Interview of “RESO” CJSC Mushegh Sahakyan to Mediamax Agency and Banks.am portal

- “UniReso” Company appeared in Armenia in 2008. It was eventually renamed into “RESO”. Why was rebranding realized?

- Our company was founded by the co-owner of Russian “RESO-Guarantee” Insurance Company Sergey Sarkisov and the owner of “Unibank” Gagik Zakaryan, and initially the company was named “UniReso”. However, since there are quite a few “puppet companies” in Armenia, certain people got the impression that “UniReso” was the “puppet company” of “Unibank”.

We decided to break this stereotype, although, I should admit that it was not easy to convince the founders of the company of the necessity to change the name. After changing the name, we registered change in the attitude towards us to the better among the participants of the market.  

The fact that “RESO” is a famous and strong brand played a quite important role in changing the brand. French AXA Company and European Bank for Reconstruction and Development are the founders of Russian “RESO-Guarantee”.

- What did you manage to do over two years of activity in Armenia?

- “RESO” company de jure appeared in Armenia in 2008, however we received the licence from the Central Bank only in late April, 2009. In fact, we have been functioning in the market for less than a year.

In this period we introduced the basic business processes, and one can say that the company is established. Concerning direct activity, we have insured “Zvartnots” International Airport – the most strategic object in Armenia. The founder of the airport appreciated the strength of RESO brand and the fact of it being affiliated to EBRD and AXA. We won the tender on medical insurance of “ArmenTel” employees - this is the largest corporate customer on medicine in Armenia.

 “RESO” carries out close cooperation with “Ameriabank”, “Areximbank-Gazprombank Group”, “VTB Bank (Armenia)”, “Unibank”, “Converse Bank”, “ACBA Credit Agricole Bank” and others.

- Did the crisis have its influence on your activity in Armenia?

- Since we are a new company in the Armenian market, we did not have time to bear serious losses, but the crisis, of course, did have negative influence on the market in general.

- What is the state of insurance market in Armenia? And what share of the market belongs to “RESO”?

- The state of insurance market in Armenia is not very good. The volume of the market makes about $21mln. “RESO-Guarantee” branch in a small Russian town with its 30% share of the market collects more insurance premium, than all Armenian insurance companies taken together.

The worst thing is that there is no insurance culture in Armenia. I believe that one of the reasons is the lack of experience and a law on compulsory insurance. Besides, at the initial stage of the market formation, perhaps, certain companies did not provide for stable payments, and this fact undermined the confidence of the population towards insurance.

Our goal is to occupy 20-30% of the Armenian market within a few years. In a few directions we have already secured this index, but in general our share in the market now makes about 5%.

- They plan to introduce compulsory insurance of transport means in Armenia since 2011. According to you, is Armenia ready for compulsory civil liability insurance of vehicle owners?

- Practically no one insures a car voluntarily in Armenia today. Basically, banks force creditors to insure cards. With the arrival of Compulsory civil liability insurance of vehicle owners, voluntary insurance will start developing as well. Any type of compulsory insurance is perceived with negative emotions in the society, and one may expect that quite many people will protest against this law. But it is necessary for development of the insurance market in general. With the arrival of compulsory civil liability insurance of vehicle owners, the insurance market will increase at least twofold and the culture of insurance will improve. I hope that this will also serve a stimulus for implementing compulsory medical insurance in Armenia.    

- You had plans on insuring banking risks. At which stage is this project?

- Insurance of banking risks was the idea of the company founders. We are thinking it over, but this is not the main direction of our business.

- Which segments of the market represent priority for your company?

- Car insurance. About 50% of our portfolio in Russia falls under the category of car insurance. In Armenia we also stake on insurance of cars and property. At that, the expert assessment and the analysis of the situation are carried out in Moscow, and the final decision on payments is made by us. We have technologies, which allow maintaining a large number of consumers on a wide geographic territory.

In the process of car or other transport vehicle insurance sale, we make photos of the car from 10-12 angles, we ask the customer to fill in a big form, which registers the state of the car in detail. That is to say, we know our customer and his/her car very well.

Besides, individual approach is important in car insurance. An 18-years-old teenager, driving a Porsche Cayenne, should not be serviced at the same tariff as a professor with 20 years of experience, driving Nissan Tiida. They should have different tariffs.

We consider micro-insurance one of the priority directions for us in Armenia. And this is a very interesting topic.

- What does “RESO School” represent?

- RESO School is our difference from other companies. In Russia, we specialize in this, investing volume means in teaching people.

In Armenia, we plan to train at least 100-150 people a month. Interested people, who do not need to have special knowledge or higher education, may attend our School. The potential agent passes a special test, the results of which allow finding out the level of the person’s communicability and understanding whether the person suits this type of activity. There are no limitations of age either. There are even pensioners, who possess all the necessary skills and even use notebooks, among our 20 thousand agents in Russia.

There is individual training for each product at our School. Specialists deliver lectures on sale technique, on communications skills with customers. Our goal is not only to sell a policy, but explain to people that the customer of the company first of all is the customer of the agent. We invest in people and they have quite good interests. This is the agent’s own business and own portfolio.  

The education fee is purely symbolic. We sell accident insurance to students (3-5 thousand AMD). But in future, since this is the requirement of the CB, for the agents to be insured from their professional mistakes, we plan to sell these very policies to our School’s students as a payment for the gained knowledge.

Our School has already trained 150 agents in Armenia. 6 agents out of these 150 work in Nagorno-Karabakh.

By the end of the year we plan to make the number of agents in “RESO” Company in Armenia reach 3 thousands. This is a bit complex model for Armenia, since everyone wants to service the customer in the office. But our task is that the agent should go to the customer and not the customer come to us.