Business Report 2011 - Prisma Kreditversicherungs AG

54
Business Report 2011
Short Summary of the Financial Highlights and the Business Development in 2011
Non-binding translation, only the German version is legally binding.

Report of the
Supervisory Board
Dear ladies and gentlemen,
As Chairman of the Supervisory Board, I would like to congratulate the management
and staff on the excellent results for 2011 and the company’s success
in extending its market leadership.
The Supervisory Board received regular detailed reports from the Board of
Management on the performance and financial position of the company and its
subsidiaries. Regular meetings and prompt oral and written reports from the
Board of Management enabled the Supervisory Board to discharge the duties
incumbent on it by virtue of the law and the company’s articles of association.
The accounts, annual financial statements, and management report for 2011
were audited by KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
and received an unqualified auditor’s certificate. The Supervisory
Board has approved the results of the audit.
We have examined the annual financial statements for the year to 31 December 2011 and the Board
of Management’s proposal for the distribution of the profit for the year. This examination revealed
no grounds for objections.
The Supervisory Board has approved the annual financial statements drawn up by the Board of
Management, which are thereby adopted under section 96 (4) Aktiengesetz (Austrian Companies
Act). The Supervisory Board also endorses the Board of Management’s proposal for the distribution
of profits and recommends that the proposal be adopted by the Annual General Meeting.
In autumn 2011 Mr Robert Walter left Euler Hermes Kreditversicherungs-AG, Hamburg, to take up
a position at Allianz SE, Munich. He also stepped down from the Supervisory Board of PRISMA with
effect from 31 December 2011. His replacement on the Euler Hermes Board of Management and
on the PRISMA Supervisory Board is Ms Silke Grimm. On behalf of the Supervisory Board I wish
Ms Grimm every success with her new responsibilities, and I look forward to working with her.
For the Supervisory Board
Dr. Rudolf Scholten Vienna, March 2012
Chairman
55
Business Report

Introduction from
the Board of Management
Dear ladies and gentlemen,
We are writing this foreword at the beginning of 2012, but you will only be reading it in April, May or possibly later.
How are we supposed to write anything, and how can we be sure that it will still apply in such a rapidly changing economic
environment?
From time to time in 2011 we had the feeling that key figures in the global economy were like actors in some surreal
play. Nobody could avoid being dragged into the performance, and PRISMA was no exception. This report aims to raise
the curtain on the events that played out on our particular stage – complete with a happy ending!
The photos at the beginning of this report are designed to give you an impression of the way we work behind the scenes:
calmly, confidently, and affected as little as possible by the happenings on the global stage, as you would expect.
Irrespective of the tumultuous events contained in the script, as directors, actors, and stagehands we are dedicated to
underlining the quality of our performance.
The core message of our report is that PRISMA had a very successful 2011. Turnover increased, we bolstered our position
as the market leader, and the claims ratio was moderate. We are well placed to handle any difficulties that may lie
ahead. So all in all, we are on a solid footing as we move into 2012 for the next act.
We hope that the customer satisfaction survey is still fresh in your mind. Your comments have given us a jolt. And of
course you are right to point out that personal contact is the most effective confidence-building tool available to us all
and that it is the cornerstone of our partnership. We hope that the various events and meetings we held in the course of
the past year satisfied your expectations. As in the theatre, animated discussions in the interval help us to digest what
we have just experienced and to relax before we settle down to watch the action unfold again.
And what can we – and you – expect in 2012? Not even the most seasoned professionals trust themselves to make any
definite predictions in the current climate. We are no different. But we can assure you of one thing: we are well set to
cope with a whole range of scenarios and are committed to putting in a first-rate performance whenever we are on stage.
We would like to thank you, our audience, for watching and for your critical appreciation. And a special mention goes
to the supporting cast at PRISMA for their highly professional work.
Demand is always strong for top-quality theatre. So raise the curtain and let the show go on!
Bettina Selden Ludwig Mertes
Member of the Board of Management Member of the Board of Management
57

Management Report
What a performance!
The introduction to this annual report takes us into the world of the theatre – a fitting metaphor for
the events we witnessed during 2011. However, as the foreword points out, we at PRISMA refused to
be diverted by the drama of the debt crisis, the Italian comedy, and the ongoing Greek farce. We con-
tinued to play our parts with the utmost professionalism and, where appropriate, in a distinctive style.
Not all of last year’s events raised a smile. But looking back, we can say with a clear conscience that
the overall impression we made was a convincing one. We encourage you to cast a critical eye over
this review – the figures speak for themselves.
In the first half of the year it was fairly plain sailing, but from the autumn onwards, it was widely felt
that the rules of the game no longer applied. Since then, all economic actors have sensed that there
is something in the air – something we can’t quite put our finger on, but which is causing ever more
uncertainty. The prevailing climate has a strange feel to it, even though on the surface everything
seems to be in perfect order. Business as usual, you may ask? We think not, but finding the facts to
back up our view is proving difficult. We are cautiously optimistic about the prospects for 2012 and
hope we are not deluding ourselves. But even if that is the case, we are well placed to handle any challenges
that may come our way. And if we are not in a position to say that, who is?
At the end of 2011, we wanted to find out how Austrian companies view the current situation and the
risks they face in receivables management. Together with our sister company OeKB Versicherung AG
and market research institute Gallup, we commissioned a representative survey of non-credit insured
suppliers. The results provided plenty of food for thought. Two thirds of the chief financial officers
surveyed said they expected both the economic climate to deteriorate and growth to slow. Some
15 percent mentioned that some clients were already in arrears, and 35 percent anticipated a rise in
defaults due to customers filing for bankruptcy.
However, we are still finding that prospective clients are very reluctant to take out credit insurance.
In this regard, two thoughts spring to mind. First, no insurer will be willing to increase its exposure
to risks that have become highly toxic or are threatening to do so. But that could soon increasingly be
the case with respect to defaults. Secondly, we are appealing to clients to take a prudent approach by
safeguarding receivables before problems arise.
The figures for compensating for bad debts paint their own clear and impressive picture.
58

This suggests that it would be more effective to take out credit insurance for the current customer
portfolio and eradicate the risk of default. After all, we all know how time-consuming the acquisition
of new customers can be.
We believe that taking out credit insurance needs to become a matter of course, as a means of enhancing
the profitability, liquidity, and stability of a business.
Despite the challenging operating environment we succeeded last year in extending and consolidating
our market leadership.
Our shareholders:
OeKB and Euler Hermes
Oesterreichische Kontrollbank AG is now firmly established as the leading financial and information
services provider for Austrian exporters and the country’s capital market. Its bespoke instruments
and services are helping Austrian-based companies to compete in the global market.
PRISMA and the OeKB Group work together to provide internal services such as IT, human resource
management, accounting, and risk management and to leverage synergies within the partnership.
The ongoing realignment of the Euler Hermes Group is creating clear structures and increasing process
and decision-making transparency. Brussels-based Euler Hermes Europe began operations on
1 January 2012 and will focus on meeting the requirements of the Solvency II Directive. There are
now three Euler Hermes subsidiaries in Europe. The other two companies are headquartered in Paris
and Hamburg. This streamlined setup will also help to boost efficiency in customer service.
PRISMA is the independent Austrian subsidiary of Euler Hermes, which holds a minority stake, and
is largely integrated into the group.
Euler Hermes is part of the Allianz Group and is the global leader in credit insurance, with a market
share of around 35 percent. Some 52,000 customers insure their receivables through Euler Hermes,
and the company’s on-site databases contain up-to-date information on more than 40 million businesses.
The group has a presence in more than 50 countries on all five continents.
“Credit is local” – and that also goes for the
countries of former Yugoslavia
OeKB Südosteuropa Holding GmbH, a sister company of PRISMA, has been testing the markets in
former Yugoslavia for some time. Now the company is set to merge with PRISMA.
Serbian-based PRISMA Risk Services d.o.o. will become a fully-owned subsidiary of PRISMA, which
will also acquire a minority stake in HKO Hrvatsko Kreditno Osiguranje d.d. in Croatia.
59

The merger will be the launch pad for expanding our operations, in particular credit assessment, in
Serbia, Croatia, Slovenia, Bosnia and Herzegovina, Montenegro, and Macedonia.
The medium-term objective is to enable exporters to those countries to benefit from our expertise
and support. These services will be provided to PRISMA clients in Austria as well as to all Euler
Hermes customers who supply businesses in the countries of the former Yugoslavia.
All of the relevant bodies are involved in preparing the merger, and the process of securing approvals
and implementing the necessary changes is under way.
The merger will come into force retrospectively from 1 January 2012.
Financial performance indicators
Turnover
Turnover grew at a surprisingly strong rate and was well above budget.
Earned premiums in the direct insurance business jumped by around 12 percent to 56.2 million
Euros, of which Prisma Global and Prisma Plus policies accounted for 55.4 million Euros.
Prisma Invest, a policy for insuring plant and equipment and capital goods transactions, generated
0.8 million Euros.
Total turnover from the direct and indirect businesses rose by 12 percent year on year, to 58.8 million
Euros.
Performance at PRISMA Risikoservice GmbH & Co. KG was also well above budget. Other credit
assessment fees, fees for credit assessments of Austrian companies requested by Euler Hermes
Group companies, and fees for collection and ratings amounted to 11.6 million Euros, an increase of
13 percent on 2010.
New business
New business including extensions of cover and premium increases in the existing portfolio was
down slightly year on year. However, the number of businesses still without insurance remains high.
Policy portfolio
The portfolio consisted of 1,767 policies as of 31 December 2010, a year-on-year decline of 3.5 percent.
Policy cancellations were slightly lower than in 2010, both in absolute terms and as measured
by premium volumes.
Credit assessments
The number of new credit assessment requests rose slightly. In total 133,800 requests were processed
and decisions issued. Total exposure increased to 19.4 billion Euros.
60

Outlook for 2012
Despite the recent recovery, a number of factors suggest that we are heading into a renewed economic
crisis. Due to the ongoing sovereign debt crisis, attempting to make even remotely reliable
forecasts is a pointless exercise.
However, PRISMA is still committed to meeting its long-term objectives: profitable growth, market
development, and consolidation of our market leadership. We are cautiously optimistic as we move
into 2012.
Our plans remain as ambitious as ever. We also have a range of measures in reserve that could be
implemented quickly and at any time in response to a deterioration in our operating environment.
PRISMA will continue to focus on acquiring new customers and on the measured and quality-driven
assessment and assumption of the default risk faced by our insured clients.
Result for the business year
Profit on ordinary activities amounted to 9,571,832.00 EUR, the profit after tax was 7,490,882.01
EUR. Allocations to the risk reserve under section 73 a Austrian Insurance Supervision Act (Versicherungsaufsichtsgesetz
[VAG]) totalled 112,527.00 EUR, and those to the unappropriated reserve
3,100,000.00 EUR. The profit for the year was 4,278,355.01 EUR.
No events of material importance occurred after the balance sheet date.
Appropriation of profits
The Board of Management proposes to use the profit for the 2011 financial year amounting to
4,340,466.69 EUR as follows:
Distribution of a dividend of 717.00 EUR per share 4,302,000.00 EUR
Brought forward to new account 38,466.69 EUR
Vienna, 31 January 2012
61

Annual Financial Statements
Balance Sheet as at 31 December 2011
62
Assets
A. Intangible assets
2011 2010
in EUR in TEUR
I. Other intangible assets 100,477.65 66
B. Investments
I. Investments in group undertakings
1. Shares in related companies 150,000.00 150
II. Other financial investments
1. Shares and other variable-yield securities 3,120,842.26 3,129
2. Debt securities and other fixed-income securities 40,176,034.85 27,946
3. Deposits with banks 12,000,000.00 3,000
C. Accounts receivable
I. Accounts receivable arising out of direct insurance business from
1. policyholders 1,540,306.55 1,580
2. intermediaries 280.82 4
II. Accounts receivable arising out of reinsurance operations 4,949.00 112
III. Other accounts receivable 2,902,175.86 2,136
D. Interest receivable pro rata 424,508.66 352
E. Other assets
I. Rents and office equipment 485,994.55 518
II. Cash at bank and in hand 12,258,334.72 22,913
III. Other 8,237,612.00 6,301
F. Prepayments and accrued income 383,171.67 276
Vienna, 31. 1. 2012 81,784,688.59 68,483

Liabilities
A. Capital and reserves
2011 2010
in EUR in TEUR
I. Subscribed capital
Nominal capital 6,000,000.00 6,000
II. Capital reserves
Tied reserves 899,060.42 899
III. Revenue reserves
Voluntary reserves 19,372,204.89 16,272
IV. Risk provision pursuant to § 73 a VAG taxed portion 930,356.00 818
V. Net profit for the financial year of which profit carried forward
62,111.68 EUR (2010: 49 TEUR) 4,340,466.69 3,062
B. Untaxed reserves
I. Risk provision pursuant to § 73 a VAG 64,453.79 64
C. Technical provisions for own account
I. Provision for unearned premiums
1. Gross amount 884,264.00
2. Reinsurers' share -448,319.00 435,945.00 362
II. Provision for outstanding claims
1. Gross amount 30,612,120.29
2. Reinsurers' share -17,154,892.00 13,457,228.29 10,170
III. Provision for premium refund
1. Gross amount 3,202,000.00
2. Reinsurers' share -1,819,000.00 1,383,000.00 1,048
IV. Equalization reserve 14,740,172.00 11,977
V. Other technical provisions
1. Gross amount 235,014.00
2. Reinsurers' share -133,488.00 101,526.00 100
D. Provisions for other risks and charges
I. Provisions for executive pensions 3,443,989.00 3,083
II. Provisions for other pensions 2,897,347.00 3,066
III. Other provisions 4,562,994.60 4,535
E. Other liabilities
I. Accounts payable arising out of direct insurance business to
1. policyholders 483,576.27 372
2. intermediaries 102,563.97 62
II. Accounts payable arising out of reinsurance operations 5,238,134.00 3,555
III. Other 3,331,670.67 3,037
Vienna, 31. 1. 2012 81,784,688.59 68,483
63

Profit and Loss Account
for the year ended 31 December 2011
64
I. Technical account 2011 2010
in EUR in TEUR
1. Earned premiums 24,870,238.66 23,517
a) Premiums written
aa) Gross amount 58,721,969.66
ab) Reinsurers' share -34,003,485.00 24,718,484.66 22,877
b) Change in premium deferrals
ba) Gross amount 327,786.00
bb) Reinsurers' share -176,032.00 151,754.00 640
2. Other technical income 27,500.80 28
3. Claims incurred -11,913,334.70 -9,558
a) Claims paid
aa) Gross amount -17,604,385.05
ab) Reinsurers' share 8,978,439.00 -8,625,946.05 -12,356
b) Change in the provision for outstanding claims
ba) Gross amount -5,530,860.65
bb) Reinsurers' share 2,243,472.00 -3,287,388.65 2,798
4. Bonuses and rebates
a) Gross amount -4,652,240.36
b) Reinsurers' share 2,755,678.00 -1,896,562.36 -1,459
5. Operating expenses
a) Acquisition costs -6,521,990.69
b) Other operating expenses -4,706,585.31
c) Reinsurance commission and
profit participation from ceded reinsurance 8,723,048.00 -2,505,528.00 -3,641
6. Other technical expenses -99,029.63 -25
7. Change in the equalization reserve -2,763,170.00 -4,468
8. Balance on the technical account for general business 5,720,114.77 4,396

II. Non-technical account
2011 2010
in EUR in TEUR
1. Balance on the technical account for general business 5,720,114.77 4,396
2. Investment income 4,173,964.45 2,961
a) Income from participating interests
Share derived from affiliated companies 2,828,160.00 EUR 2,828,160.00 1,922
b) Income from other investments 1,020,556.46 796
c) Gains on the realization of investments 166,300.00 109
d) Other income from interest 158,947.99 134
3. Investment expenses and charges -322,247.22 -384
a) Investment management expenses -303,620.34 -310
b) Value adjustments on investments -18,626.88 -53
c) Losses on the realization of investments 0.00 -21
4. Profit or loss on ordinary activities before tax 9,571,832.00 6,975
5. Tax on profit or loss on ordinary activities -2,080,949.99 -1,821
6. Surplus for the financial year 7,490,882.01 5,154
7. Allocations to reserves
a) Allocation to risk provision pursuant to § 73 a VAG -112,527.00 -141
b) Allocation to voluntary reserves -3,100,000.00 -2,000
8. Net profit for the year 4,278,355.01 3,013
9. Retained profit brought forward from previous year 62,111.68 49
10. Net profit for the financial year 4,340,466.69 3,062
The Board of Management: Ludwig Mertes and Bettina Selden
Vienna, 31. 1. 2012
65

Impressum
Eigentümer, Herausgeber & Verleger:
PRISMA Kreditversicherungs-AG
Himmelpfortgasse 29, 1010 Wien
Tel +43 (0)5 01 02-0, www.prisma-kredit.com
Für den Inhalt verantwortlich: Mag. Melitta Schabauer
Projektleitung: Petra Stritzl
Konzept, Text, Koordination: Dr. Karin Krobath, IDENTITÄTER
Artdirection: Robert Kneitschel, www.adhok.at
Grafik: Alois Kiendlhofer
Foto: Günter Parth, www.guenterparth.com
Druck: Produktionswerkstatt, www.produktionswerkstatt.at
PRISMA Kolleg(inn)en in der Reihenfolge des Erscheinens
(Bild von rechts nach links):
Attila Berki (Kreditprüfung)
Claudia Wodwarka (Kreditprüfung)
Mag. Nicole Wendelberger (Kreditprüfung)
Ludwig Mertes (Mitglied des Vorstandes)
Karin Straub (Versicherungsleistung)
Harald Patry (IT)
Mag. Marcus Paseka (Verkauf)
Juliette Kottar (Verkauf)
Mag. Bettina Selden (Mitglied des Vorstandes)
Eva Einzinger (Versicherungsleistung)
Angelika Rathmayer (Personalwesen)
Mag. Igor Bjelanovic (Kreditprüfung)
Mag. (FH) Andreas Walz (Kreditprüfung)
Mag. Stefan Szimak (Verkauf)
Johanna Penz (Kreditprüfung)
Inga Zutz (Verkauf)
Mag. Marc-André Frenzel (Verkauf)
66