Pursuing growth, BTA initiates reorganization of the company by establishing a subsidiary company and detaching businesses in the Baltic States and the rest of Europe
To continue the successful implementation of the company’s operational expansion strategy and to structure administrative resources and processes aligned with the strategic vectors of business, in this October BTA Insurance Company SE has submitted documents to the Latvian Commercial Register regarding establishment of a subsidiary company – AAS BTA Baltic Insurance Company (AAS – Insurance JSC). The subsidiary AAS BTA Baltic Insurance Company is going to proceed with provision of insurance services in the Baltic States, while BTA Insurance Company SE is going to take care of business development in other than Baltic European countries.
During past five years, BTA Insurance Company SE has considerably increased its business volumes (gross written premiums) – nearly three times. From 68.1 million euros of gross insurance premiums written by BTA in 2009, this number has swelled to 183 million euros – as expected at the end of 2014. The financial result of nine months of this year supports this estimate – BTA has written gross insurance premiums for 133,1 million euros during this period, which is a 8,4 % increase year-on-year. Also, in nine months of this year, BTA has disbursed 64 million euros in insurance indemnities, which is by 11,3 % more than the respective period of the previous year. Due to streamlining of administrative processes and rational disposal with resources, the profit of BTA in nine months of this year was 4,9 million euros.
BTA has started its operations in Estonia in 2006, starting with some activities in few insurance lines. Most popular at this point are BTA transportation insurance products, but other insurance products like property, liability and different technical insurance products are also becoming more appreciated by BTA clients. BTA increases its business from year to year faster and has grown by more than 30 % over 2012 and 2013 and plans to grow more than 10 % also in 2014. The insurance market in Estonia grows by approximately 5 % per year.
BTA Estonian branch reached a gross written premium of 3,9 million euros in 2007 and paid 1,3 million euros claims whereas last year gross written premium was 13,5 million euros and paid claims reached 8,6 million euros. Thus since the first full year of operation BTA Estonian branch has increased the business more than three times. In 9 months of 2014 BTA has reached 11,4 million euros in gross written premium that was 13,6 % more than in the respective period last year and paid 6.1 million euros in claims that was 4,8 % less than in 9 months of 2013. By the end of 2014 it is planned to exceed 15 million euros in gross written premium.
BTA business principles in the Baltic States differ from those employed in other European countries. The goal of BTA in the Baltic insurance market is to work on being strong to keep the earned third spot on the market and to carry on providing its customers with good quality insurance products and contemporary customer service, employing the current sales channels.
Whereas in the other European countries, BTA’s business strategy is focused on geographic expansion: study of new markets, development of new insurance products to meet the market requirements of the respective countries and building distribution network by active engagement of insurance brokers, which is the major sales channel for the insurance industry in Europe. Even at this very moment, the volume of BTA non-Baltic business in terms of gross written premiums is 31% of the total BTA business volume, which means that business processes, administrative functions and competences are actually split to tend the Baltic market and markets of other European countries, which considerably differ in terms of legislation, traditions, risks and other peculiarities, thus requiring thorough analysis and adjustment. This calls for the necessity to adjust the company structure and puts a milestone for a new stage of BTA strategic development.
Therefore BTA has initiated reorganization of the company – splitting it in line with geographic division of business: Baltics and the other Europe. AAS BTA Baltic Insurance Company, the new subsidiary of BTA, is going to distribute insurance products in the Baltic States, with the current branches of BTA in Lithuania and Estonia becoming branches of the new enterprise. Meanwhile the company registered as a European Company – BTA Insurance Company SE will pursue the expansion in other European countries.
Jānis Lucaus, Chairman of the Board of BTA Insurance Company SE,
“Back in 2009, when the Latvian economy was struck by the crisis, BTA made a strategic decision – to look for new sales markets for its insurance products within Europe. We dared to stride deep in then uncharted for us European insurance market, today we have not just made solid positions for us in the Baltic insurance market, but stepped outside of it and did the same there, and now compete with significant European insurers, who have been functioning in constantly developing market environment over centuries. Owing to teamwork, the professionalism and industriousness of our staff, as well as rational disposal with administrative resources, we manage to achieve still better results from year to year. Now we have reached a new stage of strategic growth of the company, when spreading of business beyond the boundaries of the Baltic States call for adequate adjustment of administrative processes un resources, which will allow focusing management processes to each of the operational markets, as each country has its peculiarities of industry, traditions, legal framework, which requires the staff to specialize and focus on these peculiarities. With these changes accomplished, the response time to our decisions regarding our overseas operations will decrease, it will allow us to implement independent business strategies in each region and country in line with the peculiarities of the particular market, to make clearer the process of attribution of business costs to each of the countries, getting a complete picture of the profit that the business of each country generates, it will also make for us easier to split risks and diversify them in response to the geopolitical situation. Proceeding with business expansion, we are going to stick to our current fundamental principles of operation, pursuing our main operational values – to offer good quality insurance products meeting customer expectations, to employ advanced technologies to contribute to company development, to manage the administrative resources in a rational way, to guarantee stability and certain performance of liabilities.”
Documents for establishment of the joint-stock company BTA Baltic Insurance Company, notifying the supervisory institution – the Financial and Capital Market Commission (FCMC), were submitted to the Register of Enterprises on 27 October 2014. The Board of AAS BTA Baltic Insurance Company is going to include the current board members of BTA Insurance Company SE: the Chairman of the Board Jānis Lucaus, Board Members Oskars Hartmanis and Evija Matveja. The sole shareholder and owner of the new company will be BTA Insurance Company SE. The Lithuanian and Estonian branches as well will be run by their current directors: in Lithuania – director Tadeuš Podvorski, in Estonia – director Jānis Lucaus, with deputy director Dace Azace. The Board of BTA Insurance Company SE will further be as follows: the current Chairman of the Board Jānis Lucaus and current Board Members Oskars Hartmanis and Dita Daukste.
Company reorganization will be performed in line with statutory requirements and under supervision of the Financial and Capital Market Commission, which means no inconvenience or additional duties for BTA customers and business partners. The current insurance and cooperation contracts will remain in effect, as commitments will be taken over by the assignee, which means that the current rights and obligations of BTA Insurance Company SE with respect to the Baltic States markets will be transferred to the new company AAS BTA Baltic Insurance Company.
BTA development stages
Insurance company BTA was established in 1993 as Baltijas Transporta apdrošināšana AS. It did not take long for BTA, after the starting of business in maritime and aircraft insurance, to make a name for itself for being a universal insurance company, able to furnish its customers with the broadest range of insurance products. Since 2002, when BTA acquired Lithuanian insurance company BTA Draudimas, BTA had focused on developing its operations in other countries as well – Estonia, Germany, Spain, Poland, France, Italy, United Kingdom, initially operating under the freedom to provide cross border services, later- establishing branches.
BTA Estonian branch is able to provide wide range of insurance products for private and corporate clients starting from transport, property, travel and accident insurances and ending with specific products like railway, aircraft, marine, cargo, different financial risks as well as wide range of general liability and professional indemnity products. Branch has one direct sales point and products can be bought through brokers as well as travel agencies and other BTA partners.
To take all advantages provided by the European Union and facilitate business abroad, in February 2011 BTA made a transformation to the form of European Commercial Company, acquiring a new name – BTA Insurance Company SE.
BTA is one of the few insurance companies of Latvia, which exports financial services and operates not just within the Baltic States. BTA’s global growth is confirmed by the list of TOP 500 largest Central European companies made by the international auditors Deloitte in 2013, where BTA was ranked among 50 largest Central European insurance companies.
Additional information:
Dace Azace
Juhataja asetäitja
“BTA Insurance Company” SE Eesti filiaal
Tel.: +372 6 868 075 Faks: +372 6868062
e-post: dace.azace@bta.lv
