The year 2005 has been the best year in the history of Polish Reinsurance Company from the point of view of both reinsurance
activity and financial results. The company generated the highest underwriting results in its operation so far, amounting
to EUR 411 million. This means that the underwriting results
achieved are far more profitable (by nearly EUR 1 million) than
in the previous year. Such good results were achieved primarily
due to the quality improvement in the portfolio of the agreements concluded and appropriate acceptance and investment policies.
The company’s financial net result exceeded last year’s by nearly EUR 3.3 million and amounted to EUR 4 billion. It is worth noting
that the achievement of such a high profit took place under difficult
market conditions, resulting from the state of the ‘soft’ international
reinsurance market (lower reinsurance prices, greater availability
of reinsurance cover, significant com-petition), the continuing
process of consolidation in most Central and Eastern European
countries, greater capitalization of Polish insurers and consequent
reduction of the need for reinsurance cover, and the strengthening
of the Polish Zloty (PLN), which has a negative bearing on exporters of financial services, a group to which the company belongs. In such
an environment, the work of the Polish Re Executive Board and
Team focused on undertaking proactive actions aimed at
the mitigation of the impact of market tendencies carrying
negative consequences for the company, including the broadening
of the Client base and the objective to reinforce cooperation
with current Clients.
In 2005, Polskie Towarzystwo Reasekuracji S.A. again applied
to the renowned international rating agencies Standard & Poor’s
and AM Best for ratings to be awarded to confirm the Company’s credibility and stability.
Both the agencies, much as in 2004, awarded Polish Re
ratings at investment level, namely BBB- (S & P) and B+
(AM Best). Following the changes in the Board, from August
to October 2005, Polish Re received a negative CreditWatch
listing by Standard & Poor’s. Yet, having received an appropriate explanation from the new Board, which assured that
the development strategy assumed earlier would be continued,
the rating agency awarded Polish Re a stable perspective.
Reinsurance activity
In 2005, 335 inward reinsurance agreements were concluded,
on both treaty and facultative basis. The company has cooperated
with 113 insurers and reinsurers in the Polish market and with
30 in the Central and Eastern European markets, Africa and Asia (including a number of insurance pools), which marks an 11% growth in the number of foreign markets as compared to 2004.
The 2005 gross written premium in the Polish market accounted
for 64.3%. The persistently implemented acquisition policy brought about an increase in the share of the foreign acceptance premiums by approx. 11% compared to the previous year, to the level of 35.7% of the portfolio (the foreign share accounted for 32.2% in 2004). The largest foreign insurance markets in the Company’s portfolio were Bulgaria, Ukraine, Russia, Czech Republic, and Romania.
Structure of the reinsurance portfolio
The gross written premium amounted to EUR 56.459 billion, and
the premiums written net of reinsurance to EUR 50.424 billion. Compared to 2004, an improvement was seen in the quality structure of the portfolio. The share of motor risks in the gross portfolio decreased by 4.1 percentage points compared to 2004
and amounted to 69.7% (the share of third party liability risks accounted for 43.7%, and that of motor hull insurance risks
to 26% of the portfolio). Furthermore, a rise was registered
in property risks, whose share in the portfolio grew as compared
to 2004 by 1.6 percentage points to the level of 22.3% of
the Company’s gross portfolio (the gross written premium
in this group of risks amounted to EUR 12,618 million).
Alexandru CIUNCAN
