Access America 2003 Annual Report Download - page 21

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Investments and financial results
On December 31st, 2003, the Group’s financial investments amounted to 418.6 million Euros, compared to
407.0 million Euros at the end of the previous year. A portion of the cash and cash equivalents held at year-end
(173.3 million Euros ; preceding year: 122.1 million Euros) can be considered as part of the investment portfolio.
Given the situation in the bond market, the Group decided to temporarily increase short-term investments, which
are classified as cash equivalents.
The part of shares in the portfolio has been reduced significantly in order to further improve the matching of the
asset structure with the characteristics of liabilities born out of insurance contracts.
Ordinary investment results decreased to 14.0 million Euros (down from 18.3 million Euros in 2002) as market interest
rates fell to an exceptionally low level. Realised gains and losses on investment assets amounted to -1.5 million Euros
but were more than offset by the reversal of impairments recognised at year-end 2002 (accounting result: +6.2 million
Euros in 2003, compared to -9.1 million Euros in 2002). In addition, the Group reduced its share in a subsidiary
which in turn generated an additional realised loss of 1.9 million Euros. The realised total was therefore
-3.4 million Euros, compared with those posted in 2002 at +6.8 million Euros. 2002 results included an exceptional
gain from the sale of an office building in Switzerland, amounting to +5.6 million Euros. We consider that the reported
16.9 million Euros in total financial results reflect a return to a normal level. In 2002 this figure was 10.2 million
Euros, and in 2001, 17.0 million Euros.
Results before and after tax
With a slight growth in earned turnover (1.7%), an improved claims ratio and only a marginal increase in
acquisition and administration expenses, 2003 posted a nearly constant net operating result of 23.9 million Euros
compared to 23.5 million Euros the previous year.
Due to much improved Financial Results, profit before taxes was 37.2 million Euros in 2003 versus 29.7 million Euros
the previous year.
Taking into consideration the exceptionally high taxes on profits (20.4 million Euros in 2003, compared to
12.4 million Euros in 2002), which included a significant portion of non-recurrent tax expenses, profit after taxes
was 15.6 million Euros, compared to 17.1 million Euros the previous year.
Changes in Group structure
In 2003, Mondial Assistance Group legally established its Chinese subsidiary in Beijing, and prepared to launch operations.
The Group reduced its participation in the Moroccan subsidiary from 80% to 41%.
Elvia Travel Insurance in Zurich obtained an insurance license to operate in Poland and has established a branch
office in Warsaw, which will begin underwriting travel and assistance policies in 2004. Elvia Sp.z.o.o, its Services
subsidiary, has represented Mondial Assistance Group in Poland since 1999.
The portfolio of the Dutch branch of Société Belge d’Assistance Internationale S.A. (SBAI) has been transferred to
the Dutch branch of Elvia Travel Insurance.