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1420
Annual Report 2014PO
JIŠŤ
OV
NA
ČES
KÉ
SPO
ŘIT
ELN
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POJIŠŤOVNA ČESKÉ SPOŘITELNY HAS BECOME THE LEADER ON THE LIFE ASSURANCE MARKET IN TERMS OF THE VOLUME OF PREMIUMS WRITTEN FOR 2014.
Contents5 YourEasyRoadtoLifeAssurance7 CompanyProfile10 IntroductoryWordbytheChairmanoftheBoardofDirectors12 DevelopmentintheMostImportantEconomicIndicators13 MembersoftheCompany‘sExecutiveBodies14 OrganizationalStructure15 ReportbytheBoardofDirectors24 ReportbytheSupervisoryBoard25 InformationaboutViennaInsuranceGroup28 FinancialSection84 Non-financialSection
3 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Contents
(in thousands of Czech crowns CZK) 2014
Assets 32,686,701
Equity 3,543,822
Technicalprovisions 26,791,114
Profit(loss)ofcurrentaccountingperiod 855,121
Totalwrittenpremiums 11,918,758
ofthis: lifeassurance 11,201,393
non-lifeinsurance 717,365
Totalcostsofinsuranceclaims 7,837,144
ofwhich: lifeassurance 7,635,905
non-lifeinsurance 201,239
Key Figures
4 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Key Figures
Your Easy Road to Life Assurance
PojišťovnaČeskéspořitelnyisoneofthelargestinsurancecompaniesinthefieldofbankinsuranceontheCzechmarket.Thecomprehensivesaleofproducts,includingsubsequentclientservice,iscoveredbytwodistributionchannels.
THE BRANCH NETWORK OF ČESKÁ SPOŘITELNAClientsarecaredforbymorethan4,800consultantsatČeskáspořitelna.Theydeliverthemaximumavailabilityofinsuranceproductsforclientsaswellascomprehensivesalesandaftersalesserviceatmorethan670locationsintheCzechRepublic.
THE EXTERNAL NETWORK OF POJIŠŤOVNA ČESKÉ SPOŘITELNYAprofessionalclientserviceisprovidedbyapproximately167externalcontractualpartners.Consultantsmaintainaflexibleapproachtoclients,adaptingthetimeandplaceofappointmentstosuitclientneeds.Ourproductsarethusalwaysavailabletotheclient.
5 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Your Easy Road to Life Assurance
LIFE ASSURANCE MARKET LEADER BY VOLUME OF WRITTEN PREMIUMS
Life assurance premiums written in 2014 amounted to CZK 11,201 million, representing a 15.74% share of the total life assurance market in the Czech Republic.
6 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Your Easy Road to Life Assurance
Company Profile
2014PojišťovnaČeskéspořitelnylaunchedamarketingcampaignunderthebanner“TwiceasmuchwithFLEXI”,aimedatpromotingtheinclusionofcoverforseriousrisksinnewinsurancepolicies.Thestrategywasalsoreflectedinanadvertisingspot.TheCompanyfinanciallysupportedtheCentrumParaple(ParaplegicCentre)project“Mum-DadinaWheelchair”andmovedaheadincooperationwithNadaceJedličkovaústavu(JedličkaInstituteFoundation),supportingtheneedsandinterestsofhandicappedchildrenandadolescents.ThemoneywenttotheSFLEXIdoživota(LivelifeWITHFLEXI)transitprogrammeandtowardsspecificgiftsandaidsforclientsoftheJedličkaInstitute.TheCompany’semployeesalsomadefinancialcontributionstohelpchildrenandactivelyparticipatedinCharityDays.PojišťovnaČeskéspořitelnywonsecondplaceintheInsuranceCompanyoftheYear2013awardsandtookfirstplacewithFLEXILifeAssuranceinthecategoryofLifeAssuranceoftheYearintheZlatákoruna(GoldenCrown)competition.ThecompanyachievedCZK11.9billioninwrittenpremiumsandinsuredmorethan1.9millionclients.SinceJanuary2015,FLEXIhasalsobeenabletoinsuremoreseriousillnessesforthesamepriceandacceptmoreclientsforinsurance;itintroducesdecreasingannuitysumsinsuredforseriousrisksandoffersbettersecurityfordisabilityatthesamerates.
2013PojišťovnaČeskéspořitelnywontwoprestigiousawardsintheZlatákoruna(GoldenCrown)competition,thisbeingforfirstplace(withFLEXILifeAssurance)andthirdplace(withFLEXILifeAssurance–JUNIOR)inthecategoryLifeAssuranceoftheYear.TheCompanywasalsosuccessfulintheInsuranceCompanyoftheYear2012survey,winningfirstplaceintheLifeAssurancecategory.FLEXIunderwentinnovationattheendoftheyear.Itnowoffersclientsprogressivedailybenefits,incapacitybenefitsfromtheveryfirstdayandvariousrisksforchildreninsuredunderasinglecontract.PojišťovnaČeskéspořitelnyachievedalevelofpremiumswrittenofCZK11.4billionandinsuredmorethan1.9millionclients.TheinsurancecompanyisalsoactiveinthefieldofCSR.ItsemployeesactivelyparticipateinCharityDays.AfinancialcontributionwasawardedtoBambiriáda,aneventwhichsupportstheactiveandsafespendingofleisuretimebychildren.IncooperationwithCentrumParaple(ParaplegicCentre),theCompanycontinuestosupporthandicapped
fellowcitizensandfamilieswithchildren.Attheendoftheyear,theCompanyestablishedcooperationwiththeJedličkaInstitute(aninstituteforhandicappedchildren).
2012In2012PojišťovnaČeskéspořitelnydefendeditsgold-medalplaceintheZlatákoruna(GoldCrown)competitionandwonsilverintheHospodářskénovinycompetitioninthecategoryofBestInsuranceCompanyoftheYear.InMarchthecompanylaunchedanewproductonthemarket,funeralinsurance.InOctoberFLEXIunifiedtheratesforinsurancerisksandunderwentinnovation.Itnowoffersclientsdoubleindemnityfordeathinacaraccident,itextendedthird-degreedisabilityinsurancetoincludelong-termcareforfree,itenabledtheadvancepaymentofinsurancebenefitsandclientswhogosevenyearswithoutaserioushealthincidentareconsideredhealthy.PojišťovnaČeskéspořitelnyattainedCZK10.7billionofwrittenpremiumsandinsuredmorethan1.9millionclients.IncooperationwithCentrumParapleitcontinuestosupporthandicappedfellowcitizensandfamilieswithchildren.Bambiriáda,aneventtosupportactiveandsafewaysforchildrentospendtheirfreetime,alsoreceivedafinancialcontribution.OuremployeesareactivelyinvolvedintheDaysforCharity.
2011ThisyearPojišťovnaČeskéspořitelnycelebrateditsachievementswithFLEXILifeAssurance,whichwontheZlatákoruna(GoldenCrown)competition.Atthesametime,wewonthetitleBestInsuranceCompanyof2011andMostClientFriendlyInsuranceCompany2011.AtthestartoftheyearFLEXILifeAssuranceunderwentsomeinnovations,inwhichwepresentedauniqueprogramme,InSpiral,thatallowsthepolicyparameterstobemodifiedtotakeadvantageoftheproduct’sotherbenefits.Wealsointroducedbonusesforloyaltyandnoclaimsorinsuranceforrecreationalsportsrisks.WegeneratedmorethanCZK10billioninpremiumswrittenandinsuredover1.9millionclients.WorkingwithCentrumParapleandSPIDhandicap,o.p.s.,wecontinuetosupporthandicappedfellowcitizensandfamilieswithchildren.WealsomadeadonationtotheKrtek(Mole)children’scancerfoundation.OuremployeesareactivelyengagedintheDaysforCharityscheme.
7 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Company Profile
2010 InMarch2010,FLEXILifeAssurancecelebratedits10thanniversaryontheCzechmarketwithmorethan900,000peopleinsured.Thecompany’slong-termeconomicstabilitywasstrengthenedbythegeneralmeetinginMay,whenitwasdecidedtoincreasethebasiccapitalbyCZK782.9milliontoatotalofCZK1.9billion.PojišťovnaČeskéspořitelnyalsoenjoyedsuccessinvariouscompetitions.OurcoreproductFLEXILifeAssurancedefendeditsvictoryfromthepreviousyearintheZlatákoruna(GoldenCrown)competitionintheLifeAssurancecategory.WecamefirstinplaceinthecategoryInsuranceCompanyof2009–LifeAssuranceandinoneofthecompetition’smaincategories,InsuranceCompanyof2009,wedefendedourvictoryforthefourthtimeinarow.PetrZapletal,ChiefExecutiveOfficerofPojišťovnaČeskéspořitelny,alsowonanawardinthefirstyearoftheInsuranceOfficeroftheYearcompetition.Thesuccessof2010wasalsounderscoredbythefactthatforthefirsttimeinourhistorywemanagedtoexceedthelimitof9billioninwrittenpremiums.
2009 Atthebeginningof2009,wepresentedthenewcomprehensiveFLEXILifeAssurance,whichmergedtheproductsFLEXI,FLEXIINVEST2008andFLEXIH-FIXintoasingleproduct.Thequalityofthisinsuranceistestifiedtobythefactthatmorethan200,000clientsmadeuseofFLEXILifeAssurancein2009andalsobythenumberofawardstheinsuranceproductwon.IntheFincentrumBankoftheYearcompetitionFLEXILifeAssurancewontheLifeAssuranceof2009category,anditwontwoofthehighestawardsintheZlatákoruna(GoldenCrown)competition,thosebeinginthecategoriesofLifeAssuranceandInnovationoftheYear.IntheInsuranceCompanyof2008competition,wewoninallcategoriesrelatingtolifeassurance.TheAssociationofCzechInsuranceBrokersawardedusthehighestawardinthecategoriesofinsurancecompanyof2008inLifeAssurance,InnovationofInsuranceProducts,CooperationwithBrokersandinthecategoryofClaimsSettlement.TheFLEXILifeAssuranceproductcrowneditssuccesswithavictoryinthecategoryofInsuranceProductof2008.In2009,thecompanynamewaschangedtoPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup.
2008InSeptember2008PojišťovnaČeskéspořitelnybecameamemberoftheViennaInsuranceGroup.InthesameyearFLEXIINVEST2008unit-linkedlifeassurancewasvotedwinnerinthecategoryofLifeAssuranceof2008intheMasterCardBankoftheYear2008competition.Atthesametime,wewontheSilverCrownintheLifeAssurancecategory.Likewisein2008,theAssociationofCzechInsuranceBrokersawardedusInsuranceCompanyof2007inlifeassuranceandtheFLEXIproductwonthehighestawardintheInsuranceProductcategory.WewereawardedthetitleofBestInsuranceCompanyintheareaofSettlementandInnovationinInsuranceProducts.
20072007wasmarkedbyimportantproductchanges.Weinnovatedoneofourmostsuccessfulproducts,FLEXIFlexibleLifeAssurance,weintroducedanewtypeofunit-linkedlifeassurance,FLEXIH-FIX,andfor2008wepreparedaninnovationtoFLEXIINVESTunit-linkedlifeassurance.
2006During2006,westrengthenedourpositioninthelifeassurancemarket,defendingthusvindicatingourrankingamongthefivemajorlifeassurancecompanies.Inaddition,wegainedthetitleInsuranceCompanyof2006intheLifeandAccidentInsurancecategoryinasurveyorganizedbytheAssociationofCzechInsuranceBrokers.Ourclientnumbersexceededhalfamillion.
2005In2005,wecameupwithseveralproductinnovations.TheKVATROandHYPOTÉKACreditLifeAssuranceproductsmadetheirmarkamonginsurancerepresentatives.Attheendoftheyear,theproductportfoliowasenrichedwithanewinsuranceschemeforchildren,characterizedbyhighflexibility,reflectingtheneedsofthechildorthefamily.ItwentunderthenameofJUNIORFlexiblelifeAssurance.
8 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Company Profile
2004From2004onwards,wespecializedinthesaleoflifeassuranceviatheČeskáspořitelnabranchnetworkandselectedexternalnetworks.However,theČeskáspořitelnaFinancialGroupcontinuestoofferitsclientscertainproductsthroughitsstrategicpartner.Weoperateasthe“competencecentre“oftheČeskáspořitelnaFinancialGroupand,togetherwithastrategicpartner,theKooperativainsurancecompany,weprovidehighlystandardizedgeneralinsuranceproductsintendedfortheČeskáspořitelnabranchnetwork.AsignificantadditiontoourproductswasFLEXIINVESTUnit-linkedLifeAssurance,whichoffersclientsachoiceofthreeinvestmentprogrammesandawiderangeofinsuranceforliferisks.
2003WithregardtothedevelopmentoftheinsurancemarketintheCzechRepublicandtheEuropeanUnion,andalsowithregardtothefactthatČeskáspořitelnaandtheErsteBankgroupspecializeintheareaoflifeassuranceandbancassurance,inlate2003theshareholdersofPojišťovnaČeskéspořitelnydecidedtosellthenon-lifeinsurancepartofthecompanytoKooperativa.
2001UndertheinfluenceofthetransformationofČeskáspořitelnaanditsentirefinancialgroup,asof17September2001wetookonthenewnameofPojišťovnaČeskéspořitelny.Thechangeinthebusinessnameisrelatedtothechangesinthecorporatecolours,namesandlogosoftheentireČeskáspořitelnaFinancialGroup,whicharebasedonthecompositionofitsmajorityowner–ErsteBank.Therewerealsochangesintheareaofprovidingservicestoclientsandthecompany’smanagementculture.TherewasdevelopmentinsalesofourinsuranceproductsofferedinČeskáspořitelna’snetworkofbranches,inwhatisnowcalledbancassurance.
2000WithintheframeworkofprivatizingČeskáspořitelnawealsounderwentathoroughlegalandfinancialaudit.Thisresultedinanewshareholderenteringattheendof2000.ThelargestAustrianlifeassurancecompany,SparkassenVerischerung,amemberoftheErsteBankFinancialGroup,acquireda45%stakeinthecompanybyincreasingthesharecapitalbyCZK500million.WeputFLEXIFlexibleLifeAssuranceonthemarket,auniqueproductforanewgeneration.
1995–1999In1995,wewerethefirstinsurancecompanyintheCzechRepublictoputinsuranceforveryseriousdiseasesontothemarket,underwhichclaimscanbemadeifaclientisdiagnosedwithadisease.AnimportantmilestoneintheCompany’shistorywasthecapitalinputofČeskáspořitelnain1995,which,inadditiontotherequiredcapitalbase,broughtthebackgroundofthestrongestfinancialgroupintheCzechRepublic.Theimportanceofagoodqualityshareholderstructurewasdemonstratedin1997,whenthewholeinsurancemarketwasnegativelyhitbytheimpactofextensiveflooding.
1992–1994PojišťovnaČeskéspořitelnywasfoundedin1992usingCzechprivatecapital.InJanuary1993,webeganourinsuranceactivitiesunderthenameŽivnostenskápojišťovna.Ouraimwastoprovideinsuranceservices,inparticulartotherisingentrepreneurialsphere.Withthedevelopmentofinsuranceactivities,wealsostartedtoexpandourofferofinsuranceschemesforthegeneralpublic.
9 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Company Profile
In the coming period, we intend to adhere to our strategy: point out critical life situations and be open and fair to our clients.
RNDr. Petr Zapletal, MBAChairman of the Board of Directors
10 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Introductory Word by the Chairman of the Board of Directors
Dearclients,shareholdersandbusinesscolleagues,
Lastyear,wefocusedonpromotinglifeassurance.Ourgoalwastoremindpeopleoftheimportantriskscoveredbylifeassuranceandwelaunchedamarketingcampaignunderthebanner“TwiceasmuchwithFLEXI”,aimedatpromotingandpopularizingtheinclusionofseriousrisksinnewinsurancepolicies.ThecompanyguaranteeddoubleindemnityforselecteddiagnosesofseriousillnessesoncontractsconcludedbeforeMarch,andforseriousinjuriesresultingfromtrafficaccidentsoncontractsconcludedfromMaytoJuly.Wethenpreparedadoublebonusforclientswhotookoutaninsurancepolicywithcoverageforthird-degreedisabilityfrommid-SeptembertotheendofNovember.Wealsopresentedourstrategy,aimedatserioussituationsineverydaylife,intheformofamorelight-heartedadvertisingspot.
Weenabledadvisorstoviewtheirclients’contractsusingamobileapplication,PČSAssistant,andmodifiedtheSmartClientapplicationfordraftingcontracts.Theapplicationisnowclearer,intuitiveandincludesaneasy-to-understandguidewhicheliminateserrorsthatfrequentlyoccurredonpaperforms.Inthepast,theonlydrawbackwasthatthedrafthadtobeprinted,signedandsenttothecompany.Wesolvedthistoo,andwereamongthefirsttoofferclientstheoptiontosignelectronicallyusingSignPad.Wecannowreceiveoffersforinsuranceinanextremelyshorttime.I’mveryproudthatPojišťovnaČeskéspořitelnaplaysaleadingroleininnovationontheinsurancemarket.
Attheendoftheyear,wecametogripswiththeamendmentoftheIncomeTaxAct.Therealtestwashowtoresolveasituationaffectingmorethan500,000clientsinanextremelyshortperiod.Werespondedverywell.Therewasarushonclientrequestsforextraordinarywithdrawalsandthedispatchofrequeststopreserveextraordinarywithdrawals.Everyonewhocouldwasinvolvedintheadministrativeprocess.Wehandleditwithcredit.It’sgreattoknowyoucanrelyonyourcolleagueswhentheneedarises.
Commercially,wemanagedtorecordhighergrowththantheaverageofthewholemarketagainthisyear.TotalwrittenpremiumsreachedCZK11.9billion,withamarketshareof15.74%.
Duringthecourseoftheyear,colleaguesworkedontheinnovationofourflagshipproduct,FLEXIlifeassurance.Themostimportantchangesoccurredinrelationtotheriskofdisability,wheretheclientcannowchooseadifferentsuminsuredforeachdegreeofdisabilityandreceiveindemnityforeachofthethreerecognizedlevels.Clientscanalsoinsurealoan–seriousriskscanbesetwithdecreasingannuityincombinationwithaconstantsuminsured.Wereducedthepricefortheriskofveryseriousillnessesandaddedfurtherdiagnoses.Ifthedoctordeliversaterminalprognosis,wewillpaytheclient60%oftheagreedsuminsured.Theremainingfundswillbepaidouttobeneficiariesfollowingtheclient’sdeath.
Attheendoftheyear,wecompletedthepreparationofournewwebsite,whichismorefocusedontheneedsofourexistingandpotentialclients.Wearealsocontinuingaprojectaimedatimprovingthelevelofcommunicationwiththeclient.Themajorityoflettersincirculationnowarewrittenineasy-to-understandlanguage.
WewonthegoldmedalintheZlatákoruna(GoldenCrown)competitioninthecategoryofLifeAssuranceoftheYear2014forthesixthtimeinarow,andrankedsecondintheInsuranceCompanyoftheYear2013awards.FLEXIlifeassuranceonceagainconfirmedthatitisagreatproductthathasauniqueplaceontheinsurancemarket.What’smore,thesynergybetweentheCompany,itsemployeesandbusinesspartnerswasincredible.
Iwouldliketothankallcolleaguesandbusinesspartnersfortheirprofessionalapproach.Thankstothem,three-quartersofCzechfamilieswithchildrenundertheageoffivearefamiliarwithFLEXIlifeassurance.
Petr ZapletalChairmanoftheBoardofDirectors
Introductory Word by the Chairman of the Board of Directors
11 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Introductory Word by the Chairman of the Board of Directors
in thousands CZK 2011 2012 2013 2014
Assets 27,044,503 29,262,587 30,877,537 32,686,701
Equity 2,694,637 3,355,574 3,225,270 3,543,822
Financialplacements 24,742,299 26,780,771 28,364,959 30,093,911
Technicalprovisions 22,935,205 24,007,183 25,616,623 26,791,114
Profit(loss)ofcurrentaccountingperiod 417,615 1,018,418 792,052 855,121
Totalwrittenpremiums 10,679,693 10,702,266 11,355,789 11,918,758
ofthis: lifeassurance 9,892,180 9,897,341 10,594,630 11,201,393
non-lifeinsurance 787,513 804,925 761,159 717,365
Totalcostsofinsuranceclaims 5,144,551 6,745,877 6,832,406 7,837,144
ofthis: lifeassurance 4,960,058 6,556,934 6,635,313 7,635,905
non-lifeinsurance 184,493 188,943 197,093 201,239
Numberofpoliciesconcludedasat31December 774,902 789,964 782,631 786,370
ofthis: lifeassurance 726,187 740,970 736,852 743,212
non-lifeinsurance 48,715 48,994 45,779 43,158
Averagenumberofemployees(FTE) 221 239 255 269
Economic Highlights
12 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Economic Highlights
Members of the Company‘s Executive Bodies at 31 December 2014Members of the Supervisory Board
Chairman of the Supervisory BoardIng.MartinDiviš,MBA–ChairmanoftheBoardofDirectorsofKooperativaPojišťovna,a.s.,ViennaInsuranceGroup
Vice-chairman of the Supervisory BoardDkfm.HansRaumauf–MemberoftheManagementBoardofthemajorityshareholder,WienerStädtischeWechselseitigerVersicherungsverein–Vermögensverwaltung–ViennaInsuranceGroup
Member of the Supervisory BoardDr.Hans-PeterHagen–CEOandChairmanoftheManagementBoard,ViennaInsuranceGroupWienerStädtischeVersicherungAG
Member of the Supervisory BoardMag.ErwinHammerbacher–memberoftheBoardofDirectorsofSparkassenVersicherungAG
Member of the Supervisory BoardMag.RolandGröll–DirectorofFinanceandAccounting,ViennaInsuranceGroup,AG
Member of the Supervisory BoardIng.JiříDrahoš–HeadoftheControllingandReportingDepartment,PojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup
Member of the Supervisory BoardIng.PetrKohoutek–HeadoftheInsuranceDepartmentofPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup
Member of the Supervisory BoardIng.PetrProcházka–HeadoftheProductManagementDepartment,PojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup
Board of Directors
Chairman of the Board of DirectorsRNDr.PetrZapletal,MBA
Vice-chairman of the Board of DirectorsIng.JaroslavKulhánek
Member of the Board of DirectorsIng.TomášVaníček,MBA
13 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Members of the Company‘s Executive Bodies
Organizational Structure at 31 December 2014
TheCompanydoesnothaveanybranchabroad.
CEO
DEPUTY CEO(Division Finance, IT and Risk Management)
DEPUTY CEO(Sales Division)
DEPUTY CEO(Insurance and Administrative Division)
Investment Strategy Committee
Technical reserves and assumptions Committee
Committee for the Management and Control System
and Risk Management
Committee for products
GENERAL MEETING
BOARD OF DIRECOTRS
Chairman of the Board of Directors
Vice-chairman of the Board of Directors
Member of the Board of DirectorsSUPERVISORY BOARD AUDIT COMMITTEE
FinanceSection
Controllingand
Reporting
Accounting
AssetManagement
Maintenance
ICTSection
SoftwareDevelopment
RiskManagement
Section
RiskManagement
HardwareSupport
SoftwareSupport
Actuaries
SalesSupportSection
MarketingandPR
SalesReporting
ExternalNetworkSection
Regional SalesManagers
for VIP Clients
BancassuranceSection
RegionalSales
Managers
RegionalSales
Managers
ClientServiceSection
RegionalManagers
Help Desk
SalesDevelopment
ProductDevelopment
Section
Insurance Riskand Product Portfolio
Management
Productand processes
ProductDevelopmentApplication
AdministrativeSection
Legaland
Compliance
OrganizationDepartment
Internal Controland Security
HumanResources
DMS
InsuranceSection
PolicyAdministration
ClaimsHandling
Underwriting
DistributionNetworkSupport
14 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Organizational Structure
Report by the Board of Directors
Whensettinggoalsfor2014,weknewthatachievingthemwouldnotbeeasy.Financialmarketsoperatedinalow-inflationenvironmentthroughouttheyear;insomecaseswitharealthreatofdeflation.Domesticinflationarypressuresalsoremainedverylow.Thiswasreflectedinafurtherdeclineinrevenues,especiallyinbondswithlongermaturity.Newhistoriclowswererecordedonanumberofimportantmarkets.
Sharemarketsfluctuatedconsiderablymore,particularlyundertheinfluenceofgeopoliticalrisks.Thecloseoftheyearwasaffectedbyasharpdropinoilpricesandthusfurtherpressureonadecreaseinpriceindexesacrossglobaleconomies.
Thistrendinrevenues,accompaniedbyapersistinglow-interestenvironment,ultimatelyforcedtheCzechNationalBank,asthefinancialmarketregulator,toannounceareductioninthemaximumtechnicalinterestratefromthecurrent1.9%to1.3%inJanuary2015.
Legislativedevelopmentsweremuchcalmercomparedtothepreviousyearand,asidefromachangeinconditionsforthetaxadvantageoflifeassuranceattheendoftheyear,therewerenofurthersurprises.Basedonexperiencetodate,itcanbesaidwithsatisfactionthatthetransitionofinsurancetermsandconditionsunderthenewCivilCodewashandledwithmerit.
Therewerenosurprisesinthedevelopmentofwrittenpremiumsforlifeassuranceinthismacroeconomicenvironment.ThelifeassurancemarketfellyearonyearbyCZK329million,andinrelativetermsby0.7%(totalofCZK46.1billion).Thedeclineinthemarketcontinuedwithacoolingofinterestinsingle-premiuminsurance,whichremainedbehindlastyear’sfigureby0.8%(thisinsurancedroppedby4.2%in2013).Similarly,regular-premiuminsurancealsofailedtoexceedwrittenpremiumsfor2013,andfellyearonyearby0.7%.
Theyear2014wasalsomarkedbyafiercecompetitivebattleinproductoffersanddistributormotivation.Despiteallefforts,therewasnoturnaroundinthetrendofprematurepolicyterminationpromptedbytheconclusionofnewcontractswithsimilarparameters.Marketing
activitieswereconductedinanefforttoexpandthescopeofinsurancecoverageforthesameorlowerprices.Asarule,alltheseactivitiesincreasedtheeconomicdemandsofinsurance.
ThemaintasksoftheBoardofDirectorsofPojišťovnaČeskéspořitelnyin2014werebasedontheCompany’sbusinessstrategy,whichwastoofferprofitableproductswithhighaddedvaluefortheend-consumer.Thisvalueprimarilyliesintheflexibilityofinsurancecoverage,supportedbyfirst-classclientserviceforthedurationoftheinsurancepolicy.Intheyearunderreview,Companymanagementcontinuedtoimplementproductinnovations,buildcustomerandbusinesspartnerloyaltyandincreasethestabilityoftheinsuranceportfolio.
In2014,theCompanyalsofocusedontheneedtosecurethefamilyandindividualswhentacklingseriouslifesituationsthatcanoccurindailylife.However,theCompanychangeditscommunicationconceptbasedonapositiveapproachtolife,withtheslogan“Mysletepozitivně,životstojízato(“Thinkpositively,lifeisworthliving”).Asinpreviousyears,theflagshipproducttoaddressclients’needswasFLEXIlifeassurance.Thetargetgroupismainlyyoungfamilies,wherethetaskoflifeassuranceistosecuremembersofthefamilyinvariouslifesituations,evenunderchangingconditionsinthelivesofindividualfamilymembers.
TheCompanysubjugateditsfurtherdevelopmentin2014totheneedtomaintainbusinesscontinuity,whilemeetingitsbusinessgoalsandachievingfinancialstability.Growingcompetition,theregulator’sincreasingdemandsonthedemonstrationofthefinancialhealthofinsurancecompaniesandrequirementstoensureconsumerprotectionareallassociatedwithrisingcostsinbothpersonnelandmaterial.TheCompanycanonlyfacethesedemandsbyenhancingmanagementefficiencyandproductivity.Forthisreason,theCompanycontinuedtoincreaseelectroniccommunicationwithclientsinthewholeprocessofacquisitionandinsurancepolicymanagement.In2014,theCompanyfurtherimprovedsystemsfortheelectronicconclusionofinsurancepolicies,whichwasjoinedbythepilotdeploymentofbiometricsignaturesattheendoftheyear.Theintroductionof
15 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Report by the Board of Directors
biometricsignatureswastheculminationofthepaperlessprocessofconcludingcontracts,whichwillsavetime,reducetheerrorrateindraftinsurancepoliciesand,lastbutnotleast,limitthepossibilityofpotentialfraud.
Businessgoalssetfor2014wereachievedthroughaprovenmixofdistributionchannels,i.e.theuseofexternalpartnersandtheČeskáspořitelnabranchnetwork.Intheyearunderreview,salesintheČeskáspořitelnanetworkbroughtpositiveresults.Individuallifeassurancepoliciesexceededthevolumeachievedin2013byalmost10%.Salesinexternalnetworksdevelopedequallywell,withsalesexceedingfiguresin2013bymorethan3%.TheresultsachievedinboththeCompany’sdistributionnetworksrepresentedanaggregateyear-on-yeargrowthof5%,whichisamajorsuccessgiventheoveralldeclineoftheinsurancemarket.
Inabsolutefigures,writtenpremiumsthusachievedhistorichighstotallingCZK11,919million,ofwhichwrittenpremiumsforlifeassurancewereCZK11,201million.
Thepercentageofregularlypaidpremiumsintotalwrittenpremiumsheldat53.5%duetogrowthinsingle-premiuminsurance.ThetotalofregularlypaidwrittenpremiumswasCZK6,382million,whichisCZK144millionmorethanthevolumeachievedin2013.SinglepremiumsreachedCZK5,537million.ThisisanincreaseofCZK419millioncomparedtothepreviousyear,whichwasachievedthroughsalesintheČeskáspořitelnanetwork.ThevolumeofwrittenpremiumsforlifeassuranceofCZK11,201million,reportedaccordingtoCzech
accountingstandards,earnedtheCompanyfirstplaceonthelifeassurancemarket.Thesebusinessresultsrepresentatotalshareofthelifeassurancemarketof15.74%.
Innon-lifeinsurance,theCompanyfailedtoreachthevolumeofwrittenpremiumsachievedin2013andthisinsurancefellyearonyearby5.8%,whichcorrespondstowrittenpremiumsintheamountofCZK717million.Thisconcernsstandalonepersonalaccidentinsurance,incapacityinsuranceandinsuranceforlossofemployment,especiallyforČeskáspořitelnaclients,suchaspaymentprotectioninsurance.Developmentsinthesaleofinsuranceinthiscasecopythetrendinthesaleofconsumerloans,whichthebankoffersitsclients,andwhichsawadeclineofinterestinthisfinancialservicein2014.Despitethispartialfailure,wewanttocontinuetodevelopthisformofinsurancesalesaspartofgroupinsurance.Themainreasonisthatthisrepresentsacomprehensiveofferoffinancialproductsintheformofbancassurance.
Thefollowinggraphsdocumentthedevelopmentofwrittenpremiumsandmarketshare.
16 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Report by the Board of Directors
Development in written premiums (in thousands CZK)
Development in market share on the insurance market by written premium (%)
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2012 2013 2014
2012 2013 2014
Totalwrittenpremiums Lifeassurance Non-lifeinsurance
Total1a,2) Lifeassurance1a) Non-lifeinsurance2)
1a)theentiresinglepremiumisincluded(accordingtoCzechaccountingstandards),cross-bordertransactionsarenotincluded2)includingpremiumsfromnon-lifeinsuranceassignedtoCzechInsuranceAssociation(ČAP)members,
notincludingtheemployer’sstatutoryliabilityinsurance
10,702,26611,355,789
11,918,758
9,897,34010,594,630
11,201,393
804,924 761,159 717,365
7.56% 7.97% 8.24%
13.99%15.16%
16.15%
1.14% 1.05% 0.95%
17 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Report by the Board of Directors
PojišťovnaČeskéspořitelnyreceivedthefollowingawardsin2014foritsproducts,mannerofcommunicationwithclientsandinsurance-management-relatedservices:
• Insurance Company of the Year 2013–AČPM–2ndplaceinthecategoryofInsuranceCompanyoftheYear2013
• Zlatá koruna (Golden Crown)–1stplaceinthecategoryofLifeAssuranceoftheYear,forthesixthtime
• Fincentrum Bank of the Year–2ndplaceinthecategoryofLifeAssuranceoftheYear2014
Productinnovationin2014wasbasedonexperiencegainedfromourclientsanddistributors.Thesechangeshaveimprovedinsurancecoverageandflexibility.Forexample,incapacityinsurancewithindemnitypaidfromthefirstday,subjecttoa63-daywaitingperiod;theabilitytoconcludesecond-degreedisabilityinsurancewithoutfirst-degreedisabilitywhenconcludingthird-degreedisabilityinsurance,acombinationofpermanentinjuriesfrom0.5%andfrom10%,andotherchanges.
In2014,clientswhomettheconditionsforbeingawardedano-claimsorloyaltybonuswereacquaintedwiththestatusoftheirbonusinannualreports.Theloyaltyprogrammemotivatesresponsiblebehaviourbytheclientintermsofalong-termformofinsurancecoverageandsettingasidefundsfortheirpost-workinglife,andrewardsno-claimsbehaviour.
TheCompanywantstocontinuetostrengthentheimplementedloyaltyprogrammeandotheractivitiesaimedatcontinuouslyimprovingthequalityoftheCompany’sclientapproach.Forthisreason,itbegantosystematicallymanageclientexperience.Thisresultedinachangeinorganizationalandproceduralconditionsin2014.Thecapacityrequiredtocontinuallymonitorandevaluatefeedbackfromourclientswascreated.NewclientexperiencemanagershavebeengraduallyincorporatedintoalltheCompany’sbusinessactivitiesandtheirmainroleistoprovideCompanymanagementwithobjectiveinformationonclientneedsfortheevaluationofprocessesandchanges.
Thefollowinggraphsgiveanoverviewofdevelopmentsinthestructureofpremiumsoverthelastthreeyears.
18 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Report by the Board of Directors
Development in written premiums by manner of payment (in thousands CZK)
Structure of written premiums written in 2014
14,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
6.02%
93.98%
2012 2013 2014
Regularpremiums Singlepremiums
Lifeassurance
Non-lifeinsurance
Thehighshareofregularlypaidpremiumsistheresultofalong-termstrategyfocusedongrowthinpreciselythisareaofregular-premiumlifeassurance,despitetheprovisionofinsuranceservicesincooperationwithČeskáspořitelna(bancassurance).
Theabovegraphshowsthatthecompanyalmostexclusivelyfocusesonthesaleoflifeassurance.
6,071,1206,238,286 6,382,074
4,631,144
5,117,502
5,536,684
19 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Report by the Board of Directors
Financial resultsItwasverysatisfyingtoseethatthedevelopmentoftheCompany’seconomicmanagementdidnotlagbehinditsfinancialresultsin2014.TheCompanyreportedprofitaftertaxofCZK855.1millionaccordingtoCzechaccountingstandards.ThisresultisCZK63millionbetterthanthepreviousyear.
OveralltechnicalreservesreachedCZK26,791million,ofwhichtheprovisionforlifeassurance,wheretheinvestmentriskisbornebythepolicyholder,wasCZK3,365.7million.Thesereserveshadthefollowingstructureasatthebalancesheetdate:provisionsforunearnedpremiumsofCZK29.5million,provisionforlifeassuranceofCZK21,763.1million,provisionsforoutstandingclaimsofCZK1,488.7millionandotherreservesamountingto
CZK144.1million.In2014,totalreservesincreasedbyCZK1,174.5millioncomparedto2013.Theprovisionforlifeassuranceincreased,largelyduetoanincreaseinsingle-premiuminsurance.Thisincreasefellattheendoftheyearduetoextraordinarywithdrawalsfromcapitalvalueasaresultofchangesinthetaxadvantageoflifeassurance.Technicalreservesforlifeassurance,wheretheinvestmentriskisbornebythepolicyholder,increasedyearonyearbyCZK224.5million.Reservesarecreatedinaccordancewithcurrentlegislationandprovidethenecessarysecuritytocoverfutureinsuranceclaims.
Thefollowinggraphsshowthedevelopmentineconomicresults,reservesandtotalassetsupto2014.
Development in earnings by accounting period (in thousands CZK)
Development in total assets (in thousands CZK)
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
33,000,000
32,000,000
31,000,000
30,000,000
29,000,000
28,000,000
27,000,000
1,018,418
792,052855,121
2012 2013 2014 2012 2013 2014
29,262,587
30,877,537
32,686,701
20 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Report by the Board of Directors
Thevolumeoftechnicalreservesdeterminedthefinancialinvestmentoffunds;82%ofthesereservesrepresentthecompany’sassets.Thefinancialinvestmentportfolioisdividedbetweenindividualtypesoffinancialinstrumentsinaccordancewithconditionsstipulatedbylegislationgoverningbusinessintheinsurancesector,andwiththerequirementsofprudentriskmanagementestablishedbyCompanymanagement.Thestructureofthefinancialinvestmentportfolio,whichisdocumentedinthefollowinggraph,isdesignedtocoverinsuranceliabilitiesinthelongterm,whileensuringadequatesecurityofinvestedfundsforourclients.Thefinancialinvestmentoffundsismanagedin
cooperationwithČeskáspořitelna’sspecializedinvestmentbankingunits.
Inthecurrentlow-interestenvironment,theCompanyfocusesontheimportanceofprudentpolicyontheliabilitysideofthebalancesheet,withtheaimofensuringlong-termfinancialstabilityandareturnonthecommitmentsmade.Wecreditourclientswithashareofprofitsachievedfromfundsinvestedonfinancialmarketsinexcessoftheaveragetechnicalinterestrate,wheretheaverageappreciationoflifereservesin2014was3.33%.
Structure of technical reserves in 2014
Structure of financial investments in 2014
PojišťovnaČeskéspořitelnymeetstherequirementsanddemandsofsolvencyandcomplieswithsetlimitsforsolvencyimposedonlifeassuranceandnon-lifeinsurance.Indoingso,itcreatessufficientsecurityforitsclientscoveringliabilitiesarisingfromtheinsurancepoliciesconcluded.
Inthefieldofreinsurance,PojišťovnaČeskéspořitelnyproceedsaccordingtoaprudentstructureofreinsuranceandlong-termcooperation,especiallywiththerenownedreinsurancecompanySWISSRE.
Provisionforlifeassurance
Provisionsforunearnedpremiums
Provisionsforoutstandingclaims
Technicalprovisionforlifeassurance,wheretheinvestmentriskisbornebythepolicyholder
Otherreserves
Fixedincomesecurities
Variableincomesecurities(shares)
Variableincomesecurities(funds)
Financialinvestmentoflifeassurance,wheretheinvestmentriskisbornebythepolicyholder
Bankdeposits
Other
81.23% 78.56%
0.65%
6.85%
11.18%
2.70%0.06%
0.11%
5.56%
12.56%
0.54%
21 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Report by the Board of Directors
The Company’s management and control systemOverthecourseof2014,theestablishmentofthebasicfeaturesoftheCompany’smanagementsystemaccordingtoriskswascompleted,basedontheconditionsprescribedunderSolvencyIIrequirements.
Theorganizationalstructuredefinesthreelinesofdefenceagainstpotentialrisks,includingthedeterminationofrolesandresponsibilitiesforindividuallines.Ariskmanagementdepartmentwasestablishedtoserveasthemaincoordinator,togetherwithmethodologyforriskmanagementattheCompany,althoughtheprimaryresponsibilityfortheoperationoftheriskmanagementsystemremainswiththeCompany’sBoardofDirectors.Themanagementandcontrolsystemthereforecoversalltheinsurancecompany’sactivities,whilemanagementcontinuallymonitorsitsfunctionalityandefficiency.Thesystemfacilitatestheconsistentandsystematicevaluationandmanagementofrisks.Themanagementsystemensures:
• thefunctionalityofthemanagementandcontrolsystem;• thatorganizationandprocessesaresetupsothereisno
conflictofinterestsandtheseparationoftheinsurancecompany’scommercialandotheractivitiesissecured;
• riskstowhichtheinsurancecompanyisexposedinrelationtoitsactivitiesareidentified,includingprocessesleadingtotheirmanagementandcontrol;
• thatthebasicstructureofreportsforindividualdecision-makinglevelsattheCompanyisdefined;
• thatfeaturesaredefinedinaccordancewithSIIandthatthoseresponsibleforthesefeaturesarenotified,and,atthesametime,thatrequirementsforthecompetenceandintegrityofthesepersonshavebeenset;
• thesolvencycapitalrequirementissetquarterlyaccordingtothestandardSIIformula;
• thattheBoardofDirectorsconducted,processedanddiscussedanORSAreview.TheresultingORSAreportdescribedandevaluatedmanagementandcontrolsystemprocesses,gaveaninventoryofrisks,withanevaluationoftheadequacyofprocessesandinformationonthecoverageoftheriskprofile,includingthesensitivityofthesolvencypositionanditsprojectionforthefuture.
Throughtheseanalyses,theCompanyevaluateditsfinancialstabilityintheyearunderreview.Accordingtointernalandexternalcontrolsandaudits,theCompany’smanagementandcontrolsystemisconsistentandefficient,andgivestheBoardofDirectorssufficientinformationfortheeffectiveandprudentmanagementoftheCompany.
22 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Report by the Board of Directors
IN 2014, WE RECEIVED THE FOLLOWING AWARDS FOR OUR PRODUCTS, COMMUNICATION WITH CLIENTS AND SERVICE RELATED TO INSURANCE MANAGEMENT:
• Insurance Company of the Year 2013 – Association of Czech Insurance Brokers – 2nd place in the category Insurance Company of the Year 2013
• Golden Crown – 1st place in the category of Life Assurance of the Year, for the sixth consecutive time
• Fincentrum Bank of the Year – 2nd place in the category of Life Assurance of the Year 2014
23 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Report by the Board of Directors
Report by the Supervisory Board
In2014,theSupervisoryBoardofPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup,continuouslyperformedthetasksassignedtoitbylawandtheCompany’sArticlesofAssociation.AstheCompany’ssupervisoryandcontrolbody,itoversawtheactivitiesoftheBoardofDirectorsandtheCompany’sbusinessoperations.TheSupervisoryBoardwaskeptregularlyinformedoftheCompany’soperations,itsfinancialsituation,itcheckedthefulfilmentofGeneralMeetingresolutions,reviewedtheexternalauditor’sreports,andprovidedCompanymanagementwithsuggestionsandrecommendationsaimedatimprovingtheCompany’ssituation.TheSupervisoryBoardreviewedthesubmittedfinancialstatementsofPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroupasat31December2014andcametotheconclusionthataccountingrecordswerekeptinaclearandevidentiarymannerinaccordancewithvalidaccountingregulationsandtheCompany’sArticlesofAssociation.
TheannualfinancialstatementswereauditedbyKPMGČeskárepublikaAudit,s.r.o.,whichconfirmedthatthefinancialstatementsfairlypresent,inallmaterialrespects,theassets,liabilitiesandshareholders’equityofPojišťovnaČeskéspořitelny,a.s.,asat31December2014andtheresultofitsbusinessoperationsfor2014inaccordancewiththeAccountingActandotherapplicableregulationsoftheCzechRepublic.TheSupervisoryBoardtookduenoteoftheAuditor’sReport.
TheSupervisoryBoardreviewedtheReportonRelationssubmittedbytheCompany’sBoardofDirectorsinaccordancewithSection83oftheActonBusinessCorporationsandstatedthatPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroupdidnotincuranylossordamageasaconsequenceofcontracts,otherlegalactsorothermeasuresconcluded,takenoradoptedbyPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroupduringtheaccountingperiodof2014infavouroforattheinstigationofanyrelatedparties.
TheSupervisoryBoardalsodiscussedandtookintoaccounttheReportontheActivityoftheAuditCommitteeofPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroupfor2014.
Basedonallthesefacts,theSupervisoryBoardrecommendsthattheGeneralMeetingapprovethestateoftheCompany’sassetsandliabilitiesasat31December2014andtheproposeddistributionoftheCompany’sprofitsfor2014,includingthepaymentofdividendsinaccordancewiththeproposalsubmittedbytheBoardofDirectorsofPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroupfordiscussionbytheGeneralMeeting.
24 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Report by the Supervisory Board
Information about Vienna Insurance Group
Approximately23,000ViennaInsuranceGroup(VIG)employeesinaround50Groupcompaniesin25countriesgeneratedaroundEUR9.1billioninpremiumswrittenin2014.ThismakestheGrouponeoftheleadingexchange-listedinsurancegroupsinAustriaandCentralandEasternEurope.Asthenumberoneinitscoremarkets,VIGprovidesitscustomerswithanoutstandingportfolioofferingawiderangeofpropertyandcasualty,lifeandhealthinsuranceproductsandservices.
From Austria to Central and Eastern Europe VIG’srootsgoallthewaybacktotheyear1824inAustria:190yearsofhistoryinwhichtheCompanydevelopedfromasuccessfullocalinsurerintoaleadinginternationalinsurancegroup.ThestorybeginswithWienerStädtische,oneofthefirstWesternEuropeancompaniesinitsindustrytorecognisethegrowthopportunitiesinCentralandEasternEurope,andtotakeachanceonenteringthemarketintheformerCzechoslovakiain1990.Additionalmarketsfollowed,withthecompanyexpandingintoHungaryin1996,Polandin1998,Croatiain1999andRomaniain2001,tomentiononlyafewexamples.FollowingitsentryintotheMoldovanmarketin2014,ViennaInsuranceGroupnowoperatesin25markets.
Welcome to the family of Vienna Insurance Group AG Wiener Versicherung Gruppe
25 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Information about Vienna Insurance Group
Number-one in its core marketsVIG’scoremarketsincludeAustria,theCzechRepublic,Slovakia,Poland,Romania,Bulgaria,Croatia,Hungary,SerbiaandUkraine.Withamarketshareofmorethan19%,VIGistheclearnumber-oneinsurerinthesemarkets.
TheVIGmarketsinCentralandEasternEuropegeneratedmorethanhalfoftheapproximatelyEUR9.1billioninGrouppremiumswrittenin2014–aclearindicationofthesuccessoftheCEEexpansionstrategy.VIGisconvincedthattheregionwillcontinuetoconvergeeconomically,leadingtofurtherincreasesinthedemandforinsurance.
VIGRE,thereinsurancecompanythatwasestablishedbyVIGin2008,hasitsregisteredofficeintheCzechRepublic,therebystressingtheimportanceoftheCEEregionasagrowthmarketforVIG.
Customer proximity – in 25 marketsLocalentrepreneurship,andthecustomerproximityitbrings,playsakeyroleinVIG’ssuccessandisreflectedintheregionalties,multi-brandstrategyandthewidevarietyofdistributionchannelsused.TheGroupthereforeintentionallyreliesonestablishedregionalbrandsunitedundertheViennaInsuranceGroupumbrella,becauseitistheindividualstrengthsofthesebrandsandlocalexpertisethatmakeVIGsuccessfulasacorporategroup.
Success thanks to a focus on our core business and binding valuesVIGisaprogressive,highlyrisk-consciousinsurerthatfocusesonitscorebusiness,theinsurancebusiness.Itofferssecurityintheformofreliability,trustworthinessandsoundness–notonlytoitscustomers,butalsoinitsdealingswithbusinesspartners,employeesandshareholders.Allitsbusinessdecisionsinthisregardarebasedonethicalvaluessuchashonesty,integrity,diversity,equalopportunityandcustomerorientation.
Theeffectsofthisfundamentalapproachareshownnotonlybyitsstrategyofcontinuoussustainablegrowth,butalsoitsexcellentcreditworthiness.InJuly2014theinternationallyrecognizedratingagencyStandard&Poor’sconfirmeditsA+ratingwithastableoutlook.Asaresult,VIGcontinuestohavethebestratingofallcompaniesintheATX,theleadingindexoftheViennaStockExchange.
Two strong partners in the CEE region: VIG and the Erste GroupTheErsteGroupisoneoftheleadingbankinggroupsinCentralandEasternEurope,withstrongtiestoAustria.VIGandtheErsteGroupenteredintoastrategicpartnershipin2008thathasbenefitedbothofthem.Inmarketswherebothgroupsareactive,ErsteGroupbranchesmarketVIGinsuranceproductsandVIGGroupcompaniesofferErsteGroupbankproductsinreturn.
26 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Information about Vienna Insurance Group
Strong stock-exchange presence, long-term principal shareholderVIGshareshavebeenlistedontheViennaStockExchangesinceOctober1994.Attheendof2014,slightlymorethan20yearsafteritsIPO,VIGwasoneofthetopcompaniesinthePrimeMarketoftheViennaStockExchangewithamarketcapitalizationofaroundEUR4.7billion.WhiletheATXleadingindexfellby15.2%in2014,VIGsharesonceagainprovedtheirstabilitybyachievingapricegainofaround2.4%.Thecompany’sdividendpolicyisbasedonstabilityandcontinuity.VIGhaspaidadividendeveryyearsinceitsIPO,thelatestbeingEUR1.30persharein2013.
VIG’ssecondarylistingonthePragueStockExchangeinFebruary2008underscoresthegreatimportanceoftheCentralandEasternEuropeanregiontothecompany.WithamarketcapitalizationofaroundCZK132.1billion,VIGwasalsooneofthelargestcompaniesonthePragueStockExchangeattheendof2014.
Around70%ofVIG’ssharesareheldbyWienerStädtischeVersicherungsverein,astableprincipalshareholderwithalong-termorientation.Theremainingsharesareinfreefloat.
Employer of choiceInadditiontobeingfirstchoiceforinsuranceproducts,VIGalsowantstobethefirstchoiceasanemployerandtoattractthemosttalentedandintelligentemployees.Awidearrayofmeasures,suchasidentifyinganddevelopingeachemployee’sindividualskills,areimplementedbyamodernPeopleManagementDepartment.Diversityisseenasanopportunityandispartofday-to-daylifeatVIG.Importanceisattachedtocreatingtheconditionsneededtoenablewomentodeveloptheirfullpotential.ThisisbecauseViennaInsuranceGroupisawarethatitssuccessisbasedonpeople,andthereforeonthededicationofitsapproximately23,000employees.
FurtherinformationonVIGisavailableatwww.vig.comandintheVIGGroupAnnualReport.
27 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Information about Vienna Insurance Group
Contents of Financial Section29 IndependentAuditor‘sReport32 BalanceSheet35 ProfitsandLossAccount38 StatementofChangeinEquity39 NotesoftheFinancialStatements73 ReportonRelations
Financial Section
28 PojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup
Annual Report 2014
Financial Section
Independent Auditor’s Report
29 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Financial Section
30 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Financial Section
31 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Financial Section
Balance Sheet as at 31 December 2014
(in thousands CZK) Line No. Gross Adjustment Net Prior
period
ASSETS
A.Receivablessforregisteredcapitalsubscribed 1
B.Intangiblefixedassets,ofwhich: 2 419,015 322,153 96,862 84,502
C.Financialplacements(investments) 5 26,728,243 0 26,728,243 25,223,756
I.Landandbuildings(realestate),ofwhich: 6 55,653 0 55,653 55,440
1.Land 1,900 0 1,900 1,900
2.Buildings 53,753 53,753 53,540
a)Landandbuildings–self-occupied 7 55,653 55,653 55,440
II.Investmentsinaffiliatedundertakingsandparticipatinginterests 8 305,553 0 305,553 304,506
3.Participatinginterestswithsignificantinfluence 11 305,553 305,553 304,506
III.Otherfinancialplacements 13 26,367,037 0 26,367,037 24,863,810
1.Sharesandothervariable-yieldsecurities,otherparticipatinginterests 14 1,950,877 1,950,877 1,950,853
2.Bondsandotherfixed-incomesecurities 15 23,640,466 23,640,466 21,698,068
a)Securitiesvaluedatfairvaluethroughprofitandloss 8,403,014 8,403,014 8,379,852
b)OECDbondsheldtomaturity 12,317,093 12,317,093 10,456,689
c)Othersecuritiesheldtomaturity 2,920,359 2,920,359 2,861,527
6.Depositswithfinancialinstitutions 18 814,025 814,025 1,205,494
7.Otherfinancialplacements 19 (38,331) (38,331) 9,395
D.Financialplacementsforthebenefitoflifeassurancepolicyholderswhobeartheinvestmentrisk 21 3,365,668 3,365,668 3,141,203
E.Debtors 22 785,760 122,972 662,788 551,166
I.Receivablesarisingfromdirectinsuranceoperations 23 165,404 122,731 42,673 61,456
1.Receivablesduefromthepolicyholders 24 144,193 102,654 41,539 58,183
2.Receivablesduefromintermediaries 25 21,211 20,077 1,134 3,273
II.Receivablesarisingfromreinsuranceoperations 26 398,740 398,740 309,387
III.Otherreceivables 27 221,616 241 221,375 180,323
F.Otherassets 28 160,438 79,346 81,092 101,565
I.Tangiblefixedassetsotherthanthoselistedunder"C.I.Landandbuildings",andinventories 29 125,754 79,346 46,408 66,440
II.Cashinaccountsinfinancialinstitutionsandcashinhand 30 34,684 34,684 35,125
32 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Financial Section
(in thousands CZK) Line No. Gross Adjustment Net Prior
period
ASSETS
G.Temporaryassetaccounts 32 1,752,048 0 1,752,048 1,775,345
II.Deferredacquisitioncosts,ofwhich: 34 1,574,659 0 1,574,659 1,597,073
a)inlifeassurancebusiness 35 1,574,607 1,574,607 1,596,999
b)innon-lifeinsurance 36 52 52 74
III.Othertemporaryassetaccounts,ofwhich: 37 177,389 177,389 178,272
a)Estimatedreceivables 38 145,312 145,312 146,735
TOTAL ASSETS 39 33,211,172 524,471 32,686,701 30,877,537
LIABILITIES AND EQUITY
A.Equity 40 3,543,822 3,225,270
I.Registeredcapital,ofwhich: 41 1,900,100 1,900,100
IV.Othercapitalfunds 46 148,071 42,865
V.Statutoryreservefundandotherfundsfromprofit 47 364,344 326,457
VI.Profitorlossbroughtforward 48 276,186 163,796
VII.Profitorlossforthefinancialyear 49 855,121 792,052
C.Technicalprovisions 51 24,604,157 1,178,711 23,425,446 22,475,420
1.Provisionforunearnedpremiums,ofwhich: 52 53,716 24,243 29,473 32,786
a)Provisionforunearnedpremiumsrelatingtolifeassuranceclasses 53 25,112 9,923 15,189 17,726
b)Provisionforunearnedpremiumsrelatingtonon-lifeinsuranceclasses 54 28,604 14,320 14,284 15,060
2.Lifeassuranceprovision 55 21,763,106 0 21,763,106 20,841,133
3.Provisionforoutstandingclaims,ofwhich: 56 2,534,250 1,045,518 1,488,732 1,493,985
a)Provisionforoutstandingclaimsrelatingtolifeassuranceclasses 57 2,309,383 887,442 1,421,941 1,412,209
b)Provisionforoutstandingclaimsrelatingtonon-lifeinsuranceclasses 58 224,867 158,076 66,791 81,776
4.Provisionforbonusesandrebates,ofwhich: 59 131,432 108,950 22,482 24,168
a)Provisionforbonusesandrebatesrelatingtolifeassuranceclasses 60 22,304 0 22,304 23,994
b)Provisionforbonusesandrebatesrelatingtonon-lifeinsuranceclasses 61 109,128 108,950 178 174
7.Provisionforliabilitiesfromthetechnicalinterestrateapplied 63 121,653 0 121,653 83,348
33 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Financial Section
(in thousands CZK) Line No. Gross Adjustment Net Prior
period
LIABILITIES AND EQUITY
D.Lifeassurancetechnicalprovisionwheretheinvestmentriskisbornebythepolicyholders 71 3,365,668 0 3,365,668 3,141,203
E.Provisionsforotherrisksandlosses 72 198,489 189,617
2.Provisionsfortaxation 74 198,489 189,617
F.Depositsreceivedfromreinsurers 76 961,164 811,793
G.Creditors 77 934,662 729,791
I.Payablesarisingfromdirectinsuranceoperations 78 363,678 308,047
II.Payablesarisingfromreinsuranceoperations 79 461,626 368,794
V.Otherpayables,ofwhich: 83 109,358 52,950
a)Taxliabilitiesandpayablesduetosocialsecurityandhealthinsuranceinstitutions 84 23,523 6,696
H.Temporaryliabilityaccounts 86 257,450 304,443
I.Accruedexpensesanddeferredincome 87 1 0
II.Othertemporaryliabilityaccounts,ofwhich: 88 257,449 304,443
a)Estimatedpayables 89 257,449 304,443
TOTAL LIABILITIES AND EQUITY 90 32,686,701 30,877,537
34 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Financial Section
(in thousands CZK) Line No. Base Subtotal Result Prior period
I. TECHNICAL ACCOUNT FOR NON-LIFE INSURANCE
1.Earnedpremiums,netofreinsurance: 1 × × × ×
a)grosspremiumswritten 2 717,365 × × ×
b)outwardreinsurancepremiums 3 655,035 62,330 × ×
c)changeinthegrossprovisionforunearnedpremiums(+/-) 4 (1,556) × × ×
d)changeintheprovisionforunearnedpremiums,reinsurers'share(+/-) 5 (780) (776) 63,106 67,042
2.Allocatedinvestmentreturntransferredfromthenon-technicalaccount(itemIII.6.) 6 × × 3,757 4,208
3.Othertechnicalincome,netofreinsurance 7 × × 1,578 1,527
4.Claimsincurred,netofreinsurance: 8 × × × ×
a)claimspaid: 9 × × × ×
aa)grossamount 10 201,239 × × ×
ab)reinsurers'share 11 158,157 43,082 × ×
b)changeintheprovisionforoutstandingclaims(+/-): 12 × × × ×
ba)grossamount 13 (40,537) × × ×
bb)reinsurers'share 14 (25,552) (14,985) 28,097 50,138
5.Changesinothertechnicalprovisions,netofreinsurance(+/-) 15 × × 0 0
6.Bonusesandrebates,netofreinsurance 16 × × 2,047 2,112
7.Netoperatingexpenses: 17 × × × ×
a)acquisitioncosts 18 × 1,304 × ×
b)changeindeferredacquisitioncosts(+/-) 19 × 22 × ×
c)administrativeexpenses 20 × 8,841 × ×
d)reinsurancecommissionsandprofitparticipation 21 × 29,844 (19,677) (16,521)
8.Othertechnicalexpenses,netofreinsurance 22 × × 1,243 1,307
10.Sub-total,balance(result)inthetechnicalaccountfornon-lifeinsurance(itemIII.1.) 24 × × 56,731 35,741
II. TECHNICAL ACCOUNT FOR LIFE ASSURANCE
1.Earnedpremiums,netofreinsurance: 25 × × × ×
a)grosspremiumswritten 26 × 11,201,393 × ×
b)outwardreinsurancepremiums 27 × 1,307,027 × ×
c)changeintheprovisionforunearnedpremiums,netofreinsurance(+/-) 28 × (2,536) 9,896,902 9,376,279
Profit and Loss Account as at 31 December 2014
35 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Financial Section
(in thousands CZK) Line No. Base Subtotal Result Prior period
II. TECHNICAL ACCOUNT FOR LIFE ASSURANCE
2.Incomefromfinancialplacements(investments): 29 × × × ×
a)incomefromparticipatinginterests,withaseparateindicationofthatderivedfromcontrollinginfluence 30 × × ×
b)incomefromotherinvestments,withaseparateindica-tionofthatderivedfromcontrollinginfluence,ofwhich: 31 × × × ×
ba)incomefromlandandbuildings 32 0 × × ×
bb)incomefromotherfinancialplacements(investments) 33 652,058 652,058 × ×
c)valueadjustmentsonfinancialplacements 34 × 0 × ×
d)incomefromdisposaloffinancialplacements 35 × 1,760,829 2,412,887 1,739,676
3.Unrealizedgainsonfinancialplacements 36 × × 1,332,455 1,366,862
4.Othertechnicalincome,netofreinsurance 37 × × 142,759 118,044
5.Claimsincurred,netofreinsurance: 38 × × × ×
a)claimspaid: 39 × × × ×
aa)grossamount 40 7,635,905 × × ×
ab)reinsurers'share 41 664,260 6,971,645 × ×
b)changeintheprovisionforoutstandingclaims(+/-): 42 × × × ×
ba)grossamount 43 161,804 × × ×
bb)reinsurers'share 44 152,072 9,732 6,981,377 6,267,374
6.Changesinothertechnicalprovisions,netofreinsurance(+/-): 45 × × × ×
a)lifeassuranceprovisions: 46 × × × ×
aa)grossamount 47 921,973 × × ×
ab)reinsurers'share 48 0 921,973 × ×
b)othertechnicalprovisions,netofreinsurance 49 × 262,769 1,184,742 1,409,482
7.Bonusesandrebates,netofreinsurance 50 × × 252,915 263,152
8.Netoperatingexpenses: 51 × × × ×
a)acquisitionscosts 52 × 1,471,692 × ×
b)changeindeferredacquisitioncosts(+/-) 53 × 22,392 × ×
c)administrativeexpenses 54 × 554,051 × ×
d)reinsurancecommissionsandprofitparticipation 55 × 389,872 1,658,263 1,394,665
9.Expensesconnectedwithfinancialplacements(investments): 56 × × × ×
a)investmentmanagementcharges,includinginterest 57 × 199,802 × ×
b)valueadjustmentstofinancialplacements 58 × 0 × ×
c)bookvaluedisposed-offinancialplacements 59 × 1,736,818 1,936,620 1,284,701
36 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Financial Section
(in thousands CZK) Line No. Base Subtotal Result Prior period
10.Unrealizedlossesonfinancialplacements(investments) 60 × × 655,864 934,954
11.Othertechnicalexpenses,netofreinsurance 61 × × 119,134 104,571
13.Sub-total,balance(result)inthetechnicalaccountforlifeassurance(itemIII.2.) 63 × × 996,088 941,962
III. NON-TECHNICAL ACCOUNT
1.Resultofthetechnicalaccountfornon-lifeinsurance(itemI.10.) 64 × × 56,731 35,741
2.Resultofthetechnicalaccountforlifeassurance(itemII.13.) 65 × × 996,088 941,962
3.Incomefromfinancialplacements: 66 × × × ×
a)incomefromparticipatinginterests,withaseparateindicationofthatderivedfromcontrollinginfluence 67 × × ×
b)incomefromotherinvestments,withaseparateindicationofthatderivedfromcontrollinginfluence: 68 × × × ×
ba)incomefromlandandbuildings 69 70 × × ×
bb)incomefromotherfinancialplacements(investments) 70 4,504 4,574 × ×
c)valueadjustmentstofinancialplacements 71 × 4,529 × ×
d)incomefromdisposaloffinancialplacements 72 × 5,911 15,014 153,498
5.Expensesconnectedwithfinancialplacements: 74 × × × ×
a)investmentmanagementcharges,includinginterest 75 × 2,556 × ×
b)valueadjustmentstofinancialplacements 76 × 2,263 × ×
c)bookvaluedisposed-offinancialplacements 77 × 6,438 11,257 149,290
6.Allocatedinvestmentreturntransferredtothetechnicalaccountfornon-lifeinsurance(itemI.2.) 78 × × 3,757 4,208
7.Otherincome 79 × × 19,757 21,094
8.Otherexpenses 80 × × 16,843 17,667
9.Incometaxonordinaryactivities 81 × × 200,191 188,795
10.Profitorlossonordinaryactivitiesaftertax 82 × × 855,542 792,335
15.Othertaxesnotshownundertheprecedingitems 87 × × 421 283
16.Profitorlossforthefinancialyear 88 × × 855,121 792,052
37 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Financial Section
(in thousands CZK) Registered capital
Other funds from profit
Changes in valuation
Statutory reserve fund
Retained earnings
Profit (loss) for the
current yearTotal
BALANCEAT1/1/2012 1,900,100 4,285 56,168 249,786 66,683 417,615 2,694,637
Additionstofunds 3,405 20,881 393,329 (417,615)
Utilizationoffunds (3,705) (3,705)
Changeinvaluationoffinancialplacements 39,553 39,553
Increase/reductioninregisteredcapital
Paymentofdividends (393,329) (393,329)
Profit/lossforthecurrentyear 1,018,418 1,018,418
BALANCE AT 31/12/2012 1,900,100 3,985 95,721 270,667 66,683 1,018,418 3,355,574
BALANCEAT1/1/2013 1,900,100 3,985 95,721 270,667 66,683 1,018,418 3,355,574
Additionstofunds 4,730 50,921 962,767 (1,018,418)
Utilizationoffunds (3,846) (3,846)
Changeinvaluationoffinancialplacements (52,856) (52,856)
Increase/reductioninregisteredcapital
Paymentofdividends (865,654) (865,654)
Profit/lossforthecurrentyear 792,052 792,052
BALANCE AT 31/12/2013 1,900,100 4,869 42,865 321,588 163,796 792,052 3,225,270
BALANCEAT1/1/2014 1,900,100 4,869 42,865 321,588 163,796 792,052 3,225,270
Additionstofunds 3,179 39,602 749,271 -792,052
Utilizationoffunds (4,894) (4,894)
Changeinvaluationoffinancialplacements 105,206 105,206
Increase/reductioninregisteredcapital
Paymentofdividends (636,881) (636,881)
Profit/lossforthecurrentyear 855,121 855,121
BALANCE AT 31/12/2014 1,900,100 3,154 148,071 361,190 276,186 855,121 3,543,822
Statement of Change in Equity for 2014
38 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Financial Section
Notes to the Financial Statements for 2014
I. GENERAL CONTENTS
I.1. Description and principal activitiesPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup(“theCompany”)wasenteredintheCommercialRegisteron1October1992(identificationnumber:47452820).
Shareholders of the Company as at 31 December 2014:
VIENNAINSURANCEGROUPAGWienerVersicherungGruppe 90%
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup 5%
Českáspořitelna,a.s. 5%
TheCompanyreceivedalicencetocarryoninsuranceactivitieson16December1992.TheCompanycommenceditsinsuranceactivitieson1January1993.
TheCompanycarriesonthefollowingclasses/groupsofinsurance:
Life assurance• assuranceondeath,assuranceonsurvivaltoacertain
age,andassuranceonsurvivaltoacertainageordeath• pensioninsurance• accidentorsicknessinsuranceasasupplementtothe
abovetypesofinsurance• marriageinsuranceandsavingsinsurancetoprovide
fundstoraisechildren• insuranceconnectedwithaninvestmentfund/unit-linked
insurance
Non-life insurance• accidentandsicknessinsurance• insuranceforvariousfinanciallosses
Apartfromtheabove,theCompany’sprincipalactivitiesincludealsonon-lifeinsurancebusiness,whichtheCompanyhasnotbeenactivelyprovidingsince2January2004.Thesearenon-lifeinsuranceclasses3,5,7,8,9,11,13,15and18listedinPartBofAppendixNo.1toActNo.277/2009Coll.andgroups,andgroupse)andf)ofnon-lifeinsurancelistedinPartCoftheAppendixtotheInsuranceAct.
TheCompany’sprincipalactivitiesalsoincludeactivitiesrelatingtoinsurancebusinesspursuanttoSection3(1)(n)oftheInsuranceAct,i.e.intermediaryactivitycarriedoninconnectionwithinsurancebusinessundertheInsuranceAct,advisoryactivityinconnectionwiththeinsuranceofindividualsandcorporateentities,investigationofclaimscarriedonunderacontractwithaninsurancecompany,intermediaryactivityintheareaofbuildingsavingschemesandsupplementarypensioninsurance,andEducationactivityforinsuranceintermediariesandindependentlossadjusters.
Registered officePojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroupnám.Republiky11553002Pardubice
MembersoftheBoardofDirectors,SupervisoryBoardandAuditCommitteeasat31December2014:
Board of DirectorsChairman:RNDr.PetrZapletal,MBANaZahrádkách307,Praha4,Šeberov
Vice-chairman:Ing.JaroslavKulhánekZalomená175,HradecKrálové11,Roudnička
Member:Ing.TomášVaníček,MBADonínská1778,Praha9,ÚjezdnadLesy
StatementsofwillandsigningofdocumentsonbehalfoftheCompanymustalwaysbeconductedjointlybytwomembersoftheBoard.NoauthorizationforindividualrepresentationinanymatterrelatedtotheoperationsoftheCompanyispossible.WhensigningdocumentsonbehalfoftheCompany,therequirednumberofrepresentativesshalladdtheirsignaturesandstatetheirofficestotheprintedorwrittennameoftheCompany.
39 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Financial Section
Organizational Structure at 31 December 2014
TheCompanydoesnothaveanybranchabroad.
CEO
DEPUTY CEO(Division Finance, IT and Risk Management)
DEPUTY CEO(Sales Division)
DEPUTY CEO(Insurance and Administrative Division)
Investment Strategy Committee
Committee for the Management and Control System
and Risk Management
GENERAL MEETING
BOARD OF DIRECOTRS
Chairman of the Board of Directors
Vice-chairman of the Board of Directors
Member of the Board of DirectorsSUPERVISORY BOARD AUDIT COMMITTEE
FinanceSection
Controllingand
Reporting
Accounting
AssetManagement
Maintenance
ICTSection
SoftwareDevelopment
RiskManagement
Section
RiskManagement
HardwareSupport
SoftwareSupport
Actuaries
SalesSupportSection
MarketingandPR
SalesReporting
ExternalNetworkSection
Regional SalesManagers
for VIP Clients
BancassuranceSection
RegionalSales
Managers
RegionalSales
Managers
ClientServiceSection
RegionalManagers
Help Desk
SalesDevelopment
ProductDevelopment
Section
Insurance Riskand Product Portfolio
Management
Productand processes
ProductDevelopmentApplication
AdministrativeSection
Legaland
Compliance
OrganizationDepartment
Internal Controland Security
HumanResources
DMS
InsuranceSection
PolicyAdministration
ClaimsHandling
Underwriting
DistributionNetworkSupport
Technical reserves and assumptions Committee
Committee for products
40 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Financial Section
ProxyIng.FrantišekMarešNo.78,Stéblová
Supervisory BoardChairman:Ing.MartinDiviš,MBADivokáŠárka39,Praha6,Liboc
Vice-chairman:Dkfm.HansRaumaufBiedermannsdorf,Borromäumstrasse38,2362,Austria(since14.4.2014;until19.3.2014Mag.ErwinHammerbacherSeyring,Helmaweg29,2201,Austria)
Members:Dr.Hans-PeterHagenVienna,LaudonGasse20/10,1080,Austria(since28.3.2014)
Mag.ErwinHammerbacherSeyring,Helmaweg29,2201,Austria(since20.3.2014,until19.3.2014VeronikaMaderová,Nechvílova1826/2,Praha4,Chodov)
Ing.PetrKohoutekVaňkova1341,Chrudim,ChrudimIV
Mag.RolandGröllVienna,NeuwaldeggerStr.37/1,1170,Austria
Ing.JiříDrahošNo.181,CerekvicenadLoučnou(since26.6.2014,until26.6.2014JUDr.KarelKopecký,Bělehradská396,Pardubice)
Ing.PetrProcházkaVěryJunkové92,Pardubice,Studánka(since26.6.2014)
Audit CommitteeIng.MartinDiviš,MBADr.Hans-PeterHagenIng.HynekVodička
I.2. Compliance with legislationAtthebalancesheetdatetheCompanyfullycompliedwithActNo.277/2009Coll.oninsurance,asamended(“theInsuranceAct“),ActNo.89/2012Coll.,theCivilCode,asamended,ActNo.38/2004Coll.oninsuranceintermediariesandindependentlossadjusters,asamended,includingtheapplicableimplementingregulations,andwithotherlegislationinforce.
I.3. Basis of preparation of the financial statements
TheaccountingrecordsoftheCompanyaremaintainedandthefinancialstatementsoftheCompanyhavebeenpreparedinaccordancewithActNo.563/1991Coll.onaccounting,asamended,ImplementingDecreeNo.502/2002Coll.implementingcertainprovisionsofActNo.563/1991Coll.onaccounting,asamended,foraccountingunits,whichareinsurancecompanies,asamended(“RegulationNo.502/2002”),andwiththeCzechAccountingStandardsforaccountingunitsthatmaintaintheiraccountingrecordsincompliancewithRegulationNo.502/2002Coll.andotherrelevantlegislation.
TheaccountingrecordsoftheCompanyaremaintainedinsuchamannerthatthefinancialstatementspreparedbasedontheserecordspresentatrueandfairviewoftheaccountingandfinancialpositionoftheCompany.
I.4. Significant accounting policies
(a) Tangible and intangible fixed assetsTangibleandintangiblefixedassetsarestatedatacquisitioncost.
TangiblefixedassetscostinglessthanTCZK40andintangiblefixedassetscostinglessthanTCZK60arechargedtotheprofitandlossaccountintheyearinwhichtheyareacquired.Theannualdepreciationratereflectstheassets’expectedusefullives.
41 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Financial Section
Thefollowingdepreciationratesareusedfortheindividualassetclasses:
Fixed assets Method Depreciation period in years
Software Straight-line 4
Motorvehicles Straight-line 4
ITequipment Straight-line 3
Fixturesandfittings Straight-line 8
Other Straight-line 15
(b) Investments
Land and buildings (real estate)Landandbuildings(realestate)areinitiallyrecordedattheiracquisitioncostandarenotsubsequentlydepreciated.
Atthebalancesheetdate,landandbuildings(realestate)arevaluedattheirfairvalue.Thefairvaluemeansthemarketvaluedeterminedbyanexpertappraisalasthepriceforwhichsuchlandandbuildings(realestate)couldbesoldonthedateofvaluation.
Thefairvalueisdeterminedthroughaseparatevaluationofeachitemoflandandbuildings(realestate)byanexpertappraisalasatthebalancesheetdate.
Anychangeinthefairvalueoflandandbuildings(realestate)isrecognizedinequity.
Debt securities Attheacquisitiondatedebtsecuritiesarestatedatacquisitioncost.
Acquisitioncostistheamountforwhichadebtsecurityhasbeenacquiredandincludesaproportionatepartofanyaccruedinterestandexpensesdirectlyassociatedwiththeacquisition.
TheCompanyamortizespremiumsanddiscountsonalldebtsecurities.Premiumsanddiscountsareamortizedtotheprofitandlossaccountonthebasisoftheeffectiveinterestratemethodfromthedateofacquisitiontotheirmaturity.
AmortizeddebtsecuritiesarerevaluedattheirfairvalueasatthebalancesheetdatewiththeexceptionofbondsheldtomaturitythathavebeenissuedbyamemberstateoftheOrganizationforEconomicCooperationandDevelopmentandawardedaratingattheleveloftheCzechRepublicorhigherbyatleasttworeputableratingagencies(“OECDbondsheldtomaturity“).
TheCompanyrecognizestheOECDbondsheldtomaturityattheiramortizedcostasatthebalancesheetdate.
Fairvaluemeansthemarketpricepublishedbyadomesticorforeignstockexchangeorotherpublic(organized)market.TheCompanyappliesthemostrecentpublishedmarketpriceasatthedateofthefinancialstatements(balancesheetdate).Ifthereisnoavailablepriceorifitdoesnotsufficientlyrepresentthefairvalue,thefairvalueisdeterminedonthebasisofaqualifiedestimate.
Amortizedcostmeansthepriceusedwhenfirstrecognized(theacquisitioncost),whichisgraduallyincreasedbyaccruedinterestincome,adjustedbyamortizationofthediscount/premiumanddecreasedbytheamountofadjustments.
Debtsecuritiesareclassifiedassecuritiesvaluedatfairvaluethroughprofitandlossorsecuritiesavailableforsale,OECDbondsheldtomaturityandothersecuritiesheldtomaturity.
Achangeinthefairvalueofdebtsecuritiesvaluedthroughprofitandlossoravailableforsaleisrecognizedintheprofitandlossaccount.Achangeinthefairvalueofdebtsecuritiesheldtomaturitythatarerevaluedatfairvalueisrecognizedinequity.
Wheredebtsecuritiesaredenominatedinaforeigncurrency,theirvalueistranslatedtoCzechcrownsusingthecurrentexchangeratepublishedbytheCzechNationalBank(“CNB”).Theappropriateexchangeratedifferenceisincludedinthefairvalue.
42 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Financial Section
Shares and other variable-yield securitiesAttheacquisitiondate,sharesandothervariable-yieldsecuritiesareaccountedforatacquisitioncost.
Acquisitioncostistheamountforwhichthesharesorothervariable-yieldsecuritieswereacquiredandincludesallexpensesdirectlyassociatedwiththeacquisition.
Atthebalancesheetdate,sharesandothervariable-yieldsecuritiesarerevaluedattheirfairvalue.
Fairvaluemeansthemarketpricepublishedbyadomesticorforeignstockexchangeorotherpublic(organized)market.TheCompanyappliesthemostrecentpublishedmarketpriceasatthedateofthefinancialstatements(balancesheetdate).Ifnomarketpriceisavailableorifitdoesnotsufficientlyrepresentthefairvalue,thefairvalueisdeterminedonthebasisofaqualifiedestimate.
Sharesandothervariable-yieldsecuritiesareclassifiedassecuritiesvaluedatfairvaluethroughprofitandlossorsecuritiesavailableforsale.Thechangeinfairvalueofsharesorothervariable-yieldsecuritiesisrecognizedintheprofitandlossaccount.
Wheresharesandothervariable-yieldsecuritiesaredenominatedinaforeigncurrency,theirvalueistranslatedbasedonthecurrentexchangeratepublishedbyCNB.Theappropriateexchangeratedifferenceisincludedinthefairvalue.
Participating interestsParticipatinginterestsincontrolledpersonsareparticipationsinanotherenterpriseinwhichtheCompanyholdsacontrollinginfluence.Inaddition,othercaseswheretheinsurancecompanyisacontrollingpersonarereportedunderthisitem.
ParticipatinginterestswithsubstantialinfluenceareparticipationsinanotherenterpriseinwhichtheCompanyholdsasubstantialinfluence.Unlessproventothecontrary,substantialinfluenceisconsideredtobeaholdingofatleast20%ofthevotingrights.
Participatinginterestsintheformofsecuritiesissuedbythecontrolledpersonsorpersonsinwhichtheaccountingunitexercisessubstantialinfluence,andwhichareheldfortradingorareavailableforsaleareshowninitemC.II.2Debtsecurities.
Attheacquisitiondate,participatinginterestsarestatedattheiracquisitioncost.Theacquisitioncostistheamountforwhichtheparticipatinginterestswereacquiredandincludesallexpensesdirectlyassociatedwiththeacquisition.
Atthebalancesheetdate,participatinginterestsarerevaluedattheirfairvaluebasedontheCompany’sshareinthenetassetvalue.Changesinfairvaluearerecognisedinequity.
Deposits with financial institutionsDepositswithfinancialinstitutionsareinitiallyrecognizedatnominalvalue.Atthebalancesheetdate,theseassetsarerevaluedattheirfairvalue.Thefairvalueofshort-termdepositswithfinancialinstitutionsisdeterminedastheirnominalvalueincludingaccruedinterest.
DepositsdenominatedinaforeigncurrencyaretranslatedtoCzechcrownsusingthecurrentexchangeratepublishedbytheCNB,andtheappropriateexchangeratedifferenceisincludedinthefairvalue.ChangesinfairvaluearereflectedintheCompany’sprofitandlossaccount.
DerivativesDerivativesarevaluedatfairvalue.Thefairvalueoffinancialderivativesisdeterminedasthepresentvalueofexpectedcashflowsfromthesetransactions.
Financialderivativesthatdonotmeettherequirementsfortheapplicationofhedgeaccountingor,ifappropriate,derivativesinrespectofwhichtheCompanyhasdecidednottoapplyhedgeaccountingarecarriedatfairvalueandthegainsorlossesarisingfromtheirrevaluationarerecognizedintheprofitandlossaccount.ThederivativesareusedbytheCompanytohedgecurrencyrisks,i.e.currencyswaps.
43 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Financial Section
(c) Financial placements for the benefit of life assurance policyholders who bear the investment riskFinancialplacementsforthebenefitoflifeassurancepolicyholderswhobeartheinvestmentriskareaccountedforseparatelyfromotherfinancialplacements.
Atthebalancesheetdate,financialplacementsforthebenefitoflifeassurancepolicyholderswhobeartheinvestmentriskarerevaluedattheirfairvalue.InordertopreservethetrueandfairviewoftheCompany’sresultfortheyear,allchangesresultingfromrevaluationatfairvaluearerecognizedintheCompany’sprofitandlossaccount.
(d) AdjustmentsTheCompanyestablishesadjustmentstoreceivablesandotherassetsexceptforfinancialplacementsreportedatfairvalue.Adjustmentsrepresentatemporarydecreaseinthevalueofindividualassets.TheamountofthedecreaseisdeterminedonthebasisofaprofessionalriskassessmentcarriedoutbytheCompany’smanagement.
Adjustmentstoreceivablesfrompolicyholdersareestablishedbasedonananalysisoftheirrecoverability.Theanalysisincludesanageinganalysisofthereceivables.
AdjustmentstoOECDbondsheldtomaturityareaccountedforonlyifthereisariskthatthenotionalprincipalamountofthebondorthebondyieldorboththevalueandtheyieldwouldnotberepaid.
(e) Impairment of assetsAtthebalancesheetdate,theCompanyassesseswhetherthoseassets,whicharenotcarriedatfairvalueorforwhichchangesinfairvaluearerecognizedinequity,areimpaired.Impairmentofanassetisrecognizedintheprofitandlossaccount.
(f) Deferred acquisition costsDeferredacquisitioncostsrepresenttheproportionofacquisitioncostsincurredduringthecurrentfinancialyearthatrelatestotherevenuesofsubsequentfinancialyears.AttheendofeachfinancialyeartheCompanycarriesoutaliabilityadequacytesttodeterminewhethertheamountofthedeferredacquisitioncostsisappropriate.
Non-life insuranceInrespectofnon-lifeinsurance,deferredacquisitioncostsarebasedontotalacquisitioncostsincurredinthecurrentperiodandtheratioofthegrossprovisionforunearnedpremiumsatthebalancesheetdatetothetotalgrosspremiumswrittenforthefinancialyear.Deferredacquisitioncostsaredeterminedforallindividualclassesofnon-lifeinsurance.
Life assurance (other than assurance connected with an investment fund/unit-linked insurance)InlifeassurancetheCompanydeterminesdeferredacquisitioncostsusingthezillmerizationmethod,whichisthemethodusedtocalculatethelifeassuranceprovision,seenoteI.4.(i).
Life assurance connected with an investment fund/unit-linked insuranceDeferredacquisitioncostsinunit-linkedassurancearedeterminedusingactuarialmethodsandreflectingtheexpectedcancellationratebasedonthevalueofexpectedfuturedeductionsfrominitialfeesandfromtheexpectedrepaymentofthenegativecapitalvaluearisingfrominsurancecontractsduringtheperiodinwhichtheinitialcostsarededucted.Theexpectedrepaymentofthenegativecapitalvalueisdeterminedusingtheprospectivemethodtakingintoconsiderationallrelevantfuturecashflowsandusingprudentassumptionsregardingthecancellationrate,claimfrequencyandinsurancecontractdurationperiod.
(g) Income taxIncometaxontheprofitfortheyearcomprisescurrentincometaxandthechangeindeferredtax.Currentincometaxcomprisesthetaxliabilitycalculatedfromthetaxbaseusingtheeffectivetaxrateandanyadditionalpaymentsorrefundsoftaxforpreviousyears.
Deferredtaxisprovidedonalltemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesforfinancialreportingpurposesandtheamountsusedfortaxationpurposesandothertemporarydifferences(taxlossescarriedforward,ifany)multipliedbytheincometaxratesexpectedtobevalidfortheperiodsinwhichthetaxasset/liabilityisexpectedtobeutilized.
44 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Financial Section
Adeferredtaxassetisrecognizedonlytotheextentthatthereisnodoubtthatfuturetaxableprofitswillbeavailableagainstwhichthisassetcanbeutilized.
(h) Provision for unearned premiumsTheprovisionforunearnedpremiumsiscreatedinrespectoflifeassuranceandnon-lifeinsurance,exceptforsinglepremiumlifeassurance.Theprovisionamountrepresentsthepartofgrosspremiumswrittenwhichistobeallocated,intermsoftime,tothesubsequentfinancialyearortofuturefinancialyearsandisdeterminedasthesumofallamountscalculatedforindividualcontractsusingthe“proratatemporis”method.
(i) Life assurance provision Thelifeassuranceprovisioncomprisesthesumoftheprovisionsforindividuallifeassurancepolicies.ThelifeassuranceprovisionrepresentsthevalueoffutureliabilitiesoftheCompanyandiscalculatedusingactuarialmethods,includingprofitsharesdeclaredandallocatedandaprovisionforexpenses,relatedtotheadministrationofcontracts,afterdeductingthevalueoffuturepremiums.
TheCompanyaccountsfortheprovisionusingthezillmerizationmethod.Thezillmerizationmethodresultsinthedeferralofacquisitioncostsforlifeassurancecontracts.Thesecostsareincludedwithinthelifeassuranceprovisionthroughactuarialmethodsaftereliminatingtemporarynegativebalances,whicharecapitalizedandpresentedasdeferredacquisitioncosts.Theacquisitioncostsarecapitalizedanddeferredinaccordancewiththeprudenceprincipleandtakingintoaccounttheriskoflapsesandcancellations.
Forunit-linkedassurancethatinvolvesinvestmentfundswheretheCompanyguaranteesaminimumreturnoninvestment,thispartoftheprovisionsisaccountedforasalifeassuranceprovision.Theprovisioniscalculatedbasedonthenumberandpriceofunitscreditedtotheinsurancecontracts.
Withsomeunit-linkedassurancecontracts,anoclaimsbonusoraloyaltybonuscanbearrangedinaccordancewiththeinsurancetermsandconditionsandthetariffofrates.Withinthedefinedassessmentperiod,thebonusisrecognizedaspartofthelifeassuranceprovisionandamountstothe
estimatedpresentvaluedeterminedbasedondiscountingandnetoftheexpectedprobabilityofbreachofthetermsandconditionsuntiltheendoftheassessmentperiod.Uponfulfilmentoftheconditionsattheendoftheassessmentperiod,thebonusiscreditedtotheinsurancecontractintheformofpurchasedunitsanditbecomesacomponentpartofthecapitalvalueofthecontract.
(j) Provision for outstanding claimsTheprovisionforoutstandingclaimsinrespectofbothlifeandnon-lifeinsurancecomprisestheamountofexpectedcostsinrespectofclaims:
• reportedbutnotsettledduringtheperiod(RBNS),• incurredbutnotreportedduringtheperiod(IBNR).
Theprovisionforoutstandingclaimsreportedbytheendoftheyearrepresentsthesumofallamountscalculatedforindividualclaims.
Theprovisionforoutstandingclaimsincurredbutnotreportedasatthebalancesheetdateisdeterminedusingthechainladdermethod.
Theprovisionforoutstandingclaimsincludesanestimateofallrelatedexternalandinternalclaimshandlingcosts.Theprovisionforoutstandingclaimsisreducedbythevalueofsalvageandothersimilarrecoveries.
Whencalculatingtheprovisionforoutstandingclaims,nodiscountingiscarriedout.
AlthoughtheBoardofDirectorsconsiderstheprovisionforoutstandingclaimstobefairlystatedonthebasisoftheinformationcurrentlyavailabletoit,theultimateliabilitymayvaryasaresultofsubsequenteventsornewinformation,whichmayresultinsignificantadjustmentstotheamountsprovidedfor.Adjustmentstotheamountsoftheprovisionsarereflectedinthefinancialstatementsfortheperiodinwhichtheadjustmentsaremade.Theproceduresandmethodsusedinmakingestimatesarereviewedregularly.
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(k) Provision for bonuses and rebatesTheprovisionforbonusesandrebatesiscreatedinaccordancewiththerespectivetermssetoutininsurancecontracts,i.e.theGeneralTermsandConditionsofInsuranceorspecificcontractualarrangements.
Changesintheprovisionforbonusesandrebatesarepresentedintheprofitandlossaccountunder“Bonusesandrebates”.
(l) Provision for liabilities arising from the technical interest rate applied and other calculation parametersTheCompanycarriesoutalifeassuranceliabilityadequacytestasatthebalancesheetdate(“theliabilityadequacytest”)inordertoassesstheadequacyofthelifeassuranceprovisions(provisionforunearnedpremiums,lifeassuranceprovision,provisionforoutstandingclaims,provisionforbonusesandrebatesandlifeassuranceprovision,wheretheinvestmentriskisbornebythepolicyholder).
Theliabilityadequacytestisperformedusingdiscountedprojectedcashflows.
Theliabilityadequacytestresultsintheminimumvalueofliabilitiestopolicyholdersbasedonbestestimatesofthefuturedevelopmentofentryparametersadjustedbymarketvaluemargins.
Wherethisamountexceedsthetotalamountofthelifeassuranceprovisionsreducedbytherespectiveunamortizedacquisitioncostsandotherintangibleassets,thedeficiencyisrecognizedthroughtheestablishmentofaprovisionforliabilitiesarisingfromthetechnicalinterestrateappliedandothercalculationparameters.
IncompliancewithSection66(2)oftheInsuranceAct,theCompanyinformedtheCNBofthemethodforcalculatingtheprovisionforliabilitiesarisingfromthetechnicalinterestrateappliedandothercalculationparameters.
ThechangeinthisprovisionispresentedinitemII.6.(b)intheprofitandlossaccount.
(m) Life assurance provision where the investment risk is borne by the policyholdersThelifeassuranceprovisionwheretheinvestmentriskisbornebythepolicyholdersisintendedtocovertheliabilitiesoftheCompanyduetoinsuredpersonsinthoseclassesoflifeassurancewhere,basedonaninsurancecontract,theinvestmentriskisbornebythepolicyholders.
Theamountoftheprovisionisdeterminedasthesumofliabilitiesduetoinsuredpersonsintheamountoftheirsharesofinvestedpremiumsfromindividuallifeassurancecontractsinaccordancewiththeprinciplesincludedintheinsurancecontracts.
(n) Reinsurers’ share of technical provisionsTechnicalprovisionsarepresentedasanetliability,i.e.afterdeductionofthereinsurers’share.Theamountofthisshareiscalculatedbasedonthetermsoftherelatedreinsurancecontracts,themethodofsettlementwithreinsurersandinconsiderationoftheprudenceprinciple.
TheCompanypresentsthereinsurers’shareoftheprovisionforunearnedpremiums,theprovisionforoutstandingclaimsandtheprovisionforbonusesandrebates.Thereinsurersdonotparticipateintheothertechnicalprovisions.
(o) Provisions Provisionsareintendedtocoverrisks,lossesandotherrespectivepayables,whichareclearlydefinedandtheoccurrenceofwhichiseitherprobableorcertainbutwhoseamountortimingareuncertain.
Provision for taxesTheprovisionfortaxesisestablishedatthebalancesheetdateandamountstotheestimatedcorporateincometaxliabilitydue.Theutilization(release)oftheprovisionisaccountedforwhenthetaxreturnisfiled.
(p) Gross premiums writtenGrosspremiumswrittencompriseallamountsdueduringthefinancialyearinrespectofinsurancecontractsregardlessofthefactthatsuchamountsmayrelateinwholeorinparttofuturefinancialyears.
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(q) Claims paidClaimspaidcomprisetheamountassessedforpaymentbasedontheclaimsinvestigationprocess,externalandinternalclaimshandlingcostsandadeductionforthesalvagevalueandotherrecoveries.
Claimspaidarerecordeduponcompletionoftheinvestigationoftheclaimandintheamountoftheassessedsettlement.
(r) Acquisition costsAcquisitioncostscomprisealldirectandindirectcostsarisingfromtheconclusionofinsurancecontracts.
(s) Expenses and income from financial placements
Allocation of expenses and income from financial placements between life assurance and non-life insurance accounts:Expensesandincomefromfinancialplacementswhicharedirectlyrelatedtolifeassuranceactivitiesarerecordedinthelifeassurancetechnicalaccount.
Otherexpensesandincomefromfinancialplacementswhicharenotrelatedtolifeassuranceactivitiesarerecordedinitiallyinthenon-technicalaccountandsubsequentlyallofthemaretransferredtothenon-lifeinsurancetechnicalaccount.
Method of accounting for realized gains and losses upon disposal of financial placementsThedisposaloffinancialplacementsisrecognizedonagrossbasis,wherebytherevenuesfromdisposalintheamountofthesellingpriceoftherelevantfinancialinstrumentsarerecordedseparatelyfromtheexpensesintheamountofthecarryingvalueoftherelatedfinancialplacements.
(t) Allocation of items between life assurance and non-life insuranceInordertoaccountforitemscommontobothlifeassuranceandnon-lifeinsurance,theCompanyusesamethodincompliancewithRegulationNo.502/2002Coll.Underthismethodindividualitemsaregroupedaccordingtotheclassofinsurancetowhichtheyrelate.Foritemsthatcannotbeallocateddirectly,theratioofpremiumswrittenandclaims
paidforindividualclassesofinsurancetototalpremiumswrittenandtotalclaimspaidisusedasabasisforallocationofexpensesandincomebetweenlifeassuranceandnon-lifeinsurance.
Expenses and revenues from financial placementsExpensesandrevenuesfromfinancialplacementsareallocatedbetweenlifeassuranceandnon-lifeinsuranceusingthemethodstatedinpointI.4.(s).
Other expenses and revenuesDuringtheaccountingperiod,clearlyattributableexpensesandrevenuesarerecordeddirectlyinthelifeassuranceornon-lifeinsurancetechnicalaccountorthenon-technicalaccount.Expensesandrevenuesthatcannotbedirectlyattributedarerecordedprimarilyinthenon-technicalaccountandsubsequentlyallocatedtothetechnicalaccountforlifeassuranceornon-lifeinsuranceusingthemethodstatedinnoteI.4.(t).
Theallocationisnotappliedtotaxes,fees,orotherexpensesincurredoutsideinsuranceorreinsuranceactivities.
(u) Foreign currency translationTransactionsduringtheyeararerecordedattheCNBexchangerateeffectiveasatthetransactiondateorattherateatwhichthetransactionwasrealized.
Atthebalancesheetdate,foreigncurrencyassetsandliabilitiesaretranslatedattheCNBofficialrateforthatdate.Unlessstatedotherwise,foreigncurrencygainsandlossesarerecordedintheprofitandlossaccount.
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Financial Section
I.5. Changes in accounting policies and procedures
During2014,therewerenochangesinaccountingpoliciesandproceduresmadebytheCompany,andduringthefinancialyeartheCompanydidnotapplyanydeviationsfromthesepoliciesandprocedures.
I.6. Risk managementIncompliancewithRegulationNo.434/2009Coll.,toimplementcertainprovisionoftheActonInsurance,theCompanyhasensuredthattheset-upoftheinternalcontrolsystemcoversallofitsoperations.
Theset-upoftheinternalcontrolsystemenablesconsistentandsystematicriskmanagement.
TheCompanyisexposedtoinsuranceriskwhichnaturallyresultsfromtheunderwritteninsurancecontractsaswellasotherrisks,mainlythemarketrisk,creditrisk,operationalrisk,liquidityriskandconcentrationrisk.
Thepoliciesandproceduresforriskmanagementarecomprehensiveandinterrelatedwiththepoliciesandproceduresformaintenanceofthecapitaldeterminedtocovertheserisks.
TheCompany’sBoardofDirectorshastheprimaryresponsibilityforriskmanagementsystemeffectiveness.Theriskmanagementdepartmentisresponsibleforperformanceofriskmanagementactivities.Simultaneously,therehavebeendefinedtheindividuallinesofprotectionagainstrisks,includingtheirtasksandresponsibilitiesforriskmanagementwithintheCompany.
(a) Non-life insurance riskTheCompanyisexposedtoinsuranceriskandunderwritingrisksfollowingfromthesaleofnon-lifeinsuranceproducts.
Insuranceriskrelatestouncertaintyinrespectoftheperiod,frequencyandamountofdamagecoveredbyinsurancecontracts.
Themostsignificantcomponentsofinsuranceriskarethereserveriskandthepremiumrisk.Thepremiumamountisdeterminedusinghistoricalassumptions,whichmaydifferfromtheactualsituation.Theriskoftrend,riskofestimate,
changeinassumption,etc.,mayhaveasignificantimpactondeterminingtheamountofprovisions.Theliabilityadequacytestsandanalysisofsensitivitytochangeinassumptionsareusedtoeliminatethereserverisk.
InordertomanagetheinsurancerisktheCompanyappliesinternalpoliciesforthedevelopmentandvaluationofproducts,thedeterminationoftheamountoftechnicalprovisions,reinsurancestrategyandunderwritingrules.
Concentration of insurance riskConcentrationofinsuranceriskmayexistintheeventthataparticulareventoraseriesofeventsmayimpactsignificantlyupontheCompany’sliabilities.TheconcentrationofinsuranceriskthendeterminestheextentofthepossibleimpactoftheseeventsontheamountoftheCompany’sliabilities.Suchconcentrationmayarisefromasingleinsurancecontractorthroughasmallnumberofrelatedcontracts,andrelatestocircumstancesthathavegivenrisetosignificantliabilities.Concentrationofinsuranceriskmayarisefromtheaccumulationofrisksintheframeofseveralindividualgroupsofcontracts;itmayalsoariseinlow-frequency,high-severityeventsorintheeventofsignificantlitigationsorlegislativeamendments.
Geographic concentrationTherisksunderwrittenbytheCompanyareprimarilylocatedintheCzechRepublic.Fromageographicalpointofview,theCompanyhasnosignificantconcentrationofexposuretoanygroupofpersonsinsured,measuredbysocial,professionaloragecriteria.
Reinsurance strategy for non-life insuranceTheCompanyreinsuressomeoftherisksitunderwritesinordertocontrolitsexposurestolossesandprotectitsowncapitalresources.Innon-lifeinsurance,theCompanyhasbaseditsreinsuranceschemeonacontractwithanexternalreinsurer.
TheCompanyconcludesproportionatereinsurancecontractstreatiestoreduceitsnetexposure.Themaximumnetexposurelimits(ownretentions)forparticularbusinesslinesarereviewedannually.
TheCompanycooperateswithreinsurersrated“A”andhigherandcarriesoutregularmonitoringoftheirfinancialcondition.
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Financial Section
(b) Life assurance riskTheCompanyisexposedtorisksresultingfromanunfavourabledevelopmentofassumptionscomparedtotheirdeterminationatthemomentofvaluationofproducts.Thisinvolves,forexample,theriskofunfavourabledevelopmentofmortalityorsurvival,riskofadifferentdevelopmentofinvestmentreturn,riskresultingfromanunexpecteddevelopmentofcostinflationorbehaviourofclientsuponcancellationofthecontract.IntheabovecasestheCompanyisexposedtothedangerofalossresultingfromthediscrepancybetweencollectedpremiumsandclaimspaid,investmentreturnsandexpenses.
Otherrisksare,forexample,theobjectiveandsubjectiveriskoftheinsured.Theobjectiveriskisdeterminedbyobjectivefactorssuchastheage,sex,healthconditionorprofession.Thesubjectiveriskisdeterminedbysubjectivefactorssuchastheeffortoftheinsuredtosurviveormaintainahealthylifeorthepoorfinancialconditionoftheinsured.
OtherriskstowhichtheCompanyisexposedareasfollows:
• riskswithalow-frequencyoccurrenceandasignificantimpact,whichinlifeassurancemayrepresentanyclaimthataffectsseveralpersonsinsuredatthesametimeandinthesameplace(e.g.naturaldisasters),
• theriskofconcentrationofhighsumsassuredwhichdonotconstituteasignificantpartoftheportfoliobutwhichmayhaveasignificantimpactontheamountofsettlementsandasaresultalsotheprofit(loss)oftheCompany.
Thegoalofriskmanagementistheidentification,quantificationandeliminationofrisksinordertopreventchangesthathaveanegativeimpactontheprofit(loss)oftheCompanyandtheCompany’sequity.
TheCompanyappliesprofittestingwhenvaluinginsuranceproductsand,furthertheliabilityadequacytestinordertoidentify,quantifyandeliminatetherisks.Profittestingisusedtodetermineadequateinsuranceratesfortheinsuranceandfinancialguaranteesforindividualproductsandfortheassumptionsdetermined.
Thepurposeoftheliabilityadequacytestistoassesstheamountofthelifeassuranceprovisionsintermsoftheupdatedassumptions.Thelevelofsensitivityoftheresultstoachangeintheindividualassumptionsisalsoacomponentoftheseprocedures.
Inrespectoftheobjectiveandsubjectiverisksoftheinsured,theserisksmustbeassessedindividuallyuponconclusionofthecontract,primarilyintheeventofahighersumassured.Thereareproceduresforidentifyingandassessingtheserisks;aspartofsuchproceduresitisnecessarytocarryoutaqualifiedassessmentofthehealthcondition,or,ifappropriate,thefinancialconditionoftheclient,ortoassessthelevelofrisktowhichtheinsuredisexposed.Basedoninformationonthehealthcondition,subjectiveriskandotheractuarialrisks,thepremiumrateisdetermined.Inadditiontoasurchargeonthepremium,certainrisksmaybeexcludedfromtheinsurance,ortheamountofthesumassuredmaybelimited.
TheCompanyhasnosignificantconcentrationofexposuretoanygroupofpersonsinsured.
Inordertomanagetheinsurancerisk,theCompanyprimarilyusesreinsuranceandaprudentunderwritingpolicy.
Reinsurance strategy for life assuranceTheCompanyreinsuressomeoftherisksitunderwritesinordertocontrolitsexposurestolossesandprotectitsowncapitalresources.TheCompanyhasbaseditsreinsuranceschemeonacomplementarycombinationofcontractswithexternalreinsurers.
Inlifeassurance,theCompanyconcludesnon-proportionatereinsurancetreatiestoreduceitsnetexposure.
TheCompanycooperateswithreinsurersrated“A”andhigherandcarriesoutregularmonitoringoftheirfinancialcondition.
(c) Market riskTheCompanyisexposedtomarketrisk,whichfollowsfromtradingpositionsininterestrate,currencyandequityinstrumentsthatareallexposedtocommonandspecificchangesinthemarket.
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Financial Section
Themainexposureisthattherevenuesfrominvestmentswillnotbesufficienttocovertheliabilitiesfrominsurancecontracts.
Themarketriskisconstantlymonitored,measuredandmanagedusingasset/liabilitymanagement(ALM).ThebasicmethodofALMinvolvesadjustingtheduedateofassetstotheliabilitiesfrominsurancecontracts.
Asset/liability management (ALM)ThebasicgoalofALMistoachievebalanceinthestructureofassetsandliabilities,inparticularfromthepointofviewoftheirmaturity,interestratesandcurrencystructure.Theaimistoensurethattheassetspermanentlygeneratesufficientcashflowsintherequiredcurrencystructurenecessarytocoverthedueliabilitiestoclients(includingtheguaranteedrevenues)andatthesametimetoensurethatthesystemenablesthegenerationofadequateprofitforshareholders.
ForthispurposetheCompanyperformsregularmonitoringofassetsandliabilities,followedbyALMcalculation,whichenablestheCompanytomonitorandcomparethestructureofitsassetsandliabilitiesintermsoftheirmaturity,theinterestratesachievedandguaranteed,andintermsoftheircurrencystructure.Thistypeofoutputisoneoftheunderlyingtoolsformakingdecisionsonthefurtherallocationoffinancialinvestments.
Interest rate riskTheCompanyisexposedtointerestrateriskduetotheimpactofup-to-datemarketinterestratefluctuations.Thefairvalueandinvestmentreturnmaybothgrowordecreaseasaresultofthesefluctuations.
Besideschangesinthevalueofassets,theinterestratefluctuationsmayalsoresultinchangesofliabilities.
Basedonacashflowanalysis,theCompanypreparestheportfolioofsecuritiesthevalueofwhichchangestogetherwithachangeinthevalueofliabilitiesuponachangeintheinterestrate.
Theriskofchangesincashflowsasaresultofachangeininterestraterepresentsexposureprimarilytoinsurancecontractswithaguaranteedinterestrate,wheretheclient
comparestherevenueguaranteedbythecontractwiththerevenueofferedinthemarket.Wherethemarketinterestratesincrease,sometypesofcontractsmayshowanincreaseinthelapserate,orviceversa.
Price fluctuation riskTheCompanyisexposedtopricefluctuationrisk,whichconsistsinthefactthatthevalueofthefinancialinstrumentwillchangeduetochangesinthemarketprices.Thesechangesmaybecausedbyfactorsspecifictoasingleinstrumentorbytheissuersoftheinstrumentsorbyfactorsaffectingallinstrumentstradedinthecapitalormoneymarkets.
TheCompanymanagesitsuseofequityinvestmentsbymaintainingadiversifiedportfolio.
Currency riskTheCompanyisexposedtocurrencyriskthroughtransactionsinforeigncurrenciesandthroughitsassetsandliabilitiesdenominatedinforeigncurrencies.AsthecurrencyinwhichtheCompanypresentsitsfinancialstatementsistheCzechcrown(CZK),movementsintheexchangeratesbetweenthesecurrenciesandtheCZKaffecttheCompany’sfinancialstatements.
TheCompanyusescurrencyswapsinordertohedgeagainstcurrencyrisk.
(d) Credit riskTheCompanyisexposedtothecreditrisk,whichfollowsfromthecounterpartyfailingtopaytheamountsdueinfull.
ThemainareasoftheCompany’sexposuretothecreditrisk:• reinsurers’shareininsuranceliabilities,• reinsurers’debt,which,relatingtoaclaimthathasalready
beenpaid,• outstandingpremiums,• receivablesfrominsuranceintermediaries,• counterpartyriskrelatingtocurrencyswaps,• riskoffailuretorepaytheprincipalorincomefrom
financialinvestments.
Concentrationsofcreditriskarisewheregroupsofcounterpartieshavesimilareconomiccharacteristicsthat
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Financial Section
wouldcausetheirabilitytomeettheircontractualobligationstobesimilarlyaffectedbychangesineconomicorotherconditions.
Thecreditriskislimitedbyexternallimitsregulatingthestructureoffinancialplacement(RegulationNo.434/2009Coll.implementingcertainprovisionsoftheActonInsurance.).
Theoutstandingpremiumsareregularlymonitored,andthemethodofcreatingadjustmentsisdescribedinpointI.4.(d).
RecoveryofdebtfrominsuranceiscarriedoutbytheCompanyincooperationwithexternalpartners.
(e) Operational riskOperationalriskistheriskarisingfromthefailureofinternalprocesses,humanresourcesorsystems,ortheriskoflossthatmayariseduetoexternalevents,includingtheriskoflossarisingfromabreachofornoncompliancewithalegalstandard.
LossmeansanyharmordamageincurredbytheCompany.
TheCompanymonitorstheserisks,designsmodificationstoworkproceduresandprocessestoeliminatethelossevents,andbuildsasystemtoanalyseoperationalrisks.
(f) Liquidity riskTheCompanyisexposedtorequirementsforliquidityonadailybasis.Theserequirementsarerelatedtoclaimsettlements.Theliquidityriskisariskthatthecashnecessaryforpaymentofliabilitieswillnotbeavailableattheduedateandatadequatecost.
Theneedforliquidityiscontinuouslymonitoredinordertoensurenecessaryresources.
TheCompanyhasaccesstoadiversefundingbase,andincompliancewithlegislationinforceithasinvestedasufficientportionofitsfinancialplacementinliquidfinancialinstruments.
II. ADDITIONAL DISCLOSURES IN RESPECT OF THE BALANCE SHEET
II.1. Intangible fixed assetsIntangiblefixedassetsoftheCompanyasat31December2014comprisethefollowingitems:
(in thousands CZK) Software Total
Acquisitioncostat1/1/2014 369,410 369,410
Additions 51,346 51,346
Disposals (1,741) (1,741)
Acquisition cost at 31/12/2014 419,015 419,015
Accumulateddepreciationat1/1/2014 284,908 284,908
Depreciation 38,749 38,749
Disposals (1,504) (1,504)
Accumulated depreciation at 31/12/2014 322,153 322,153
Netbookvalueat1/1/2014 84,502 84,502
Net book value at 31/12/2014 96,862 96,862
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II.2. Investments
(a) Land and buildings (real estate)
Operating (in thousands CZK) 2014 2013
Land 538 538
Valuationdifferences 1,362 1,362
Buildings 70,381 70,169
Valuationdifferences (16,628) (16,629)
Total operating land and buildings at fair value 55,653 55,440
Themostrecentvaluationoflandandbuildings(realestate)basedonanexpertappraisalwascarriedoutasat31December2014.
(b) Participating interests with significant influence
2014 (in thousands CZK)
Share in registered
capital in %
Acquisition cost Fair value
Total registered
capitalTotal equity
Profit or loss for the
financial year
Dividend income/profit
share
V.I.G.ND,uzavřenýinvestičnífonda.s. 10,48 299,773 305,553 2,671,000 2,702,904 58,812 6,055
Total 299,773 305,553 N/A N/A N/A 6,055
2013 (in thousands CZK)
Share in registered
capital in %
Acquisition cost Fair value
Total registered
capitalTotal equity
Profit or loss for the
financial year
Dividend income/profit
share
V.I.G.ND,uzavřenýinvestičnífonda.s. 10,48 299773 304506 2671000 2880278 60797 6373
Celkem 299 773 304 506 N/A N/A N/A 6 373
Thefinancialdataarebasedonnon-auditedpreliminaryfinancialstatementsasat31December2014.V.I.G.ND,uzavřenýinvestičnífonda.s.isacompanyunderfullandjointcontrolofentitieswithintheVIGfinancialgroup.
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(c) Shares and other variable-yield securities, other participating interests
(in thousands CZK)Fair value Acquisition cost
2014 2013 2014 2013
Issued by financial institutions
– ListedonarecognizedCRexchange 138,288 151,158 122,033 122,033
– Unlisted 1,755,262 1,728,896 1,388,888 1,419,904
Issued by non-financial institutions
– ListedonarecognizedCRexchange 57,327 70,799 50,430 75,141
Total 1,950,877 1,950,853 1,561,351 1,617,077
Unlistedsecuritiesissuedbyfinancialinstitutionscompriseparticipationcertificates/units.
(d) Debt securities valued at fair value through profit and loss and available for sale securities
(in thousands CZK)Fair value Acquisition cost
2014 2013 2014 2013
Issued by financial institutions
– ListedonarecognizedCRexchange 157,049 149,611 157,097 151,096
– Listedelsewhere 1,695,588 1,397,893 1,611,030 1,344,050
– Unlisted 50,842 281,508 46,707 228,510
Issued by non-financial institutions
– ListedonarecognizedCRexchange 50,391 0 49,792 0
– Listedelsewhere 139,870 179,671 129,235 159,851
Issued by government sector
– ListedonarecognizedCRexchange 5,338,554 5,570,770 5,093,624 5,419,213
– Listedelsewhere 970,720 800,399 820,114 704,702
Total 8,403,014 8,379,852 7,907,599 8,007,422
SecuritieslistedelsewherearetradedmainlyonEuropeanmarkets.
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(e) OECD bonds held to maturity
(in thousands CZK)Fair value Amortized value Acquisition cost
2014 2013 2014 2013 2014 2013
– ListedonarecognizedCRexchange 13,987,168 11,229,149 12,317,093 10,456,689 12,306,599 10,395,740
Total OECD bonds held to maturity 13,987,168 11,229,149 12,317,093 10,456,689 12,306,599 10,395,740
(f) Other debt securities held to maturity
(in thousands CZK)Fair value Acquisition cost
2014 2013 2014 2013
Issued by financial institutions
– ListedonarecognizedCRexchange 347,014 318,268 343,547 313,547
– Listedelsewhere 466,998 454,082 380,205 380,205
– Unlisted 268,817 615,904 250,478 549,628
Issued by non-financial institutions
– ListedonarecognizedCRexchange 1,236,230 1,061,109 1,172,036 1,048,752
– Listedelsewhere 601,300 412,163 507,038 358,173
Total other debt securities held to maturity 2,920,359 2,861,527 2,653,304 2,650,304
(g) Deposits with financial institutions
(in thousands CZK) 2014 2013
Duewithin1year 814,025 1,205,494
Total 814,025 1,205,494
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(h) Other financial placements – derivativesOther derivatives – derivatives held for trading
Fixed term contracts with a positive fair value (in thousands CZK)
Nominal value Fair value
2014 2013 2014 2013
Termcurrencytransactions 1,619,406 9,395
Total 1,619,406 9,395
Fixed term contracts with a negative fair value (in thousands CZK)
Nominal value Fair value
2014 2013 2014 2013
Termcurrencytransactions 2,187,491 (38,331)
Total 2,187,491 (38,331)
TheCompanyconcludesderivativessolelytohedgeagainstcurrencyrisk.Alltheabovefinancialinstrumentswereconcludedontheinterbankmarket(OTC).
ThenominalvalueoffixedtermcontractsistheamountinCZKoftheCompany’sshort-termcurrencyposition.Thefairvalueoffixedtermcontractsistherevaluationofthecontractsasatthebalancesheetdate,i.e.thedifferencebetweenthepresentvaluesofexpectedcashinflowsandoutflows.
Asat31December2014theremainingmaturityofderivativesamountingtoTCZK(38,331)(TCZK9,395asat31December2013)waslessthan3months.
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II.3. Financial placements for the benefit of life assurance policyholders who bear the investment risk
Description (in thou sands CZK)Fair value Acquisition cost
2014 2013 2014 2013
Sharesandothervariable-yieldsecurities 818,922 787,408 727,091 731,133
Debtsecurities 2,546,746 2,353,795 1,802,620 1,830,535
Total 3,365,668 3,141,203 2,529,711 2,561,668
II.4. Currency structure of the financial placement
Currency (in thou sands CZK)
Variable-yield securities Fixed income securities Deposits and other financial placements Total
2014 2013 2014 2013 2014 2013 2014 2013
CZK 1,146,506 1,159,270 22,564,861 20,875,682 4,124,968 4,340,389 27,836,335 26,375,341
EUR 335,341 310,115 831,556 757,093 19,194 6,578 1,186,091 1,073,786
GBP 112,563 105,262 (2,680) 629 109,883 105,891
USD 662,020 680,712 244,049 (120) 8,496 905,949 689,208
PLN 65,293 0 65,293
Total 2,256,430 2,255,359 23,640,466 21,698,068 4,141,362 4,356,092 30,038,258 28,309,519
Variable-yieldsecuritiescompriseaparticipatinginterestwithsignificantinfluenceamountingtoTCZK305,553(2013:TCZK304,506).AllsecuritieswheretheinvestmentriskisbornebythepolicyholdersaredenominatedinCZK.Allfinancialplacementsinthetableabovearestatedatbookvalue.
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II.5. Receivables
At 31 December 2014 (in thou sands CZK)
Receivables from policyholders
Receivables from insurance intermediaries
Receivables from reinsurance
operationsOther receivables Total
Due 5,146 398,740 221,463 625,349
Overdue 139,047 21,211 153 160,411
Total 144,193 21,211 398,740 221,616 785,760
Adjustment 102,654 20,077 241 122,972
Total net 41,539 1,134 398,740 221,375 662,788
At 31 December 2013 (in thou sands CZK)
Receivables from policyholders
Receivables from insurance intermediaries
Receivables from reinsurance
operationsOther receivables Total
Due 8,180 2,000 309,387 179,874 499,441
Overdue 149,717 19,712 581 170,010
Total 157,897 21,712 309,387 180,455 669,451
Adjustment 99,714 18,439 132 118,285
Total net 58,183 3,273 309,387 180,323 551,166
Other receivables
(in thou sands CZK) 2014 2013
Inter-companyreceivables 2,437 1,561
Incometaxprepayments 214,721 171,319
Otherreceivables 4,458 7,575
Total other receivables (gross) 221,616 180,455
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II.6. Other assets
(a) Tangible fixed assets
(in thou sands CZK) Cars IT equipment Fixtures and fittings Other
Acquisition of assets and
advances paid
Total
Acquisitioncostat1.1.2014 29,792 59,026 24,306 11,397 1,581 126,102
Additions 4,967 1,194 60 8,169 1,075 15,465
Disposals (4,573) (1,340) (2,920) (8,867) (1,613) (19,313)
Acquisition cost at 31/12/2014 30,186 58,880 21,446 10,699 1,043 122,254
Accumulateddepreciationat1/1/2014 16,439 31,420 12,712 835 0 61,406
Depreciationexpense 6,436 16,732 1,759 1,092 26,019
Disposals (3,268) (1,340) (2,669) (802) (8,079)
Accumulated depreciation at 31/12/2014 19,607 46,812 11,802 1,125 0 79,346
Netbookvalueat1/1/2014 13,353 27,606 11,594 10,562 1,581 64,696
Net book value at 31/12/2014 10,579 12,068 9,644 9,574 1,043 42,908
Asat31December2014,theCompanyalsoreportedinventoriesintheamountofTCZK3,500(2013:TCZK1,743).
II.7. Temporary asset accounts
(a) Deferred acquisition costs for life assurance contracts
(in thou sands CZK) 2014 2013
Lifeassuranceconnectedwithaninvestmentfund/unit-linked 1,574,607 1,596,999
Total 1,574,607 1,596,999
ThecalculationoftheamountreportedinDeferredacquisitioncostsforunit-linkedinsurancecontractsdependsontwocalculationbases.ThevolumeofexpectedfuturedeductionsoftheinitialallocationfeesisusedtocreateanassetofTCZK608,860(2013:TCZK591,405)andthevolumeofthenegativecapitalvalueofinsurancecontractsisusedtocreateanassetofTCZK965,747(2013:TCZK1,005,594).
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Financial Section
(b) Estimated receivables
(in thou sands CZK) 2014 2013
Estimatedwrittenpremiums 104,952 109,843
Estimatedreinsurancecommissions 22,931 20,292
EstimatedshareintheprofitofthereinsurerBNP 11,417 10,228
Other 6,012 6,372
Total 145,312 146,735
Estimated written premiumsTheCompanyinestimatedreceivablesdisclosesanestimateofthewrittenpremiumsforDecemberinrespectofgeneralinsurancecontractswherethepolicyholdersreporttotheCompanyonamonthlybasisinarrears.
(c) Other temporary asset accounts
(in thou sands CZK) 2014 2013
Prepaidexpensesrelatingtocommissionsonpremiumsnotyetrecorded 28,816 22,354
Postage 0 7,000
Prepaidsoftwareservices 2,208 916
Other 1,053 1,267
Total 32,077 31,537
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Financial Section
II.8. Equity
(a) Share capitalTheregisteredsharecapitalcomprises8,180registeredordinarysharesinbookedformwithanominalvalueofTCZK45and15,320ordinarybearershareswithanominalvalueofTCZK100.Asat31December2014,100%,i.e.TCZK1,900,100,ofthesharecapitalwaspaidup.Intheaccountingperiodsof2014and2013,thesharecapitaldidnotchange.
Issue Type of security Form Nominal value
(in CZK)Number
of securitiesTotal volume
(in CZK)
Information on public
marketability
CZ0008040706 share book-entry 45,000 8,180 368,100,000 Notmarketable
CZ0008040698 share book-entry 100,000 15,320 1,532,000,000 Notmarketable
Total 23,500 1,900,100,000
ThesharecapitalamountcomplieswiththerequirementsoftheInsuranceAct,withregardtotheinsuranceclassesinwhichtheCompanyisauthorizedtocarryoninsuranceactivities.
(b) Other capital funds(in thou sands CZK) 2014 2013
Revaluationofassetsandliabilitiesatfairvalue 148,071 42,865
Total 148,071 42,865
Revaluation of assets and liabilities at fair value
(in thou sands CZK) 2014 2013
Balanceat1/1 42,865 95,721
Changeinfairvalueoffinancialplacement 129,884 (65,255)
Changeindeferredtax (24,678) 12,399
Balance at 31/12 148,071 42,865
Planned distribution of the current period profit
(in thou sands CZK)
Profit for the current period 855,121
Transfertostatutoryreservefund 42,756
Transfertosocialfund 5,248
Dividend(CZK29.19pershare) 686,050
Profit to be added to retained earnings 121,067
Theproposeddistributionofprofitissubjecttotheapprovalofthegeneralmeeting.
60 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Financial Section
II.9. Technical provisions
(a) Life assurance provision
(in thou sands CZK) 2014 2013
Unzillmerizedprovision 6,051,902 8,203,997
Zillmeradjustment 14,893 12,985
Eliminationofnegativereserves 2,341 1,992
Zillmerized provision presented in the balance sheet 6,039,350 8,193,004
Flexiprovision 14,932,176 11,943,371
Provisionforprofitsharecommitments 329,288 360,349
Annuityprovision 7,066 7,640
Provisionforbonuses 455,226 336,769
Total life assurance provision 21,763,106 20,841,133
(b) Provision for outstanding claimsThenetprovisionforoutstandingclaimsattheendofthefinancialyeariscreatedasfollows:
(in thou sands CZK) 2014 2013
RBNS 358,277 333,214
IBNR 1,130,455 1,160,771
Total 1,488,732 1,493,985
Claims run-off resultTheclaimsrun-offresultisthedifferencebetweentheprovisionforoutstandingclaimsasat31December2013,theclaimspaymentsduring2014(withrespecttoclaimsincludedwithinthisprovision)andtheresidualamountofthisprovisionasat31December2014.
(in thou sands CZK) 2014 2013
Grossprovisionforoutstandingclaimsasat1January 2,412,983 2,034,766
Claimspaymentsinthecurrentperiodinrespectofpriorperiodclaims 1,173,560 1,068,845
Provisionforoutstandingclaimsasat31Decemberintendedforpriorperiodclaimsnotpaidyet 911,461 768,944
Run-off result 327,962 196,977
61 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Financial Section
Thegrossrun-offresultbyclassesofinsurance:
Class of insurance (in thou sands CZK) 2014 2013
Accidentandsickness–non-lifeinsurance 34,593 40,983
Otherlosses–non-lifeinsurance 483 6,074
Assuranceondeath,assuranceonsurvival 44,437 9,760
Accidentandsicknessinsuranceasarider 236,995 151,263
Marriageinsurance 3 (10)
Lifeassuranceconnectedwithaninvestmentfund/unit-linked(notincludingaccidentalriders) 11,451 (11,093)
Total 327,962 196,977
II.10. Provisions Type of provision (in thou sands CZK) Opening balance Creation Release Closing balance
Provisionfortaxes 189,617 198,489 189,617 198,489
Total 189,617 198,489 189,617 198,489
TheincometaxprepaymentsofTCZK214,721(2013:TCZK171,319)arerecognizedinOtherreceivables.
II.11. Payables
31 December 2014 (in thou sands CZK)
Payables to policyholders
Payables to insurance
intermediaries
Payables from reinsurance
operationsOther payables Total
Due 235,081 128,577 461,626 109,175 934,459
Overdue 20 183 203
Total 235,081 128,597 461,626 109,358 934,662
31 December 2013 (in thou sands CZK)
Payables to policyholders
Payables to insurance
intermediaries
Payables from reinsurance
operationsOther payables Total
Due 192,063 115,984 368,794 52,822 729,663
Overdue 128 128
Total 192,063 115,984 368,794 52,950 729,791
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Financial Section
Otherpayablescomprisethefollowingitems:
(in thou sands CZK) 2014 2013
Payablestoemployees 33,236 7,968
Socialsecurityandhealthinsuranceliabilities 13,166 4,419
Payablestosuppliers 12,030 25,749
Deferredtaxliability 40,569 12,536
Othertaxliabilities 10,357 2,278
Total 109,358 52,950
(a) Social security and health insurance liabilitiesLiabilitiesinrespectofsocialsecurityandhealthinsurancetotalTCZK13,166(2013:TCZK4,419)ofwhichTCZK6,815(2013:TCZK2,916)relatestosocialsecurityandTCZK6,351(2013:TCZK1,503)relatestohealthinsurance.Noneoftheseliabilitiesisoverdue.
(b) Tax liabilities TaxliabilitiesamounttoTCZK10,357(2013:TCZK2,278),noneofwhichisoverdue.
(c) Long-term payables (maturity over five years)TheCompanydoesnothaveanylong-termpayableswitharemainingmaturityofoverfiveyears.
(d) Payables and receivables due to or from reinsurersTheCompanyhasanetpayabletoreinsurersintheamountgiveninthefollowingtable:
(in thou sands CZK) 2014 2013
Receivablesfromreinsurers 398,740 309,387
Payablestoreinsurers 461,626 368,794
Depositsduetocedents 961,164 811,793
Net (+ receivable, – payable) (1,024,050) (871,200)
ThedepositofTCZK961,164(2013:TCZK811,793)relatestoreinsurancecontractswithVIENNAINSURANCEGROUPAGWienerVersicherungGruppe.
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Financial Section
II.12. Temporary liability accounts
(a) Other temporary liability accounts
(in thou sands CZK) 2014 2013
Accruedexpenses 1 0
Estimatedpayables 257,449 304,443
Total 257,450 304,443
Adetailedbreakdownofestimatedpayablesisasfollows:
(b) Estimated payables
(in thou sands CZK) 2014 2013
Alliancepartnercommission 96,790 89,519
Reinsurancepremiumsoninsurancepremiumsnotyetrecorded 54,907 57,654
Performance-basedcommissionofinsuranceintermediaries 42,935 26,498
Annual,extraordinarybonusesanduntakenholidays 23,419 68,651
Assetmanagementfees 12,997 26,631
Operatingsystemrepairsandmaintenance 10,389 9,164
Servicesnotyetinvoicedbyothercreditors 6,852 9,715
Lawsuitsandlitigations 5,721 5,721
Advancepaymentsforservicesrelatingtorent 2,940 2,753
Consultingservices 499 8,137
Total 257,449 304,443
Alliance partner commissionTheCompanydisclosesunderAlliancepartnercommissiontheexpectedamountofcommissionrelatingtoadistributionagreementbetweenentitiesofErsteBankfinancialgroupandentitiesofViennaInsuranceGroup.
Estimated reinsurance premiumsTheCompanydisclosesunderestimatedreinsurancepremiumsanestimateoftherelevantreinsurers’shareintheestimateofgrosspremiumswrittendisclosedintheestimatedreceivables,seepointII.7.(b).
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Financial Section
II.13. Inter-company receivables and payables
(a) Other inter-company receivables and payables
(in thou sands CZK)Receivables Payables
2014 2013 2014 2013
Short-term 374,617 285,016 397,539 302,199
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup 3,237 3,570 2,648 2,769
Českápodnikatelskápojišťovna,a.s.,ViennaInsuranceGroup 89 50
VIENNAINSURANCEGROUPAGWienerVersicherungGruppe 371,291 281,396 394,891 299,430
Total 374,617 285,016 397,539 302,199
AsspecifiedinsectionII.11.(d),theCompanyalsorecordsadepositrelatingtoreinsurancecontractswithVIENNAINSURANCEGROUPAGWienerVersicherungGruppe.
Allsignificanttransactionswithrelatedpartieswerecarriedoutundercommonmarketconditions.
III. ADDITIONAL DISCLOSURES IN RESPECT OF THE PROFIT AND LOSS ACCOUNT
III.1. Non-life insuranceNon-lifeinsurancefor2014and2013brokendownintoclassesofinsurance:
(in thou sands CZK)
Class of insurance
Gross premiums written
Gross premiums earned Gross claims paid Gross operating
expensesReinsurance
balance
Direct insurance
Accidentandsickness 1,2
2014 484,195 485,751 142,639 8,701 (100,855)
2013 513,554 515,505 193,849 9,471 (84,860)
Miscellaneouslosses 16
2014 233,170 233,170 18,063 1,466 (67,373)
2013 247,605 247,605 19,172 1,499 (72,160)
Total
2014 717,365 718,921 160,702 10,167 (168,228)
2013 761,159 763,110 213,021 10,970 (157,020)
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Financial Section
III.2. Life assuranceGrosspremiumswritteninlifeassurance:
(in thou sands CZK) 2014 2013
Individualpremiums 10,516,473 9,897,314
Premiumsundergroupcontracts 684,920 697,316
Total 11,201,393 10,594,630
Regularpremiums 5,664,709 5,477,128
Singlepremiums 5,536,684 5,117,502
Total 11,201,393 10,594,630
Premiumsfromnonprofit-sharingcontracts 1,040,957 1,434,438
Premiumsfromprofit-sharingcontracts 8,769,390 7,746,546
Premiumsfromcontractswheretheinvestmentriskisbornebypolicyholders 1,391,046 1,413,646
Total 11,201,393 10,594,630
Reinsurance balance (107,845) (112,076)
III.3. Total amount of gross premiums written by countryIn2014and2013,thetotalamountofgrosspremiumswrittenwasgeneratedoncontractsconcludedintheCzechRepublic.
III.4. Bonuses and rebatesTheCompanygrantedthefollowingbonusesandrebatesbasedonpolicytermsandconditionsandinsurancecontracts:
(in thou sands CZK) 2014 2013
Gross
Non-lifeinsurance 333,528 382,787
Lifeassurance 254,606 263,971
Total gross amount 588,134 646,758
Reinsurers’share(non-lifeinsurance) 331,485 380,665
Total net amount 256,649 266,093
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Financial Section
InaccordancewiththeproceduresstatedinpointI.4.(k)pointoftheNotestheCompanyaccountedforthefollowingchangesintheprovisionforbonusesandrebates:
2014 (in thou sands CZK) Gross Reinsurers´ share Net
Non-life insurance
Creation 328,058 326,014 2,044
Release 333,874 331,834 2,040
Changeofbalance (5,816) (5,820) 4
Life assurance
Creation 252,915 252,915
Release 254,606 254,606
Changeofbalance (1,691) (1,691)
Total change of balance (7,507) (5,820) (1,687)
2013 (in thou sands CZK) Gross Reinsurers´ share Net
Non-life insurance
Creation 354,714 352,602 2,112
Release 386,183 384,061 2,122
Changeofbalance (31,469) (31,459) (10)
Life assurance
Creation 265,322 265,322
Release 266,141 266,141
Changeofbalance (819) (819)
Total change of balance (32,288) (31,459) (829)
67 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Financial Section
III.5. Commissions and other acquisition costs for insurance contracts
(in thou sands CZK)2014 2013
Non-life insurance
Life assurance Total Non-life
insuranceLife
assurance Total
Commissions
Initial 129 1,243,490 1,243,619 281 1,046,011 1,046,292
Renewal 4,611 271,203 275,814 4,788 241,908 246,696
Total commissions 4,740 1,514,693 1,519,433 5,069 1,287,919 1,292,988
Otheracquisitioncosts 1,175 228,202 229,377 1,575 221,828 223,403
Changeindeferredacquisitioncosts 22 22,392 22,414 5 (12,122) (12,117)
Total commissions and other acquisition costs 5,937 1,765,287 1,771,224 6,649 1,497,625 1,504,274
TheCompanydisclosesrenewalcommissionsinadministrativeexpenses.
Otheracquisitioncostsprimarilycomprisecostsforwagesandsalaries,promotion,advertisingandotheradministrativeexpensesassociatedwiththeconclusionofinsurancecontracts.
III.6. Administrative expenses
(in thou sands CZK) 2014 2013
Personnelexpenses(payroll,socialsecurityandhealthinsurance,remunerationtomembersoftheSupervisoryBoard,BoardofDirectorsandAuditCommittee)
99,674 101,022
Renewalcommissions 275,814 246,696
Rentandrelatedservices 6,022 7,185
Consultancyandexternalaudit 11,257 23,076
Consumptionoflow-valuetangibleandintangibleassetsandothermaterial 9,414 10,624
Depreciationandrepairsandmaintenanceoftangibleassets 30,033 28,263
Operatingsystemsadministrationandmaintenance 27,565 23,719
Postalandtelecommunicationservices 29,096 23,830
Bankfees 7,929 11,433
Otherservices 16,514 16,874
Otheradministrativeexpenses 49,574 42,690
Total administrative expenses 562,892 535,412
Otherpersonnelexpensesareincludedinotheradministrativeexpenses.
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Financial Section
III.7. Other technical expenses and income
2014 (in thou sands CZK) Gross Reinsurers´ share Net
Non-life insurance
Othertechnicalexpenses 1,243 1,243
Othertechnicalincome (1,578) (1,578)
Balance – non-life insurance (335) 0 (335)
Life assurance
Othertechnicalexpenses 119,134 119,134
Othertechnicalincome (142,759) (142,759)
Balance – life assurance (23,625) 0 (23,625)
2013 (in thou sands CZK) Gross Reinsurers´ share Net
Non-life insurance
Othertechnicalexpenses 1,307 1,307
Othertechnicalincome (1,527) (1,527)
Balance – non-life insurance (220) 0 (220)
Life assurance
Othertechnicalexpenses 104,571 104,571
Othertechnicalincome (118,044) (118,044)
Balance – life assurance (13,473) 0 (13,473)
III.8. Employees and managementPersonnelexpensesandaveragecalculatednumberofemployeesbyindividualcategoriesfor2014and2013:
Personnel expense – type (in thou sands CZK)
Employee categoryTotal
Year Acquisition, sales Claims handling Administration
Payrollexpense2014 81,922 12,617 73,216 167,755
2013 77,423 11,477 77,182 166,082
Socialsecurityandhealthinsurance
2014 23,096 4,355 19,209 46,660
2013 19,550 3,661 18,194 41,405
Otherpersonnelexpenses2014 4,790 1,419 4,527 10,736
2013 4,512 1,287 4,282 10,081
Total personnel expenses2014 109,808 18,391 96,952 225,151
2013 101,485 16,425 99,658 217,568
Averagenumberofemployees
2014 121 35 113 269
116 32 107 255
69 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Financial Section
Theabovefiguresdonotincluderemunerationpaidtostatutory,executiveandsupervisorybodymembers.
Asat31December2014,themanagementoftheCompanycomprised13managers:theCEO,3deputyCEOsand9sectiondirectors.Personnelexpenses(payroll,socialsecurityandhealthinsurance,otherpersonnelexpenses)relatingtomanagerstotalledTCZK33,654in2014(2013:TCZK27,185).
ExpensesrelatingtothejobpositionsofdeputyCEOinchargeofthesalesdivision,salesdivisionsectiondirectorsandproductmanagementdirectorarepresentedunderacquisitioncosts.Expensesrelatingtoothermanagementpositionsarepresentedunderadministrativeexpenses.
(a) Statutory, executive and supervisory body members’ remunerationTheCompanyhasprovidedthefollowingmonetaryandnon-monetaryremunerationtothestatutory,executiveandsupervisorybodymembersforthefinancialyears2014and2013:
(in thou sands CZK) 2014 2013
MembersoftheBoardofDirectors 7,080 517
Proxyholder 60 60
MembersoftheSupervisoryBoard 1,271 980
AuditCommittee 14 14
Total remuneration paid 8,425 1,571
ThemembersoftheCompany’sBoardofDirectorsareatthesametimeemployeesoftheCompanyexercisingtheofficeofDeputyCEOortheCEOoftheCompany.
TheproxyholderisalsoanemployeeoftheCompany,exercisingtheofficeofDeputyCEO.
ThemembersofstatutorybodiesandtheproxyholderareentitledtoremunerationthatisdeterminedbytheSupervisoryBoardinlinewiththeArticlesofAssociationandwithrespecttothescopeoftheworkperformed.AmemberoftheAuditCommitteeispaidafixedannualfeeunlessreceivingatthesametimeremunerationasamemberofanothercontrollingorsupervisorybodyoftheCompany.
ThefeesarespecifiedinTableIII.8.(a)basedonthetypeofstatutorybody.
TheincreaseinremunerationpaidtothemembersoftheBoardofDirectorsresultedfromachangeintheremunerationschemeandtheincreaseinremunerationpaidtoSupervisoryBoardmembersresultedfromanincreaseinthenumberofitsmembers.
TheCompanypresentednoreceivablesfrommembersoftheBoardofDirectors,SupervisoryBoard,AuditCommitteeortheproxyholderrelatingtoloansgrantedoradvancespaid,eitherin2014or2013.
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Financial Section
(b) Information on remuneration for statutory auditorsInformationaboutremunerationforstatutoryauditorsisprovidedintheNotestotheconsolidatedfinancialstatementsoftheparentcompanyVIENNAINSURANCEGROUPAGWienerVersicherungGruppe.
III.9. Expense allocation between technical accounts and non-technical accountAsatthebalancesheetdate,thetotalamountofexpensesallocatedbetweenthetechnicalaccountsforlifeassurance,non-lifeinsuranceandthenon-technicalaccountbymeansofthemethodstatedinnoteI.4.(t)amountedtoTCZK72,782(2013:TCZK64,084).
III.10. Result of non-technical accountTheresultofthenon-technicalaccountasat31December2014amountedtoTCZK2,914(2013:TCZK3,427).
III.11. Result before taxTheresultbeforetaxasat31December2014amountedtoTCZK1,055,312(2013:TCZK980,847).
III.12. Taxation
(a) Income tax in the profit and loss account(in thou sands CZK) 2014 2013
Provisionforcurrentperiodincometax 198,489 189,617
Differencebetweenthecurrentincometaxrelatingtopriorperiodsandreleaseoftheprovisionforincometaxrelatingtopriorperiods
(1,653) (595)
Currentincometaxrelatingtopriorperiods 0 531
Changeindeferredtaxasset/Changeindeferredtaxliability 3,355 (758)
Income tax in profit and loss account 200,191 188,795
(b) Deferred tax assets and liabilitiesReporteddeferredtaxassetsandliabilitiesareasfollows:
Temporary differences (in thou sands CZK)
Assets Liabilities Net
2014 2013 2014 2013 2014 2013
Tangiblefixedassets 6,743 6,751 (6,743) (6,751)
Intangiblefixedassets 4,362 2,609 (4,362) (2,609)
Receivables 1,045 1,140 1,045 1,140
OthertemporarydifferencerecordedinProfitandlossaccount
4,224 5,739 4,224 5,739
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Financial Section
Temporary differences (in thou sands CZK)
Assets Liabilities Net
2014 2013 2014 2013 2014 2013
Effectonprofitandlossaccount 5,269 6,879 11,105 9,360 (5,836) (2,481)
Revaluationofassetsandliabilities 34,733 10,055 (34,733) (10,055)
Effectonequity 0 0 34,733 10,055 (34,733) (10,055)
Deferredtaxasset/(liability) 5,269 6,879 45,838 19,415 (40,569) (12,536)
Off-settingofrelateddeferredtaxassetsandliabilities (5,269) (6,879) (5,269) (6,879)
Deferred tax asset/(liability) 0 0 40,569 12,536 (40,569) (12,536)
InaccordancewiththeaccountingpolicydescribedinpointI.4.(g),deferredtaxwascalculatedusingthetaxratesvalidfortheperiodsinwhichthetaxasset/liabilityisexpectedtobeutilized,i.e.19%.
IV. OTHER DISCLOSURES
IV.1. Group relationsTheCompanyhasnotconcludedacontrollingagreementwithitsmajorityshareholderVIENNAINSURANCEGROUPAGWienerVersicherungGruppe,havingitsregisteredofficeinVienna,Austria.Areportonrelationsbetweenrelatedpartieswillbeapartoftheannualreport.
IV.2. Contingent liabilities and transactions not disclosed in the financial statements TheCompanyisnotawareofanyevenpotentialcommitmentsortransactionsnotdisclosedinthefinancialstatements.
IV.3. Subsequent eventsTheCompany’smanagementisnotawareofanymaterialsubsequenteventsthathaveoccurredsincethebalancesheetdatethatwouldrequireanadjustmenttothefinancialstatementsasat31December2014.
InPardubice,20February2015
RNDr. Petr Zapletal, MBA ChairmanoftheBoardofDirectors
Ing. Jaroslav Kulhánek Vice-chairmanoftheBoardofDirectors
72 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Financial Section
ThisreportonrelationsbetweentheentitieslistedbelowwascompiledinaccordancewithSection82ofActNo.90/2012oncompaniesandcooperatives(theBusinessCorporationsAct),asamendedfortheaccountingperiodfrom1January2014to31December2014(hereinafterthe“accounting period”).
Pojišťovna České spořitelny, a.s., Vienna Insurance Group,havingitsregisteredofficeinPardubice,nám.Republiky115,53002,IDNumber:47452820,enteredinthecommercialregisteradministeredbytheRegionalCourtinHradecKrálové,SectionB,File855(hereinafterthe“Processor”)isapartoftheVIENNAINSURANCEGROUPAGWienerVersicherungGruppe.Withinthisbusinessgroup,theProcessorprovidesfinancialservicesinthescopeofalicencetooperateinsuranceactivityintheCzechRepublic.
ControlisensuredthroughmanagementbymeansofrepresentationofthecontrollingentityintheProcessor’ssupervisoryboardandvotingatthegeneralmeeting,wherethecontrollingentity’sownershipinterestis90%.Withinthegroup,otherinstrumentsareusedintheformofcontractualagreements,themainsubjectofwhichcomprisesthedeliveryofservicesandtheconditionsofseparationofselectedactivities.Thepurposeofthisformofmanagementisprimarilytoimprovethefinancialservicesprovidedandsavecosts.AnoverviewoftheexistingrelationsbetweentheProcessorandcontrollingentities,andbetweentheprocessorandentitiescontrolledbythesamecontrollingentities(hereinafterthe“Affiliated Entities”),isprovidedbelow:
Report on Relations
1. OVERVIEW/DIAGRAM OF THE STRUCTURE OF RELATIONS BETWEEN ENTITIES IN THE ENTIRE VIENNA INSURANCE GROUP AG WIENER VERSICHERUNG GRUPPE, RESPECTIVELY, OR ENTITIES WHOSE RELATIONS ARE DESCRIBED
Controlling entities VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe,Schottenring30,A1010Vienna,enteredintheCommercialRegisteradministeredbytheCommercialCourtinVienna,SectionFN,File75687F(hereinafter“WienerStädtische”)
Company Country Current capital interest in %
Consolidated companies
"BULSTRADLIFEVIENNAINSURANCEGROUP"JOINTSTOCKCOMPANY,Sofia Bulgaria 95.53
"GrünerBaum"Errichtungs-undVerwaltungsges.m.b.H.,Vienna Austria 100.00
"POLISA-ZYCIE"TowarzystwoUbezpieczenSpolkaAkcyjnaViennaInsuranceGroup,Warsaw Poland 98.57
ASIGURAREAROMANEASCA–ASIROMVIENNAINSURANCEGROUPS.A.,Bucharest Romania 99.44
AndělInvestmentPrahas.r.o.,Prague CzechRepublic 100.00
ArithmeticaVersicherungs-undFinanzmathematischeBeratungs-Gesellschaftm.b.H.,Vienna Austria 100.00
BCRAsigurarideViataViennaInsuranceGroupS.A.,Bucharest Romania 93.98
BMLVersicherungsmaklerGmbH,Vienna Austria 100.00
BenefiaTowarzystwoUbezpieczenSpolkaAkcyjnaViennaInsuranceGroup,Warsaw Poland 100.00
BlizzardRealSp.zo.o.,Warsaw Poland 100.00
BulgarskiImotiAsistansEOOD,Sofia Bulgaria 100.00
BusinessInsuranceApplicationConsultingGmbH,Vienna Austria 100.00
BusinessparkBrunnEntwicklungsGmbH,Vienna Austria 100.00
73 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Report on Relations
Company Country Current capital interest in %
Consolidated companies
CALICAL"Globus",Kiev Ukraine 80.00
CAMEHoldingGmbH,Vienna Austria 100.00
CAPITOL,akciováspoločnost',Bratislava Slovakia 100.00
CENTERHotelbetriebsGmbH,Vienna Austria 80.00
COMPENSAHoldingGmbH,Wiesbaden Germany 100.00
CentralPointInsuranceIT-SolutionsGmbH,Vienna Austria 100.00
Českápodnikatelskápojišt'ovna,a.s.,ViennaInsuranceGroup,Prague CzechRepublic 100.00
CompensaLifeViennaInsuranceGroupSE,Tallinn Estonia 100.00
CompensaTowarzystwoUbezpieczenNaZycieSpolkaAkcyjnaViennaInsuranceGroup,Warsaw Poland 100.00
CompensaTowarzystwoUbezpieczenSpolkaAkcyjnaViennaInsuranceGroup,Warsaw Poland 99.92
CompaniadeAsigurari"DONARISVIENNAINSURANCEGROUP"SocietatepeActiuni,Kishinev Moldova 99.98
DBLVImmobesitzGmbH,Vienna Austria 100.00
DBLVImmobesitzGmbH&CoKG,Vienna Austria 100.00
DBR-LiegenschaftenGmbH&CoKG,Stuttgart Germany 100.00
DBR-LiegenschaftenVerwaltungsGmbH,Stuttgart Germany 100.00
DONAUVersicherungAGViennaInsuranceGroup,Vienna Austria 99.24
DVIBGmbH,Vienna Austria 100.00
Deutschmeisterplatz2ObjektverwaltungGmbH,Vienna Austria 100.00
DonauBrokerlineVersicherungs-ServiceGmbH,Vienna Austria 100.00
ELVPBeteiligungenGmbH,Vienna Austria 100.00
ERSTEViennaInsuranceGroupBiztositóZrt.,Budapest Hungary 95.00
ErsteosiguranjeViennaInsuranceGroupd.d.,Zagreb Croatia 95.00
GPIHB.V.,Amsterdam Netherlands 91.11
GesundheitsparkWien-OberlaaGesellschaftm.b.H.,Vienna Austria 100.00
INSURANCEJOINT-STOCKCOMPANY"BULSTRADVIENNAINSURANCEGROUP",Sofia Bulgaria 99.21
INTERSIGVIENNAINSURANCEGROUPSh.A.,Tirana Albania 89.98
JointStockCompanyforInsuranceandReinsuranceMakedonijaSkopje–ViennaInsuranceGroup,Skopje Macedonia 94.25
InterRiskLebensversicherungs-AGViennaInsuranceGroup,Wiesbaden Germany 100.00
InterRiskTowarzystwoUbezpieczenSpolkaAkcyjnaViennaInsuranceGroup,Warsaw Poland 99.98
InterRiskVersicherungs-AGViennaInsuranceGroup,Wiesbaden Germany 100.00
InternationalInsuranceCompany"IRAO"LTD,Tbilisi Georgia 100.00
JointStockCompanyInsuranceCompanyGPIHolding,Tbilisi Georgia 90.00
74 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Company Country Current capital interest in %
Consolidated companies
WienerOsiguranjeViennaInsuranceGroupad,BanjaLuka BosniaandHercegovina 100.00
KOMUNÁLNApoisťovňa,a.s.ViennaInsuranceGroup,Bratislava Slovakia 100.00
KOOPERATIVApoisťovňa,a.s.ViennaInsuranceGroup,Bratislava Slovakia 100.00
Kaiserstraße113GmbH,Vienna Austria 100.00
Kapitolpojišťovacíafinančníporadenství,a.s.,Brno CzechRepublic 100.00
Kooperativa,pojišťovna,a.s.ViennaInsuranceGroup,Prague CzechRepublic 98.39
KÁLVINTOWERImmobilienentwicklungs-undInvestitionsgesellschaftm.b.H.,Budapest Hungary 100.00
LVPHoldingGmbH,Vienna Austria 100.00
MAPBürodienstleistungGesellschaftm.b.H.,Vienna Austria 100.00
MH54ImmobilienanlageGmbH,Vienna Austria 100.00
NeueHeimatOberösterreichHoldingGmbH,Vienna Austria 90.00
OMNIASIGVIENNAINSURANCEGROUPS.A.,Bucharest Romania 99.47
PensionInsuranceCompanyDoverieAD,Sofia Bulgaria 92.58
PFGHoldingGmbH,Vienna Austria 89.23
PFGLiegenschaftsbewirtschaftungsGmbH&CoKG,Vienna Austria 92.88
PrivateJoint-StockCompany"Insurancecompany"Ukrainianinsurancegroup",Kiev Ukraine 100.00
PRIVATEJOINT-STOCKCOMPANY"UKRAINIANINSURANCECOMPANY"KNIAZHAVIENNAINSURANCEGROUP",Kiev Ukraine 99.99
PrivateJoint-StockCompany"JUPITERLIFEINSURANCEVIENNAINSURANCEGROUP",Kiev Ukraine 97.80
PROGRESSBeteiligungsges.m.b.H.,Vienna Austria 60.00
PalaisHansenImmobilienentwicklungGmbH,Vienna Austria 56.55
PassatRealSp.zo.o.,Warsaw Poland 100.00
PoisťovňaSlovenskejsporitel'ne,a.s.ViennaInsuranceGroup,Bratislava Slovakia 95.00
PojišťovnaČeskéspořitelny,a.s.ViennaInsuranceGroup,Pardubice CzechRepublic 95.00
ProjektbauGesmbH,Vienna Austria 100.00
ProjektbauHoldingGmbH,Vienna Austria 90.00
Rathstraße8LiegenschaftsverwertungsGmbH,Vienna Austria 100.00
RaySigortaAnonimSirketi,Istanbul Turkey 94.96
SECURIAmajetkovosprávnaapodielovás.r.o.,Bratislava Slovakia 100.00
SIGMAINTERALBANIANVIENNAINSURANCEGROUPSh.A.,Tirana Albania 89.05
SkandiaZycieTowarzystwoUbezpieczenSpolkaAkcyjna,Warsaw Poland 100.00
SVZGmbH,Vienna Austria 100.00
SVZIGmbH,Vienna Austria 100.00
Schulring21BürohausErrichtungs-undVermietungsGmbH,Vienna Austria 100.00
75 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Company Country Current capital interest in %
Consolidated companies
Schulring21BürohausErrichtungs-undVermietungsGmbH&CoKG,Vienna Austria 100.00
SeniorenResidenzFultererparkErrichtungs-undVerwaltungsGmbH,Vienna Austria 100.00
SeniorenResidenzVeldidenaparkErrichtungs-undVerwaltungsGmbH,Innsbruck Austria 66.70
SparkassenVersicherungAGViennaInsuranceGroup,Vienna Austria 95.00
T125GmbH,Vienna Austria 100.00
TBIBULGARIAEAD,Sofia Bulgaria 100.00
TBIHFinancialServicesGroupN.V.,Amsterdam Netherlands 100.00
UNIONViennaInsuranceGroupBiztositóZrt.,Budapest Hungary 100.00
V.I.G.ND,uzavřenýinvestičnífonda.s.,Prague CzechRepublic 100.00
VIGFUNDuzavřenýinvestičnífond,a.s.,Prague CzechRepublic 100.00
VIGREzajišťovna,a.s.,Prague CzechRepublic 100.00
VIGREALESTATEDOO,Belgrade Serbia 100.00
VIGRealEstateGmbH,Vienna Austria 100.00
VIG-CZRealEstateGmbH,Vienna Austria 100.00
VLTAVAmajetkovosprávníapodílováspol.s.r.o.,Prague CzechRepublic 100.00
ViennaLifeViennaInsuranceGroupBiztositóZártkörüenMüködöRészvénytársaság,Budapest Hungary 100.00
Vienna-LifeLebensversicherungAGViennaInsuranceGroup,Bendern Lichtenstein 100.00
VIGPropertiesBulgariaAD,Sofia Bulgaria 99.97
WGPVHoldingGmbH,Vienna Austria 100.00
"WIENERRE"akcionarskodruštvozareosiguranje,Belgrade Serbia 100.00
WIENERSTÄDTISCHEBeteiligungsGmbH,Vienna Austria 100.00
WIENERSTÄDTISCHEFinanzierungsdienstleistungsGmbH,Vienna Austria 100.00
WIENERSTÄDTISCHEVERSICHERUNGAGViennaInsuranceGroup,Vienna Austria 99.90
WIENERVEREINBESTATTUNGS-UNDVERSICHERUNGSSERVICE-GESELLSCHAFTM.B.H.,Vienna Austria 100.00
JointStockInsuranceCompanyWINNER-ViennaInsuranceGroup,Skopje Macedonia 100.00
WSBVBeteiligungsverwaltungGmbH&CoKG,Vienna Austria 100.00
WSVImmoholdingGmbH,Vienna Austria 100.00
WILAGmbH,Vienna Austria 100.00
WIENERSTÄDTISCHEOSIGURANJEakcionarskodrustvozaosiguranje,Belgrade Serbia 100.00
Wienernekretnined.o.o.zaposlovanjenekretninama,Zagreb Croatia 100.00
WienerosiguranjeViennaInsuranceGroupdioničkodruštvozaosiguranje,Zagreb Croatia 99.47
76 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Company Country Current capital interest in %
Companies consolidated using the equivalence method
AISServis,s.r.o.,Brno CzechRepublic 100.00
AlpenländischeHeimstätte,gemeinnützigeWohnungsbau-undSiedlungsgesellschaftm.b.H.,Innsbruck Austria 94.00
Benefita,a.s.,Prague CzechRepublic 100.00
Beteiligungs-undImmobilienGmbH,Linz Austria 25.00
Beteiligungs-undWohnungsanlagenGmbH,Linz Austria 25.00
ČPPServis,s.r.o.,Prague CzechRepublic 100.00
CROWN-WSFspol.s.r.o.,Prague CzechRepublic 30.00
ErstegemeinnützigeWohnungsgesellschaftHeimstätteGesellschaftm.b.H.,Vienna Austria 99.77
GLOBALASSISTANCE,a.s.,Prague CzechRepublic 100.00
GemeinnützigeIndustrie-Wohnungsaktiengesellschaft,Leonding Austria 55.00
GemeinnützigeMürz-YbbsSiedlungsanlagen-GmbH,Kapfenberg Austria 55.00
Gewista-Werbegesellschaftm.b.H.,Vienna Austria 33.00
GlobalExpert,s.r.o.,Pardubice CzechRepublic 100.00
HOTELYSRNÍ,a.s.,Prague CzechRepublic 100.00
KIP,a.s.,Prague CzechRepublic 100.00
MedialBeteiligungs-Gesellschaftm.b.H.,Vienna Austria 29.63
NEUEHEIMATOberösterreichGemeinnützigeWohnungs-undSiedlungsgesmbH,Linz Austria 99.81
NeulandgemeinnützigeWohnbau-Gesellschaftm.b.H.,Vienna Austria 50.12
ÖsterreichischesVerkehrsbüroAktiengesellschaft,Vienna(groupfinancialstatements) Austria 36.58
S–budovy,a.s.,Prague CzechRepublic 100.00
SIMMOAG,Wien(groupfinancialstatements) Austria 10.22
S-správanemovitostí,a.s.,Prague CzechRepublic 100.00
SCHWARZATALGemeinnützigeWohnungs-undSiedlungsanlagenGmbH,Vienna Austria 55.00
SOZIALBAUgemeinnützigeWohnungsaktiengesellschaft,Vienna Austria 50.12
SURPMO,a.s.,Prague CzechRepublic 100.00
SanatoriumAstoria,a.s.,KarlovyVary CzechRepublic 92.71
TECHGATEVIENNAWissenschafts-undTechnologieparkGmbH,Vienna Austria 60.00
WNHLiegenschaftsbesitzGmbH,Vienna Austria 100.00
UrbanbauGemeinnützigeBau-,Wohnungs-undStadterneuerungsgesellschaftm.b.H.,Vienna Austria 50.12
VBV–BetrieblicheAltersvorsorgeAG,Vienna(groupfinancialstatements) Austria 23.56
77 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Company Country Current capital interest in %
Unconsolidated companies
"AssistanceCompanyUkrainianAssistanceService"LLC,Kiev Ukraine 100.00
"Auto-Ekspert"Spolkazorganiczonaodpowiedzialnoscia,Warsaw Poland 100.00
"CompensaServices"SIA,Riga Latvia 100.00
"DUNAJ–Finanse"–Spolkazorganiczonaadpowiedzialnoscia,Warsaw Poland 50.00
MedicalClinic"DIYA"LLC,Kiev Ukraine 100.00
AISMPMeditzinskiTsentarBulstradZdraveEOOD,Sofia Bulgaria 100.00
AkcionarskodrustvozazivotnoosiguranjeWienerStädtischePodgorica,ViennaInsuranceGroup,Podgorica Montenegro 100.00
AlpenlachsSoraviaGmbH,Vienna Austria 33.30
AmadiGmbH,Wiesbaden Germany 100.00
AQUILAHausmanagementGmbH,Vienna Austria 100.00
AREALISLiegenschaftsmanagementGmbH,Vienna Austria 50.00
AutosigSRL,Bucharest Romania 100.00
B&AInsuranceConsultings.r.o.,MoravskáOstrava CzechRepublic 49.00
BrunnN68SanierungsGmbH,Vienna Austria 50.00
BulstradTrudovaMeditzinaEOOD,Sofia Bulgaria 100.00
CamelotInformatikundConsultingGesellschaftm.b.H.,Villach Austria 99.48
CAPITOLBROKERDEPENSIIPRIVATES.R.L.,Bucharest Romania 100.00
CAPITOLINTERMEDIARDEPRODUSEBANCARES.R.L.,Bucharest Romania 100.00
CAPITOLINTERMEDIARDEPRODUSEDELEASINGS.R.L.,Bucharest Romania 100.00
CAPITOLSpolkazOgraniczonaodpowiedzialnoscia,Warsaw Poland 100.00
CARPLUSVersicherungsvermittlungsagenturGmbH,Vienna Austria 100.00
CCAEDVfürVersicherungswirtschaftGmbH,Vienna Austria 24.28
DIRECT-LINEDirektvertriebs-GmbH,Vienna Austria 100.00
DVSDonau-VersicherungVermittlungs-undService-Gesellschaftm.b.H.,Vienna Austria 100.00
EBSWohnungsgesellschaftmbHLinz,Linz Austria 25.00
EBV-LeasingGesellschaftm.b.H.,Vienna Austria 49.49
EGWWohnbaugemeinnützigeGes.m.b.H.,WienerNeustadt Austria 100.00
ERSTEdrustvosogranicenomodgovornoscuzaupravljanjeobveznimidobrovljnimmirovinskimfondovima,Zagreb Croatia 29.00
ErsteSBiztositasiAlkuszKft,Budapest Hungary 100.00
EuropeanInsurance&ReinsuranceBrokersLtd.,London UnitedKingdom 85.00
EXPERTASchadenregulierungs-GesellschaftmbH,Vienna Austria 100.00
FinanzpartnerGmbH,Vienna Austria 50.00
Foreignlimitedliabilitycompany"InterInvestUchastie",Minsk Belarus 100.00
78 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Company Country Current capital interest in %
Unconsolidated companies
GainCapitalSA,SICAV-FISRealEstateCarParksI,Luxemburg Luxemburg 40.01
GELUPGmbH,Vienna Austria 33.33
GEOHOSPITALSLLC,Tbilisi Georgia 100.00
GlamasBeteiligungsverwaltungsGmbH,Vienna Austria 23.33
GlamasBeteiligungsverwaltungsGmbH&Co"Beta"KG,Vienna Austria 23.33
GLOBALASSISTANCESERVICESs.r.o.,Prague CzechRepublic 100.00
GLOBALASSISTANCESLOVAKIAs.r.o.,Bratislava Slovakia 100.00
HendersonGlobalInvestorsImmobilienAustriaGmbH,Vienna Austria 35.00
HORIZONTPersonal-,Team-undOrganisationsentwicklungGmbH,Vienna Austria 100.00
IICS/Polskazograniczonaodpowiedzialnoscia,Warsaw Poland 100.00
InterRiskInformatikGmbH,Wiesbaden Germany 100.00
Jahorinaautod.o.o.,Brcko BosniaandHercegovina 100.00
JahorinaKonsekoProgresa.d.,Pale BosniaandHercegovina 28.00
JointStockCompany"Curatio",Tbilisi Georgia 100.00
JointStockInsuranceCompanyWINNERLIFE–ViennaInsuranceGroupSkopje,Skopje Macedonia 100.00
KUPALABelarusian-AustrianClosedJointStockInsuranceCompany,Minsk Belarus 98.26
KWCCampusErrichtungsgesellschaftm.b.H.,Klagenfurt Austria 50.00
LeadEquitiesIIAuslandsbeteiligungsAG,Vienna Austria 21.59
LeadEquitiesII.PrivateEquityMittelstandsfinanzierungsAG,Vienna Austria 21.59
LiSciVMuthgasseGmbH&CoKG,Vienna Austria 23.33
MCEINSInvestmentGmbH,Vienna Austria 50.00
Money&MorePénzügyiTanácsadóZártkörüenMüködöRészvéntársaság,Budapest Hungary 100.00
People'sPharmacyLLC,Tbilisi Georgia 50.00
PFGLiegenschaftsbewirtschaftungsGmbH,Vienna Austria 83.57
PrivatJoint-StockCompany"OWNSERVICE" Ukraine 100.00
RenaissanceHotelRealbesitzGmbH,Vienna Austria 40.00
RISKCONSULTSicherheits-undRisiko-ManagementberatungGesellschaftm.b.H.,Vienna Austria 51.00
S.C.CLUBA.ROS.R.L.,Bucharest Romania 100.00
S.O.S.-EXPERTd.o.o.zaposlovanjenekretninama,Zagreb Croatia 100.00
SeniorenResidenzengemeinnützigeBetriebsgesellschaftmbH,Vienna Austria 100.00
Slovexperta,s.r.o.,Žilina Slovakia 100.00
SoletaBeteiligungsverwaltungsGmbH,Vienna Austria 23.33
SoraviaFoodMarketGmbH,Vienna Austria 33.33
79 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Company Country Current capital interest in %
Unconsolidated companies
Sparkassen-VersicherungsserviceGesellschaftm.b.H.,Vienna Austria 100.00
SpoldzielniaUslugowaVIGEKSPERTWWARSZAWIE,Warsaw Poland 100.00
SVZImmoholdingGmbH,Vienna Austria 100.00
SVZImmoholdingGmbH&CoKG,Vienna Austria 100.00
TBIAssetManagementEAD,Sofia Bulgaria 100.00
TBICONSULTINGEOOD,Sofia Bulgaria 100.00
TBIInfoEOOD,Sofia Bulgaria 100.00
TBIInvestEAD,Sofia Bulgaria 100.00
ThermenlandCongressCenterLoipersdorfGmbH&CoKG,Loipersdorf Austria 32.26
TOGETHERInternetServicesGmbH,Vienna Austria 24.99
UAB"CompensaServices",Vilnius Lithuania 100.00
UNION-InformatikaiSzolgáltatóKft.,Budapest Hungary 100.00
UntereDonaulände40GmbH,Vienna Austria 100.00
UntereDonaulände40GmbH&CoKG,Vienna Austria 100.00
VersicherungsbüroDr.IgnazFialaGesellschaftm.b.H.,Vienna Austria 33.33
CompensaDystrybucjaSpolkazograniczonaodpowiedzialnoscia,Warsaw Poland 100.00
ViennaInsuranceGroupContactCenterBulgariaAD,Sofia Bulgaria 100.00
ViennaInsuranceGroupPolskaSpolkazograniczonaodpowiedzialnoscia,Warsaw Poland 100.00
ViennaInternationalUnderwritersGmbH,Vienna Austria 100.00
VIGAssetManagementinvestičníspolečnost,a.s.,Prague CzechRepublic 100.00
VIGManagementServiceSRL,Bucharest Romania 100.00
VIGServicesBulgariaEOOD,Sofia Bulgaria 100.00
VIGServicesShqiperiSh.p.K.,Tirana Albania 100.00
VIGServicesUkraine,LLC,Kiev Ukraine 100.00
VILEBAREDINEd.o.o.,Zagreb Croatia 30.00
VÖBDirektVersicherungsagenturGmbH,Graz Austria 50.00
VVTVermögensverwaltungGmbH,Vienna Austria 33.33
VVTHGmbH,Vienna Austria 33.33
WAGWohnungsanlagenGesellschaftm.b.H.,Linz Austria 25.00
Wien3420AspernDevelopmentAG,Vienna Austria 33.33
WienerStädtischeDonauLeasingGmbH,Vienna Austria 100.00
WSBVBeteiligungsverwaltungGmbH,Vienna Austria 100.00
WSVVermögensverwaltungGmbH,Vienna Austria 100.00
80 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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ConclusionBasedontheinformationavailable,noconductwasundertakenattheinstigationorintheinterestofthecontrollingentityoritscontrolledentitiesinthecourseoftheaccountingperiodwhichinitsnaturewouldaffecttheProcessor’sassetsinexcessof10%ofitsequitydeterminedaccordingtothelastfinancialstatements.
2. OVERVIEW OF MUTUAL CONTRACTS WITH CONTROLLED ENTITIES: VIENNA INSURANCE GROUP AG WIENER VERSICHERUNG GRUPPE
Contracts
Sale of servicesDuringtheaccountingperiod,theProcessorprovided/receivedservicesbasedonthesecontractsconcludedinpastaccountingperiodsorinthecurrentaccountingperiod:
Contract name Contractual party Date of conclusion Effective date Deliverable Note
Agreementoncooperationinusingbuildingno.115andNo.1400inPardubiceNo.46/2013–asamendedbySupplementNo.1
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup,Pobřežní665,18600Prague8
27Jun.2013SupplementNo.1dated5Mar.2014
1Jun.2013SupplementNo.1dated1Jan.2014
Regulationofmutualrightsandobligationswhenusingcommercialpremisesatbothpropertiesservingbothparties
Agreementonsubleaseofcommercialpremisesforadefiniteterm–sub-lesseeKooperativa–asamendedbySupplementNo.1–leaseuntil31Jul.2019andSupplementNo.2
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup,Pobřežní665/21,18600Prague
20Jan.2010SupplementNo.1dated27Sep.2013SupplementNo.2dated05Mar.2014
1Jan.2010SupplementNo.1dated1Oct.2013SupplementNo.2dated1Jan.2014
Leaseofofficeno.m.371withatotalareaof298.22m2inthebuildingatnám.Republiky1400,Pardubice
AgreementonsubleaseofcommercialpremisesforadefinitetermasamendedbySupplementNo.13andSupplementNo.14
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup,Pobřežní665/21,18600Prague
10Dec.2004SupplementNo.13dated5Mar.2014SupplementNo.14dated05.062014
2Jan.2004SupplementNo.13dated01Jan.2014SupplementNo.14dated01.052014
Leaseofofficesno.m.241,361and431withatotalareaof1378.74m2inthebuildingatnám.Republiky1400,Pardubice
InsurancePolicyNo.2268707823until28Feb.2015asamendedbySupplementsNo.26throughNo.38
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup,Pobřežní665/21,18600Prague
29Feb.2012SupplementNo.26dated30Dec.2013SupplementNo.38dated18Nov.2014
1Mar.2012SupplementNo.26dated2Jan.2014SupplementNo.38dated19Nov.2014
Motorhullinsuranceforcompanycars
InsurancePolicyNo.7720795825until31.12.2014asamendedbySupplementNo.2
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup,Pobřežní665/21,18600Prague
31Dec.2013SupplementNo.2dated16Sep.2014
1Jan.2014SupplementNo.2dated16Sep.2014
Agreementoninsuranceofcompanypropertyandliabilityinsurance
81 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Contract name Contractual party Date of conclusion Effective date Deliverable Note
InsurancePolicyNo.2060001407onsupplementaryvehicleinsurance–H73asamendedbySupplementsNo.41throughNo.53
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup,Pobřežní665/21,18600Prague
29Oct.2010SupplementNo.41dated30Dec.2013SupplementNo.53dated18Nov.2014
1.11.2010SupplementNo.41dated30Dec.2013SupplementNo.53dated18Nov.2014
VehicleinsuranceNA100PRO–nofaultaccident
InsurancePolicyNo.8603105774
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup,Pobřežní665/21,18600Prague
31Jul.2014 1Aug.2014
InsurancepolicyforgroupliabilityinsuranceofPojišťovnaČeskéspořitelnyemployees
CostSharingAgreement–asamendedbySupplementNo.2
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup,Pobřežní665/21,18600Prague
16Dec.2010SupplementNo.2dated17Feb.2014
1Jan.2011SupplementNo.2dated1Jan.2014
Outsourcingfor:– internalauditincluding
ongoingŘKSmonitoring;– informationtechnologies;
payrollprocessing,– CustomerSupport
Centreservice
AgreementonInternalGroupCooperation
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup,Pobřežní665/21,18600PragueČeskápodnikatelskápojišťovna,a.s.,ViennaInsuranceGroup,Pobřežní665/21,18600Prague
13Aug.2010 13Aug.2010
DefinitionofbasiccompetencesandresponsibilitiesintheprocessofdevelopmentmanagementandcoordinationoftheVIGgroupintheCzechRepublic
DataCenterServiceFrameAgreement
VIENNAINSURANCEGROUPAGWienerVersicherungGruppe,Schottenring30,1010Wien,Austria
14Jan.2014 1Jan.2013
Regulationoftheconditionsofprovidedservicesrelatedtouseofcentraldatasystems
QuataShareReinsuranceAgreementNo.17/2014
VIENNAINSURANCEGROUPAGWienerVersicherungGruppe,Schottenring30,1010Wien,Austria
28Feb.2014 1Jan.2014Organisationofnon-lifesupplementaryaccidentinsurancefor2014
QuataShareReinsuranceAgreement18/2014
VIENNAINSURANCEGROUPAGWienerVersicherungGruppe,Schottenring30,1010Wien,Austria
28Feb.2014 1Jan.2014Organisationofnon-lifesupplementaryaccidentinsurancefor2014
Agreement3/2015
VIENNAINSURANCEGROUPAGWienerVersicherungGruppe,Schottenring30,1010Wien,Austria
1Jan.2014SimCorp–conditionsofoperationoftheassetmanagementsystem
82 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
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Contracts on brokering activityTheprocessorconcludedthefollowingcontractsonbrokeringactivity,basedonwhichitprovidedthefollowingfulfilment:
Contract name Contractual party Date of conclusion Effective date Deliverable Note
ContractonexclusivebusinessrepresentationNo.4600-400500/01-2005-A(134/04)asamendedbySupplementNo.9
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup,Pobřežní665/21,18600Prague
29.12.2004SupplementNo.9dated31Dec.2013
1Jan.2005SupplementNo.9dated1Jan.2014
Brokeringofnon-lifeinsurancesales
SupplementNo.9–Citizens’propertyinsuranceonline(DS2,RD8,BT8),from1Mar.2014,citizens’propertyinsurance(DS2,SB2,SN2),businessinsurance(PS1/T14)
Commentary:AlltherelationssetoutinthisannexwereestablishedbetweentheAffiliatedEntities,namelytheProcessorandVIENNAINSURANCEGROUPAGWienerVersicherungGruppe.
Intheconclusionoftheserelations,thevalidlawsoftheCzechRepublicwererespectedandpriceswerestipulatedwithregardtotheIncomeTaxAct,i.e.accordingtothearm’slengthprinciple.InsurancebrokeringaccordingtoActNo.38/2004isregulatedincontractualrelationsbydefiningthemutualrightsandobligationsofthecontractualparties,withthesimultaneousdefinitionofconditionsofthecourse,claimandpaymentofremunerationforserviceprovisionrelatedtothesaleofinsurance.Thesecontractsincludetheauthorizationgrantedbytheaffiliatedentityfortheprovisionoftheseservices,undertheconditionsstipulatedbytheaforementionedlaw.
ConclusionInthecourseoftheaccountingperiod,nocontractualpartyclaimedanypropertylosses.Theadvantagesoftheconcludedcontractualrelationsaretheeffectiveuseofresourcesandservicesduringregulareconomicactivityand/orcostsavings.
Pardubice,10March2015
Pojišťovna České spořitelny, a.s., Vienna Insurance Group
RNDr. Petr Zapletal, MBAChairmanoftheBoardofDirectors
Ing. Jaroslav KulhánekDeputyChairmanoftheBoardofDirectors
Ing. Tomáš Vaníček, MBAMemberoftheBoardofDirectors
83 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Report on Relations
1. OUTLOOK
TheCompany’slong-termbusinessstrategyistofocusonprovidingprofitableproductswithhighaddedvalue,managingandplanningproductinnovations,buildingrelationshipswithclientsandbusinesspartners,increasingthestabilityoftheinsuranceportfolioandcontinuallyimprovingthesystemofclientserviceforbusinesspartnersandend-consumersofinsuranceservices.
AnyfurtherdevelopmentwillbedrivenbyeffortstocontinuallymeetrequirementstoachievetheCompany’sbusinessobjectivesandfinancialstability.TheCompany’sactivityisaffectedbyevergrowingcompetitionandpersistentlyadverseconditionsonfinancialmarkets,includingasharpdeclineininterestrates.Theseconditionsarecharacterizedbyalow-interestenvironmentandincreasinglystrongstateintervention.Thelong-awaitedlastingimprovementintheeconomicsituationhasnotarrivedbutinsteadwemustfacenewrisksandanenvironmentoftighterregulationoftheinsuranceindustryandrapidlydevelopinglegislation.TheCompanywillhavetodealwithnewrequirementsarisingfromtheplannedamendmenttolegislationgoverninginsuranceactivities,especiallyinrelationtotheanticipatedeffectivedateofconditionsforthemanagementofinsuranceactivitiesaccordingtoSolvencyII.
In2014,theCompanyfinishedsettingupbasicfunctionalitiesandprocessesassociatedwiththetransition(orfinalizationthereof)toconditionsnecessaryforeffectivecompanymanagementaccordingtorisks.Theresultoftheseactivitiesisthedivisionofresponsibilitiesforriskmanagementatindividualmanagementlevels,theverificationofproceduresassociatedwiththeidentificationoftheCompany’sriskpositionsandtheirreportingandtheiruseinmanagementatindividualmanagementlevels.Atthesametime,relatedformalstepsassociatedwiththeadjustmentoftheCompany’sorganizationalandprocessstructuresweretaken.ThecomingyearwillbeayearfortheverificationandconfirmationofthecorrectnessofthechangesmadebytheCompanyforasmoothtransitiontotheconditionsofSolvencyIIin2016.
In2014,theCompanyemployedacommunicationconceptbasedonapositiveapproachtolifewiththeslogan“Thinkpositively,lifeisworthliving”.Asinpreviousyears,thiscommunicationwasbuiltonthecoreproduct,FLEXIlifeassurance.Thephilosophyoftheprojectfocusedoncommunicatingtheneedforsecurityincaseofseriouslifesituations.Thetargetgroupwasyoungfamilies,wheretheroleoflifeassuranceistosecurethefamilyinvariouslifesituations,eveninthechangingconditionsofafamilywithgrowingchildren.
Productchangesaimedatfulfillingthecompany’scommunicationconceptandconditionsforresolvingseriouslifesituations.Theessenceofthesechangeswastheexpansionofdisabilityinsurance,insurance,andinsuranceofincapacityduetoillnessandacombinationofpermanentinjuries.In2014,weverifiedhowwellwehadmanagedtodealwiththenewCivilCodeandnewrequirementsforinsuranceinpractice.Basedontheresponsefromclientsandtheverificationofcompliancewiththeserequirementsbyaninternalauditandthesupervisorybody,itisfairtosaythatwesuccessfullyachievedthischallengingtask.Attheendoftheyear,wehadtoadjustinsurancecontractsinresponsetothechangeinconditionsforthetaxadvantageoflifeassurance,which,giventhatthisaffectedmorethanhalfamillionclients,placedconsiderabledemandsonhuman,operatingandtechnicalresources.
Tomaintaincustomerloyaltyandresponsiblebehaviour,theCompanycontinueditsloyaltyandbonusprogrammesmotivatingclientstowardslong-termpartnershipsandrewardingthemformakingnoorfewclaimsinthedurationoftheircontracts.Clientsinthisprogrammewillbeinformedofthestatusofbonusesontheirinsurancepoliciesfor2014.
TheCompanyconstantlyinnovatesinsurancemanagementprocedures,asevidencedbythecontinuedcomputerizationofinsurancecontractadministration.Lastyear,theCompanyfurtherdevelopedtheseinnovations,whichareaimedatstreamliningtheacquisitionprocessbyintroducingelectronicinsurancepolicyformsforourbusinesspartners.Apilotprogrammealsotestedtheelectronicconclusionofcompleteinsurancepolicies,includingtheclient’selectronicsignature.
Non-financial Section
84 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Non-financial Section
Thisapplicationfullyreplacesthetraditionalpaperformofconcludingcontracts,includingtheelectronictransferofdatatotheCompany’ssystems.Inadditiontoacceleratingandimprovingtheprocessofconcludinginsurancepolicies,italsocutscostsforinsurancemanagementandlimitsthepossibilityoffraud.
Thewholeprocessofinnovatinginsurancemanagementisaimedatincreasingproductivityandthequalityofoutputassociatedwithprocessinginsurancepolicieswhilesavingtimeandcosts.TheCompanyintendstofurtherstrengthentheseactivities,includingthequalityofitsclientapproach.Forthisreason,ithasbeguntomonitortheso-calledclientexperience,andhascreatedorganizationalandproceduralconditionsforthefulfilmentoftheseambitions.First,itchangedtheCompany’sorganizationalstructureandcreatedthepositionofaclientexperiencemanager,whilethuscreatingthenecessaryprerequisitesfortheevaluationofprocessesandchangeswithregardtoclientexperience.
2. ACTIVITY IN THE FIELD OF RESEARCH AND DEVELOPMENT
Givenitslineofbusiness,theCompanyhaslimitedoptionsinthefieldofresearchanddevelopment.Forthisreason,developmentisfocusedontheincorporationofnewinformationtechnologiesandformsofcommunicationintotheprocessofprovidinginsuranceservices.
3. ENVIRONMENTAL PROTECTION AND EMPLOYMENT RELATIONS
DuetothenatureoftheCompany’sbusiness,itplacesaminimumburdenontheenvironmentandmeetstherequirementsimposedbylegalstandardsintheCzechRepublicintheperformanceofitsactivities.Despitelimitedoptionsinviewofitslineofbusiness,theCompanydoesnotdismisstheissueofenvironmentalprotection.Intheyearunderreview,weimplementedasystemofsortingwasteanditsdisposalaccordingtoitsnature.AdecisionontherenewalofITinfrastructurewasalsoveryimportant,whichaimsnotonlytoensureadequatecapacityandquality,butalsofullrecyclingandasignificantreductioninenergydemandsfortheCompany’soperation.
Inthefieldofemploymentrelations,theCompanystrivestobeapreferredemployer.Forthisreason,itdevotesgreatattentiontothedevelopmentofitsemploymentpolicyandsocialprogrammes,withtheaimofbeinganattractiveemployeronthelabourmarket.TheCompanyusesmodernmethodsinthefieldofhumanresourcemanagementformotivationsystems,withtheutilizationofremunerationsurveysconductedincooperationwiththeHayGroup.TheCompanyprovidesemployeeswithawiderangeoffinancialandnon-financialbenefits.TheCompanycontinuallyevaluatestheconditionsoftheworkenvironmentsothatitmeetsrequirementsfortheperformanceofworktasks,andcomplieswithoccupationalsafetyprinciples,includingregularandcontractuallyprovidedhealthcareforitsemployees.EmployeeeducationandprofessionaldevelopmentareamongtheCompany’sdevelopmentpriorities.TheCompanyhasanestablishedsystemofemployeeassessmentanddevelopment,basedonwhichitenablesemployeestotakeadvantageofvariousformsofeducation/training,includingupgradingandaugmentingtheirqualifications.
4. THE COMPANY’S ORGANIZATIONAL UNITS ABROAD
TheCompanyhasnoorganizationalunitsabroad.
5. OTHER REQUIREMENTS ACCORDING TO SPECIAL LEGAL REGULATIONS
TheCompanymeetsrequirementsforitslineofbusiness–insurance,asprescribedby,inparticular,theInsuranceAct,ortheActonInsuranceIntermediariesandIndependentLossAdjusters.NootherspecialrequirementsaresetfortheCompany’sactivity.
85 Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Annual Report 2014
Non-financial Section
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