Veronika Malcoch, GRAWE Carat: Improving the business climate is possible only through the synergy of business and government efforts
For 20 years, Moldova’s major foreign investors, united in the Foreign Investors Association (FIA), have been working together with the authorities to improve the country’s investment climate. They are the most dynamic businesses, developing their industries, influencing the sustainable development of the economy as a whole and the social sphere. Veronica Malcoch, General Director of Grawe Carat Insurance, shared with us in an interview the achievements, goals and future plans of the association.
– According to your opinion, what goals did foreign investors, in particular Grawe Carat, set for themselves when joining the Association?
The establishment of the Foreign Investors Association was motivated by the need to build a platform for foreign investors in Moldova to develop jointly the local investment climate and to share best practices among themselves.
GRAWE Carat entered the local market, based on the more than 190 years of experience of the GRAWE Group in the financial markets of Central, Eastern and South-Eastern Europe. When we joined FIA, we already had well-established corporate values and an international approach to sustainability. At the same time, we were open to share experience and knowledge, to co-operate constructively with local authorities and international institutions in order to increase insurance market penetration and development.
Insurance undoubtedly contributes equally to the development of the Republic of Moldova, which still has a growing market economy. We contribute to the development of the country by improving insurance products to protect against financial losses, encouraging and expanding access to insurance services, creating jobs and increasing the qualifications of employees. In this way, we ensure the development of society and a sustainable future for our fellow citizens here at home.
We continue to believe that only through the synergy of investor and government efforts we can improve the business climate to attract, support and protect the interests of the international business community and our customers.
– It has already become a tradition that periodically the FIA collects the most important recommendations for regulating the business environment in a so-called “White Book”. Would you please list some of the proposals that have led to improvements in the business climate in the insurance industry and in the economy in general?
The FIA’s contribution in supporting business and the organizations it represents in creating a favorable regulatory, policy and institutional environment for business expansion and sustainability is to be commended. In terms of the White Book’s proposals that have improved the business environment for the insurance sector, there are a few to name.
Firstly, the transparency of insurance companies’ ownership has increased, and they have fulfilled the requirements of legislation on preventing and combating money laundering and terrorist financing.
A new insurance law was also introduced, which aims to strengthen the regulatory and supervisory framework for the market and improve its competitiveness by harmonizing national legislation with Community norms. The law places greater emphasis on risk management and corporate governance, which in the long term will lead to stronger prudential rules on indicators such as solvency and liquidity, as well as on increasing the quality of assets covering insurance technical reserves.
As a final step, the strengthening of the Green Card insurance system, taking into account the recommendations contained in the White Book, resulted in the Republic of Moldova being removed from monitoring and becoming a full member of the International Green Card Insurance System since September 2020. This demonstrates that the efforts made in this direction have been constructive and purposeful.
In recent times, although still on a small scale, we have seen more and more actions aimed at creating conditions for the issuance of insurance products in electronic form. Eventually, the digitization of services will certainly make insurance products more attractive and accessible. In the long term, it will also increase the level of financial education of the population.
– What goals does your company set in formulating the proposals for the White Book 2023? What are the current strategic challenges for your company, the insurance sector and for the Republic of Moldova?
Obviously, there is still a need to improve the business climate, especially in the insurance sector. There are still many challenges to be solved together with the authorities. Specifically, we are working on a number of proposals for legislative reform and product development.
Our recommendations for the insurance market of the Republic of Moldova are primarily aimed to ensure predictability in the market, which is a key factor for the business climate and for investors in taking decisions on the development of the insurance sector.
It is also necessary to continue the reform of the justice system – lengthy trials are also a matter of concern. Changes are needed to ensure an effective, independent and transparent justice system.
Another extremely important issue is the development of the capital market, including growth of the long-term insurance market. For example, the development of life insurance as part of the third pillar pension scheme and private health insurance could make a huge contribution to the well-being of the population and the economy at large.
We should not forget about financial education, which is not only a strategic priority, but also an important component of the development of the financial and banking market. Unfortunately, the level of financial education among Moldovans is very low, and we believe that it is very important to encourage campaigns and projects aimed at financial education of the population, including explaining the benefits of financial protection through insurance.
To remain internationally competitive, it is very important to follow the trends of digitalization of companies, markets and services. Although the degree of digitalization of the domestic insurance market has increased slightly in recent years, we believe that some draft laws should be amended to allow more types of insurance to be written online in order to optimize and improve the efficiency of companies. These trends indicate a clear reorientation of consumer needs and a revolution in insurance distribution channels.
And, of course, one of our main objectives remains the improvement of the investment climate in the Republic of Moldova. Despite the fact that currently many things are not working out, we want to contribute to changing the situation and we are glad that both FIA and the authorities share our desire to change the situation for the better.