Invacare 2009 Annual Report Download - page 16

Europe
The company’s European segment has marketing and distribution operations throughout Western Europe
and export sales activities through local distributors elsewhere in the world. The company has a sales force and
where appropriate, distribution centers, in the United Kingdom, Ireland, France, Germany, Belgium, Portugal,
Spain, Italy, Denmark, Sweden, Switzerland, Austria, Norway and the Netherlands, and sells through distributors
elsewhere in Europe and in the Middle East supported by a dedicated distributor team. In markets where the
company has its own sales force, product sales are typically made through dealers of medical equipment and, in
certain markets, directly to government agencies. In 2009, the consolidation of big buying groups tending to
develop their business on a European scale has continued. As a result, Invacare is generalizing the application of
pan-European pricing policies. In 2009, Invacare was the title sponsor for the eleventh year in a row of the
Invacare World Team Cup of Wheelchair Tennis Tournament in Nottingham.
PRODUCT LIABILITY COSTS
The company’s captive insurance company, Invatection Insurance Company, currently has a policy year that
runs from September 1 to August 31 and insures annual policy losses of $10,000,000 per occurrence and
$13,000,000 in the aggregate of the company’s North American product liability exposure. The company also
has additional layers of external insurance coverage insuring up to $75,000,000 in annual aggregate losses arising
from individual claims anywhere in the world that exceed the captive insurance company policy limits or the
limits of the company’s per country foreign liability limits, as applicable. There can be no assurance that
Invacare’s current insurance levels will continue to be adequate or available at affordable rates.
Product liability reserves are recorded for individual claims based upon historical experience, industry
expertise and indications from the third-party actuary. Additional reserves, in excess of the specific individual
case reserves, are provided for incurred but not reported claims based upon actuarial valuations at the time such
valuations are conducted. Historical claims experience and other assumptions are taken into consideration to
estimate the ultimate reserves. For example, the actuarial analysis assumes that historical loss experience is an
indicator of future experience, that the distribution of exposures by geographic area and nature of operations for
ongoing operations is expected to be very similar to historical operations with no dramatic changes and that the
government indices used to trend losses and exposures are appropriate. Estimates made are adjusted on a regular
basis and can be impacted by actual loss awards and settlements on claims. While actuarial analysis is used to
help determine adequate reserves, the company is responsible for the determination and recording of adequate
reserves in accordance with accepted loss reserving standards and practices.
PRODUCT DEVELOPMENT AND ENGINEERING
Invacare is committed to continuously improving its existing product lines in a focused manner. In 2009,
new product development continued to be a focus as part of Invacare’s strategy to gain market share and
maintain a competitive advantage along with beginning to globally standardize certain product platforms. To this
end, the company introduced several new products and product enhancements. The following are some of the
most significant 2009 product developments:
NA/HME
The Invacare®InTouch™PCS (positioning-comfort-stability) back is designed for improved comfort
and function. Single-point mounting hardware with quick-release latch provides secure mounting, while
allowing height, depth and back angle adjustments with easy installation and removal. The spacer fabric
cover improves airflow between the user and the back, increasing comfort and preventing heat and moisture
build-up. Three inches of contour depth allow for centering and postural stability without interfering with
hip placement. For customizable support, the InTouch™PCS back comes with optional pelvic stabilizers
and thoracic lateral supports to provide additional pelvic and trunk control and stability.
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