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Annual Report
for 2013
Adriatic Slovenica d. d.
ANNUAL REPORT FOR 2013
Adriatic Slovenica d.d.
Annual Report
for 2013
Annual Report
for 2013
CONTENTS OF THE ANNUAL REPORT FOR 2013
1.
OPERATING HIGHLIGHTS ........................................................................................................ 4
1.1
SIGNIFICANT BUSINESS EVENTS IN 2013 .............................................................................. 4
1.2
SIGNIFICANT BUSINESS EVENTS AT THE BEGINNING OF 2014 ......................................... 9
1.3
STATEMENT BY THE PRESIDENT OF THE MANAGEMENT BOARD .................................. 11
1.4
SUPERVISORY BOARD REPORT - Summary ....................................................................... 13
1.5
REPORT OF THE SUPERVISORY BOARD'S AUDIT COMMITTEE – Summary ................... 15
1.6
FINANCIAL HIGHLIGHTS AND OTHER DATA FOR 2013...................................................... 17
2.
COMPANY PROFILE, ITS VISION AND VALUES ................................................................... 18
2.1 ADRIATIC SLOVENICA D.D. ......................................................................................................... 18
2.2 THE COMPANY'S VISION AND VALUES ..................................................................................... 20
3.
MANAGEMENT AND CORPORATE GOVERNANCE BODIES ............................................... 21
3.1
THE SUPERVISORY BOARD................................................................................................... 21
3.2
THE MANAGEMENT BOARD .................................................................................................. 21
3.3
OWNERSHIP STRUCTURE...................................................................................................... 24
3.4
ORGANISATION AND ORGANISATIONAL STRUCTURE ..................................................... 25
3.5
BRAND VISIBILITY, CORPORATE PERCEPTION OF THE COMPANY AND
SATISFACTION OF INSURED WITH CLAIM SETTLEMENT .................................................. 26
4.
BUSINESS OVERVIEW ............................................................................................................ 30
4.1
ECONOMIC LANDSCAPE IN 2013 .......................................................................................... 30
4.2
LONG-TERM BUSINESS PLANS AND OBJECTIVES FOR 2014 ........................................... 31
4.3
BUSINESS PERFORMANCE AND MAIN FEATURES OF INSURANCE CLASSES .............. 32
4.4
ANALYSIS OF OPERATIONS, PRESENTATION OF THE FINANCIAL RESULT AND
FINANCIAL POSITION FOR 2013 OF ADRIATIC SLOVENICA D.D. ...................................... 51
4.5
MARKETING AND SALES NETWORK .................................................................................... 55
4.6
RISK MANAGEMENT ............................................................................................................... 59
4.7
COMMUNICATION WITH STAKEHOLDERS ........................................................................... 61
4.8
INTERNAL AUDIT REPORT ..................................................................................................... 65
5
REPORT ON SUSTAINABLE DEVELOPMENT ....................................................................... 67
5.1
EMPLOYEES ............................................................................................................................ 67
5.2
IMPROVEMENTS, INFORMATION SECURITY AND QUALITY .............................................. 71
5.3
THE COMPANY'S RESPONSIBILITY TO THE LOCAL COMMUNITY AND THE
ENVIRONMENT ........................................................................................................................ 74
6
SELECTED ACCOUNTING AND FINANCIAL PERFORMANCE INDICATORS ..................... 77
7
FINANTIAL STATEMENTS....................................................................................................... 91
Annual Report
for 2013
1.
1.1
OPERATING HIGHLIGHTS
SIGNIFICANT BUSINESS EVENTS IN 2013
January
- On 3 January, the insurance company introduced a new module for paper-free management of personnel
matters provided by Business Connect support system. Consequently, all paper documents referring to the
management of working hours and business travel orders were abolished. In July, the system was upgraded with
a module for paper-free settlement of invoices and e-filing system, and at the end of the year, with a module for
internal regulatory environment and quality management system.
- In January, Maja Benko was named Executive Director of Life Insurance sector at Adriatic Slovenica.
- The accounting and finance division prepared the ground for the acquisition of life insurance portfolio of KD
Življenje. Particular attention was paid to analysing data contained in the accounting records of KD Življenje and
their method of transfer, i.e. recording in the Company's books of account.
February
-Adriatic Slovenica have introduced additional accident insurance against accidental bone fracture, accidental
burns, accidental permanent loss of sight, accidental complete loss of hearing and accidental loss of life in fire. To
simplify and accelerate the payment of insurance indemnity and minimise the number of documents required, an
additional accident insurance option was set up which enables the policyholder to obtain the extra resources
needed to alleviate the financial consequences of an accident more rapidly.
- On 1 February, the Company started the internal reorganisation project focused on business process
redesigning, with the purpose of making team work and flexibility the leading principle for all employees of the
Company, providing for greater flexibility and a better focus on meeting the clients' needs. The reorganisation
was concluded on 1 October.
- In February, Aleš Žižmund was appointed Executive Director of Adriatic Slovenica for sale to SMEs and natural
persons, while Tanja Blatnik was appointed Executive Director of insurance operations.
- In the beginning of February, training and motivational events entitled “Sales Conference” took place in Rogaška
Slatina and Ankaran for in-house and external insurance agents and key account managers, attended by over
600 participants. The main goal of these events was to inform participants in detail about new developments in
the parent company both in terms of new services and organisational changes that are underway in the
framework of the Pinwheel project and are aimed at implementing new values in practice.
March
- On 7 March, the Supervisory Board of Adriatic Slovenica discussed and approved the decisions of the
Management Board in relation to the business policy and financial plan for 2013.
- Through its call centre, Adriatic Slovenica started conducting active marketing for the insurance product Health
AS (Zdravje AS) – serious illnesses and surgical procedures.
- In the beginning of March, Adriatic Slovenica and the insurance company KD Življenje started marketing a new
life insurance product Comprehensive life insurance – assistance for life (Življenjski kasko - Asistenca življenja),
Annual Report
for 2013
with KD Življenje bearing the risk. This insurance product encompasses comprehensive coverage for all types of
unforeseeable life events and can be combined with additional coverage for permanent disability, accident
annuity, bone fracture, redesigned supplemental accident insurance for children and DNK Nutri rider.
- Following the requirements of the international reinsurance market, the Company included the sanctions clause
in all non-life insurance policies. Its purpose is to warn the policyholders that the insurance company has no
liabilities insofar as the payment of loss would expose it to any sanctions, prohibitions or restrictions arising from
the United Nations resolutions, or violations of the EU legislation and regulations.
April
- Due to the amended Decree on co-financing of insurance premiums of agricultural production and changed
market needs, repriced premium tariffs for the insurance of crops were prepared and insurance with a lower, 15
% deductible was introduced. Some minimum sums insured were raised for certain types of cultures.
May
- Before the beginning of the season when marine insurance products are purchased, Adriatic Slovenica revised
the premium tariffs for the insurance of these products, modified certain premium rates and increased the
minimum deductibles.
- In May, Adriatic Slovenica started implementing the project of controlling cover in relation to health insurance
policies. As part of this project, on-line control of payments related to valid health insurance contracts was
established via the Health Insurance Card system.
- At its 51st session on 24 May 2013, the Supervisory Board took note of the resignation of Management Board
member Matej Cergolj. He would remain in office until the expiration of the six-month notice period, i.e. until 24
November 2013. After his resignation, he would focus on the area of risk management in the Company.
- On 25 May, more than 700 employees of all companies of the KD Group in Slovenia and abroad gathered at the
21st traditional social and recreational event organised in Ankaran by the sports and cultural society Pravi Asi
(True AceS), established within the framework of the Company, to compete against each other in several sporting
disciplines. Such socialising among employees fosters a common corporate culture and contributes to better
cooperation between employees in their work.
- On 27 May, Adriatic Slovenia launched one of its most important development projects in 2013. The Company
now offers tailor-made motor insurance designed to suit the specific client which also includes the premium that is
adapted to the risk level of specific client segments and is determined on the basis of a number of factors
including the age and domicile of the driver. The Company now also offers clients new coverage, such as the
urban motor hull insurance for safe and experienced drivers and Totalka AS (AS Total Loss Insurance) insurance
that covers only total loss, but the premium is only a third of that for full motor comprehensive insurance. The
premium for AO+ insurance covering bodily injury resulting from a traffic accident has been reduced by
20%.
June
- On 14 June in Koper, Adriatic Slovenica organised the concluding event of the 4 th writing competition entitled
“Write a Poem about the Clear Sea”. The winner of the competition was a 5th grade pupil of the elementary school
in Vače, who was rewarded with a day-trip to the seaside for her and her classmates. Every year, the Company
announces the competition in order to invite elementary schools and their pupils to think about the environment
and be creative. In 2013, 60 schools and as many as 289 pupils took part.
- On 19 June, the Management Board of Adriatic Slovenica endorsed a new supplemental health insurance
covering the risk of cancer called ONA AS ZDRAVJE (AS HEALTH INSURANCE FOR WOMEN) that entails
several levels of settlement depending on the seriousness of the condition. The product is targeted at women
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aged 18 to 55 and encompasses three types of coverage – the diagnosis of a women’s cancer, the diagnosis of
other cancer types and a bereavement grant.
- In June, Adriatic Slovenica and the insurance company KD Življenje started marketing the product Fondpolica
POTENCIAL PLUS, a life insurance for the event of death and maturity in which the insurer bears the investment
risk. This insurance product provides the insurer with favourable access to the Dynamic Commodity Index,
investment security and locked-in return and gives them the possibility to maintain the policy in the event of death
of the policyholder. At the expiry of the insurance policy, the payout amounts to at least 90% of the in-paid
premium. The value of funds is appreciated as if the agreed phased premium was paid as a lump sum at the
beginning of the insurance period. The locked-in return is included as well.
- On 30 June, insurance companies stopped offering insurance against the risk of death for children under 14
years of age as required by the Insurance Supervision Agency (AZN). Consequently, Adriatic Slovenica excluded
this rider for this age group from the range of insurance products.
- Adriatic Slovenica launched a successful campaign for underwriting long-term accident insurance for pupils.
Based on the decision of the Market Inspectorate of the Republic of Slovenia and with a view to ensuring equal
opportunities for everyone, persons suffering from depression, anxiety disorders and mental retardation were also
offered the possibility to purchase accident insurance.
July
- Adriatic Slovenica prepared repriced premium tariffs for machinery breakdown insurance and set up detailed
rules on increasing or decreasing the premiums based on loss ratio (bonus / malus system). The CRS - Central
client register application was upgraded to facilitate the calculation of bonus / malus for each particular client.
- On 1 July, the client loyalty scheme Klub KD Plus that offers advantages to clients of companies in the KD
Group was redesigned and renamed AS Klub ugodnosti (AS Benefits Club), since Adriatic Slovenica as one of its
founders took over the management of the scheme.
- At the end of July, a stormy wind hitting the central Slovenia in particular caused a lot of damage to property,
mainly to house roofs and cars. Adriatic Slovenica paid to policyholders approximately EUR 1 million as
indemnification.
September
- Adriatic Slovenica was the first in Slovenia to offer two new health insurance products within the medical
assistance AS, i.e. short-term care in the case of illness or injury and short-term care in the case of injury.
These two insurance products complement primarily the existing personal insurance (health, life and accident
insurance) and cover home help, transport to medical follow-ups and transport to chemotherapy sessions, to the
extent provided by a particular insurance package which may be of mini, opti or max. size.
- As in previous years, Adriatic Slovenica offered a wide range of accident insurance products for pre-school
children and pupils of elementary and secondary schools, as well as for university students, including various
advantages, additional discounts for policies purchased on-line or via mobile phone and an attractive prize
competition.
- On 6 September, the Company organised its traditional charity golf tournament for business partners at the golf
course in Smlednik. By participating in the tournament, business partners contributed towards the purchase of a
new defibrillator that will be installed at a highly frequented location in Ljubljana in the framework of the iHELP
project.
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- On 17 September, the Insurance Supervision Agency issued a decision allowing the spin-off of the transferring
company KD Življenje followed by the acquisition of the spun-off part by the acquiring company Adriatic
Slovenica. Among other things, the acquisition of the assets of the company KD Življenje will result in the transfer
of all insurance contracts to the acquiring company.
- On 17 September, Adriatic Slovenica was awarded 1st place in the competition “WEBSI online champions 2013”
in the category of mobile applications for its project AS POLICA (AS POLICY) that enables the purchase of three
types of insurance via mobile phone.
- In September, Adriatic Slovenica conducted a large-scale marketing campaign aimed at selling supplemental
health insurance to young adults. The campaign was accompanied by advertising and an attractive prize
competition.
- Adriatic Slovenica completed the project of redesigning the corporate visual identity, which is one of the most
important elements of the Company's visibility. The new visual identity is refreshed and simple, communicating
openness and contemporaneity, while also preserving all the elements of the Company's visibility.
- On 24 September, the Supervisory Board of Adriatic Slovenica appointed Varja Dolenc as member of the
Management Board. She is to assume office once she has acquired the licence of the Insurance Supervision
Agency (AZN) and shall start working in the Company on 1 December 2013, initially as advisor to the
Management Board for the area of finance and accounting and as full Management Board member once her
licence has been granted.
October
- On 1 October, the spin-off of the transferring company KD Življenje zavarovalnica d.d. and the acquisition of the
spun-off part by the acquiring company Adriatic Slovenica Zavarovalna družba d.d. was recorded in the
Companies Register. As of 1 October, Adriatic Slovenica has therefore entered into all legal relationships
resulting from insurance contracts concluded by KD Življenje. All KD Življenje policyholders received a publication
entitled “New Dimensions of Security”, explaining the transfer of life insurance from KD Življenje to Adriatic
Slovenica.
- As a result of the acquisition of the spun-off part of the transferring company KD ŽIvljenje and in order to be able
to provide shareholders of the transferring company with shares, Adriatic Slovenica as the acquiring company
increased its share capital. The initial share capital of EUR 40,338,758.14 was increased by EUR 2,660,771.66 to
EUR 42,999,529.80 via the issue of 637,627 new par value shares. The increase in share capital was recorded in
the Companies Register at the time of the registration of the spin-off by acquisition, i.e. on 1 October 2013. As
required by paragraph 3 of Article 588 of the Companies Act, the increase in share capital was reviewed by an
independent auditor.
- On 1 October, Miloš Milivojevič was appointed Executive Director responsible for insurance claims.
- After registering the acquisition of life insurance portfolio of KD Življenje, consolidated financial statements and
reports were prepared in compliance with the planned activities. The interim external audit was carried out as at
30 September 2013.
- On 14 October, Adriatic Slovenica offered a new investment-linked life insurance product Aktivna renta AS
(AS Active annuity), which provides guaranteed pension to policyholders or scholarship to their children and/or
annuities for a specified period of time. The greatest advantage of this insurance product is that the Company
pays the premium in the event of death, unemployment, long-term incapacity to work or disability of the
policyholder and pay-out of the insured sum in the event of an accident or serious illness.
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- In October, Adriatic Slovenica upgraded the INIS information system in order to provide for easy calculation and
entry of the minimum premium per policy. The rules and procedures for adjusting the minimum premium per
policy in the process of non-life insurance policies preparation were defined.
- In October, Adriatic Slovenica organised an interesting prize competition for the female clients with
supplemental health insurance which would bring them a year of free insurance of intermediate care as well as
attractive gifts. At the same time the clients were informed about the benefit that was to be offered exclusively to
them if they decided to conclude motor vehicle insurance.
November
- The Company honoured the wishes of its clients and offered them the option to conclude additional
comprehensive motor vehicle insurance with no deductible. Insurance of immovable and movable property Dom
AS (AS Home) was enriched with some new combinations of accident coverage.
- On 6 November, the Supervisory Board of Adriatic Slovenica appointed Matija Šenk as member of the
Management Board. He was due to take office at the end of January 2014, after being granted the licence by the
Insurance Supervision Agency (AZN). With over 17 years of experience in the insurance business, he is
responsible for insurance claims, risk management, actuarial activities, strategic reinsurance, and prevention and
elimination of fraud.
- On 11 November, a wind storm in Gorenjska, Štajerska, Notranjska and Primorska regions caused a lot of
damage to property. The damage suffered by the insured of Adriatic Slovenica (mostly inflicted on real property
and cars) amounted to approximately EUR 0.5 million.
- Employees of Adriatic Slovenica joined the charity campaign of KD Foundation to collect warm clothes for
children and adolescents of the Malči Beličeve Youth Centre. Employees in all business units collected a lot of
clothes that were handed to the children at St. Nicolas' celebration in December.
- Adriatic Slovenica redesigned the insurance products ONA AS ZDRAVJE (AS HEALTH INSURANCE FOR
WOMEN) and ON AS ZDRAVJE (AS HEALTH INSURANCE FOR MEN) and tailored them to the clients' needs.
Now they entail several levels of settlement, i. e. the option of several payouts up to the agreed sum insured in
the event of female / male cancer. They also provide for the payout in the event of occurrence of other forms of
cancer, as well as in certain cases of precancerous conditions. At the same time, the policyholders are offered an
additional benefit - a health bonus with a 15% payout on the premiums paid upon the expiry of insurance
period if no claim was submitted during the insurance period.
December
- On 12 December, the representative office of Adriatic Slovenica at Ravne na Koroškem, where insurance
policies are concluded and damage appraisals are performed, began to operate in new and modern premises.
- On 17 December, at the traditional annual meeting organised for Primorska journalists and correspondents of
the national media at the Company's headquarters in Koper, Adriatic Slovenica presented its business operations
in 2013 which consolidated its position in the 2nd place in the Slovene insurance market, as well as plans for
2014. They also presented the partnership with the life-saving iHelp project and acquainted the journalists with
the emergency resuscitation procedures.
- Adriatic Slovenica redesigned medical travel insurance with assistance for travels abroad (ZZTA) and offered, in
cooperation with a foreign partner, a new travel arrangement insurance product called Multirisk. It was the first
insurance company to include the ZZTA insurance in motor vehicle insurance policy, intended primarily for those
who travel abroad a lot for business or personal reasons.
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- In December 2013, Adriatic Slovenica started with the sale of an insurance package called ZASE (FOR ME) via
direct mail. The package comprises life insurance in the event of death with additional coverage for accidental
death, death in a car accident, and permanent disability due to an accident and bone fracture. Moreover, the
coverage may be extended to include intermediate care insurance due to accident or illness.
1.2
SIGNIFICANT BUSINESS EVENTS AT THE BEGINNING OF 2014
January
- On 11 January, Adriatic Slovenica, at the event ONA ali ON (SHE or HE) in Postojna organised by the regional
Radio 94, handed over a donation of EUR 10 thousand for the purchase of a new ultrasound machine to the
Hospital for Gynaecology and Obstetrics in Postojna. Postojna Maternity Hospital records over 1,800 births
annually; its extremely good references and experienced staff also attract many pregnant women from other parts
of Slovenia, in addition to female patients from a wider area covered by municipalities of Sežana, Ilirska Bistrica,
Postojna and Cerknica.
- In compliance with the amended pension legislation, Adriatic Slovenica prepared and submitted for approval to
the Insurance Supervision Agency and the Ministry of Labour, Family and Social Affairs collective and individual
pension schemes of voluntary supplemental pension insurance for the entire saving period, including the
management rules and investment policy statements.
- On 13 January, Varja Dolenc, after being granted the licence to perform the office as member of the
Management Board by the Insurance Supervision Agency, assumed her duties in the Board. She is responsible
for finance, accounting, treasury and controlling.
- Adriatic Slovenica has been the official insurance company of our Olympic team since 1992. Before the
departure of Slovene Olympic athletes to the Olympic Winter Games in Sochi, Russia, all members of the
Slovene Olympic team received a four-month life insurance premium Aktivna renta AS (AS Active annuity) as a
gift.
- On 27 January, Adriatic Slovenica invited its business partners to the concert of the Silence duo and RTV
Slovenia Symphony Orchestra, followed by a socialising event aimed at strengthening the business ties. Adriatic
Slovenica and the companies of the KD Group have been supporters of the RTV Slovenia Symphony Orchestra
for seven years.
- On 31 January, the Company’s Management Board also formally became a four-member board. On 30 January,
Matija Šenk was granted the licence to perform the office as member of Management Board by the Insurance
Supervision Agency (AZN). He is responsible for insurance claims, risk management, actuarial activities, strategic
reinsurance, and prevention and elimination of fraud.
February
- On 30 January and 1 February, the largest training and motivational event called the “Sales Conference” took
place in Portorož. For the first time it was organised for the entire sales network; i.e. both for insurance agents
and key account managers. It was attended by approximately 450 participants who learned about Company's key
guidelines for 2014, as the event was entitled the Compass.
- On 1 February, a wider area of Slovenia including in particular Notranjska and Koroška regions and Savinjska
and Saleška valleys, was hit by glaze ice causing a lot of damage especially in forests, on the power grid,
telecommunications infrastructure, rail and roads. Real properties and cars of the insured were also affected to
some extent. Based on the first claim reports, filed by the policyholders, the damage amounts to approximately
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Annual Report
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EUR 800,000. This is preliminary estimate, while the claims are still being filed. The remedy of damage caused
by the glaze ice will be long-term since 40% of Slovene forests have been destroyed, and the remedy of the
power grid will also take a long time. In Notranjska region, the flooding of Planinsko polje caused serious
problems.
- In February, the Management Board paid a visit to all area branch offices in Slovenia, informing the employees
on the Company's strategic goals implemented in the past period as well as presenting the future goals set to be
achieved in the four-year strategy. The board also disclosed the results of an internal survey on the satisfaction of
employees with organisational climate, conducted in November 2013. The results indicate that the cumulative
index of measurements performed in terms of management systems, organisational climate and employee
satisfaction has increased in comparison with 2011, when the organisational climate was last measured.
- Within the framework of a long-standing support to the Road Safety Council of Municipality of Ljubljana,
representatives of day-care centres in Ljubljana received 500 child vests with light-reflecting stripes to make the
children better visible in traffic during their walks in the city and thus enhance their safety.
March
- On 1 March, Viljem Kopše, a long-time chairman of the Works Council of Adriatic Slovenica, became a
professional member of the Works Council.
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1.3
STATEMENT BY THE PRESIDENT OF THE MANAGEMENT BOARD
Dear policyholders and business partners, dear shareholders,
Implementing the strategy
In 2013, Adriatic Slovenica realised the majority of its business plans according to the new strategy of the KD
Group. In the years to come we aspire to become one of the leading insurance groups both in Slovenia and in the
Balkans, while at the same time remaining a solid, safe and financially sound institution with growth potential in
domestic and foreign markets. The main goal of the Company and the Group remains transformation from a
financial into an insurance holding by 2015. Adriatic Slovenica will provide to its clients the widest possible range
of insurance and financial services from a one-stop shop, as well as be the pillar of the Group.
One of the major steps on this path was the merger of the Group’s life insurance portfolios in Adriatic Slovenica
on 1 October 2013, resulting from the spin-off and acquisition of the sister life insurance company KD Življenje.
Through such organisational restructuring the insurance portfolios of both companies were combined under a
single roof. Policyholders now enjoy an integrated range of insurance products throughout Slovenia under even
more favourable conditions, since Adriatic Slovenica is the only insurance company to offer a full range of quality
insurance and financial services under a singe roof. At the end of 2013 our insurance and financial services were
available at no less than 346 points of sale.
Profitable operations and the highest ever market share
Despite long-standing adverse economic conditions, Adriatic Slovenica firmly established its market position.
Although the Slovene insurance industry experienced a decline for the third year in a row (in 2013 alone, written
premium in Slovenia went down by more than 4%), Adriatic Slovenica posted EUR 306 million of gross premium
written, nearly 14% more than in 2012, and increased its market share to 15.5 %. This means that by taking over
the portfolio of KD Življenje, Adriatic Slovenica not only strengthened its position of the second largest insurer, but
also reached the highest market share in its history and in 2013 generated EUR 13.6 million of profit.
In addition, the financial standing of the Company strengthened, since 2013 closed with a surplus of available
capital in both non-life and life insurance segments. By merging the portfolios the Company’s total assets
increased by EUR 269 million to EUR 717.3 million as at the 2013 year-end.
As planned the major part of premium was written in the non-life insurance segment, which together with health
insurance accounted for 81.5% of the Company's portfolio. Also due to the transfer of the life insurance portfolio,
the share of life insurance increased to 18.5% as at the reporting date.
In 2013, Adriatic Slovenica registered no special events in terms of claims, as no major disasters occurred.
However, the takeover of the life insurance portfolio resulted in an increase of total gross claims, which exceeded
the 2012 figure by 16.5% and reached EUR 208.5 million.
Adriatic Slovenica is advancing its reputation in the business public for its performance and was ranked among
above-average trusted companies. We are even more proud of the finding of the national Trusted Brand Survey
that Adriatic Slovenica in comparison with competitors had by far the largest share of satisfied clients and
according to All Finance research an above-average client satisfaction level.
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The present is the seed for the future
By developing the online and mobile insurance segments, Adriatic Slovenica increases the number of sales
channels and provides readily available services to its clients. The Call Centre extended its helpline to any
information and/or explanation a client requires through a toll-free telephone number. In addition, direct selling is
becoming a great success.
Along with a series of new and modern health and life insurance products, Adriatic Slovenica in 2013 offered as
the most significant new product a redesigned car insurance policy with tailored coverage and premium. The
membership in AS Club was made free for more than 90,000 members, offering many redesigned benefits and
discounts.
Target-oriented changes
In 2013, Adriatic Slovenica concluded the process of restructuring and job classification and placed the client in
centre. At the same time, business processes were redesigned to satisfy the needs of both clients and
employees, whilst being sufficiently flexible to enable the Company to achieve its future business goals. After Mr
Matej Cergolj resigned from the three-member Management Board, Ms Varja Dolenc and Mr Matija Šenk were
appointed new Management Board members by the Supervisory Board in December 2013 and took office in
January 2014.
The key objective in 2014 is to adjust to the new pension reform. To this end Adriatic Slovenica will use all the
potential within the Group to implement its investment policy for long-term savings. In the non-life insurance
segment, early this year the Company responded to the current needs of its clients by launching an enhanced
and updated home insurance package DOM AS. In addition, numerous new insurance products and services are
underway in order to boost sales.
Since 2008, non-life insurance products have been marketed in Serbia through the subsidiary insurance company
AS Osiguranje and in 2013 the new web trademark AS Direkt was introduced. Travel and comprehensive
insurance products were launched as well as two new roadside assistance insurance products. Adriatic Slovenica
was the first on the market to offer online health insurance abroad and roadside assistance on mobile devices
and the use of credit cards for insurance payments. The Company also improved the collection process and the
risk management process, together with the subsidiary Prospera which was established in 2011 and has since
then been stable and prosperous . In 2013, the subsidiary VIZ celebrated the first anniversary of selling car
insurance fully online. Furthermore, it was very successful in attracting new clients and recorded a good loss
result.
Discover the new insurance range of Adriatic Slovenica and the Group KD Group, including their many
financial products and state-of-the-art services. The main focus this year will be the long-term financial
safety and stability of our clients and business partners.
We firmly believe that in 2014 we will again prove to be worthy of your trust.
Sincerely,
Gabrijel Škof,
President of the Management Board
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Annual Report
for 2013
1.4
SUPERVISORY BOARD REPORT - Summary
SUPERVISION OF OPERATIONS OF ADRIATIC SLOVENICA D.D.
The purpose of this report is to preset to the Annual General Meeting of Shareholders an expert assessment
regarding the materials for the meeting at which the Annual Report will be discussed and a resolution regarding
the distribution of the accumulated profits passed. The Supervisory Board is authorised to verify the Annual
Report of Adriatic Slovenica d.d. and the Consolidated Annual Report of the Adriatic Slovenica Group. In the
report, the Supervisory Board has to specify how and to what extent it has examined the operations carried out by
the Company during the financial year; take a position with regard to the independent auditor’s report, the
actuarial report, and other reports stipulated by law.
In 2013, The Supervisory Board of Adriatic Slovenica consisted of eight members, three of whom were
representatives of employees.
The Supervisory Board performed its duties in accordance with the agreed model for carrying out supervision of
the work of the Management Board. At its sessions it regularly reviewed the quarterly reports on the Company’s
operations, periodic reports on plan implementation with regard to premiums, claims and costs; it monitored
investments and their return on a regular basis, as well as the carrying out of measures for improving business
and meeting the set targets. In addition to the quarterly reports, the Supervisory Board examined and approved
the business policy and the financial plan for 2013 as well as approved the Annual Report of Adriatic Slovenica
d.d. for 2012 and the Consolidated Annual Report of the Adriatic Slovenica Group for 2012. The Supervisory
Board paid special attention to the organisational transformation – spin-off by acquisition of the sister insurance
company KD Življenje d.d.; approved the Management Board’s conclusion of the Agreement on Spin-off by
Acquisition and an additional business plan of the Management Board with regard to the spin-off by acquisition.
On the basis of regular reports, the Supervisory Board also took note of business operations of the subsidiary
insurance company AS neživotno osiguranje a.d.o. and of other major issues, such as development strategy of
health insurance, marketing strategy for individuals and small companies, strategy regarding AS neživotno
osiguranje a.d.o. subsidiary, etc.
The Insurance Act inter alia stipulates that the Supervisory Board is responsible for the supervision of the Internal
Audit Department (IAD). In line with its mandate, the Supervisory Board approved the IAD work plan for 2013,
examined the reports on the work done in 2012, and the report on the audit work carried out by the IAD during the
first half of 2013. Having examined all reports on the assignments carried out by the Internal Audit Department,
the Supervisory Board concluded no incompliances in risk management that would threaten the security of the
Company’s business.
In order to make the functioning of the Supervisory Board more efficient in the realisation of the mission and
strategic objective of the Company and the Group, the Supervisory Board on a regular basis examined reports by
the Audit Committee.
The Audit Committee devoted special attention to the following areas:
 risk management and efficient operation of internal controls;
 efficient functioning of the Internal Audit Department;
 financial statements and the external audit;
 risk management and corporate governance of the subsidiary AS neživotno osiguranje, Belgrade;
 debt collection process;
 other operating expenses.
In 2013, the Supervisory Board exercised its powers concerning the composition of the Company's governing
bodies. After Mr Matej Cergolj had resigned as a member of the Management Board, the Supervisory Board
appointed first Ms Varja Dolenc and later Mr Matija Šenk as new members of the Management Board with a 5year term of office.
13
Annual Report
for 2013
From the end of the reporting year until the Annual Report and the Consolidated Annual Report for 2013 were
adopted, the Supervisory Board closely monitored the operations conducted by the Company, as well as
endorsed the business policy and the financial plan (budget) for 2014, and the work plan of the Internal Audit
Department for 2014.
REVIEW AND APPROVAL OF THE ANNUAL REPORT
At its 59th session on 21 May 2014, the Supervisory Board examined the Annual Report of the Company for 2013
together with the Independent Auditor’s Report prepared by the audit firm KPMG Slovenija d.o.o., and the
proposal of the Management Board for the distribution of accumulated profits, together with the proposal to give
discharge to the Management Board. Prior to that, the Supervisory Board had received a report of the Audit
Committee expressing its positive opinion on the Annual Report.
During the examination of the Annual Report, the Supervisory Board looked into the actuarial reports prepared by
the appointed actuaries, Ms Jadranka Maček and Ms Nataša Djukić, stating that total premiums written and total
provisions as at 31 December 2013 were adequate and provided for all liabilities assumed by the Company over
a long term period.
At the session, the Supervisory Board was briefed on the work of the Internal Audit Department during the second
half of 2013 and the report on the work in 2013. The Supervisory Board gave a positive opinion on the Internal
Audit Department’s annual report for 2013.
At the session, the Supervisory Board was also briefed on the report of the Management Board on the relations
with the controlling company in 2013.
The Supervisory Board finds that the content of the Annual Report gives a true picture of the operations
conducted by the Adriatic Slovenica. On the basis of the examination of the Annual Report and of the
Independent Auditor’s Report for the financial year 2013, the Supervisory Board:



approves the Annual Report of the Company for the financial year 2013;
has no objection to the Independent Auditor’s Report on the Company’s operations in 2013;
proposes to the Annual General Meeting of Shareholders the distribution of accumulated profits in
accordance with the proposal of the Management Board that reads as follows:
1. the Company's accumulated profits as at 31 December 2013 amount to EUR 32,986,990.00;
2. the amount of EUR 13,400,000.00 shall be allocated to the dividends to be paid out to the shareholders no
later than by 30 May 2014.
3. the remaining accumulated profits in the amount of EUR 19,586,990.00 shall remain undistributed and are
transferred to the accumulated profits of subsequent years
Koper, 21 May 2014
Matjaž Gantar,
President of the Management Board
14
Annual Report
for 2013
1.5
REPORT OF THE SUPERVISORY BOARD'S AUDIT COMMITTEE – Summary
Formal Aspect
The aim of the Audit Committee report is to provide the Supervisory Board with a professional evaluation prior to
the discussion of the actuarial opinions and the reports on the work of the Internal Audit Department, the adoption
of the Annual Report and prior to the deliberations on the proposals of the Management Board regarding the
distribution of the accumulated profit.
The Audit Committee provides expert support to the Supervisory Board in exercising supervision over the
company’s operations. In 2013, the Audit Committee held 8 meetings at which its members paid particular
attention to the following matters:
1.
2.
3.
4.
5.
6.
7.
risk management and efficient operation of internal controls;
efficient operation of the Internal Audit Department;
financial statements and the external audit;
risk management and corporate governance of the subsidiary AS Osiguranje, Belgrade;
monitoring the execution of reviews and/or the regulators' decisions issued to the Company;
monitoring of processes (debt collection, preparations for Solvency II);
monitoring of major projects.
In 2014, the Audit Committee held thre more meetings at which its members also discussed material related to
the approval of the 2013 Annual Report.
In 2013, the Audit Committee had five members: Marjaž Gantar ‒ Chairman, Polona Pergar Guzaj ‒ Deputy
Chairman, and Mojca Kek, Milena Georgievski and Matjaž Pavlin ‒ members.
Substantive aspect
Risk management and efficiency of the internal controls system
In the reporting period, the members of the Audit Committee monitored on a continuing basis the adequacy of
insurance risk management through an appropriate investment policy of Adriatic Slovenica and by providing a
sufficient amount of capital and the statutory capital adequacy in accordance with the Solvency II Directive.
The Audit Committee reviewed the actuarial reports for the financial year 2013 and found that Adriatic Slovenica
quarterly calculated the amount of capital and the capital adequacy, the levels of technical provisions and
mathematical reserves, the matching of assets with liabilities and statutory restrictions and provided for regular
reporting to the Insurance Supervision Agency (ISA). As at 31 December 2012, the Company is in the state of
sound capital adequacy having capital surplus. The expert opinion that arises from the report of the certified
actuaries states that the amounts of premiums written in 2013 and the amount of the technical provisions formed
as at 31 December 2013 are adequate to ensure that the Company at all times meets all its liabilities arising from
the insurance contracts. Reinsurance protection is also adequate.
Efficient operation of the Internal Audit Department
The Audit Committee monitors on a regular basis the efficiency and operational performance of the Internal Audit
Department including the compliance of the internal audit function with the International Standards for the
Professional Practice of Internal Auditing. In 2013, the Internal Audit Department performed its function on the
basis of the annual work plan. In 2013, the IAD carried out 11 scheduled audits and three extraordinary audits
and, pursuant to the request of the Management Board prepared two reports on internal control reviews that were
carried out. They also reported on a monthly basis on implemented and non-implemented recommendations
made to the auditees. Altogether, seven reports for Adriatic Slovenica, eight reports for AS Osiguranje and two
reports for KD Življenje were issued to that end. Among other tasks, the IAD also monitored the compliance with
the risk management rules of the Company, provided informal consulting services and carried out other audit
activities if so requested by the Management Board or by the Audit Committee.
15
Annual Report
for 2013
The Internal Audit Department issued 60 recommendations in 2013; the auditees corrected the identified
irregularities and deficiencies as recommended.
In 2013, the Internal Audit Department revised its Rules of Procedure and presented it to the Audit Committee of
the Supervisory Board
Financial statements and the external audit
In accordance with its powers, the Audit Committee has participated in the procedure for the selection of the new
independent external auditor KPMG Slovenija d.o.o., and the determination of the mandatory content of the
contractual relationship with the external auditor.
The Audit Committee first learned about the progress of the external audit. As stated in the Independent Auditor’s
Report, no major difficulties arose during the audit.
With regard to the Annual Report of Adriatic Slovenica and the Independent Auditor’s Report drawn up by KPMG
Slovenija d.o.o. for the financial year 2013, the Audit Committee, among other things, has establishes as follows,
the Annual Report and consolidated Annual Report of Adriatic Slovenica have been prepared within the statutory
time frame and comprises all mandatory elements and KPMG Slovenija d.o.o. has drawn up the independent
auditor's report on the Company's financial statements and expressed an unqualified opinion.
Conclusions
In accordance with the above stated, the Audit Committee proposes to the Supervisory Board:
1. to give a positive opinion on the reports of the certified actuaries:
2. to give a positive opinion on the IAD's report for the second half of 2013, and on the IAD's Annual Report for
the financial year 2013;
3. to give no objection to the Independent Auditor’s Report in the proposed content and to approve as proposed
the Annual Report and consolidated Annual Report of Adriatic Slovenica d.d. for the financial year 2013.
Koper, 19. May 2013
Audit Committee of the Supervisory Board of Adriatic Slovenica
Matjaž Gantar,
Chairman of the Audit Committee
16
Annual Report
for 2013
1.6
FINANCIAL HIGHLIGHTS AND OTHER DATA FOR 2013
Gross written premium (in EUR million)
Gross claims paid (in EUR million)
Profit/loss before tax (in EUR million)
Net profit/loss (in EUR million)
Financial investments and cash equivalents (as at 31 December)
Gross insurance contract liabilities (as at 31 December)
No. of employees (as at 31 December)
Insurance premium per employee (in EUR thousand)
Return on equity (ROE)
Carrying amount of equity (as at 31 December) (in EUR million)
Carrying amount per share v EUR (as at 31 December)
2013
2012
306.4
269.2
217.6
192.8
15.9
17.1
13.6
13.2
532.9
327.4
491.4
287.2
1,050
1,010
291.8
266.5
15.1%
15.8%
93.2
86.6
9.04
8.96
Trends in net premiums, net claims and benefits paid and underwriting result of Adriatic Slovenica d.d.
300
261
259
80
250
215
200
70.2 182
70
69.4 181
67.0
60
144
150
50
100
40
50
0
in mio EUR
2011
2012
Net premiums
2013
Net claims paid
17
Underwriting results
30
in %
Annual Report
for 2013
2. COMPANY PROFILE, ITS VISION AND VALUES
2.1 ADRIATIC SLOVENICA D.D.
Registered company name, head office and address:
ADRIATIC SLOVENICA Zavarovalna družba d. d.
Ljubljanska cesta 3 a
6503 Koper, Slovenia
Telephone: +386 (0) 5 66 43 100
Abbreviated name: ................................................. ADRIATIC SLOVENICA d. d.
E-mail: .................................................................... [email protected]
Web page: ............................................................... http:// www.as.si
Company registration number:: ............................... 5063361
VAT identification number: ...................................... SI 63658011
Share capital: .......................................................... 42,999,529.80 EUR
Date of entry into the Companies Register: ............ 20 November 1990
Adriatic Slovenica Zavarovalna družba d. d. – Slovenia's second biggest insurance company – was established
on 29 December 2005 by combining the strengths of two well-known Slovene insurers.
The alliance was made back then between Slovenica, zavarovalniška hiša d. d. Ljubljana, and Adriatic
Zavarovalna družba d. d. Koper. Adriatic changed its name and since then it has been operating under the
company name of Adriatic Slovenica Zavarovalna družba d. d. The merger was the first and until then the only
successful merger in Slovenia’s insurance sector, blending two corporate entities each with its sales network, all
employees, assets, resources, strengths and knowledge. The capital capacity and soundness of the new
insurance company has increased, as well as access to insurance products and services across the Slovene
territory. Adriatic Slovenica has become the only insurance provider in Slovenia with a full range of insurance
services in its portfolio: health insurance, non-life, life and pension insurance.
On 1 October 2013, Adriatic Slovenica, in the acquisition of the spun-off part of the transferring company KD
Življenje, took over the employees and the whole portfolio of this insurance company. At the end of 2012, KD
Življenje was ranked in the 4th place on the life-insurance market with its aggregate gross written premium of EUR
51.3 million and 8.85% market share. By merging with KD Življenje, Adriatic Slovenica further expanded its range
of insurance products and services offered and provided the clients with secure and competitive, as well as
comfortable and up-to-date services under one roof. In this manner, Adriatic Slovenica successfully consolidated
its position as the second largest insurance company in the Slovene market, with its market share in terms of
aggregate gross written premium (EUR 306 million) achieving 15.6% at the end of 2013 (in the year before the
merger, its market share was 13.2% and in 2011 it was 12.68%), or 2.5 percentage points more than the year
before. With the acquisition of the life insurance portfolio, the Company’s market share in this area increased to
10.5% of the Slovene market, while the market share of non-life insurance slightly decreased in comparison with
2012 (by 0.1 percentage point), reaching 17.5%. Primarily owing to the acquisition of the KDŽ portfolio, Adriatic
Slovenica concluded 2013 with a 13.7% higher gross written premium from life and non-life insurance, whereas
the aggregate gross written premium in the Slovene market fell by 4.4% (by 2.7% in 2012).
Adriatic Slovenica is proud of its extensive sales network, consisting of nine area branch offices located in all
regional centres of Slovenia (Koper, Postojna, Nova Gorica, Ljubljana, Kranj, Novo mesto, Celje, Maribor and
18
Annual Report
for 2013
Murska Sobota). The Company offers its services in four more branch offices, 42 representative offices, 130
contractual points-of-sale and a network of 161 other outlets of the complementary third-party distribution
channels. The services of Adriatic Slovenica are therefore available to clients at 346 points-of-sale altogether as
at the 2013 year-end.
The Company has also been operating in the market of South-East Europe since 2008. It established a
subsidiary in Belgrade called AS neživotno osiguranje a.d.o. Beograd, authorised to sell non-life and health
insurance in Serbia. On 24 November 2011, Adriatic Slovenica registered a fully owned company specialised for
debt collection Prospera d.o.o., Koper, with the aim to make debt collection more effective in a long term. The
company was entered into the Companies Register on 16 December 2011. On 14 May 2012, Adriatic Slovenica
established Viz d.o.o., the first company in Slovenia to introduce an efficient motor vehicle insurance web portal
www.wiz.si.
Historical milestones
The insurance company Adriatic d. d., Koper was established back in 1990 and it took it just a couple of years to
achieve its goal - to put in place an extensive sales network across Slovenia and Istria. The first branches were
opened in 1991 in Koper, Pula, Ljubljana, Celje and Kranj, followed by the branches established in 1992 in
Postojna, Nova Gorica, Novo mesto and Maribor, and the branch in Murska Sobota established in 1993. Adriatic
transformed the branch office established in Pula into a legal entity Adria Pula in 1992 and had a majority interest
in the new company, only to sell it in 1996 in line with a new business strategy and the situation in the market.
Adriatic acquired the controlling stake in SLOVENICA d. d. in 1999 (51.2 %). It is regulated by the Insurance
Supervision Agency (AZN) and is fully licensed for all classes of the insurance business. The market share of
Adriatic d. d. in 2004 in terms of aggregate gross written premium was 9% and positioned it in the 4 th place
among all insurance companies in Slovenia, and in the 2nd place in the supplemental health insurance business
having an 18% market share.
The insurance company registered as Zavarovalniška hiša SLOVENICA d. d., Ljubljana, was incorporated at the
end of 1992. KD Holding d. d. Ljubljana became in 1996 its majority shareholder and in 1999 KD Holding d.d.
acquired the majority stake also in the insurance company Adriatic d. d. In 2004, life insurance business was
carved out and spun off to a new life insurer SLOVENICA ŽIVLJENJE d. d. The new life insurer started to operate
on 3 January 2005. Before the merger, SLOVENICA d. d. had the authorisation to provide all other classes of
insurance except life. The market share measured by gross premium written by Zavarovalniška hiša Slovenica d.
d. Ljubljana, excluding the insurance business spun off to the life insurer Slovenica Življenje, was 4% in 2004 and
it earned Slovenica the 5th place among all insurance companies in Slovenia. On 22 August 2007, the life
insurance company Slovenica Življenje d. d. changed its name to KD Življenje, zavarovalnica d. d.
On 20 November 2010, Adriatic Slovenica celebrated its 20th anniversary in the insurance business marked by
continuous growth. The merger of Adriatic and Slovenica back in 2005 has resulted in a strong insurance
company capable of delivering a higher level of safety to the persons insured. The Company is in a position to
provide better services and it continues to develop modern insurance operations in marketing and sales, human
resources and informatics. Growth is demonstrated also through product innovation and on more than one
occasion Adriatic Slovenica has been the leader in the Slovene insurance market with its insurance products,
advanced insurance services and affordability of its insurance products.
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Annual Report
for 2013
2.2 THE COMPANY'S VISION AND VALUES
Adriatic Slovenica is part of the KD Group which has adopted a new development strategy in 2012. The
circumstances demanded a consideration of future guidelines to optimise the Group’s financial structure and
strengthen its financial soundness. An insurance based strategy, underpinned by a range of high-quality asset
management and investment products, as key accompanying activities laid a solid foundation for cost-efficiency,
growth and development. The final goal of the new strategy is to establish a group which would become one of
the leading insurance groups in Slovenia and the Balkans within three to five years. The parent company of the
Group will be Adriatic Slovenica. Its aim of further increasing the sales growth in Slovenia and on foreign markets
will be reached by organisational restructuring, simultaneously with product portfolio optimisation. As the parent
company of the KD Group, Adriatic Slovenica harmonised its vision with the new strategy of the Group.
Vision
Adriatic Slovenica aims to become one of the leading insurance and finance groups with its main market in
Slovenia and subsidiaries on the Balkans. The Company will sell life, non-life and health insurance, accompanied
with high-quality asset management and investment products. At Adriatic Slovenica, the clients are placed at the
core of its activities, while developing quality and competitive solutions for their needs – products, services and
sales channels.
Corporate, management and employee values
In order to adapt to the market and pursue the business goals even more effectively, AS thoroughly revised its
values in 2012. The five core values are observed by all employees, including the management, who live
according to these values and transfer them to the employees with their actions. These values are the basis of
relationships within the Company, and they are reflected in the relationships with clients and all other
stakeholders in the environment.
Responsibility
Adriatic Slovenica’s activities convey the message that it is a reliable company. All stakeholders can rely on the
Company as it acts with due care and diligence as well as keeps its promises. It fulfils the expectations of clients,
the environment and employees.
Trust
Trust is built on high ethical standards that are based on open relationships and ensure coordinated operations.
Through trust, an environment of growth is created and obstacles are overcome with respect and mutual help.
The Company’s attitude and actions are reliable because it complies with joint agreements.
Proaction
Adriatic Slovenica constantly considers its next steps because it has enough courage and experience required to
make changes. It is a future-oriented company, whose proactive activities are aimed at achieving business results
and satisfying the needs of clients, owners and employees.
Passion and pleasure
The Company takes great pleasure in being part of the insurance industry, radiating passion and joy. It accepts
challenges with optimism as it believes it can make changes for the better. Passion and pleasure give the
Company the drive to continue and not stop halfway through, but to follow and pursue its goals until they are
achieved.
Winners' attitude
The Company’s work and results prove it is a winner. Its success is the result of team work, cooperation and
enthusiasm of the winning team of over a thousand employees. Adriatic Slovenia believes in its success because
it is led by high moral standards and respect for the integrity of every individual.
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Annual Report
for 2013
3. MANAGEMENT AND CORPORATE GOVERNANCE BODIES
3.1
THE SUPERVISORY BOARD
The Supervisory Board
Chairman:
Matjaž Gantar
Members:
Sergej Racman
Aljoša Tomaž
Tomaž Butina
Aleksander Sekavčnik
Members – Employee representatives
Viljem Kopše
Matjaž Pavlin
Ljuba Miljušević
3.2
THE MANAGEMENT BOARD
Predsident: Gabrijel Škof
Member: Matej Cergolj (until 24 November 2013)
Member: Willem Jacob Westerlaken
Member: Varja Dolenc (from 13 January 2014)
Member: Matija Šenk (from 31 January 2014)
3.2.1
Meet the members of the Management Board
Gabrijel Škof, President of the Management Board
Born in 1960 in Ljubljana.
Education and professional training:
- Graduated from the Faculty of Law, Boris Kidrič University in Ljubljana 1986 (LL.B
21
Annual Report
for 2013
-
Passed the bar exam on 25 October 1989 before the Republic Secretariat for Justice and Administration of
the Republic of Slovenia, having completed one year law internship at the Higher Court of Ljubljana.
Professional experience record:
1986 – to date in the insurance business, Non-life insurance Executive Director, member of the Management
Board, adviser to the Management Board, Director of the Ljubljana Branch (Zavarovalnica Triglav d. d.).
-
Since 9 November 2006 to 30 September 2007 – member of the Management Board.
Since 1 October 2007 to date – President of the Management Board.
Membership of and functions in professional organisations and associations and bodies of enterprises and
institutions:
- member of the Management Board of KD Group d.d.;
- Executive Director of KD Group d.d.;
- Member of the Council of the Slovenian Insurance Association
-
Member of the Supervisory Board of the Nuclear Insurance and Reinsurance Pool, GIZ;
Member of the Organising Committee for the preparation and performance of the Insurance Days since
1999 to date and President of the Organising Committee for 2014;
Member of the Board of Directors of the Chamber of Commerce and Industry of Primorska.
Willem Jacob Westerlaken, Member of the Management Board
Born in 1967 in Delft, the Netherlands.
-
Mathematical Engineering, TU Delft, the Netherlands, Engineer of Mathematics, 1991.
Actuarial Science, Amsterdam, the Netherlands, specialisation in actuarial science, 1995.
INSEAD, training "Finance for Executives", 2004.
-
January 1994 to May 1995 – Brans&Co, May 1995 to September 1996 Reaal, September 1995 to
December 1998 Stichting Performance, January 1999 to March 2000 Amev / Fortis;
March 2000 to May 2005 – Senior Vice president in ABN / Amro;
May 2005 to December 2007 – CEO for Europe of Fortis Insurance International;
December 2007 to February 2009 – CEO of Rosgosstrakh insurance company;
October 2009 to August 2011 – Partner in Financial Access Consulting Services.
-
Since 1 October 2011 – adviser to the Management Board.
Since 25 November 2011 – member of the Management Board.
institutions:
-
Executive Director of KD Group d.d.
Chairman of the Supervisory Board of KD Skladi;
22
Annual Report
for 2013
-
Member (Non-Executive Director) of the Board of Directors of AS neživotno osiguranje Beograd;
Member of the Dutch Actuarial Association.
Varja Dolenc, Member of the Management Board
Faculty of Economics at the University of Ljubljana, BSc in economics; money and finance, 1995.
- Master's degree studies at the University of Reading, Great Britain; MSc in International Securities, Investments
and Banking, 1999
From 1996 to 2013 in banking. Executive Assistant to the Management Board, in charge of an asset
management centralisation project in the NLB Group in Slovenia. Executive Director of Marketing, Clients'
Segments and Development, Back-Office Services Director for transactions of treasury and investment banking
(in NLB d.d. Ljubljana). Chairman of the Supervisory Board of NLB Skladi, upravljanje premoženja. Member of
the Supervisory Board of Skupna pokojninska družba.
-
Since 1 December 2013 adviser to the Management Board.
Since 13 January 2014 – member of the Management Board.
institutions:
-
KD IT Director;
Member of the Slovenian Supervisory’s Board Association;
Member of the Association of Female Managers (FAM).
Matija Šenk, Member of the Management Board
-
Faculty of Mathematics and Physics at the University of Ljubljana, BSc. Engineer of Mathematics,
1992.
Faculty of Economics at the University of Ljubljana in cooperation with the Faculty of Actuaries,
Great Britain, authorised actuary, 2000.
-
1990 to 1996 – professor of mathematics at the Šubičeva Grammar School in Ljubljana;
1996 to 2002 – active cooperation in the setting up of Generali zavarovalnica d.d. company in Slovenia;
2002 to 2005 – member and President of the Management Board of Slovenica, zavarovalniška hiša
d.d.;
2005 to 2006 – President of the Management Board of Slovenica Življenje d.d.;
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Annual Report
for 2013
-
19 February 2007 to 1 October 2013 – President of the Management Board of KD Življenje d.d.;
3 February 2009 to 16 November 2009 – member of the Management Board of KD Group d.d.;
1 October 2013 to 30 January 2014 – Director of KD IT.
-
From 2006 to 2007 – member of the Management Board and Deputy President.
Since 31 January 2014 – member of the Management Board.
institutions:
-
3.3
Executive Director of KD Group d.d.;
Deputy President of the Supervisory Board of KD Skladi;
President of the Supervisory Board of KD životno osiguranje Croatia;
President of the Advisory Board of the European Actuarial Academy;
regular lecturer at annual meetings of the Chief Risk Officer Assembly witnih the framework of Geneva
Association.
OWNERSHIP STRUCTURE
Shareholder structure as at 31 December 2013
Shareholder
No. of shares
Stake
KD Group d. d.
10,304,407
100%
Total
10,304,407
100%
The share capital of Adriatic Slovenica insurance company was additionally increased by the merger of the KDŽ
company in 2013, and as at 31 December 2013 it amounted to EUR 42,999,529.80
24
Annual Report
for 2013
3.4
ORGANISATION AND ORGANISATIONAL STRUCTURE
Organisational scheme of the company
25
Annual Report
for 2013
3.5
BRAND VISIBILITY, CORPORATE PERCEPTION OF THE COMPANY AND SATISFACTION OF
INSURED WITH CLAIM SETTLEMENT
For a number of years, Adriatic Slovenica has been systematically monitoring the satisfaction of policyholders
and potential policyholders, and visibility and reputation of the Company through internal systems of monitoring
and analysis and through annual research performed by independent external research institutions. Keeping track
of client satisfaction and the perception our clients have of Adriatic Slovenica and its reputation, are important
elements for identification, research and development of insurance products, services and business processes,
aimed at making the clients satisfied and the performance of the insurance company successful.
In 2013, the Company again participated in three high-profile surveys, carried out by external research
institutions. The first named Ugled (Company Reputation) survey (Kline & Partner, 2013), polling 800
representatives of the professional community, screened 60 of the best-known and largest companies in
Slovenia. The survey has revealed that the visibility of Adriatic Slovenica among the members of professional
community, compared to other companies included in the survey, ranked 29 th. The visibility of Adriatic Slovenica
among the companies in the same line of industry ranked 2nd, which corresponds to its market share. Compared
to other companies in Slovenia included in the survey, the professional community ranked Adriatic Slovenica in
the 33rd place and among the companies with above-average reputation. In comparison with 2012, Adriatic
Slovenica made the most progress among the insurance companies screened, overtaking two major market
competitors and moving up 7 places on the scale of the most reputable companies.
The Zavarovalniški monitor (Insurance monitor) survey (2013) is a continuous insurance market survey
polling individual insured (conducted in Slovenia since 2001). Adriatic Slovenica comes to minds of the
respondents in the 2nd place when asked to enumerate insurance companies, and is in the 3rd place among the
insurance companies with which the respondents took out new insurance. It is also important how the Company
was assessed by its policyholders– as the second most attractive insurance company in Slovenia and as a
financially sound and secure insurer they feel they can rely on. The insured are satisfied with the competent and
professional personnel, i.e. agents and brokers, and appreciate the innovativeness and introduction of novelties
(new insurance products). This year, additional research was carried out as part of the survey, focusing on the
satisfaction of the Company's clients compared to that of the competitors' clients. The respondents ranked us in
the 2nd place with an average score of 4.2 (on the scale from 1 to 5), and with the highest share of completely
satisfied clients recorded in any of the surveyed companies, i.e. 57% (score 4 on the scale from 1 to 5), and only
1% of dissatisfied clients (score 2) and none very dissatisfied client (score 1).
In 2013, Adriatic Slovenica participated in the All Finance research (Valicon), which offers comprehensive insight
into the brand in the context of users of financial services. In terms of brand strength, the respondents ranked
Adriatic Slovenica in the 2nd place. In the client satisfaction survey (respondents who rated the Company as their
principal insurer), Adriatic Slovenia was ranked as an insurer with above-average client satisfaction, compared to
the satisfaction of clients committed to competitors. It recorded the highest share of completely satisfied clients,
i.e. 16% (12% or less in the rest of insurers). (Graph 1)
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Annual Report
for 2013
Graph 1: Share of completely satisfied clients (AS as the principal insurer)
16%
12%
10%
6%
Adriatic Slovenica
5%
4%
Insurance company Insurance company Insurance company Insurance company Insurance company
A
B
C
D
E
Source: All Finance research, Valicon 2013
Results of the Internal Client Satisfaction Survey
The Internal survey on satisfaction of clients in the process of claim resolution was conducted for the
seventh time in 2013. Among its active and potential policyholders, a representative sample of 1,120 individuals
was chosen who have received compensation for their insured accident or loss in October and November (natural
persons). The results are favourable again for Adriatic Slovenica because they show on average over 91% of
satisfied policyholders (Graph 2). According to 87% of policyholders the AS insurance product range is high
quality, up-to-date and client tailored (Graph 3).
Graph 2: The results of the internal client satisfaction survey in response to the statement: I am satisfied with the
Adriatic Slovenica insurance company.
84%
2007
87%
87%
88%
91%
2008
2009
2010
2011
91%
85%
2012
2013
Source: The Internal survey on the satisfaction of clients in the process of claim resolution 2013
Graph 3: The results of the internal client satisfaction survey in response to the statement: The insurance
products are of high quality, up-to-date and well suited to my needs.
86%
85%
2008
2009
80%
2007
82%
2010
87%
2011
85%
2012
87%
2013
The results of this survey show the satisfaction of respondents and the fulfilment of their expectations in the case
they suffered a loss or accident. More than 86% of the respondents agreed with the statement that the notified
27
Annual Report
for 2013
loss or accident claim was resolved quickly (scores 4 and 5), and as much as 65% of the respondents awarded
the top score (5) to this statement (Graph 4).
Graph 4: The results of the internal client satisfaction survey in response to the statement: The notified loss or
accident was resolved quickly
Score 5
65%
Score 4
Score 3
21%
8%
Score 2
3%
Score 1
2%
When conducting the internal client satisfaction survey, the level of client satisfaction with the work in the area of
claim handling and settlement was assessed. As many as 86% of the respondents agreed with the statement: ”As
regards handling and settlement of a claim filed after a loss or accident, my expectations have been fulfilled” and
64% of the respondents who received a compensation or a benefit awarded the top score to this segment (Graph
5).
Graph 5: The results of the internal survey in response to the statement: As regards handling and settlement of a
claim filed after a loss or accident, my expectations have been fulfilled.
Score 5
64%
Score 4
Score 3
23%
9%
Score 2
2%
Score 1
2%
In 2013, the Survey on the satisfaction of policyholders with the process of taking out insurance was
conducted for the second time in row. A representative sample of 456 (natural) persons who recently took out
insurance with Adriatic Slovenica for the first time was chosen. The results of this survey, too, were excellent
because they showed that on average more than 96% of respondents were satisfied with the process of taking
out insurance (Graph 6). Almost 86% of the policyholders assessed that the insurance products were of high
quality, up-to-date and well suited to their needs (Graph 7).
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Annual Report
for 2013
Graph 6: The results of the internal client satisfaction survey in response to the question: Were your expectations
in the process of taking out insurance fulfilled?
4% 1%
96%
Yes.
Partly.
No.
Source: The Internal Survey on the satisfaction of clients with the process of taking out insurance 2013
Graph 7: The results of the internal client satisfaction survey in response to the question: Do you think that the
insurance products are of high quality, up-to-date and well suited to your needs?
13%
1%
86%
Yes.
In most cases.
No.
Source: The Internal Survey on the satisfaction of clients with the process of taking out insurance 2013
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Annual Report
for 2013
4. BUSINESS OVERVIEW
4.1
ECONOMIC LANDSCAPE IN 2013
Macroeconomic conditions in Slovenia further deteriorated in 2013. Annual declines in final household
consumption and government spending deepened. Structural changes are needed to revitalise the economy and
stop the downturn in social welfare, including among other things further consolidation of public finances,
restructuring of the banking system, modification of health care and long-term care systems, increase in added
value, creation of an encouraging business environment, improvement of labour market efficiency, reduced
environmental pressures, and a better institutional framework.
In 2013, the economic activity was down by 1.1%. A decline in capital project (in particular those financed by the
state) was the main reason for a relatively major downturn in the economic activity. Decline in household
consumption by 2.7% was a consequence of deteriorated condition on the labour market and more prudent
purchasing. A 2.0% fall in government spending was connected with further consolidation of public finances.
In the second half of 2013, Slovenia experienced continued growth of exports. In terms of value, the 2013 exports
exceeded the level of 2008. Despite of tax changes, the average annual inflation rate of 2013 was lower by 1.8%
over the previous year. Lower inflation rate resulted from weak economic activity in both domestic and
international environment.
Several years of poor economic conditions have aggravated the labour market situation and additionally
deepened the shrinking of available income and of population welfare. The registered unemployment rate rose to
13.1% in 2013. The household income continued to decrease and, consequently, households deliberated and
reduced their bank deposits. The mass of total net wages and salaries was lower by 3.3% in real terms (2012:
3.2%) and the social transfers also decreased in real terms in 2013.
At the end of 2013, the Slovene banking system was marked by the initiated restructuring of the most exposed
banks. In 2013, the volume of credits granted to the domestic non-banking sector decreased by EUR 5.3 billion
which is four times the volume of 2012. The volume of household deposits fell to its all time low and government
deposits were lower, too. At the 2013 year-end, banks were reducing their foreign liabilities. Additional provisions
and impairments increased by EUR 3.7 billion in 2013, that is by 1.5 times the volume of 2012. SBI TOP was up
by only 3.17% in 2013.
The volume of insurance premiums on the Slovene market has been decreasing for the third concurrent year in
2013, denoting a fall of 4.4%. Compared to the year before, the non-life insurance premiums dropped by 2.0%,
while the life insurance premiums decreased by 10.2%.
The financial crisis has likewise affected the decline in life insurance premiums. The decline in the economic
activity and fierce competition in the car insurance market exerted an additional impact in 2013 on further
decrease in non-life insurance premiums
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Annual Report
for 2013
4.2
LONG-TERM BUSINESS PLANS AND OBJECTIVES FOR 2014
In the finance and accounting area, the Company will pay utmost attention to the provision of technological and
organisational solutions to ensure reliable accounting in conditions after Adriatic Slovenica has assumed the
leading role in the Group. Consequently, shorter terms will be provided for the preparation of financial statements
and all other accounting reports. In the payments segment, the Company strives to achieve a larger portion of
less risky payment instruments.
In the collection segment, the Company plans together with the Prospera subsidiary to initiate enforced collection
also with regard to other (external) market participants.
In the non-life segment, Adriatic Slovenica will focus on innovative products and upgrade the existing products
with additional covers in order to meet the needs of various client segments. The Company will proceed with the
client segmentation process and simplify the claims resolution control, especially in the car insurance segment.
Much attention will be devoted to insurance packages for entrepreneurs and small companies, and to
restructuring of insurance of movable and immovable property. In addition, the Company will analyse data on
flood and earthquake areas for even better control of risks. The sales network will be actively trained in all
novelties and extensions of insurance services offered.
In the health insurance segment, Adriatic Slovenica will continue its orientation towards higher social and financial
security of the insured upon occurrence of illness, during longer medical treatment and in case of more severe
accidents in 2014 as well. Regarding supplemental health insurance, the Company will continue to control health
services providers and be actively involved in public discussion concerning the health care and insurance system
reform. Its upgraded offer of assistance services will provide a market advantage.
In 2014, Adriatic Slovenica will strengthen its activities in life insurance provision and sales. In compliance with
the new strategy, Adriatic Slovenica places great emphasis on life insurance development and especially on
product adjustments that would meet market requirements and could be combined with other insurance groups,
including health and non-life insurance products.
The Company's key objective is the adjustment to the new pension reform and marketing of products for the
second and the third pension pillars. To achieve that, Adriatic Slovenica will use the potentials within the Group to
implement its investment policy for long-term savings. With the pension reform, the second pillar becomes more
interesting for wider public. Long-term savings provide opportunity for better investment policy and introduces a
more strict definition of the second pillar as an "extension" of the mandatory pension insurance, more clearly
defining the saving for the time after retirement (withdrawal of funds is not possible, intended purchase of pension
annuity).
All that opens the possibilities for Adriatic Slovenica and the KD Group to profile themselves on the market of
additional pension insurance as providers of an integrated solution to fill the pension gap faced due to the
decrease in rights arising from the first pension pillar. For that reason, Adriatic Slovenica plans to widen its offer
of annuity insurance at various life stages in 2014. At the same time, greater emphasis will be on life insurance
products intended to satisfy the needs of population at various stages of life, and on the extension of additional
insurance provision and innovative services. Special attention will be paid to the adjustment of insurance for sale
through complementary sales channels, such as banks, direct mailing and e-sales (online underwriting). Life
insurance contracting will be optimised by online application and simplified underwriting procedure.
In 2013, great emphasis was laid on internal business processes and via the DigitAS project paperless operation
was introduced to be maintained also in the years to come. In 2014, greater emphasis will be on processes
related to clients and business partners, as well as on optimisation of processes for operating costs reduction.
The AS-Portal project will bring insurance services of Adriatic Slovenica closer to clients, whilst business partners
will be able to contact the Company via its service-oriented architecture which follows the trend of state-of-the-art
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Annual Report
for 2013
communication channels for business contacts with clients and partners. In 2014, the Company will continue the
integration of solutions within the CRM conceptual framework and complete the intranet restructuring project
By implementing a monitoring system, Adriatic Slovenica will update the existing assurance of uninterrupted
operations of the information system. Special attention will be devoted to operating and security risk controls. The
Company will also follow the requirements of the Solvency II standard which, among other things, requires
support to regulatory reporting.
The consolidation and integration of information systems for the life insurance portfolio transferred from KD
Življenje to Adriatic Slovenica started in 2013 will continue. The key issue is the consolidation of clients in the
Central Register of Clients (CRS) and the transfer of the acquired portfolio into the data warehouse (ASBI) of the
Company.
Annual training programmes will be prepared and executed in the AS Academy. E-material prepared in
cooperation with the Human Resources Department will contribute to greater satisfaction of users of IT solutions
since a well educated and satisfied user is one of the main objectives of Adriatic Slovenica.
In the insurance claims resolution segment, Adriatic Slovenica will remain and be even more focused on their
clients' satisfaction. The Company's prime rule is to bring an unpleasant damage or injury event to a conclusion
which will turn into a positive experience of the insured.
Fast and efficient work in the resolution of claims will be improved by a chain of selected suppliers engaged in a
strategic partnership for the provision of comprehensive and professional solutions for speedy recovery.
Communication with clients and professional progress will also be intensified. In 2014, Adriatic Slovenica will
improve their information systems with advanced solutions, boost the efficiency of paperless operation, and offer
their employees all needed professional support in resolution of more complex or complicated claims. More
significant stages of the claims resolution process will be supported by target-oriented management and
measurable indicators.
4.3
BUSINESS PERFORMANCE AND MAIN FEATURES OF INSURANCE CLASSES
As at the 2013 year-end, the market share of Adriatic Slovenica d.d. equalled 15.5 % (Source: Slovenian
Insurance Association, all data on market shares), having increased by 2.5 percentage points over 2012. The
increased market share mainly resulted from the acquisition of the sister insurance company KD Življenje (KDŽ)
in October 2013. Insurance premiums gathered in 2013 were by 13.7% above the previous year, and the majority
of the increase was in life insurance business due to the acquired portfolio of the KDŽ life insurance. Otherwise,
the market insurance premium was down by 4.4% in 2013. In terms of written premiums, the top performer in
2013 was again non-life insurance business, followed by health insurance and life insurance operations.
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Annual Report
for 2013
The structure of premiums by class of insurance business
Life insurance
18%
Non-life insurance
45%
Health insurance
37%
4.3.1
Health insurance
The structure of premiums written in health insurance
Paralell and
complementary
health insurance
2%
Supplemental health
insurance
98%
Operating performance in 2013
Adriatic Slovenica remains the leading provider of additional health insurance products. In 2013, the market share
in this segment reached 23.2% (2012: 22.9%) which means that the insurance company gathered by 4.8% more
premiums than in the year before. The health insurance market also grew by 3.5%. However, in terms of
premiums written, Adriatic Slovenica was by 1.3 percentage points above the market growth.
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Annual Report
for 2013
Net premiums, claims and benefits paid, and underwriting result of the health insurance segment in 2013
120,000
113,656
89
106,451
100,000
100,055
95,727
89,839
87
83,161
85
80,000
84.4
60,000
84.2
83
83.1
81
40,000
79
20,000
77
75
0
in 000 EUR
2012
2011
Net premiums
Net claims paid
2013
in %
Additional health insurance
By rationalising the costs and implementing standardisation, Adriatic Slovenica improved the management and
operational execution of key additional health insurance processes. A guarantee procedure was introduced,
renewal and extension procedures simplified, and insurance interruption, suspension and reactivation made
possible. The process of claims resolution was aligned to the Claims Rules, contract administration was regulated
for insurance contracts of major contractors and service providers (such as Craft and Small Business Fund).
Claims resolution procedures in the parallel and additional health insurance segment have been standardised
and coordinated with the claims resolution team in the personal insurance segment.
Intensive training was carried out to assist the marketing of additional life insurance and several marketing
activities have been designed and implemented for various sales channels and target groups. Adriatic Slovenica
wishes to promote additional life insurance especially with the insurance product that covers serious illnesses and
surgical procedures where the plan has been exceeded by 500%, a welcome package for new life and non-life
insurance clients, and a new assistance insurance for transitional care in case of an accident in 2014 as well.
Parallel health insurance
The main objective in 2013 was to extend the range of additional health insurance products and to provide a
distinctive offer promoting the sales of additional health insurance that continues to be the driving vehicle of the
Company.
Within the assistance services project, two new products were developed in 2013: short-term care in the case of
injury and short-term care in the case of illness or injury. The rider comprises assistance at home, transport to
medical control and transport to chemotherapy.
Two additional health insurance products have been developed for the target group of active clients in the age
bracket of 18 to 55, covering the risk of critical diseases of the so-called second generation: ONA AS HEALTH for
women and ON AS HEALTH for men. Both products include rider in case of female and male reproductive
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Annual Report
for 2013
cancers, other forms of cancer, and rider in case of death (death allowance). An additional benefit to the product
is the so-called health bonus since the insurance company pays the policyholder an amount of 15% premium
payments if no insured event occurs until the expiry of the contract.
Development
Additional health insurance is the driving vehicle of the health insurance segment and for that reason Adriatic
Slovenica will continue to introduce competitive components of distinction and develop this segment as the basis
for other health, accident and life insurance products. This will also apply in case of any possible systemic
changes that might require modifications in additional health insurance. The management of additional health
insurance will further comprise standardized operating processes and supervision over health care providers. The
key element for an efficient fraud prevention system in the health insurance segment will be the implementation of
an appropriate IT package.
Social and financial security of individuals after a serious illness, surgery or heavy accident is long lasting
unstable since the completed medical treatment (the cost of which are still appropriately covered) is followed by a
lengthy period of time in which individuals having increased needs lack adequately high and stable income (low
disability pensions and compensations, necessary housing adjustments, adequate nourishment alternative health
treatments). Employers, too, are affected by sick leaves. The proportional additional health insurance has been
designed to fill this gap. In 2014, Adriatic Slovenica will further develop their competitive and innovative range of
products to cover both the insured and their employers. A new significant collective health insurance product
(occupational disability due to illness or accident) will be launched and the assistance insurance range of
products extended.
Main features
Supplemental health insurance
Supplemental health insurance covers additional costs for health-related services that are not entirely covered by
compulsory health insurance. The amount of these additional costs, covered by supplemental health insurance, is
defined in Article 23 of the Health Care and Health Insurance Act (ZZVZZ).
Parallel health insurance
Parallel health insurance covers health care expenses and related services and the supply of drugs and medical
technical aids for medical treatment to which a policyholder is entitled under compulsory health insurance, but in
line with alternative procedures and under different conditions. The Company offers insurance coverage for selffunding services in specialist clinics which enables quick access to specialists who can make the right diagnosis
and provide quality treatment without undue waiting time, typical of the public healthcare system.
Additional health insurance
Additional health insurance serves to fund payments for health services and medicines not treated as
entitlements under compulsory health insurance, as well as additional funds indispensable in case of illness or
accident. Additional health insurance comprises insurance for serious illnesses, surgical procedures, drugs and
superior accommodation in health spas and additional assistance insurance products: short-term care insurance
in case of an accident and short-term care insurance in case of illness or injury. The latter comprise assistance at
home, transport to medical controls and transport to chemotherapy. The "assistance at home" covers an agreed
amount of hours of help with basic daily activities, supporting daily activities and child care for the insured.
"Transport to medical controls" provides for the agreed number of accompanied transportations of the insured to
medical controls and the transportation of the insured back home after dismissal from hospital. The coverage of
"transport to chemotherapies" provides for the agreed number of accompanied transportations of the insured to
chemotherapies and radiation therapy.
Two additional health insurance products have been developed for the target group of active clients in the age
bracket of 18 to 55, covering the risk of critical diseases of the so-called second generation: ONA AS HEALTH for
35
Annual Report
for 2013
women and ON AS HEALTH for men. Both products include the following coverage: "coverage in case of female
or male reproductive cancers" which refers to forms of cancer specific for women or men, whilst "coverage for
other forms of cancer" refers to other forms of diagnosed cancer (e.g. lung cancer, bowel cancer, etc.), and
"coverage in case of death" (death allowance) refers to death of any reason. The amount of monthly premium
depends on the age on entry and the selected sum insured for the case of female or male reproductive cancer.
Insurance can be applied for and underwritten on the basis of just four questions about the health status. A key
novelty of these insurance products in comparison to the previous ONA AS and ON AS products, and to the
competition, are the pro rata payments upon the occurrence of the female or male cancer that poses no threat to
the life of the insured yet. An additional benefit to the product is the so-called health bonus (Adriatic Slovenica
pays the policyholder an amount of 15% premium payments if no insured event has occurred until the expiry of
the contract).
4.3.2
Life insurance
The structure of premiums written of the life insurance segment
Supplemental voluntary
pension insurance
1%
Endowment and term life
insurance
34%
Unit-linked insurance
65%
Life insurance premiums written grew in 2013 thanks to the acquisition of the life insurance portfolio of KD
Življenje. In this sector, the market share of Adriatic Slovenica increased by 10.5% in 2013, whilst the Slovene
insurance market in 2013 again registered a decrease in life insurance premiums, similar as in 2012 and 2011.
The four biggest insurance companies controlled 71.1% of the life insurance market which still show a high level
of concentration in the Slovene insurance market.
An essential move in 2013 was the transfer of insurance business from the sister insurance company KD
Življenje, together with integration and extension of sales channels, laying greater emphasis on life insurance
business and product development adjusted to current market conditions. Longer life expectancy, indebtedness
and relative smallness of households in Slovenia along with lower social, health and pension security, open new
opportunities and a higher demand for life insurance. On the other hand, however, the overall economic situation,
higher unemployment rates and expected decrease in personal income do not stimulate the demand in spite of
the growing need for basic insurance protection. Therefore, Adriatic Slovenica put emphasis on life insurance
products in the desire to satisfy the needs of the population of a specific age group, and boosted its offer of
36
Annual Report
for 2013
additional insurance possibilities with innovative solutions. Of key importance was the adjustment to the new
pension reform with products developed for the second and third pension pillar.
Net premiums, claims and benefits paid, and underwriting result of the life insurance segment in 2013
60,000
55,931
80
81.4
50,000
70
73.8
40,000
33,207
30,000
50
20,000
40
12,331
9,102
10,000
0
in 000 EUR
60
59.4
2011
12,053
9,806
2012
Net premiums
Net claims paid
30
2013
20
in %
Development
In 2014, development of life insurance products will continue in the light of their adjustment to current market
conditions. The needs of individuals in a specific period of life will be satisfied with new services and/or additional
insurance products and possible combinations with other insurance groups within a comprehensive insurance
package including health and non-life insurance. Of key importance will be the adjustment to the new pension
reform and marketing of products for the second and third pension pillar. In realising this concept, Adriatic
Slovenica will use the potentials within the Group to implement its investment policy for long-term savings. 2014
will be a year of an extended offer of annuity insurance at various life stages, a revised life insurance for elderly
population, up-to-dated collective life insurance and endowment life insurance, and of newly developed
investment-linked life insurance with either single or instalment premium. Special attention will be paid to the
adjustment of insurance for sale through complementary sales channels, such as the banks, Post of Slovenia,
direct mailing and e-sales (online underwriting).
Main features
Actively marketed life insurance is divided into the following groups: life insurance with death benefit, unit-linked
life insurance, mixed life insurance and pension insurance. Additional insurance products taken out together with
life insurance only increase insurance protection of any individual.
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Annual Report
for 2013
Life insurance with death benefit
Comprehensive life insurance – life assistance is a life insurance with death benefit providing high insurance
protection and opportunity for additional insurance services for the enhanced security of the insured, their children
and family members in case of unforeseen events, and additional coverage in case of illness. Additional accident
insurance comprises enhanced coverage for permanent disability, accident annuity, sum insured for broken
bones, daily accident allowance and accident insurance of children. Additional insurance can be agreed to cover
critical diseases and add an additional DNA Nutri rider, or to be exempt from premium payments in case of
disability due to illness or injury.
Decreasing comprehensive life insurance is a life insurance with death benefit designed for borrowers. The
insurance covers repayment obligations of the borrower up to the agreed sum insured and, in addition, offers
security for the borrower's family members in the worst case.
Life insurance product TOP ŽIVLJENJE (TOP LIFE) covers the payment of the agreed sum insured in case of
death in the five-year term of insurance. The product includes coverage for serious permanent disability and
occurrence of a critical disease such as: cancer, heart attack, stroke, and coma. This insurance product provides
the insured and their family with basic social and financial security for just EUR 0.30 per day and is appropriate to
be marketed through complementary sales channels.
Life insurance products with affordable premiums are suitable for direct mailing sale. The insurance package
ZASE (FOR ONESELF) has been adjusted for such sale. It comprises life insurance with death benefit and
additional coverage for accidental death, traffic accident death, permanent disability due to accident and broken
bones; short-term care in case of illness or injury may be added. The insurance package FOR ONESELF
provides the insured and their family with basic social and financial security. The same is true of the Vita AS 50+
life insurance product, available to persons between 50 and 60 years of age. The product has been designed for
persons who remain active into their mature years and offers a broad range of additional accident covers.
The Vita AS 60+ product covers the needs of the senior target group as a whole life insurance with death benefit
intended to cover funeral costs and hospitalisation due to an accident. The product is available to persons up to
80 years of age.
Unit-linked life insurance
Aktivna renta AS (Variable AS annuity) is a unit-linked life insurance product that, after expiry of the saving
term, provides the agreed guaranteed annuities for a defined period of time as an additional retirement income or
scholarship. The product is composed of a guaranteed and variable portion and the greatest advantage of the
variable AS annuity is the opportunity offered to the insured to generate their annuity according to their wishes
since the product allows for saving in shorter periods or payment of lifetime annuities.
The insured can actively decide on investment policy. In addition to the part of premium invested into Zajamčeni
paket AS (the AS Guaranteed package), the rest of the premium may be invested into one of the investment
packages (active, balanced and conservative) or into maximum 4 investment funds from among the current offer
of Adriatic Slovenica. The insured may even change the ratio between the guaranteed part and other investments
under the variable AS annuity, which depends on their wishes and financial capacity.
The annuity always remains safe regardless of unpredictable life events. In case of sudden life events, such as
death, unemployment or temporary disability the insurance company takes care of premium payments and
guarantees that the insured will receive the agreed annuity after the expiry of the insurance. In addition, the
insurance even covers monthly compensation in case of unemployment or disability and guarantees the payment
of the sum insured in case of serious disease or accident.
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Annual Report
for 2013
Unit-linked life insurance policy Fondpolica can provide life long comprehensive insurance protection and offer
diverse investment opportunities. Fondpolica in adjusted to the needs of people in various stages of life as
indicated in the names of product varieties: Fondpolica DRUŽINA (FAMILY), Fondpolica OTROK (CHILD),
Fondpolica POKOJNINA (PENSION BENEFIT), Fondpolica ZLATA LETA (GOLDEN YEARS) (for persons above
60 years of age), Fondpolica KLASIKA (CLASSICS) which is a flexible form and/or up-grade of mixed life
insurance, and Fondpolica PERSPEKTIVNE VREDNOSTI (PROSPECTIVE VALUES) with possibility to invest in
precious metals.
By taking out a Fondpolica, the policy holder achieves high level of financial and social security for himself and for
his family since the policy provides a guaranteed death benefit and possible addition of a broad range of
additional insurance coverage, such as: additional life insurance with death benefit, additional accident insurance,
additional critical illness insurance, premium exemption insurance, additional accident insurance for up to three
children on one policy, and additional life insurance product called Boljše življenje (Better Life). The latter
increases the sum insured under the life insurance with death benefit by 10% and at the same time clients may
chose between different preventive DNA services depending on their wishes and needs (DNA analysis for
selected diseases, DNA analysis; child, manager and general DNA analysis).
In the course of insurance period, investment policy, premium, accumulation period, the sum insured and
additional covers may be adjusted with regard to the changed needs. The insured may change and adjust their
investment policy at any time throughout the insurance period and once a year such change can be made free of
charge. In this way the insured can provide for higher return on assets and mitigate investment risk which is much
lower in case of investment into money market investment funds and bonds investment funds. The same applies
to the selection of the Guaranted package, an investment for which Adriatic Slovenica guarantees a minimum
2.75% annual rate of return. In case that the achieved return on investments exceeds the guaranteed rate, these
life insurance policies also participate in the annual surplus.
Mixed life insurance
Vita AS Royal and Vita AS Royal Plus are an endowment life insurance products providing death and survival
benefit, plus accident and health insurance throughout the active life of the insured until 65 years of age. The
death benefit insurance can be upgraded with a higher death cover. The revised accident insurance product
enables the insured persons to choose from seven different covers. Furthermore, they can include the insurance
for their children on the same policy for a favourable premium. This insurance product is highly flexible since the
insured can change the amount of the premium during the life of the contract, modify the scope and content of the
covers and the amount of the sums insured, get an advance, convert insurance into a death benefit insurance,
cover the premium from the automatically approved advance during the period in which they are unable to pay
premiums, etc. Both insurance products can be extended and combined with insurance cover while travelling
abroad (Tujina AS), and with CORIS assistance and TBO (with health insurance for serious illnesses and surgical
procedures from the additional health insurance offer).
Pension insurance
Pension insurance of the second pillar is intended as saving for additional retirement income. With tax reliefs, the
system of voluntary additional insurance provides an incentive for collective and individual additional insurance
with the aim to become eligible for early additional retirement income in the form of pension annuity. For the time
being, three insurance companies are selling voluntary additional pension insurance under a group pension
scheme. Adjusted to the revised pension legislation, Adriatic Slovenica will offer both individual and individual
voluntary additional pension insurance.
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Annual Report
for 2013
4.3.3
Non-life insurance
The structure of premiums written of the non-life insurance segment
General liability
insurance
5%
Other insurance
7%
Motor vehicle
liability insurance
31%
Other damage to
property insurance
8%
Fire and natural
disasters
insurance
11%
Accident insurance
12%
Land motor vehicle
insurance
26%
Operations in 2013
In 2013, the non-life insurance market was down by 4.6% in Slovenia, mainly due to several years of continuing
tight economic conditions. Accordingly, the premium written of Adriatic Slovenica in non-life segment (i.e. in other
insurance) also decreased by 8.3%. At the 2013 year-end, the Company's market share in this segment was
14.5% (2012: 15.1%).
Net premiums, claims and benefits paid, and underwriting result of the non-life segment in 2013
160,000
146,842
75
140,000
70
120,000
100,000
80,000
89,668
96,743
65
91,181
60
61.1
57.1
60,000
44,650
52,100
50
40,000
20,000
45
46.2
0
40
2011
in 000 EUR
55
2012
Net premiums
Net claims paid
40
2013
in %
Annual Report
for 2013
4.3.4
Accident insurance
Accident insurance accounts for 12% of the non-life insurance portfolio. Collective accident insurance contracts
account for close to 50% of this class of insurance and 29% falls to driver accident insurance under MTPL+. The
majority share is taken by accident insurance for persons in vehicles and accident insurance of pre-school and
school children. In 2013, Adriatic Slovenica launched some new covers in accident insurance (bone fracture,
burns, loss of hearing, etc.) and revised long-term accident insurance of pre-school and school children. Through
the revised insurance, the Company registered a 5% premium increase above 2012.
In accident insurance, Adriatic Slovenica recorded a fall in total premiums written compared to 2012, mainly
arising from group accident insurance and the negative trends from previous years continue; the pressure of
economic crisis and unemployment growth is noticed. Companies are cutting down their costs and expenses and
group insurance of employees suffers, too. The mandatory insurance of passengers increased with an index of
127, also thanks to stricter control at the registration of vehicles and, consequently, growing demand for such
insurance.
In segmenting car insurance, Adriatic Slovenica lowered the additional premium for motor third party liability
insurance with additional coverage (MTPL+), but the share of persons who, in addition to MTPL also decide to
take out a MTPL+ has not yet sufficiently increased to cover the premium discount.
Accident insurance: net premiums, claims and benefits paid, and underwriting result in 2013
20,000
50
18,661
18,000
16,000
48
46
46.3
13,817
14,000
13,277
44
12,000
42
10,000
40
8,639
39.3
8,000
38
5,425
6,000
4,742
35.7
4,000
2,000
34
32
0
30
2011
in 000 EUR
36
2012
Net premiums
Net claims
2013
Net underwritting result
in %
Despite of economic crisis, net premium was down only by 4% compared to 2012. Net claims and benefits paid
fell by 13%. The net underwriting result thus improved by 4 percentage points.
41
Annual Report
for 2013
Development
In 2014, Adriatic Slovenica will first analyse and then standardise and simplify business process in accident
insurance in order to achieve better cost efficiency and separation of responsibility.
The product mix will be enriched with innovative products for various target groups and different sales channels.
Early in 2014 a new additional accident insurance product with premium exemption in case of permanent
disability will be launched. The insurance company will assume the premium payment responsibility up to the 75 th
year of age of the insured in case of their 50 plus or 100% permanent disability. Adriatic Slovenica will develop
additional range of covers for additional accident insurance policy holders in the above 60 age bracket and offer,
in addition, a revised group accident insurance product for companies. Traditional marketing campaigns, such as
prepared for school-children accident insurance, will also be complemented with new cover opportunities.
Main features
Accident insurance comprises several sub-categories, such as accident insurance of persons during their
occupational activity and outside it, accident insurance for persons in vehicles, accident insurance of passengers,
accident insurance of pre-school and school children. … In case of an accident, the insurance alleviates its
financial consequences and provides for financial safety of both the insured and of the members of their
household. In addition to the basic risks insured, such as disability and death, policyholders often opt for
additional coverage such as daily accident benefits, daily benefits for the time spent in hospital while undergoing
medical treatment, and daily benefits for the time spent in a health spa undergoing medical treatment after an
accident.
4.3.5
Motor vehicle liability insurance (MTPL)
Premiums under the motor vehicle liability insurance account for 30% of all non-life premiums written. Due to
severe price competition average premium is down year after year. At the 2013year-end , the premium was by
11% below the premiums written in 2012.
In May 2013, Adriatic Slovenica published new car insurance segmented rates with the aim to direct the
underwriting into more profitable segments. Premium is calculated on the basis of several criteria, such as the
age of the insured, the year of the car, residence area of the insured, and a combination thereof. Premium rates
were set lower in those segments which were proved less problematic according to the claims analysis
performed. The purpose was to provide various segments with a premium that would most reflect their risk, and
to direct insurance agents to search for those segments and to acquire new, profitable policyholders offering them
a broad range of possible covers.
42
Annual Report
for 2013
Motor vehicle liability insurance: net premiums, claims and benefits paid, and underwriting result in 2013
60,000
80
51,242
70
50,000
40,000
60
61.5
50
31,528
30,000
40
25,969
23,811
36.6
30
20,000
20
8,712
10,000
10
9.7 2,515
0
0
2011
in 000 EUR
2012
Net premiums
Net claims
2013
in %
The drop of net premium in 2012 resulted from the implemented quota reinsurance contract for car insurance. In
2012, a considerable drop in net claims resulted from the impact of the quota contract on provisions, and from a
modified methodology applied in the calculation of provisions. In 2013, however, the drop in net premiums reflects
sever competition and premium allowances, as well as a drop in average premiums. In comparison to 2011,
premiums were lower due to the experienced drop in the number of insurance contracts and, consequently, the
claims and benefits paid, but also do to the effect of the reinsurance contract.
Development
In 2014, Adriatic Slovenica will continue with segmentation of clients. However, this is a process that requires
continuous monitoring and adjusting. The first half of the year will be focused on segmentation of other categories
of vehicles (lorries, buses, trailers). In cooperation with the sales teams, Adriatic Slovenica will develop covers to
be offered as addition to the motor vehicle third party liability insurance (MTPL) policy (such as premium
payments in case of unemployment). The cooperation and connecting with external databases RAZ, RSK and
MRVL will continue; this will enable the Company to easy control the claims status of the insured coming from
other insurance companies and to collect vehicle data. The next step will be to simplify the collection of vehicle
and policyholder data in order to ensure fast and correct entry into claims files.
Main features
Motor third-party liability insurance falls under the category of compulsory insurance in road traffic. This means
that every vehicle owners must purchase this insurance before hitting the road, provided that registration is
required for that vehicle. The policyholder and the authorised user of the vehicle are insured against payment of
damages accidentally caused to third parties while using the insured vehicle in the amount of the sum insured.
Insurance policies are concluded for the sum insured that has been statutory set and currently amounts to EUR
5,000,000 for personal injuries and EUR 1,000,000 for damage to property.
43
Annual Report
for 2013
4.3.6
Land motor vehicle insurance
The premiums written in land motor vehicle insurance account for 26% of non-life insurance premiums. Premiums
written for comprehensive insurance is falling year after year and was by 12% lower than in 2012. Economic crisis
has affected motor vehicle insurance since fewer clients decide to take out insurance for their second car. The
market of new vehicles has remained at the last year level, but car dealers believe such statistical data to be the
result of one-day registration of re-exported vehicles. On the contrary, some car dealers talk about a sales drop of
20 to 30% which is heavily reflected in the insurance business. The sales shortfall in comprehensive insurance is
the result of fierce competition and decline in the number of insurance contracts.
Land motor vehicle insurance: net premiums, claims and benefits paid, and underwriting result in 2013
45,000
90
40,538
40,000
85
35,000
30,269
80
30,000
78.8
75
25,000
74.7
19,817
20,000
17,332
70
13,655
11,741
15,000
65
10,000
60
5,000
59.2
0
55
2011
in 000 EUR
2012
Net premiums
Net claims
2013
in %
The drop of net premium in 2012 resulted from the implemented quota reinsurance contract. In 2013, the drop
resulted from a lower number of insurance policies and the lower average premium. As a consequence of
premium decrease and increase of net claims, the net underwriting result is lower, too.
Development
Adriatic Slovenica will continue the segmentation process. The sales team incentives have brought about some
new covers to distinguish the Company from their competitors. Further segmentation will be focused on lorries
and trailers. The scales of premiums will be modified, so that new factors having impact on premium calculation
will be taken into account.
Main feature
Comprehensive and collision insurance covers the perils of road traffic and natural disasters, theft and fire,
malicious and other acts that could result in partial or complete loss of value of motor vehicles.
The insurance product is of modular structure and the policyholder may select between the following covers:
traffic events, collision, severe damage; fire, theft and special events, additional insurance covers (D covers),
insurance of extras, additional machine breakage insurance and insurance of vehicles in repair shops.
44
Annual Report
for 2013
4.3.7
Fire and natural forces insurance
Premiums written in this category are constantly increasing and in spite of the economic crisis it remained at the
previous year level also in 2013. In the non-life premium structure, this class of insurance accounts for 11%. An
85% share of that premium falls under subcategory of fire insurance apart from trade and industry which includes
premiums of the home insurance Dom AS product (Home AS). Premium increase was predominantly achieved in
the part of fire insurance related to insurance in trade and industry and housing units insurance under the Dom
AS product.
Fire and natural forces insurance: net premiums, claims and benefits paid, and underwriting result in
2013
14,000
12,000
10,966
10,707
10,000
95
11,668
83.6
85
9,170
75
8,000
6,449
6,000
4,477
65
55
4,000
55.3
45
2,000
0
41.8
35
2011
in 000 EUR
2012
Net premiums
Net claims
2013
in %
Due to the lower reinsurance premium, net premium grew by 6.8%, whilst net claims paid decreased by 30%
since no major mass disaster events were registered in 2013. Consequently, the net underwriting result improved
by 28 percentage points.
Development
Fire insurance will be included in the new package for small enterprises and sole proprietors. In housing units
insurance the now offered home insurance product will be revised and premium rates corrected for floods since
they haven’t been set to low in light of more frequent events of storms and weather damages. Adriatic Slovenica
will cooperate with external institutions in the transfer of buildings data into the Company's information system
and in the provision of information on floods, earthquakes and storms available in various data bases with the aim
to establish better control over the insurance portfolio and to direct sales activities.
45
Annual Report
for 2013
Main features
The fire and natural forces insurance covers damage or loss on real estate and movable property. It includes
coverage due to fire, explosion, storm, hail, and a hit by a motor vehicle or movable working machine, fall of an
aircraft, demonstrations and riots. By special arrangement, fire insurance can also cover additional hazards of
flooding, accidental discharge or overflow of water, avalanche and landslide, snow mass, fluid leakage, discharge
of glowing mass, self-ignition of inventories, inflow of meteoric water, indirect lighting strike, vandalism and
earthquake. The housing part of real estate and movable property are covered within the Domas home insurance
product.
4.3.8
Other damage to property insurance
The class of insurance called other damage to property is composed of several insurance subcategories and
accounts for 9% of the premium structure in non-life insurance. The majority of premiums written, i. e. 55%
premium from this class of insurance and generated by home contents and machinery breakdown insurance. This
class of insurance also comprises crops and livestock insurance, construction and erection insurance, burglary
insurance, glass breakage insurance, etc.
In 2013, home insurance premium continued its constant growth of 3%. Premiums in machinery breakdown
insurance, however, were by 6% below the past year figure, which in part resulted from a decline in this type of
insurance in companies, and in part from the portfolio cleaning and orientation of Adriatic Slovenica towards more
profitable clients. More strict rules were applied with regard to bonus and malus calculations in machinery
breakdown insurance with the purpose to increase premium for policyholders with many claims and provide
discounts for policyholders with no claim bonus.
Other damage to property insurance: net premiums, claims and benefits paid, and underwriting result in
2013
12,000
10,000
100
10,972
9,577
9,727
10,416
95
8,318
8,000
90
7,355
87.3
6,000
85
4,000
80
79.9
2,000
75
75.6
0
70
2011
in 000 EUR
2012
Net premiums
Net claims
46
2013
in %
Annual Report
for 2013
Despite of unfavourable economic situation, net premium was down by 5%, but net claims paid fell by 13%. The
net underwriting result thus improved by 7 percentage points compared to 2012.
Development
In 2014, Adriatic Slovenica will continue activities for the development of Podjetnik (the Small Business) package
designed to comprise various insurance covers. Similar to the home insurance Dom AS package one single
policy will contain insurance covers needed by a small business or sole proprietor: fire, liability, accident, burglary,
glass breakage, etc. The accordingly designed information support will provide for fast and simple premium
calculation and application drafts. In the first half of the year, a package will be prepared for hospitality providers
and, in continuation, packages for other groups of craftsmen and small business owners will follow.
After four years since first implementation, the home insurance Dom AS package needs to be revised, the covers
provided refreshed and the insurer's obligations in certain covers restricted; to cut it short, the package shall be
updated in line with market expectations and the desired underwriting result.
Main features
In terms of premiums written, housing units insurance is the largest insurance subcategory under the other
damage to property class of insurance. Adriatic Slovenica provides this type of insurance as the home insurance
Dom AS package in which both home and its contents can be insured against a number of different hazards
threatening the assets of the insured. In addition, the same policy can also provide accident cover for family
members, cover farm risks and home pats; provide liability insurance, and many more. The second largest
insurance subcategory constitutes the machinery breakdown insurance that covers damages in case of
malfunction or breakdown of equipment, machinery and installations. This subcategory also comprises
construction and erection insurance, burglary and robbery insurance, glass breakage insurance, livestock and
crops insurance and others.
4.3.9
General liability insurance
Liability insurance accounts for 5% in the non-life insurance structure. This class of insurance comprises a rather
diverse range of liability insurance covers: general civil liability, manufacturer liability, and various mandatory and
non-mandatory professional liabilities and forwarders liability. In 2013, the premium invoiced was by 0.7% above
the 2012 figure. The highest increase has been recorded in manufacturer liability insurance.
47
Annual Report
for 2013
General liability insurance: net premiums, claims and benefits paid, and underwriting result in 2013
7,000
6,000
100
6,070
5,890
5,926
90
5,000
4,365
80
3,829
4,000
3,138
74.1
3,000
70
64.6
2,000
1,000
50
51.7
0
40
2011
in 000 EUR
60
2012
Net premiums
Net claims
2013
in %
In 2013, net premium was down by 2%, and net claims were up by 22%. For that reason, the underwriting result
deteriorated by 13 percentage points.
Development
General liability insurance will be revised in 2014. In addition, Adriatic Slovenica will focus on education and
training of the sales network since the liability insurance segment is expected to offer great opportunities for sales
growth.
Main features
Liability insurance covers losses due to third-party civil claims against a policyholder due to a sudden and
unexpected damage event (accident) arising from the hazard source stated on the policy that has resulted in
bodily injury or damage to property. The hazard source may be an activity, profession, product, etc., and that
source of hazard characterises the type of insurance. Of major importance are the needs to insure the
manufacturer's liability of companies that sell their products abroad, especially if they export them to the USA.
Professional liability insurance is compulsory for many professionals, such as notaries, lawyers, designers,
physicians, insurance brokers etc.
4.3.10 Other non-life insurance
Operations in 2013
Other non-life insurance accounts for 8% of total non-life insurance premium. This segment contains insurance of
goods in transit, insurance of financial losses, credit and suretyship insurance, legal expenses insurance and
assistance insurance. In 2013, suretyship insurance and car assistance insurance registered the highest
increase, whilst the highest decrease index was recorded in the credit insurance Kredit AS product
48
Annual Report
for 2013
Development
In 2014, Adriatic Slovenica will revise its strategy of assistance insurance which could in an extended form also
be offered through banks, post offices and other sales channels. In the beginning of the year Adriatic Slovenica
launched a new travel insurance product named Multirisk with assistance which will be even further upgraded. A
new unemployment compensation cover that could be included in any non-life insurance policy is also in the
pipelines. Insurance coverage that provides for loss of income due to injury or illness is underway; this will be
especially welcomed by small business owners or sole proprietors where illness or injury of a key employee may
result in substantial loss of income or inability to cover fixed costs.
Main features
Transportation insurance segment comprises aircraft and vessel third-party liability insurance, forwarder and
carrier third party liability insurance, comprehensive goods in transit insurance, as well as aircraft hull insurance
and vessel hull insurance. Assistance insurance is included in three classes of insurance: car assistance, medical
assistance abroad and other assistance insurance. Financial loss insurance comprises event insurance, loss of
income due to fire or machinery breakdown, travel cancellation insurance, and others. Suretyship insurance
consists of various bonds, such as tender bond, performance bond, warranty bond, etc.
49
Annual Report
for 2013
The number of persons insured and the number of insurance contracts issued by class of insurance in
2013
Adriatic Slovenica
Insurance class
Accident insurance
The number of
insured persons
The number of
insurance
contracts issued
2,853,203
346,299
Health insurance
382,965
382,965
Land motor vehicle insurance
141,656
141,656
3
3
17
17
Marine loss insurance
1,950
1,950
Transportation (goods in transit) insurance
3,468
3,468
Fire and natural disaster insurance
78,481
78,481
81,716
81,716
271,805
271,805
36
36
Ship/boat liability insurance
6,111
6,111
11,421
11,421
Credit insurance
650
650
Suretyship insurance
342
342
Miscelaneous financial loss insurance
1,849
1,849
Legal expenses insurance
6,790
6,790
Insurance of assistance
181,719
181,719
Life insurance
154,565
149,864
102,106
99,003
2,401
2,401
Railway rolling stock insurance
Aircraft insurance
Motor vehicle liability insurance (MTPL)
Aircraft liability insurance
Insurance with capitalised payments
Note: The number of concluded insurance contracts has been in line with the Insurance Statistical Standard since 1 January
2009.
The number of concluded insurance contracts at the insurance subclass level is taken into
account.
The insurance contracts are counted in the way as it was reported in ST forms. A long-term insurance policy is counted each
year of its validity.
50
Annual Report
for 2013
4.4
ANALYSIS OF OPERATIONS, PRESENTATION OF THE FINANCIAL RESULT AND FINANCIAL
POSITION FOR 2013 OF ADRIATIC SLOVENICA D.D.
In the 2013 financial year, Adriatic Slovenica reported a strong operating performance despite a deteriorated
macroeconomic environment. Written premiums amounted to EUR 306 million or 13.8% more than the year
before. The bulk of the increase in life insurance premiums in 2013 was a result of the life insurance portfolio
takeover from the sister company KD Življenje. If combined life insurance premiums of both Adriatic Slovenica
and KD Življenje were taken into account for 2012, the insurance premium of Adriatic Slovenica for 2013 would
be lower by 4.5% compared to the preceding year. In 2013 the Slovene insurance market recorded a 4.4% drop
over the previous year. Further decline in economic activity, stagnating disposable income and falling purchasing
power of households significantly contribute to decreased premiums on the Slovene insurance market. The
competitiveness of insurance companies has remained at a high level, and the possibility of growth of individual
insurers is limited. The Company had a 15.5 % market share in 2013, ranking it as the second largest insurer in
terms of total written premiums.
FINANCIAL RESULT
Adriatic Slovenica performed well and ended 2013 with profit before tax amounting to EUR 15.9 million and net
profit totalling EUR 13.6 million. The achieved net profit increased by 3.1% over the same period in 2012.
In 2013, non-life, health and life insurance segments recorded a positive operating result. Net underwriting result
of non-life insurance excluding health insurance deteriorated in 2013, mainly on account of a drop in premiums.
Profit and loss for life insurance in 2013 was higher compared to 2012 due to the life insurance portfolio takeover
from the sister company KD Življenje. The underwritting result of health insurance in 2013 increased by 1.6
percentage points compared to the preceding year. The final profit for 2013 was primarily lower due to investment
impairments.
Summary of profit or loss
In 000 EUR
Gross written premiums
Life
insurance
Non-life
insurance
Health
insurance
2013
Life
insurance
Non-life
insurance
Health
insurance
2013
Index
13/12
56,836
136,960
112,603
306,399
12,348
149,353
107,452
269,153
-984
-50,388
0
-51,372
-292
-55,321
0
-55,613
92.4
78
4,609
1,053
5,741
-2
2,711
-1,001
1,707
336.2
55,931
91,181
113,656
260,768
12,053
96,743
106,451
215,247
121.1
Gross claims and benefits paid
-33,865
-87,559
-96,169
-217,593
-10,160
-92,644
-89,952 -192,756
112.9
Reinsurers'/coinsurers' share
292
24,970
0
25,261
63
20,815
0
20,878
Change in outstanding claims provisions
367
10,490
443
11,299
-49
22,557
-1,396
21,112
53.5
-33,207
-52,100
-95,727
-181,033
-10,146
-49,273
-91,348 -150,767
120.1
3,286
298
6
3,590
-4,861
-352
Written premium ceeded to reinsurers/coinsurers
Change in provision for unearned premiums
Net earned premiums
Net claims and benefits paid
Change in other technical provisions and change in
liabilities from investment contracts
Change in other technical provisions for the benefit of
life policyholders who bear investment risk
72
113.8
121.0
-5,140
-69.8
-10,604
-
-
-10,604
-2,369
-
-
-2,369
447.6
-5,858
-16,208
-1,791
-23,857
-806
-17,394
-1,658
-19,858
120.1
-11,419
-24,853
-10,278
-46,550
-1,970
-27,196
-11,413
-40,578
114.7
Net financial profit/(loss) from investing activities
4,122
-4,478
1,262
906
6,436
1,926
1,148
9,511
9.5
Other revenues / expenses
Profit/(loss) before taxes
1,025
12,415
-740
12,700
52
11,516
-482
11,086
114.6
3,276
6,256
6,389
15,921
-1,610
15,971
2,769
17,130
92.9
-498
-850
-989
-2,338
257
-3,553
-656
-3,952
59.1
2,777
5,406
5,400
13,583
-1,353
12,417
2,114
13,178
103.1
Acquisition costs
Other operating costs
Taxes
Net profit/(loss) for the reporting period
Written premiums of Adriatic Slovenica in 2013 amounted to EUR 306.4 million, which is 13.8% more than in
2012. The largest share of premium growth was recorded in life insurance due to taking over the life insurance
portfolio of the sister company KD Življenje. By taking into account the premiums ceded to reinsurers and/or coinsurers and unearned premiums, the Company collected EUR 260.8 million in net insurance premiums,
surpassing the 2012 figure.
51
Annual Report
for 2013
The bulk of total gross written premiums is accounted for by non-life insurance with 44.7% share. Together with
health insurance, they represented 81.5% of total gross written premiums in 2013. Adriatic Slovenica is a
composite insurance company, also providing life insurance. In 2013, life insurance accounted for 18.5% of total
written premiums, significantly increasing compared to 2012 as a result of taking over the life insurance portfolio
of the sister company KD Življenje.
In 2013, the Company was not marked by significant catastrophic claims. The life insurance portfolio takeover
from the sister company KD Življenje in 2013 was also reflected in increased volume of claims. Total gross claims
for 2013 stood at EUR 208.5 million or 16.5% more than in 2012. Compared to the previous year, reinsurance
protection slightly increased in 2013. Net underwritting result for 2013 totalled 69.4%, slightly less compared to
the 70.1% in 2012.
In claims from motor vehicle insurance, impact due to improved traffic safety was recorded, especially increased
use of motorways with respect to the number of purchased vignettes and a lower number of serious road
accidents. However, the number of damaged vehicles due to traffic density (car parks) and deer-vehicle collisions
are on the rise. In 2013, almost no claims related to hail were recorded, while loss events due to storms were rare
and limited to small geographic areas. In contrast, the number of roadside assistance insurance claims has been
significantly increasing as did the number of claims settled for contractual partners abroad.
In 2013, several large claims were reported, the largest being the fire in the Stara Cerkev elementary school. In
addition to several large claims caused by the policyholders abroad, even larger claims due to professional
liability, guarantees, loan collateral and cash robbery were recorded in 2013. Moreover, the number of claims
related to solar power station insurance increased.
Non-life insurance
In 2013, gross written premiums from non-life insurance contracts totalled EUR 137 million or 8.3% less than
compared to 2012. Continued declining economic activity, lower purchasing power of households and maintaining
competition between the insurance companies did not enable premium growth in 2013. Net premiums earned
from non-life insurance amounted to EUR 91.2 million, decreasing by 5.8% compared to the preceding year.
In 2013, net claims incurred equalled EUR 52.1 million, which is 5.7% more than in 2012. The net undewritting
result of non-life insurance in 2013 increased by 6.2 percentage points compared to 2012, totalling 57.1%.
Health insurance
Gross written premiums from health insurance amounted to EUR 112.6 million in 2013, which is 4.8% more than
in 2012. The prices of supplemental health insurance were not increased in 2013 (the last increase in prices was
on 1 July 2012 based on the Fiscal Balance Act (ZUJF)).
Net claims incurred from health insurance rose by 4.8% in 2013 compared to the preceding year, amounting to
EUR 95.7 million. The net loss ratio of health insurance stood at 84.2% and was by 1.6 percentage points better
than in 2012.
Life insurance
Gross written premiums in life insurance totalled EUR 56.8 million in 2013, increasing significantly as a result of
the life insurance portfolio takeover from the sister company KD Življenje. A reduced volume of written premiums
for life insurance in 2013 was again affected by deteriorating macroeconomic conditions and further decline in the
purchasing power of households.
52
Annual Report
for 2013
Operating costs
In 2013, operating costs amounted to EUR 70.4 million, having increased by 16.5% compared to 2012. By taking
over the life insurance portfolio of the sister company KD Življenje, a proportional part of operating costs was
transferred. In 2013, acquisition costs totalled EUR 23.9 million or 20.1% more over the preceding year.
Compared to 2012, the share of operating costs in gross written premiums went down by 0.7 percentage point
and stood at 27.6%.
Income and expenses for the financial year by insurance class
in EUR thousand
2013
Insurance class
Accident insurance
Income
Expenses
18,750
-15,580
Health insurance
115,714
-110,437
58,345
-62,620
Railway insurance
0
0
Aircraft insurance
21
-23
Marine insurance
893
-608
1,629
-1,294
Fire and natural forces insurance
17,677
-18,794
12,949
-16,605
Motor vehicle liability insurance
65,121
-56,551
Aircraft liability insurance
24
-22
Marine liability insurance
652
-292
7,051
-7,738
Credit insurance
3,784
-1,413
Suretyship insurance
256
-191
Miscellaneous financial loss insurance
804
-574
Legal expense insurance
186
-155
6,522
-6,214
40,611
-28,159
117,800
-127,057
1,188
-1,328
Land motor vehicles insurance
Goods in transit insurance
Assistance insurance
Life insurance
Income protection insurance due to accident or illness
Net cash flow from investing activities
Net cash flow from investing activities amounted to EUR 906 thousand, representing a 9.6% share of the net
cash flow recorded in 2012. This drop is mostly a result of impairments of equity shares and subordinated bonds.
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FINANCIAL POSITION
Risk management is increasingly more important for Adriatic Slovenica. Special attention is paid to the financial
position of the Company and to achieving long-term financial stability, as proved by appropriate balance sheet
structure as at 31 December 2012 and capital adequacy of the Company with a surplus of available capital in
non-life and life insurance segments.
The balance sheet total of Adriatic Slovenica as at 31 December 2013 amounted to EUR 706.9 million or EUR
258.7 million more as at the 2012 year-end. The growth was primarily the result of the life insurance portfolio
takeover from KD Življenje. On the assets side, the largest increase was recorded in assets and provisions for
unit-linked insurance policyholders. A rise in balance sheet total was also a result of a reinsurance contract
concluded in 2012 in a different form and under changed terms of reinsurance protection, increasing the
reinsurer's share in insurance technical provisions, reinsurance receivables and reinsurance liabilities.
The structure of assets
At 75.4% the bulk of total assets was accounted for by assets from financial investments, which include financial
investments, investment properties, investments in subsidiaries and associates, unit-linked investments of
policyholders and cash. As of 2013, assets from financial contracts are recorded within financial investments.
Together with reinsurance assets, the share of assets ensuring coverage of liabilities from insurance contracts
(technical provisions and insurance technical provisions for unit-linked insurance contracts) increased to 79.1%.
Receivables accounted for 15,0% share of total assets. As at 31 December 2013, they grew by EUR 47.1 million
compared to the 2012 year-end.
With a share of 5.9 %, other assets consisted mainly of intangible assets, property, plant and equipment, and
other assets.
Balance sheet – the structure of assets
31 Dec Structure
2013
in %
4,597
0.7%
27,153
3.8%
0
0.0%
3,816
0.5%
28,357
4.0%
21,973
3.1%
258,536
36.6%
213,926
30.3%
26,252
3.7%
0
0.0%
105,904
15.0%
6,291
0.9%
10,099
1.4%
706,903
100%
in EUR thousand
Intangible assets
Property, plant and equipment
Non-current available-for-sale assets
Deferred tax receivables
Investment properties
Financial investments in subsidiaries and associates
Financial assets
Unit-linked insurance assets
Reinsurers' share of insurance technical provisions
Assets from investment contracts
Receivables
Other assets
Cash and cash equivalents
Total assets
31 Dec Structure
2012
in %
3,614
0.8%
24,907
5.6%
0
0.0%
3,777
0.8%
30,430
6.8%
21,428
4.8%
239,412
53.4%
24,606
5.5%
23,714
5.3%
0
0.0%
58,838
13.1%
5,928
1.3%
11,520
2.6%
448,173
100%
The structure of liabilities
As at 31 December 2013, equity accounted for 13.2 % or EUR 93.2 million of total liabilities, having increased
mainly as a result of higher share capital and share premium upon taking over the portfolio of the sister company
KD Življenje. Compared to the 2012 year-end, the negative revaluation surplus as at the 2013 year-end rose and
negatively impacted the final equity balance.
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In total liabilities, liabilities from insurance contracts (insurance technical provisions and insurance technical
provisions for unit-linked insurance) accounted for a 69.5% share. As of 2013, liabilities from investment contracts
are recorded within insurance technical provisions. Liabilities from insurance technical provisions amounted to
EUR 279.5 million as at 31 December 2013. Together with insurance technical provisions for unit-linked
insurance contracts, liabilities totalled EUR 491.4 million. Compared to the 2012 year-end, liabilities from
insurance contracts (technical provisions and insurance technical provisions for unit-linked insurance) were
higher by EUR 204.2 million as at 31 December 2013, primarily on account of the portfolio takeover from the
sister company KD Življenje.
Other liabilities, comprising 17.3 % of total liabilities, include provisions for retirement benefits, deferred tax
liabilities, operating liabilities and other liabilities. As at the 2013 year-end, operating liabilities and other liabilities
significantly increased, mostly as a result of higher liabilities from reinsurance not yet due, arising from the new
reinsurance contract.
Balance sheet – the structure of liabilities
in EUR thousand
Equity
Subordinated liabilities
Insurance technical provisions
Insurance technical provisions for unit-linked insurance
policyholders
Other provisions
Deferred tax liabilities
Liabilities from investment contracts
Other financial liabilities
Operating liabilities
Other liabilities
Total equity and liabilities
4.5
4.5.1
31 Dec Structure
2013
in %
93,188
13.2%
0
0.0%
279,545
39.5%
31 Dec Structure
2012
in %
86,573
19.3%
0
0.0%
263,207
58.7%
211,833
2,767
27
0
1,093
92,887
25,563
706,903
24,009
2,831
48
0
3,987
51,203
16,316
448,173
30.0%
0.4%
0.0%
0.0%
0.2%
13.1%
3.6%
100%
5.4%
0.6%
0.0%
0.0%
0.9%
11.4%
3.6%
100%
MARKETING AND SALES NETWORK
Marketing strategy
The main focus of sales in 2013 was on satisfying client needs in terms of security. Sales activities were aimed at
creating a partnership between Adriatic Slovenica and a client as a win-win situation. The mission of the
Company was implemented through key sales channels represented by a network of agents, administrators and
advisors, direct sales via the client service centre and online sales via the Internet portal. The foundation of
successful performance is quality advising in the acquisition of insurance products and quality after-sales service
provided by claim centres.
The key sales strategy elements in 2013 were as follows:
- sale of simple products understandable for clients and package solutions;
- strengthening of partnerships with clients through ongoing communication and cooperation;
- provision of comprehensive non-life, life and health insurance protection;
- continual training of the sales network in order to improve advising to clients;
- of sales processes and linking of sales networks;
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Annual Report
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-
sales expansion to new sales channels.
The key sales opportunity proved to be merger with KD Življenje, through which a network of agents specialised
in life insurance was recruited, thus increasing the competitiveness of the Company.
Marketing activities in 2013
By maintaining quality in a turbulent year 2013, marked by the continued economic crisis, Adriatic Slovenica
strived to provide maximum possible security for the policyholders, their families and for the Company. The aim of
special offers and especially information on optimal choice of coverage was to point out the importance of
selecting client-tailored insurance products.
In January, the “Life Stories” drive (Zgodbe, ki jih piše življenje) was supported, providing assistance to 15
families who have difficulties in repaying their loans due to various life circumstances, making their harsh living
conditions slightly better, while four persons received free Comprehensive life insurance (Življenjski kasko).
In February, marked by winter holidays, a 10% discount was offered on Tujina AS insurance (insurance for
travelling abroad) for all Spar Plus discount cardholders, who buy insurance via their mobile phone or online.
With the business partner Hervis Slovenija, a marketing campaign was designed in March, offering everyone who
bought a bicycle free comprehensive bicycle insurance and a EUR 30 discount for taking out motor vehicle
insurance or home insurance.
In April, a new website AS Pomlad (AS Spring) was launched, where interesting blogs provided additional
information on and explanation of individual coverage of a wide range of motor vehicle insurance products. The
website visitors could also participate in a prize competition, which included prizes like EUR 300 vouchers for the
purchase of new or renewal of existing insurance, while the main winner received EUR 2,000 for gas. By
upgrading the contents and organising a new prize competition, 12 young drivers were able to participate in a
safe driving course for free during the summer months.
At the end of the school year, policyholders received a new offer for accident insurance of pre-school children,
elementary and secondary school pupils, with an additional bonus – free health insurance for travelling abroad
with CORIS assistance during the summer holidays for the insured child and a 25% discount on the family
insurance package if purchased for the whole year.
In cooperation with the business partner Merkur, the Obnovi si stanovanje in mi ti podarimo zavarovanje
(Renovate Your Apartment and Get Free Insurance) drive was launched. Clients could participate in the prize
competition to win gift vouchers for purchases in Merkur by filling out a competition entry form.
September was marked by accident insurance for children, pupils and students, for whom an extensive range of
insurance products was prepared at competitive prices.
In October, the focus was again on young people who are no longer students and have to take out supplemental
health insurance. An attractive offer was introduced that included not only health insurance but also free accident
insurance and a EUR 40 discount for purchasing motor vehicle insurance. In cooperation with Simobil, everyone
who bought insurance via their mobile phone also received a EUR 40 discount for purchasing a new mobile
phone or paying the monthly subscription.
Loyal female policyholders were presented a very special gift in October – free health insurance for short-term
care in case of an injury, a CD by Slovene singer Darja Švajger and a discount coupon for wellness packages in
Thermana Laško.
In October, a new insurance product Aktivna renta (Active Annuity) was launched, supported by an extensive
advertising campaign on all media channels.
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In collaboration with SPAR retail chain, in December 2013 and January 2014, policyholders who own a SPAR
Plus discount card were offered a EUR 40 discount for the purchase of an annual motorway vignette.
4.5.2
Sales network
As at the 2013 year-end, the Company provided insurance services in nine business units located in all regional
centres of Slovenia, four branch offices, 42 representative offices and through an external sales network of
insurance agencies with as many as 130 points-of-sale and a network of 161 points-of-sale using
complementary sales channels, or a total of 346 outlets selling insurance products and services of Adriatic
Slovenica. In 2012, the range of products offered at all nine business units was expanded to include KD Skladi.
A lot is invested in training of employees who directly or indirectly communicate with clients, while long-term client
relationships are built through agents. By revising business processes, improving after-sales services and
extending the sales network every year, policyholders are provided more accessible and high quality insurance
services.
By introducing online insurance sales and insurance purchase via mobile phones, the range of sales channels
was broadened, enabling the clients to have a wide range of services always at hand.
Information on business units as at 31 December 2013
Celje Business Unit, Director Srečko Dobelšek
Lava 7, 3000 Celje, Slovenia
Telephone: +386 (0)3 425 35 15, fax: +386 (0)3 545 17
72
Nova Gorica Business Unit, Director Rok Filipič
Erjavčeva 19, 5000 Nova Gorica, Slovenia
Telephone: +386 (0)5 330 95 12, fax: +386 (0)5 302 91
56
Koper Business Unit, Director Borut Širca
Ljubljanska cesta 3a, 6503 Koper, Slovenia
Telephone: +386 (0)5 664 30 10, fax: +386 (0)5 664 30
99
Novo mesto Business Unit, Directrice Jasminka
Kovačič
Novi trg 1, 8000 Novo mesto, Slovenia
Telephone: 07 373 06 20, fax: +386 (0)7 332 27 62
Kranj Branch Office, Director Franci Strniša
Kidričeva cesta 2, 4000 Kranj, Slovenia
Telephone: +386 (0)4 281 70 11, faks: +386 (0)4 281
70 10
Murska Sobota Business Unit, Directrice Milena
Grah
Arhitekta Novaka 13, 9000 Murska Sobota, Slovenia
Telephone: +386 (0)2 539 10 11, fax: +386 (0)2 539 10
40
Postojna Business Unit, Director Anton Marušič
Novi trg 6, 6230 Postojna, Slovenia
Telephone: +386 (0)5 700 30 10, fax: +386 (0)5 700 30
15
Ljubljana Business Unit, Director Borut Završan
Celovška 206, 1000 Ljubljana, Slovenia
Telephone: +386 (0)1 582 48 01, fax: +386 (0)1 582 49
45
Maribor Business Unit, Director Vinko Prislan
Ulica Eve Lovše 15, 2000 Maribor, Slovenia
Telephone: +386 (0)2 320 81 12, fax: +386 (0)2 332 18
90
Sales network map of Adriatic Slovenica
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4.6
RISK MANAGEMENT
Strategic risk
Due to the nature of their business, insurance companies are daily faced with various risks that may jeopardise
their long-term financial soundness, i.e. solvency. As Adriatic Slovenica is aware of these risks, it strives to
manage and minimise them to the maximum extent. By constantly optimising and expanding the risk
management function, the insurance company makes its risk management more effective, while remaining ready
for future business risks. The forthcoming Solvency II Directive is another factor requiring these improvements.
The new directive not only focuses on risk management but imposes stricter risk-weighted capital requirements
and the need to establish a centralised process for risk identification, monitoring and management. Adriatic
Slovenica has been preparing for the new requirements for several years. A centralised risk management
function and an integrated comprehensive risk management strategy were set up. The strategy includes all
necessary operating limits and organisational measures to ensure an effective risk management process. An
exhaustive list of all present risks and an evaluation of potential future risks were made and a tool was introduced
to constantly monitoring the effects of implemented measures.
The Company's efforts in this area will continue to focus on introducing final IT support for Solvency II, which will
enable automatic calculation of capital requirements and filling in of external reporting forms. Above all, it will
enable central storage of all data required for regulatory calculations and reports, as well as execution of own
simulations and calculations within the framework of risk management. The following paragaphs outline the main
risk groups and risk management methodologies applied by the Company. They are described and analysed in
greater detail in Notes to the financial statements.
Underwriting risks
Underwriting risks are all risks faced by an insurance company in its core business, i.e. acceptance of risk from a
policyholder. Given the nature of insurance contracts, underwriting risks are random and unpredictable. They can
be realised in any phase of the core business, be it during the design of an insurance product (the risk that the
product is improperly designed), pricing (the risk that the amount of premium is insufficient to cover the
contractual obligations and claims) or at the assumption of underwriting risks (wrong decisions on risk
assumption, non-compliance with insurance tariffs, terms and conditions, insurance underwriting based on
incorrect data, inadequate reinsurance for particular risks, improper valuation of potential maximum loss,
insurance for concentrated risks (e.g. geographic concentration), insufficient risk assessment qualifications of
employees).
After accepting underwriting risks, the following risks can occur as well: the risk of insufficient insurance technical
provisions, the risk of claims (the risk that the reported number and/or amount of claims will exceed the expected
values and that the Company's retention will be too high due to improper reinsurance protection, especially in the
case of catastrophic events), the risk of change in policyholder behaviour (mostly reflected in the number of
insurance fraud attempts) and the risk of changes in the economic environment, which can lead to a lower
number of policies taken out due to a decreased purchasing power and a higher number of cancelled contracts
and paid out claims.
The Company manages the described underwriting risks primarily through effective internal control of consistent
compliance with internal rules, internal auditing, through forming adequate insurance technical provisions to cover
future liabilities from taken out insurance contracts and appropriate reinsurance. Much attention is devoted to the
development of new insurance products, where already in the of product development process the relevant
statistics is carefully verified and obtained, confirming the appropriateness of considered assumptions. After filing
a claim, loss ratio by insurance class is carefully monitored and any deterioration thereof is analysed, correcting
premium rates or insurance terms and conditions if necessary. The other critical point for the realisation of
underwriting risks is the assumption of such risks. The Company manages these risks through risk assumption
rules, stricter risk assumption criteria and procedures, particularly for larger sums insured and coverage.
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Annual Report
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Departments in charge of high risks (in non-life insurance) monitor loss ratio trends by individual insurance
contracts and may refuse renewal of an insurance contract or re-assess the accepted risk. Reinsurance
protection is a very important tool for underwriting risk management.
Financial (market) risks
An insurance company is exposed to market risks through its financial assets and liabilities, reinsurance assets
and obligations from insurance contracts. Market risks are reflected primarily in the threat of future changes in
market terms that could negatively affect the value of the Company's financial assets, or the threat that the
financial liabilities of opposite parties towards the Company would not be fulfilled (credit risk). This could lead to
cash inflows not being sufficient for coverage of outflows related to insurance and financial contracts.
The main components of market risk are:
liquidity risk, credit risk, debt securities price risk, interest rate risk, currency risk and the risk of changes in other
prices.
Within the framework of its investment policy, Adriatic Slovenica actively manages and controls all risks to which
its assets and liabilities are exposed. These activities include regular monitoring of cash flows, ensuring sufficient
liquid assets to settle its obligations at all times, investing in such a manner that the assets reach a long-term
profitability higher than the profitability of insurance liabilities, duration reconciliation of financial assets with
financial liabilities and ensuring adequacy of financial assets.
Operational, strategic and other risks
In recent years, but even more so since the introduction of the Solvency II Directive, operational risk has become
one of the most important risks. It mostly includes the risk of loss as a result of ineffectiveness, failure or errors in
the business process implementation, malfunction or non-existence of internal controls, unprofessional,
inappropriate or harmful employee behaviour, system or infrastructure malfunction or any other external factors,
including amendments to legislation, business interruptions due to natural catastrophes or epidemics,
competition, etc.
The key moment for operational risk management is identification and assessment of such risks, followed by the
execution of measures for risk mitigation and constant monitoring of remaining risks. Adriatic Slovenica made an
exhaustive list of and identified the existing operational risks and set up a system of indicators for early detection
of new risks. For the most critical operational risks, the necessary precautions for their mitigation or elimination
were carried out. Other operational risks are actively monitored and appropriate internal controls as well as the
internal environment are being established so as to minimise the remaining risks and prevent the occurrence of
new ones.
Strategic risks can also be considered a special form of operational risks. They can occur in the early stages of
strategy planning, its implementation, management and strategic decision making and supervision of the
Company. Their realisation can crucially affect the ability of the Company to achieve its strategic objectives. In
order to prevent these risks, it is of utmost importance that competences and responsibilities are clearly specified,
an effective communication and reporting system set up and constant monitoring of achieved set goals
established.
In its operations, Adriatic Slovenica is also exposed to the risks arising from the business relationship with the
subsidiary AS neživotno osiguranje a.d.o., headquartered in Belgrade, where risks are managed by management
and supervisory bodies. Adriatic Slovenica will continue to focus on underwriting and market (financial) risk
management, as these risks, in addition to operational risks, significantly affect the Company's solvency and
account for the largest portion of capital requirements. One of the Company's most important tasks, which is also
required by law, is ensuring an adequate amount of capital (capital adequacy) with respect to the volume and
types of insurance operations as well as the risks to which it is exposed. Based on its equity management policy,
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Annual Report
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the Company keeps a certain surplus of available capital surplus above the required level (in accordance with the
existing legislation), which provides protection against unpredictable loss events as well as ensures business
continuity and coverage of potential operating loss.
4.7
4.7.1
COMMUNICATION WITH STAKEHOLDERS
Communication with clients
Client Service Centre
The fundamental task of the client service team is to ensure comprehensive client satisfaction in all insurance
segments. The aim is to reply to all questions posed by clients at the first call. If that is not possible, their question
is submitted to the back office and, after receiving an answer, the client is contacted. Furthermore, the Client
Service Centre strives to provide a comprehensive reply to all questions raised by clients. Increasingly more
frequent are calls by well-informed policyholders, which represent an even greater challenge. The knowledge
base is enriched with policyholders' experience, professional knowledge, new products, recognising opportunities
and new tasks. Clients can call the toll-free number from 8:00 a.m. to 6:00 p.m. every business day. At the
merger of Adriatic Slovenica and KD Življenje, the toll-free numbers available to all clients were also merged in
October. Thus, clients can contact the Company by calling the toll-free number 080 11 10 or sending an e-mail to
[email protected]. Since October, clients can also visit the Company in person at six business units, where professional
overview of the existing life insurance policies is provided. Telephone sales activities (output contacts) are
performed with the chosen client segments.
Call Centre
The main activities of the Call Centre are two: direct sales promotion, offering additional life insurance to the
existing and potential clients so as to increase their financial security in the case of an unpleasant event, and
making appointments. The latter means that the operator arranges the exact time and place for the visit and
describes to the client, what the consultant will present to them during their visit. The aim of acquiring
appointment dates is to inform clients in person of new products and benefits and to maintain personal contact.
The Call Centre is also engaged in conducting surveys, checking client satisfaction, etc. In 2013, the Call Centre
made 1,013,290 phone calls, concluded 8,882 insurance contracts and arranged 11,840 appointments.
Client Care Unit
In 2013, the number of callers to the toll-free continued to increase, i.e. calls from existing and potential clients.
By calling the toll-free number, callers can receive comprehensive information about insurance, assistance,
special and regular offer, advertising, claims, etc. In 2013, as many as 228,820 phone calls were received or 26%
more than in 2012. Data confirm that electronic communication is becoming a more frequent communication
channel. In the reporting year, a total of 36,419 e-mails were sent to [email protected], representing an 86.2% increase
over 2012. An increase in electronic communication with the elderly was also detected. Furthermore, the
Company was very successful in recovery of debt over the phone, mail notifications to clients and acquiring of
real addresses.
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4.7.2
Communication with the employees
Two-way internal communication with the employees is the key building block of organisational culture. Since
2004, the internal communication systems ASnet intranet and in-house electronic newsletter AS novice (AS
News) have played a key role in keeping the employees of Adriatic Slovenica informed, as they represent a
knowledge base and an archive of all major events. In the SiOK survey, employees gave a high score (3.73) to
in-house communication, meaning that the in-house communication tools (ASnet, e-mail, AS News, meetings
with the management, etc.) are comprehensible and up-to-date.
Employees of the Public Relations Department prepare the weekly in-house electronic newsletter AS News.
Since 2009, they have also been general administrators of ASnet, which began to be upgraded in 2013. Early
2014, a trial intranet will be launched and by mid-year a redesigned intranet under a new name – Kompas
(Compass). The name symbolises intranet’s content, serving as an improved compass for employees in their
work, showing the Company’s position and the right direction of its activities. Simultaneously with intranet
redevelopment, e-newsletter is also being redesigned. These two channels inform the employees of the latest
major activities of the Company, marketing and promotion campaigns, sales network news, and the development
of insurance products and services. In 2013, as a member of the KD Group, Adriatic Slovenica was actively
involved in the KD Group's intranet by providing information on special offers. Moreover, it participated in
preparing the news for KD Club, which it took over in July 2013, enriched it with new content and renamed it AS
Club of Benefits (AS Klub ugodnosti).
At the beginning of 2012, a new e-mail address [email protected] was set up so as to improve
vertical communication among the company management and employees. Its purpose is to simplify
communication and resolving of issues related to marketing and insurance development. The suggestions are
delivered directly to the member of the Management Board in charge of marketing, sales and development. The
new communication channel proved to be an effective means of communication as it enables the management to
understand market developments. However, in 2013, the use of this channel slightly declined due to other more
direct forms of communication. Thus, only 4 suggestions were sent to the e-mail address (26 suggestions in
2012).
In autumn 2012, major organisational changes within the Pinwheel Project (project Vetrnica) began to be
implemented in internal communication. On the basis of this project, the Management Board and the project team
introduced to the employees a new strategy and changes in the Company’s organisational structure by
consolidating new corporate values. In its messages, the Management Board explained the changes and the time
schedule for their implementation. The project team informed the employees of concrete changes at the
organisational level of the Company. The first phase ended with the first amendment to the Rules on Internal
Organisation, while the second phase was finalised in October 2013 by the second amendment to these Rules.
For communication purposes, a new symbol was introduced – the pinwheel, which represents the Company's
values and is well accepted and recognised among the employees. In December, a survey was conducted
among employees on the changed organisational structure. They were informed of five project goals: adaptable
and flexible organisational structure, efficient teams in a flat and lean structure, awareness that the client is the
focus of all activities, managers being aware of the responsibility of creating integrated, client-focused processes
and, last but not least, the entire organisation and teams carry out their activities in accordance with the
Company’s values.
AS News (AS novice), launched in January 2004 as an electronic newsletter, serves to provide fast and direct
information for the employees. At the end of 2005, the newsletter was redesigned into e-news for the employees
of both companies (Adriatic and Slovenica), and in early 2006 it was merged into a joint e-newsletter for all
employees. In 2010, AS News was upgraded to a weekly bulletin, regularly published on Mondays. At major
events, it is published as a special edition. In 2013, 42 issues of AS News were published (the same as in 2012).
Since 1 October it is also available to employees from the sister company. The employees are informed about
corporate goals and operating results, significant loss events, sales activities and events organised by the
Company for its employees and clients.
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Annual Report
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The ASnet intranet portal is available for all employees and has served as a valuable in-house communication
tool for a whole decade. It provides efficient and quick information to all employees on current developments in
the Company as well as access to the latest documentation and internal acts. ASnet is adapted to in-house
communication needs. In 2012, it was expanded to include new content, while in June 2013 a full upgrade project
was launched to be finalised in spring 2014. Successful maintenance of the portal, which has become a real
encyclopaedia of useful information for the employees, is ensured by up-to-date content administration divided
among business segments.
ASnet provides professional support to the sales network, efficiently delivers information about changes in work
processes and has an educational role. The employees of Adriatic Slovenica enjoy the benefits of having fast
access to all information and documents used in the course of their work and the fastest access to business
applications, serving as their basic tool. From the business point of view, it is most important to maintain a
transparent and permanent access to the entire collection of internal documents and the archive of older
documents. The greatest advantage of ASnet is its up-to-date information as the entire content is constantly
updated.
In 2013, ASnet recorded 1,243 visitors a month on average (1,012 users in 2012 and 632 users in 2011), who
visited the portal 63,540 times (71,800 times in 2012 and 69,274 times in 2011) and viewed 163,609 pages
(162,694 pages in 2012 and 163,656 pages in 2011).
No. of users a month on average
1243
1400
1012
1200
1000
800
632
572
600
400
200
0
2010
2011
2012
2013
No. of visits a month on average
71.800
74.000
72.000
69.274
70.000
68.000
66.000
64.763
63.540
64.000
62.000
60.000
58.000
2010
2011
2012
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Annual Report
for 2013
No. of web pages viewed a month on average
163.656
165.000
162.694
163.609
160.000
155.000
149.739
150.000
145.000
140.000
2010
2011
2012
2013
Corporate events for employees significantly enhance working relationships, while fostering interpersonal
relationships between more than thousand geographically dispersed employees. They continually strengthen
corporate identity and values as well as increase employee motivation and loyalty in the long-term, which is why
they are an important form of communication.
Every year, Adriatic Slovenica organises sports games for all employees and partner agencies (the event was
cancelled only in 2007 when the September catastrophic flooding in Železniki kept all people in the insurance
business fully tied-up and there was a day of mourning for the victims). On 25 May 2013, the 21 st Adriatic
Slovenica Sports Games were held in Ankaran, which for the first time grew into a KD Group-wide event,
including teams from subsidiaries in Zagreb and Serbia and employees from Slovene subsidiaries Viz and
Prospera. At an annual level, many more events were held for employees organised by business units or teams
for their co-workers, significantly contributing to team building (various training courses, motivational workshops,
excursions, and Christmas and New Year parties).
4.7.3
Communication with business partners, the broader social environment and the media
Meetings with business partners are an established form of communication with major business partners and
policyholders.
They are held independently, in cooperation with other KD Group companies, while individual business units
occasionally organise professional and other meetings for smaller business partners in their regions.
On 18 June 2013, business partners of all KD Group’s companies were invited to an exceptional acoustic
spectacle by the RTV Slovenia Symphony Orchestra and the music band Siddharta in the Cankar Cultural and
Congress Centre in Ljubljana. The performers completely enthralled the audience at the concert in the Gallus
Hall, which was sold-out several weeks in advance. Since Adriatic Slovenica has been a sponsor of the
Symphony Orchestra for many years, the Company’s business partners have the benefit to attend their concerts.
On 6 September 2013, the Company organised the traditional charity golf tournament for business partners at
the Smlednik golf course. All tournament participants donated their fee for the purchase of a new defibrillator,
which will be installed at a much frequented location in Ljubljana within the framework of the iHELP project.
Communication and co-operation with the wider social environment, where the business policy and strategic
goals of Adriatic Slovenica are reflected, are carried out on an ongoing basis. The Company supports panSlovene projects and organisations, while at the business unit level it provides support to small-scale regional and
local events, associations and other institutions. With sponsorships and donations, Adriatic Slovenica supported
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numerous initiatives in healthcare, sports, culture and education as well as safety in all areas, while support for
the environment is presented in greater detail in Section 6.2.
Communication with journalists and the media is in compliance with the strategy and centralised and
coordinated with other companies of the KD Group. Communication with journalists is proactive, responding to all
the questions posed by the media. The public, the media and journalists are regularly informed of any news
related to the Company, its operating results and major business decisions. Policyholders are advised on how to
respond in the case of loss events and catastrophic natural disasters.
In 2013, regular press conferences were held for the journalists. At the conference in Ljubljana on 10 June 2013,
business results and the restructuring strategy of the KD Group were presented. The aim of the strategy is to
restructure the Group in an insurance holding company by 2015, Adriatic Slovenica being the parent company.
At the traditional annual press conference, held on 17 December 2013 in the headquarters in Koper and
organised for journalists from the Primorje region and national media correspondents, performance results of
Adriatic Slovenica in 2013 and plans for 2014 were presented. At this occasion, the Company's cooperation with
the iHelp Project was presented, which is why Andraž Ogorevc, project manager, and Borut Lončarevič,
medical technician, demonstrated the use of the GSM application for saving lives and resuscitation using a
defribrillator in the case of cardiac arrest.
Media coverage of Adriatic Slovenica is monitored through the Press Clipping company, which specialises in
media monitoring and analysis. In 2013, the Company was mentioned in the media 912 times (1,407 times in
2012 and 877 times in 2011). The number of commentaries favourable to Adriatic Slovenica prevailed – 675
commentaries or 74% (2012: 66.0%), almost all other commentaries, i.e. 894 or 24%, were neutral, while only 18
or 2% of media commentaries were negative (2012: 5.6%).
In December at the Adriatic Slovenica headquarters in Koper, around 20 PR experts were received by the PR
Department and the traditional annual meeting of PR representatives from the companies and institutions of the
Primorje region was hosted.
4.8
INTERNAL AUDIT REPORT
The Internal Audit Department (hereinafter: IAD) is organised as an independent organisational unit, directly
accountable to the Management Board of the Company. The head of IAD directly reports to the Management
Board about its work and operations. Such an organisation ensures organisational and functional independence
of the IAD. The core task entrusted to the IAD as set out in the Insurance Act (ZZavar) is to carry out ongoing and
comprehensive supervision of the Company's operations in all business segments and to verify whether specific
work processes are in compliance with the applicable legislation, implementing regulations and the Company’s
internal rules.
In 2013, internal audits were conducted in accordance with the International Standards for the Professional
Practice of Internal Auditing, the Charter and Rules of Operation of the Internal Audit Department in Adriatic
Slovenica, the Insurance Act, and other laws and implementing regulations.
In 2013, KPMG conducted an external quality assessment of IAD and expressed an opinion that in all material
aspects the IAD operated in accordance with all International Standards for the Professional Practice of Internal
Auditing, the Code of International Auditing Principles and the Code of Ethics of Internal Auditors. KPMG also
stated that the IAD operations in the reviewed period significantly contributed to the added value of the Company.
The IAD carried out auditing activities on the basis of the annual audit plan for 2013 adopted by the Management
Board, subject to a prior approval by the Supervisory Board. A significant amount of auditing time was devoted to
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the following activities: performance of 14 audits, monitoring of recommendation implementation, continual
auditing, ongoing supervision as laid down in the ZZavar, business consulting, development tasks and training,
and other audit activities.
In addition to the compliance with the regulatory requirements, the IAD strategy was largely focused on the
following:
- an internal audit approach with an aim to generate added value and, above all, to continue to reduce
operating costs (expenses);
- an internal audit approach focused on reviews of potential high risk areas, consequently resulting in
potentially greater damage (loss) or more significant opportunities missed;
- an internal audit approach with an emphasis on identifying major risks and determining whether they are
effectively managed and whether the Company's operations are carried out with due care and diligence
and in conformity with the internal rules and external regulations;
- internal control system assessment;
- professional advice to the top management of Adriatic Slovenica;
- transfer of best practices from individual organisational units.
After the audits were completed, the IAD issued draft audit reports, which were coordinated with the auditees.
The final internal audit reports were considered at Management Board meetings. The decisions adopted by the
Management Board included the deadlines for the auditees to prepare their response reports, specifying how the
identified irregularities were corrected and how the recommendations received were implemented. Based on the
findings of the follow-up reviews, the IAD regularly issued special reports on the elimination of identified
irregularities and submitted them to the Management Board for consideration. Since the IAD and the
Management Board actively monitored the correction measures taken by the auditees, the share of
recommendations implemented by the auditees was high also in 2013.
All reports were also submitted to the Audit Committee after they were examined by the Management Board.
Pursuant to the ZZavar and the internal rules on the IAD operation, two interim internal audit reports and one
annual internal audit report were drawn up, submitted and presented to the management and supervisory bodies
of the Company.
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5
REPORT ON SUSTAINABLE DEVELOPMENT
5.1 EMPLOYEES
5.1.1
Headcount and educational structure of employees
At the end of 2013, Adriatic Slovenica had 1,050 employees. In comparison with the end of 2011, their number
increased by 3.8%, mostly as a result of the transfer of staff from KD Življenje to Adriatic Slovenica. From among
the Adriatic Slovenica staff, women account for 68% and men for 32%. The average age of the Company's
employees at the end of 2013 was 43 years. At the end of 2013, the fixed-term employees accounted for more
than 6%, their number having decreased by 4% in comparison with the preceding year.
Number of employees 2005–2013
No. of employees in 2005–2013
2011
2012
1050
2009
1010
2008
998
2007
951
1090
2006
1006
1106
2005
800
1033
1123
1,200
400
0
2010
2013
The insurance company boasts a well-branched distribution network in all Slovene regions. As at 31 December
2013, the workforce was composed of 265 insurance agents employed with Adriatic Slovenica, 599 agents selling
its insurance products through authorised agencies and 51 contracted agents.
Number of agents in the distribution network in 2013
260
240
220
200
180
160
140
120
100
80
60
40
20
0
Contracted agents
Agency representatives
Business unit agents
Other employees
KP
CE
LJ
NM
MB
KR
NG
PO
MS
business business business business business business business business business
unit
unit
unit
unit
unit
unit
unit
unit
unit
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The biggest share (as much as 41%) of AS employees has completed level VII or higher education. Due to the
nature of the insurance business, employees with level V technical education account for an important share of
AS staff – as much as 40%, since the statutory requirement for insurance agents is completed secondary
education.
Educational structure of employees in 2013
3%
41%
Level VII or more
40%
Level VI
Level V
Level IV or less
16%
5.1.2
Education, training and HR development
Education and training receives much of the Company's attention. It sees it as an identifiable social value, a
significant competitive advantage and most profitable investment. Education and training is planned in accord
with the Company's objectives, shared also by the management and not least the employees, as it is an
important non-pecuniary method of employee motivation. The Annual Education and Training Plan seeks to
upgrade and develop employee competences to the level allowing them to successfully manage both work and
personal challenges.
In order to make education, training and HR development more efficient, the in-house training system was
improved already in 2012 with Akademija AS (AS Academy) and the drafting of first product materials. In 2013,
the system was further upgraded and developed.
With respect to education, the in-house seminars and workshops organised by Akademija AS in 2013 focused
primarily on professional training of the marketing staff and on enhancing their social sales skills needed to boost
sales. Special attention was also placed on those employee groups who are in direct client contact, and on
senior, managerial and professional staff.
In 2013, the Company finalized the general competence model of Adriatic Slovenica, which will permit targeted
training and key competence development among its staff, enhancing their efficiency and the quality of products.
Education and training is offered in various professional fields, with priority assigned to those of sales and sales
skills, personal development, communication, leadership, foreign-language courses, in-depth knowledge of the
Company’s insurance products and the use of internal information systems.
Moreover, the Company consistently carries out specialised training required by law, primarily in the occupational
health and safety segment, but also in security policy and security notifications. Akademija AS is certainly the
right route to becoming a successful sales or commercial officer, leader, in-house coach or a insurance clerk,
accounts receivable collection clerk and loss adjuster.
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Akademija AS (AS Academy)
Akademija AS was established for the benefit of all who wish to build their careers in sales, development or
insurance contract processing, become top financial advisers or loss adjusters in non-life insurance, personal
insurance, banking services and securities trading (funds).
All Akademija AS training programmes have been designed to help participants acquire knowledge and transfer it
into sales results, as well as learn about the practical use of insurance services. They guarantee continuous
knowledge building and allow participants the free choice of seminars they wish to attend in accordance with their
needs. Following the completion of a selected module, participants are awarded an Akademija AS certificate.
Licensed employees are recognised level AS2 certificate, which they can build on further by taking higher-level
modules.
eAkademija AS (AS eAcademy)
E-training is based on the eAkademija AS web portal which facilitates higher-quality and active learning, tailored
to the needs of an individual. The purpose of eAkademija is to grant access to knowledge everywhere and at all
times, and employees can use it to refresh their knowledge, verify information, solve exercises and test their
learning. The web portal contributes to a more flexible and adaptable learning process in terms of time, space
and content, and assists in a more efficient and transparent organisation of the educational process.
The eAkademija AS already offers e-materials on insurance products available under health insurance, on Office
Tools and the Business Connect system, while further materials are planned on insurance law, internal
information systems (INIS, CRS, ES) and other classes of insurance. In 2013, the drafting of technical and
product materials was in full swing. Due account was taken of the marketing orientations, meaning that primary
attention was given to those classes of insurance which the strategy of the Small Businesses and Individuals
team identified as a priority. Presently, the training portal includes materials on the following topics: Aktivna renta
(Active Annuity), Asistenca življenja (Life Assistance), car insurance (motor third-party liability (AO), AO+, avto
nezgoda (car accident), avtoasistenca (roadside assistance) and avtokasko (comprehensive motor vehicle
insurance), non-life insurance (home insurance Dom AS) and health insurance (supplemental and additional
health insurance products). The first technical material was made available to all employees at the end of 2013
on the new product “short-term care in the case of illness or injury“ and followed by materials on new Business
Connect modules related to the Interim/short-term care due to illness or injury; and, in addition, materials were
produced for the new Business Connect modules.
The Company again organised numerous in-house technical meetings. These included the already traditional
Sales conference, the AS legal experts meeting, the Client Care team meeting, the OIZ team meeting, the sales
network organisers meeting, as well as the first conference of key account managers who could also attend a
special workshop on developing personal potentials to boost work efficiency. Colleagues working on debt
collection were offered training on stress and climate management techniques. Being aware of the importance of
maintaining good communication and relationship with clients, colleagues from the Claim settlement team were
offered refresher courses on communication skills, character recognition, conflict prevention and, not least,
personal growth. Furthermore, public speaking and knowledge transfer classes were offered to those technical
staff who will in the future actively participate as lecturers at trainings and internal meetings. For the purposes of
the marketing staff, two training seminars were designed to introduce the new Aktivna renta AS (AS Active
Annuity) product and new dimensions of selling motor vehicle insurance products. Additionally, some employees
could benefit from motivational workshops conducted by external coaches. Where appropriate, product sales
workshops were organised at business units and carried out by an in-house coach. The company has again
organised preparatory courses for those who wished to take the exam required to engage in the business of
insurance.
Also in 2013, intensive training was launched to raise the awareness about safety and the security policy. The
latter was provided in conjunction with regular training on occupational health and safety.
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The Company's external partners, too, were regularly involved in all education and training activities related to the
changes to insurance products, and special product sales workshops carried out by external providers were
organised on their behalf.
The Company has earmarked almost EUR 400,000 for education and training, EUR 236,670 of which for direct
costs: EUR 222,516 on functional education and training in Slovenia and abroad, and EUR 14,154 on off-the-job
training to obtain a formal professional degree and scholarships. Other indirect costs (e.g. for rentals of lecture
rooms, equipment, etc.) amounted to a total of EUR 160,310.
In 2013, 97% of employees participated in education and training for an average of 37 hours. The majority of
education and training activities, i.e. 73%, were conducted in-house with company coaches, while numerous
workshops intended for particular employee target groups were organised in cooperation with external providers.
Most education and training hours were devoted to the marketing staff – insurance agents, who, on average,
followed 39 hours of training. Education and training also resulted in 15 employees obtaining the authorisation
issued by the Insurance Supervision Agency to engage independently in the business of insurance agency, and
two employees obtaining the authorisation issued by the Securities Market Agency to sell units in investment
funds. The co-financing provided by Adriatic Slovenica enabled 30 employees to study in 2013 and six
employees got a degree this year.
Akademija AS is in full swing and will continue to pursue its mission also in 2014. It will respond to all educational
and training needs, as enhancement of knowledge about insurance products, intensive training courses and
seminars on selling new insurance lines and using information systems and tools belong to the regular
educational and training activities. According to the needs, the company will continue to support employees who
wish to upgrade their professional knowledge, be it in Slovene or foreign external education institutions.
5.1.3
Care for employees
Adriatic Slovenica is committed to ensuring a safe and healthy work environment, good interpersonal relations
and a positive atmosphere to its employees. This endeavour is supported by the activities of the Sports and
Culture Club, annual gatherings, sports events, preventive medical check-ups for employees as well as collective
accident insurance and voluntary supplementary pension insurance that are co-financed by Adriatic Slovenica for
the company staff.
The Sports and Culture Club with the name “Pravi ASi” (True AceS) was established in May 2010 to promote
employee involvement in sports and cultural activities, thus encouraging them to spend active time together also
outside work. One of the primary goals of the Club's members is to foster a positive climate among company
employees.
Membership of the club – presently counting 305 members — is open to all Adriatic Slovenica employees as well
as to the workforce of its exclusive agencies and pensioners formerly working in the Company. In 2013,
recreational activities (gym, basketball, volleyball, table tennis, nine-pins, futsal, badminton, fitness, swimming,
spa), were offered to club members at all branches. In addition, the club organised theatre visits (provided season
tickets), 7 cycling trips and 5 mountain hikes, encouraged participation of members in winter and summer sports
games for the employees of financial institutions (ŠIFO), assisted in the organisation of the KD Group sports
games in Ankaran, attended the June Olympic run in Koper where Adriatic Slovenica was the main sponsor, and
carried out a cultural and educational trip to Istria.
In addition, employees with families and pensioners of Adriatic Slovenica can benefit from the quality and
affordable accommodation facilities the company has in Slovenia and Croatia. In 2013, 144 employees with
families took advantage of this possibility.
In the desire to foster good interpersonal relations and the team-building spirit, employees get together for a
Christmas and New Year's celebration, and the company maintains the tradition of handing out holiday presents
to the children of employees. Once a year (usually late May), a sporting and social event is organised for all
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company employees. These may also compete in summer and winter sports games for the employees of
financial institutions (ŠIFO), in which case their participation is co-financed by Adriatic Slovenica.
The health screening programme and prevention are of immense importance for both the employees and the
Company. In 2013, 31% (i.e. 320) of employees were referred to preliminary, periodic or targeted check-ups. As
every year, vaccination against seasonal influenza was organised for company employees.
All Adriatic Slovenica employees are included in group accident insurance coverage and they can also join the
group voluntary pension insurance scheme co-financed by the employer. At the end of 2013, the supplemental
pension insurance scheme co-financed by the employer covered 86% of all employees. The average monthly
premium under this pension scheme amounted to EUR 40.33 per employee and it is partly sponsored (co-funded)
by the employer. The employees of Adriatic Slovenica can take out accident insurance policies also for their preschool children as well as their children of school age. The Company provides to all its employees a special
bonus if they decide to purchase the higher-than-standard health insurance coverage Zdravje AS - Težke bolezni
in operacije (AS Health - Serious illnesses and surgical procedures), and favourable insurance terms for their
family members. The coverage provided under this product has been purchased by 985 employees and 334
members of their families.
All employees entitled to the use of personal protective equipment according to the Risk Assessment and Safety
Statement are provided outdoor jackets with detachable fleece lining and waterproof trekking footwear.
5.2 IMPROVEMENTS, INFORMATION SECURITY AND QUALITY
5.2.1
Improvements
The 2013 work programme of the IT Department (ITO) followed the guidelines defined in the IT Strategy (adopted
in 2011), which, in turn, is based on the company strategy, the business environment, information technology
trends, experts' demands and good IT management practices. The ITO has also provided assistance to the
subsidiaries AS Neživotno Osiguranje and Prospera.
The conversion of all insurance classes – with the exception of life insurance -- into the target INIS back-office
information system was completed (previous back-office information systems now only serve the access to
historic data). The entire health and non-life insurance portfolio and a part of the life insurance portfolio were
already managed by a single transaction system.
Furthermore, the Company has commenced integration and consolidation of the information systems
supporting life insurance contracts which were transferred to AS upon the spin-off of KD Življenje followed by
the acquisition by AS, and are managed in the Amarta information system.
To provide IT support for the new insurance products, the point-of-sale and the back-office information systems
were adapted so as to allow for the segmentation of motor vehicle insurance. A portal solution for health
assistance services offered under the Zdravstvena asistenca AS (AS Health insurance assistance) was
developed and will be handed over to production in the beginning of 2014. Furthermore, the design of the new
human resources information system was completed.
In the framework of the DigitAS project, the transfer to paperless business operation was continued. The emailroom and settlement of invoices are two of the processes that received IT support.
In line with the strategy, a modern technological platform was selected for the setting-up of the insurance
company portal, which will be used in the coming years to build new websites and update the existing ones.
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The data warehouse was upgraded with additional contents and new applications were developed, which permit
specialised departments and management of the company to monitor business operations more closely and
prepare various analyses.
In the CRM area, 2013 marked the beginning of preparations for the migration and merger of clients of the
transferred KDŽ life insurance portfolio from Amarta to CRS.
Another project launched was the update of the standard workstation configuration, i.e. transition to Windows 7
and Office 2010, as well as the project of introducing a control system that will not only cover critical information
systems but rather the majority of the segments of the company's information environment. The control system
project includes the establishment of control mechanisms to oversee the functioning of key information system
components, the setting up of a limited SIEM system and a CMDB system, as well as the renewal of the back-up
system.
In cooperation with the HR Department, the ITO has started to take advantage of the opportunities offered by elearning and in this manner upgraded the support provided to IT solution users.
As part of the Company's reorganisation, ad hoc teams were established under the standing IT team to track
applications in the process of introducing and managing IT solutions.
Following successful implementation of the human resources module for web-based approvals of absence from
work and management of the travel order issuing process in the Business Connect (BC) document system early
2013, the DigitAS project of paperless operations and introduction of new BC modules gained new momentum.
As a consequence, "the e-mailroom", one of the most extensive modules of the system, was launched without
major complications already mid July 2013, whereby the processing of the incoming mail has become fully
electronic. Even before it enters the company, all incoming mail is now centrally captured, converted into an
electronic form and imported into the BC document system. This makes it possible to automatically or "manually"
forward and allocate an e-mail directly to whom it is addressed, to electronic files or to a group of recipients at a
particular organisational unit. In parallel with the "e-mailroom" module, the "invoice settlement" module also
started to be used in operations, which permits certification of invoices in electronic form. The fourth module
introduced in the BC document system is the "internal regulatory framework and quality management system"
module. Early 2014, a further module of "procurement" is being launched, while the "contracts" module is planned
for the end of the first quarter of 2014. This way, the Company is gradually switching over to a predominantly
paperless environment.
In the autumn of 2013, the project of revising the organisational structure and job classification was also
completed. The changed Company's organisation places the client – the policyholder in the centre of its
operations, whereas business processes have been remodelled and adapted so as to primarily satisfy the needs
of the clients but also of employees, and to be flexible enough to warrant the achievement of the set business
goals.
5.2.2 Information security
In the frame of activities seeking to improve the quality, security and reliability of information technology, the
Company continued to update the documents related to the information security management system. Based on
penetration testing, security adjustments were made to the information systems in order to enhance the
Company's and client safety. Lectures on occupational safety given in individual branches were augmented with
a block of lectures aimed at enhancing the awareness and education of employees with respect to information
security. In 2014, employee training will be further complemented with e-learning provided by Akademija AS.
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Attention was devoted to the Solvency II standard and the development of solutions for computerisation of the
standard's requirements.
5.2.3 Quality management system
Adriatic Slovenica is aware that quality makes all the difference, therefore the company introduced as well as
certified the Quality management system in line with the international standard ISO 9001 already in June 2004.
The objective of the quality management system is to achieve the overall quality of operations. This objective is
being met through constant improvements to business processes and dissemination of best practices among all
organisational units.
Continuous improvements to business processes and to the quality management system (QMS) are guided
primarily by the system of internal and external audits, management reviews and reviews by the college of area
branches related to QMS, by the system of useful suggestions and several other approaches (projects,
improvements to IT solutions, supplements to the internal regulatory framework, etc.). Based on these and other
project activities, the Company introduces measures and improvements at all levels of its operations, information
technology support and organisation.
Within the framework of the Organisational Change project which is driven by a process approach, the division of
processes in the company has been modified. The fundamental guiding principles to the reorganisation were the
process approach, team work and work flexibility.
The company operates in agreement with the accepted values and by placing clients at the centre of all activities.
Thus the Company achieves development orientations, meet the demands of all stakeholders and enhance their
satisfaction and trust.
The system of useful suggestions has been in place since 2003, i.e. for an entire decade, and the usefulness and
feasibility of suggestions has constantly been increasing. Till the end of 2013, the useful suggestions evaluation
committee received a total of 333 proposals, 49 of assessed as exceptionally useful and their authors have been
rewarded. Every year in November, the Useful Suggestions Month campaign is conducted, which additionally
spurs the employees to propose innovations (in November, 18 were suggested out of 35 submitted this year).
Investments in equipment and office space
Investments in equipment and office space were made in compliance with the new strategy of KD Group focusing
on growth, development and cost-efficient business operations.
By merging KDŽ in October, new office premises were obtained and in order to increase the cost efficiency of
business operations, lease agreements for most of the rented office space in Maribor, Novo mesto, Nova Gorica
and Ljubljana were terminated. The employees who previously worked in these locations were transferred to the
office premises held by AS, which were partly refurbished to ensure proper working conditions (e.g. installation of
an air condition system). This investment amounted to over EUR 30,000. By terminating the lease agreements,
the costs of the rent were reduced by almost EUR 28,000 per year. In accordance with the new organisational
structure of Adriatic Slovenica, the employees of the Client Care Centre from both companies are now located in
the premises on Celovška 91 road.
The Murska Sobota branch invested EUR 32,500 in the construction of an overhanging roof in order to provide
better working conditions for adjusters of non-life loss and clients during the car damage inspection. The
Maribor branch repaired the damaged district heating system, thus restoring normal heating of the premises. The
value of the repair works amounted to EUR 5,760.
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Adriatic Slovenica is still interested in two real properties; the aquisition of both locations could make the branch a
meaningful whole, and reduce the costs of renting.
The vehicle fleet is regularly renewed. Last year, an amount in excess of EUR 191,000 was allocated to this
purpose and in 2014 this amount is planned at EUR 162,000. In order to reduce the carbon footprint, environment
friendly vehicles, such as hybrid cars, will be gradually purchased. Almost one quarter (EUR 40,000) of the assets
to be spent on the renewal of the existing car fleet have been earmarked for the purchase of such vehicles in
2014.
For a number of years, the Company has been paying much attention to environmental protection and ecology.
At the end of 2013, both buildings at the Company’s headquarters in Koper underwent extended energy audits.
The results are expected to arrive at the end of February 2014. Nevertheless, the investments for 2014 include an
amount of EUR 145,000 to increase the energy efficiency of the buildings.
In 2014, a total of EUR 146,000 was budgeted for investments to upgrade the equipment and means of work and
replace the obsolete office equipment and small tools.
5.3 THE COMPANY'S RESPONSIBILITY TO THE LOCAL COMMUNITY AND THE ENVIRONMENT
Since its establishment in 1990, Adriatic Slovenia has been involved in a plethora of projects, initiatives and
campaigns of national importance as well as less extensive regional and local celebrations and events,
contributing to a better quality of life in smaller towns and peripheral regions. In 2013, the Company supported
over 520 such activities and events (2012: 470).
For more than two decades, Adriatic Slovenica has been promoting projects related to its strategic development
orientation, primarily in the fields of healthcare, education, culture, sports and traffic safety.
In the area of cultural and natural heritage protection, the Company has traditionally supported the Škocjan
Caves, where it donated for the renovation of fences along the park educational trail to enhance visitor safety. In
culture, AS has continuously supported the work of the Portorož Auditorium and the Koper Theatre (since
2002).
Since 2009, Adriatic Slovenica has been a partner of the Podjetna Primorska Best Business Plan Contest held
by the University Incubator of Primorska to stimulate new, modern and knowledge-based enterprises in the
Primorska region and contribute to the transfer of knowledge from the university to the real sector. In 2013, 25
business plans were submitted in the contest, and awards were presented to those exhibiting innovativeness,
potential for growth and international orientation. The winning projects included the Comments, Complaints and
Compliments Mobile Application, the Contour Point, and the Gravity-Fed Wood Pellet Burner.
In the area of culture and education, Adriatic Slovenica has from 2010 onwards been inviting fifth grade pupils
from all Slovene primary schools to participate in the Write a Poem about Clean Sea Waters Contest,
encouraging them to creatively engage in nature preservation. In 2013, almost 60 schools with 298 pupils (2012:
342 pupils) responded to the invitation. The evaluation committee awarded the prize to a fifth grade pupil from the
primary school in Gradec, residing in Vače. The winning poem The Deep was written in a very rare Indonesian
poetic form. Consequently, Vanja and her entire class spent 14 June in an outing along the Slovene coast. For a
series of years now, the insurance company has been carrying out prevention campaigns in cooperation with the
Road Safety Council of the City Municipality of Ljubljana. This year, too, they presented reflective vests to 500
children from kindergartens in Ljubljana, thus contributing to greater safety of our youngest road users. The vests
were handed out on 12 February 2014 in the Trnovo kindergarten.
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In 2013, Adriatic Slovenica continued to advance sports at various levels. Top-level national teams, including
Team Slovenia participating in the Olympic Games and the national football team could rely on its support as the
official insurance company. Ever since 1993, Adriatic Slovenica has sponsored the Olympic Committee of
Slovenia, and on 21 December 2012, it signed a sponsorship contract for the next four-year period until the 2016
Olympic Games in Rio de Janeiro. In 2013, the Olympic Committee of Slovenia organised the third Slovenia-wide
Olympic run to celebrate the International Olympic Day and the anniversary of the International Olympic
Committee. It has organised as many as 6 runs in various regional centres, and on 14 May opened an exhibition
of photographs along the Jakopič Promenade in Tivoli Park in Ljubljana with the title Slovene Olympic Heroes
2013 marked the 13th year of the Company’s collaboration with the Football Association of Slovenia, and on 22
January 2013, the two parties signed a sponsorship contract for the period until 2015. The Company furthermore
joined the ranks (as Gold Sponsor) of staunch supporters of the Soške Elektrarne Kayak Club, which organised
the Wildwater Canoeing Sprint World Championship between 11 and 16 June, as well as of Slovene national
swimming teams and of the Judo Federation of Slovenia, which in October organised the World Junior Judo
Championship taking place in Ljubljana. In June 2013, the Company signed up as a Silver Sponsor of the Sailing
Federation of Slovenia, and in January extended sponsorship of Vasilij Žbogar, successful Slovenian sailor in
his fourth consecutive Olympic cycle. Other significant sports sponsorships include the four-year-long gold
sponsorship of the men’s senior national handball team (until the end of the 2013/2014 competition season)
and cooperation with the Slovenian Cycling Federation and the Rog Cycling Club.
Since 2010, Adriatic Slovenica has been handing out prizes to children aged 5 to 12 years as part of the annual
accident insurance marketing campaign, while young football players were taken to the June Real Madrid
Football School.
In health insurance management, Adriatic Slovenica cooperates with approximately 1,700 medical services
providers and supports education and initiatives raising the profile of medical professionals. For the twelfth time in
a row, the Company has acted as the main sponsor of the Moj zdravnik (My Doctor) campaign singling out the
best and most reputable Slovene doctors.
In April, the Company concluded important partnership with the iHELP project. In order to assist the highest
possible number of people, save lives and reduce the number of cardiac arrest victims and victims of other
sudden incidents, young innovators have developed the iHELP mobile application which is simple to use and
sends an SOS alert to lay people and paramedics who can provide prompt assistance to the victim. With just one
touch on the mobile phone, this free-of-charge application can thus save your life and the lives of your family
members, friends or strangers. The SOS notification activates the safety net consisting of people entered as
emergency contacts (family and friends), paramedics and all iHELP users in the vicinity. The safety net is
activated in not more than 20 seconds, which reduces the time of rescue by six- to tenfold, increasing the chance
of survival.
In June, the Company made a donation to the Elvira Vatovec Training Centre in Strunjan to help it procure a van
for the transport of children in care, and in January 2014 it donated funds to the community health centre in Piran
for the purchase of a defibrillator. By participating in Unicef's Safe Spots project, all Adriatic Slovenica branches
contribute to greater safety of children and teenagers in larger city centres.
In 2013, Adriatic Slovenica became a corporate partner of the Ypsilon Institute, which organises professional
lectures and workshops for the young under the age of 30. At the end of September, the Company also
supported the organisation of the Management Congress in Portorož, which discussed the topical issue of trust
placed in Slovene managers.
Together with other KD Group companies, the insurance company assists in the work of KD Fundacija (KD
Fundation) (known earlier as Ajda Fundacija), which was founded on 4 November 1995 and has since offered
scholarships to exceptionally talented students. At first it focused on those from socially disadvantaged rural
families, but later expanded its reach to all promising young talents. KD Fundacija helps them complete their
75
Annual Report
for 2013
education. Since its establishment — with shorter spells of reduced activity due to the shortage of funding —, the
foundation has provided financial assistance to 19 individuals, mostly for the entire four- to five-year duration of
higher education or academic programmes. Since 2008, all KD Group employees and clients have been actively
informed of the possibility to donate part of their income tax to KD Fundacija, which in 2013 managed to collect
EUR 3,990.86.
In 2013, KD Fundacija selected music and literature as its primary focus. It continued to support Žiga Pirnat who
in the spring semester of 2014 is completing his studies of film scoring, contemporary writing and production at
the renowned Berklee College of Music in Boston, US. He was one of the best students of the college. KD
Fundacija also supports Eva Nina Kozmus, a young Slovene virtuoso on flute who continues her 2nd cycle
Bologna studies (Master) at the French music conservatory Conservatoire national supérieur de musique et de
danse de Lyon.
In the 2013/2014 academic year, KD Fundacija selected two further protégés, both musicians. It sponsors Rok
Zalokar, a jazz piano student who is in the first of the five years of studies at the Rotterdam Codarts Academy of
Music in the Netherlands, and Petra Koprivec, a piano student following a three-year postgraduate course at the
Royal Conservatory of Brussels in Belgium.
With respect to literature, KD Fundacija remains the main and only sponsor of the Taras Kermauner Institution.
In 2013, one-time financial assistance was granted to Igor Žunkovič, a young analyst and interpreter of the
contemporary Slovene drama, to facilitate his scientific work. His scientific research covers Slovene dramas
created between 2003 and 2013 receiving the Grum Award, with a particular focus on morals and ethics in the
contemporary Slovene drama.
On St. Nicholas eve of 2013, KD Fundacija, following its long-standing tradition, brought presents to the children
of the Malči Belič Youth Care Centre. With assistance of the KD Group and Adriatic Slovenica employees and
contractual partners, it collected a large quantity of warm winter clothing and sweets, thus creating a festive
atmosphere.
The total amount of the financial assistance provided in 2013 stood at EUR 22,961.20. In 2014, KD Fundacija is
expected to change its name to AS Fundacija.
In 2012, the Company acquired a rich art collection, which it started to exhibit in 2013 in the AS Galerija gallery at
KD Group headquarters at Dunajska 63 street in Ljubljana. There, four thematic exhibitions of the works of art
owned by the company are staged every year (e.g. works of the OHO Group, a retrospective exhibition of
paintings by Bard Iucundus, etc.) In addition, the gallery cooperates with other visual art institutions. In the
autumn, it lent 13 works of art from its collection to the International Biennial of Graphic Art. It also provided some
pieces for the retrospective exhibition of Gabrijel Stupica hosted by the Gallery of Modern Arts, and some for the
1:1 Stopover exhibition displayed in the Museum of Contemporary Art Metelkova at Metelkova 22 in Ljubljana.
Via Gea College, Adriatic Slovenica has supported the international research project GUESSS (Global University
Entrepreneurial Spirit Students' Survey), which analyses students' career choices and investigates their intention
and activities related to career path planning. The research is conducted in 34 countries of all continents and at
more than 500 universities. The project lead is in the hands of the University of St. Gallen in Switzerland.
The business of the Company does not result in direct environmental burden. Furthermore, ecological behaviour,
electricity saving and separation of waste are high on the Company's agenda. Last year, the Company
employees took part in the collection of plastic bottle caps campaign carried out by students in the area of Koper,
who used the charity funds thus collected to buy a means of transport for a disabled girl. Furthermore, the
Company consistently separates hazardous waste (toners and ink cartridges) and all branches collect waste
paper in separate containers. Early 2014, the Company signed up for the third consecutive Waste Paper for
Fresh Hope campaign. Since 2012 onwards, the AS Novice e-magazine has informed employees of ecological
issues and solutions in the Eko AS weekly column, offering advice on ecological behaviour in all spheres of life.
76
Annual Report
for 2013
6
SELECTED ACCOUNTING AND FINANCIAL PERFORMANCE INDICATORS
All figures are in euros. The selected accounting indicators were calculated on the basis of the data from the
financial statements prepared in compliance with the Decision amending the Decision on Annual Reports and
Quarterly Financial Statements of Insurance Companies – SKL 2009 included in Appendix 1.
Growth of gross written premium
1
Results by class of insurance:
1 Accident insurance
2 Health insurance
3 Land motor vehicles insurance
4 Railway rolling stock insurance
5 Aircraft insurance
6 Marine loss insurance
7 Goods in transportation insurance
8 Fire and natural forces insurance
9 Other damage to property insurance
10 Motor vehicle liability insurance
11 Aircraft liability insurance
12 Liability for ship/boat insurance
13 General liability insurance
14 Credit insurance
15 Suretyship insurance
16 Miscellaneous financial loss insurance
17 Legal expenses insurance
18 Assistance insurance
19 Life insurance
21 Unit-linked life insurance products
23 Insurance with capitalised payments
Non-life insurance contracts, excluding health insurance
Life insurance contracts
Health insurance contracts
Total
Gross written
premium in
current year
Gross written
premium in
previous year
2013
Gross written
premium in
current year
Gross written
premium in
previous year
2012
in euros
in euros
in %
in euros
in euros
in %
2
3
4=2/3*100
5
6
7=5/6*100
16,650,947
112,602,959
35,342,445
11
18,329
635,629
1,410,663
15,290,285
11,605,632
41,820,425
20,912
587,623
6,572,791
61,838
164,167
724,835
137,385
5,677,910
19,171,334
37,012,119
652,933
136,721,827
56,836,385
112,602,959
18,068,815
107,452,224
40,069,487
30
20,555
675,023
1,506,709
15,303,947
12,400,637
46,828,894
21,521
622,735
6,527,768
116,331
151,881
754,086
167,331
5,837,241
7,817,382
3,844,683
685,770
149,072,991
12,347,835
107,452,224
92
105
88
36
89
94
94
100
94
89
97
94
101
53
108
96
82
97
245
963
95
0%
92
460
105
18,068,815
107,452,224
40,069,487
30
20,555
675,023
1,506,709
15,303,947
12,400,637
46,828,894
21,521
622,735
6,527,768
116,331
151,881
754,086
167,331
5,837,241
7,817,382
3,844,683
685,770
149,072,991
12,347,835
107,452,224
18,449,784
100,254,920
41,503,769
14,250
707,515
1,120,912
14,831,614
10,908,900
50,501,853
14,556
599,413
6,264,187
728,680
135,337
785,441
171,071
5,681,158
7,078,613
4,808,834
740,488
152,418,440
12,627,935
100,254,920
98
107
97
144
95
134
103
114
93
148
104
104
16
112
96
98
103
110
80
93
0%
98
98
107
306,161,171 268,873,050
114
268,873,050
265,301,296
101
77
Annual Report
for 2013
Net written premiums as % of gross written
premiums
1
2 Health insurance
14 Credit insurance
19 Life insurance
Total
Net written
premiums
Gross written
premiums
2013
Net written
premiums
Gross written
premiums
in euros
2
in euros
in %
in euros
in euros
in %
3
4=2/3*100
5
6
7=5/6*100
2012
12,915,296
112,602,959
15,599,959
11
17,667
565,618
1,187,088
11,756,544
10,344,072
22,154,530
4,716
523,025
6,033,655
61,838
119,631
627,835
65,079
4,595,262
18,187,538
37,012,119
652,933
16,650,947
112,602,959
35,342,445
11
18,329
635,629
1,410,663
15,290,285
11,605,632
41,820,425
20,912
587,623
6,572,791
61,838
164,167
724,835
137,385
5,677,910
19,171,334
37,012,119
652,933
78
100
44
0
96
89
84
77
89
53
23
89
92
100
73
87
47
81
95
100
100
13,950,096
107,452,224
18,718,290
30
19,894
596,095
1,339,777
11,140,549
11,016,016
24,708,519
7,174
555,095
6,239,589
116,331
91,576
683,483
77,940
4,771,970
7,524,896
3,844,683
685,770
18,068,815
107,452,224
40,069,487
30
20,555
675,023
1,506,709
15,303,947
12,400,637
46,828,894
21,521
622,735
6,527,768
116,331
151,881
754,086
167,331
5,837,241
7,817,382
3,844,683
685,770
77
100
47
0
97
88
89
73
89
53
33
89
96
100
60
91
47
82
96
100
100
86,571,825
55,852,590
136,721,827
56,836,385
63
98
94,032,422
12,055,349
149,072,991
12,347,835
63
98
112,602,959
112,602,959
100
107,452,224
107,452,224
100
255,027,374
306,161,171
83
213,539,995
268,873,050
79
78
Annual Report
for 2013
Movement in gross claims and benefits paid
1
2 Health insurance
14 Credit insurance
19 Life insurance
Total
Gross claims Gross claims
and benefits
and benefits
paid in current paid in previous
year
year
2013
Gross claims Gross claims
and benefits
and benefits
paid in current paid in previous
year
year
2012
in euros
in euros
in %
in euros
in euros
in %
2
3
4=2/3*100
5
6
7=5/6*100
6,781,589
90,466,507
28,722,892
15,751
497,182
215,271
7,846,035
8,464,761
26,870,585
53,398
3,477,292
1,042,025
72,324
353,178
1,898,814
11,712,565
20,810,053
693,008
86,311,098
33,215,626
90,466,507
7,480,695
85,169,214
30,520,828
726,511
993,676
8,195,563
9,667,225
27,575,308
126,691
3,632,891
1,690,943
16,204
538,018
1,967,500
5,948,062
2,987,896
883,938
93,132,052
9,819,896
85,169,214
209,993,231
188,121,162
79
91
106
94
97
197
696
78
93
338
106
7,480,695
85,169,214
30,520,828
726,511
993,676
8,195,563
9,667,225
27,575,308
126,691
3,632,891
1,690,943
16,204
538,018
1,967,500
5,948,062
2,987,896
883,938
93,132,052
9,819,896
85,169,214
8,015,021
81,984,296
30,890,252
463,136
681,657
5,504,611
7,631,000
30,314,766
62,102
3,776,590
1,596,360
5,044
537,570
39
1,597,882
5,009,163
3,179,366
1,047,013
91,076,031
9,235,542
81,984,296
93
104
99
157
146
149
127
91
204
96
106
321
100
123
119
94
84
102
106
104
112
188,121,162
182,295,869
103
68
22
96
88
97
42
96
62
446
66
-
Annual Report
for 2013
Average claim/benefit paid
Gross claims Number of
and benefits claims/los
paid
s events
2013
in euros
1
2
2012
in euros
3
2 Health insurance
14 Credit insurance
19 Life insurance
6,781,589
90,466,507
28,722,892
497,182
215,271
7,846,035
8,464,761
26,870,585
53,398
3,477,292
1,042,025
72,324
353,178
1,898,814
11,712,565
20,810,053
693,008
11,003
50,698
41,989
194
1,327
6,659
17,078
9,722
115
1,519
243
7
709
10
9,925
9,352
9,521
208
86,311,098
33,215,626
90,466,507
Total
Gross claims Number of
and benefits claims/loss
paid
events
4=2/3
6
7=5/6
191
1,252
2,186
3,332
7,480,695
85,169,214
30,520,828
726,511
993,676
8,195,563
9,667,225
27,575,308
126,691
3,632,891
1,690,943
16,204
538,018
1,967,500
5,948,062
2,987,896
883,938
11,814
74,582
44,909
228
1,423
7,368
17,213
10,100
21
1,636
311
2
978
20
9,333
4,589
1,836
203
100,501
859
93,132,052
105,356
884
19,081
50,698
1,741
1,784
9,819,896
85,169,214
6,628
74,582
1,482
1,142
209,993,231 170,280
1,233
188,121,162
186,566
1,008
80
616
1,784
684
2,563
162
1,178
496
2,764
464
2,289
4,288
10,332
498
5
633
1,142
680
3,186
698
1,112
562
2,730
6,033
2,221
5,437
8,102
550
211
1,296
1,627
4,354
Annual Report
for 2013
Claims ratio
Gross claims
and benefits paid
Gross written
premiums
in euros
in euros
2
3
1
2013
4=2/3
Gross claims Gross written
and benefits paid
premiums
in euros
in euros
5
6
2012
7=5/6
2 Health insurance
14 Credit insurance
19 Life insurance
6,781,589
90,466,507
28,722,892
15,751
497,182
215,271
7,846,035
8,464,761
26,870,585
53,398
3,477,292
1,042,025
72,324
353,178
1,898,814
11,712,565
20,810,053
693,008
16,650,947
112,602,959
35,342,445
11
18,329
635,629
1,410,663
15,290,285
11,605,632
41,820,425
20,912
587,623
6,572,791
61,838
164,167
724,835
137,385
5,677,910
19,171,334
37,012,119
652,933
0.41
0.80
0.81
0.00
0.86
0.78
0.15
0.51
0.73
0.64
0.00
0.09
0.53
16.85
0.44
0.49
0.00
0.33
0.61
0.56
1.06
7,480,695
85,169,214
30,520,828
726,511
993,676
8,195,563
9,667,225
27,575,308
126,691
3,632,891
1,690,943
16,204
538,018
1,967,500
5,948,062
2,987,896
883,938
18,068,815
107,452,224
40,069,487
30
20,555
675,023
1,506,709
15,303,947
12,400,637
46,828,894
21,521
622,735
6,527,768
116,331
151,881
754,086
167,331
5,837,241
7,817,382
3,844,683
685,770
0.41
0.79
0.76
0.00
0.00
1.08
0.66
0.54
0.78
0.59
0.00
0.20
0.56
14.54
0.11
0.71
0.00
0.34
0.76
0.78
1.29
86,311,098
33,215,626
136,721,827
56,836,385
0.63
0.58
93,132,052
9,819,896
149,072,991
12,347,835
0.62
0.80
90,466,507
112,602,959
0.80
85,169,214
107,452,224
0.79
209,993,231
306,161,171
0.69
Total
81
188,121,162 268,873,050
0.70
Annual Report
for 2013
Operating expenses as % of gross written premiums
Operating
expenses
Gross written
premiums
2013
Operating
expenses
Gross written
premiums
2012
in euros
in euros
in %
in euros
in euros
in %
2
3
4=2/3*100
5
6
7=5/6*100
1
2 Health insurance
14 Credit insurance
19 Life insurance
4,551,748
12,285,076
10,029,727
4,881
193,589
313,053
6,307,784
4,954,277
10,381,423
4,459
184,988
1,913,485
80,801
13,088
207,340
42,966
2,723,696
8,755,135
8,507,477
121,604
16,650,947
112,602,959
35,342,445
11
18,329
635,629
1,410,663
15,290,285
11,605,632
41,820,425
20,912
587,623
6,572,791
61,838
164,167
724,835
137,385
5,677,910
19,171,334
37,012,119
652,933
27
11
28
0
27
30
22
41
43
25
21
31
29
131
8
29
31
48
46
23
19
5,336,394
15,015,440
12,516,541
5,666
239,889
381,148
7,056,852
5,749,135
12,263,514
4,353
199,026
2,082,029
119,756
17,377
239,012
47,182
3,780,320
2,477,732
570,212
106,008
18,068,815
107,452,224
40,069,487
30
20,555
675,023
1,506,709
15,303,947
12,400,637
46,828,894
21,521
622,735
6,527,768
116,331
151,881
754,086
167,331
5,837,241
7,817,382
3,844,683
685,770
30
14
31
0
28
36
25
46
46
26
20
32
32
103
11
32
28
65
32
15
15
41,907,305
17,384,217
12,285,076
136,721,827
56,836,385
112,602,959
31
31
11
50,038,193
3,153,952
15,015,440
149,072,991
12,347,835
107,452,224
34
26
14
71,576,598 306,161,171
23
68,207,585 268,873,050
25
Total
82
Annual Report
for 2013
Acquisition costs as % of gross written premiums
Insurance
acquisition
costs
Gross written
premiums
in euros
2
1
2013
Insurance
acquisition
costs
Gross written
premiums
in euros
in %
in euros
in euros
in %
3
4=2/3*100
5
6
7=5/6*100
2013
2 Health insurance
14 Credit insurance
19 Life insurance
1,510,163
1,782,953
3,192,036
1,311
88,125
92,650
3,508,915
2,340,080
3,224,086
1,604
86,459
883,624
13,833
1,068
64,392
17,183
982,027
4,098,571
16,650,947
112,602,959
35,342,445
11
18,329
635,629
1,410,663
15,290,285
11,605,632
41,820,425
20,912
587,623
6,572,791
61,838
164,167
724,835
137,385
5,677,910
19,171,334
9
2
9
0
7
14
7
23
20
8
8
15
13
22
1
9
13
17
21
1,600,903
1,683,205
3,699,675
2,240
96,081
94,728
3,483,248
2,346,031
3,668,299
1,739
93,475
934,705
23,229
1,916
73,076
17,870
1,044,324
776,954
18,068,815
107,452,224
40,069,487
30
20,555
675,023
1,506,709
15,303,947
12,400,637
46,828,894
21,521
622,735
6,527,768
116,331
151,881
754,086
167,331
5,837,241
7,817,382
9
2
9
0
11
14
6
23
19
8
8
15
14
20
1
10
11
18
10
1,378,634
743
37,012,119
652,933
4
0
28,020
724
3,844,683
685,770
1
0
16,007,556
5,477,949
1,782,953
136,721,827
56,836,385
112,602,959
12
10
2
17,181,539
805,698
1,683,205
149,072,991
12,347,835
107,452,224
12
7
2
23,268,457
306,161,171
8
19,670,442
268,873,050
7
Total
83
Annual Report
for 2013
(Balance of
investments at
Return on beginning of year
investments + balance of
investments at
year-end)/2
in euros
in euros
Investment return as % of average investments
1
2
Investments of fund covering mathematical provisions for life insurance
Investments of fund covering mathematical provisions for life insurance where
policyholder bears investment risk
policyholder bears investment risk - Fond Polica
policyholder bears investment risk - FP Dirigent
policyholder bears investment risk - FP Aktivni paket
policyholder bears investment risk - KD Vrhunski
Investments of fund covering mathematical provisions for pension insurance
during saving period
3
2013
in %
4=2/3*100
(Balance of
investments at
Return on
beginning of
investments year + balance
of investments at
year-end)/2
in euros
in euros
5
6
2012
in %
7=5/6*100
2,131,726
101,645,642
2.1
4,098,800
66,397,373
6.2
1,280,157
25,413,352
5.0
2,024,401
23,105,219
8.8
633,079
148,467,781
0.4
-
-
-
(26,387)
10,623,654
-0.2
-
-
-
(57,942)
8,451,310
-0.7
-
-
-
(104,480)
11,249,141
-0.9
-
-
-
157,566
5,700,345
2.8
248,044
5,785,166
4.3
26,705
424,875
6.3
32,906
408,191
8.1
(4,706,318)
152,289,821
-3.1
5,276,695
172,453,688
3.1
557,604
9,132,377
6.1
988,752
9,677,849
10.2
4,419
464,555
1.0
27,991
578,339
4.8
Investments of own sources of funding
956,694
49,128,583
1.9
(2,518,597)
34,336,016
-7.3
Total
852,823
522,991,437
0.2 10,178,990 312,741,839
3.3
Investments of fund covering pension insurance provisions during pay out
Investments of fund covering mathematical provisions without the fund
Investments of fund covering provisions for supplementary health insurance
products
Investments of fund covering other health insurance products
84
Annual Report
for 2013
Net provisions for claims outstanding as % of
net income from insurance premiums
1
Net provisions
for claims
outstanding
Net earned
premiums
2013
Net provisions
for claims
outstanding
Net earned
premiums
2012
in euros
in euros
in %
in euros
in euros
in %
2
3
4=2/3*100
5
6
7=5/6*100
2 Health insurance
14 Credit insurance
19 Life insurance
11,208,168
6,091,059
4,725,352
485,749
803,096
3,657,085
4,465,606
47,277,097
334,337
18,803,085
158,583
79,873
56,892
24,073
239,432
6,218,524
244,820
-
13,277,269
113,656,286
17,331,668
11
19,801
556,799
1,206,645
11,668,081
10,415,974
23,811,377
5,661
533,451
5,926,235
1,066,843
101,018
620,448
72,668
4,567,066
18,219,143
37,012,119
652,933
84
5
27
0
0
87
67
31
43
199
0
63
317
15
79
9
33
5
34
1
0
12,782,501
6,533,655
5,390,905
1,037
724,983
457,962
3,943,187
4,069,181
56,062,881
456,221
18,152,817
231,361
51,000
213,967
12,256
257,842
911,736
1,121
-
13,816,876
106,450,787
19,816,719
30
19,323
612,623
1,319,598
10,965,568
10,971,555
25,968,672
5,466
546,290
6,070,421
1,064,160
87,946
653,112
89,834
4,735,145
7,522,719
3,844,683
685,770
93
6
27
0
5
118
35
36
37
216
0
84
299
22
58
33
14
5
12
0
0
92,318,429
6,463,345
6,091,059
91,181,016
55,884,195
113,656,286
101
12
5
102,808,102
912,857
6,533,655
96,743,338
12,053,172
106,450,787
106
8
6
104,872,832
260,721,497
40
110,254,614
215,247,298
51
Total
85
Annual Report
for 2013
Gross profit, i.e. loss, of the
current year as % of net written
premiums
1
Non-life insurance contracts,
excluding health insurance
Total
Gross profit, i.e.
loss, of the
Net written
current year
in euros
premiums
in euros
2
3
Non-life insurance contracts
Total
1
Total
current year per share
1
Total
current year
in euros
premiums
in euros
2012
in %
4=2/3*100
2
3
4=2/3*100
7
6
6
15,970,947 94,032,422
(1,609,602) 12,055,349
2,769,420 107,452,224
17
-13
3
15,920,603 255,027,374
6
17,130,766 213,539,995
8
2
12,644,792
3,275,811
15,920,603
3
2
3
2
12,644,792
3,275,811
15,920,603
2012
in %
in euros
in euros
in %
4=2/3*100
2
3
4=2/3*100
16
36
18
18,740,367
(1,609,602)
17,130,766
78,170,623
5,411,357
83,581,980
24
-30
20
2013
Gross profit, i.e.
loss, of the
current year
(Assets at
beginning of
year + assets
at year-end)/2
2012
in %
in euros
in euros
in %
2
3
4=2/3*100
4=2/3*100
12,644,792 359,185,054
3,275,811 232,214,655
15,920,603 577,538,108
Gross profit
in euros
(Capital at
Gross profit, i.e.
beginning of
loss, of the
year + capital at
current year
year-end)/2
2013
80,740,480
9,140,214
89,880,694
(Assets at
Gross profit, i.e. beginning of
loss, of the
year + assets
current year
at year-end)/2
current year as % of average
assets
in euros
in euros
Net written
2013
in %
6,255,776 86,571,825
3,275,811 55,852,590
6,389,016 112,602,959
(Capital at
Gross profit, i.e. beginning of
loss, of the
year + capital at
current year
year-end)/2
current year as % of average
capital
in euros
in euros
1
Gross profit, i.e.
loss, of the
4
1
3
Number of
shares
2013
3
4=2/3
10,304,407
10,304,407
10,304,407
18,740,367 327,484,096
(1,609,602) 100,666,895
17,130,766 421,052,355
Gross profit
in euros
2
1.2
0.3
1.5
18,740,367
(1,609,602)
17,130,766
6
-2
4
Number of
shares
2
3
4=2/3
9,666,780
9,666,780
9,666,780
1.9
-0.2
1.8
(Capital at
(Capital at
beginning of
beginning of
2012
Gross profit, i.e. loss, as % of
average capital
Net profit
year + capital at
year-end)/2
2013
Net profit
year + capital at
year-end)/2
in euros
in euros
in %
in euros
in euros
in %
1
2
3
4=2/3*100
2
3
4=2/3*100
Aggregate insurance
business - total
13,583,099
89,880,694
86
15
13,178,514
83,581,980
16
Annual Report
for 2013
The insurer's eligible capital as
% of the insurer's net earned
premiums
The insurer's
eligible capital
in euros
Net earned
premiums
in euros
1
2
3
Total
2013
in %
The insurer's
eligible capital
in euros
Net earned
premiums
in euros
2012
in %
4=2/3*100
2
3
4=2/3*100
55,230,639 199,174,784
12,479,003 55,852,590
67,709,643 255,027,374
% of the insurer's minimum
capital
The insurer's
eligible capital
The insurer's
minimum capital
in euros
1
2
28
22
27
53,783,915 201,484,647
5,201,159 12,055,349
58,985,074 213,539,995
27
43
28
2013
The insurer's
eligible capital
The insurer's
minimum capital
in euros
in %
in euros
in euros
in %
3
4=2/3*100
2
3
4=2/3*100
2012
55,230,639
12,479,003
28,158,098
10,516,263
196
119
53,783,915
5,201,159
30,771,919
3,916,053
175
133
Total
58,985,074
34,687,971
170
58,985,074
34,687,971
170
% of the insurer's technical
provisions
1
Total
The insurer's
Technical
eligible capital
in euros
provisions
in euros
2013
in %
2
3
4=2/3*100
55,230,639 176,981,690
12,479,003 314,396,320
67,709,643 491,378,011
31
4
14
The insurer's
Technical
eligible capital
in euros
provisions
in euros
2012
in %
2
3
4=2/3*100
53,783,915 191,484,684
5,201,159 76,434,719
58,985,074 267,919,403
Receivables
from
Receivables
from
2013
The insurer's
eligible capital
reinsurance and
technical
provisions
attributable to
reinsurers
28
7
22
% of receivables from
reinsurance and technical
provisions attributable to
reinsurers
The insurer's
eligible capital
reinsurance and
technical
provisions
attributable to
reinsurers
in euros
in euros
in %
in euros
in euros
in %
1
2
3
4=2/3*100
2
3
4=2/3*100
2012
55,230,639
12,479,003
67,071,021
465,914
82
2678
53,783,915
5,201,159
42,334,818
118,586
127
4386
Total
67,709,643
67,536,935
100
58,985,074
42,453,404
139
87
Annual Report
for 2013
Net expenses
for claims and
benefits paid
Net earned
premiums
Incurred loss ratio
in euros
in euros
1
2
3
Non-life insurance contracts,
excluding health insurance
Total
Net written premiums as %
of average capital and
technical provisions
1
Total
Net written premiums as %
of average capital
1
Total
Total
Capital as % of net
unearned premiums
1
Total
Net earned
premiums
in euros
in euros
2
3
4=2/3
2012
4=2/3
52,099,557
33,206,728
95,726,554
91,181,016
55,930,837
113,656,286
0.57
0.59
0.84
49,760,485
9,773,490
90,034,664
96,743,338
12,053,172
106,450,787
0.51
0.81
0.85
181,032,840
260,768,138
0.69
149,568,639
215,247,297
0.69
Net written
premiums
Average capital +
average balance of
2013
Net written
premiums
Average capital +
average balance of
2012
in euros
in euros
in %
in euros
in euros
in %
2
3
4=2/3*100
2
3
4=2/3*100
199,174,784
55,852,590
255,027,374
264,973,667
214,204,037
479,177,704
Net written
premiums
Average capital
in euros
2
199,174,784
55,852,590
255,027,374
75
26
53
201,484,647
12,055,349
213,539,995
274,043,027
78,394,579
352,437,606
74
15
61
2013
Net written
premiums
Average capital
in euros
in %
in euros
in euros
in %
3
4=2/3*100
2
3
4=2/3*100
80,740,480
9,140,214
89,880,694
Average balance of
Average balance of net
Net revenues from
technical provisions as % of
net technical
insurance premiums
net revenues from insurance
provisions
premiums
1
2013
Net expenses for
claims and
benefits paid
247
611
284
201,484,647
12,055,349
213,539,995
Average balance of
2013
net technical
provisions
2012
78,170,623
5,411,357
83,581,980
Net revenues from
insurance premiums
258
223
255
2012
in euros
in euros
in %
in euros
in euros
in %
2
3
4=2/3*100
2
3
4=2/3*100
159,388,816
204,924,794
364,313,609
204,837,301
55,884,195
260,721,496
Capital
Net unearned
premiums
in euros
2
80,144,316
13,043,731
93,188,047
78
367
140
179,133,893
72,902,910
252,036,803
203,194,125
12,053,172
215,247,297
88
605
117
2013
Capital
Net unearned
premiums
in euros
in %
in euros
in euros
in %
3
4=2/3*100
2
3
4=2/3*100
50,075,622
534,060
50,609,682
88
160
2,442
184
81,336,644
5,236,698
86,573,342
55,738,139
501,460
56,239,599
2012
146
1,044
154
Annual Report
for 2013
Capital as % of liabilities to
sources of funding
1
Total
Net technical provisions as
% of liabilities to sources of
funding
1
Total
Net provisions (mathematical
reserves) as % of net
1
Aggregate insurance
business - total
Underwritten gross
insurance premium as % of
number of full-time
employees
1
Capital
Liabilities to sources
of funding
in euros
2
80,144,316
13,043,731
93,188,047
2013
Capital
of funding
in euros
in %
in euros
in euros
in %
3
4=2/3*100
2
3
4=2/3*100
367,462,677
362,827,917
717,251,086
Net technical
provisions
of funding
in euros
in euros
2
3
150,939,189
314,186,501
465,125,690
Net technical
provisions
in euros
2
Gross written
premiums
351,265,098
102,374,290
448,173,446
23
5
19
provisions
of funding
in %
in euros
in euros
in %
4=2/3*100
2
3
4=2/3*100
41
87
65
167,838,442
76,366,480
244,204,922
2012
351,265,098
102,374,290
448,173,446
48
75
54
2013
Net provisions
(mathematical
reserves)
Net technical
provisions
in euros
in %
in euros
in euros
in %
3
4=2/3*100
2
3
4=2/3*100
66
465,125,690
Number of full-time
employees
2013
3
4=2/3
in euros
2
81,336,644
5,236,698
86,573,342
Net technical
2013
367,462,677
362,827,917
717,251,086
Net provisions
(mathematical
reserves)
306,807,834
22
4
13
2012
74,791,626
Gross written
premiums
2012
31
244,204,922
Number of full-time
employees
2012
3
4=2/3
in euros
2
Aggregate insurance
business - total
306,161,171
1,050
89
291,582
268,873,050
1,010
266,211
Annual Report
for 2013
90

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