Hasiãská vzájemná poji‰Èovna, a.s OBSAH CONTENTS I. ÚVODNÍ SLOVO OPENNING ADDRESS II. ÚDAJE O SPOLEâNOSTI COMPANY PROFILE III. FINANâNÍ V¯SLEDKY FINANCIAL RESULTS IV. V¯ROK AUDITORA AUDITOR'S STATEMENT V. V¯ROK DOZORâÍ RADY STATEMENT OF THE SUPERVISORY BOARD Hasiãská vzájemná poji‰Èovna, a.s Dear Ladies and Gentlemen, catastrophe in a responsible way Now only dry numbers: presc- and steadfastly. During the floods ribed insurance was successfully When facing the task of brief- our insurees suffered about 3500 increased by 13 % in comparison ly describing the past year at the damages that the group of 20 of with the year 2001 to the amount Hasiãská vzájemná poji‰Èovna, a.s. our surveyors and other metho- of 236 million CZK. The economic insurance company, the following dologists dealt with not only wit- result before taxation is the profit ideas come to my mind: "Is it at all hin the scope of their usual wor- of 9.694 million CZK. It is the best true? We are balancing again!" king duties, but in order to achie- economic result since the re-com- So, what was the past year ve early compensations of the flo- mencement of the Hasiãská vzá- like? Many adjectives could be oded, these employees often sac- jemná poji‰Èovna, a.s. insurance attached to it. I have in mind espe- rificed also their free weekends. company's activity. Even though cially the following ones: the year They deserve to be thanked for we did not succeed in fulfilling the of re-licensing, the year of the flo- that, because according to the tasks the general assembly set for ods, the revitalization year, the statistics continuously processed us 100 %, we got to the position year of hard work, and the year by the Czech Association of Insu- where we deserve to be, i.e. during which the Czech insurance rance Companies, we were always among the good insurance com- system started to approach Euro- among the best. Also the small panies existing in the Czech mar- pe. number of unfinished claims at ket. the end of the year 2002 (about Please allow me to briefly int- 600 cases), which is the parameter In regard to approaching roduce the particular adjectives to monitored also by the Ministry of Europe, we are especially expec- you. In regard to the re-licensing, Finance, prove that in case of ting a huge number of new laws this act was an obligation stipula- most claims only 14 days pass bet- adjusting the insurance enterprise ted by the law about the insuran- ween the time our insurance (the law about the insurance sys- ce system for all the insurance company is notified about the tem, about the insurance con- companies which wanted to damage and the time it sends out tract, about insurance brokers and successfully continue existing in the insurance benefit. external surveyors, but also the our market also in the year 2002 amendments of the Civil Code and and the following years. We had to Independently of these facts, the business law). Most of them process a lot of statistical materials other two adjectives appeared. want to say roughly the following: supported by statistical calculati- The one representing the hard There is no place for loafers in the ons. I have to say the materials we work was connected to the flo- sun, and a better service needs to presented were accepted by the ods, but also to autumn and the be better paid. Regardless whet- Ministry of Finance without any nationwide windstorms, so the her we identify with such ides or comments and we received our increased effort of all employees not, we will have to get used to new license among the first ones. continued till the end of the year. this new way of life. In connection to it, the security It was good we had a very well that had been blocked for a long negotiated reinsurance. It was I do not feel competent to time was released, which signifi- thanks to that our insurance com- make a clear conclusion or to say a cantly helped to improve our pay- pany spent "only 10 million CZK" motto which would close the past ment morale. This was the begin- that we paid for the flood dama- year. I would rather ask the share- ning of the year and everything ges. However, we, unfortunately, holders to continue entrusting us looked as if the worst is already lost the planned share in profits of withthe administration of the behind us, and the way to prospe- the reinsurers which would usual- deposited property, I will once rity is wide open. The half-yearly ly be about 3 million, and the inc- again thank the employees for economic results suggested that reased costs for the settlement of their effort and I will wish the already at the end of June our extraordinary losses cost us anot- Hasiãská vzájemná poji‰Èovna, a.s. insurance company was making her 2 million CZK. You have to insurance company significantly the profit of about 10 million CZK. admit that such an unplanned better conditions for its prosperi- burden at a time when you want ty than it had last year. In the end, But then it happened! The to revitalize the firm came at the if there had been no floods, we end of the holidays and the catas- least convenient moment. The could have all happily said toget- trophic floods, so far unknown in revitalization is connected not her at the upcoming general the history of this country. Prior to only to savings in all possible areas assembly: "We have fulfilled eve- the beginning of the year 2002 I that may unnecessarily burden rything!" could hardly imagine a worse sce- the company, but also to savings nario than that nature wrote for of advertisement costs, and, of us in the form of the torrential course, to savings of employee rains. I strongly hope I will never rewards, including the statutory have to experience similar catas- bodies. Most employees withsto- trophes. After some confusion at od also this burden and deserve to Ing. Josef Kube‰ first, the insurance company star- be thanked for that. ted to gradually deal with the HVP, a.s. Board of Directors Head Hasiãská vzájemná poji‰Èovna, a.s Establishment of the Company: 1992, in the area of life insurance • Ing. Miroslav Slovják, Ostrava- the foundation meeting took October 1, 1994. Nová Bûlá, Mitrovická 477 place in Brno on November 26, • Ing. Jaroslava Reichlová, Praha 1991 Reinsurance of the Insurance 10- Kolovraty, U Ïeleznice 413 Activity: • Ing. Ivan Jirota, Praha 6, Jugo- Incorporation of the Company: The HVP, a.s.'s reinsurance pro- slávsk˘ch partyzánÛ 42, co-opted the entry into the business gram is ensured by AON, the to the SB since 26.3.2003 register was made in Brno on French broker. The offered kinds November 11, 1992 of insurance are covered by a Directors of Branches: group of reinsurers, Swiss Re Ger- Praha and Pﬁíbram: Business Name: many is the main reinsurers. • Ing. Jaroslava Jelenová, since Hasiãská vzájemná poji‰Èovna, a.s. 4.4.2003 Ing. Ret Václav charged Life insurance is covered by with management Company Residence: surplus reinsurance. Non-life Praha 2, ¤ímská 45 insurance is covered by combined âeské Budûjovice: surplus and quota-sharereinsu- • Václav ÎiÏka Identification Number: rance. The actual retention of the 46973451 proportional reinsurance is cove- PlzeÀ: red by reinsurance of the excess • Ing. Du‰an Duchek, terminated Legal Status of the Insurance of loss per event. the employment relationship Company: 31.3.2003, 1.4.2003 stock company In the year 2002 the compositi- • Ing. Yveta Korunková charged on of the statutory bodies was with management Scope of Business: the following: 1. Insurance activity Ústí nad Labem: 2. Reinsurance activity Board of Directors: • Pavel Doubrava 3. Operating activities connected Head: to the insurance activity • Ing. Josef Kube‰, Praha 6, Jiãín: Na Hutích 13/693. • Vlastimil Dlab, 14.6.2002 elected Permit to operate in the Czech a member of the CR Parliament, Republic in the area of non-life Deputy Head: since 15.6.2002 insurance: issued by the Ministry • Jan Dﬁínek, Îìár nad Sázavou, • Bﬁetislav Hol‰án charged with of Finance of the Czech Republic Ferencova 6 management on July 30, 1992, Ref. No. 103/39 561/92 in the area of life insuran- Members: Brno: ce: issued by the Ministry of • Ing. Ladislav Raul, CSc., Praha 4, • Ing. Jan Tesaﬁ, since 11.4.2003 Finance of the Czech Republic on ·alounova 1936/12 • Ing. Poláchová Marie charged December 23, 1993, Ref. No. • Vlastimil Dlab, Jiãín, Îidovská 69, with management 323/41 385/1993 permits to ope- 30.4.2002 activity terminated rate the insurance activity, reinsu- • Petr Kurzweil, Praha 4, Pod Krã- Ostrava: rance activity and related activiti- sk˘m lesem 759/42 activity from • Ing. Leo Kubûna es. 30.4.2002 till 30.9.2002 • Ing. Tomá‰ Spurn˘, Praha 4, Îìár nad Sázavou: Based on § 42, par. 4 and 5 of Kvûtnového vítûzství 496/82 acti- • Jan Dﬁínek the Act 363/1999 of the Legal vity since 30.4.2002 Code, the insurance company had • Ing. Ivana Laitlová, PrÛhonice, to put its legal situation in accor- Tﬁe‰Àová 483, activity since dance with this legal norm. 23.10.2002 Based on the request submit- Supervisory Board: ted by the insurance company, Head: the Ministry of Finance awarded, • Ing. Jaroslav Schulz, CSc., Brno, in the sense of § 42, par. 5 of the Fleischnerova 936/19 Act No. 363/1999 of the Legal Code, the permit to oper te the Deputy Head: insurance activity, reinsurance • Franti‰ek Hanus, Manûtín 68, activity and the related activiti- p. Manûtín es on March 20, 2002, Ref. No. Members: 322/26946/2002. • Bc. Dalibor Gosman, Praha 10, Radostná 1, requested release Commencement of the Insu- from the SB rance Activity: in the area of the • Lubo‰ Zeman, Polniãka, Polniãka non-life insurance November 11, 182 Hasiãská vzájemná poji‰Èovna, a.s Foundation Capital: Other shareholders mals) In the period from 1992 till 2001 16 756 800 CZK • damage liability insurance the Hasiãská vzájemná poji‰Èovna, which is 7.10 % •life insurance a.s. insurance company's shares • life insurance with additional existed as registered stock. Based Total insurance of serious illness on the Act 363/1999 of the Legal 236 160 000 CZK • pension insurance Code about the insurance system, which is 100% • accident insurance the form of the HVP, a.s. shares • travel insurance has to be changed from the On December 31, 2002 the total documentary registered stock to number of shareholders was Aside from our own products, the registered stock filed with the 6 571. we cooperate on the sale of pro- Stock Center. ducts for âPP, a.s. and VZP, i.e. the Insurance Activities: sale of mandatory contractual The general assembly resolution The insurance activity is ensured insurance and health insurance. dated May 15, 2001 changed the by a network of insurance agents nominal value of one share to 100 who are trained and after passing CZK in case of all the hitherto exams work based on the con- emitted shares of the Hasiãská tract about intermediary activity vzájemná poji‰Èovna, a.s. insuran- in the insurance system. The insu- ce company. rance company also cooperates with insurance brokers based on The extraordinary general contracts. assembly resolution dated December 10, 2001 decreased the On December 31, 2002 the foundation capital of the compa- Hasiãská vzájemná poji‰Èovna, a.s. ny by the losses that occurred insurance company had 685 insu- due to the ownership of the rance agents and brokers. Moravia Bank shares, in bankrupt- cy, by 20%. The value of one share Permanent Staff of the Insu- decreased to 80 CZK. The Hasiãská rance Company: vzájemná poji‰Èovna, a.s. insuran- On December 31, 2002 the ce company's foundation capital number of staff, individuals thus decreased to 236 160 000 CZK 118. due to this resolution. Organizational Structure of The extraordinary general the Insurance Company: assembly resolution is recorded in Hasiãská vzájemná poji‰Èovna, the business register. Since July a.s. insurance company operates 2001 all documentary shares have the been withdrawn from all share- insurance activity throughout the holders and they are being en Czech Republic. For this purpose bloc registered at the Stock Cen- its organization is divided into 8 ter. The unreturned documentary branches and the headquarters of shares were pronounced invalid the insurance company. Within by the HVP, a.s.'s board of direc- the branches there are offices tors, the relevant shareholders where the insurance agents pro- were informed about this fact, mote, offer and sell the particular and at the same time the list of kinds of our insurance, give infor- these shares was published in the mation and advise to our present Business Gazette. and futureclients. We operate 43 offices in total. Shareholders' Shares: Association of Firemen of Bohe- Offered Products: mia, Moravia and Silesia • insurance 168 203 200 CZK • insurance of permanently inha- which is 71.22 % bited and recreational contents Moravia Bank • complex insurance of housing 43 200 000 CZK cooperatives, towns, municipaliti- which is 18.29 % es, firemen Tep, a. s. • insurance of entrepreneurs 8 000 000 CZK • insurance of motor cars and which is 3.39 % transported persons and cargo • agricultural insurance (crop, ani- Hasiãská vzájemná poji‰Èovna, a.s III. FINANâNÍ V¯SLEDKY FINANCIAL RESULTS V¯SLEDEK HOSPODA¤ENÍ / PROFIT AND LOSS ACCOUNT v tis. Kã / in thousands of CzK Ukazatel / Indicator 2000 2001 2002 2002 / 2002/ 2001 2000 Celkové v˘nosy / Revenues - Total 402730 380014 436748 1,15 1,08 Pﬁedepsané pojistné / Written premium 227327 208635 236110 1,13 1,04 z toho Ïivotní / of which Life Insurance 15171 14994 17799 1,19 1,17 neÏivotní / Non - Life Insurance 212156 193641 218311 1,13 1,03 z toho majetek / of which Property 106453 106930 128301 1,20 1,21 domácnosti / Hoseholds 22265 22647 23470 1,04 1,05 odpovûdnost / Third Party 23602 22026 25723 1,17 1,09 úraz / Accident 17928 16988 17743 1,04 0,99 motorová vozidla / Motor - Hull 41908 25050 23074 0,92 0,55 Podíl zajistitele na pﬁedpisu pojistného / Ceded to Reinsurer -101229 -90396 -113506 1,26 1,12 Provize od zajistitele / Commision for Reinsurer 37506 37758 39272 1,04 1,05 PouÏití rezerv / Utilized Surplus 136479 163106 188102 1,15 1,38 z toho na poj. jin˘ch období / of which for Insurance Premiums from other periods 120196 118195 119934 1,01 1,00 na poj. plnûní / for Insurance Idemnities 918 2447 10206 4,17 11,12 na prémie a slevy / for Bonuses and Discounts 1496 2381 3156 1,33 2,11 vyrovnávací rezerva / Compensating Reserve 5233 8176 8504 1,04 1,63 na Ïivotní poji‰tûní / for Life Insurance 8636 31907 46302 1,45 5,36 Ostatní v˘nosy / Other Revenues 102647 60911 86770 1,42 0,85 Celkové náklady / Costs - Total 412718 415599 427054 1,03 1,03 Náklady na pojistná plnûní / Insurance Benefits 90679 74420 190207 2,56 2,10 z toho Ïivotní / of which for Life Insurance 1448 1397 4077 2,92 2,82 neÏivotní / for Non - Life Insurance 89231 73023 186130 2,55 2,09 Podíl zajistitele na pojistn˘ch plnûních / Ceded to Reinsurer -41266 -33188 -128691 3,88 3,12 Tvorba rezerv / Reserves Formation 145307 170698 200103 1,17 1,38 z toho na poj. jin˘ch období / of which for Insurance Premiums from other periods 119188 116918 126264 1,08 1,06 na poj. plnûní / for Insurance Idemnities 15697 39889 55724 1,40 3,55 na prémie a slevy / for Bonuses and Discounts 1532 3527 3337 0,95 2,18 vyrovnávací rezerva / Compensating Reserve 1828 2382 3156 1,32 1,73 na Ïivotní poji‰tûní / for Life Insurance 7062 7982 11622 1,46 1,65 Náklady na pojistné smlouvy / Insurance Contracts Costs 35100 26179 29054 1,11 0,83 Ostatní náklady / Other Costs 182898 177490 136381 0,77 0,75 V˘sledek hospodaﬁení / Business Performance -9988 -35585 9694 4,67 2,03 Hasiãská vzájemná poji‰Èovna, a.s ROZVAHA / BALLANCE SHEET v tis. Kã/in thousands CzK AKTIVA / ASSETS Stav 1.1.2002/ Stav 31.12.2002/ as of 1.1.2002 as of 31.1.2002 Nehmotn˘ inv. majetek / Intangible Fixed Assets 4804 3119 Hmotn˘ majetek / Tangible Fixed Assets 14254 11685 Finanãní umístûní / Financial Assets 272189 288794 z toho pozemky a stavby / of which Lands and Buildings 33617 33159 majetkové úãasti v podnicích s rozhodujícím vlivem/ Capital Participation in Companies with definitive influence 85690 88632 majetkové úãasti v podnicích s podstatn˘m vlivem/ Capital Participation in Companies with fundamental influence 64092 70998 cenné papíry s pevn˘m v˘nosem / stocks with fixed production 41574 57450 depozita u bank / Bank Deposits 47096 38435 ostatní / other Assets 120 120 Zásoby / Inventories 3308 3386 Finanãní prostﬁedky / Financial Assets - Total 9287 24212 z toho úãty u bank / of which Bank Ddeposits 8520 23412 hotovost / Cash in Hand 767 800 Pohledávky / Receivables - Total 105556 133131 z toho z pﬁímého poji‰tûní / of which Direct Insurance Premiums 26908 34184 ze zaji‰tûní / from Reinsurance 71578 88252 ostatní pohledávky / other Assets 7070 10695 Pﬁechodné úãty aktiv / Temporary Assets Accounts 8277 12312 Neuhrazená ztráta z min. let / Unsettled Loss from Recent Years 35585 AKTIVA CELKEM / ASSETS GRAND TOTAL 453260 476639 PASIVA / LIABILITIES Základní kapitál / Authoorized Capital 236160 236160 Základní rezervní fond / Basic Reserve Fund 911 0 Jiné kapitálové fondy / Other Capital Funds -47690 Technické rezervy / Technical reserves - Total 103744 115745 z toho na nezaslouÏené pojistné / for Undeserved Insurance Premiums 43927 50257 na pojistné Ïivotních poji‰tûní / for Life Insurance Premiums 30823 40244 na pojistná plnûní / for Insurance Idemnities 23074 16205 na premie a slevy / for Bonuses and Discounts 3500 3500 vyrovnávací rezerva / Compensating Reserve 2420 5539 Závazky celkem / Liabilities - Total 117805 141975 z toho z pﬁímého poji‰tûní / of which Direct Insurance Premiums 12198 41210 ze zaji‰tûní / Reinsurance Operations 93685 94306 ostatní závazky / other Liabilities 11922 6459 Pﬁechodné úãty pasiv / Temporary Accounts of Liabilities 640 1729 Nerozdûlen˘ zisk minul˘ch let / Indiscrete Profit from Recent Years 19026 Zisk bûÏného roku / Current Year Profit 9694 PASIVA CELKEM / LIABILITIES GRAND TOTAL 459260 476639 Hasiãská vzájemná poji‰Èovna, a.s The report is destined for the Defining Responsibilities same time there are also no reser- shareholders of the company and ves for repairing this property. In was negotiated at the board of The board of directors is res- our opinion, the financial state- directors' meeting, with the ponsible for the accounting, its ment, with the exception of the supervisory board head's partici- comprehensiveness, conclusive- effect the above described fact pation on May 6, 2003. ness, correctness and for putting can have, gives in all the signifi- together the financial statement cant respects a true and honest The audit was carried out by the and the annual report. The audi- picture of the assets, liabilities, Lou‰a&Christensen, spol. s r.o. tor verifies the information pro- capital, transferred results of past company, âernovice, Táborská 95, ving the data stated in the finan- years and the financial situation of auditor license number 132, ing. cial statement and makes a state- the Hasiãská vzájemná poji‰Èovna, Franti‰ek Lou‰a auditor, auditor ment based on this audit. He furt- a.s. insurance company on license number 158. hermore verifies the accord of December 31, 2002 and the eco- the information about the audi- nomic result for the accounting The first part of the audit was ted company for the past period period corresponding with the carried out in February and March stated in the annual report with calendar year which ended on this 2003. The next part was carried the audited financial statement. date. out during April, the audit was The financial statement was put finished at the beginning of May Extent of the Audit together in accordance with the 2003. Act No. 563/1991 of the Legal We produced the financial sta- Code about accounting and with The audited company, Hasiãská tements and annual reports in the relevant rules of the Czech vzájemná poji‰Èovna, a.s. insuran- accordance with the Act No. Republic. We verified the accord ce company, residence ¤ímská 45, 254/2000 of the Legal Code about of the information about he audi- Praha 2, was incorporated on auditors, and with the auditor ted company for the past period November 11, 1992. The registe- directives of the Czech Republic stated in the annual report with red scopes of business include Chamber of Auditors. These audi- the financial statement. In our insurance and reinsurance activiti- tor directives require the planning opinion, this information is in all es, and activities related to the and carrying out of the audit in significant respects in accordance insurance activity. such a way that the auditor recei- with this financial statement. ves an appropriate reassurance There is a report attached to the The originally registered foun- that the financial statement does annual report about the relations dation capital of the company not include significant incorrect- of the connected persons. The of 21 000 000 CZK was gradually ness. The audit includes in a selec- statutory body of the company is increased to the amount of tive way the verification of the responsible for the comprehensi- 295 200 000 CZK as lastly registe- comprehensiveness and conclusi- veness and correctness of this red in the business register. veness of the amounts and infor- report. We verified the factual mation stated in the financial sta- correctness of data stated in this The company's general assem- tement, reviewing the accounting report and discovered no signifi- bly decided on December 10, procedures and significant esti- cant incorrectness. The company 2001 to decrease the foundation mations of the accounting unit created technical reserves in the capital, according to § 216 par. 1b) and also the review of the total amount prescribed by the Act of the Business Code, by presentation of the financial sta- 363/1999 of the Legal Code which 59 040 000 CZK to 236 160 000 via tement and the annual report. We was verified by the responsible decreasing the nominal value of believe that the carried out audit insurance mathematician, MGr. shares. This foundation capital provided us with an appropriate Petr Zahrádka and is able to fulfill decrease came into force on Sep- material to make our statement. its obligations that could result tember 2, 2002. from the agreement about joint Auditor Statement liability within the Czech nuclear The Subject of the Audit pool. Part of the financial assets of The subject of our audit inclu- the company is in real estate, âernovice on May 15, 2003 ded the financial statement (i.e. which the company is obliged to, the balance sheet, the profit and according to §27 par. 1c), estima- Report produced by: loss account and the appendix) of te with a real value. Lou‰a&Christensen, spol s r.o., the Hasiãská vzájemná poji‰Èovna, auditor license number 132, a.s. insurance company on The real value should represent December 31, 2002 for the the market value which should be accounting period equivalent to set based on an opinion not older the 2002 calendar year, and the than five years. This opinion is not Responsible auditor and director annual report corresponding with available to the company and that of the company: this financial statement. is why it did not make the estima- ing. Franti‰ek Lou‰a auditor, audi- tion with the real value. At the tor license number 158. Hasiãská vzájemná poji‰Èovna, a.s In accordance with §198 of the In respect to the floods of the business code, the supervisory year 2002 which had a significant board reviewed the proper finan- and unpredictable impact on the cial statement of the Hasiãská vzá- HVP a.s.'s profit, the supervisory jemná poji‰Èovna, a.s. insurance board considers the economic company (hereafter only HVP a.s.) result of the year 2002, which is for the accounting period of the after many years positive, as year 2002 and came to this conc- successful and confirming the lusion: board's report presented to the shareholders at the last general The supervisory board repea- assembly of the company. The tedly and thoroughly dealt with supervisory board approved the the HVP a.s.'s business perfor- company's financial statement for mance also during the year 2002 the year 2002. accounting period. It continuous- ly incorporated its findings into its resolutions and informed the board of directors and the com- pany's responsible staff about the possible faults. The supervisory board insisted Ing. Jaroslav Schulz on the observance of principles head of the Supervisory Board defined by the law about accoun- ting, the law about the insurance system, the business code and the related rules, and it also conti- nuously controlled their obse- rvance. It also continuously dealt with the relationship between the HVP a.s. and the insuree. It is ple- ased to state that there is a signi- ficant speeding up of the settle- ment of claims, including their payment, which today is faster than the relevant laws stipulate. From the point of view of the HVP a.s. insurees, it considers the amount of the technical reserves, their location and the form of securing to be decisive. Today the technical reserves are created not only in a sufficient amount, but at the same time they are located into highly credible assets ena- bling a fast settlement of losses. The supervisory board states that the HVP a.s.'s insurees today receive high security which was apparent, among other things, during the settlement of losses from the year 2002 floods. In the board's opinion, the accounting is managed with a sufficient care and from the point of view of a usual business performance, the future results should not be dis- torted by uncalculated losses or uncreated adjustments.