Boris Palichev, Chairman of the Supervisory Board of UNIQA Bulgaria and General Manager of UNIQA for Southeast Europe

How will the insurance sector change worldwide in the next 30 years?

When looking ahead, it's easy to get caught up in high technology, artificial intelligence, and the impact of technology companies, and quite logically, these topics are developed in almost every story about the future of every area of the economy. For me, people will continue to be of the utmost importance 30 years ago, today, and in the next 30 years. The implementation of ideas and the speed of transformation of processes and customer experiences will depend on how well teams can respond to ever-increasing customer demands. In the insurance industry, the key is the speed of contracting a policy, filing a claim, and paying a claim, which will happen within minutes and even seconds. Time and health are our most valuable assets and I expect much of the transformation to be in this direction – providing access to quality prevention and diagnosis easily and conveniently for consumers. Offering new services that will increasingly go beyond pure insurance solutions will continue to grow in our efforts to be where we need to be for our customers.

We are also facing significant challenges, for example, climate change being one of them: the last summer period, June-August 2023, was the warmest globally for over 150 years. We are witnessing more frequent floods, storms, and other natural disasters, which affect us all and are a reason to think, both as an industry and as individuals, about the footprint we are leaving for the future and what we can improve for future generations.

How do you see the ESG concept evolving – environmental, social, and governance factors? 

This topic is highly popular and is already on the agenda of international insurance companies, which are also some of the largest investors in government securities and corporate bonds. What industries are targeted for funds is crucial. The UNIQA Group follows strict rules, already taking into account ESG factors when managing the Group's investment portfolio, which is more than EUR 20 billion, by not investing in companies for which a significant part of the revenue comes from sources related to oil, coal and other areas of the economy with a harmful impact on nature. I expect ESG behaviour to transfer more substantially to the insurance products on offer, as well as an increasing push into digital channels, and for people who behave responsibly to enjoy benefits – such as discounts, higher speed, and convenience of service – thus becoming the preferred customer segment.
In the financial industry, we should inspire society so that the collective consciousness changes and we all contribute small steps every day towards a more sustainable way of living.

How will technology and artificial intelligence change the business of insurance and the way companies in the sector operate?

Technology and artificial intelligence will enable us to be faster and more accurate in delivering insurance services. Very soon, we will introduce our first insurance products on an innovative IT system that we will use in the 5 countries of the SEE region (Bulgaria, Bosnia and Herzegovina, Croatia, Montenegro and Serbia), and this is just the beginning. Putting the speed of processes in focus and self-service capabilities will close the whole process within 5 minutes – from clicking the first button to receiving an insurance policy. We value the time of our customers and partners and will continue to work in this digital transformation direction. More ambitious projects are in the pipeline that will empower our intermediaries and clients.

Motor insurance has the largest relative share in Bulgaria - do you expect a change here, and what would trigger it? 

Motor insurance (Third Party Liability and Casco) has a significant share of nearly 60% of the total premium income, including life insurance, while, for example, in Croatia, their percentage is much lower – 40%.  Traditionally, Bulgarians put their car at the top which is a logically inverted pyramid. From an objective point of view, our homes are more valuable. In the case of an adverse event, we will have to allocate a larger budget for recovering damages as well as health, which, if we lose due to disability, we suffer the most significant damage. Of course, change in Bulgaria in recent years has been visible, but it is still happening slowly and is driven by the momentum of current events. As a result of various natural disasters, such as the floods in recent years and this one in Burgas now, the matter of homes being valuable and risks being probable has once again come to the fore in the public domain, and we should not underestimate the need for insurance. In Bulgaria, less than 1 in 10 homes have insurance coverage. The language of insurers is usually complex, and it is not clear to people that, for example, if they spent less than 50 cents a day on home insurance, they would take good care of their home by having it covered for various risks: fire, flood, earthquake, etc., which, if they occurred, would lead to damage, the recovery of which could reach significant amounts of more than BGN 100,000 and seriously affect the family budget. We would not describe this as a luxury but rather as a necessity.

The region of Southeast Europe (SEE), for which you are responsible, is currently of particular importance for UNIQA Group – could you tell us a little more about its future development?

The SEE region has become a core region for UNIQA Group, and we are currently the third largest group of companies in UNIQA International. Over the last two years, we have been growing at a robust double-digit rate and attracting more and more new customers, with an annual premium income of nearly €300 million and earning the trust of over 2 million customers. 

Our position in the region is that of a reliable partner with a strong brand.  We offer modern solutions, seeking to meet our customers' requirements daily. We rely on our employees' high dedication and allow them to participate in international projects, sharing best practices in the financial industry. We are guided by the principle of "living better together," and every day, we have the ambition to develop and grow as a company. Our goal is to be in the top 3 insurers in the SEE region by total premium income and a leader in health insurance, where in Bulgaria we are already the second-largest insurer by market share.

Boris Palichev is UNIQA's General Manager and Chief Retail and Digital Officer for Southeast Europe for Bulgaria, Serbia, Bosnia and Herzegovina, Croatia and Montenegro and Chairman of the Supervisory Board of UNIQA Bulgaria. Previously, he held the position of General Manager and Chairman of the Board of UNIQA Bulgaria, as well as a member of the Board of the Association of Bulgarian Insurers. He started his career in 2005 at PricewaterhouseCoopers (PwC), after which he moved through several management positions at UNIQA Bulgaria as well as at UNIQA Group Headquarters in Vienna from 2009 to 2018. He was also Executive Director of Finance and Risk at DZI for two years.

This interview was published first in Capital.bg