A N N U A L R E P O R T G R U P O S E C U R I T Y ... - Banco Security

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página 172 4.5 Insurance Industry The insurance industry in Chile is made up of two main branches, life and general, which are differentiated by the regulations covering the players and the types of product they sell. At September 2008, there were 28 life insurance companies and 17 general insurance companies (excluding credit companies). In recent years, the number of participants in life insurance has increased considerably, but with a high degree of concentration; this is not only in life insurance but also in the general insurance segment. The direct premium income of life and general insurance companies was Ch$ 1,812 billion and Ch$ 896 billion respectively at September 2008. The industry’s results were a loss of Ch$ 60,167 million and a profit of Ch$ 10,631 million for life and general insurance companies respectively, at September 2008. 5. Consolidated Statement of Cash Flows of Grupo Security S.A. Descripción y análisis de los principales componentes de los flujos netos: For the years ended December 31, 2008 and 2007 in thousands of pesos Dec-08 Dec-07 Net cash flow from operating activities 9.935.890 -23.664.121 Net cash flow from financing activities -16.204.180 -3.267.673 Net cash flow from investment 2.394.976 49.139.661 Net Total Cash Flow for the Year -3.873.314 22.207.867 Effect of inflation on cash & cash equivalents 488.489 -579.675 Net change in cash & cash equivalents -3.384.825 21.628.192 Opening balance of cash & cash equivalents 30.266.865 8.638.673 Closing balance of cash & cash equivalents 26.882.040 30.266.865 The net flow from operating activities of ThCh$ 9,935,890 at December 31, 2008, compared to ThCh$ -23,664,121 in 2007, mainly includes the Changes in assets accounts which affect the cash flow (increase) decrease. The net flow from financing activities of ThCh$ -16,204,180 at Dcember 31, 2008, compared to ThCh$ -3,267,673 in 2007 arises mainly from the payment of dividends of ThCh$ -14,068,332, loan repayments of ThCh$ -29,362,862 and payments of bonds of ThCh$ -9,361,819. The net flow from investment activities of ThCh$ 2,394,976 at December 31, 2008, compared to ThCh$49,139,661 at December 31, 2007, mainly relates to Other investment income of ThCh$ 25,758,174.
6. Risk Factors 6.1 Dependence on dividends from subsidiaries Grupo Security is the parent company of a conglomerate of companies that receives its revenues in the form of dividends paid by its subsidiaries. The company’s results therefore depend substantially on the performance of its subsidiaries. The most important asset of Grupo Security is Banco Security, which provided 83% of the dividends that the Group received in 2008. The solvency rating of Banco Security is AA-, granted by both Feller-Rate and Fitch Ratings, with stable outlook. The second largest dividend flow for Grupo Security in 2008 came from Factoring Security. The solvency rating of Factoring Security is A+ / Level 1, granted by both Feller-Rate and International Credit Ratings. With respect to the Group insurance companies, Vida Security is rated at AA- by Fitch Ratings and International Credit Ratings, while Penta Security is rated A+ by Fitch Ratings and AA- by International Credit Ratings. Lastly, it should be mentioned that Grupo Security controls its principal subsidiaries with a holding of more than 90% of each one’s capital. This gives it the flexibility to set dividend policies according to its needs. This point is strengthened by the diversification of revenues developed by the company, having subsidiaries that participate in different sectors of the finance industry. 6.2 Other risk factors 6.2.1 Risks of general performance of the economy. The performance of the Grupo Security subsidiaries is correlated with the performance of the economy and financial conditions that in turn depend on monetary policy which, in restrictive conditions should be reflected in a reduction in the growth of revenues and earnings, and the opposite in expansive situations. 6.2.2 Competition in all the Group’s businesses The industries in which Grupo Security participates are highly competitive, especially in banking and insurance, which are showing a reducing trend in their margins. This is reflected in the mergers and alliances generated between competitors. While this presents potential difficulties for the companies, it is believed that in the case of Grupo Security, the potential negative effects are offset by the strong brand image it has in its objective market, thus giving it high levels of loyalty among its customers thanks to the niche strategy to which the Group’s development is directed. This permits Grupo Security to generate a favorable market position for facing the competition.
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A N N U A L R E P O R T G R U P O S
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02 page U n c o n s o l i d a t e d
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04 page Letter from the Chairman De
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06 page BOARD OF DIRECTORS AND MANA
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THE BEST FUNDS Diario Financiero, j
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SECURITY ECONOMIC SEMINAR CORPORACI
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1998 HISTORY 1981 Banco Urquijo de
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ECONOMIC AND FINANCIAL ENVIRONMENT
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The worsening of the external scena
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C h i l e : B a s i c E C o N O m i
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22 page Strategic Pillars of Grupo
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24 page Last year, the human capita
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26 page The Company currently has a
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B U S I N E S S A R E A S F I N A N
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The net income of Grupo Security fo
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financial system as one of the most
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N E T I N C O M E A N D R O E B A N
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• Private Banking: focused on the
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página 40 B U S I N E S S A R E A
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página 42 S e c u r i t y M u t u
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página 44 B U S I N E S S A R E A
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página 46 D I R E C T P R E M I U
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página 48 C O M P O S I T I O N O
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Travel Security S.A. Since its inco
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54 page INVESTMENT POLICY The bylaw
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56 page cover the obligations of th
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58 page R I S K S R E L A T E D T O
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INFORMATION OF THE COMPANY
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Since then, Grupo Security has form
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The remuneration was set at the equ
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fees Andrés Concha Rodríguez; UF
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Dividends Paid The following table
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The following shows the number of G
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Santiago, April 25, 2008 The board
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INDIVIDUAL FINANCIAL STATEMENTS
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Report of Independent Auditors To t
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B a l a n c e S h e e t s As of Dec
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S t a t e m e n t s o f C a s h F l
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e) Basis of conversion. Assets and
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v) Cash and cash equivalents. The P
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a) Notes and accounts receivable fr
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Note 8 - Other Current Assets As of
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esulting in the merger of that comp
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Note 11 - Other Assets Other assets
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As of December 31, 2008 and 2007, b
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c) Paid-in capital. In accordance w
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Otros egresos fuera de la explotaci
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Note 20 - Contingencies and Restric
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Current liabilities Up to 90 days 9
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The application of these new accoun
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Financial Indicators Unit Dec-08 De
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On August 14, 2008, Grupo Security
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5.3. Mutual Funds Industry At Decem
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The second largest dividend flow fo
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7.4.3 Industry structure The large
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página 120
Page 124 and 125: página 122 C o n s o l i d a t e d
Page 126 and 127: página 124 C o n s o l i d a t e d
Page 128 and 129: página 126 NOTES TO THE FINANCIAL
Page 130 and 131: página 128 i) Trade accounts recei
Page 132 and 133: página 130 x) Accounts payable. Ac
Page 134 and 135: página 132 Until 2007, dividends w
Page 136 and 137: página 134 a) Documentos y cuentas
Page 138 and 139: página 136 2008 2007 Company Taxpa
Page 140 and 141: página 138 Note 8 - Current and De
Page 142 and 143: página 140 Note 10 - Other Current
Page 144 and 145: página 142 Investments in related
Page 146 and 147: página 144 BANCO SECURITY AND SUBS
Page 148 and 149: página 146 BANCO SECURITY AND SUBS
Page 150 and 151: página 148 SEGUROS DE VIDA SECURIT
Page 152 and 153: página 150 Note 15 - Short-term Ob
Page 154 and 155: página 152 Note 17 - Long-term Obl
Page 156 and 157: página 154 As of December 31, 2007
Page 158 and 159: página 156 Ch$179,858,273,908 divi
Page 160 and 161: página 158 During 2008 and 2007 th
Page 162 and 163: página 160 Note 23 - Price-level R
Page 164 and 165: página 162 Ownership: The Company
Page 166 and 167: página 164 Current liabilities Des
Page 168 and 169: página 166 Banco Security On Novem
Page 170 and 171: página 168 MANAGEMENT’S ANALYSIS
Page 172 and 173: página 170 Given the different nat
Page 176 and 177: página 174 6.2.3 Regulatory change
Page 178 and 179: Banco Security and Subsidiaries 178
Page 180 and 181: 178 page B A N C O S E C U R I T Y
Page 182 and 183: 180 page C O N S O L I D A T E D S
Page 184 and 185: 182 page I N T E G R A L R E S U L
Page 186 and 187: 184 page Valores Security S.A. Corr
Page 188 and 189: 186 page Administradora General de
Page 190 and 191: 188 page Factoring Security S.A. TY
Page 192 and 193: 190 page Asesorias Security S.A. AN
Page 194 and 195: 192 page Global Asset Advisors Type
Page 196 and 197: 194 page Securitizadora Security S.
Page 198 and 199: 196 page Inversiones Seguros Securi
Page 200 and 201: 198 page Seguros Vida Security Prev
Page 202 and 203: 200 page Compañía de Seguros Gene
Page 204 and 205: 202 page Servicios Security S.A. an
Page 206 and 207: 204 page Corredores de Seguros Secu
Page 208 and 209: 206 page Europ Assistance Chile S.A
Page 210 and 211: 208 page Cooper Gay Chile S.A. Corr
Page 212 and 213: 210 page Inmobiliaria Security S.A.
Page 214 and 215: 212 page Inversiones Invest Securit
Page 216 and 217: 214 page Travel Security S.A. and S
Page 218 and 219: 216 page Global Security Gestión y
Page 220 and 221: 218 page Mandatos Security Limitada
Page 222 and 223: 220 page D E C L A R A T I O N O F
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222 page ADDRESSES OF COMPANIES OF
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224 page SANTA MARÍA DE MANQUEHUE
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226 page TEMUCO Claro Solar 835, Of
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228 page Antofagasta (ex Cigna) Man
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