Annual Report kunszt ubezpieczeń

Transcription

1 Annual Report 2013 Compensa Towarzystwo Ubezpieczeń S.A. Vienna Insurance Group Compensa Towarzystwo Ubezpieczeń na Życie S.A. Vienna Insurance Group kunszt ubezpieczeń

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3 Table of contents Letter from the Chairman of the Supervisory Board 4 Letter from the CEO 5 Company 7 Information about the Company 8 Shareholder Structure 10 Compensa in Insurance products 14 Branch Offices 17 Results of Compensa TU S.A. 21 Financial results 22 Technical account 23 General profit and loss account 24 Cash flow statement 25 Balance sheet: assets 26 Balance sheet: liabilities 27 Expert auditor s opinion 28 Report of the Supervisory Board 31 Results of Compensa TU na Życie S.A. 35 Financial results 36 Technical account 38 General profit and loss account 40 Cash flow statement 41 Balance sheet: assets 42 Balance sheet: liabilities 43 Expert auditor s opinion 44 Report of the Supervisory Board 47 Vienna Insurance Group 51

4 Letter from the Chairman of the Supevisory Board Dear Madam / Sir, In 2013, Vienna Insurance Group earned a total of EUR million gross financial result, out of which as much as EUR 50.2 million came from Poland, with an impressive growth of nearly 21 percent year to year. Within VIG ranking in terms of premium written for 2013, Poland came third directly after Austria and Czech Republic with a total premium income of EUR 1.14 billion. These excellent results strengthen VIG s view of the Polish market as a prospective and profitable one. Our activities in Poland are a paradigm for VIG s earnings-oriented strategy in the CEE region. Our Group companies follow a course of growth adjusted to the different phases of the market that appropriately takes into account the growth spurts and quiet phases of the market. This allows our Group to optimally utilize its existing potential. Since one of VIG s biggest operations is Poland, Compensa is a central element of this strategic approach. For a third year in a row, the company has successfully outperformed the historical threshold of PLN 1 billion premium in non-life and PLN 500 million in life. It deserves special appreciation as keeping a stable and strong position on the local market greatly contributes to one of our strategic cornerstones, which is to keep the position of the leading CEE insurance group. This top line success is even more impressive as, along with growth, Compensa managed to retain an outstanding level of profit, which in 2013 amounted to PLN million in total, and which was historically the highest in non-life. The Supervisory Board is pleased with such an impressive bottom line development at these times of a slowdown on the insurance market. The successful development and growing importance of Poland for VIG is to a large extent the contribution of Compensa Life and Non-life and its team of experienced managers, engaged employees as well as business partners, who perceive the company as a stable and competitive insurer and who build long-term relations with an increasing number of customers. Having said that, I wish to extend my special thanks to retail and business clients of Compensa who have placed their trust in Compensa s services and reliability to cover their risks. VIG is glad to see Compensa building its position based on reliability and high service standards another year in a row. Yours Sincerely, Peter Hagen Chairman of the Supervisory Board Compensa TU S.A. Vienna Insurance Group Compensa TU na Życie S.A. Vienna Insurance Group CEO of Vienna Insurance Group

5 Letter from the CEO Dear Customers, Partners and Employees, Out of a total of 24 years of Compensa operations in Poland, I have had an honor to manage this company and participate in its success for the last decade. Year 2013 was a special one for Compensa, having its historically highest financial results, but also very special for me as it was my last year on the CEO position of both Compensa Life and Non-life. Over the last 10 years period we have managed to increase gross premiums written from PLN 320 mio in 2003 to PLN 1.62 bn in We have built a strong brand and a good track record, which combined with VIG know-how made us the first daughter company in Vienna Insurance Group to expand abroad with two foreign branch offices. Within these 10 years, we have been successful in removing all historical burdens and we have brought up the company s financial result from PLN -64 mio in 2003 to PLN 130 mio in A big part of this contribution came directly from the achievements of Despite the slowdown on the Polish insurance market in 2013, Compensa Non-life for the third time in a row broke the PLN 1 bn premium threshold. At the same time, the company generated the best-in-history NGAAP gross financial result of PLN 98.6 mio, which outperformed the budget by 36%. In 2013, the Company continued its focus on further diversification of its portfolio towards less motor insurance and more property business, as well as expansion into new customer niches. In all property lines, we have managed to grow by 21% in corporate business we grew by 20% and in SME by 24% increasing share of property insurance in our portfolio up to 25,4%. Simultaneously in personal insurance, we have recorded an excellent 28% growth. In life, we collected PLN mio of GPW and managed to keep a growing portfolio in the individual customer segment. Acting in line with VIG s multichannel strategy, the company also gained new retail sales partners and further diversified its sales structures. In total, sound financial results and stable income level allowed the companies for the second time in history to allocate funds for a considerable dividend of 59 mio PLN in Compensa Non-life and 15.7 mio PLN in Compensa Life. On behalf of the Management Board of Compensa, I would like to express my thanks to our new and longterm customers as well as business partners for their engagement not only in favorable but also difficult market conditions. I direct my special thanks also to all employees who do their best to continue the success story of Compensa. I am also happy to announce that I have been given the opportunity to see Compensa s development in future years as a chairman of the Supervisory Board, to which I am gladly looking forward. Kind regards, Franz Fuchs CEO Compensa TU S.A. Vienna Insurance Group Compensa TU na Życie S.A. Vienna Insurance Group

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7 THE COMPANY

8 I N F O R M A T I O N A B O U T T H E C O M P A N Y Compensa TU S.A. as of 31 December 2013 Company Management Bodies Pursuant to the articles of association of Compensa TU S.A. Vienna Insurance Group, the Company Management Bodies are: The General Assembly The Supervisory Board The Management Board Management Board Franz Fuchs Ireneusz Arczewski Jarosław Szwajgier Michał Gomowski Wolfgang Stockmeyer President of the Management Board Deputy President of the Management Board Deputy President of the Management Board Deputy President of the Management Board Member of the Management Board Supervisory Board Hans Peter Hagen Dieter Fröhlich Roland Goldsteiner Wolfgang Petschko Andrzej Witkowski Chairman of the Supervisory Board Deputy Chairman of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Date of establishing the Company 12 February 1990 National Court Register (KRS) TIN (tax identification number) Share capital PLN fully paid Address of the Headquarters Compensa Towarzystwo Ubezpieczeń S.A. Vienna Insurance Group Al. Jerozolimskie Warszawa

9 Compensa TU na Życie S.A. as of 31 December 2013 Company Management Bodies Pursuant to the articles of association of Compensa TU S.A. Vienna Insurance Group, the Company Management Bodies are: The General Assembly The Supervisory Board The Management Board Management Board Franz Fuchs Ireneusz Arczewski Grzegorz Liszka Piotr Tański President of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board Supervisory Board Hans Peter Hagen Dieter Fröhlich Roland Goldsteiner Wolfgang Petschko Andrzej Witkowski Chairman of the Supervisory Board Deputy Chairman of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Date of establishing the Company 5 November 1997 National Court Register (KRS) TIN (tax identification number) Share capital PLN fully paid Address of the Headquarters Compensa Towarzystwo Ubezpieczeń na Życie S.A. Vienna Insurance Group Al. Jerozolimskie Warszawa

10 S H A R E H O L D E R S T R U C T U R E Compensa TU S.A. as of 31 December 2013 Number of Share in Number of Shareholders shares the share votes in pcs. in % in % COMPENSA Holding GmbH Vienna Insurance Group AG Wiener Versicherung Gruppe Others Total Others 0.08% COMPENSA Holding GmbH 36.56% Vienna Insurance Group AG Wiener Versicherung Gruppe 63.36% Share capital PLN fully paid

11 Compensa TU na Życie S.A. as of 31 December 2013 Number of Share in Number of Shareholders shares the share votes in pcs. in % in % COMPENSA Holding GmbH Vienna Insurance Group AG Wiener Versicherung Gruppe Total COMPENSA Holding GmbH 28.87% Vienna Insurance Group AG Wiener Versicherung Gruppe 71.13% Share capital PLN fully paid

12 C O M P E N S A I N Compensa TU S.A. as of 31 December 2013 Employment At the end of 2013, the Company had a total of 573 employees. The number of employees decreased by 12 as compared to Gross premium written in PLN million The gross premium written reached the value of PLN thousand and was lower by 5.0% as compared to the preceding year. Similarly as in the preceding years, motor insurance accounted for the major part of the portfolio (70.5%). It should be emphasized that the company aims at growth in the share of property insurance in the portfolio. The target segment of Compensa is the individual customer and small and medium-sized enterprises

13 Compensa TU na Życie S.A. as of 31 December 2013 Employment Similarly as in the previous years, the majority of the departments carried out their activities within the whole VIG group. As of 31 December 2013, the Company had full-time positions, including full-time positions in the Headquarters, and 1.9 full-time positions in local units. At the end of 2012, the Company had full-time positions; the number of full-time positions increased by Gross premium written in PLN million The year 2013 was closed with the gross premium written of PLN thousand and with the net profit of PLN thousand. As compared to the preceding year, the premium written fell down by 10.2%

14 I N S U R A N C E P R O D U C T S Compensa TU S.A. In 2013, Compensa TU S.A. offered insurance products aimed at individual and corporate customers. The offer included both insurance individual risk coverage insurance and insurance packages providing comprehensive insurance. Changes in the insurance offer resulted from the need for product adaptation to the changing needs of customers, continuous development of products and the application of best experience in their sale. Motor insurance Compensa Komunikacja MTPL Motor hull insurance Green Card Assistance Motor legal protection insurance Accident insurance Property insurance Household insurance Compensa Rodzina Compensa Mój Dom Twoja Inwestycja insurance of construction projects Agricultural insurance Compulsory agricultural civil liability insurance Compulsory farm buildings insurance Farm property insurance Gross premium written structure Insurance for businesses Compensa Firma insurance package for middle-sized enterprises Mój Biznes insurance package for small-sized enterprises Property fire insurance and insurance of other risks with BI option Property all risk insurance extended with BI option Property robbery and burglary insurance Machinery insurance extended with BI option All risks construction machinery and equipment insurance All risks electronic equipment insurance Construction all risks insurance Assembly all risks insurance National and international cargo insurance TPL insurance Carrier s TPL Personal insurance Compensa Voyage tourist insurance Accident insurance Health insurance Compensa Zdrowie Compensa Zdrowie z Refundacją (with refund) Property insurance 24.5% Personal insurance 5.0% Motor insurance 70.5%

15 Compensa TU na Życie S.A. The Company is licensed to provide insurance activities in groups 1-5 of section I of the appendix to the Act on Insurance Activities (life insurances, dowry insurance, maintenance of children, if unit-linked insurance, annuity insurance, accident and health insurance, if they supplement insurances mentioned in groups 1-4). Individual life insurance Gwarancja Ochrona individual term life insurance Gwarancja Profit individual endowment life insurance with profit sharing Flexi Plus single premium individual unit-linked insurance Fundusz Wierzytelności single premium individual unit-linked insurance TopFundusz single premium individual unit-linked insurance SuperFundusz, SuperFundusz Plus single premium individual unit-linked insurance MegaFundusz single premium individual unit-linked insurance Compensa IKZE single premium individual unit-linked insurance Gwarancja Renta individual endowment life insurance Gwarancja Renta Premium regular premium individual endowment life insurance Bezpieczna Strategia Plus individual endowment life insurance Group life insurance Bezpieczna Grupa group life insurance Pakiet Bezpieczna Grupa group life insurance Bancassurance Borrowers life insurance Leaseholders life insurance Checking and saving account owners life insurance Credit card holders life insurance Life endowment insurance Gross premium written structure Bancassurance and STE 52.6% Group insurance 13.7% Individual insurance 33.7%

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17 BRANCH OFFICES

18 B R A N C H O F F I C E S Compensa TU S.A. Branch offices Białystok ul. Armii Wojska Polskiego 7A Bydgoszcz ul. Matejki 1A Częstochowa ul. Kawia 4/16 Gdańsk ul. Rzemieślnicza 33, Sopot Katowice ul. Floriana 15 Kraków ul. Kordylewskiego 1 Kraków II ul. Rusznikarska Deptak 2/8 Lublin ul. Tomasza Zana 32, Łódź Al. Marszałka E. Śmigłego Rydza 20 Łódź II ul. Nawrot 85A/3 Olsztyn ul. K. S. Wyszyńskiego 1 Opole ul. Luboszycka 36 Płock ul. Miodowa 1 Poznań ul. Rataje 164 Radom ul. F. Focha 14 Rzeszów ul. Bernardyńska 2 Suwałki ul. Noniewicza 85C Szczecin ul. Mieszka I Warszawa Al. Jerozolimskie 162 Warszawa II ul. A. Mickiewicza 63, p. 246 Wrocław ul. Grabiszyńska 208 Wrocław II ul. 3-go Maja 25, Zgorzelec Zielona Góra ul. Wiśniowa 19A Headquarters Al. Jerozolimskie 162, Warszawa

19 Compensa TU na Życie S.A. Individual isurance representations Group insurance representations Bielsko-Biała ul. Wapienna 6 Gdańsk ul. Rzemieślnicza 33, Sopot Katowice ul. Floriana 15 Koszalin ul. Zwycięstwa 40 box 69/70 Kraków ul. Kordylewskiego 1 Lublin ul. Zana 32 Łódź al. Marszałka E. Śmigłego-Rydza 20 Poznań ul. Poznańska 64/72 Rzeszów ul. Bernardyńska 2/7 Szczecin ul. Mieszka I nr Szczecinek ul. Wyszyńskiego 73 Stargard S. ul. 11 Listopada 37 Tarnów ul. Krakowska 26/3 Warszawa ul. Mickiewicza 63 Wrocław ul. Grabiszyńska 208 Bydgoszcz ul. Matejki 1 Częstochowa ul. Kawia 4/16 Ip. Gdańsk ul. Rzemieślnicza 33, Sopot Katowice ul. Floriana 15 Koszalin ul. Zwycięstwa 40 box. 70 Kraków ul. Kordylewskiego 1 Rzeszów ul. Bernardyńska 2/7 Warszawa Al. Jerozolimskie 162 Wrocław ul. Grabiszyńska 208 Headquarters Al. Jerozolimskie 162, Warszawa

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21 RESULTS Compensa TU S.A.

22 R E S U L T S Compensa TU S.A. Financial results The Company closed the year 2013 with the net profit of PLN thousand. The result increased by PLN thousand compared to the preceding year. Detailed specification of results (PLN thous.) (PLN thous.) Gross premium written Net return on investments Gross claims Change in gross technical provisions Acquisition and administrative costs Technical result Net financial result Solvency declaration ratios and parameters (PLN thous.) Solvency margin Own funds to cover solvency margin Coverage of solvency margin by own assets 222,4%

23 Compensa TU S.A. Technical account (PLN thous.) (PLN thous.) Premiums Gross premiums written Reinsurers share in premium written Change in gross provisions for unearned premiums and provision for unexpired risk Reinsurers share in change in provisions for premiums Revenues of net investments transferred from P&L account Other technical income net of reinsurance Claims Claims paid net of reinsurance Gross claims paid Reinsurers share in claims paid Change in provisions for outstanding claims net of reinsurance Change in gross provisions for outstanding claims Reinsurers share in change in provisions for outstanding claims Change in other technical provisions net of reinsurance 0 0 Bonuses and discounts including change in provisions for bonuses and rebates net of reinsurance 0 0 Costs of insurance activities Acquisition costs Administrative costs Reinsurance commissions and reinsurers profit sharing Other technical costs - net of reinsurance Change in provisions for claims outstanding Balance on technical account

24 R E S U L T S Compensa TU S.A. General profit and loss account (PLN thous.) (PLN thous.) Technical account non-life insurance Return on investments Unrealized gains on investments Net returns on investments including costs, transferred from the technical life insurance account Investments charges Unrealized losses on investments Net returns on investments including costs transferred to the technical non-life insurance account Other operating income Other operating expenses Profit (loss) on operating activities Extraordinary profits Extraordinary losses 0 0 Gross profit (loss) Income tax Other statutory reductions in profit (increases in loss) 0 0 Net profit (loss)

25 Compensa TU S.A. Cash flow statement (PLN thous.) (PLN thous.) Cash flows from business activities Proceeds Direct insurance and reinsurance activities proceeds Outwards reinsurance proceeds Proceeds on other operating activities Expenses Direct insurance and reinsurance expenses Outwards reinsurance expenses Expenses on other operating activities Cash flows from investment activities Proceeds Expenses Cash flows from financial activities Total net cash flows Balance sheet change in cash Opening balance of cash Closing balance of cash

26 R E S U L T S Compensa TU S.A. Balance sheet: assets (PLN thous.) (PLN thous.) Intangible assets Investments Land and buildings Investments in subordinated undertakings 0 0 Other financial investments Deposit debtors from credit undertakings 0 0 Net assets of life insurance when the investment risk is borne by the policyholder Debtors Direct insurance debtors Reinsurance debtors Other debtors Other asset components Tangible assets Cash Other assets 0 0 Prepayments and accrued income Deferred income tax assets Deferred acquisition costs Accrued interest and rent 0 0 Other prepayments and accrued income ATOTAL ASSETS

27 Compensa TU S.A. Balance sheet: liabilities (PLN thous.) (PLN thous.) Equity Share capital Supplementary capital Revaluation reserve Other reserve capitals Profit (loss) from previous years Net profit (loss) Subordinated creditors Technical provisions Provision for unearned premiums and provision for unexpired risk Provision for life insurance Provisions for outstanding claims Provisions for bonuses and rebates for the policyholders 0 0 Equalization provisions Provision for the benefit of life insurance policyholders who bear the investment risk Reinsurers share in technical provisions (negative value) Reinsurers share in provision for unearned premiums and provision for unexpired risk Reinsurers share in life insurance provision Reinsurers share in outstanding claims Reinsurers share in life insurance provision when the investment risk is borne by the policyholder Estimated recourses and claim returns (negative value) Estimated gross recourses and claims returns Reinsurers share in estimated recourses and claim returns Other provisions Provisions for pensions and other workforce entitlements Deferred income tax provision Other provisions Creditors arising out of reinsurers investments Other creditors and special funds Creditors arising out of direct insurance Creditors arising out of reinsurance Other creditors Special funds Prepayments and accrued income TOTAL LIABILITIES

28 E K S P E R T A U D I T O R S O P I N I O N Compensa TU S.A.

29 Compensa TU S.A.

30 E K S P E R T A U D I T O R S O P I N I O N Compensa TU S.A.

31 REPORT OF THE SUPERVISORY BOARD Compensa TU S.A. On activity in 2013 and on assessment of the Financial Statement for the financial year ending on , 2013 Management Board 2013 Report and the Management Board motion on distribution of net profit for the financial year ending 31 December Composition of the Supervisory Board On , the Supervisory Board was composed: Peter Hagen Chairman Dieter Fröhlich Deputy Chairman Roland Goldsteiner Member Wolfgang Petschko Member Andrzej Witkowski Member During the General Meeting held on , Mr. Witkowski was appointed to the position of Member of the Supervisory Board for the term of office ending on the date of approval of the financial statement for the year Throughout 2013, the Supervisory Board made decisions at the meetings and by circulation. Meetings were held four times. In the reporting period, 16 resolutions were adopted on essential matters concerning the operation of the Company. The meetings of the Supervisory Board held in 2013 were devoted to the analyses of detailed information of the Management Board on financial results achieved in particular reporting periods, sales results and results on investment activities as compared to the results from the preceding year and plans approved by previous resolutions of the Supervisory Board, and their effect on the Company s financial position. The Supervisory Board was also monitoring, each quarter, Management Board reports on financial results, which contained, in particular, profit and loss account, balance sheet, technical account and cash flow statement. The Supervisory Board analyzed detailed information presented by the Management Board concerning the situation on the insurance market, gross premium written, gross premium earned and claims, separately for MTPL and AC motor insurance, property insurance, personal insurance and for other business lines. Moreover, the Supervisory Board monitored the level of administrative costs, direct and indirect costs of acquisition, loss adjustment costs, assets management costs and other technical costs as compared to the preceding year and the approved budget. Actions of the Supervisory Board in the investment area were focused on analyses of internally and externally managed assets portfolio in terms of their size, structure and profitability. The Supervisory Board paid particular attention to the compliance of the investment portfolio structure with the Investment and Risk Strategy approved by the Supervisory Board and the Asset Management Department at Vienna Insurance Group. The Supervisory Board monitored of the list of largest transactions of purchase and sale of financial instruments and with major investments in the portfolio by asset class. In addition, the Supervisory Board was monitoring the current technical results of the company and with breakdown into business lines and profitability in given reporting periods. Additionally, the Supervisory Board took note of the value and changes in gross technical provisions, in particular in provisions for claims (IBNR/RBNP) and provision for premiums, with breakdown into major business lines and types of claims (property, personal, accident insurance, endowment insurance). In the above respect, the Supervisory Board was also monitoring activities of the company in Lithuania and Latvia. In 2013, the Supervisory Board evaluated the financial statement for 2012 and met the auditor s representatives to discuss the most important conclusions from the conducted audit of the financial statement. The Supervisory Board took note of the auditor s comments, in particular with regard to control of the IT area and actuary, and the tax position of the VIG Ekspert cooperative in the context of last decisions of tax authorities. The auditor confirmed the compliance of the drawn up financial statement of the company for 2013 with the Accounting Act, did not ascertain cases of any abuses or prohibited acts and issued chartered auditor s opinion without reservations. The Supervisory Board obtained also the auditor s statement on independence, and thus fulfilled its obligations as the Audit Committee.

32 REPORT OF THE SUPERVISORY BOARD When executing the above tasks, the Supervisory Board was constantly monitoring the Company s activities. The Board was also assessing activities of the Company from the point of view of its compliance with financial safety standards, as specified in the Act on insurance activities. The Supervisory Board was also executing tasks of the Audit Committee, as imposed by Resolution no. 11/2009 of , i.e. among others: monitoring of the financial reporting process, monitoring of the effectiveness of internal control system, internal audit and risk management, monitoring of the performance of financial inspection activities, monitoring independence of the chartered auditor and the entity authorized to audit financial statements, including in the case of provision of the following services: service of keeping accounting and tax books, tax consulting, running bankruptcy procedure or liquidation procedure, publishing or training activities regarding accounting, financial review and taxes, preparing expert s reports, economic and financial opinions, provision of attestation services, consulting or management services, requiring knowledge in the field of accounting or financial review, provision of services as stipulated in the standards of financial review, and of other services stipulated in separate regulations to be performed by chartered auditors. In the capacity of Audit Committee, the Supervisory Board, in close co-operation with competent departments of Vienna Insurance Group, was supervising the correctness of the financial statements provided in the form of quarterly reports, among others, Accounting Report, Controlling Report and Budget Execution Report, and Actuarial Report. Moreover, the Supervisory Board was monitoring risk management in the Company, as well as progress in preparing for implementation of requirements of the Solvency II Directive. In particular, during the meetings, the Supervisory Board discussed the following issues: implementation of 4 key functions as required by the Solvency II Directive, results of calculations of SCR in accordance with the Solvency II Directive, as at and , results of risk inventory-taking and analysis of the internal control system, with indication of the largest risks the Company was exposed to, stress test results as at , conducted once a year, in accordance with the supervision authority s guidelines, information about Supervisory and Review Assessment, given to the Company by the Polish Financial Supervision Authority for 2012, progress in works in the pre-application process with the Polish Financial Supervision Authority, being preparation to submit application for approving partial internal model, results of test Own Risk and Solvency Assessment (ORSA), prepared on the basis of the financial plan In 2013, the Supervisory Board regularly considered information provided by the Internal Audit Office, containing a report on Internal Audit activities in a particular reporting period, execution of the internal audit plan, main conclusions, recommendations and their executions and the audit plan for the coming period. In particular, the Supervisory Board took cognizance of the results of conducted audits: branch offices, impact of loss adjustment of renewals of insurance note, organization and operation of the Settlements Center, organization and correctness of running court cases, e-business projects and profitability analysis of selected distribution channels.

33 Assessment of the Financial Statement, Management Board Report and Management Board motion on distribution of profit The Supervisory Board, pursuing the provisions of Article 382 of the Code of Commercial Companies and taking account of actions performed under the Supervisory Board s fulfilment of the assumed obligations of Audit Committee, mentioned above, assessed: Financial statement for the financial year ending on , including: introduction to the financial statement, balance sheet, technical account, general profit and loss account, cash flow statement, statement of changes in equity, Report of the Management Board on activity in 2013, Management Board motion on distribution of net profit for the financial year ending on 31 December The Supervisory Board, having read the assessed documents as well as the Chartered Auditor s opinion on audit of the financial statement of the Company for the financial year ending on 31 December 2013, ascertained that the Management Board Report and the Financial Statement were in full compliance with books and documents and with the actual facts, in particular: they present reliably all information essential for assessment of the Company s activities in 2013, in particular relating to profitability and financial result on business activities as well as the Company s assets and financial position as at 31 December 2013, they are compliant, with regard to content and form, with the binding legal regulations and the Company s Articles of Association, the financial statement was prepared according to accounting principles, on the basis of correctly kept accounting books, the financial statement and its audit, conducted by the charted auditor, complies with the regulations of the Accounting Act of 29 September 1994 and standards of exercising the regulated profession of Chartered Auditor, issued by the National Board of Chartered Auditors in Poland. Assessment of the motion on distribution of net profit In the opinion of the Supervisory Board, allocation of 75% of the net profit earned in 2013 for payout of dividend for 2013 and 25% of the net profit earned in 2013 for increase in supplementary capital according to the Management Board motion fully complies with the current needs of the Company and fulfils statutory requirements and criteria of the Recommendation issued by the Polish Financial Supervision Authority. The Supervisory Board recommends the Ordinary General Meeting of Compensa TU S.A. Vienna Insurance Group to adopt resolutions on approval of the financial statement for the financial year ending on and of the Report of the Management Board on activity in 2013, and on allocation of 75% of the net profit earned in 2013 on payout of dividend for 2013 and 25% of the net profit earned in 2013 on increase in supplementary capital. Peter Hagen Dieter Fröhlich Roland Goldsteiner Wolfgang Petschko Andrzej Witkowski Chairman Deputy Chairman Member of the Member of the Member of the of the of the Supervisory Board Supervisory Board Supervisory Board Supervisory Board Supervisory Board

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35 RESULTS Compensa TU na Życie S.A.

36 R E S U L T S Compensa TU na Życie S.A. Financial results The year 2013 was closed with gross premium written at the level of PLN thousand and with the net profit of PLN thousand. As compared to the previous year, premium written decreased by 10.2%. Min items of the profit and loss account (PLN thous.) (PLN thous.) Gross premium written Net return on investments Gross claims Change in gross technical provisions Acquisition and administrative costs Technical result Net financial result Solvency declaration ratios and parameters 2013 (PLN thous.) Solvency margin Own funds to cover solvency margin Coverage of solvency margin by own assets 325%

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38 R E S U L T S Compensa TU na Życie S.A. Technical account (PLN thous.) (PLN thous.) Premiums Gross premiums written Reinsurers share in gross premium written Changes in provisions for premiums and risk Revenue on investments Return on other financial investments from stock, shares, other securities with variable amount of income and units of participation and investment certificates in investment funds from debt securities and other securities with fixed amount of income from term deposits in credit institutions fromother deposits Positive balance on realized investments Unrealized gains on investments Other technical income net of reinsurance Claims Claims paid - net of reinsurance gross claims paid reinsurers share in claims paid Change in provisions for claims outstanding net of reinsurance gross provisions reinsurers share Change in other technical provisions net of reinsurance Change in provisions for life insurance net of reinsurance Change in technical provisions net of reinsurance for life insurance when the investment risk is borne by the policyholder Bonuses and discounts including change in provisions net of reinsurance Net operating expenses Costs of acquisition including change in activated costs of acquisition Administrative costs Reinsurance commissions and profit participation

39 Compensa TU na Życie S.A. Technical account (PLN thous.) (PLN thous.) Investments charges Other costs of deposit activities Negative result on deposit indexation Negative result on realized investments Unrealized losses on investments Other technical costs net of reinsurance Revenue on net investments transferred to profit and loss account 0 0 Result on technical life insurance account

40 R E S U L T S Compensa TU na Życie S.A. General profit and loss account (PLN thous.) (PLN thous.) Result on technical life insurance account Other operating income Other operating expenses Profit (loss) on operating activities Extraordinary gains 0 0 Extraordinary losses 0 0 Gross profit (loss) Income tax Other statutory reductions in profit (increases in loss) 0 0 Net profit (loss)

41 Compensa TU na Życie S.A. Cash flow statement (PLN thous.) (PLN thous.) Cash flows from business activities Proceeds Direct insurance and reinsurance activities proceeds Outwards reinsurance proceeds 0 0 Proceeds on other operating activities Expenses Direct insurance and reinsurance expenses Outwards reinsurance expenses Expenses on other operating activities Cash flows from investment activities Proceeds Expenses Cash flows from financial activities Proceeds 0 0 Expenses Total net cash flows Balance sheet change in cash Opening balance of cash Closing balance of cash

42 R E S U L T S Compensa TU na Życie S.A. Balance sheet: assets (PLN thous.) (PLN thous.) Intangible assets Investments Land and buildings 0 0 Investments in subordinated undertakings 0 0 Other financial investments Deposit debtors from credit undertakings 0 0 Net assets of life insurance when the investment risk is borne by the policyholder Debtors Direct insurance debtors Reinsurance debtors 0 0 Other debtors Other asset components Tangible assets Cash Other assets 0 0 Prepayments and accrued income Deferred income tax assets Deferred acquisition costs Accrued interest and rent 0 0 Other prepayments and accrued income TOTAL ASSETS

43 Compensa TU na Życie S.A. Balance sheet: liabilities (PLN thous.) (PLN thous.) Equity Share capital Supplementary capital Revaluation reserve Other reserve capitals Profit (loss) from previous years Net profit (loss) Subordinated creditors 0 0 Technical provisions Provision for unearned premiums and provision for unexpired risk Provision for life insurance Provisions for outstanding claims Provisions for bonuses and rebates for the policyholders Provision for the benefit of life insurance policyholders who bear the investment risk Reinsurers share in technical provisions (negative value) Reinsurers share in provision for claims outstanding Estimated recourses and claims returns (negative value) 0 0 Other provisions Provisions for pensions and other workforce entitlements Deferred income tax provision Other provisions Creditors arising out of reinsurers investments Other creditors and special funds Creditors arising out of direct insurance Creditors arising out of reinsurance Other creditors Special funds Prepayments and accrued income 0 0 TOTAL LIABILITIES

44 E K S P E R T A U D I T O R S O P I N I O N Compensa TU na Życie S.A.

45 Compensa TU na Życie S.A.

46 E K S P E R T A U D I T O R S O P I N I O N Compensa TU na Życie S.A.

47 REPORT OF THE SUPERVISORY BOARD Compensa TU na Życie S.A. On activity in 2013 and on assessment of the Financial Statement for the financial year ending , Management Board 2013 Report and the Management Board motion on distribution of net profit for the financial year ending Composition of the Supervisory Board in 2013 On , the Supervisory Board was composed: Peter Hagen Chairman Dieter Fröhlich Deputy Chairman Roland Goldsteiner Member Wolfgang Petschko Member Andrzej Witkowski Member During the General Meeting held on , Mr. Andrzej Witkowski was appointed to the position of Member of the Supervisory Board for the term of office ending on the date of approval of the financial statement for the year Throughout 2013, the Supervisory Board made decisions at the meetings and by circulation. Meetings were held four times. In the reporting period, 13 resolutions were adopted on essential matters concerning the operation of the Company. During meetings held in 2013, the Supervisory Board was analyzing detailed information of the Management Board on financial results, sales results and results on investment activities achieved in particular periods as compared to results from the preceding year and plans approved by previous resolutions of the Supervisory Board, as well as their effect on the Company s financial position. The Supervisory Board was monitoring also each quarter Management Board reports on financial results, which contained, in particular, profit and loss account, balance sheet, technical account and cash flow statement. The Supervisory Board analyzed the detailed information presented by the Management Board on the then situation on the insurance market, financial results, gross premium written, gross premium earned, claims, separately for individual and group insurance with single and regular premium, and bancassurance. Moreover, the Supervisory Board monitored the level of administrative costs, direct and indirect costs of acquisition, loss adjustment costs, assets management costs and other technical costs as compared to the preceding year and the approved budget. Actions of the Supervisory Board in the investment area were focused on analyses of internally and externally managed assets portfolio in terms of their size, structure and profitability. The Supervisory Board paid particular attention to the compliance of the investment portfolio structure with the Investment and Risk Strategy approved by the Supervisory Board and the Assets Management Department at Vienna Insurance Group. The Supervisory Council took cognizance of the list of the largest transactions of purchase and sale of financial instruments and major investment projects in the portfolio by asset class. In addition, the Supervisory Board was monitoring current technical results of the Company and with breakdown into business lines and profitability recorded in a particular reporting period. Additionally, the Supervisory Board took note of value and changes in the balance of gross technical provisions, in particular mathematical provision, provisions for UFK products, provisions for claims, DAC and premium provision with breakdown into the most important business lines and types of claims paid. Additionally, the Supervisory Board considered the Management Board Report on SAP project implementation. In 2013, the Supervisory Board evaluated the financial statement for 2012 and met the auditor s representatives to discuss the most important conclusions from the conducted audit of the financial statement. The Supervisory Board took note of the auditor s comments, in particular with regard to control of the IT area and actuary. The auditor confirmed the compliance of the drawn up financial statement of the company for 2013 with the Accounting Act, did not ascertain cases of any abuses or prohibited acts and issued chartered auditor s opinion without reservations. The Supervisory Board obtained also the auditor s statement on independence, and thus fulfilled its obligations of Audit Committee.

48 REPORT OF THE SUPERVISORY BOARD When executing the above tasks, the Supervisory Board was monitoring constantly the Company s activities. The Board was assessing also activities of the Company from the point of view of its compliance with financial safety standards, as specified in the Act on insurance activities. The Supervisory Board was executing also tasks of the Audit Committee imposed by resolution no. 10/2009 of , among others: monitoring of the financial reporting process, monitoring of the effectiveness of internal control system, internal audit and risk management, monitoring of the performance of financial inspection activities, monitoring independence of the chartered auditor and the entity authorized to audit financial statements, including in the case of provision of the following services: service of keeping accounting and tax books, tax consulting, running bankruptcy procedure or liquidation procedure, publishing or training activities regarding accounting, financial review and taxes, preparing expert s reports, economic and financial opinions, provision of attestation services, consulting or management services, requiring knowledge in the field of accounting or financial review, provision of services as stipulated in the standards of financial review, and of other services stipulated in separate regulations to be performed by chartered auditors. In the capacity of Audit Committee, the Supervisory Board, in close co-operation with competent departments of Vienna Insurance Group, was supervising the correctness of financial statements provided in the form of quarterly reports, among others, Accounting Report, Controlling Report and Budget Execution Report, and Actuarial Report. The Supervisory Board was monitoring risk management in the company, as well as progress in preparation for implementation of requirements of the Solvency II Directive. In particular, during the meetings, the Supervisory Board discussed the following issues: implementation of 4 key functions as required by the Solvency II Directive, results of calculations of SCR in accordance with the Solvency II Directive, as at and , results of risk inventory-taking and the internal control system, with indication of the largest risks the Company was exposed to, stress test results as at , conducted once a year, in accordance with the supervision authority s guidelines, information about Supervisory and Review Assessment, given to the Company by the Polish Financial Supervision Authority for 2012, results of test Own Risk and Solvency Assessment (ORSA), prepared on the basis of the financial plan In 2013, the Supervisory Board regularly considered information provided by the Internal Audit Office, containing a report on Internal Audit activities in a particular reporting period, execution of the internal audit plan, main conclusions, recommendations and their executions and the audit plan for the coming period. In particular, the Supervisory Board took cognizance of the results of conducted audits: service of issuing group life insurance policies, compliance with regulations concerning personal data protection, correct charging of commissions, monitoring of booking of debtors and principles of debt collection, distribution channels profitability analyses and monitoring of EWITA system.

49 Assessment of the Financial Statement, Management Board Report and Management Board motion on distribution of profit The Supervisory Board, pursuing the provisions of Article 382 of the Code of Commercial Companies and taking account of actions performed under the Supervisory Board s fulfilment of the assumed obligations of Audit Committee, mentioned above, assessed: Financial statement for the financial year ending on , including: introduction to the financial statement, balance sheet, technical account, general profit and loss account, cash flow statement, statement of changes in equity, Report of the Management Board on activity in 2013, Management Board motion on distribution of net profit for the financial year ending on 31 December The Supervisory Board, having read the assessed documents as well as the Chartered Auditor s opinion on audit of the financial statement of the Company for the financial year ending on 31 December 2013, ascertained that the Management Board Report and the Financial Statement were in full compliance with books and documents and with the actual facts, in particular: they present reliably all information essential for assessment of the Company s activities in 2013, in particular relating to profitability and financial result on business activities as well as the Company s assets and financial position as at 31 December 2013, they are compliant, with regard to content and form, with the binding legal regulations and the Company s Articles of Association, the financial statement was prepared according to accounting principles, on the basis of correctly kept accounting books, the financial statement and its audit, conducted by the charted auditor, complies with the regulations of the Accounting Act of 29 September 1994 and standards of exercising the regulated profession of Chartered Auditor, issued by the National Board of Chartered Auditors in Poland. Assessment of the motion on distribution of net profit In the opinion of the Supervisory Board, allocation of 75% of the net profit earned in 2013 for payout of dividend for 2013 and 25% of the net profit earned in 2013 for increase in supplementary capital according to the Management Board motion fully complies with the current needs of the Company and fulfils statutory requirements and criteria of the Recommendation issued by the Polish Financial Supervision Authority. The Supervisory Board recommends the Ordinary General Meeting of Compensa TU S.A. Vienna Insurance Group to adopt resolutions on approval of the financial statement for the financial year ending on and of the Report of the Management Board on activity in 2013, and on allocation of 75% of the net profit earned in 2013 on payout of dividend for 2013 and 25% of the net profit earned in 2013 on increase in supplementary capital. Peter Hagen Dieter Fröhlich Roland Goldsteiner Wolfgang Petschko Andrzej Witkowski Chairman of the Deputy Chairman Member of the Member of the Member of the Supervisory Board of the Supervisory Board Supervisory Board Supervisory Board Supervisory Board

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51 VIG Vienna Insurance Group

52 V I E N N A I N S U R A N C E G R O U P Company Profile Vienna Insurance Group (VIG) has been one of the leading listed insurance groups in Austria and Central and Eastern Europe for years. Approximately 23,000 employees in around 50 Group companies in 24 countries generated about EUR 9.2 billion in premiums in As the leading insurance company in its core markets, Vienna Insurance Group provides its customers with an outstanding portfolio of products and services in all segments of life and non-life insurance. At home in both Austria and Central and Eastern Europe During a long history steeped in tradition the Company s roots reach back to the year 1824 in Austria VIG has successfully overcome all of the challenges of history, and has often taken on a pioneering role. This was the case in 1990, when Wiener Städtische became one of the first Western European insurance companies to recognise the exciting growth opportunities in Central and Eastern Europe and take a chance on entering the market in the former Czechoslovakia. That was the starting point for further expansion. Hungary followed in 1996, Poland in 1998, Croatia in 1999 and Romania in 2001 to mention just a few examples. VIG now operates in 24 markets and is proud of its broad geographical orientation. Number one in its core markets In addition to Austria, VIG s core markets are the Czech Republic, Slovakia, Poland, Romania, Bulgaria, Croatia, Hungary, Serbia and Ukraine. VIG s market share of approximately 18% makes it the number one insurance company in these markets, and VIG is working continuously to further consolidate this position. More than half of all premiums written in 2013 came from markets in the CEE region, which provides impressive proof of VIG s successful expansion strategy. Indeed, given the economic convergence process taking place in Central and Eastern Europe and the increased need for insurance coverage it brings, this region will continue to grow in importance. VIG RE, the reinsurance company that was established by VIG in 2008, has its registered office in the Czech Republic, thereby stressing the importance of the CEE region as a growth market for VIG. 24 markets, one objective: to continue the mutual success In spite of the wide range of customer requirements and conditions in its individual markets, VIG has one common objective everywhere: to continue its business success by providing customers with the best possible insurance protection. This places a great responsibility on VIG, and the VIG Group companies are fully dedicated to meeting this responsibility, using professional, forward-looking advisory services and a flexible product portfolio. The use of a broad network of service centres and a variety of distribution channels ensures the customer proximity that this requires. At the same time, the Group relies on established regional brands that are brought under the Vienna Insurance Group umbrella without losing their own identity or individual strengths. This is because it is the individual strengths and advantages of these companies that make VIG a strong family. Stability based on binding values and a focus on core competences Vienna Insurance Group is a progressive and highly risk-conscious insurer. Its activities are fully focused on its core business the insurance business. However, Vienna Insurance Group offers various forms of security to more than its customers. Security in the form of reliability, trustworthiness and solidarity also receives top priority in dealings with business partners, employees and shareholders. Ethical values such as honesty, integrity, leadership in matters large and small, diversity, equal opportunity and customer-orientation form the basis for all business decisions.

53 This fundamental approach is confirmed not only by a strategy of continuous sustainable growth, but also excellent creditworthiness. In June 2013, the rating agency Standard & Poor s confirmed its rating of A+ with a stable outlook, making VIG the best rated company in the ATX leading index of the Vienna Stock Exchange. VIG and Erste Group two strong partners In 2008, two leading financial service providers in Central and Eastern Europe VIG and the Erste Group decided to further increase their success by working together. They therefore entered into a long-term strategic partnership that benefits both of them: Erste Group branches distribute VIG insurance products, and in return VIG companies offer Erste Group bank products. Strong stock exchange presence, long-term principal shareholder VIG s shares have been listed on the Vienna Stock Exchange since Its market capitalisation of more than EUR 4.6 billion at the end of 2013 makes it one of the largest listings on the exchange. It has also had a secondary listing on the Prague Stock Exchange since February 2008, which once again emphasises the great importance the Central and Eastern European region has for the Group. Around 70% of VIG s shares are held by Wiener Städtische Versicherungsverein, a stable principal shareholder with a long-term orientation. The remaining shares are in free float. Strong team, attractive employer Our success is based on people in addition to forming the basis for VIG s business success, this concept also guides its people management and thereby determines its position as an attractive employer. VIG develops and supports the know-how of its approximately 23,000 employees and their readiness to provide top performance. Identifying and developing the individual skills that each person brings to VIG s large team is particularly important, and a wide variety of training and advanced training opportunities, international exchange programmes and international cooperations exist within the Group to ensure that this happens. Further information on VIG is available at and in the VIG Group Annual Report.

54 Welcome to the family of VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe January

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