Chrysler 1999 Annual Report Download - page 51

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GROWTH STRATEGIES
The Italian insurance market posted strong growth in 1999. Total
premiums written are estimated to have risen by about 20%, with
especially good gains in life insurance. In this environment, the
Insurance Sector continued to pursue a growth strategy that has
already enabled it to triple in size over just four years.
❚In life insurance, Roma Vita, a joint venture with Banca di
Roma, posted particularly gratifying results and has now
become one of the top life insurance companies in Italy.
❚The success of Toro Targa Assicurazioni, a joint venture with
Fiat Auto, enabled the Sector to strengthen its ties with the
Group’s dealer network, which it uses to distribute insurance
products in Italy and abroad.
❚The traditional distribution networks of Toro Assicurazioni
and Nuova Tirrena also performed well.
❚In an important development, the Sector acquired the
French operations of the Guardian Royal Exchange Group,
which specializes in the sale of life insurance and the
provision of asset management services. This transaction
will help Le Continent expand its business in several
attractive market segments with excellent growth potential.
RESULTS FOR THE YEAR
Consolidated premiums totaled 4,088 million euros, or
29% more than in 1998. This amount does not include the
premiums written by the Guardian Group in France (more than
180 million euros), which, if added, would raise the 1999 total
to more than 4,200 million euros. At 2,205 million euros, life
insurance grew by 53% compared with 1998. Over the same
period, casualty insurance premiums increased by 8.7%,
reaching 1,883 million euros.
Premiums earned totaled 3,922 million euros, for a gain of
32.5% over 1998.
The insurance operations were affected by a further increase
in the cost of automobile insurance claims, particularly in the
area of personal injury awards. Another important negative
factor was the impact of the natural disasters that devastated
France at the end of 1999.
The Sector posted improved results in 1999, owing to a sharp
reduction in operating costs and strong gains in investment
income.
In particular, the ratio of distribution costs and overhead to
premiums earned fell by more than one percentage point.
Investment income, which reflects both ordinary and
extraordinary transactions, totaled about 620 million euros
(526 million euros in 1998), as gains generated on trading
securities more than offset the negative impact of the lower
interest rates earned on bonds.
Income before taxes amounted to 178 million euros (116 million
euros in 1998). It reflects a decrease in net financial income
caused by a drop in the market rates available for investments
of liquid funds, offset in part by lower extraordinary expenses. In
1998, the Sector absorbed extraordinary non recurring charges
from the implementation of Legislative Decree No. 173/97.
At December 31, 1999, investments in financial assets and real
estate totaled more than 10,800 million euros, or 3,400 million
euros more than at the end of the previous fiscal year,
exceeding technical reserves by more than 1,100 million euros.
Net income came to 92 million euros (64 million euros in
1998). The Sector’s interest in net income amounted to
94 million euros, up from 59 million euros in 1998.
In 1999, the Sector was again successful in its effort to create
value.
INSURANCE — TORO ASSICURAZIONI
Highlights
(in millions of euros) 1999 1998 1997
Consolidated premiums 4,088 3,169 2,162
Premiums earned 3,922 2,959 2,016
Income before taxes 178 116 133
Net income before minority interests 92 64 88
Technical reserves 9,733 6,386 4,738
Investments in financial
assets and real estate 10,867 7,393 5,520
Stockholders’ equity 1,444 1,334 1,083
Number of employees 2,907 2,869 2,786