VINCI - 2005 annual report

C. INSURANCE
1. GENERAL POLICY
Given VINCI’s decentralised organisation, this policy is defi ned at several
levels of responsibility:
– VINCI’s Executive Committee lays down the general framework and
rules, and in particular the standards applicable to all subsidiaries;
– Within this framework, and after identifying and rigorously analysing
the risks relating to their activitities, the managers of the business lines
or major subsidiaries defi ne the optimum trade-off between the level
and extent of the guarantees likely to meet the range of insurable risks,
and a cost (comprising premiums and uninsured losses) which allows
operational entities to remain competitive in their sector.
With a view to optimising costs and preventing accidents, uninsured losses
are defi ned on a subsidiary-by-subsidiary basis and are often as high as
€75,000. Using the same approach, self-insurance budgets have been
allocated, as in Civil Liability or in the automobile sector at Eurovia, GTM
Construction or VINCI Energies – with a maximum amount lower than
or equal to €4 million for each of these entities and each risk.
Subsidiaries’ specifi c cover is in addition to that taken out by VINCI SA on
behalf of all its subsidiaries together, in particular regarding:
– civil liability of company offi cers;
– disaster risks under civil liability;
– professional liability of engineering and design offi ces;
– liability for environmental damage.
After studying its advisability, the Group has decided not to set up a captive
reinsurance company, as the fi nancial benefi t was not proven. Only a part
of VINCI’s activity in the United Kingdom is insured through a captive
insurance company based in Guernsey, for historical reasons. A reinsurance
mechanism restricts its exposure at a level defi ned on the basis of market
conditions. This was €6 million in 2005.
The Group’s main insurers are SMABTP and AXA. VINCI has set up its own
brokerage fi rm, VINCI Assurances, charged with taking out policies and
harmonising cover within the Group. With a few exceptions, VINCI Assurances
acts as a broker for French subsidiaries. As a simple intermediary, it
bears no fi nancial risk as an insurer.
2. LOSS PREVENTION AND CLAIMS RECORD
Loss prevention arrangements are systematically adopted on construction
sites and operating sites. This policy, which gives a major role to training,
is in line with the efforts made by VINCI companies in terms of quality
assurance and prevention of work-place accidents.
The Group’s claims record is marked, on the basis of available statistics and
data and without prejudging any actual responsibility, by the low number
3. INSURANCE IN THE CONSTRUCTION,
ROADS AND ENERGY BUSINESS LINES
3.1 CIVIL LIABILITY
Subsidiaries are exposed to their responsibility for bodily, physical or
consequential damage caused to third parties, including customers and
principals.
The civil liability cover taken out in this respect comprises a fi rst line that
combines the cover in place at subsidiary level, intended to cover usual
incidents, and a set of complementary lines taken out for the common
benefi t. To date, no claim has been settled under these further lines of
insurance in the business lines concerned.
REPORT OF THE BOARD
of incidents of more than €1 million (around ten in fi ve years), by a few
medium-sized incidents of between €75,000 and €1 million (about 30
in 2005), and, lastly, by a relatively irreducible number of small incidents,
of less than €75,000 each, borne directly by subsidiaries as uninsured
losses. Only two incidents of an individual amount of more than €1 million,
but less than €2 million, were declared in 2005.
In addition to this basic cover, specifi c insurance is taken out as a result of
legal or contractual requirements or management decisions in the following
areas:
– ten-year warranty (in France);
– automobile third-party cover;
– transport.
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