of development of insurance activity for 2006-2010 and measures on performance of the indicators established by these program was considered.

Vladimir Amarin considers that it is necessary to speed up work on increase of competitiveness and investment appeal of the insurance market of Belarus. In this connection the Ministry of Finance suggests to discuss changes in the legislation, giving equal possibilities to insurers of all patterns of ownership, including created with participation of the foreign capital. Separate offers are already prepared. They provide granting of possibility to insurers with participation of the foreign capital to carry out life insurance, simplification of an order of the coordination of rules of insurance, and also granting to insurers of the right to carry insurance payments on the cost price without dependence from a pattern of ownership.

The Belarusian Finance Ministry is displeased with the attitude of some heads of state-run insurance companies towards the fulfillment of the program meant to develop the insurance market and improve insurance practices as a whole, First Deputy Finance Minister of Belarus Vladimir Amarin said at a session of the Council of Ministers Presidium on 4 May.

“For a long time we’ve constantly heard them complaining that it is impossible to increase insurance contributions fast due to the weak financial status of corporations and low incomes of individuals. As a result, there is the lack of initiatives and the use of standard approaches,” said Vladimir Amarin. For instance, in January-October 2009 insurance contributions rose by 17% only.

At the end of 2009 the Finance Ministry took radical measures to change the organization of control and accountability for performance. In November-December 2009 several insurance companies managed to raise insurance contributions by 40-60% while the growth rate of voluntary insurance services reached 170-180%. For instance, in 2009 the company Eximgarant of Belarus doubled export insurance. In Q1 2010 the share of export insurance in the portfolio amounted to 39.4%. It means that there is space for Belarusian insurance companies to grow into.

Vladimir Amarin reminded that this year Belarusian insurance companies are supposed to reach 175% growth rate as against 2009. At the moment many companies fall behind the target, with their growth rate as low as last year. Only Eximgarant of Belarus and Belarusian National Reinsurance Organization keep up with the growth schedule.

The Finance Ministry believes the performance can be improved through human resources and effective use of branch networks.

“A lot depends on the top executive and his team. Last year the heads of Eximgarant of Belarus and Belarusian National Reinsurance Organization were replaced. They obviously benefited from it. This year the heads of Stravita and Promtransinvest will have to be replaced. I think improvements will follow,” said Vladimir Amarin. In order to change the state of things, the Finance Ministry has adjusted the system of bonuses for top executives in state-run insurance companies. Bonuses now directly depend on hitting business plan targets.

According to Vladimir Amarin, one of the ways to expand the insurance market is to make it more attractive for foreign investors. This will allow attracting additional resources to the economy, and new technologies to the insurance business.

There are 24 insurance organizations in Belarus, 11 of them feature foreign capital. “The share of foreign capital on the market is low yet efficient. The share of the foreign capital make up 2.4% (the government’s quota on the share of foreign capital in the aggregate equity capital of insurance organizations is 30%) and the share of it insurance premiums is over 14%,” Vladimir Amarin said.

This year the government took a decision to turn Belgosstrakh and Stravita into joint stock companies. The Finance Ministry believes that this is not enough to boost the insurance market. “We need strategic investors who have resources and who are willing to raise the insurance business onto a new level,” Vladimir Amarin said. According to him, this will allow increasing the competition on the market, the quality of insurance services and will generate an additional growth of insurance premiums.