Since 2005, Mr. Marek Pietka is in charge of Bancassurance Department at Commercial Union Poland (Aviva Group), being responsible for approx. 25% of GWP in life company and approx. 40% of GWP in non-life company. Previously he was working for ING Nationale-Nederlanden Poland, initially as actuary, later as product manager and business development manager. He graduated from the Faculty of Mathematics at Warsaw University and Executive MBA at University of Illinois – Urbana Champaign. Mr. Pietca was one of the top speakers at the Bancassurance in Emerging Markets (15-16 January 2008 in Budapest) conference.
1. How would you characterize the Polish market / the attitude of Polish people towards investment products?
Poland has been developing very quickly since 2004/2005. The natural consequence of the growth is an increase in household savings. However, the above is still not sufficient for quick development of more sophisticated investment products. As long as there is no strong trigger, people will keep to the traditional forms of savings, by which I also understand investment funds. In 2001, after the investment income tax was introduced, investment funds launched and within several years achieved double digit share in household savings. I expect that in 2008, after recent turbulences in the equity markets and expected temporary return to deposits, structured products will launch, incl. those in the insurance wrapper. MIFID and tax advantages for insurance wrapper will catalyze the process - I believe that the awareness of Polish consumers is still very low and the market is still supply driven. However, the material results of the mentioned transition will not be in my opinion visible until 2009.
2. Since Commercial Union is part of Aviva Group – What are the main benefits and disadvantages of such a partnership?
The benefits are fairly straightforward - being the part of the global organization provides access to world-class know-how and enables sharing of best practices among business units worldwide. As far as disadvantages are concerned, they are significant only in the short run. I personally see only one of them, common for all large organizations, which is slightly reduced flexibility, resulting from more careful attitude towards certain risks than in case of locally owned companies.
3. How do you think the current sub-prime crisis will affect your plans?
As commented above, in my opinion the impact of the sub-prime crisis on the retail market will be rather short term and will be reflected in reduced consumer trust to investment world in general. After the markets calm down, consumers will return, initially to structured products and then also to those more risky investments. In the meantime financial institutions will come up with new trendy ideas. In particular, I expect variable annuities to be a supernova in CEE.
4. Do you think that the bancassurance model that Commercial Union is developing in Poland can Aviva use successfully also in Slovakia, Czech Republic and Hungary?
Aviva usually adjusts its business models to local markets. I do not think that the Polish model can be directly exported to the mentioned countries, however we are sharing insights and best practices in the region and some elements of the business models are actively transferred. One of the examples of how Aviva works is bancassurance JV concept. Although it is dominant in Aviva's Italian and Spanish operations, it is now being implemented in Poland parallel to the development of direct sales force.
5. What was the key learning of the event for you? How did you like the conference?
Key learning point for me was that the marketplace is going to remain very competitive and that even being the part of the worldwide organization, we need to constantly innovate in order to maintain our local position and to be able to provide appropriate return on capital to our shareholders. I liked the conference very much, with special focus to the presentations of more in-depth issues, rather than those just sharing success stories, however I found also the latter fairly interesting.
Conducted in March 2008
