registration document France Telecom 2009 - Orange.com

6 INSURANCE
overview of the Group’s Business
6.9 INSURANCE
France Telecom fi nances coverage of its main risks through
the insurance and reinsurance market. This provides it with
an insurance plan that covers the risk of damage to property
(damage to assets and operating losses), civil liability risks
that may arise in connection with its corporate purpose and
management.
This coverage also includes risks related to its main motor fl eets.
Finally, there is an assistance plan for employees’ business
travel or expatriation.
The current insurance plan policies are regularly renegotiated
in close cooperation with qualifi ed providers (brokers) chosen
through a competitive selection of insurers . These measures
are combined with regular monitoring of selected companies’
solvency and their fi nancial ratings, and the policies contain
contractual provisions that set minimum rate requirements for
the partnership.
The insurance plan’s scope of application concerns the France
Telecom Group, nearly all of whose revenues are covered under
the corporate programs.
This policy streamlines how coverage is managed, signifi cantly
improves the level and reduces costs, which means signifi cant
savings for the Group, and fosters the integration of new
subsidiaries (Equant, Mobistar, etc.).
Compared with the benchmarks available internationally, the
Group’s current insurance programs refl ect France Telecom’s
risks and are in line with current market offers for groups of
a similar size and similar business activities, particularly
concerning coverage limits.
France Telecom S.A.’s cost for insurance coverage for 2009 was
approximately 11.3 million euros, including 10.3 million euros in
premiums (compared with around 14 million euros in 2008 and
16.3 million euros in 2007).
For the 2009 fi nancial year, this amount was divided as follows,
by major risk category:
■ coverage for damage to assets and operating losses:
approximately 4.2 million euros;
■ liability coverage: approximately 3.5 million euros;
■ motor fl eet insurance coverage: approximately
3.6 million euros.
In addition to these amounts, subsidiaries insured under
corporate insurance programs bear costs related to the increase
in scope covered.
These costs were approximately 10 million euros in 2009
(10.7 million euros in 2008, 11.8 million euros in 2007).
The risks of damage to the aerial fi xed-line network (open-wire
lines and telephone poles) due to natural disasters have been
self-insured since the end of 2002.
Since then, the amount related to such events affecting poles
and open-wire lines has not, on average, exceeded 13.5
million euros annually.
In 2009, no insurance and reinsurance market players chose to
cover this type of risk.
In addition, in the context of its risk management policy, for
several years France Telecom has regularly carried out site
inspections surveys in partnership with the internal engineering
departments and those of its principal insurers. This surveys
program extends to the main subsidiaries in the group and
is used to detect possible risks and to assess the prevention
and protection levels with respect to them. These actions,
which help to give its insurers more in-depth knowledge of the
Group’s risks, contribute signifi cantly to insurance coverage
negotiations.
In parallel, other actions are taken to provide insurers with other
types of information in order to round out their assessment of our
scope of professional and contextual risks and to continuously
ensure that the insurance coverage is in line with the company’s
needs.
As part of its policy, the Group Insurance department uses
internal control processes (procedures and environment) to
make its program management more effi cient. This process is
combined with specifi c indicators that cover its disaster and
production management activities.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM