PANNÓNIA GROUP INSURERS

Transcription

1 PANNÓNIA GROUP INSURERS QUARTERLY INFORMATION Q August 2017

2 1. Summary The purpose of this information is to publish the data of CIG Pannónia Life Insurance Plc., CIG Pannónia First Hungarian General Insurance Company Ltd., Pannónia Life Insurance cplc., Pannónia General Insurance cplc. compiled in accordance with the Hungarian Accounting Act, unaudited and unconsolidated. The CIG Pannónia Life Insurance Plc. publishes its report on the second quarter of 2017 separately from the present information. In the report it publishes its consolidated, unaudited data for the first quarter of 2017 in accordance with the International Financial Reporting Standards (IFRS) adopted by the EU as required by the law. Main results and events of Q2 2017: - On 13 April 2017 the general meetings of CIG Pannónia First Hungarian General Insurance Ltd and Pannónia General Insurance cplc. decided on the merger by acquisition of Pannónia General Insurance cplc. into CIG Pannónia First Hungarian General Insurance cplc., which transformation plan was approved by the supervisory authority at 23 June. MKB Bank cplc as the minority shareholder of Pannónia General Insurance cplc. submitted a statement to the Board of Directors of CIG Pannónia First Hungarian General Insurance cplc. on the decision that it wishes not to be a shareholder of the successor (merged) company and it requests the payment for its share according to the draft terms of transformation. - On 24 April 2017 the General Meeting of CIG Pannónia Life Insurance Plc. approved the transformation plan of the Company and Pannónia Life Insurance cplc., the draft terms of the merger by acquisition with its annexes, in particular the draft statements of assets and liabilities and the draft inventory of assets, the report of the auditor and the merger agreement. The General Meeting determined 30 June 2017 as the date of the transformation. The type of the transformation is merger by acquisition, which means that Pannónia Life Insurance cplc. merges into CIG Pannónia Life Insurance Plc. by acquisition. The merge was authorized by supervisory authority on 23 June The Company Registry Court of Budapest Capital Regional Court registered the merger by acquisition of Pannónia Life Insurance cplc. into the Company and the merger by acquisition of Pannónia General Insurance cplc. into CIG Pannónia First Hungarian General Insurance Company Ltd on 30 June The date of the transformation is 30 June With the merger by acquisition Pannónia Life Insurance cplc. ceased to exist and all of its assets and liabilities were transferred to CIG Pannónia Life Insurance Plc. by way of universal succession. The business form of CIG Pannónia Life Insurance Plc. remained unchanged, it continues its operation as a public limited company, the executive officers and the registered capital of the company remained unchanged. Pannónia General Insurance cplc. also ceased to exist and all of its assets and liabilities were transferred to CIG Pannónia First Hungarian General Insurance Company Ltd. by way of universal succession. The business form of CIG Pannónia First Hungarian General Insurance Company Ltd. remained unchanged, it continues its operation as a public limited company, the executive officers and the registered capital of the company remain unchanged. - On 30 June 2017, with the effect of the merge, the equity of CIG Pannónia Life Insurance Plc, as legal successor, is increased with HUF 722 million, from HUF million to HUF million. Meanwhile the equity is increased in the successor balance sheet of CIG Pannónia First Hungarian General Insurance Ltd. with HUF 582 million (from HUF million to HUF million). - On 31 Marc 2017 the General Meeting of the Pannónia General Insurance cplc. (majority owned by CIG Pannónia First Hungarian General Insurance Ltd) decided to transfer the portfolio of compulsory motor vehicle liability insurance and condominium and home insurance to Aegon Hungary General Insurance cplc. The supervisory authority approved the transfer on 23 June 2017, with the effect of 1 July One step of the integration process of Pannónia Insurance Companies is the portfolio adjustment: according to its business strategy, CIG Pannonia First Hungarian General Insurance Ltd. focuses on those niche markets where it can operate competitively. CIG Pannónia Life Insurance Plc., Q information 2

3 - CIG Pannónia Life Insurance Plc., on 11 April 2017 concluded a strategic cooperation agreement with the MKB Bank cplc. According to this, the two companies cooperate in long term, the branches of MKB started to sell the pension and insurance products of CIG Pannónia, while the agents of CIG Pannónia offer the products of the MKB Bank for their clients. With this strategic agreement, the mutually beneficial cooperation between the companies will continue to strengthen. - Parallel with the legal merger, the change of IT systems and the migration of policies into the insurance registration systems of CIG Pannónia has been started. The first step is that the claim settlement of non-life insurances have been done in the systems of CIG Pannónia since 1st May On 1st July 2017, the policies of the non-life insurance have been migrated into the IT system of the CIG Pannónia First Hungarian General Insurance Ltd. In line with the IT migration the harmonisation of the operation and the merger of the operating areas are also in progress. - The owners of Pannónia Insurance Companies approved the companies audited annual report and business report for the financial year 2016, prepared according to the Hungarian Accounting Act, and the General Meeting of CIG Pannonia held on 24 April 2017 approved the Company's audited, consolidated financial statements and consolidated business report for the financial year 2016, prepared according to the international financial reporting and accounting standards accepted by the European Union. - The General Meeting held on 24 April 2017 appointed Ernst & Young Audit LLC (chamber registration number: ) until the closure of the financial year 2017 and personally responsible auditor Gabriella Virágh (chamber registration number: ) as the statutory auditor of the Company. - The General Meeting appointed Mrs Imre Fekete as a member of the Supervisory Board and Audit Committe of the Company for a three years period with the effect from 2. June 2017 by the authorization of the National Bank of Hungary. - CIG Pannónia First Hungarian General Insurance Ltd. made a strategic decision on starting it s activity in retail casco. The decision is justified by the fact that after the merger by acquisition EMABIT retained the retail casco portfolio of Pannónia General Insurance cplc. - Pannónia General Insurer cplc., to cover it s risk and decrease the expected losses, restructured it s reinsurance structure in the first part of The Insurer concluded an adverse development cover contract to cover it s claims from previous years. - The revision of the product structure at Pannónia Life Insurer Ltd. is in progress. The sale of the profitable products and products in the target segments of the Group, will be continued. While the Group will maintain the portfolio of the other life products and serve its existing clients. - On 1st June 2017 the Budapest-Capital Regional Court (striking down the decision of the court of first instance) has partly suspended until the final decision in the base litigation the execution of the decision of the National Bank of Hungary of 8th November 2016 regarding Dimenzió Kölcsönös Biztosító és Önsegélyező Egyesület in its order of 24th May Namely, the Court temporarily suspended the implementation of those parts of the decision in which the National Bank of Hungary had withdrawn the activity license of Dimenzió association and appointed the supervisory commissioner of the Pénzügyi Stabilitási és Felszámoló Nkft. (PSFN) to accomplish the transfer of the insurance portfolio of the association. CIG Pannónia Life Insurance Plc., Q information 3

4 Events after the balance sheet date: - The MKB Bank cplc., in accordance with the merger agreement related to Pannónia Life Insurer cplc., was entitled by a share exchange to receive piece of ordinary shares of CIG Pannónia Life Insurance Plc. The shares were provided from the treasury shares of the Company. The shares were transferred to the securities account of the owner on 6 July. Meanwhile CIG Pannónia First Hungarian General Insurance Ltd. transferred the value of the shares of the Pannónia General Insurer cplc. determined in the merger agreement to the MKB Bank cplc. - On 31 July 2017, on the general meeting of Pannonia CIG Fund Manager Ltd. (which is founded by the CIG Pannónia Life Insurance Plc. with it s strategic partner, the Pannonia Pension Fund) decided to decrease the share of CIG Pannónia Life Insurance Plc. from 50% to 16% in the Fund Manager. The reason of the change (with the intention of the economies of scale and efficiency) is to increase it s owner scale with MKB Bank cplc, MKB Pension Fund, MKB-Pannónia Health and Self-help Fund and the Gránit Bank cplc. With the increase of the ownerscale, the registered capital of the Pannonia CIG Fund Manager Ltd. increased significantly from the previous HUF 150 million to HUF 306,12 million. The profit of the Pannonia CIG Fund Manager Ltd. will be subdivided between the owners by the profitability of the owners portfolio and not by the share from the Pannonia CIG Fund Manager Ltd.. According to the preference shares CIG Pannónia Life Insurance Plc. delegates 1-1 member to the 7 members Executive Board and 5 members Audit Board. Budapest, 22 August 2017 CIG Pannónia Life Insurance Plc., Q information 4

5 2. Financial statements of CIG Pannónia Life Insurance Plc. Headlines in the Insurer s Income Statement (A) (B) (C) million HUF Change (A - B) Gross written premium Gross acquisition costs Changes in deferred acquisition costs Claims and benefits Gross changes in reserves Technical investment result Administration costs Reinsurance and other technical result Technical result Non-technical and investment result Dividends received Profit before tax Tax liability Profit after tax CIG Pannónia Life Insurance Plc., Q information 5

6 Headlines in the Insurer s Balance Sheet million HUF (A) (B) (C) Change (A - B) Intangible assets Investments Investments performed for policyholders of unitlinked life insurance Receivables Other assets Prepaid expenses and accrued income Total assets Shareholders' equity Technical reserves Unearned premium reserve a) gross amount b) reinsurers share of the reserve (-) Actuarial reserves a) gross amount b) reinsurers share of the reserve (-) Outstanding claim reserves a) gross amount b) reinsurers share of the reserve (-) Premium refund reserves a) gross amount b) reinsurers share of the reserve (-) Other reserves a) gross amount b) reinsurers share of the reserve (-) Technical reserves for policyholders of unit-linked life insurance policies Provisions Liabilities Accrued expenses and deferred income Total liabilities CIG Pannónia Life Insurance Plc., Q information 6

7 In the reporting period, the Insurer s gross written premium was HUF 6,102 million, which is HUF 363 million better compared to the previous year, same period. Within this, the gross written premium from unit-linked life insurance amounted to HUF 5,836 million (including HUF 1,648 million gross written premium from pension insurance), the gross written premium from traditional life products amounted to HUF 185 million and the gross written premium from health insurance policies amounted to HUF 81 million. New sales Annualized premium of new sales (million HUF) (A) (B) (C) Change (A - B) Change % (A - B) / B Unit-linked life insurance % Traditional and group life insurance % Annualized premium % As for life insurance policies sold in 2017 first half year, the share of the tied agent network is 52 percent, the performance of broker channel was 40 percent, while the banking channel sold 8 percent. The gross written premium from the first annual premiums of policies sold was HUF 899 million, which is a 12 percent increase compared to the previous year, same period (802 million). The renewal premiums of policies concluded in the previous years have decreased by 5 percent, which is slightly worse compared to the previous year s 1 percent decrease. The gross written premium income from renewals was 4,213 million in 2017 first half year, in contrast to HUF 4,430 million in previous year, same period. Top-up and single premiums (HUF 991 million) were 196% of the previous year s top-up/single premium revenue. Within the total premium income, the rate of top-up/single premiums increased to 16 percent from 9 percent compared to the previous year, same period. Among expenses, one of the most important item is the expenditure on claims and benefits (HUF 4,529 million) of which HUF 4,262 million is related to the partial or total surrender of unit-linked life insurance policies. Another significant item is the change in gross technical reserves (HUF 399 million). The HUF 540 million unit-linked life insurance reserves, the other technical reserves (HUF 71 million), the outstanding claim reserves (HUF 62 million), mathematical reserves (HUF 37 million), the unearned premium reserves (HUF 34 million) and reserves for premium refunds depending on profit (HUF 6 million) increased. Thus the cancellation reserves (HUF -283 million) were decreased. The expected payment of customer loyalty bonuses, which was accounted as reserves for premium refunds independent on profit earlier, is showed from the end of 2016 in the other technical provision line. The Insurer had an acquisition cost (with the deferred acquisition costs) of HUF 993 million, 6% less than in 2016, same period, resulted mainly form the lower aqusition cost ratio of etchical products. The other administration costs show a minor increase (HUF 39 million), compared to previous year, same period. The investment result amounted to HUF 412 million profit in 2017 which is due to the aggregated effect of the following issues. The unit-linked yield in 2017 was a HUF 365 million profit. During the second quarter of 2017 the rise of stock markets continued, and overperformed the bond market instruments, while the raw material market investments had produced negative yield as in the previous quarter. The developing stock markets overachieved significantly the developed stock markets, where the Japanese market produced the weakest performance. After the correction at the end of the quarter the European shares were slightly underperformared compared to the American stocks. Among the stock markets of emerging countries, the Chineese and Indian market lead the increase, while the Russian stock market suffered again devaluation. The BUX index closed this period with a 11% growth. Accordingly during this quarter the most popular funds were those that invest in the Eeastern-European and Chineese stock markets and the actively managed portfolios. Moreover as a result of the Navigator service there was a significant capital inflow into the liquidity funds. The investment result of (traditional) technical reserves amounted to HUF 73 million in 2017, first half year. The financial reinsurance interest expenditure had a significant effect on the investment result with a HUF -26 million. In the Reinsurance and other technical result line, the Insurer shows the revenue from fund management fees (HUF 434 million), the pending charges (HUF 23 million), the results of reinsurance activities (HUF-37 million) and the other technical result (HUF -13 million). CIG Pannónia Life Insurance Plc., Q information 7

8 The non-technical result is the other result (HUF -23 million) which consists of mostly local tax expenses and the innovation contributions. The Insurer received HUF 223 million, as dividend from it s joint venture company, the Pannonia CIG Fund Manager Ltd., which is the share of the profit of the Fund Manager, based on invidual profit center. The profit before tax is HUF 676 million which is HUF 38 better than in 2016 same period. The tax expenditure is HUF 18 million in the first half year. Thus the retained profit is HUF 658 million as at 30 June The Insurer s balance sheet total was HUF 73,213 million; its financial position is stable; the company has met its liabilities in full. The shareholders equity was HUF 6,999 million on 30 June The available solvency capital of the Company is 289 percent at 30 June 2017, which significanty exceeds the 150 percent Solvency Capital Requirement of the Supervisor Authority (which contains a 50 percentage volatility puffer). CIG Pannónia Life Insurance Plc., Q information 8

9 3. Financial statements of CIG Pannónia First Hungarian General Insurance Ltd. Headlines in the Insurer s Income Statement million HUF Changes in profit/loss (A) (B) (C) Change (A)-(B) Gross written premium Change in the unearned premium reserve (gross) (-/+) Gross earned premium Reinsurance premiums (-) Reinsurer s share in unearned premium reserve Net earned premium Gross claim settlement expenditure Gross claims paid Gross changes in claim reserve Claim settlement costs Reinsurer s share of claim settlement expenditure Reinsurer s share of claim payments Reinsurers' share of reserve changes Net claim settlement expenditure Other changes in reserves Acquisition costs Changes in deferred acquisition cost Commissions and profit shares from reinsurers Other technical expenses Technical result (without operating costs) Operating costs Technical result Investment result Other result Profit/loss for the year before taxes Tax Profit after tax CIG Pannónia Life Insurance Plc., Q information 9

10 Headlines in the Insurer s Balance Sheet (A) (B) (C) million HUF Change (A)-(B) Intangible assets Investments Receivables Other assets Prepaid expenses and abcrued income Total assets: Shareholders' equity Technical reserves Unearned premium reserve a) gross amount b) reinsurers share of the reserve (-) Outstanding claim reserves a) gross amount b) reinsurers share of the reserve (-) Premium refund reserves a) gross amount b) reinsurers share of the reserve (-) Other reserves a) gross amount b) reinsurers share of the reserve (-) Liabilities Accrued expenses and deferred income Total liabilities: CIG Pannónia Life Insurance Plc., Q information 10

11 In 2017 first half year the Insurer realized a gross written premium of HUF 3,369 million, of which the amount of premiums transferred to the reinsurer was HUF 1,900 million, the change of the unearned premium reserve was HUF 381 million, and the reinsurer s share of the latter was HUF 263 million. The total amount of the net earned premiums was HUF 1,351 million. The total amount of the gross earned premium has increased by 48% (with HUF 965 million), while the total amount of the net earned premium increased by 41% (with HUF 391 million) compared to previous year, same period. Within the gross written premium the composition of the portfolio was the following in The land vehicles comprehensive coverage (casco) is the leading products (31%), the shipment and insurance carriers are the second (20%), while the suretyship and guarantee insurances are the third largest product type (15%). The most important item among expenses is the amount of claim settlement expenditure (HUF 224 million), which is made up of claim payments (HUF 148 million), the change of the outstanding claim reserve (HUF 24 million) and the costs of claim settlement (HUF 52 million). The gross claim ratio changed from 37% to 42% and the net claim ratio changed from 18% to 17% as compared to the previous year. The increasing gross claim ratio is caused by a reserve change because of an Italian suretyship claim, which is almost 100% reinsured. The Insurer maintains relationships with several reinsurance partners. The Insurer covers its risks by reinsurance in the field of property insurance, liability insurance, carrier and transporter liability insurance, suretyship-related insurance and motor insurance. In connection with this, HUF 518 million were recognized as reinsurers commissions and profit shares. The amount is HUF 147 million higher compared to In 2017 the most important costs of the Insurer are the earned acquisition cost (HUF 1,218 million) and the operating cost (HUF 175 million). Level of acquisition costs (including deferred acquisition costs) increased by HUF 395 million (48 percentage), which is caused by the growth of the the gross earned premium by HUF 965 million (48 percentage) compared to 2016, same period. Operating costs did not changed significantly compared to 2016 same period. The Other technical result line (HUF 114 million loss) includes the insurance tax, the supervisory fee and settlements of the indemnification fund. The investment result is a profit of HUF 58 million. The other result line shows mainly the local tax expenses and innovation contributions (HUF 28 million), impairment for commission advance (HUF 9 million) and the penalties (HUF 20 million) as expenditures, while the release of the impairment of previous year (HUF 37 million) as income. As a result of the written above, the retained profit is HUF 166 million, which is HUF 37 million (29%) better, compared to 2016, same period. The Insurer s balance sheet total was HUF 6,127 million at the end of June 2017; the Company has met its liabilities in full. On 30 June 2017, the shareholders equity was HUF 1,842 million. The solvency capital adequacy of the Company as at 30 June 2017 is 173 percentage according to the Solvency II. CIG Pannónia Life Insurance Plc., Q information 11

12 4. Financial statements of Pannónia Life Insurance cplc. Headlines in the Insurer s Income Statement (A) (B) (C) million HUF Change (A - B) Gross written premium Gross acquisition costs Changes in deferred acquisition costs Claims and benefits Gross changes in reserves Technical investment result Administration costs Reinsurance and other technical result Technical result Non-technical and investment result Profit before tax Tax liability Profit after tax CIG Pannónia Life Insurance Plc., Q information 12

13 Headlines in the Insurer s Balance Sheet (A) (B) (C) million HUF Change (A-B) Intangible assets Investments Investments performed for policyholders of unit-linked life insurance Receivables Other assets Prepaid expenses and accrued income Total assets Shareholders' equity Technical reserves Unearned premium reserve a) gross amount b) reinsurers share of the reserve (-) Actuarial reserves a) gross amount b) reinsurers share of the reserve (-) Outstanding claim reserves a) gross amount b) reinsurers share of the reserve (-) Premium refund reserves a) gross amount b) reinsurers share of the reserve (-) Other reserves a) gross amount b) reinsurers share of the reserve (-) Technical reserves for policyholders of unitlinked life insurance policies Provisions Liabilities Accrued expenses and deferred income Total liabilities CIG Pannónia Life Insurance Plc., Q information 13

14 In the reporting period, the Insurer s gross written premium was HUF 2,655 million, which is HUF 113 million lower compared to the previous year, same period. This is caused by the single unit-linked premiums decrease, which is HUF 271 million lower compared to 2016, first half year (from HUF 1,846 million to HUF 1,575 million). It is partly offseted by increase in the regular-premium, which increased from HUF 922 million to HUF 1,080 million. The volume of the new sales decreased by HUF 124 million in the period, mainly because of traditional insurances. The main reason for the decrease is that the Insurer terminated continuously the sales of own products and the sales channels started to sell CIG Pannonia products. The sold CIG Pannonia products effect can bee seen in CIG Pannónia s sales data in the second quarter. New sales Annualized premium of new sales (A) (B) (C) Change (A - B) Change % (A - B) / B Unit-linked life insurance % Traditional and group life insurance % Annualized premium % Among expenses, one of the most important item is the expenditure on claims and benefits (HUF 1,883 million) of which HUF 1,301 million is related to the maturity of the unit-linked life insurance, HUF 97 million is related to the death claims of the unit-linked life insurance, HUF 116 million is related to the partial or total surrender of the unit-linked life insurance, HUF 357 million related to claim of traditional insurance policies. The low level of the partial or total surrender of unit-linked life insurance is caused by the high maturity because of the portfolio consist of mainly short time (even 1 year) single unit-linked policies. Another significant item is the change in gross technical reserves (HUF 743 million), which is HUF 348 million higher compared to previous year, same period. The mathematical reserves (HUF 441 million), the outstanding claim reserves (HUF 170 million), the unit-linked life insurance reserves (HUF 58 million) other technical reserves (HUF 30 million) and the unearned premium reserves (HUF 45 million) increased, while the reserves for premium refunds depending on profit (HUF -1 million) decreased. The higher new acquisition of previous year caused the increased mathematical reserves in the current year, because the mathematical reserves of new policies are zero, and become positive in 1-2 years. The UL reserves didn t change significantly (HUF 8,230 million at , while HUF 8,288 million at ). The Insurer had an acquisition cost (with the deferred acquisition costs) of HUF 209 million, 16% more than in 2016, same period. The gross acquisition cost decreased along with the new acquisition (from HUF 230 million to HUF 194 million), despite the change of the deferred acquisition costs increased the acquisition cost of It is caused by the lower deferred acquisition costs of the new acquisition, than the amortization of the old portfolio. The administration costs (HUF 234 million) decreased by 35 percentage, compared to previous year, same period, which is mainly the result of the integration process. The investment result amounted to HUF 300 million profit in 2017 which is due to the aggregated effect of the following issues. The unit-linked yield in 2017 was a HUF 211 million profit. The increase of the investment result is mainly due to the increase of the yields of the shares. The investment result of the traditional technical reserves is HUF 89 million profit in the first half year of The technical portfolio realised a HUF 18 million better result compared to previous year, same period. The non-technical result is HUF 95 million, which is mainly the investment result (HUF 11 million) and the other result (HUF -84 million) which consists of mostly provision, and smaller part of local tax expenses and the innovation contributions. The the retained loss is HUF 210 million, which is HUF 59 million lower, compared to previous year, same period. The Insurer s balance sheet total was HUF 14,671 million; its financial position is stable; the company has met its liabilities in full. The shareholders equity was HUF 811 million on 30 June The available solvency capital of the Company is 163 percent at 30 June 2017, which exceeds the 150 percent Solvency Capital Requirement of the Supervisor Authority (which contains a 50 percentage volatility puffer). CIG Pannónia Life Insurance Plc., Q information 14

15 5. Financial statements of Pannónia General Insurance cplc. Headlines in the Insurer s Income Statement million HUF Changes in profit/loss (A) (B) (C) Change (A)-(B) Gross written premium Change in the unearned premium reserve (gross) (-/+) Gross earned premium Reinsurance premiums (-) Reinsurer s share in unearned premium reserve Net earned premium Gross claim settlement expenditure Gross claims paid Gross changes in claim reserve Claim settlement costs Reinsurer s share of claim settlement expenditure Reinsurer s share of claim payments Reinsurers' share of reserve changes Net claim settlement expenditure Actuarial changes in reserves Other changes in reserves Acquisition costs Changes in deferred acquisition cost Commissions and profit shares from reinsurers Other technical expenses Technical result (without operating costs) Operating costs Technical result Investment result Other result Profit/loss for the year before taxes Tax Profit /loss after tax CIG Pannónia Life Insurance Plc., Q information 15

16 Headlines in the Insurer s Balance Sheet million HUF (A) (B) (C) Change (A)-(B) Intangible assets Investments Receivables Other assets Prepaid expenses and abcrued income Total assets: Shareholders' equity Technical reserves Unearned premium reserve a) gross amount b) reinsurers share of the reserve (-) Actuarial reserves a) gross amount b) reinsurers share of the reserve (-) Outstanding claim reserves a) gross amount b) reinsurers share of the reserve (-) Premium refund reserves a) gross amount b) reinsurers share of the reserve (-) Other reserves a) gross amount b) reinsurers share of the reserve (-) Provisions Liabilities Accrued expenses and deferred income Total liabilities: CIG Pannónia Life Insurance Plc., Q information 16

17 In 2017 first half year the Insurer realized a gross written premium of HUF 2,603 million, of which the amount of premiums transferred to the reinsurer was HUF 5,094 million, the change of the unearned premium reserve was HUF 177 million, and the reinsurer s share of the latter was HUF 1,129 million. The total amount of the net earned premiums was HUF 1,185 million. The total amount of the gross earned premium (HUF 2,780 million) is lower compared to the previous year, same period (HUF 3,079 million), which is mainly due to the exit from the MTPL market. While the total amount of the net earned premium decreased with HUF 2,713 million compared to previous year, same period. This is mainly due to the new reinsurance structure. According to this to decrease the risk of the portfolio - the reinsurance share of outstanding claim reserves have been increased from 40% to 80% and the surplus have been transfered to it s reinsurance partner in the first half of The own retention of claims before 2017 which are not covered with XL reinsurance have been changed to 20% compared to the previous 60% (the previous 50% in case of general liability insurance). Since 2017, the claims are covered with a 100% Quota Share reinsurance contract. The Stop Loss reinsurance contract of previous years related to the previous parent company, Versicherungskammer Bayern (VKB) Konzern-Rückversicherung AG have been terminated by them. Within the gross written premium the composition of the portfolio was the following in The gross written premium of the home insurance (31%) and the MTPL (14%) portfolio, with a HUF 1,166 million. This portfolio have be transferred to Aegon Hungarian General cplc. at While the other property insurance (30%) and other vechicle insurance (25%) portfolio with a HUF 1,437 million. This portfolio wil be held by the Insurer. An important item is the amount of claim settlement expenditure (HUF 888 million income), which is made up of claim payments (HUF 77 million), claim compensation (HUF 33 million), the change of the outstanding claim reserve (HUF 1,180 million decrease) and the costs of claim settlement (HUF 248 million). The reinsurance share of the change in the reserves are higher than the change gross reserves, which is due to the reasons above. The gross claim ratio is 59%, equal to the ratio previous year and the net claim ratio changed from 48% to 75% as compared to the previous year, same period. The change of the net claim ratio is due to change of the reinsurance structure detailed above. The change of other reserves if HUF 50 million mainly because of the 100% reinsurance part of cancellation reserve of 2017 and the release of premium provision independent of profit. The Insurer maintains relationships with several reinsurance partners. The Insurer covers its risks by reinsurance in the field of residential and corporate property insurance, liability insurance, and motor insurance. In connection with this, HUF 947 million were recognized as reinsurers commissions and profit shares, which is HUF 594 million higher compared to 2016, same period, due to the change of the reinsurance structure. While before 2017 there was a sliding-scale commission, since 2017 there is a fix commission and a profit share depending on profit. In 2017 the most important costs of the Insurer are the earned acquisition cost (HUF 576 million) and the operating cost (HUF 388 million). Level of acquisition costs (including deferred acquisition costs) decreased by HUF 47 million (8 percentage). Operating costs decreased with HUF 107 million compared to 2016, same period. The Other technical result line (HUF 137 million loss) includes the insurance tax, the supervisory fee, uncovered premiums and the settlements with the indemnification fund. The technical result is HUF 354 million loss, which is HUF 287 million lower, compared to 2016, same period. The result of the previous year is increased with HUF 440 million by the Stop loss reinsurance contract with the VKB. The Insurer signed a adverse development cover (ADC) reinsurance contract for the portfolio before The fee of the contract is HUF 140 million, which caused a single cost in 2017, first half year, while the contract covers the probable bad claim ratio for the portfolio of previous years in the future. This will cover the Insurer against the long-term loss of the previous portolfio. The investment result is a profit of HUF 56 million, consist of mostly interests and similar income. The other result line shows the provisions for the futures costs and expected liabilities. CIG Pannónia Life Insurance Plc., Q information 17

18 As a result of the written above, the retained loss is HUF 326 million, which is HUF 320 million lower, compared to 2016, same period. The Insurer s balance sheet total was HUF 4,100 million at the end of June 2017; the Company has met its liabilities in full. On 30 June 2017, the shareholders equity was HUF 1,263 million. The solvency capital adequacy of the Company, at 30 June 2017 is 122 percentage according to the Solvency II. CIG Pannónia Life Insurance Plc., Q information 18

19 Annex I (CIG Pannónia Life Insurance Plc.) The presentation of the insurance policies (number) in the Insurer s life business line at the end of the period in question Opening Closing New stock on stock on business Death insurance Endowment insurance Indexed or unit-linked life insurance Health Insurance Pension Insurance according to the Personal Income Tax Act Credit protection insurance Group loan collateral life insurance Group life insurance Total regular-premium policies Indexed or unit-linked life insurance Pension Insurance according to the Personal Income Tax Act Total single premium policies Total life business line Accident and sickness riders linked to life insurance Presentation of the stock of the non-life business line of the Insurer at the end of the period thousand HUF Opening Closing New stock on stock on business Death insurance Endowment insurance Indexed or unit-linked life insurance Health Insurance Pension Insurance according to the Personal Income Tax Act Credit protection insurance Group loan collateral life insurance Group life insurance Total life business line Accident and sickness riders linked to life insurance CIG Pannónia Life Insurance Plc., Q information 19

20 The Insurer s gross written premium at the end of the period in question, broken down by insurance sectors Total gross written premium Gross written premium from single premium products thousand HUF Top-up gross written premium Death insurance Endowment insurance Indexed or unit-linked life insurance Health Insurance Pension Insurance according to the Personal Income Tax Act Credit protection insurance Group loan collateral life insurance Group life insurance Élet üzletág részösszesen: Accident and sickness riders linked to life insurance The actuarial reserves of life insurance policies with single/top-up premiums at the end of the period Amount of actuarial reserve Single premium thousand HUF Top-up premium Unit-linked life insurance reserve 0 0 Total traditional reserves CIG Pannónia Life Insurance Plc., Q information 20

21 Annex II (CIG Pannónia First Hungarian General Insurance Ltd.) The presentation of the insurance policies (number) in the Insurer s non-life business line at the end of the period in question Opening stock on New business Closing stock on Total regular-premium policies Institutional property insurance Business Insurance (other than SMEs) SMEs property insurance General liability insurance Professional liability insurance Shipment and insurance carriers Accident insurance Sickness insurance Vehicle insurance Casco Suretyship and guaranty insurance Total single premium policies Institutional property insurance Business Insurance (other than SMEs) SMEs property insurance Other property insurance General liability insurance Professional liability insurance Shipment and insurance carriers Accident insurance Casco Suretyship and guaranty insurance Extended warranty Total CIG Pannónia Life Insurance Plc., Q information 21

22 Presentation of the stock of the non-life business line of the Insurer at the end of the period thousand HUF Opening stock on New business Closing stock on Institutional property insurance Business Insurance (other than SMEs) SMEs property insurance General liability insurance Professional liability insurance Shipment and insurance carriers Accident insurance Sickness insurance Vehicle insurance Casco Suretyship and guaranty insurance Total The Insurer s gross written premium at the end of the period in question, broken down by insurance sectors thousand HUF Total gross written premium Gross written premium from single premium products Institutional property insurance Business Insurance (other than SMEs) SMEs property insurance Other property insurance General liability insurance Professional liability insurance Shipment and insurance carriers Accident insurance Sickness insurance Vehicle insurance Casco Suretyship and guaranty insurance Extended warranty Total CIG Pannónia Life Insurance Plc., Q information 22

23 Annex III (Pannónia Life Insurance cplc.) The presentation of the insurance policies (number) in the Insurer s life business line at the end of the period in question Opening Closing New stock on stock on business Death insurance Endowment insurance Pension Insurance according to the Personal Income Tax Act Credit protection insurance Group loan collateral life insurance Group life insurance Total regular-premium policies Indexed or unit-linked life insurance Pension Insurance according to the Personal Income Tax Act Total single premium policies Total life business line Accident and sickness riders linked to life insurance Presentation of the stock of the life business line of the Insurer at the end of the period thousand HUF Opening stock on New business Closing stock on Death insurance Endowment insurance Pension Insurance according to the Personal Income Tax Act Credit protection insurance Group loan collateral life insurance Group life insurance Total life business line Accident and sickness riders linked to life insurance CIG Pannónia Life Insurance Plc., Q information 23

24 The Insurer s gross written premium at the end of the period in question, broken down by insurance sectors Total gross written premium Gross written premium from single premium products thousand HUF Top-up gross written premium Death insurance Endowment insurance Indexed or unit-linked life insurance Pension Insurance according to the Personal Income Tax Act Credit protection insurance Group loan collateral life insurance Group life insurance Élet üzletág részösszesen: Accident and sickness riders linked to life insurance The actuarial reserves of life insurance policies with single/top-up premiums at the end of the period Single premium Amount of actuarial reserve Top-up premium thousand HUF Unit-linked life insurance reserve - - Total traditional reserves CIG Pannónia Life Insurance Plc., Q information 24

25 Annex IV (Pannónia General Insurance cplc.) The presentation of the insurance policies (number) in the Insurer s non-life business line at the end of the period in question Opening stock on New business Closing stock on Total regular-premium policies Business Insurance (other than SMEs) SMEs property insurance General liability insurance Professional liability insurance Vehicle insurance Casco Residential property insurance Credit insurance Total Presentation of the stock of the non-life business line of the Insurer at the end of the period thousand HUF Opening stock on New business Closing stock on Business Insurance (other than SMEs) SMEs property insurance General liability insurance Professional liability insurance Vehicle insurance Casco Residential property insurance Credit insurance Total CIG Pannónia Life Insurance Plc., Q information 25

26 The Insurer s gross written premium at the end of the period in question, broken down by insurance sectors thousand HUF Total gross written premium Gross written premium from single premium products Business Insurance (other than SMEs) SMEs property insurance General liability insurance Professional liability insurance Vehicle insurance Casco Residential property insurance Credit insurance Total Disclaimer: All information contained within this document is for information purposes only, and shall not be considered an official translation of the official communication referred to herein. This document does not include the integral wording of the official communication referred to herein, the original Hungarian language version of it remains to be the solely legally binding material in the subject matter. For further information, please do not hesitate to contact us. CIG Pannónia Life Insurance Plc., Q information 26