Serbia Today Interview Mila Jezdimirovic

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INTERVIEW OF THE WEEK
Interview , July 22, 2009
Milenka - Mila Jezdimirovic
GENERAL MANAGER OF DUNAV INSURANCE ”

“We Need a Minority Strategic Partner”

By Radojka Nikolic ( Magazine Biznis, Belgrade )

We have prepared all the materials that are important for the talks about the company and we are eagerly waiting to be invited to discuss this. Our arguments are that Dunav Insurance should not be sold.

It is certain that the question of the destiny and the strategic position regarding the further work and development of Dunav Insurance will be solved at a much higher level than that of the company. I expect that in the general strategy of the Serbian Government in the much longer term, not in a year or two, the question of the fate of such companies will be solved. In any case, Serbian Government will have the final word on the company status- Milenka Mila Jezdimirović, general director of the Dunav Insurance company, answering the question of Magazin Biznis on what the strategic position of the state can be expected in the privatization of this company, which is the biggest domestic insurance company.

In the interview for our magazine director Jezdimirović emphasizes that when resolving the status of this company attention will be paid to all the capacities and qualities of the company.

- Dunav Insurance Company is the biggest on the market and should still be the leading regarding insurance, and that implies being acquainted with both the structural and other risks of all the other insurance beneficiaries of importance for the Republic of Serbia. I have primarily the big infrastructure facilities such as Electric Power Industry of Serbia (EPS), Serbian Railways, Jat Airways (national airline company of Serbia) in mind… The state must pay attention to how the general policy of the Government, which cannot be separated from the insurance, will be conducted with respect to the maintenance and renovation of all these infrastructure facilities.

What would be the ideal ownership form of Dunav Insurance?

- Precisely because Dunav Insurance is such a big company and so important for the insurance, because it holds a big part of the structural system of this country, both directly and indirectly, the question of the final status of the company must be seriously considered. Therefore the question is not only for Dunav Insurance but also the issue of a big part of the banking system and the other participants in the financial sphere. In any case, the state will first have to restructure the company because this is a specific form of organization. Here we still have to resolve the introduction of the corporate management principle, to distinguish the managing from the ownership structure, and that within these issues and analyses the Government decides on which status they intend to give the company after the ending of its state ownership phase.

My humble opinion is that perhaps in this transition period it could be done in the way it was done in Komercijalna Banka, where a minority strategic partner appeared. Therefore, first the restructuring within the system should have been prepared, and in arrangement with the government further goals should have been determined.

Therefore, Dunav Insurance should remain a state company with the increase of share capital by EBRD (European Bank for Reconstruction and Development). How should this be realized?

- First of all, as I said we have to exit the status of having social capital. And then, nothing would be new, only, as it was done with Komercijalna Banka, a state arrangement with the EBRD should be prepared so that certain benefits are obtained for both the EBRD and the state. To be fair, there should never be a single candidate, but there can be others as well. In that sense there has already been some interest on the part of other investors as well, but we still cannot get into specifics. But of course the Serbian Government will decide on that.

You have a great and valuable experience working in the area of public finances. What is your opinion on how the money circulating in the insurance can be used in the best way?

- Money circulation not only in the insurance but also in other money flows among the payment system participants should be much faster than now, that is, everyone should make use of the money and it should flow further as fast as possible. We have many inconsistencies among the payment system participants in the mutual payments and taxes. We still have not reached the level where the indisputable liabilities should be paid or it has to be determined in which time period they should be paid. I was a witness many times of the fact that when you do not have money and cannot pay a liability it is very important to announce when you will be able to do that. That certainty regarding money flows is as important as how much money there is. The biggest trouble is if the user does not know when they will get the money and by geometric progression, it then spreads into uncertainty which takes up many more partners.

When insurance is in question, unlike other economic subjects business insurance also has the task to have the part from the entire insurance premium to be saved for the insurance function. These are the reserves that it has to, both keep and increase, so that a sufficient resources quantum is ensured in order for it to meet the responsibilities overtaken by the insurance. For that reason the money circulating from the collected insurance premium can be profitable, that is can be used for different investment projects.

Are the plans of Dunav Insurance short or long term?

- As far as the plans are concerned, we will keep all that is good, and when it comes to strategy, big plans are short and clear as a rule: to be the best, the most profitable and to do quality work. Those are permanent goals, but in any case, the general attitude is that we wish to keep the knowledge and quality of staff and our clients. That is a quality that does not need be particularly proved. We will attempt to do business in the most rational way since Dunav Insurance Company has great assets, which also implies great responsibilities because everything needs to be maintained.

The development of the insurance depends on the tempo in which the economy will be recovering. Foreign companies create their capacities according to market demands and Dunav Insurance should survive with its capacities on such a market - Milenka Mila Jezdimirović said in the interview for Magazin Biznis.