NOTES TO BOSNA RE Co. Ltd. ANNUAL REPORT FOR 2007

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NOTES TO BOSNA RE Co. Ltd. ANNUAL REPORT FOR 2007

ANNUAL REPORT 2007Graph 3In its nominal amount, reinsurance losses are significantly lower that the premiums but the losses tend togrow faster than the premiums. During the period of 12 years, reinsurance losses grew 28 times and reinsurancepremium for 17 times. This twelve years long tendency of reinsurance losses growth was interrupted in2006 when a drop of 37,80% in comparison to previous year was registered. Such oscillations are not resultof a pattern but simply, several years were affected by one or two larger losses which led to abrupt oscillationsin the period 2005 / 2006. Small and inhomogeneous portfolios, such as is Bosna RE’s, are dependent onsuch influences. The reinsurance losses grew again in 2007 but did not reach the record from 2005. However,considering IV Quarter of 2007 and state of reserves, the reinsurance losses growth index shall surely pass thelimit of 3.000,00 KM in the period to come.A part of a risk that exceeds its capacity Bosna RE places to international insurance market through variousforms of retrocession treaties. Of course, the retrocession is accompanied by payment of a part of reinsurancepremium.The self-retained reinsurance premium amounts KM 18,17, i.e. KM 23,96 million, which means continuationof growth of self-retained premium disturbed in 2006. That year was obviously an exception. The reason forthis is purchase of additional protections for Bosna RE portfolio. That is to say, protection of Bosna RE and itscedents is an imperative of the Company. All these elements could be seen from the Table 5 and Graph 4.24

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