CZECH REPUBLIC: Profit of CP last year grew by 9% in 2012

3 June 2013 —
Ceska pojistovna again confirmed its strong position in the Czech insurance market.
Its financial results last year, according to IFRS, showed a profit of CZK 3.9 billion after tax (+9% year-on-year) and total premiums written exceeded CZK 32 billion. The extremely stable position of Ceska pojistovna is evidenced by the A- rating recently affirmed by S&P, with a stable outlook.
Also the largest subsidiary of Ceska pojistovna - Penzijni fond CP (Pension Fund, now Penzijni spoleCnost CP - Pension Company of CP) achieved significant success last year with an increase in profit to CZK 1.4 billion (+57% year-on-year). Clients will benefit from this profit because it will be distributed among them by law. Thanks to the PFCP record profit, clients have the highest appreciation among pension funds (+2.2%). Together with the government contributions, PFCP clients' deposits appreciated by 4.8% on average.

"Last year's profit of CZK 3.9 billion, about 9 percent higher than the year before, proves our ability to preserve profitability even in a very complicated environment. In recent years, we implemented extensive structural savings in operating costs, so we can substantially invest in the future", says CP CEO Pavel Rehak, who adds: "Last year, we reduced our general expenses by 7 percent, which means that we saved CZK 555 million, of which we re-invested back into CP's business development approximately CZK 180 million."

Premiums written are stabilizing
The total CP premiums written last year reached, according to IFRS, CZK 32 billion. In P&C insurance premium income was CZK 19.5 billion, in life CZK 12.5 billion.

"Despite the complicated economic environment and de facto stagnating insurance market, we further improved the trend in premiums written last year. Premiums written in 2012 were almost stabilized, even though last year they still declined by 4 percent year-on-year. However we managed to reduce the rate of decline dramatically (-10 percent in 2011)", says Pavel Rehak.
Premiums written in life insurance in 2012 declined by 5.6% on a year on year basis (-15.7% in 2011). In P&C insurance, the slowdown in the rate of decline is also noticeable. In 2011 it was 6%, while last year 3%.
600,000 new clients joined Penzijni fond CP last year
At the end of 2012, almost 5.2 million people had pension insurance in the Czech Republic. A quarter of them entrusted their financial resources to Penzijni fond Ceske pojistovny, which in 2012 retained the leading position in the Czech market and contributed to the profit of the whole sector of pension funds by almost one-third.

"Last year people wanted to join the pension scheme under the original terms and conditions, so at the end of the year we noticed a rapid increase in our client base. In November alone we gained approximately 100,000 new clients, for the whole year there were 250,000 new contracts. At the same time, 350,000 of our existing clients increased their regular deposit", explains Tomas Matousek, CEO of Penzijni fond Ceske pojistovny.

Excellent results of PFCP are supported by financial indicators. Thanks to the PFCP record profit, clients have the highest appreciation among pension funds (+2.2%). Clients' deposited financial resources, including contributions from government and employers, in 2012 amounted to CZK 11.7 billion (+15% year-on-year). Also total assets recorded a growth, with a year-on-year increase of 14% to CZK 67.7 billion as at 31 December 2012.

At the end of 2012 PFCP underwent a transformation and converted into today's Penzijni spoleCnost Ceske pojistovny. The company is now a leader in the so-called second pillar of the pension system, as it concluded more than 10,000 contracts during the first ten weeks of the pension reform. This represents two thirds of all contracts concluded
so far in the Czech Republic.

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