The total value of premiums received by companies belonging to the CU Poland Group in the first half of 2003 rose by 7% to 2.4bn zlotys. The value of assets managed by the CU Group exceeded 18bn zlotys. lly the opening paragraph of the release
The total value of premiums received by companies belonging to the CU Poland Group in the first half of 2003 rose by 7% to 2.4bn zlotys. The value of assets managed by the CU Group exceeded 18bn zlotys.
Among its offers, CU Poland Life Insurance Company has introduced Your Health, additional hospital cash benefit contract. The company has paid out 750 thousand zlotys, the highest benefit connected with inability to work since its operations started. In the first half year CU Life collected gross premiums amounting to 827m zlotys, achieving gross profits of 226m zlotys.
The CU General Pension Company achieved operating revenues of 92m zlotys and gross profits of 30m zlotys. CU Poland General Insurance Company achieved a nearly 12% increase in its gross premiums and made 5.4m zlotys gross profit. CU Poland Investment Fund Company achieved good market success, winning over 300m zlotys assets following 14 months of operations.
Commercial Union Life Insurance Company SA
The most important event of the first half year was the introduction of two additional contracts as part of its offer into the individual, universal life insurance with an investment fund.
The new offer is called Your Health, an additional hospital benefit insurance contract and In Case of Accident, an additional insurance against the consequences of accidents. This offer is designed both for clients buying new life insurance and for existing policy owners interested in extending their range of cover. The essence of the Your Health additional contract consists in the payment of a specific sum in accordance with the chosen benefit cover, to the insured person who has undergone medical procedures connected with conservative or radical hospital treatment stipulated in the contract. At the present time, the Your Health contract includes over 420 medical conditions connected with over 800 disease units.
"We are counting on dynamic development of both individual and group health insurance contracts, in the face of the vast scope of social needs and aspirations, which the general system of health insurance is unable to satisfy," said Jarosław Myjak, chief executive of Commercial Union Poland Group and CU Life SA.
During the first half of this year, CU Life has paid out the highest ever benefit in Poland, amounting to 750 thousand zlotys from two policies to one person, due to a permanent and total inability to work.
"Benefit payments form the essence of life insurance companies' activities. The client who received the payment mentioned above was properly insured and the paid sum constitutes real help for this person and his family in a difficult life situation. No cash benefit can bring back good health, but a well planned insurance package makes it possible to receive a payment constituting not just a subsistence allowance, but also an amount making a realistic financial solution possible.
"This is a true measure of benefit for the client. Despite the fact that the insurance market in Poland has been growing for a dozen years or so, we still have the impression that the protection aspect of insurance is not fully valued, not just by general public opinion, but even by some opinion-forming circles and the media," said Mr Myjak
The following are other examples of the highest benefits, paid out by CU Life since its beginnings:
| Type of benefit | Amount |
| Highest benefit due to death (from one policy) | over 1.2m zlotys |
| Highest total benefit due to death (from several policies) | over 1.3m zlotys |
| Highest benefit due to permanent and total inability to work (from one policy) | 572 thousand zlotys |
| Highest benefit due to permanent and total inability to work (from two policies) | 750 thousand zlotys |
| Highest benefit due to the "serious illness" option (group life insurance) | 150 thousand zlotys |
| Highest benefit due to death paid out during a so-called temporary protection (ie, between submitting the application and conclusion of the contract), after the client had paid a premium of a few dozen zlotys. | 100 thousand zlotys |
In the first half of 2003, CU Life recorded a small fall in the premium counted as gross and a rise in claims and surrenders, on the one hand, and on the other, lower acquisition and administration costs and good investment results that made it possible for the Company to maintain its financial effectiveness. One of the most important measures showing the scale of CU Life operations is the value of its assets, which in the first half year increased by 5% in relation to the state at the end of 2002. CU Life capital insurance funds, where policy holders' proceeds handed over are built up, have achieved very good results.
"The somewhat lower gross premium is due to the CU decision to diversify the sale of investment products and this resulted in the CU TFI. The indirect result of this decision was a lower level of investment insurance sales with a single premium in CU Life, but these products are just the ones that have largely contributed to the rise in the life insurance market during the past few years," said Mr Myjak.
The level of claims and surrendered policies in CU Life, in relation to the technical provisions, remains lower than the average level of this indicator for the remaining market participants.
"Along with the rise of the average time life insurance is maintained, there is a rise in the value of payments connected with insurance events, while a large proportion of early withdrawal of the policy amounts continues to be caused by economic slowdown, rising unemployment and low consumer confidence. The number of surrendered policies decreased during the spring and summer months and this, along with the improved macroeconomic indicators is a good prognosis for the future," added Mr Myjak.
In its portfolio CU Life includes insurance contracts concluded by employers on behalf of their employees, who bear the burden of premium payments. After such policies are maintained for 5 years, as stipulated in social security regulations, more and more employees in this category have the option to cash them in. These types of payments constitute a significant part of compensation and benefit pay-outs.
| Item | First half of 2002 | First half of 2003 |
| Gross premium written | 878 | 827 |
| Claims and surrenders | 309 | 428 |
| Acquisition costs | 112 | 83 |
| Administration costs | 82 | 67 |
| Gross financial result | 169 | 226 |
| Net financial result | 122 | 172 |
Commercial Union Pension Fund Company BPH CUT WBK SA
The CU Pension Fund Company Shareholders' General Meeting held in April of this year made a decision to lower the premium of client membership in the CU Open Pension Fund for the first two years to 8.5%. The entry into force of this decision is subject to approval by the Insurance and Pension Funds Supervisory Committee. An appropriate application has been submitted to the Insurance and Pension Funds Supervisory Committee on 13 May 2003.
"Our decision to lower payments is a result of market requirements and is intended to increase CU Pension Fund Company's competitiveness," emphasised Piotr Szczepiórkowski, chief executive of the CU Pension Fund Company.
Beginning with the third year of any given person's membership, the fund charges a 4% premium and this amount has remained unchanged since the beginning of the 1999 pension reform. "At the present time, nearly 75% of our clients pays this commission, the lowest on the market, deriving measurable benefits as a result," added Mr Szczepiórkowski.
The net value of CU Pension Fund assets is approaching 11.5bn zlotys. In the first half of 2003, the Department of Social Security transferred over 1.3bn zlotys of premiums to the CU Pension Fund – an amount similar to that received during the analogous period last year. However profits from investments of CU Pension Fund sources during the six months of 2003 rose by 31% to 453m zlotys. The 19% reduction in the number of "dead" accounts and thanks to this fact, the percentage of accounts with contributions – in any case the highest on the market – rose to 95.7%. In the first half of 2003, the CU Pension Fund also opened nearly 45 thousand new accounts and their total number now exceeds 2.5m.
"During the process of achieving the ISO Certificate, we have also identified additional ways of improving our efficiency. Taking advantage of these opportunities will make it possible to continue to ensure the Pension Fund's continued profitable operations despite unfavourable external circumstances (a high level of activity of acquisition, competition and legislative changes). We expect, that by the end of this year, we will be able to regenerate the 210m zlotys of our ownership capital invested by Pension Fund Company shareholders," said Mr Szczepiórkowski.
| Item | First half of 2002 [million zlotys] | First half of 2003 [million zlotys] | Change [percent] |
| Operating revenues | 91 | 92 | 1 |
| Acquisition costs | 12 | 7 | -42 |
| Remaining operating revenues | 67 | 61 | -9 |
| thereof: regulatory payments | 12 | 12 | 0 |
| Gross financial result | 21 | 30 | 43 |
Commercial Union Poland General Insurance Company SA
In the first half of 2003, Commercial Union Poland General Insurance Company introduced annual insurance, Travel Partner for people who travel abroad frequently, both privately and on business. This is the next stage of extending the insurance range for individual clients. At the present time Commercial Union Poland General Insurance Company offers three types of Locum house and flat insurance , three types of accident insurance, Sensible Partner for individual clients (plus a group option).
"We belong to the fastest growing property insurance companies in Poland thanks to the expansion of insurance offers for individual clients and our strong position among institutions offering some types of insurance for companies," said Ryszard Bociong, chief executive of CU General Insurance Company.
"The rise in acquisition costs represents outlays for expansion of the distribution range of insurance for individual clients. The stable level of administrative costs, achievement of a positive technical result, a rare thing in the property market, satisfactory gross profit and a high level of financial security deserve special attention," emphasised Mr Bociong.
| Item | First half of 2002 [million zlotys] | First half of 2003 [million zlotys] | Change [percent] |
| Gross premiums written | 34.5 | 38.6 | 11.9 |
| Net premiums | 25.5 | 27.4 | 7.5 |
| Net income from investments | 5.1 | 3.6 | -29.4 |
| Net claims | 6.1 | 8.8 | 44.3 |
| Acquisition costs | 6.1 | 9.5 | 55.7 |
| Administrative costs | 7.0 | 7.0 | 0 |
| Technical result | -1.1 | 2.2 |
|
| Gross financial result | 3.9 | 5.4 | 38.5 |
| Value of investments | 73.5 | 90.9 | 23.7 |
| Ownership capital | 34.4 | 42.6 | 23.8 |
| Technical and insurance provisions in ownership share | 37.0 | 47.1 | 27.3 |
| Solvency margin | 5.4 | 12.4 | 129.6 |
For further information please contact: Grazyna Goslings. Corporate Communications Director of the CU Poland Group. Tel: +48 22 557 40 93. Fax: + 48 22 557 40 26. e-mail: bohdan_bialorucki@cu.com.pl. Additional information about the Commercial Union Poland Group can also be found on the web page http://www.cu.com.pl
- All figures used in this release have been prepared on a local basis