After receiving a license to issue life and accident insurance, Hansa Apdrosinasana signed its first insurance contracts Sept. 17. The new company will work in close cooperation with Hansabank-Latvija, and its first clients will be the bank's clients.
"It's the first bank insurance company in Latvia," said Mart Einpalu, Hansa Apdrosinasana's council charman.
The company was founded by Hansapank Insurance, which has been successfully operating on the Estonian insurance market for three years.
Hansapank Insurance now accounts for 22 percent of the Estonian life insurance market.
"We expect the new company will also get a considerable stake in the Latvian market," Einpalu said.
Hansa Apdrosinasana Board Chairman Arnis Pakalnins said in five years, the company will increase its nominal capital from 1.06 million lats ($1.8 million) to 2 million lats and will have a market share of 15 percent.
By the end of this year, the new insurance company will collect 30,000 to 50,000 lats in premiums and issue 100 to 150 insurance contracts, Pakalnins said. He predicted the amount of insurance premiums will increase to 350,000 lats in 1999.
According to Einpalu, when people are saving for their retirement, they allocate money in life insurance and pension funds, so banks deposits decrease.
"We started a bank insurance company to avoid this outflow of money and expand the service range," Einpalu said.
The new company offers endowment insurance, term insurance, creditor's life insurance, and accident insurance.
Einpalu predicted the company will have a bright future because the insurance business is growing quickly, especially life insurance.
According to the State Insurance Supervision Inspection, life insurance companies collected 5.5 million lats in gross premiums in the first eight months, an 8.64 percent increase compared to last year.