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Interamerican and the Bulgarian market are among the perspective for Eureko

27 Декември 2009 12:10 INSMARKET по статията работи:
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The Dutch group is to stay in Romania, Turkey and Greece, says Dominique Bauduin, independent member of the board of Interamerican Bulgaria

For more than a year now Dominique Bauduin is independent member of the board of Interamerican Bulgaria, part of the financial and insurance holding Eureko Group, based in Netherlands. He is a former diplomat, servicing the Dutch state in China, Japan and Canada. Consequently he has become director general of the investment and foreign trade department of the Ministry of foreign affairs of Netherlands. Being an advisor to the Bulgarian government for the EU accession, he has spent 2 years in this country. Later he has started his own consultancy business, helping the Dutch companies in their operations abroad. When Eureko has asked him to join the board of Interamerican Bulgaria as an independent member, he accepted willingly, because this assignment gives him the possibility to visit Bulgaria and his friends here more often.

Is it easy to do business in Bulgaria?
– Yes and no. Yes if you know the culture and the people and if you have the right access to the right people. I have success stories and I have stories that are less good, but I thing that goes for every country. It always depends on the people you are working with – that is true not only for the small companies, but for the big ones too.

What is the impact of the crisis on the Dutch business – both in Netherlands and abroad, also in Bulgaria – however modest is its representation here.
– Netherlands’ is one of the strongest economies in Europe for many years now. We have a lot of multinational companies like Philips and Unilever. But the heart of the economy is still and will be for ever the small and medium enterprises. The Dutch authorities forged the government finances very well over the years, thanks to which we are in today's strong position. While we are probably the largest exporter in the world per capita, we also suffer from the crisis. Unemployment rate is slowly going up, but still within very good brackets. One of the things I personally never expected because of the financial level and organizations in our country. Now some of our biggest banks (globally as well) are government property – ABN Amro, Fortis. Which is quite a sad story. Although we have still left good banks like Rabo Bank, which is one of the few in the world with triple-A rating – and it is the largest shareholder in Eureko, which helped us quite a lot in crisis. If you summarize - yes, our country suffers from the crisis, but you cannot yet see this on the street. Yes, people spend less – because they are scared. I expect more troubles, but henceforth they will not be of the enterprises any more, but of ordinary people. If another bubble bursts, I doubt that the governments will be unable to cope with it and protect the personal savings of the individuals.

I was expecting in the eve days of Christmas a more upbeat conversation …
What is the prognosis for the exit of the crisis and how did it affect Eureko and the Interamerican Bulgaria particularly?
– To escape from the economic crisis, banks must start lending money. There are a lot of companies in good health, but they have no access to financial markets which does not allow them to work. The same applies for the starting businesses. And if the banks continue this line of conduct I have to be even much more pessimistic for the outlook. It is a very important task for the governments to convince, even to force banks to start lending money. Because they have access now to very-very cheap money and they should be able to start lending it at very reasonable interest rates. But of course, avoiding the over lending which they did in the past and which led to the crisis.

ING has serious problems on the international markets; the group is planning to sell its life and pension insurance businesses in the world. What about Eureko – is it strong enough financially, is it planning to buy or to sell?
– Eureko also needed financial injection, but fortunately we had Rabo Bank behind and the bank borrowed us 1 billion euro. We are facing difficulties in certain countries, especially in Ireland, where the economic situation is not good. So for the past few months we decided to review the situation in all countries we have businesses in and to look for possibilities of restructuring our companies. Bulgaria was one of the countries we have put under the magnifying glass. And I have a very positive news before Christmas: two days ago the executive and the supervisory boards of the group decided that our operation in Bulgaria is in relatively good shape and Eureko will continue to strongly support and develop its business here. In short, we are on the Bulgarian market to stay. Of course, we did review the plans for the future of this market, our three-year program is coordinated with head office in the Netherlands, and we are confident that with the young and energetic team we have here we will be able to reach our goals. We're not among the biggest companies here, but if you look at the results, we are doing quite well.
We have no immediate intentions to purchase new entities. Yes, it is a good time to purchase, but it is difficult to make deals.

But firmly and definitely, Eureko does not plan to exit the Bulgarian market?
– No, we stay.

Several companies are "for sale" at the moment. There are rumors that Eureko is negotiating to purchase KD Life in Slovenia. Is there any truth in this?
– No specific negotiations for acquisitions in Bulgaria, but as I said, the decision was to stay for sure. We are going to look at the developments of the market and any opportunity that arises will be considered. My strong personal wish is to begin to "regionalize" Interamerican much more – we are in Greece, Romania and Bulgaria. I think we can have additional advantages if we look at our policy more in a regional context.
Recently we have completed a deal in Poland, you have probably heard. We were more or less forced to sell our operations there; we did not want to leave this market. We have won all the lawsuits at European level and have received the green light, but at one time it is wiser to take a different decision. So we have made a deal with the Polish government and the price received is much higher than our initial investment. This is good and bad news at the same time, but we will be able right away to pay off our loan to Rabo Bank and because of this we are in quite a healthy financial position.

And what are your plans for Romania, Turkey, Greece and Cyprus?
– In Greece, are pretty big – we are there to stay too. In Turkey we are doing very well, there is one of our best companies, working in very good conditions. Cyprus is a small market; no decision has been made yet. In Romania we are also to stay. Over the past two years we are realizing there one shift of effort and investment from general insurance to life insurance, pension and health insurance. Transformation there is ongoing.

How would you assess the work of Interamerican Bulgaria as a board member of the company? Are you satisfied with the results?
– I am very bias, because I really like Bulgaria and Bulgarians. I think the company has achieved a lot and is doing quite a good job. Looking at the size of the company it has achieved quite an impressive growth. Recently were visiting agents and brokers to hear what their view on our company is. Usually board members don’t do this, but I like to know what is happening on the field. I liked the comments of those people that the company really does what it promises – we pay out on time and without unnecessary delays, which makes them happy.

Obviously, the assessment of the major shareholder is good having in mind that they have decided to stay on the Bulgarian market.
– The review of companies in the region has not been an easy thing to do, but the shareholder wants to see things happening. And purely on the results of the Bulgarian company we convinced the shareholder that it is a good course to stay on the Bulgarian market – that we have enough bases to stay here.

What are the specific targets for the development of the Bulgarian company? Do you plan to develop health and pension insurance on our market?
– We have been looking at the health and pensions markets, at specific companies as well. But now it's time to first restructure from within, before we start to look again to acquire possible companies. We try to focus on life insurance – for a year now we are in this business. We are reaching our goals and we are planning in 2 years from now to be profitable. We are in healthy financial position, but we are careful, because nobody knows what will happen next year.

You have rebranded your operations in Romania the company is trading under the Eureko brand. Are you planning a similar move for Bulgaria?
– Not at the moment. We have discussed it before, but it is not in our short-term objectives.

Turkish media published a statement of the Turkish foreign minister, who claimed after a visit to the Netherlands, that Eureko is happy with its investment in the country and mulls some transfer of activities from other countries to Turkey because the conditions there are much better. How would you comment?
– I have not seen this article yet, but we are indeed doing very well in Turkey. And if we have more opportunities there, we will grab them. The statement of the foreign minister seems to me rather political – and it is understandable. But we are happy on that market.

Some 10 years now dispute is ongoing among leading experts in our country whether to introduce compulsory property insurance against natural disasters, whether to build a catastrophic pool – something which in Turkey is a fact. The pool is managed by Eureko’s company in the country. Do you think this is a successful model? Bulgaria is also a seismic zone - is the Turkish model applicable in Bulgaria according to you?
– I think it is good thing to have such a facility. An event like an earthquake can have catastrophic consequences, which insurance companies can not meet alone. But this is not a matter which can be solved only by the insurance industry - and is a political decision.

Thank you for this interview.

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