At the beginning of 2008, Romania became one of the latest countries in Central and Eastern Europe to introduce mandatory private pensions for many of its citizens. Silvia Sirb, Chief Executive of AEGON’s joint venture in Romania, BT-AEGON, explains how an overhaul of the country’s pension system is opening up new opportunities for the Group and its local partner Banca Transilvania.

“Twenty years ago, Central and Eastern Europe was off-limits for western insurers like AEGON. Now, the region is one of the fastest-growing areas of the Group’s business.

Throughout the region, you have all the conditions required for sustained growth. Economies are expanding. Wealth is increasing. More people are putting their money into pensions, life insurance and other long-term investment products. In Romania alone, we’re expecting life premiums to rise from approximately EUR 300 million in 2006 to something like EUR 1 billion by 2010. In other words, we think the market will more than treble in size in the space of just four years.

Recent reforms mean that a lot of that new money will be channeled into the private sector. People can no longer rely on the state to provide for them, as they might have done a generation or two ago. They have to take responsibility for themselves.

Reform has been very important in opening the door to companies like AEGON. It’s no coincidence that four of the five countries in the region in which AEGON has a presence have all introduced mandatory, private pensions. Even in the Czech Republic, which opted for a voluntary private pension scheme, there are discussions underway on further reform. For us at BT-AEGON, it’s extremely important knowing we have this kind of regional expertise available to us. In Romania, we’ve been working very hard these past few months,