Výročná správa 2005 - Komunálna Poisťovňa

Management report
Economy
Following Slovakia’s joining the European Union the country’s economy has confirmed its healthy business environment, which was recognised
by rating improvement to A, stable outlook by international rating agencies FITCH and Standard & Poor’s. In 2005 we have recorded the fastest
growth of economy for the last 10 years. The gross domestic product (after adjustments) was 6% higher than the GDP achieved in year 2004.
This result was possible mainly as a result of foreign investments in automotive industry in particular, and it was significantly impacted also household
consumption and foreign demand. Also after last year Slovak Republic belongs among the fastest-growing economies in the European
Union - together with the Baltic states and the Czech Republic.
Currency development was marked by strengthening of the Slovak currency against Euro and lowering of NBS interest rate, which subsequently
has translated in interest rate reductions on the capital as well as financial market.
Strong economic growth of the Slovak Republic can be demonstrated also by basic macro economic GDP indicators. GDP in 2005 was 5.6%,
average CPI inflation reached 2.5% and average unemployment was 16.3%, whereby in Q4 it stood at 15.3%, which was the lowest level since
Q1 1999. Real wages growth, highest since 1997, related to the lower average inflation, as well as nominal wage increase. Average nominal
monthly wage in the national economy was 17,274 Sk. The highest level of average monthly wage remains in financial brokerage services where
it reached a level of 34,950 Sk.
*Source: Bureau of Statistics SR, Trend Analyses
Insurance market
According to data from Slovak Association of Insurers the premium income reached in 2005 a total of 50,519,435,000 Sk, corresponding to 5.34%
market growth. In non-life segment the premium decreased in comparison with 2004 by 0.12% to a total of 28,487,990,000 Sk and increased
13.36% in life insurance to 22,031,445,000 Sk.*
New impulse on the insurance market was provided mainly by life insurance, which can be attributed mainly to the introduction of tax deduction
and ongoing pension reform. Whole of non-life insurance experienced growth resulting from compulsory third-party insurance in a slower pace.
The ratio between life and non-life insurance 40:60 has remained almost unaltered.
In terms of legislation the insurance market was impacted by the income tax legislation, as well as Act No. 340/2005 Coll. on insurance and reinsurance
brokerage, which has brought the Slovak legislation considerably closer to that of the European Union.
Banking entities, which have set up their own subsidiaries providing exclusively insurance products have improved their position on the market
and had impacted mainly the development in the area of the sale of single premium life insurance products, where the premium income growth
rate in 2005 reported as much as 47.6%.
In terms of the current year 2006 we can expect more significant increase in life insurance sales under the prevailing influence of tax benefits.
The product sales structure will be impacted also by expected significant reduction of maximum technical interest rate, which is due on
1.1. 2007.
*Source: Slovak Association of Insurers
The Company and milestones during the year
Parent company Wiener Städtische entered in 2005 the Austrian share market with successful subscription of 18 mil publicly traded shares,
embarking on a new phase in its history. This successful development was also confirmed by rating upgrade to A+ by rating agency Standard
and Poor’s.
Overall market share of the Wiener Städtische Group, which is represented in Slovakia by insurance companies KOOPERATIVA, KONTINUITA and
KOMUNÁLNA represented in 2005 26% and share of the year-on-year increase in premium income of the total market was as much as 55%.
Important decision in further growth of our Company was mainly the commencement of building an internal sales network, with the aim to
strengthen existing distribution channels, i.e., MLM network and co-operation with brokers. As a result we have established 8 agencies across
Slovakia.
During the year KONTINUITA has exceeded a historic milestone of 1 billion Sk premium income.
Also in 2005 we have continued in implementation of joint Back-office. One of the most important elements of the implementation was the data
migration to one IT system. The expectation from these measures a positive impact on productivity of work, internal expenses, as well as
quality of all aspects of the company's operations.
The Company produced after tax profit of 10,359,000 Sk.
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