* Group results of 120 million euros in 2006
* Gothaer's plans for the future have been nearly fulfilled
* Growth in sales, in particular, in life insurance
* Growth again in the number of health insurance policyholders
Cologne, 20 June 2007. With Group results of 120 million euros, Gothaer has bettered its results for the fourth year in a row. The Group results rose by over 16 % in comparison to last year. The equity increased by more than 18 % to over 1.1 billion euros, while the after-tax return on equity remained stable at 10.7 %. Thus, the Group's profit situation once again improved, as it has done continually during the last few years.
The turnover also increased while the administrative costs remained nearly constant at 444 million euros. The gross premiums written in 2006 amounted to 3.9 billion euros (as compared to 3.8 billion euros in 2005), which is 1.3 % more than the previous year. Dr. Werner Görg, the Gothaer Group's chief executive officer, commented on the Group's success by saying: "Thanks to our excellent profit situation, we are well-prepared to meet the challenges of the future." The Gothaer Group began preparing its financial statements in accordance with the International Financial Reporting Standards in 2001 and is currently one of the few mutual insurance companies in Germany to do so. The individual types of insurance are assessed in accordance with the German Commercial Code (Handelsgesetzbuch).
In 2006, the number of the Group's employees fell to 5,730 or approximately 280 less than in 2005. In Cologne, on the other hand, approximately 230 new positions were filled so that on the average Cologne?s employment figures for 2006 will be approximately 3,306.
Gothaer's Plans for the Future Have Been Nearly Fulfilled
Dr. Görg put it succinctly: "Gothaer's plans for the future have been nearly fulfilled." The Group's insurance situation is stable, our investments in the brand are leading to increasing brand recognition, our financial investment strategy has been successfully changed, and the leaner structures mean costs for our customers will remain lower.
"The achieved growth is welcome, but it must be substantially increased in the coming years", Dr. Görg stated self-critically. Externally, this means investing even more effort in our "two-brand strategy", i.e. promoting Asstel and Gothaer. Internally, the procedures will be increasingly bundled. A customer service centre will handle the standard business transactions. The overall goal is to increase efficiency by reducing complexity, standardising and utilizing automatisation.
Growth in Sales
There is clear growth in the Group's sales. The premium income of the Group's life insurance company rose by more than 80 % and was thus well above the market average of just 19.5 %. Production climbed to 2.4 billion euros; a figure to which the independent field sales personnel made a significant contribution. In health insurance, the monthly premiums from new business increased to approximately 2 million euros. In the property and accident insurance sector, the Group acquired new business in the amount of 174 million euros. A recruiting campaign was started in 2007 to increase the size of the Group's own sales staff. The goal is to increase the number of insurance agencies by 300 to bolster the Group's existing 1,700 agencies. The campaign to market multi-risk policies was quite successful in 2006. The success of the campaign can be seen in the fact that 117 % more policies were concluded in May 2006 than in the same month in 2005. The newly introduced "Gothaer Vorsorgekonzept" (Gothaer Personalized Provision Concept), which was awarded the Bronze Award by the magazine "Versicherungsmagazin", has been exceptionally well received. Dr. Hartmut Nickel-Waninger, who became the Gothaer Group's executive director in charge of marketing and sales in April 2007, explained: "We want to stay with the tried and proven, but at the same time to improve even further in those areas in which we are currently only good."
Gothaer Allgemeine Does Well
Gothaer Allgemeine Versicherung AG held its own in 2006 in spite of the difficult market conditions. The gross premiums written in 2006 (1.37 billion euros) achieved about the same level as in the previous year (1.39 billion euros). While premium income in the highly competitive car insurance business did decrease, this was balanced by the growth in building insurance. The Group's chief executive officer, Dr. Görg, is satisfied with the development: "The contribution of car insurance business to the Group's total turnover has greatly decreased in the last few years. The more profitable lines have, however, been growing with the consequence that we have become less and less dependent on the highly cyclical car insurance business." Furthermore, although the prices in the industrial insurance line dropped, the company was able to increase the number of policies written. As a consequence, Gothaer Allgemeine considers itself well positioned to meet the challenges of the future.
The international rating agencies have also not been blind to the strength of Gothaer Allgemeine. Fitch has awarded the company an "A" rating for the first time and, in the autumn, Standard and Poor's confirmed the "A-" rating that it awarded Gothaer the previous year.
Gothaer Lebensversicherung - Substantially Better Growth than Average
2006 was a particularly satisfying year for the life insurance company Gothaer Lebensversicherung AG. The gross premiums written plus the premiums from the policyholder bonus reserve increased from 1.16 billion euros to 1.17 billion euros. At the same time, the administrative costs were reduced by 0.2 percentage points to 3.2 %. Thanks to the good investment results, the net yield rose to 4.6 % in 2006. The customers of Gothaer Lebensversicherung also benefited from the positive results since new policyholders received a guaranteed return of 4.2% in 2007. The total return on funds invested under Riester tax-deferred retirement plans increased from 4.1 to 4.4 %.
In its first assessment of the financial strength of Gothaer Lebensversicherung Standard and Poor's awarded it an "A-" rating ("very good") in 2006. This year the life insurer is drumming up new business with a pension marketing campaign. The range of products was increased and improved. The company's main attraction, "VarioRent plus", is now not only available with the flexibility of a unit-linked policy, but also as a conventional product with guaranteed interest. Beginning in autumn, the company will focus on sales campaigns under the heading "Innovation". The campaigns will be aimed at marketing new solutions for company old-age pension schemes based on a combination of a unit-linked direct component and deferred compensation.
Gothaer Krankenversicherung Expands Its Business Segment
The health insurance company, Gothaer Krankenversicherung AG, has succeeded in not only stopping the previous loss of policyholders in the full health insurance segment, but now shows a slight gain in the number of policyholders in this segment. At the same time, the company achieved substantial growth in supplementary health insurance.
One particularly welcome aspect for customers is that, for the fourth year in a row, the premiums have remained relatively stable. The average premium increase was no more than 0.7 %, while for more than half of the policyholders the premiums did not change at all on 1 January 2007. In addition, about a third of the fully insured policyholders received a refund. The group insurance sector will become an important pillar for Gothaer Krankenversicherung in the future. With its family of "MediGroup" products and its "Gothaer Firmenservice", it has a range of supplementary products that are of interest to both companies and their employees. Mr. Michael Kurtenbach, deputy chief executive officer, of Gothaer Krankenversicherung AG, stated that: "We see great potential in this sector and will strive to win a substantial share of this market."
Asstel Shows Substantial Growth
As the Gothaer Group's direct insurer, the Asstel Group, proved once again in 2006 that a significant contribution to the growth of Gothaer's total business can be made with products which require less in the way of advisory services. Asstel Sachversicherung AG increased its premium income from 16.7 million euros to 26.3 million euros in 2006 - an increase of over 50 %. The increase in Asstel Lebensversicherung AG premiums from new business was particularly welcome; the company boosted its premium income by 135.5 % from 205 million euros to 482 million euros. The sum of the gross premiums written plus the premiums from the policyholder bonus reserve rose from 226 million euros to 250 million euros in 2006.
Your contact person: Alrun Griepenkerl
Press Relations and Group Communications
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