In 2003, the value of assets managed by Commercial Union Poland group exceeded 21bn PLN (£3.01bn). The group serves approximately three million customers. In the past year, two insurance capital funds of CU Life and two unit trusts of CU Unit Trust Company achieved the highest return rates in their peer groups.
In 2003, the value of assets managed by Commercial Union Poland group exceeded 21bn PLN (£3.01bn). The group serves approximately three million customers. In the past year, two insurance capital funds of CU Life and two unit trusts of CU Unit Trust Company achieved the highest return rates in their peer groups.
CU Life Insurance Company collected 1.686bn PLN (240m) of gross premiums and reached 313m PLN (£44.8m) net profit. CU Pension Fund Company had sales revenue of 195m PLN (£27.9m) and net profit of 162m PLN (£23.2m). CU General Insurance Company collected 72m PLN (£10.3m) of gross premiums and reached 2m PLN (£290,000) net profit. CU Unit Trust Company, with revenue of 17.5m PLN (£2.5m) made 1.5m PLN (£210,000m) net profit.
Commercial Union Poland Life Insurance Company
CU Life continues to lead both the individual and unit linked life insurance markets in Poland. It is second in the whole life insurance market and in group life insurance. In 2003 two insurance capital funds of CU Life took primary position among the funds linked to life insurance: the Dynamic Fund reached an annual return rate of 61%, and CU Equities Fund - 43.2 %. The total value of CU Life investments has increased in the past year from 6.8 to 7.7bn PLN (from £970bn to £1.1bn) .
"A small decrease in gross written premium levels in 2003 is the result of product diversification within CU Poland group and the introduction of unit trusts," said Jarosùaw Myjak, chief executive of CU Poland group and CU Life. Claims and surrenders paid in relation to technical provisions were much lower at CU Life (12.4% after the first three quarters of 2003) than the market average without considering CU (17.7 %). "I would like to underline that in the past year we paid out on over 19,600 claims on life insurance contracts. The most precious argument for us in convincing customers and public opinion about the social usefulness of life insurance are the opinions of the beneficiaries of these claim payments," added President Myjak.
Further effects of good cost management contributed to achieving results confirming the company’s healthy finances and a high level of security for assets entrusted by customers to CU Life. The company’s capital increased to 960m PLN (£137m) at the end of 2003.
The most important results of CU Life:
| Item | 2002 [in millions of PLN] | 2003 [in millions of PLN] |
|---|---|---|
| Company’s capital | 857 | 960 |
| Gross technical provisions | 5,858 | 6,648 |
| Investments | 6,780 | 7,734 |
| Gross written premiums | 1,755 | 1,686 |
| Claims and surrenders | 608 | 798 |
| Operating costs | 352 | 294 |
| Operating results | 308 | 312 |
| Gross financial results | 381 | 388 |
| Net financial results | 276 | 313 |
Commercial Union Pension Fund Company
In 2003, CU Pension Fund Company’s operations proved to be very effective. The company increased its sales revenue to 195m PLN (£27.8m) in an environment where increasing numbers of its pension customers pay a 4% fee on premiums (the lowest on the market). Also, at the end of October 2003, the fee paid by customers with less than two years of membership was cut from 10 to 8.5%.
"In 2003 we conducted work enabling us to obtain a quality management certificate according to ISO 9001:2000 standard. This caused significant practical results such as a decrease in operational costs and further optimisation of processes. Though the costs of obligatory charges slightly increased, profit on sales significantly increased to 59m PLN (£8.4m), which is the key measurement of the company’s very high effectiveness," said Piotr Szczepiórkowski, general manager of CU Pension Fund Company.
The company achieved high gross and net profits by including revenue from the dissolved reserve account (on the basis of the amended Pension Funds Act). The company’s capital increased to 307.8m PLN (£44m) at the end of 2003.
| Item | 2002 [in millions of PLN] | >2003 [in millions of PLN] | Change [%] |
|---|---|---|---|
| 1. Sales revenue | 179 | 195 | + 9 |
| 2. Operating costs (a+b+c) | 150 | 136 | – 9 |
| a) obligatory charges * | 66 | 69 | + 5 |
| b) transfer agent costs | 42 | 26 | – 38 |
| c) other costs | 42 | 41 | – 2 |
| 3. Profit on sales | 29 | 59 | + 103 |
| 4. Results from remaining operations ** | – 4 | 141 | n/a |
| 5. Operating results | 25 | 200 | + 700 |
| 6. Investment results | 19 | 8 | – 58 |
| 7. Gross financial results | 44 | 208 | + 373 |
| 8. Net financial results | 58 | 162 | + 180 |
* including costs of state Social Security Office commissions, payments into reserve account, charges for the regulator and the Insurance Ombudsman, as well as into the Guarantee Fund
** in 2003 includes revenue from dissolution of the reserve account
Commercial Union Poland General Insurance Company
CU General Insurance increased gross premiums by 2% to 71.8m PLN (£10.3m) and net earned premiums by 34%. The company broadened its offering and developed sales of personal lines products (home, accident and travel insurance), mainly via CU tied agents. The company also offers commercial lines insurance, focusing on high quality of risk acceptance process and on continuous improvement of customer and intermediary services. The increase in administrative costs was caused primarily by broadening the range of business, mainly in the area of personal lines insurance. Improvement of operating result by 133% deserves our attention - that is an increase of strict insurance operational effectiveness in a very competitive market. It is a very positive trend against falling revenue from investments due to low interest rates and low returns from Treasury bonds which dominate our portfolio. – said Ryszard Bociong, general manager of CU General Insurance.
| Item | 2002 [in millions of PLN] | >2003 [in millions of PLN] | Change [%] |
|---|---|---|---|
| Gross written premiums | 70,6 | 71,8 | + 2 |
| Net earned premiums | 36,8 | 49,2 | + 34 |
| Claims costs | 12,3 | 21,9 | + 78 |
| Acquisition costs | 17,2 | 20,0 | + 16 |
| Administrative costs | 11,9 | 12,8 | + 8 |
| Operating results | 0,6 | 1,4 | + 133 |
| Net revenue from investments | 10,3 | 3,0 | – 71 |
| Gross financial results | 10,1 | 3,7 | – 63 |
| Investment value | 85,6 | 92,4 | + 8 |
| Company capital | 39,0 | 41,8 | + 7 |
| Net technical provisions | 40,7 | 50,1 | + 23 |
| Balance sheet total | 141,6 | 140,3 | – 1 |
| Surplus of company’s capital to cover solvency margin | 21,3 | 28,8 | + 35 |
Commercial Union Poland Unit Trusts Company
In May 2002, the company began to sell four unit trusts mainly through the CU agent network. It collected assets worth over 800m PLN (£114m) within 18 months. In 2003, two CU unit trusts achieved the highest rates of return in their peer groups - CU Stable Investment among stable growth trusts funds (return rate of 26%) and CU Polish Equities among equity-based trusts (return rate 64.6%). "We closed the first full year of unit trust sales with a net profit already: we reached over 1.5m PLN (£215,000) profit on 17.5m PLN (£2.5m) revenue," said Marek Przybylski, general manager of CU Unit Trusts Company.
For further information please contact:
Graýyna Goslings, director of corporation communication of CU Polska Group, tel (22) 557 40 93, Fax (22) 557 40 26, e-mail: bohdan_bialorucki@cu.com.pl. Additional information on the Commercial Union Polska Group can also be found at http://www.cu.com.pl
- All figures used in this release have been prepared on a local basis