OREANDA-NEWS. November 17, 2009. According to financials for the 3 last quarters, ROSNO Group earned 182% more operating profit than in the same period of the previous year. ROSNO Group’s net profit equalled 625 million roubles, indicating a considerable improvement of financial performance against the net loss of 600 million roubles in the 9 months of 2008. The results achieved in the 9 months of 2009 fully conform to the Group's portfolio optimization and profitability improvement strategy, reported the press-centre of ROSNO. 

Major financials of ROSNO Group

The performance results for the 9 months of 2009 reflect the profitability growth strategy of ROSNO Group. In the 9 months of 2009, ROSNO Group’s operating profit grew by 182% to 1023 mln roubles, that is 462 mln roubles more than over the same period of the previous year.

As compared to the first 9 months of 2008, the companies of ROSNO Group increased net profit by 1226 million roubles. Such a significant growth resulted from better insurance and investment results across IC ROSNO and lower losses of its subsidiaries.

In Q3 2009, the secured yield of motor insurance portfolio and ROSNO’s increasing business profitability caused the combined non-life insurance ratio to decrease to 96.6% (vs. 98.9% in Q3 2008). In Q3 2009, the company’s aggregate loss ratio (ratio of actual losses to insurance premium earned) decreased to 55.9% (vs. 57.0% in Q3 2008).

ROSNO Group insurance premium and insurance compensations

The aggregate insurance premium collected by ROSNO Group in the 9 months of 2009 amounted to 18.7 bn roubles (vs. 19.8 bn roubles in the first 9 months of 2008). The insignificant decrease (as compared to the same period of 2008) in gross premium resulted from lower sales in the motor insurance sector due to a scheduled optimization of motor insurance portfolio in most unprofitable segments aiming to increase profit, a general market trend for reduction of medical insurance costs prevailing in the client companies, and lower volume of insurance premium collected by Allianz Ukraine (by 59 %).

The share of IC ROSNO in the aggregate premium collected by the Group in the 3 quarters of 2009 equalled 94.3% (as compared to 90.6% for the 3 quarters of 2008).

Major business lines
ROSNO Group’s portfolio remains well-balanced. Its major business lines are as follows: voluntary medical insurance (27.5% of the insurance portfolio), property insurance (22.5% of the insurance portfolio), and motor insurance, including OMTPL (30.2% of the insurance portfolio). In the 9 months of 2009, their aggregate share in the insurance portfolio equalled 80.3%.

Investment policy
The investment strategy pursued by ROSNO Group implies conservative approach with emphasis on reliability and liquidity of investments. Continuing to follow this strategy, ROSNO Group invests its insurance reserves and equity in government securities, bonds and banking instruments of the largest and most financially stable companies and banks. As of the end of Q3 2009, the share of fixed-income banking instruments grew to 62% (vs. 50% as of the end of Q3 2008).

Along with monitoring credit quality of its investment portfolio, the company pays much attention to diversifying its investments, balancing the proportions of government and corporate securities in its portfolio, and restricting the maximum share of investments per issuer.

Allianz Eurasia
According to the operating results posted by Allianz Eurasia, the aggregate insurance premium collected in the 9 months of 2009 by ROSNO Group, together with Progress-Garant, Allianz Kazakhstan, Allianz ROSNO Life and CJSC SAK Allianz equalled 24.2 bn roubles. The major contribution to the premium collected by Allianz Eurasia is made by the companies of ROSNO Group, which account for 77% of the aggregate premium.

Allianz Eurasia Group renders long-term life insurance services via Allianz ROSNO Life. Just as in Q2 2009, the company continues demonstrating active growth, as evidenced by notable increase in premium collected (by 26% vs. Q3 2008), along with considerable improvement of financial performance results. The company’s net loss decreased by 131 million roubles to 218 million roubles (against 349 million roubles in the 9 months of 2008).

Due to the unstable financial and economic situation in Ukraine and in the Ukrainian insurance market, the company’s management decided to modify the development strategy of IC Allianz Ukraine. As a result of this decision, the company’s insurance premium collected decreased by 59%, as expected. In the 9 months of 2009, the company’s insurance premium amounted to 272 mln roubles, as compared to 660 mln. roubles in the 9 months of 2008. At the same time, the company has succeeded in cutting business costs, thus contributing to the lower loss (88 million roubles of net loss for the 9 months of 2009 vs. 351 million roubles for the 9 months of 2008).