OREANDA-NEWS. May 18, 2010. According to the IFRS financials for the 1st quarter, ROSNO Group retains profitability, with the Q1 operating profit equalling 93 mln. roubles. In Q1, the insurance premium collected by ROSNO Group grew by 1.6%. The growth was largely driven by higher premiums collected in the VMI and financial risks insurance sectors, reported the press-centre of ROSNO.

ROSNO Group insurance premium and insurance compensations

The aggregate insurance premium collected by ROSNO Group in the 3 months of 2010 amounted to 6.6 bn roubles (vs. 6.5 bn roubles in the 3 months of 2009). The Group’s higher insurance premiums as compared to the same period of the year 2009 resulted from the growing sales by IC ROSNO and IC Medexpress, largely in the voluntary medical insurance segment.

The share of IC ROSNO in the aggregate premium collected by the Group in the 1st quarter of 2010 increased, reaching 92.3% (as compared to 91.2% for the 1st quarter of 2009).

Major financials of ROSNO Group
According to the IFRS financials for the 1st quarter, ROSNO Group retained profitability, with the Q1 operating profit equalling 93 mln. roubles. The decrease of this figure as compared to the last-year results (532 mln. roubles) was determined by two factors, with one of those being the general decrease in insurance premium collected in the insurance market in 2009, which affected the volume of insurance premium collected by ROSNO in 2010 and affecting the profit figures of the current period. The role of the second factor explaining the decrease in the Q1 operating profit was played by the unstable foreign exchange market situation leading to fluctuations of the euro exchange rate.

In Q1 2010, the aggregate loss ratio (ratio of actual losses to insurance premium earned) was approximately the same as in Q1 2009, equalling 59%.

Major business lines
In Q1, the insurance premium collected by ROSNO Group grew by 1.6%. The growth was largely driven by the increasing amounts of premium collected in the VMI (growth by 27.7%) and financial risks insurance (23.4%) segments, as certain large companies became ROSNO’s new corporate clients. Along with the foregoing, motor insurance premiums remained virtually the same as in Q1 2009. The most notable premium decrease has been recorded in the property insurance segment.

ROSNO Group’s portfolio remains well-balanced. Its major business lines are as follows: voluntary medical insurance (53.6% of the insurance portfolio), motor insurance, including OMTPL (26.07% of the insurance portfolio), and property insurance (7.03% of the insurance portfolio). In Q1 2010, their aggregate share in the insurance portfolio equalled 86.7%.

Investment policy
The investment strategy pursued by ROSNO Group still 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 Q1 2010, the share of fixed-income banking instruments equalled 62% (vs. 61% as of the end of Q1 2009).

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 on the consolidated basis for all Allianz companies in Russia and CIS, the aggregate insurance premium collected in the 3 months of 2010 by ROSNO Group, together with Progress-Garant, Allianz Kazakhstan, Allianz ROSNO Life and CJSC SAK Allianz equalled 9.2 bn roubles. The growth of insurance premium versus the results of Q1 2009 equalled 116% (7.9 bn roubles). The major contribution to the premium (72%) collected by Allianz Eurasia is still made by the companies of ROSNO Group.

Allianz Eurasia Group renders life insurance services via Allianz ROSNO Life. In Q1 2010, the company continued demonstrating a considerable growth in insurance premium collected (137%), as compared to Q1 2009. Also, Allianz ROSNO Life improved its profitability in Q1 2010: the company’s net loss decreased by 48 million roubles to 11 million roubles (against 59 million roubles in Q1 2009).

IC Medexpress also demonstrated improvement of its financials in Q1 2010, with insurance premium growing by 134.3% and the company’s net profit increasing by 25 mln. roubles to 23 mln. roubles.

The insurance premium collected by IC Allianz Ukraine in Q1 2010 decreased by 128.4% to 87 mln. roubles. The lower sales resulted from the still deteriorating situation in the Ukrainian insurance market and lower motor insurance sales due to the planned optimization of the insurance portfolio in the least attractive segments. This work has led to the decrease of the Q1 2010 net loss versus Q1 2009 by 14 mln. roubles (to 7 mln. roubles).

Non-audited IFRS data.
1 The decrease in the life insurance segment results from the fact that ROSNO Group’s life insurance business is run solely by Allianz ROSNO Life, which is 100% subsidiary of Allianz New Europe Holding GMBH.