In terms of investment income, life insurance companies produced an average return of 5.8% in 2007, a lower yieldthan the 6.7% recorded in 2006. The return on equity was 10.8%, lower than the 15.3% of 2006, largely explained bythe volatility in the last quarter in global stock markets which reduced the investment income of life companies.The profitability of general insurance companies in 2007, which is related to reinsurance costs and the characteristicsof an operation with more standardized products, was 4.4%, or 2.59% when measured as the income on theinvestment portfolio. This is thanks to the efficiency in operating costs and a satisfactory claims management.1.01973175377983188758648120002001200220032004200520062007casualty insurance direct premiumSOURCE: GRUPO SECURITY MILLIONS OF PESOS · DECEMBER 20072,0401,4341,5661,4381,6081,7751,7541,80320002001200220032004200520062007life insurance direct premiumSOURCE: GRUPO SECURITY MILLIONS OF PESOS · DECEMBER 2007
<strong>annual</strong> <strong>report</strong> 2007<strong>grupo</strong> <strong>security</strong>page 49V I D A S E C U R I T YTwo highlights marked the insurance area of Grupo <strong>Security</strong> in 2007.In the first half of the year, Rentas <strong>Security</strong> and Vida <strong>Security</strong> were merged. In addition, in the third quarter, 100%of the partnership rights were acquired in the Chilean company Inversiones Cigna Ltda., whose principal asset wasa 99.56% shareholding in Cigna Compañía de Seguros de Vida (Chile) S.A., whose merger with Vida <strong>Security</strong> wascompleted in December of that year.With these transactions, a company is created with a portfolio of over 565,000 insured parties in individual life,voluntary pension savings (APV), group and family-protection insurance, plus 18,000 pensioners in the annuitiesbusiness. They also enable Vida <strong>Security</strong> to become one of the market leaders, consolidating a market share of around6% in traditional life insurance and an investment portfolio of Ch$736,709 million, equivalent to 5% of the insuranceindustry’s total financial investments.In the voluntary pensions savings (APV) market, the company achieved a market share of 12.3% last year, placing itin fourth position among the sector companies.Consumer loans, which have been offered by Vida <strong>Security</strong> exclusively to its pensioner customers since 2006,amounted to Ch$2,201 million at the end of 2007, with a total of 2,330 loans granted.Profits in 2007 thus totaled Ch$17,458 million (Ch$2,179 million in Vida <strong>Security</strong>, Ch$13,902 million in Rentas<strong>Security</strong> and Ch$1,378 million in Cigna Vida) with a direct premium of Ch$55,013 million (Ch$48,131 million in Vida<strong>Security</strong> and Ch$6,883 million in Cigna Vida) and financial investments of over Ch$736,000 million.These positive results are mainly explained by the income on the investments of the three companies (Vida <strong>Security</strong>with Ch$21,487 million, Rentas <strong>Security</strong> with Ch$25,430 million and Cigna Vida with Ch$6,419 million) whichtotaled Ch$53,330 million, producing a real <strong>annual</strong> return of 7.24%.The results of Rentas <strong>Security</strong> and Cigna Vida relate to their results accrued to the date of their merger with Vida<strong>Security</strong>. Following the mergers, the accrued results of these companies became part of the equity of Vida <strong>Security</strong>.The result of Vida <strong>Security</strong> reflects the accrued income of the merged companies between the effective merger dateof each one and December 31, 2007.