Synergies, employees and knowledge sharing Respecting both markets and customers, the Tryg Vesta Group plans to capitalise on a number of synergies based on IT and procurement. In addition, reinsurance procurement will be optimised and adapted to capital allocation optimisation.
The reinsurance underwriting consists mainly of treaty reinsurance written from London and Copenhagen. The majority is proportional business in which premiums and claims are divided proportionally between the parties to the treaty. Business is written with a substantial geographical spread, but no reinsurance business is written from the USA.
The Group’s Polish company is the country’s seventh largest general insurer with a market share of 2%. A sizeable share of the company’s portfolio is made up of motor insurance, but the company writes insurance for all types of direct personal and commercial customers through service centres, insurance agents and brokers.
Allocation of loss and shareholders’ equity The Supervisory Board proposes that the year’s loss of DKK 1,679m be covered through a transfer from Share premium account. No dividend will be paid in respect of the 2002 financial year. Shareholders’ equity stood at DKK 4,268m as at 31 December 2002.
The supreme authority of the company is the Board of Representatives comprising 70 members elected by and from among the Danish policyholders.
Balance sheet Technical provisions, net of reinsurance 22,009 Total shareholders' equity 4,268 4,268 Total assets 5,393 30,305
The weak results performance was due to a major run-off loss on personal accident business written in earlier years and low investment income due to negative equity market trends. The 2002 financial statements were also impacted by high reinsurance costs, including non-recurring costs in connection with parts of the company’s reinsurance programme of approximately NOK 185m. The underlying insurance operations are, however, showing signs of improvement for most lines. A few lines require additional premium increases for operations to become sufficiently profitable.
Claims ratio, net of reinsurance 78.1 79.5 Expense ratio, net of reinsurance 44.3 36.1 Combined ratio 122.4 115.6 *Unaudited pro forma figures
Equalisation provisions Several companies of the Tryg Vesta Group have equalisation provisions to equalise claims, net of reinsurance.
The new structure1 and management composition will ensure: • Optimisation of capital employed • Efficient decision-making processes • Focus on business • Relevant sharing of knowledge and know-how • Ability to capitalise on synergy opportunities 1 Subject to final approval by the Financial Supervisory Authorities in Denmark, Norway and Estonia
The claims ratio is expected to normalise in 2003, as the provisions made in 2002 in respect of the Energy business and other lines in run-off are considered adequate to cover losses in future years.
All currency translation gains and losses are included in the income statement under the item “Currency translation adjustment”.
Insurance brokers 0 679 Total debtors arising out of direct insurance operations 0 2,334 Amounts owed by insurance companies 0 1,357 Amounts owed by group undertakings 92 0 Other debtors 1 484
Technical provisions Unearned premiums provisions Gross provisions 0 6,114 Reinsurers' share 0 -667 Unearned premiums provisions, net of reinsurance 0 5,447
Parent company Group 11 Land and buildings Cost of acquisition Addition on acquisition of subsidiary undertakings 0 3,085 Currency translation adjustment during the year 0 13 Addition during the year 0 45 Balance at 31 December 0 3,144
Upward revaluation Addition on acquisition of subsidiary undertakings 0 320 Upward revaluation during the year 0 50 Reversed upward revaluation 0 -7 Balance at 31 December 0 363
Parent company Group 15 Tax asset Land and buildings 0 69 Bonds and loans secured by mortgages 0 -2 Operating equipment and provisions etc. 0 240 Other assets 0 24
Share premium account Share premium account on non-cash contributions 4,647 4,647 Transferred to Retained earnings -1,679 -1,679 Balance at 31 December 2,968 2,968