01 Gothaer Konzern_E_09_Umschl - Gothaer Allgemeine ...

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01 Gothaer Konzern_E_09_Umschl - Gothaer Allgemeine ...

Management Report

Because of the large proportion of single premiums, the new business premium, at

€2.19 billion, remains 22.4 % below prior-year production. The new business premium is

the sum of all premiums due over the full term of the new policies written. The aggregate

insured sum of all policies in force at the end of the year reached €33.8 billion, which is

1.1 % more than in the prior year.

The benefits paid by Gothaer Lebensversicherung AG totalled €1.91 billion. Compared to

the prior-year figure of €1.21 billion, this is an increase of 58.0 %, and is due essentially

to developments in unit-linked life insurance.

Acquisition costs amounted to €130.0 million, which is 21.1 % less than in the prior year,

although production – in terms of new business premium – fell by the same amount.

The acquisition cost ratio, which is the ratio of acquisition costs to total new business

premium, was 5.9 % (PY: 5.8 %). The administrative cost ratio, which expresses administrative

costs as a percentage of the gross premiums written, showed a further improvement

to 2.7 % (PY: 2.8 %).

The book value of the Gothaer Lebensversicherung AG investment portfolio increased by

around 1.6 % to around €12.10 billion in 2009. Investment result, at €450.1 million, was

down on the prior-year figure of €494.4 million. The main extraordinary factors contributing

to this downturn were due to the financial crisis and resulted from depreciation on

real estate and bonds as well as losses on disposals in the course of portfolio restructuring.

With current average yield at a sound 5.1 %, the net yield was still satisfactory

at 3.5 % (PY: 4.1 %).

Gross profit – which is the profit before allocation of surplus to policyholders, taxes on

income and appropriation of profit – was virtually unchanged at €165.0 million

(PY: €166.8 million). The scale of the surplus is largely determined by the investment result.

Owing to the impacts of the financial market crisis, netting all the relevant forms of

income and expenses – the latter including, where applicable, the guaranteed actuarial

interest on policyholders’ assets – produced a lower surplus than in the prior year.

The greater part of gross profit was allocated to policyholders in the form of a transfer of

€91.5 million to reserves for premium refunds and direct credits totalling €53.9 million.

Before intercompany tax allocation and before transfer of profits, net profit for the year

amounted to €23.0 million. €11.8 million of this sum was transferred to the parent

company as a tax allocation and €11.2 million under the profit transfer agreement concluded

between Gothaer Finanzholding AG and Gothaer Lebensversicherung AG in 2002.

Gothaer Group Annual Report 2009 53

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