E kindlustus (e insurance) to expand to Latvia and Lithuania

 

 

The brokerage firm e-draudimas was established last year in Lithuania and a shareholding of 75% has been acquired in a medium-sized brokerage firm, SIA Janne, at the beginning of this year. “The acquired companies were not chosen based on their size, but rather the management’s preparedness and will to change the principles of selling insurance in the market and to implement the changes," assured Risto Rossar, the CEO of e kindlustus.

 

Since IT solutions are of critical importance in the business of e kindlustus, Lithuanian IT company Baltsoft, which is specialised in developing IT systems for the insurance industry, was purchased last year as well. “Baltsoft has developed software for administration of policies meant for insurance brokers, which is used in several Eastern European countries. Among others, the software is used by such international brokerage companies as MAI and AON,” noted Rossar.

 

After the foundations and acquisitions in Latvia and Lithuania the E insurance Group comprises the following companies: OÜ EKKM Partnerid and AS E-Kindlustus Kindlustusmaakler in Estonia, SIA Janne (75%) in Latvia, and UADDB E-Draudimas (100%) and UAB Baltsoft (100%) in Lithuania.

 

At present e kindlustus is in active negotiations with Latvian and Lithuanian insurance companies in order to introduce IT solutions and standards, which could provide the clients with a comparison of the prices of insurance products in real time. “During this year we expect to take the motor insurance solutions in Latvia and Lithuania to the same level as in Estonia,” said Rossar. “The expansion is certainly supported by the fact that the leading insurers and financing institutions are represented in all the Baltic States. We cannot deny that owing to the business model which functions successfully in Estonia we are taken seriously in Latvia and Lithuania as well.”

In Lithuania a cooperation agreement has been signed with Sampo Leasing and the negotiations with other financial institutions on launching cooperation are in process. “Our goal is to become the largest insurance brokerage firm in the Baltic States in 3-5 years," said Rossar.

 

At the same time he admitted that the efficiency of the company needs to be increased considerably in order to successfully service retail clients. In Estonia e kindlustus changed the insurance market considerably, making the insurance brokerage services available to the clients who purchase motor TPL insurance, which costs EEK 300. “Owing to high transaction costs retail clients cannot get a comparison of the offers of all insurance companies," noted Rossar. “E kindlustus reduced the transaction costs to the minimum owing to technology, which allows for providing retail clients with brokerage services. Earlier only large corporations enjoyed such privileges.”

 

Rossar expressed the hope that the business model which proved to be successful in Estonia will be successful in the neighbouring markets as well. “Since we have considerable experience and well-operating IT solutions, the expansion is a natural step in the development of the company," said Rossar and added that negotiations have already been conducted in Poland, Romania and Bulgaria. “In Poland we launched a feasibility study in order to find out whether the clients and insurance companies are ready to accept such a business model. If the feedback is positive, we will move outside the Baltic States.”

 

In 2001 e kindlustus was one of the first firms in Europe to open a web-based insurance environment. The web-based information system for entry into and management of insurance contracts developed by e Kindlustus allows for offering a very operative and transparent service, which gives the clients an overview of their insurance contracts in real time. In the web portal of e kindlustus one can enter into standard insurance contracts such as motor TPL insurance and motor personal liability insurance and order household and travel insurance.

 

The market share of e kindlustus, the biggest Estonian insurance brokerage firm, is 23% in the market of insurance brokers. The turnover of e kindlustus in 2006 was slightly above EEK 37.3 million. Last year the company made 114,000 new insurance contracts, i.e. 317 contracts a day and intermediated insurance premiums in the amount of EEK 261 million, i.e. 8.3% of the non-life insurance market in Estonia. The clients of e kindlustus include 111,132 private individuals and 14,541 companies.