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Key Figures
Company ProfileOpening
StatementECO Indicators
Report of BOD Report of SVBVIG
Auditor’s Report Balance Sheet
Profit and Loss Account
Changes in Equity
Notes to the Financial Statements
Report onRelations
Non-financial Section
Board
Distribution Network
Key Figures
(in thousands CZK) 2012
Assets 29,262,587
Equity 3,355,574
Technicalprovisions 24,007,183
Profit(loss)ofcurrentaccountingperiod 1,018,418
Totalwrittenpremiums 10,702,266
ofthis:lifeassurance 9,897,341
non-lifeinsurance 804,925
Totalcostsofinsuranceclaims 6,745,877
ofthis:lifeassurance 6,556,934
non-lifeinsurance 188,943
01 Contents 02 YourEasyRoadtoLifeAssurance 03 CompanyProfile07 OpeningStatementbytheChairmanoftheBoard
ofDirectors 10 Development in theMost Important Economic Indicators 11 Members of the Company’s Excecutive Bodies
12 OrganizationalStructure14 ReportoftheBoardofDirectors 23 ReportoftheSupervisoryBoard26 InformationaboutVienna
InsuraceGroup 29ContentsofFinancialSection 111 Non-financialSection
Contents
01
02Pojišťovna České spořitelny, a.s., Vienna Insurance Group
PojišťovnaČeskéspořitelnyisoneofthelargestinsurancecom-
paniesinthefieldofbankassuranceontheCzechmarket.The
comprehensivesaleofourproducts,includingthesubsequent
clientservice,isprovidedthroughtwodistributionnetworks.
Branch Office Network of Česká spořitelna
Togetherwithmorethan4,600consultantsfromČeskáspoři-
telna,weensureourinsuranceproductsandcomprehensivesa-
lesandafter-salesserviceareavailabletoourclientsatmore
than680locationsintheCzechRepublic.
Pojišťovna České spořitelny’s External Network
Thankstotheroughly200externalcontractualpartners,who
ensureboththesaleofinsuranceproductsandalsoprofessio-
nalcustomerservice,wecanguaranteeourproductsarehighly
available.Ouradvisersareflexible;beingabletomeetatatime
orplacethatsuitstheclient’sneeds.
Your Easy Road to Life Assurance
03Annual Report 2012ICompanyProfile
In2012PojišťovnaČeskéspořitelnydefendeditsnotionalgold
medal in theZlatákoruna (GoldCrown) competitionandwon
silver in the Hospodářské noviny competition in the category
ofBestInsuranceCompanyoftheYear.InMarchthecompany
launchedanewproductonthemarket,Funeral Insurance. In
OctoberFLEXIunifiedtheratesforinsurancerisksandunder-
wentinnovation.Itnowoffersclientsdoubleindemnityfordeath
inacaraccident,itextended3rddegreedisabilityinsuranceby
long-termcareforfree,itenabledadvancepaymentofinsuran-
cebenefitandaftersevenyearswithoutahealthrecorditlooks
upontheclientashealthy.PojišťovnaČeskéspořitelnyattained
CZK 10.7 billion of written premiums and insured more than
1.9millionclients.IncooperationwithCentrumParapleitcon-
tinuestosupporthandicappedfellow-citizensandfamilieswith
children.Bambiriáda,aneventtosupportactiveandsafeways
forchildrentospendtheir freetime,alsoreceivedafinancial
contribution.Ouremployeesareactively involved in theDays
forCharity.
2011
This year Pojišťovna České spořitelny celebrated its achieve-
mentswith FLEXI Life Assurance,whichwon theZlatá koruna
(GoldenCrown)competition.At thesametime,wewonthetit-
le Best Insurance Company of 2011 and Most Client Friendly
Insurance Company 2011. At the start of the year FLEXI Life
Assuranceunderwentsomeinnovations,inwhichwepresented
auniqueprogramme,InSpiral,thatallowsthepolicyparameters
tobemodifiedtakingadvantageoftheproduct’sotherbenefits.
Wealsointroducedbonusesforloyaltyandnoclaimsorinsuran-
ceforrecreationalsportsrisks.WehaveoverCZK10billionin
Company Profile
Pojišťovna České spořitelny, a.s., Vienna Insurance Group 04
writtenpremiumsandinsuremorethan1.9millionclients. In
cooperationwithCentrumParaple(ParaplegicCentre)andSPID
handicap,o.p.s.,wecontinuesupportinghandicappedcitizens
andfamilieswithchildren.TheKrtekEndowmentFundforchil-
dren’soncologyalsoreceivedafinancialcontribution.Ourem-
ployeesareactivelyinvolvedintheDaysforCharity.
2010
InMarch2010,FLEXILifeAssurancecelebratedits10thanniver-
saryontheCzechmarketwithmorethan900,000peopleinsured.
Thecompany’slong-termeconomicstabilitywasstrengthenedby
thegeneralmeetinginMay,whenitwasdecidedtoincreasethe
basiccapitalbyCZK782.9milliontoatotalofCZK1.9billion.
PojišťovnaČeskéspořitelnyalsoenjoyedsuccessinvariouscom-
petitions.Our coreproduct FLEXI Life Assurancedefended its
victoryfromthepreviousyearintheZlatákoruna(GoldenCrown)
competitionintheLifeAssurancecategory.Wecamefirstplace
inthecategoryInsuranceCompanyof2009–LifeAssuranceand
inoneofthecompetition’smaincategories,InsuranceCompany
of2009,wedefendedourvictoryforthefourthtimeinarow.Petr
Zapletal,ChiefExecutiveOfficerofPojišťovnaČeskéspořitelny,
alsowonanawardinthefirstyearoftheInsuranceManofthe
Yearcompetition.Thesuccessof2010wasalsounderscored
bythefactthatforthefirsttimeinourhistorywemanagedto
exceedthelimitof9billioninwrittenpremiums.
2009
Atthebeginningof2009,wepresentedthenewcomprehensive
FLEXILifeAssurance,whichmergedtheproductsFLEXI,FLEXI
INVEST2008andFLEXIH-FIXintoasingleproduct.Thequalityof
thisinsuranceistestifiedtobythefactthatmorethan200,000
clientsmadeuseofFLEXILifeAssurancein2009andalsothe
numberofawardstheinsuranceproductwon.IntheFincentrum
BankoftheYearcompetitionFLEXILifeAssurancewontheLife
Assuranceof2009category,itwontwoofthehighestawards
in the ZlatáKoruna (Golden Crown) competition, those being
inthecategoriesofLifeAssuranceandInnovationoftheYear.
IntheInsuranceCompanyof2008competition,wewoninall
categoriesrelatingtolifeassurance.TheAssociationofCzech
InsuranceBrokersawardedusthehighestawardinthecatego-
riesofInsuranceCompanyof2008inLifeAssurance,Innova-
tionofInsuranceProducts,CooperationwithBrokersandinthe
categoryofSettlingClaims.TheFLEXILifeAssuranceproduct
crowneditssuccesswithavictoryinthecategoryofInsurance
Productof2008.In2009,thecompanynamewaschangedto:
PojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup.
2008
InSeptember2008PojišťovnaČeskéspořitelnybecameamem-
ber of the Vienna Insurance Group. In the same year FLEXI
INVEST2008 investment lifeassurancewasvotedwinner inthe
05Annual Report 2012ICompanyProfile
categoryofLifeAssuranceof2008intheMasterCardBankof
theYear2008competition.Atthesametime,wewontheSilver
Crown in the Life Assurance category. Likewise in2008, the
AssociationofCzechInsuranceBrokersawardedusInsurance
Companyof2007inLifeAssuranceandtheFLEXIproductwon
thehighestawardintheInsuranceProductcategory.Wewere
awardedthetitleofBestInsuranceCompanyintheareaofSet-
tlementandInnovationinInsuranceProducts.
2007
2007wasmarkedbyimportantproductchanges.Weinnovated
one of themost successful products, the FLEXI Flexible Life
Assurance,weintroducedanewtypeofinvestmentlifeassur-
ance,FLEXIH-FIX,andfor2008wepreparedaninnovationto
theFLEXIINVESTInvestmentLifeInsurance.
2006
During2006,westrengthenedourpositioninthelifeassurance
marketthusvindicatingourrankingamongthefivemajorlifeas-
surancecompanies.Inaddition,wegainedthetitleInsurance
Companyof2006intheLifeandAccidentInsurancecategory
in a survey organised by the Association of Czech Insurance
Brokers.Thenumberofourclientsexceededhalfamillion.
2005
In2005,wecameupwithseveralproductinnovations.TheKVA-
TROandHYPOTÉKACreditLifeAssuranceproductsmadetheir
markamonginsurancerepresentatives.Attheendoftheyear,
theproductportfolio insurancewasenrichedbyanew insur-
anceschemeforchildren,whichischaracterisedbyhighflex-
ibility,copyingtheneedsofthechildorthefamily.Itwentunder
thenameofJUNIORFlexibleLifeAssurance.
2004
From2004onwards,weonlyspecialiseinthesaleof lifeas-
surance,thatbeingbymeansoftheČeskáspořitelnabranch
networkandselectedexternalnetworks.However, theČeská
spořitelnaFinancialGroupcontinuestoofferitsclientscertain
productsbymeansofitsstrategicpartner.Weoperateasthe
“competencecentre“of theČeskáspořitelnaFinancialGroup
and,togetherwithastrategicpartner,theKooperativainsurance
company, we provide highly standardised general insurance
products intended for the Česká spořitelna branch network.
A significant addition to our products was the FLEXI INVEST
InvestmentLifeAssurancethatoffersclientsachoiceofthree
investmentprogrammesandawiderangeofinsuranceforlife
risks.
06Pojišťovna České spořitelny, a.s., Vienna Insurance Group
2003
Withregardtothedevelopmentoftheinsurancemarketinthe
CzechRepublicandtheEuropeanUnion,andalsowithregardto
thefactthatČeskáspořitelnaandtheErsteBankgroupspecial-
iseintheareaoflifeassuranceandbankassurance,inlate2003
theshareholdersofPojišťovnaČeskéspořitelnydecidedtosell
thenon-lifeinsurancepartofthecompanytoKooperativa.
2001
UndertheinfluenceofthetransformationofČeskáspořitelna
anditsentirefinancialgroup,asof17September2001wetook
onthenewnameofPojišťovnaČeskéspořitelny.Thechangein
thebusinessnameisrelatedtothechangesinthecorporate
colours,namesandlogosoftheentireČeskáspořitelnaFinan-
cialGroup,whicharebasedonthecompositionofitsmajority
owner –ErsteBank. Therewerealso changes in theareaof
providingservices toclientsand thecompany’smanagement
culture.Therewasdevelopmentinsalesofourinsuranceprod-
uctsofferedinČeskáspořitelna’snetworkofbranches,inwhat
isnowcalledbankassurance.
2000
Within the framework of privatisingČeská spořitelnawealso
underwentathoroughlegalandfinancialaudit.Thisresultedin
anewshareholderenteringattheendof2000.ThelargestAus-
trianlifeassurancecompany,SparkassenVerischerungamem-
beroftheErsteBankFinancialGroup,acquireda45%stakein
thecompanybyincreasingthebasiccapitalbyCZK500million.
WeputFLEXIFlexibleLifeAssuranceonthemarket,aunique
productforanewgeneration.
1995–1999
In 1995, we were the first insurance company in the Czech
Republic toput insurance for very seriousdiseasesonto the
market,duringwhichaclaimismadeinthecaseofadisease
diagnosis.Animportantmilestoneintheinsurancecompany’s
historywasthecapitalinputofČeskáspořitelnain1995,which,
inadditiontotherequiredcapitalbase,broughtthebackground
ofthestrongestfinancialgroupintheCzechRepublic.Theim-
portanceofagoodqualityshareholderstructurewasdemon-
stratedin1997,whenthewhole insurancemarketwasnega-
tivelyhitbytheimpactofextensiveflooding.
1992–1994
PojišťovnaČeskéspořitelnywasfoundedin1992usingCzech
privatecapital.InJanuary1993,webeganourinsuranceactivi-
tiesunderthenameŽivnostenskápojišťovna.Ouraimwasto
provideinsuranceservices,inparticulartotherisingbusiness
sphere.Withthedevelopmentofinsuranceactivities,wealso
startedtoexpandourofferofinsuranceschemesforthegen-
eralpublic.
07Výroční zpráva 2012IÚvodníslovopředsedypředstavenstva
Opening Statement
Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Opening Statement by the Chairmanof the Board of Directors
Dearclients,shareholders,businessfriends,
IamgladtosaythatthisyeartooIcanconfirmthatPojišťovna
Českéspořitelnydidwellin2012.Wearestillworkingonstrength-
eningourposition inthemarket;we’re improvingourcoreprod-
uct,FLEXILifeAssurance,whichhasbeenhighlyacknowledged
bybothexpertsand thegeneral public. These facts reflect the
goodworkdonebythecompany’spartnersandemployees.We’ve
managedtostrengthenourpositionontheinsurancemarketat
atimewhenclientsarecautiousandconsiderverycarefullywhere
toinvesttheirmoney.Butthecompetitionisgainingground.Just
likeus,otherplayersinthefieldoflifeassurancearefightingfor
clients,andtheytoohavesomethingtoofferthem.Foralongtime
nowit’snotthelowestpricethatwinsthrough,ratheritisaclient-
friendlyapproach,first-rateservicesandaninterestingproduct.
2012broughtwithitamajorchangeinthewaywelookatpric-
inginsurance.Thegenderfactornolongerexistswhenpricing
risks.Therefore,at theendof the year FLEXILifeAssurance
unifiedtheratesformenandwomenandpresentedinteresting
productinnovations.
Weofferclientsdoubleindemnityduringatrafficaccident,achoice
oftwoinsurancepackagesforveryseriousdiseasesoranex-
tensionofthemaximumperiodofbenefitindailycompensation
insurance forchildren to365days.Weallowadvancesettle-
mentforclaimsthatoccurredfrom1November2012andneed-
edmore thanamonthof treatment. In addition, after seven
yearswithoutanythingontheirhealthrecords,weviewclients
ashealthy.
08Pojišťovna České spořitelny, a.s., Vienna Insurance Group
09Annual Report 2012IOpeningStatementbytheChairmanoftheBoardofDirectors
TheawardsthattheFLEXILifeAssurancegainedtestifytothe
qualityoftheproductsandtheprofessionalapproachofCom-
panyemployeesand thatof itspartners. For the fourth time
nowwe’vetakenfirstplaceintheLifeAssurancecategoryinthe
Zlatákorunacompetitionandwecamesecondintheeconomic
dailyHospodářskénoviny’scompetitionforthebestinsurance
companyin2012.
We also managed to attain ten billion seven hundred million
crowns inwrittenpremiums,despitethestagnationof the in-
surancemarket,ourwrittenregularpremiumscontinuetogrow.
Thankstothehighcommitmentofemployeesandpartners,we
hold thirdplaceamong insurance companiesoffering life as-
surance,withourwritteninsurancecontractsholdingamarket
shareof12.1%.
Irealisethatwhengainingaclient’strusttheconsultanttakes
onboth the roleofanadviserand thatofa reliablepartner.
Someonewhoknowshowto listentotheclient’swishesand
needs, canhelp to choose themost suitable product and is
alwaysathandwheneversomethingchangesorhappensinthe
client’slife.SoIgivemyheartfeltthankstoallourpartnerswho
knowhowtoputforwardaprofessionalargumentandexplain
thingsinhumanterms.
It’shardtogainaclient’strustwithoutstrongarguments.And
a high-quality competitive product makes for compelling ar-
guments.The lion’sshareofcreditgoes toPojišťovnaČeské
spořitelnyemployeesforthequalityoftheproductandtheex-
cellentservicesthatarerelatedtothecontinuousimprovement
ofprocessesinthecompany.Igivemyheartfeltthankstoallmy
colleaguesfortheircommitment.
Thepositivesignalsfromourclientsarethedrivingforcethat
compelsustokeepontherightcourse.Acourseensuringtheir
custom.Ibelievethatourclientswillcontinuetofindusareli-
ableinsurancepartnerinthefuture.
Petr ZapletalChairmanoftheBoardofDierctors
Pojišťovna České spořitelny, a.s., Vienna Insurance Group 10
Development in the Most ImportantEconomic Indicators
(in thousands CZK) 2009 2010 2011 2012
Assets 20,421,310 24,428,665 27,044,503 29,262,587
Equity 2,209,387 2,746,078 2,694,637 3,355,574
Financialplacements 18,953,205 22,541,660 24,742,299 26,780,771
Technicalprovisions 17,344,804 20,739,591 22,935,205 24,007,183
Profit(loss)ofcurrentaccountingperiod 619,151 603,105 417,615 1,018,418
Totalwrittenpremiums 6,962,601 9,202,722 10,679,693 10,702,266
ofthis:lifeassurance 6,855,813 8,519,754 9,892,180 9,897,341
non-lifeinsurance 106,788 682,968 787,513 804,925
Totalcostsofinsuranceclaims 4,058,139 3,503,734 5,144,551 6,745,877
ofthis:lifeassurance 4,005,190 3,401,100 4,960,058 6,556,934
non-lifeinsurance 52,949 102,634 184,493 188,943
Numberofpoliciesconcluded
asat31.December(pcs) 673,978 734,441 774,902 789,964
ofthis:lifeassurance 631,332 688,063 726,187 740,970
non-lifeinsurance 42,646 46,378 48,715 48,994
Avaragenumberofemployees 173 196 221 239
11Annual Report 2012IMembersoftheCompany’sExcecutiveBodiesat31December2012
Members of the Company’s Excecutive Bodies at 31 December 2012
Members of the Supervisory Board
Chairman of the Supervisory Board
MartinDiviš–ChairmanoftheBoardofDirectorsofKoopera-
tivaPojišťovna,a.s.,ViennaInsuranceGroup
Vice-chairman of the Supervisory Board
ErwinHammerbacher–memberoftheBoardofDirectorsof
SparkassenVersicherungAG
Member of the Supervisory Board
KarelKopecký–HeadoftheLegalandComplianceDepartment
ofPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup
Member of the Supervisory Board
PetrKohoutek–HeadoftheInsuranceDepartmentofPojišťovna
Českéspořitelny,a.s.,ViennaInsuranceGroup
Member of the Supervisory Board
RolandGröll–memberoftheBoardofDirectorsofViennaInsur-
anceGroupAGWienerVersicherungGruppe
TheremainingseatintheSupervisoryBoardwasvacantat31
December2012.AnewmemberVeronikaMaderová–Headof
theSalesandMarketingDepartmentofČeskáspořitelna–pen-
zijníspolečnostwasvotedin22March2013(thischangehas
notbeenenteredintheCommercialRegister).
Board of Directors
Chairman of the Board of Directors
PetrZapletal
Vice-chairman of the Board of Directors
JaroslavKulhánek
Member of the Board of Directors
LiborMánek
Pojišťovna České spořitelny, a.s., Vienna Insurance Group 12
Organizational Structure to 31 December 2012
TheCompanydoesnothaveanybranchabroad.
BoARD of DIReCtoRS
Vice-chairman of theBoard of Directors
Chairman of theBoard of Directors
Committee for InvestmentStrategy
Committee for Managing and Control System and for Risk Management
SuPeRVISoRy BoARD CoMMIttee foR AuDIt
financeSection
Controllingand
Reporting
Accounting
AssetManagement
Maintenance
SoftwareDevelopment
HardwareSupport
SoftwareSupport
Actuaries
Informationtechnology
Section
Marketingand PR
SalesReporting
SalesDevelopment
DistributionNetworkSupport
Sales SupportSection
RegionalManagers
HelpDesk
Client ServiceSection
externalNetwork Section
RegionalSales
Managers
Risk Insuranceand ProductDevelopment
Methodology
ProductDevelopmentApplications
ProductDevelopment
Section
RegionalSales
Managers
DePuty Ceo
Legal andCompliance
PolicyAdministration
organizationalDepartment
ClaimsHandling
RiskManagement,
Internal Controland Security
underwriting
HumanResources
InsuranceSection
AdministrativeSection
BancassuranceSection
Member of theBoard of Directors
DePuty Ceo
GeNeRAL MeetING
Ceo
DePuty Ceo
Výroční zpráva 2012IProfilspolečnosti 13
úvodní slovo předsedy představenstva
Report of theBoard of Directors
Pojišťovna České spořitelny, a.s., Vienna Insurance Group 14
2012didnotbringanysurprisesandinessencecopiedtheex-
pecteddevelopmentintheareaofeconomicindicators.Itcanbe
statedthatthedebtcrisis,strengthenedbythedeclineingrowth
of an ever increasing number of EuropeanUnion countries, is
reflectedmoreandmoreinanexport-dependenteconomy,which
theCzechRepublicmostdefinitelyis.Areflectionofthisdevelop-
mentwasafallininterestratestothelowestlevelever,aslow-
downofgrowthinGDPassociatedwithafurtherweakeningof
thepopulation’swillingnesstoincreaseconsumption.
On theonehand these factswere reflected in thegrowthof
income from the financial placement of funds from technical
provisions.Ontheotherhand,thisdevelopmentmeantanother
lacklustreyearforlifeassurancewithatotalannualincreasein
thestipulatedpremiumofjust1.9%.
In2012thepensionandtaxreformscametoanendandinthe
courseoftheyeartheirlegislativeformwasalsocompleted.
Ontheinsurancemarketforlifeassurancetherewascontinued
competitioninthefieldofmotivatingdistributors,offersofnew
productsandseekingformstoreducethepercentageofpre-
maturelyterminatedinsurancepolicies.Thehighexpectations
andperhapsthenervousnessofallplayersinthemarketwas
accentuatedupto thedatetheunificationof insurancerates
forwomenandmencameintoeffectonthebasisofadecision
bytheEuropeanCourtofJustice.Byitself,thefactthatmore
favourable rates forwomencame toanendmeantacertain
resurgenceinsalesof insuranceuntilthenewrateswereim-
plementedand intheendeventheconcentrationofchanges
andadjustmentstoinsuranceledtoacertainrevivalinthelife
Report of the Board of Directors
15Annual Report 2012IReportoftheBoardofDirectors
assurancemarket.Inthecourseof2012theprocessofimprov-
ingthemanagementofinsurancecompaniesaccordingtothe
requirementsofSolvencyIIcontinued.
ThemaintasksoftheBoardofDirectorsofPojišťovnaČeské
spořitelnyfor2012were:toensuretheplanneddynamicgrowth
inwrittenpremiumsand improve theirquality, implement the
requirementsarisingfromthetransitiontoauniformrateofin-
suranceformenandwomenwhilstensuringfortheownersthe
expectedprofitabilityoftheinsuranceactivityandfurthermore
toincreasethequalityoftheservicesforclientsandbusiness
partners.
Thebusinessgoalssetfor2012stemmedfromaprovenmix
ofdistributionpaths,basedonfurtherdevelopmentinthesale
ofinsuranceinthebranchnetworkofČeskáspořitelna,includ-
ingtheexpansionoffinancialservicesintheformofcomplex
financial products, and to cooperate with external business
partners. The product offer was built on the carrier product
FLEXI Life Assusurance for both distribution channels, whilst
bankingproductsweresupplementedwithlimitedamountsof
theFLEXIPREMIUMemissions(singlepremiumunit-linkedlife
assurance).Furthermoregroupinsurancetocovertherisksas-
sociatedwithenteringintoacreditagreementwasprovidedin
theČSnetwork.Thisfinancialproduct,offeredinonecontract,
combinesabankingproductandprovidesinsuranceprotection
incaseofinabilitytorepayaloanduetolossofjob,disability
ordeath.Thisrepresentsacomprehensivefinancialservicefor
theclient.
TheinsurancemarketforlifeassuranceintheCzechRepublic
onlyincreasedslightlyin2012,by1.9%,andthetotalvolume
ofwrittenpremiumsforlifeassuranceamountedtoCZK47.4
billion. Thestructureof contractualwrittenpremiumsbypay-
mentmethodrepresentsgrowthof2.2%withavolumeofCZK
44.7billionforregularpremiums.Singlepaymentinsurancefell
by3.2%toCZK2.7billion(singlepremiumscalculatedona10
yearbasis).
Thedevelopmentof insuranceatPojišťovnaČeskéspořitelny
copied the market trends. Total written life assurance only
slightly exceeded the level of 2011. In the structure of writ-
ten premiums by payment method, considerable growth was
achievedonthepartofregularpremiumsthatbeing9.68%.In
comparisonwithlastyearsinglepaymentinsurancepremiums
fellby9%.Theabsoluteamountofwritteninsurancecameto
CZK10,702.3million.
In2012PojišťovnaČeskéspořitelny increasedtheproportion
ofregularpremiumstothetotalwrittenpremiums.Writtenin-
Pojišťovna České spořitelny, a.s., Vienna Insurance Group 16
surance for regular premiums amounted to 57% of the total
portfolio.ThetotalwrittenregularpremiumsamountedtoCZK
6,071million.SinglepaymentpremiumsreachedCZK4,631.1
millionmakingup43%oftheinsurancecompany’stotalwritten
premiumsforlifeassurance.Thevolumeofwrittenlifeassur-
ancepremiumsmakestheinsurancecompanythethird-largest
lifeassurance companyon themarket. Thebusiness results
achieved this year represent a total market share of the life
assurancemarketof12.08%.Non-lifeinsurancegrewyear-on-
yearby2.21%,whichcorrespondstowrittenpremiumsamount-
ingtoCZK804.9million.Itconcernsseparateaccidentinsur-
anceandinsuringsickleaveandlossofemploymentespecially
for Česká spořitelna clients. The development of the market
shareisdocumentedinthechartsbelow.
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
Total Lifeassurance Non-lifeinsurance
Development of the market share in the insurance market by written premium (%)
2010 2011 2012
6.09%
7.46% 7.49%
0.85% 1.11% 1.14%
12.08%
13.74% 13.74%
Total Lifeassurance Non-lifeinsurance
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
Development of the market share in the insurance market by specified insurance (%)
2010 2011 2012
*with a converted single payment premium on the basis of 10 years
4.20%
5.53%5.18%
0.85% 1.11% 1.14%
10.26%
11.40% 12.08%
17Annual Report 2012IReportoftheBoardofDirectors
The commercial success of Pojišťovna České spořitelny, its
mannerofcommunicatingwithclientsanditssalesserviceto
businesspartners,wereallawardedbytheprofessionalpublic
in2012,thatbeingwiththeaward:
– Zlatá koruna (Golden Crown) 2012 – 1st place in the Life As-
surance category
– Hospodářské noviny (economic Newspaper) Prize – Best
Insurance Company of 2012
Products
Productinnovationswereshiftedtotheendoftheyearincon-
nectionwith the transition to theunified insuranceprices for
menandwomen (on thebasisofadecisionof theEuropean
CourtofJustice-ontheabrogationoftheequalapproachtothe
sexesinthecaseoflifeinsuranceproductsby22.12.2012).
PartofthechangestotheproductsarisingfromtheEuropean
CourtofJusticedecisionwerefurtherproductinnovationsthat
strengthenthefocusofPojišťovnaČeskéspořitelnytothetruly
seriousrisksassociatedwithday-to-daylife.Inconnectionwith
this,theinsurancecompanyadjustedtheconditionsfordeter-
miningtheamountofindemnityfromsettlingclaimsinfavour
of these risks.Forclearand transparentcommunicationwith
clients,theconditionsforappraisingtheextentofdamageto
healthwerepublishedontheinsurancecompany’swebsite.
Inadditiontothisadjustment,insurancebenefitswereincreased
intheeventofthedeathoftheinsuredpersoninatrafficac-
cidenttodoubletheagreedinsuredamount,butnotmorethan
toCZKonemillion.Veryseriousillnessesarenowavailablein
twovariantswiththeoptionsofeitheracompleteinsurancefor
24seriousillnesses,orforinsuranceofthemostcommonlyoc-
curringlifestylediseases(myocardialinfarction,cancer,sudden
vasculareventsandtotalrenalfailure).
Furthermodificationstotheproductsforthebenefitofourcli-
entswerefocusedoninsurancefordailycompensationandlong-
termcareinthecaseofrecognising3rddegreeinvalidity.
During2012theclientswhomeettheconditionsforawarding
ano-claimsbonusorabonusforloyalty,wereinformedabout
thestatusoftheirbonusinthecontextoftheannualreports.
The loyaltyprogrammeencourages the responsiblebehaviour
oftheclientforthelong-termformofinsuranceprotectionand
forputtingbypartsofthefundsforthepost-productiveageand
theprogrammefurtherrewardstheclientfornoclaims.
In 2012, we also continued expanding the computerisation
of the process for concluding insurance policies by our busi-
nesspartners.Thiscommunicationspeedsuptheprocessof
concluding an insurance policy, extends the possibilities of
Pojišťovna České spořitelny, a.s., Vienna Insurance Group 18
checkingthepoliciesconcludedandundoubtedlycontributesto
costsavings.Forthepurposesofsimulatinginsurancewepro-
videclientswiththeoptionofcalculatinginsurancewithanInsur-
anceCalculator.Inthefieldofinsuranceadministrationtherewas
afurtherexpansionofthepopularproductofČeskáspořitelna
-SERVIS24.Here theclient canfind informationabout their
insurance, make selected changes to the insurance and pay
outstandingpremiumsintheformofE-invoices.
FLEXILifeAssuranceisstillamongourtopoffersanditsproper-
tiescovertherequirementsforcoveringliferisksandtherequire-
mentsforlong-terminvestmentofthefunds.Currentlythisinsur-
anceisabletocoveralloftheindividualrequirementsforrisk
asdefinedbytheclient,almostwithoutlimitation.Moreover,the
extentoftheinsurancecoverissupplementedbyabove-standard
optionstocovertherequirementsforinvestingthefunds.
In2012wesupported thecharacterof theFLEXIproducton
thebasisofalong-termapproachintheformoftheslogan“We
likechanges”.Thiscommunicationisbasedontheattributeof
opennessinthesenseofopeninsurance,i.e.insurance,which
isfullyaccessibletotheconstantchangesinlife’ssituations.
Groupcontracts,whicharebasedoncooperationwithČeská
spořitelna,stillkeepasolidplaceintheoffer.Thisproductis
acomprehensiveofferoffinancialproductsintheformofban-
cassurance. Group insurance is a supplement to the bank-
ing product and is offered in the branch network of Česká
spořitelna.Thisinsurancecoverstheriskofdeathanddisability
ofthebank’sclients, includinginsuranceforinabilitytorepay
aloanduetojoblossorinabilitytowork,andsecuresclients
theirabilitytorepayaloanevenincomplicatedsituations.
Anoutlineofthedevelopmentandstructureofinsurancepre-
miumsinthelastthreeyearsisshowninthefollowinggraphs.
Totalinsurance Lifeassurance Non-lifeinsurance
12,000
10,000
8,000
6,000
4,000
2,000
02010 2011 2012
Developments in written premium (inthousandsCZK)
9,203
8,520
9,892 9,897
788 805
10,680 10,702
683
19Annual Report 2012IReportoftheBoardofDirectors
Ontheonehandregularpremium’sgrowingpercentageisinflu-
encedbythegrowthofnon-lifeinsuranceinassociationwiththe
provisionofinsuranceservicestoclientsofČeskáspořitelnain
theformofgroupinsurance,butalsobythelong-termstrategy
focusedonagrowthinregularlifeassurancepremiums.
Financial results
The insurancecompanyended2012withapost taxprofitof
CZK1,018.4millionaccordingtotheCzechAccountingStand-
ards(CAS).Theeconomicresultisareflectionofdevelopments
onfinancialmarkets,andinparticularthesignificantincrease
inthepriceofbonds.Thehigherprofitfrominsuranceactivities
the structure of written premium in 2012
Lifeassurance(92.48%) Non-lifeinsurance(7.52%)
Developments in written premium(inthousandsCZK)
Regularpremium Singlepaymentpremium
7,000
6,000
5,000
4,000
3,000
2,000
1,000
02010 2011 2012
4,810
5,589
6,071
5,0914,631
4,393
Pojišťovna České spořitelny, a.s., Vienna Insurance Group 20
alsocontributedtothegrowthinprofit.Weachievedthesepri-
marilyasaresultoftheabove-mentionedchangesassociated
withcoverageofseriouslifeevents.
Total technical provisionsamounted toCZK24,007.2million.
Onthebalancesheetdatetheseprovisions’structurewas:pro-
visionsforunearnedpremiumsamountingtoCZK38.1million,
provisionsforlifeassuranceCZK19,528.9million,provisions
for claims CZK 1,287.9 million and other provisions of CZK
128.5million.In2012,theabsolutegrowthoftotalprovisions
was CZK 1,071.9 million compared to 2011. Life provisions
stagnated,thereasonisthemassivepayoutofclaimssettle-
mentattheendoftheinsuranceperiodandalsotheamountof
writtenpremiumsofsinglepaymentpolicies,whichwasstillbe-
lowexpectations.Technicalprovisionsforlifeassurance,where
theinvestmentriskisbornebythepolicyholder,increasedyear-
on-year bymore than40% to a total ofCZK3,023.7million.
Theirgrowthisaffectedbytheabove-mentionedemissionsof
FLEXIPREMIUMandthegrowthinthepricesoftheunits.The
resultingamountofprovisionsiscreatedinaccordancewiththe
currentlegislationandmeansthenecessarysecurityforcover-
ingfuturesettlementsfromclaims.
Thedevelopmentoftheeconomicresultsandthebalancesheet
fortheperiodfrom2012,iscapturedintheaccompanyingcharts.
earnings from 2010 – 2012(inmillionCZK)
30,000
22,500
15,000
7,500
0
Development of the balance sheet sum(inmillionCZK)
2010 2011 2012
24,42927,045
29,263
2010
1,200
1,000
800
600
400
200
0
603
418
1,018
2011 2012
21Annual Report 2012IReportoftheBoardofDirectors
Above all, the volume of technical provisions specified the
funds’ financial placement,which representsmore than82%
ofthecompany’sassets.Theportfoliooffinancialplacements
is spread between different types of financial instruments in
accordancewiththecurrentlegislationandinaccordancewith
the requirementsof the regulator (CNB).Thestructureof the
portfolioofinvestments,whichisgivenintheattachedchart,
is drawn up so as to cover the long-term insurance commit-
mentsandatthesametimetoensurethesafetyofourclients’
investments.Thefinancialplacementsaremanagedincoopera-
tionwiththeprofessional investmentbankingdepartmentsof
Českáspořitelna.
Pojišťovna České spořitelny meets the requirements and de-
mandsonsolvencyandexceedsthesetlimitsonthesolven-
cymarginplacedon lifeassurance. It thuscreatessufficient
assuranceforitsclientstocoverthecommitmentsstemming
from the insurance policies it has concluded. In the area of
reinsurancePojišťovnaČeskéspořitelnybaseditselfonapru-
dentstructureanditslong-termcooperation,aboveallwiththe
renownedreinsurerSWISSRE.
the structure of technical provisions in 2012
Lifeassuranceprovision(81.35%)
Provisionsforunearnedpremiums(0.16%)
Provisionsforoutstandingclaims(5.36%)
Lifeassurancetechnicalprovisionwheretheinvestmentriskisbornebythepolicyholders(12.59%)
Otherprovisions(0.54%)
Pojišťovna České spořitelny, a.s., Vienna Insurance Group 22
The management and control system of Pojišťovna České
spořitelny
During2012,theBoardcontinuedinitsendeavourstoensurethe
insurancecompany’smanagementandcontrolsystemisstable,
functional andeffective. Themanagement and control system
coveredalltheinsurancecompany’sactivitiesandthemanage-
mentpermanentlymonitors its functionalityandeffectiveness.
Thesystemenablesriskstobemethodicallyandsystematically
assessedandmanaged.Thecontrolsystemischaracterisedby;
–ensuringitsfunctionalities;
–modifyingboththeorganisationandprocessessothatthere
isnoconflictofinterestsandthatthecompany’scommercial
andotheractivitiesareseparated;
– identifying risks that the company is exposed to during its
activities, including theprocesses leading to theirmanage-
mentandcontrol.
Through year long project management, the Board continued
theprocessofimplementingtherequirementsofSolvencyII.
Intheyearunderassessment,PojišťovnaČeskéspořitelnyve-
rifieditsfinancialstabilityonthebasisofcasestudiesaccor-
dingtothesetparametersintheframeworkoftheVIGholding.
Accordingtothe internalandexternalcontrolsandauditsca-
rried out, the company’s management and control system is
effectiveandgivestheBoardsufficientinformationtoeffective-
lyandprudentlymanagethecompany.
the structure of financial placement in 2012
Fixedincomesecurities(77.48%)
Variableincomesecurities(shares)(0.62%)
Variableincomesecurities(funds)(5.97%)
Bankdeposits(4.42%)
Other(0.23%)
Financialplacementoflifeassurancewheretheinvestmentriskisbornebythepolicyholders(11.29%)
23Annual Report 2012IReportoftheSupervisoryBoard
Report of the Supervisory Board
In2012,theSupervisoryBoardofPojišťovnaČeskéspořitelny,
a.s.,ViennaInsuranceGroup,continuouslyperformedthetasks
assigned to itby lawand theCompany’sArticlesofAssocia-
tion.AsthesupervisionandcontrollingbodyoftheCompany,
theSupervisoryBoardoversawtheBoardofDirector’sexercise
ofitsauthorityaswellastheCompany’sbusinessoperations.
TheSupervisoryBoardwaskeptregularlyinformedoftheCom-
pany’s operations, financial situation, checked fulfillment of
GeneralMeetingresolutions,reviewedreportsoftheexternal
auditorandprovidedtheCompany’smanagementwithsugges-
tionsandrecommendationsonhowtoimprovethesituationin
theCompany.TheSupervisoryBoardreviewedthesubmittedfi-
nancialstatementsofPojišťovnaČeskéspořitelny,a.s.,Vienna
InsuranceGroup,asatDecember31,2012andcametothe
conclusion that theaccounting recordswerekept inaclearly
supportablemannerinaccordancewithvalidaccountingregula-
tionsandtheCompany’sArticlesofAssociation.
TheAnnualFinancialStatementswereauditedbythecompany
KPMGČeská republikaAudit,s.r.o.,whichconfirmed that the
financialstatementspresentfairly,inallsubstantialrespects,
the assets, liabilities and shareholder’s equity of Pojišťovna
Českéspořitelny,a.s.,ViennaInsuranceGroup,asofDecember
31,2012andtheresultofitsbusinessoperationsfor2012in
accordancewiththeAccountingActandotherapplicableregu-
lationsoftheCzechRepublic.TheSupervisoryBoardtookthe
Auditor’sreportintoaccount.
TheSupervisoryBoardcheckedtheReportonRelationsinac-
cordancewith§66asection9and10oftheCommercialCode
Pojišťovna České spořitelny, a.s., Vienna Insurance Group 24
submittedbytheBoardofDirectorsoftheCompanyandstated
thatPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup,
didnotincuranydamageasaconsequenceofcontracts,other
legalactsorothermeasuresconcluded, takenoradoptedby
PojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup,dur-
ingtheaccountingperiodof2011infavouroratinstigationof
individualrelatedpersons.
TheSupervisoryBoardalsodiscussedand took intoaccount
theReportonactivityoftheCommitteeforAuditofPojišťovna
České spořitelny, a.s., Vienna Insurance Group for the year
2012.
Basedonallthesefacts,theSupervisoryBoardrecommends
thattheGeneralMeetingapprovesthestateoftheCompany’s
assetsand liabilitiesasatDecember31,2012and thepro-
poseddistributionof theCompany’sprofit for2012 including
paymentofdividendsinaccordancewiththeproposalsubmit-
ted by theBoard ofDirectors of PojišťovnaČeské spořitelny,
a.s., Vienna Insurance Group, for discussion of the General
Meeting.
Výroční zpráva 2012IProfilspolečnosti 25
úvodní slovo předsedy představenstva
Pojišťovna České spořitelny, a.s., Vienna Insurance Group 26
Information about Vienna Insurance Group
Vienna Insurance Group is one of the leading listed insurance
companies in Austria and the Central and eastern european
region, with around 24,000 employees generating a premium
volume of approximately euR 9.7 billion. Around 50 compa-
nies in 24 countries form a group with a long tradition, strong
brands and high customer-orientation. the Company is a clear
market leader in its core markets, offering an extensive range
of products and services in both the life and non-life insurance
segments.
Progressive insurer – conservative investor
ViennaInsuranceGroup(VIG)isaprogressiveinsurerthatcon-
sciously focuseson itscorecompetence:the insurancebusi-
ness. In largepartdue to its risk-conscious,conservative in-
vestmentpolicy,VIGstandsforsecurityandfinancialstability
–asaninsurer,employer,businesspartnerandissuer inthe
capitalmarkets. Thiswasalsounderlinedby theStandard&
Poor’s ratingagency,which renewed itsA+ ratingwithstable
outlookfor2012.ThismakesViennaInsuranceGroupthebest-
ratedcompanyintheATXleadingindexoftheViennaStockEx-
change.TheCompany’slistingonthePragueStockExchangein
2008highlightsVIG’sstrategicorientationtowardstheCentral
andEasternEuropeaneconomicarea(CEE).
ViennaInsuranceGroupalsohastheaimofcreatingandpro-
motingsociallyresponsibleandsustainableconditionsforasoci-
etyworthlivingin.VIGthereforefeelsobligatedtoinvolveitself
in cultural and social concerns in order to remain true to its
fundamentalgoalofvalue-orientedgrowth.
27Annual Report 2012IInformationaboutViennaInsuranceGroup
Focus on Austria and Central and Eastern Europe
ViennaInsuranceGroup,whoserootsreachbackto1824,was
quicktoidentifythemanygrowthopportunitiesofferedbyCen-
tralandEasternEurope.StartingfromitsbaseinAustria,the
CompanywasoneofthefirstWesternEuropeaninsurancecom-
paniestoentertheCEEregionandhasbeenexpandingthere
formorethan20years.Intheprocess,VIGhasdevelopedfrom
asuccessfullocalinsurancecompanytoaleadinginternational
insurancegroupwitharound50insurancecompaniesin24Eu-
ropeancountries.
More than 50% of Group premiums and earnings now come
fromtheCEEregion.VIGisaclearoverallmarketleaderinits
coremarkets,andinthelifeandnon-lifeinsurancesegments,
placingitinanexcellentpositiontotakeadvantageofthelong-
termopportunitiesofferedbyCentralandEasternEurope.
WithestablishmentofVIGRE,theGrouphasalsohaditsown
reinsurancecompanysince2008,andthelocationofitsregis-
teredofficeintheCzechRepublicunderscorestheimportance
oftheCEEregionasagrowthmarketforVIG.
Trust in local entrepreneurship
TheAustrianVIGcompanieshaveofferedanextensiveproduct
portfolioinboththelifeandnon-lifeareasformanyyears.The
low insurance density and large populations ofmanyCentral
andEasternEuropeancountriesoffer enormouspotential for
furthergrowthoverthemediumandlongterm.Inordertobe
asuccessfulinsurerinthisregion,onehastounderstandcus-
tomerneeds.ThisisthereasonthatVIGplacesitstrustinthe
soundmarketknowledgeoflocalmanagementandtheexperi-
enceof its localemployees.Thecombinationof localmarket
expertiseandproductknow-howputsViennaInsuranceGroup
inanoptimalpositiontocontinueconsolidatingitsmarketpo-
sition in Austria whilst at the same time benefiting from the
risingstandardoflivingintheCEEregion,withtheassociated
increaseintheneedforinsurance.
Close customer relationships based on a multi-brand stra-
tegy and multi-channel distribution
Allcustomersareuniqueintermsoftheirpersonallivingcircum-
stances,needforsecurityandretirementprovisions,andthe
waytheyliketoreceiveadvice.Thisrequiresconsiderableflex-
ibilityininsuranceproducts,aswellasforesightandprudence.
Vienna Insurance Group is aware of this and is represented
bymorethanonecompanyorbrandandabroaddistribution
networkinmostofitsmarkets.Eventhougheveryoneofthe
approximately50insurancecompanieshasitsownidentityand
individualstrengths,theyallfollowacommongoal:tomaintain
acloserrelationshipwithcustomersthanothersdo.
Pojišťovna České spořitelny, a.s., Vienna Insurance Group 28
Partnership with Erste Group
ThestrategicpartnershipestablishedwithErsteBankin2008
facilitateslong-termcooperationbetweenthetwoleadingfinan-
cialservicesprovidersintheregion,whicharebothfirmlyan-
choredinCentralandEasternEurope.Bothcompaniesbenefit
equallyfromthiscollaboration.ErsteGroupbranchesdistribute
VIGinsuranceproductsand,inreturn,VIGcompaniesofferEr-
steGroupbankproducts.
People behind every number
Theapproximately24,000employeesofthe50insurancecom-
panies in theGroup are a key success factor. In addition to
thecommitment,professionaladvisoryservicesandexcellent
service they provide, these VIG employees stand out for the
diversityoftheindividualcountriestheyrepresent.Theongoing
developmentoftheiremployeesisofkeyimportance,sinceonly
acombinationoflocalmarketunderstandingwiththepersonal
andprofessionalqualificationsofeachemployeecan lead to
thebestproductsolutions.Toenablewomentoreachtheirfull
potential,VIGalsohasthegoalofcreatingtheconditionsnec-
essarytomakeentryandpromotionwithintheGroupmoreat-
tractivetofemaleemployees.
Výroční zpráva 2012IProfilspolečnosti
úvodní slovo předsedy představenstva
29
30 Independent Auditor’sReport 32 BalanceSheet36 ProfitandLossAccount40 StatementofChangeinEquity43 Notesto
theFinancialStatements97 ReportonRelations111 Non-financialSection
Contents of Financial Section
Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Independent Auditor’s Report
30
Annual Report 2012IIndependentAuditor’sReport 31
32Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Balance Sheet as at 31 December 2012
(In thousands CZK) Line No. Gross Adjustment Net Prior period
ASSetS
B.Intangiblefixedassets,thereof: 2 315,880 253,674 62,206 63,854
C.Financialplacements(investments) 5 23,757,088 23,757,088 22,587,119
I.Landandbuildings(realestate),thereof: 6 54,700 54,700 49,920
a)Landandbuildings–self-occupied 7 54,700 54,700 49,920
II.Financialinvestmentinsubsidiariesandassociates 8 303,959 303,959 0
3.Shareswithasignificantinfluence 11 303,959 303,959 0
III.Otherfinancialplacements 13 23,398,429 23,398,429 22,537,199
1.Sharesandothervariable-yieldsecurities,otherparticipatinginterests 14 1,459,535 1,459,535 1,401,326
2.Bondsandotherfixed-incomesecurities 15 20,750,365 20,750,365 20,158,169
a)Securitiesvaluedatfairvaluethroughprofitandloss 8,158,343 8,158,343 7,946,630
b)OECDbondsheldtomaturity 10,048,554 10,048,554 8,950,349
c)Othersecuritiesheldtomaturity 2,543,468 2,543,468 3,261,190
6.Depositswithfinancialinstitutions 18 1,182,746 1,182,746 999,742
7.Otherfinancialplacements 19 5,783 5,783 -22,038
33Annual Report 2012IBalanceSheetasat31December2012
(In thousands CZK) Line No. Gross Adjustment Net Prior period
ASSetS
D.Financialplacementsforthebenefitoflifeassurancepolicyholderswhobear
theinvestmentrisk 21 3,023,683 3,023,683 2,155,181
E.Debtors 22 620,074 105,032 515,042 447,905
I.Receivablesarisingfromdirectinsuranceoperations 23 171,953 104,900 67,053 59,428
1.Receivablesduefromthepolicyholders 24 152,954 87,276 65,678 56,316
2.Receivablesduefromintermediaries 25 18,999 17,624 1,375 3,112
II.Receivablesarisingfromreinsuranceoperations 26 312,307 312,307 229,377
III.Otherreceivables 27 135,814 132 135,682 159,100
F.Otherassets 28 181,044 40,397 140,647 93,188
I.Tangiblefixedassetsotherthanlandandbuildings(realestate),andinventories 29 120,232 40,397 79,835 48,932
II.Cashonaccountsinfinancialinstitutionsandcashinhand 30 60,812 60,812 44,256
G.Temporaryassetaccounts 32 1,763,921 1,763,921 1,697,256
I.Accruedinterestandrent 33 7,129 7,129 7,751
II.Deferredacquisitioncosts,thereof: 34 1,584,955 1,584,955 1,507,332
a)Inlife-assurancebusiness 35 1,584,877 1,584,877 1,507,060
b)Innon-lifeinsurance 36 78 78 272
III.Othertemporaryassetaccounts,thereof: 37 171,837 171,837 182,173
a)Estimatedreceivables 38 146,903 146,903 147,253
totAL ASSetS 39 29,661,690 399,103 29,262,587 27,044,503
34Pojišťovna České spořitelny, a.s., Vienna Insurance Group
(In thousands CZK) Line No. Gross Adjustment Net Prior period
LIABILItIeS
A.Equity 40 3,355,574 2,694,637
I.Registeredcapital,thereof: 41 1,900,100 1,900,100
IV.Othercapitalfunds 46 95,721 56,168
V.Statutoryreservefundandotherfundsfromprofit 47 274,652 254,071
VI.Profitorlossbroughtforward 48 66,683 66,683
VII.Profitorlossforthefinancialyear 49 1,018,418 417,615
C.Technicalprovisions 51 21,906,363 922,863 20,983,500 20,780,024
1.Provisionforunearnedpremiumsofwhich: 52 67,851 29,764 38,087 44,279
a)Provisionforunearnedpremiumsrelating
tolifeassuranceclasses 53 35,739 13,687 22,052 28,357
b)Provisionforunearnedpremiumsrelating
tonon-lifeinsuranceclasses 54 32,112 16,077 16,035 15,922
2.Lifeassuranceprovision 55 19,528,968 19,528,968 19,380,795
3.Provisionforoutstandingclaimsofwhich: 56 2,034,767 746,870 1,287,897 1,275,231
a)Provisionforoutstandingclaimsrelating
tolifeassuranceclasses 57 1,785,291 576,799 1,208,492 1,197,529
b)Provisionforoutstandingclaimsrelating
tonon-lifeinsuranceclasses 58 249,476 170,071 79,405 77,702
4.Provisionforbonusesandrebatesofwhich: 59 171,226 146,229 24,997 25,309
a)Provisionforbonusesandrebatesrelatingtolifeassuranceclasses 60 24,813 24,813 25,143
b)Provisionforbonusesandrebatesrelating
tonon-lifeinsuranceclasses 61 146,413 146,229 184 166
35
(In thousands CZK) Line No. Gross Adjustment Net Prior period
LIABILItIeS
6.Provisionforliabilitiesfromthetechnicalinterestrateapplied 63 103,551 103,551 54,410
D.Lifeassurancetechnicalprovisionwheretheinvestmentriskisbornebythepolicyholders 71 3,023,683 3,023,683 2,155,181
E.Provisionsforotherrisksandlosses 72 244,011 100,837
2.Provisionsfortaxation 74 244,011 100,837
F.Depositsreceivedfromreinsurers 76 635,780 370,142
G.Creditors 77 784,117 676,919
I.Payablesarisingfromdirectinsuranceoperations 78 306,174 357,277
II.Payablesarisingfromreinsuranceoperations 79 381,156 281,839
V.Otherpayables,thereof: 83 96,787 37,803
a)Taxliabilitiesandpayablesduetosocialsecurityandhealthinsuranceinstitutions 84 20,651 5,609
H.Temporaryliabilityaccounts 86 235,922 266,763
I.Accruedexpensesanddeferredrevenues 87 0 2,906
II.Othertemporaryliabilityaccounts,thereof: 88 235,922 263,857
a)Estimatedpayables 89 235,922 263,857
totAL LIABILItIeS 90 29,262,587 27,044,503
Annual Report 2012IBalanceSheetasat31December2012
36Pojišťovna České spořitelny, a.s., Vienna Insurance Group
(In thousands CZK) Line No. Base Subtotal Result Prior period
I. teCHNICAL ACCouNt foR NoN-LIfe INSuRANCe
1.Earnedpremiums,netofreinsurance: 1 x x x x
a)Grosspremiumswritten 2 804,925 x x x
b)Outwardreinsurancepremiums 3 735,589 69,336 x x
c)Changeinthegrossprovisionforunearnedpremiums(+/-) 4 261 x x x
d)Changeintheprovisionforunearnedpremiums,reinsurers’share(+/-) 5 148 113 69,223 65,598
2.Allocatedinvestmentreturntransferredfromthenon-technicalaccount(itemIII.6.) 6 x x 20,638 3,921
3.Othertechnicalincome,netofreinsurance 7 x x 24,774 25,731
4.Claimsincurred,netofreinsurance: 8 x x x x
a)Claimspaid: 9 x x x x
aa)Grossamount 10 188,943 x x x
ab)Reinsurers’share 11 139,283 49,660 x x
b)Changeintheprovisionforoutstandingclaims(+/-): 12 x x x x
ba)Grossamount 13 10,287 x x x
bb)Reinsurers’share 14 8,586 1,701 51,361 20,554
5.Changesinothertechnicalprovisions,netofreinsurance(+/-) 15 x x 0 0
6.Bonusesandrebates,netofreinsurance 16 x x 2,154 1,563
Profit and Loss Account as at 31 December 2012
37
(In thousands CZK) Line No. Base Subtotal Result Prior period
7.Netoperatingexpenses: 17 x x x x
a)Acquisitioncosts 18 x 2,039 x x
b)Changeindeferredacquisitioncosts(+/-) 19 x 194 x x
c)Administrativeexpenses 20 x 8,872 x x
d)Reinsurancecommissionsandprofitparticipation 21 x 22,691 -11,586 -9,679
8.Othertechnicalexpenses,netofreinsurance 22 x x 20,653 21,290
10.Sub-total,balance(result)onthetechnicalaccount
fornon-lifeinsurance(itemIII.1.) 24 x x 52,053 61,522
II. teCHNICAL ACCouNt foR LIfe ASSuRANCe
1.Earnedpremiums,netofreinsurance: 25 x x x x
a)Grosspremiumswritten 26 x 9,897,341 x x
b)Outwardreinsurancepremiums 27 x 1,215,174 x x
c)Changeintheprovisionforunearnedpremiums,netofreinsurance(+/-) 28 x -6,304 8,688,471 9,103,798
2.Incomefromfinancialplacements(investments): 29 x x x x
a)Incomefromparticipatinginterests,withaseparateindication
ofthatderivedfromcontrollinginfluence 30 x x x
b)Incomefromotherinvestments,withaseparateindicationofthatderived
fromcontrollinginfluence,ofwhich: 31 x x x x
ba)Incomefromlandandbuildings(realestate) 32 0 x x x
bb)Incomefromotherfinancialplacements(investments) 33 1,135,149 1,135,149 x x
c)Valueadjustmentsonfinancialplacements 34 x 0 x x
d)Incomefromdisposaloffinancialplacements 35 x 5,283,472 6,418,621 4,047,896
3.Unrealisedgainsonfinancialplacements 36 x x 688,465 454,657
4.Othertechnicalincome,netofreinsurance 37 x x 97,824 57,104
5.Claimsincurred,netofreinsurance: 38 x x x x
Annual Report 2012IProfitandLossAccountasat31December2012
38Pojišťovna České spořitelny, a.s., Vienna Insurance Group
(In thousands CZK) Line No. Base Subtotal Result Prior period
a)Claimspaid: 39 x x x x
aa)Grossamount 40 6,556,934 x x x
ab)Reinsurers’share 41 514,595 6,042,339 x x
b)Changeintheprovisionforoutstandingclaims(+/-): 42 x x x x
ba)Grossamount 43 260,372 x x x
bb)Reinsurers’share 44 249,409 10,963 6,053,302 4,593,951
6.Changesinothertechnicalprovisions,netofreinsurance(+/-): 45 x x x x
a)Lifeassuranceprovisions: 46 x x x x
aa)Grossamount 47 148,173 x x x
ab)Reinsurers’share 48 0 148,173 x x
b)Othertechnicalprovisions,netofreinsurance 49 x 917,643 1,065,816 2,324,394
7.Bonusesandrebates,netofreinsurance 50 x x 274,501 268,280
8.Netoperatingexpenses: 51 x x x x
a)Acquisitionscosts 52 x 1,511,849 x x
b)Changeindeferredacquisitioncosts(+/-) 53 x -77,817 x x
c)Administrativeexpenses 54 x 531,096 x x
d)Reinsurancecommissionsandprofitparticipation 55 x 350,951 1,614,177 1,906,743
9.Expensesconnectedwithfinancialplacements(investments): 56 x x x x
a)Investmentmanagementcharges,includinginterest 57 x 488,041 x x
b)Valueadjustmentsonfinancialplacements 58 x 0 x x
c)Bookvalueofdisposedfinancialplacements 59 x 5,100,988 5,589,029 3,380,171
10.Unrealisedlossesonfinancialplacements(investments) 60 x x 0 686,556
11.Othertechnicalexpenses,netofreinsurance 61 x x 84,991 47,119
13.Sub-total,balance(result)onthetechnicalaccountforlifeassurance(itemIII.2.) 63 x x 1,211,565 456,241
39Annual Report 2012IProfitandLossAccountasat31December2012
(In thousands CZK) Line No. Base Subtotal Result Prior period
III. NoN-teCHNICAL ACCouNt
1.Resultofthetechnicalaccountfornon-lifeinsurance(itemI.10.) 64 x x 52,053 61,522
2.Resultofthetechnicalaccountforlifeassurance(itemII.13.) 65 x x 1,211,565 456,241
3.Incomefromfinancialplacements: 66 x x x x
a)Incomefromparticipatinginterests,withaseparateindicationofthatderived
fromcontrollinginfluence 67 x x x
b)Incomefromotherinvestments,withaseparateindicationofthatderived
fromcontrollinginfluence: 68 x x x x
ba)Incomefromlandandbuildings 69 66 x x x
bb)Incomefromotherfinancialplacements(investments) 70 8,808 8,874 x x
c)Valueadjustmentsonfinancialplacements 71 x 13,091 x x
d)Incomefromdisposaloffinancialplacements 72 x 73,843 95,808 9,788
5.Expensesconnectedwithfinancialplacements: 74 x x x x
a)Investmentmanagementcharges,includinginterest 75 x 1,438 x x
b)Valueadjustmentsonfinancialplacements 76 x 0 x x
c)Bookvalueofdisposedfinancialplacements 77 x 73,732 75,170 5,867
6.Allocatedinvestmentreturntransferredtothetechnicalaccount
fornon-lifeinsurance(itemI.2.) 78 x x 20,638 3,921
7.Otherprofits 79 x x 23 0
8.Othercosts 80 x x 0 0
9.Incometaxonordinaryactivities 81 x x 244,367 99,724
10.Profitorlossonordinaryactivitiesaftertax 82 x x 1,019,274 418,039
15.Othertaxesnotshownundertheprecedingitems 87 x x 856 424
16.Profitorlossforthefinancialyear 88 x x 1,018,418 417,615
40Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Statement of Change in Equity for 2012
other Profit (loss)
Registered funds Changes in Statutory Retained for the current
(In thousands CZK) capital from profit valuation reserve fund earnings year total
BALANCEAT1/1/2011 1,900,100 4,480 8,978 219,630 9,785 603,105 2,746,078
Additionstofunds 3,054 30,156 569,895 -603,105
Utilisationoffunds -3,249 -3,249
Changeinvaluationoffinancialplacements 47,190 47,190
Increase/reductioninregisteredcapital
Paymentofdividends -512,997 -512,997
Profit/lossforthecurrentyear 417615 417,615
BALANCe At 31/12/2011 1,900,100 4,285 56,168 249,786 66,683 417,615 2,694 637
41Annual Report 2012IStatementofChangeinEquityfor2012
other Profit (loss)
Registered funds Changes in Statutory Retained for the current
(In thousands CZK) capital from profit valuation reserve fund earnings year total
BALANCEAT1/1/2012 1,900,100 4,285 56,168 249,786 66,683 417,615 2,694,637
Additionstofunds 3,405 20,881 393,329 -417,615
Utilisationoffunds -3,705 -3,705
Changeinvaluationoffinancialplacements 39,553 39,553
Increase/reductioninregisteredcapital
Paymentofdividends -393,329 -393,329
Profit/lossforthecurrentyear 1,018,418 1,018,418
BALANCe At 31/12/2012 1,900,100 3,985 95,721 270,667 66,683 1,018,418 3,355,574
42Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Notes tothe FinancialStatements
Structure of Shareholders
90%ViennaInsuranceGroup
5%Českáspořitelna
5%Kooperativa
43Annual Report 2012INotestotheFinancialStatementsfor2012
I. GENERAL CONTENTS
I. 1. Description and principal activitiesPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup(“theCompany“)wasenteredintotheCommercialRegisteron1October
1992(Identificationnumber:47452820).
Shareholders of the Company as at 31 December 2012:
VIENNAINSURANCEGROUPAGWienerVersicherungGruppe 90%
Kooperativapojišťovna,a.s.,ViennaInsuranceGroup 5%
Českáspořitelna,a.s. 5%
TheCompanyreceivedalicensetocarryoninsuranceactivitieson16December1992.TheCompanycommenceditsinsurance
activitieson1January1993.
Notes to the Financial Statements for 2012
44Pojišťovna České spořitelny, a.s., Vienna Insurance Group
the Company carries on the following classes/groups of insurance:
Life assurance
–Assuranceondeath,assuranceonsurvivaltoacertainage,andassuranceonsurvivaltoacertainageordeath
–Pensioninsurance
–Accidentorsicknessinsuranceasasupplementtotheabovetypesofinsurance
–Marriageinsuranceandsavingsinsurancetoprovidefundstoraisechildren
–Insuranceconnectedwithaninvestmentfund/unit-linkedinsurance
Non-life insurance
– Accidentandsicknessinsurance
– Insuranceforvariousfinanciallosses
Apartfromtheabove,theCompany’sprincipalactivitiesincludealsonon-lifeinsurancebusiness,whichtheCompanyhasnotbeen
activelyprovidingsince2January2004.Thesearenon-lifeinsuranceclassesNo.3,5,7,8,9,11,13,15and18listedinPartBof
AppendixNo.1toActNo.277/2009Coll.,andgroupse)andf)ofnon-lifeinsurancelistedinPartCoftheAppendixtotheInsuranceAct.
The Company’s principal activities include also activities relating to insurance business pursuant to Section 3 (1) (n) of the
InsuranceAct,i.e.intermediaryactivitycarriedoninconnectionwithinsurancebusinessundertheInsuranceAct,advisoryacti-
vityinconnectionwithinsuranceofindividualsandcorporateentities,investigationofclaimscarriedonunderacontractwith
aninsurancecompany,intermediaryactivityintheareaofbuildingsavingschemesandsupplementarypensioninsurance,and
educationactivityforinsuranceintermediariesandindependentlossadjusters.
Registered office
PojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup
nám.Republiky115
53002Pardubice
45Annual Report 2012INotestotheFinancialStatementsfor2012
Members of the Board of Directors, Supervisory Board and Audit Committee as at 31 December 2012:
Board of directors
Chairman:RNDr.PetrZapletal,MBA,NaZahrádkách307,Praha4,Šeberov
Vice-chairman: Ing.JaroslavKulhánek,Zalomená175,HradecKrálové11,Roudnička
Member: Ing.LiborMánek,Křemže,Lomená379(membersince12January2012,until31December2011Ing.FrantišekMareš,
Palackého1932,Pardubice,ZelenéPředměstí)
StatementsofwillandsigningofdocumentsonbehalfoftheCompanymustalwaysbeconductedjointlybytwomembersofthe
Board.NoauthorisationforindividualrepresentationinanymatterrelatedtooperationoftheCompanyispossible.Whensigning
documentsonbehalfoftheCompany,therequirednumberofrepresentativesshalladdtheirsignaturesandstatetheirofficesto
theprintedorwrittennameoftheCompany.
Proxy
Ing.FrantišekMareš,Palackého1932,Pardubice,ZelenéPředměstí (since23March2012,until11January2012 Ing.Libor
Mánek,Křemže,Lomená379,zipcode38203)
Supervisory Board
Chairman: Ing.MartinDiviš,MBA,Praha6,Liboc,DivokáŠárka39,zipcode16400
Vice-chairman: Mag.ErwinHammerbacher,Seyring,Helmaweg29,2201,Austria
Members: JUDr.KarelKopecký,Pardubice,Bělehradská396,zipcode53009
Ing.PetrKohoutek,Chrudim,Vaňkova1341,zipcode53701
Mag.RolandGröll,1170Vienna,NeuwaldeggerStr.37/1(membersince28April2011,until14April2011Ing.VítRozsypal,
Divišov,NaSídlišti350,zipcode25726,wasamemberoftheboard)
theremainingseatisvacant(Ing.AlešMamica,Praha9,Lipí1247/60,zipcode19300,wasamemberuntil30November2011)
46Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Audit Committee
Ing.MartinDiviš,MBA
Dr.PeterHagen
Ing.HynekVodička
I. 2. Compliance with legislationAtthebalancesheetdatetheCompanyfullycompliedwithActNo.277/2009Coll.,onInsurance,asamended(“theInsurance
Act“), Act No. 37/2004 Coll., on Insurance Contract, as amended, Act No. 38/2004 Coll., on Insurance Intermediaries and
IndependentLossAdjusters,asamended,includingtheapplicableimplementingregulations,andwithotherlegislationinforce.
I. 3. Basis of preparation of the financial statementsTheaccounting recordsof theCompanyaremaintainedand thefinancialstatementsof theCompanyhavebeenprepared in
accordancewithActNo.563/1991Coll.,onAccounting,asamended,RegulationNo.502/2002Coll.,toimplementcertainprovi-
sionsofActNo.563/1991Coll.,onAccounting,asamended,foraccountingunits,whichareinsurancecompanies,asamended
(“RegulationNo.502/2002Coll.“),andwiththeCzechAccountingStandardsforaccountingunitsthatmaintaintheiraccounting
recordsincompliancewithRegulationNo.502/2002Coll.andotherrelevantlegislation.
TheaccountingrecordsoftheCompanyaremaintainedinsuchamannerthatthefinancialstatementspreparedbasedonthese
recordspresentatrueandfairviewoftheaccountingandfinancialpositionoftheCompany.
I. 4. Significant accounting policies(a) tangible and intangible fixed assetsTangibleandintangiblefixedassetsarestatedatacquisitioncost.
TangiblefixedassetscostinglessthanTCZK40andintangiblefixedassetscostinglessthanTCZK60arechargedtotheprofit
andlossaccountintheyearinwhichtheyareacquired.Theannualdepreciationratereflectstheassets’expectedusefullives.
47Annual Report 2012INotestotheFinancialStatementsfor2012
Thefollowingdepreciationratesareusedfortheindividualassetclasses:
fixed assets Method Depreciation period in years
Software Straight-line 4
Motorvehicles Straight-line 4
ITequipment Straight-line 3
Fixturesandfittings Straight-line 8
Other Straight-line 15
(b) Investments
Land and buildings (real estate)
Landandbuildings(realestate)areinitiallyrecordedattheiracquisitioncostandarenotsubsequentlydepreciated.
Atthebalancesheetdate,landandbuildings(realestate)arevaluedattheirfairvalue.Thefairvaluemeansthemarketvaluede-
terminedbyanexpertappraisalasthepriceforwhichsuchlandandbuildings(realestate)couldbesoldonthedateofvaluation.
Thefairvalueisdeterminedthroughaseparatevaluationofeachitemoflandandbuildingsbyanexpertappraisalasattheba-
lancesheetdate.
48Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Anychangeinthefairvalueoflandandbuildings(realestate)isrecognisedinequity.
Debt securities
Attheacquisitiondatedebtsecuritiesarestatedatacquisitioncost.
Acquisitioncostistheamountforwhichadebtsecurityhasbeenacquiredandincludesaproportionatepartofanyaccruedinte-
restandexpensesdirectlyassociatedwiththeacquisition.
TheCompanyamortisespremiumsanddiscountsonalldebtsecurities.Premiumsanddiscountsareamortisedtotheprofitand
lossaccountonthebasisoftheeffectiveinterestratemethodfromthedateofacquisitiontotheirmaturity.
Amortiseddebtsecuritiesarerevaluedattheirfairvalueasatthebalancesheetdatewiththeexceptionofbondsheldtomaturity
thathavebeenissuedbyamemberstateoftheOrganisationforEconomicCooperationandDevelopmentandawardedarating
attheleveloftheCzechRepublicorhigherbyatleasttworeputableratingagencies(“OECDbondsheldtomaturity“).
TheCompanyrecognisestheOECDbondsheldtomaturityattheiramortisedcostasatthebalancesheetdate.
Fairvaluemeansthemarketpricepublishedbyadomesticorforeignstockexchangeorotherpublic(organised)market.The
Companyappliesthemostrecentpublishedmarketpriceasatthedateofthefinancialstatements(balancesheetdate).Ifthere
isnoavailablepriceorifitdoesnotsufficientlyrepresentthefairvalue,thefairvalueisdeterminedonthebasisofaqualified
estimate.
Amortisedcostmeansthepriceusedwhenfirstrecognised(theacquisitioncost),whichisgraduallyincreasedbyaccruedinterest
income,adjustedbyamortisationofthediscount/premiumanddecreasedbytheamountofadjustments.
49Annual Report 2012INotestotheFinancialStatementsfor2012
Debtsecuritiesareclassifiedassecuritiesvaluedatfairvaluethroughprofitandlossorsecuritiesavailableforsale,OECDbonds
heldtomaturityandothersecuritiesheldtomaturity.
Achangeinthefairvalueofdebtsecuritiesvaluedthroughprofitandlossoravailableforsaleisrecognisedintheprofitandloss
account.Achangeinthefairvalueofdebtsecuritiesheldtomaturitythatarerevaluedatfairvalueisrecognisedinequity.
Wheredebtsecuritiesaredenominatedinaforeigncurrency,theirvalueistranslatedtoCzechcrownsusingthecurrentexchange
ratepublishedbytheCzechNationalBank(“CNB”).Theappropriateexchangeratedifferenceisincludedinthefairvalue.
Shares and other variable-yield securities
Attheacquisitiondate,sharesandothervariable-yieldsecuritiesareaccountedforatacquisitioncost.
Acquisitioncostistheamountforwhichthesharesorothervariable-yieldsecuritieswereacquiredandincludesallexpenses
directlyassociatedwiththeacquisition.
Atthebalancesheetdate,sharesandothervariable-yieldsecuritiesarerevaluedattheirfairvalue.
Fairvaluemeansthemarketpricepublishedbyadomesticorforeignstockexchangeorotherpublic(organised)market.The
Companyappliesthemostrecentpublishedmarketpriceasatthedateofthefinancialstatements(balancesheetdate).Ifno
marketpriceisavailableorifitdoesnotsufficientlyrepresentthefairvalue,thefairvalueisdeterminedonthebasisofaqualified
estimate.
Sharesandothervariable-yieldsecuritiesareclassifiedassecuritiesvaluedatfairvaluethroughprofitandlossorsecurities
availableforsale.Thechangeinfairvalueofsharesorothervariable-yieldsecuritiesisrecognisedintheprofitandlossaccount.
50Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Wheresharesandothervariable-yieldsecuritiesaredenominatedinaforeigncurrency,theirvalueistranslatedbasedonthe
currentexchangeratepublishedbyCNB.Theappropriateexchangeratedifferenceisincludedinthefairvalue.
Participating interests
Participating interests incontrolledpersonsareparticipations inanotherenterprise inwhichtheCompanyholdsacontrolling
influence.Inaddition,othercaseswheretheinsurancecompanyisacontrollingpersonarereportedunderthisitem.
ParticipatinginterestswithsubstantialinfluenceareparticipationsinanotherenterpriseinwhichtheCompanyholdsasubstantial
influence.Unlessproventothecontrary,substantialinfluenceisconsideredtobeaholdingofatleast20%ofthevotingrights.
Participatinginterestsintheformofsecuritiesissuedbythecontrolledpersonsorpersonsinwhichtheaccountingunitexercises
substantialinfluence,andwhichareheldfortradingorareavailableforsaleareshowninitemC.II.2Debtsecurities.
Attheacquisitiondate,participatinginterestsarestatedattheiracquisitioncost.Theacquisitioncostistheamountforwhichthe
participatinginterestswereacquiredandincludesallexpensesdirectlyassociatedwiththeacquisition.
Atthebalancesheetdate,participatinginterestsarerevaluedattheirfairvaluebasedonaCompany’sshareonnetassetvalue.
Changesinfairvaluearerecognisedinequity.
Deposits with financial institutions
Depositswithfinancialinstitutionsareinitiallyrecognisedatnominalvalue.Atthebalancesheetdate,theseassetsarerevaluedattheir
fairvalue.Thefairvalueofshort-termdepositswithfinancialinstitutionsisdeterminedastheirnominalvalueincludingaccruedinterest.
DepositsdenominatedinaforeigncurrencyaretranslatedtoCzechcrownsusingthecurrentexchangeratepublishedbyCNB,
andtheappropriateexchangeratedifferenceisincludedinthefairvalue.ChangesinfairvaluearereflectedintheCompany’s
profitandlossaccount.
51Annual Report 2012INotestotheFinancialStatementsfor2012
Derivatives
Derivativesarevaluedatfairvalue.Thefairvalueoffinancialderivativesisdeterminedasthepresentvalueofexpectedcash
flowsfromthesetransactions.
Financialderivativesthatdonotmeettherequirementsfortheapplicationofhedgeaccountingor,ifappropriate,derivativesin
respectofwhichtheCompanyhasdecidednottoapplyhedgeaccountingarecarriedatfairvalueandthegainsorlossesarising
fromtheirrevaluationarerecognisedintheprofitandlossaccount.ThederivativesareusedbytheCompanytohedgecurrency
risks,i.e.currencyswaps.
(c) financial placements for the benefit of life assurance policyholders who bear the investment riskFinancialplacementsforthebenefitoflifeassurancepolicyholderswhobeartheinvestmentriskareaccountedforseparately
fromotherfinancialplacements.
Atthebalancesheetdate,financialplacementsforthebenefitoflifeassurancepolicyholderswhobeartheinvestmentriskare
revaluedattheirfairvalue.InordertopreservethetrueandfairviewoftheCompany’sresultfortheyear,allchangesresulting
fromrevaluationatfairvaluearerecognisedintheCompany’sprofitandlossaccount.
(d) AdjustmentsTheCompanyestablishesadjustmentstoreceivablesandotherassetsexceptforfinancialplacementsreportedatfairvalue.
Adjustmentsrepresentatemporarydecreaseinthevalueofindividualassets.Theamountofthedecreaseisdeterminedonthe
basisofaprofessionalriskassessmentcarriedoutbytheCompany’smanagement.
Adjustmentstoreceivablesfrompolicyholdersareestablishedbasedonananalysisoftheirrecoverability.Theanalysisincludes
anageinganalysisofthereceivables.
52Pojišťovna České spořitelny, a.s., Vienna Insurance Group
AdjustmentstoOECDbondsheldtomaturityareaccountedforonlyifthereisariskthatthenotionalprincipalamountofthebond
orthebondyieldorboththevalueandtheyieldwouldnotberepaid.
(e) Impairment of assetsAtthebalancesheetdate,theCompanyassesseswhetherthoseassets,whicharenotcarriedatfairvalueorforwhichchanges
infairvaluearerecognisedinequity,areimpaired.Impairmentofanassetisrecognisedintheprofitandlossaccount.
(f) Deferred acquisition costsDeferredacquisitioncostsrepresent theproportionofacquisitioncosts incurredduring thecurrentfinancialyear that relates
totherevenuesofsubsequentfinancialyears.AttheendofeachfinancialyeartheCompanycarriesoutaliabilityadequacytest
todeterminewhethertheamountofthedeferredacquisitioncostsisappropriate.
Non-life insurance
Inrespectofnon-life insurance,deferredacquisitioncostsarebasedontotalacquisitioncosts incurredinthecurrentperiod
andtheratioofthegrossprovisionforunearnedpremiumsatthebalancesheetdatetothetotalgrosspremiumswrittenforthe
financialyear.Deferredacquisitioncostsaredeterminedforallindividualclassesofnon-lifeinsurance.
Life assurance (other than assurance connected with an investment fund / unit-linked insurance)
InlifeassurancetheCompanydeterminesdeferredacquisitioncostsusingthezillmerisationmethod,whichisthemethodused
tocalculatethelifeassuranceprovision,seepointI.4.(i).
Life assurance connected with an investment fund / unit-linked insurance
Deferredacquisitioncostsinunit-linkedassurancearedeterminedusingactuarialmethodsandreflectingtheexpectedcancellati-
onratebasedonthevalueofexpectedfuturedeductionsfrominitialfeesandfromthepresentvalueofprofitsfollowingfromthe
negativevalueofprovisionswhicharedeterminedusingtheprospectivemethod.
53Annual Report 2012INotestotheFinancialStatementsfor2012
(g) Income taxIncometaxontheprofitfortheyearcomprisescurrentincometaxandthechangeindeferredtax.Currentincometaxcomprisesthe
taxliabilitycalculatedfromthetaxbaseusingtheeffectivetaxrateandanyadditionalpaymentsorrefundsoftaxforpreviousyears.
Deferredtaxisprovidedonalltemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesforfinancialrepor-
tingpurposesandtheamountsusedfortaxationpurposesandothertemporarydifferences(taxlossescarriedforward,ifany)
multipliedbytheincometaxratesexpectedtobevalidfortheperiodsinwhichthetaxasset/liabilityisexpectedtobeutilised.
Adeferredtaxassetisrecognisedonlytotheextentthatthereisnodoubtthatfuturetaxableprofitswillbeavailableagainst
whichthisassetcanbeutilised.
(h) Provision for unearned premiumsTheprovisionforunearnedpremiumsiscreatedinrespectoflifeassuranceandnon-lifeinsurance,exceptforsinglepremium
lifeassurance.Theprovisionamountrepresentsthepartofgrosspremiumswrittenwhichistobeallocated,intermsoftime,to
thesubsequentfinancialyearortofuturefinancialyearsandisdeterminedasthesumofallamountscalculatedforindividual
contractsusingthe“proratatemporis“method.
(i) Life assurance provisionThelifeassuranceprovisioncomprisesthesumoftheprovisionsforindividuallifeassurancepolicies.Thelifeassuranceprovi-
sionrepresentsthevalueoffutureliabilitiesoftheCompanyandiscalculatedusingactuarialmethods,includingprofitshares
declaredandallocatedandaprovisionforexpenses,relatedtotheadministrationofcontracts,afterdeductingthevalueoffuture
premiums.
TheCompanyaccountsfortheprovisionusingthezillmerisationmethod.Thezillmerisationmethodresultsinthedeferralofacquisi-
tioncostsforlifeassurancecontracts.Thesecostsareincludedwithinthelifeassuranceprovisionthroughactuarialmethodsafter
eliminatingtemporarynegativebalances,whicharecapitalisedandpresentedasdeferredacquisitioncosts.Theacquisitioncosts
arecapitalisedanddeferredinaccordancewiththeprudenceprincipleandtakingintoaccounttheriskoflapsesandcancellations.
54Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Forunit-linkedassurancethatinvolvesinvestmentfundswheretheCompanyguaranteesaminimumreturnoninvestment,this
partoftheprovisionsisaccountedforasalifeassuranceprovision.Theprovisioniscalculatedbasedonthenumberandprice
ofunitscreditedtotheinsurancecontracts.
Withsomeunit-linkedassurancecontracts,anoclaimsbonusoraloyaltybonuscanbearrangedinaccordancewiththeinsurance
termsandconditionsandthetariffofrates.Withinthedefinedassessmentperiod,thebonusisrecognisedaspartofthelife
assuranceprovisionandamountstotheestimatedpresentvaluedeterminedbasedondiscountingandnetoftheexpectedproba-
bilityofbreachofthetermsandconditionsuntiltheendoftheassessmentperiod.Uponfulfilmentoftheconditionsattheendof
theassessmentperiod,thebonusiscreditedtotheinsurancecontractinformofpurchasedunitsanditbecomesacomponent
partofthecapitalvalueofthecontract.
(j) Provision for outstanding claimsTheprovisionforoutstandingclaimsinrespectofbothlifeandnon-lifeinsurancecomprisestheamountofexpectedcostsin
respectofclaims:
a)reportedbutnotsettledduringtheperiod(RBNS),
b)incurredbutnotreportedduringtheperiod(IBNR).
Theprovisionforoutstandingclaimsreportedbytheendoftheyearrepresentsthesumofallamountscalculatedforindividual
claims.
Theprovisionforoutstandingclaimsincurredbutnotreportedasatthebalancesheetdateisdeterminedusingthechainladder
method.
Theprovisionforoutstandingclaimsincludesanestimateofallrelatedexternalandinternalclaimshandlingcosts.Theprovision
foroutstandingclaimsisreducedbythevalueofsalvageandothersimilarrecoveries.
55Annual Report 2012INotestotheFinancialStatementsfor2012
Whencalculatingtheprovisionforoutstandingclaims,nodiscountingiscarriedout.
AlthoughtheBoardofDirectorsconsiderstheprovisionforoutstandingclaimstobefairlystatedonthebasisoftheinformation
currentlyavailabletothem,theultimateliabilitymayvaryasaresultofsubsequenteventsornewinformation,whichmayresult
insignificantadjustmentstotheamountsprovidedfor.Adjustmentstotheamountsoftheprovisionsarereflectedinthefinan-
cialstatementsfortheperiodinwhichtheadjustmentsaremade.Theproceduresandmethodsusedinmakingestimatesare
reviewedregularly.
(k) Provision for bonuses and rebatesTheprovisionforbonusesandrebatesiscreatedinaccordancewiththerespectivetermssetoutininsurancecontracts,i.e.the
GeneralTermsandConditionsofInsuranceorspecificcontractualarrangements.
Changesintheprovisionforbonusesandrebatesarepresentedintheprofitandlossaccountunder“Bonusesandrebates”.
(l) Provision for liabilities arising from the applied technical interest rate and other calculation parametersTheCompanycarriesoutalifeassuranceliabilityadequacytestasatthebalancesheetdate(“theliabilityadequacytest”)inor-
dertoassesstheadequacyofthelifeassuranceprovisions(provisionforunearnedpremiums,lifeassuranceprovision,provision
foroutstandingclaims,provisionforbonusesandrebatesandlifeassuranceprovision,wheretheinvestmentriskisbornebythe
policyholder).
Theliabilityadequacytestisperformedusingdiscountedprojectedcashflows.
Theliabilityadequacytestresultsintheminimumvalueofliabilitiestopolicyholdersbasedonbestestimatesofthefuturedeve-
lopmentofentryparametersadjustedbymarketvaluemargins.
Wherethisamountexceedsthetotalamountofthelifeassuranceprovisionsreducedbytherespectiveunamortisedacquisition
56Pojišťovna České spořitelny, a.s., Vienna Insurance Group
costsandotherintangibleassets,thedeficiencyisrecognisedthroughtheestablishmentofaprovisionforliabilitiesarisingfrom
theappliedtechnicalinterestrateandothercalculationparameters.
IncompliancewithSection66(2)oftheInsuranceAct,theCompanyinformedČNBaboutthemethodforcalculatingtheprovision
forliabilitiesarisingfromtheappliedtechnicalinterestrateandothercalculationparameters.
ThechangeinthisprovisionispresentedinitemII.6.b)intheprofitandlossaccount.
(m) Life assurance provision where the investment risk is borne by the policyholdersThe lifeassuranceprovisionwherethe investmentrisk isbornebythepolicyholders is intendedtocoverthe liabilitiesof the
Companyduetoinsuredpersonsinthoseclassesoflifeassurancewhere,basedonaninsurancecontract,theinvestmentrisk
isbornebythepolicyholders.
Theamountoftheprovisionisdeterminedasthesumofliabilitiesduetoinsuredpersonsintheamountoftheirsharesofinvested
premiumsfromindividuallifeassurancecontractsinaccordancewiththeprinciplesincludedintheinsurancecontracts.
(n) Reinsurers’ share of technical provisionsTechnicalprovisionsarepresentedasanetliability,i.e.afterdeductionofthereinsurers’share.Theamountofthisshareiscal-
culatedbasedonthetermsoftherelatedreinsurancecontracts,themethodofsettlementwithreinsurersandinconsideration
oftheprudenceprinciple.
TheCompanypresentsthereinsurers’shareoftheprovisionforunearnedpremiums,theprovisionforoutstandingclaimsandthe
provisionforbonusesandrebates.Thereinsurersdonotparticipateintheothertechnicalprovisions.
(o) ProvisionsProvisionsareintendedtocoverrisks,lossesandotherrespectivepayables,whichareclearlydefinedandtheoccurrenceofwhich
iseitherprobableorcertainbutwhoseamountortimingareuncertain.
57Annual Report 2012INotestotheFinancialStatementsfor2012
Provision for taxes
Theprovisionfortaxesisestablishedatthebalancesheetdateandamountstotheestimatedcorporateincometaxliabilitydue.
Theutilisation(release)oftheprovisionisaccountedforwhenthetaxreturnisfiled.
(p) Gross premiums writtenGrosspremiumswrittencompriseallamountsdueduringthefinancialyearinrespectofinsurancecontractsregardlessofthe
factthatsuchamountsmayrelateinwholeorinparttofuturefinancialyears.
(q) Claims paidClaimspaidcomprisetheamountassessedforpaymentbasedontheclaimsinvestigationprocess,externalandinternalclaims
handlingcostsandadeductionforthesalvagevalueandotherrecoveries.
Claimspaidarerecordeduponcompletionoftheinvestigationoftheclaimandintheamountoftheassessedsettlement.
(r) Acquisition costsAcquisitioncostscomprisealldirectandindirectcostsarisingfromtheconclusionofinsurancecontracts.
(s) expenses and income from financial placements
Allocation of expenses and income from financial placements between life assurance and non-life insurance accounts:
Expensesandincomefromfinancialplacementswhicharedirectlyrelatedtolifeassuranceactivitiesarerecordedinthelifeas-
surancetechnicalaccount.
Otherexpensesandincomefromfinancialplacementswhicharenotrelatedtolifeassuranceactivitiesarerecordedinitiallyinthe
non-technicalaccountandsubsequentlyallofthemtransferredtothenon-lifeinsurancetechnicalaccount.
58Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Method of accounting for realised gains and losses upon disposal of financial placements
Thedisposaloffinancialplacementsisrecognisedonagrossbasis,wherebytherevenuesfromdisposalintheamountofthe
sellingpriceoftherelevantfinancialinstrumentsarerecordedseparatelyfromtheexpensesintheamountofthecarryingvalue
oftherelatedfinancialplacements.
(t) Allocation of items between life assurance and non-life insuranceInordertoaccountforitemscommontobothlifeassuranceandnon-lifeinsurance,theCompanyusesamethodincompliance
withRegulationNo.502/2002Coll.Underthismethodindividualitemsaregroupedaccordingtotheclassofinsurancetowhich
theyrelate.Foritemsthatcannotbeallocateddirectly,theratioofpremiumswrittenandclaimspaidforindividualclassesof
insurancetototalpremiumswrittenandtotalclaimspaidisusedasabasisforallocationofexpensesandincomebetweenlife
assuranceandnon-lifeinsurance.
expenses and revenues from financial placements
Expensesandrevenuesfromfinancialplacementsareallocatedbetweenlifeassuranceandnon-lifeinsuranceusingthemethod
statedinpointI.4.(u).
other expenses and revenues
Duringtheaccountingperiod,clearlyattributableexpensesandrevenuesarerecordeddirectlyinthelifeassuranceornon-life
insurancetechnicalaccountorthenon-technicalaccount.Expensesandrevenuesthatcannotbedirectlyattributedarerecorded
primarilyinthenon-technicalaccountandsubsequentlyallocatedtothetechnicalaccountforlifeassuranceornon-lifeinsurance
usingthemethodstatedinpointI.4.(v).
Theallocationisnotappliedtotaxes,fees,orotherexpensesincurredoutsideinsuranceorreinsuranceactivities.
59Annual Report 2012INotestotheFinancialStatementsfor2012
(u) foreign currency translationTransactionsduringtheyeararerecordedattheCNBexchangerateeffectiveasatthetransactiondateorattherateatwhich
thetransactionwasrealised.
Atthebalancesheetdate,foreigncurrencyassetsandliabilitiesaretranslatedattheCNBofficialrateforthatdate.Unlessstated
otherwise,foreigncurrencygainsandlossesarerecordedintheprofitandlossaccount.
I. 5. Changes in accounting policies and proceduresBasedontheparentcompany’srequestandwiththeintentiontounifythemethodofvaluationofdisposedinvestments,the
Companyin2012switchedfromtheFIFOmethodtotheweighted-averagecostmethod.Thenewweighted-averagecostoffinan-
cialassets(whereapplicable)isnewlydetermineduponeachadditiontospecificinvestmentcategoriesasdefinedinaccordance
withtheexistingcategorisationoftechnicalreserves.Themanagementbelievesthatthechangeofthepolicydoesnothaveany
significantimpactontherelatedprofitandlossaccountitems.
I. 6. Risk managementIncompliancewithRegulationNo.434/2009Coll.,toimplementcertainprovisionsoftheActonInsurance,theCompanyhas
ensuredthattheset-upoftheinternalcontrolsystemcoversallofitsoperations.
Theset-upoftheinternalcontrolsystemenablesconsistentandsystematicriskmanagement.
TheCompanyisexposedtoinsurancerisk,whichnaturallyresultsfromtheunderwritteninsurancecontractsaswellasother
risks,mainlythemarketrisk,creditrisk,operationalrisk,liquidityriskandconcentrationrisk.
Thepoliciesandproceduresforriskmanagementarecomprehensiveandinterrelatedwiththepoliciesandproceduresformain-
tenanceofthecapitaldeterminedtocovertheserisks.
60Pojišťovna České spořitelny, a.s., Vienna Insurance Group
TheriskmanagementintheCompanyistheresponsibilityoftheBoardofDirectors.
(a) Non-life insurance riskTheCompanyisexposedtoinsuranceriskandunderwritingrisksfollowingfromthesaleofnon-lifeinsuranceproducts.
Insuranceriskrelatestouncertaintyinrespectoftheperiod,frequencyandamountofdamagecoveredbyinsurancecontracts.
Themostsignificantcomponentsofinsuranceriskarethereserveriskandthepremiumrisk.Thepremiumamountisdetermined
usinghistoricalassumptions,whichmaydifferfromtheactualsituation.Theriskoftrend,riskofestimate,changeinassumption
etc.mayhaveasignificantimpactondeterminingtheamountofprovisions.Theliabilityadequacytestsandanalysisofsensitivity
tochangeinassumptionsareusedtoeliminatethereserverisk.
InordertomanagetheinsurancerisktheCompanyappliesinternalpoliciesfordevelopmentandvaluationofproducts,determi-
nationofthetechnicalprovisionsamount,reinsurancestrategyandunderwritingrules.
Concentration of insurance risk
Concentrationofinsuranceriskmayexistintheeventthataparticulareventoraseriesofeventsmayimpactsignificantlyupon
theCompany’sliabilities.Theconcentrationofinsuranceriskthendeterminestheextentofthepossibleimpactoftheseevents
ontheamountoftheCompany’sliabilities.Suchconcentrationmayarisefromasingleinsurancecontractorthroughasmallnum-
berofrelatedcontracts,andrelatestocircumstancesthatgaverisetosignificantliabilities.Concentrationofinsuranceriskmay
arisefromaccumulationofrisksinframeofseveralindividualgroupsofcontracts;itmayalsoariseinlow-frequency,high-severity
eventsorintheeventofsignificantlitigationsorlegislativeamendments.
Geographic concentration
The risksunderwrittenby theCompanyareprimarily located in theCzechRepublic. From thegeographicalpointof view, the
Companyhasnosignificantconcentrationofexposuretoanygroupofpersonsinsured,measuredbysocial,professionalorage
criteria.
61Annual Report 2012INotestotheFinancialStatementsfor2012
Reinsurance strategy for non-life insurance
TheCompanyreinsuressomeoftherisksitunderwritesinordertocontrolitsexposurestolossesandprotectitsowncapital
resources.Innon-lifeinsurance,theCompanyhasbaseditsreinsuranceschemeonacontractwithanexternalreinsurer.
TheCompanyconcludesproportionatereinsurancetreatiestoreduceitsnetexposure.Themaximumnetexposurelimits(own
retentions)forparticularbusinesslinesarereviewedannually.
TheCompanycooperateswithreinsurersrated“A”andhigherandcarriesoutregularmonitoringoftheirfinancialcondition.
(b) Life assurance riskTheCompanyisexposedtorisksresultingfromanunfavourabledevelopmentofassumptionscomparedtotheirdeterminingat
themomentofvaluationofproducts.Thisinvolves,forexample,theriskofunfavourabledevelopmentofmortalityorsurvival,risk
ofadifferentdevelopmentofinvestmentreturn,riskresultingfromanunexpecteddevelopmentofcostinflationorbehaviourof
clientsuponcancellationofthecontract.IntheabovecasestheCompanyisexposedtothedangerofalossresultingfromthe
discrepancybetweencollectedpremiumsandclaimspaid,investmentreturnsandexpenses.
Otherrisksare,forexample,theobjectiveandsubjectiveriskoftheinsured.Theobjectiveriskisdeterminedbyobjectivefactors
suchastheage,sex,healthconditionorprofession.Thesubjectiveriskisdeterminedbysubjectivefactorssuchastheeffortof
theinsuredtosurviveormaintainahealthylifeorthepoorfinancialconditionoftheinsured.
OtherriskstowhichtheCompanyisexposedareasfollows:
–Riskswithalow-frequencyoccurrenceandasignificantimpact,whichinlifeassurancemayrepresentanyclaimthataffects
severalpersonsinsuredatthesametimeandinthesameplace(e.g.naturaldisasters)
–Riskofconcentrationofhighsumsassured,whichdonotconstituteasignificantpartoftheportfoliobutwhichmayhavesigni-
ficantimpactontheamountofsettlementsandasaresultalsotheprofit(loss)oftheCompany.
62Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Thegoalofriskmanagementisidentification,quantificationandeliminationofrisksinordertopreventchangesthathaveanega-
tiveimpactontheprofit(loss)oftheCompanyandtheCompany’sequity.
TheCompanyappliesprofittestingwhenvaluinginsuranceproductsandfurthertheliabilityadequacytestinordertoidentify,
quantifyandeliminatetherisks.Profittestingisusedtodetermineadequateinsuranceratesfortheinsuranceandfinancialgua-
ranteesforindividualproductsandforthedeterminedassumptions.
Thepurposeoftheliabilityadequacytestistoassesstheamountofthelifeassuranceprovisionsintermsoftheupdatedas-
sumptions.Thelevelofsensitivityoftheresultstoachangeintheindividualassumptionsisalsoacomponentoftheseproce-
dures.
Inrespectoftheobjectiveandsubjectiverisksoftheinsured,theserisksmustbeassessedindividuallyuponconclusionofthe
contract,primarilyintheeventofahighersumassured.Thereareproceduresforidentifyingandassessingtheserisks;aspart
ofsuchproceduresitisnecessarytocarryoutaqualifiedassessmentofthehealthcondition,or,ifappropriate,thefinancialcon-
ditionoftheclient,ortoassessthelevelofrisktowhichtheinsuredisexposed.Basedoninformationonthehealthcondition,
subjectiveriskandotheractuarialrisks,thepremiumrateisdetermined.Inadditiontoasurchargeonthepremium,certainrisks
maybeexcludedfromtheinsurance,ortheamountofthesumassuredmaybelimited.
TheCompanyhasnosignificantconcentrationofexposuretoanygroupofpersonsinsured.
Inordertomanagetheinsurancerisk,theCompanyprimarilyusesreinsuranceandaprudentunderwritingpolicy.
Reinsurance strategy for life assurance
TheCompanyreinsuressomeoftherisksitunderwritesinordertocontrolitsexposurestolossesandprotectitsowncapitalre-
sources.TheCompanyhasbaseditsreinsuranceschemeonacomplementarycombinationofcontractswithexternalreinsurers.
Inlifeassurance,theCompanyconcludesnon-proportionatereinsurancetreatiestoreduceitsnetexposure.
63Annual Report 2012INotestotheFinancialStatementsfor2012
TheCompanycooperateswithreinsurersrated“A”andhigherandcarriesoutregularmonitoringoftheirfinancialcondition.
(c) Market riskTheCompanyisexposedtomarketrisk,whichfollowsfromtradingpositionsininterestrate,currencyandequityinstrumentsthat
areallexposedtocommonandspecificchangesinthemarket.
Themainexposureisthattherevenuesfrominvestmentswillnotbesufficienttocovertheliabilitiesfrominsurancecontracts.
Themarketriskisconstantlymonitored,measuredandmanagedusingAsset/Liabilitymanagement(ALM).Thebasicmethodof
ALMinvolvesadjustingtheduedateofassetstotheliabilitiesfrominsurancecontracts.
Asset/Liability management (ALM)
ThebasicgoalofALMistoachievebalanceinthestructureofassetsandliabilities,inparticularfromthepointofviewoftheir
maturity,interestratesandcurrencystructure.Theaimistoensurethattheassetspermanentlygeneratesufficientcashflows
intherequiredcurrencystructurenecessarytocoverthedueliabilitiestoclients(includingtheguaranteedrevenues)andatthe
sametimetoensurethatthesystemenablesthegenerationofadequateprofitforshareholders.
ForthispurposetheCompanyperformsregularmonitoringofassetsandliabilities,followedbyALMcalculation,whichenables
theCompanytomonitorandcomparethestructureofitsassetsandliabilitiesintermsoftheirmaturity,achievedandguaranteed
interestratesandintermsoftheircurrencystructure.Thistypeofoutputisoneoftheunderlyingtoolsformakingdecisionson
thefurtherallocationoffinancialinvestments.
Interest rate risk
TheCompanyisexposedtointerestrateriskduetotheimpactofup-to-datemarketinterestratefluctuations.Thefairvalueand
investmentreturnmaybothgrowordecreaseasaresultofthesefluctuations.
64Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Besideschangesinthevalueofassets,theinterestratefluctuationsmayalsoresultinchangesofliabilities.
Basedonacashflowanalysis,theCompanypreparestheportfolioofsecuritiesthevalueofwhichchangestogetherwithachange
inthevalueofliabilitiesuponachangeintheinterestrate.
Theriskofchangesincashflowsasaresultofachangeininterestraterepresentsexposureprimarilytotheinsurancecontracts
withaguaranteedinterestrate,wheretheclientcomparestherevenueguaranteedbythecontractwiththerevenueofferedinthe
market.Wherethemarketinterestratesincrease,sometypesofcontractsmayshowanincreaseinthelapserate,orviceversa.
Price fluctuation risk
TheCompanyisexposedtoapricefluctuationrisk,whichconsistsinthefactthatthevalueofthefinancialinstrumentwillchange
duetochangesinthemarketprices.Thesechangesmaybecausedbyfactorsspecifictoasingleinstrumentorbytheissuersof
theinstrumentsorbyfactorsaffectingallinstrumentstradedinthecapitalormoneymarkets.
TheCompanymanagesitsuseofequityinvestmentsbymaintainingadiversifiedportfolio.
Měnové riziko
TheCompanyisexposedtocurrencyriskthroughtransactionsinforeigncurrenciesandthroughitsassetsandliabilitiesdeno-
minatedinforeigncurrencies.AsthecurrencyinwhichtheCompanypresentsitsfinancialstatementsistheCzechcrown(CZK),
movementsintheexchangeratesbetweenthesecurrenciesandtheCZKaffecttheCompany’sfinancialstatements.
TheCompanyusescurrencyswapsinordertohedgeagainstcurrencyrisk.
(d) Credit riskTheCompanyisexposedtothecreditrisk,whichfollowsfromthecounterpartyfailingtopaytheamountsdueinfull.
65Annual Report 2012INotestotheFinancialStatementsfor2012
ThemainareasoftheCompany’sexposuretothecreditrisk:
–Reinsurer’sshareininsuranceliabilities
–Reinsurer’sdebt,whichrelatestoaclaimthathasalreadybeenpaid
–Outstandingpremiums
–Receivablesfrominsuranceintermediaries
–Counterpartyriskrelatingtocurrencyswaps
–Riskoffailuretorepaytheprincipalorincomefromfinancialinvestments
Concentrationsofcreditriskarisewheregroupsofcounterpartieshavesimilareconomiccharacteristicsthatwouldcausetheir
abilitytomeettheircontractualobligationstobesimilarlyaffectedbychangesineconomicorotherconditions.
Thecreditriskislimitedbyexternallimitsregulatingthestructureoffinancialplacement(RegulationNo.434/2009Coll.,toim-
plementcertainprovisionsoftheActonInsurance).
Theoutstandingpremiumsareregularlymonitored,andthemethodofcreatingadjustmentsisdescribedinpointI.4.d).
RecoveryofdebtfrominsuranceiscarriedoutbytheCompanyincooperationwithexternalpartners.
(e) operational riskOperationalriskistheriskarisingfromthefailureofinternalprocesses,humanresourcesorsystems,ortheriskoflossthatmay
ariseduetoexternalevents,includingtheriskoflossarisingfromabreachof,ornoncompliancewith,alegalstandard.
LossmeansanyharmordamageincurredbytheCompany.
TheCompanymonitorstheserisks,designsmodificationstoworkproceduresandprocessestoeliminatethelossevents,and
buildsasystemtoanalyseoperationalrisks.
66Pojišťovna České spořitelny, a.s., Vienna Insurance Group
(f) Liquidity risk
TheCompanyisexposedtorequirementsforliquidityonadailybasis.Theserequirementsarerelatedtoclaimsettlements.The
liquidityriskisariskthatthecashnecessaryforpaymentofliabilitieswillnotbeavailableattheduedateandatadequatecost.
Theneedforliquidityiscontinuouslymonitoredinordertoensurenecessaryresources.
TheCompanyhasaccesstoadiversefundingbase,andincompliancewiththelegislationinforceithasinvestedasufficient
portionofitsfinancialplacementinliquidfinancialinstruments.
67Annual Report 2012INotestotheFinancialStatementsfor2012
(in thousands CZK) SoftwareIndustrial and similar rights total
Acquisitioncostat1/1/2012 287,225 295 287,520
Additions 28,753 28,753
Disposals -98 -295 -393
Acquisition cost at 31/12/2012 315,880 0 315,880
Accumulateddepreciationat1/1/2012 223,666 0 223,666
Depreciation 30,106 30,106
Disposals -98 -98
Accumulated depreciation at 31/12/2012 253,674 0 253,674
Netbookvalueat1/1/2012 63,559 295 63,854
Net book value at 31/12/2012 62,206 0 62,206
II. 2. Investments(a) Land and buildings (real estate)
operating (in thousands CZK) 2012 2011
Land 538 538
Valuationdifferences 1,362 1,382
Buildings 69,429 64,400
Valuationdifferences -16,629 -16,400total operating land and buildings at fair value 54,700 49,920
Themostrecentvaluationoflandandbuildings(realestate)basedonanexpertappraisalwascarriedouton31December2012.
II. ADDITIONAL DISCLOSURES IN RESPECT OF THE BALANCE SHEET
II. 1. Intangible fixed assetsIntangiblefixedassetsoftheCompanyasat31December2012comprisethefollowingitems:
68Pojišťovna České spořitelny, a.s., Vienna Insurance Group
(b) Participating interests with significant influence
Share of registered
capital in %
Acquisition cost
fair value
total registered
capital
total
equity
Profit or loss for the
financial year
Dividend income/
profit share
V.I.G.ND,uzavřenýinvestičnífonda.s.
total 299,773 303,959 N/A N/A N/A 0
Thefinancialdataarebasedonnon-auditedpreliminaryfinancialstatementsasat31December2012.In2011,theCompanydid
notownanyparticipatinginterestswithsignificantinfluence.
(c) Shares and other variable-yield securities, other participating interests
(in thousands CZK) fair value Acquisition cost
2012 2011 2012 2011
Issued by financial institutions
–ListedonarecognisedCRexchange 78,525 74,466 68,048 87,672
–Listedelsewhere 755,796 702,461
–Unlisted 1,294,080 410,242 1,229,531 432,427
Issued by non-financial institutions
–ListedonarecognisedCRexchange 86,930 142,618 94,611 143,110
–Listedelsewhere 18,204 16,581total 1,459,535 1,401,326 1,392,190 1,382,251
2012 (in thousands CZK)
10.48 299,773 303,959 2,671,000 2,905,098 64,024 0
69Annual Report 2012INotestotheFinancialStatementsfor2012
SecuritieslistedelsewherearetradedmainlyonEuropeanandUSmarkets.Unlistedsecuritiesissuedbyfinancialinstitutions
compriseparticipationcertificates/units.
Outofsecuritiesclassifiedas“Issuedbyfinancialinstitutionslistedelsewhere”asat31December2011securitiesamounting
toTCZK243,252atfairvalue(TCZK236,490atcost)werereclassifiedto”Unlistedsecurities”tounifythereportingstructure
ofthefinancialgroup.Theoutstandingsecuritiesquotedonanothermarketissuedbyfinancialinstitutionsasat31December
2011wererealizedduring2012.
(d) Debt securities valued at fair value through profit and loss and available for sale securities
(in thousands CZK) fair value Acquisition cost
2012 2011 2012 2011
Issued by financial institutions
–ListedonarecognisedCRexchange 712,741 776,566 701,106 783,716
–Listedelsewhere 1,313,610 994,955 1,278,269 977,884
–Unlisted 247,277 240,448 200,720 200,720
Issued by non-financial institutions
–ListedonarecognisedCRexchange 103,865 100,000
–Listedelsewhere 68,599 353,386 59,850 342,380
–Unlisted
Issued by government sector
–ListedonarecognisedCRexchange 5,007,721 4,989,633 4,740,979 4,935,789
–Listedelsewhere 704,530 591,642 642,649 588,943total 8,158,343 7,946,630 7,723,573 7,829,432
SecuritieslistedelsewherearetradedmainlyonEuropeanmarkets.
70Pojišťovna České spořitelny, a.s., Vienna Insurance Group
(e) oeCD bonds held to maturity
(in thousands CZK)
fair value Amortised value Acquisition cost
2012 2011 2012 2011 2012 2011–ListedonarecognisedCRexchange 11,192,871 9,224,015 10,048,554 8,950,349 9,909,906 8,796,624
total oeCD bonds held to maturity 11,192,871 9,224,015 10,048,554 8,950,349 9,909,906 8,796,624
(f) other debt securities held to maturity
(in thousands CZK) fair value Acquisition cost
2012 2011 2012 2011
Issued by financial institutions
–ListedonarecognisedCRexchange
–Listedelsewhere 619,979 1,034,897 509,257 959,257
–Unlisted 368,538 358,360 299,150 299,150
Issued by non-financial institutions
–ListedonarecognisedCRexchange 171,890 165,143 149,412 149,412
–Listedelsewhere 1,383,061 1,702,790 1,199,371 1,549,371
total other debt securities held to maturity 2,543,468 3,261,190 2,157,190 2,957,190
71Annual Report 2012INotestotheFinancialStatementsfor2012
(g) Deposits with financial institutions
(in thousands CZK) 2012 2011Duewithin1year 882,746 699,742
Duein1to5years 300,000 300,000total 1,182,746 999,742
BankdepositintheamountofTCZK300,000maturesin2014.
(h) other financial placements – derivatives
other derivatives – derivatives held for trading
fixed term contracts with a positive fair value (in thousands CZK)
Nominal value fair value
2012 2011 2012 2011Termcurrencytransactions 1,147,213 5,783
total 1,147,213 5,783
fixed term contracts with a negative fair value (in thousands CZK) 2012 2011 2012 2011Termcurrencytransactions 2,248,744 -22,038
total 2,248,744 -22,038
TheCompanyconcludesderivativessolelytohedgeagainstcurrencyrisk.Alltheabovefinancialinstrumentswereconcludedat
theinterbankmarket(OTC).
Nominal value fair value
72Pojišťovna České spořitelny, a.s., Vienna Insurance Group
NominalvalueoffixedtermcontractsistheamountinCZKoftheCompany’sshort-termcurrencyposition.Fairvalueoffixed
termcontractsistherevaluationofthecontractsasatthebalancesheetdate,i.e.thedifferencebetweenthepresentvaluesof
expectedcashinflowsandoutflows.
Remaining maturity of derivatives
At 31 December 2012 (in thousands CZK)Within
3 months3 months to
1 year1 to
5 yearsMore than
5 years Not specified total
other derivatives – intended for tradingTermcurrencytransactions 5,783 5,783
At 31 December 2011 (in thousands CZK)Within
3 months3 months to
1 year1 to
5 yearsMore than
5 years Not specified total
other derivatives – intended for tradingTermcurrencytransactions -22,038 -22,038
II. 3. Financial placements for the benefit of life assurance policyholders who bear the investment risk
Description
(in thousands CZK)
fair value Acquisition cost
2012 2011 2012 2011
Sharesandothervariable-yieldsecurities 701,778 785,573 740,959 903,999
Debtsecurities 2,321,905 1,369,608 1,854,285 1,098,235total 3,023,683 2,155,181 2,595,244 2,002,234
73Annual Report 2012INotestotheFinancialStatementsfor2012
II. 4. Currency structure of the financial placement
Variable-yield securities fixed income securities Deposits and other financial placements
Securities where the investment risk is borne
by the policyholders2012 2011 2012 2011 2012 2011 2012 2011
CZK 1,084,176 522,449 20,004,264 19,042,440 1,167,285 861,000 3,023,683 2,155,181
EUR 161,508 151,084 746,101 1,115,729 18,042 80,896
GBP 77,531 25,842 252 -90
USD 440,279 697,961 2,950 35,898
PLN 3,990 total 1,763,494 1,401,326 20,750,365 20,158,169 1,188,529 977,704 3,023,683 2,155,181
Variable-yieldsecuritiescompriseaparticipatinginterestwithsignificantinfluenceamountingtoTCZK303,959(2011:TCZK0).
II. 5. Receivables
31 December 2012
(in thousands CZK)Receivables from
policyholders
Receivables from insurance intermediaries
Receivables from
reinsurance operations
other receivables total
Due 22,289 312,307 135,640 470,236
Overdue 130,665 18,999 174 149,838total 152,954 18,999 312,307 135,814 620,074Adjustment 87,276 17,624 132 105,032total net 65,678 1,375 312,307 135,682 515,042
Currency (in thousands CZK)
74Pojišťovna České spořitelny, a.s., Vienna Insurance Group
31 December 2011
(in thousands CZK)Receivables from
policyholders
Receivables from insurance intermediaries
Receivables from reinsurance
operations
other receivables total
Due 13,011 2,167 229,377 158,752 403,307
Overdue 114,044 10,035 480 124,559total 127,055 12,202 229,377 159,232 527,866Adjustment 70,739 9,090 132 79,961total net 56,316 3,112 229,377 159,100 447,905
other receivables
(in thousands CZK) 2012 2011Inter-companyreceivables 2,645 2,461
Incometaxprepayments 119,967 150,353
Otherreceivables 13,202 6,418total other receivables 135,814 159,232
75Annual Report 2012INotestotheFinancialStatementsfor2012
II. 6. Other assets(a) Dlouhodobý hmotný majetek
(a) tangible fixed assets Cars It equipment
fixtures and
fittings other
Acquisition of assets and
advances paid totalAcquisitioncostat1/1/2012 25,227 47,903 18,316 10,976 1,448 103,870
Additions 11,917 33,389 7,631 33 2,016 54,986
Disposals -6,778 -31,345 -1,936 -1,557 -41,616
Acquisition cost at 31/12/2012 30,366 49,947 24,011 11,009 1,907 117,240Accumulateddepreciationat1/1/2012 10,938 36,484 10,566 441 58,429
Depreciationexpense 6,718 10,962 1,646 195 19,521
Disposals -5,057 -30,992 -1,504 -37,553Accumulated depreciation
at 31/12/2012 12,599 16,454 10,708 636 0 40,397Netbookvalueat1/1/2012 14,289 11,419 7,750 10,535 1,448 45,441
Net book value at 31/12/2012 17,767 33,493 13,303 10,373 1,907 76,843
Asat31December2012,theCompanyalsoreportedinventoriesintheamountofTCZK2,992(2011:TCZK3,491).
76Pojišťovna České spořitelny, a.s., Vienna Insurance Group
II. 7. Temporary asset accounts(a) Deferred acquisition costs for life assurance contracts
(in thousands CZK) 2012 2011Lifeassuranceconnectedwithaninvestmentfund/unit-linked 1,584,877 1,507,060
total 1,584,877 1,507,060
ThecalculationoftheamountreportedinDeferredacquisitioncostsforunit-linkedinsurancecontractsdependsontwocalcula-
tionbases.ThevolumeofexpectedfuturedeductionsoftheinitialallocationfeesisusedtocreateanassetofTCZK722,986
(2011:TCZK797,771)andthevolumeofthenegativecapitalvalueofinsurancecontractsisusedtocreateanassetofTCZK861,891
(2011:TCZK709,289).
(b) estimated receivables
(in thousands CZK) 2012 2011Estimatedwrittenpremiums 114,908 115,553
Estimatedreinsurancecommissions 17,166 23,926
Estimatedtrailerfees 1,078 1,402
EstimatedshareintheprofitofthereinsurerBNP 11,082 5,590
Other 2,669 782total 146,903 147,253
estimated written premiums
TheCompanydisclosesinestimatedreceivablesanestimateofthewrittenpremiumsforDecemberinrespectofgeneralinsuran-
cecontractswherethepolicyholdersreporttotheCompanyonamonthlybasisinarrears.
77Annual Report 2012INotestotheFinancialStatementsfor2012
(c) other temporary asset accounts
(in thousands CZK) 2012 2011
Prepaidexpensesrelatingtocommissionsonpremiumsnotyetrecorded 23,404 33,122
Other 1,530 1,798
total 24,934 34,920
II. 8. Equity(a) Share capitalTheregisteredsharecapitalcomprises8,180registeredordinarysharesinbookedformwithanominalvalueofTCZK45and
15,320ordinarybearershareswithanominalvalueofTCZK100.Asat31December2012,100%,i.e.TCZK1,900,100,ofthe
sharecapitalwaspaidup.Intheaccountingperiod2012and2011,thesharecapitaldidnotchange.
Issue
(in thousands CZK)type of
security formaNominal
valueNumber of securities total volume
Information on public marketability
CZ0008040706 share book-entry 45,000 8,180 368,100,000 Notmarketable
CZ0008040698 share book-entry 100,000 15,320 1,532,000,000 Notmarketable
total 23,500 1,900,100,000
ThesharecapitalamountcomplieswiththerequirementsoftheInsuranceAct,withregardtotheinsuranceclassesinwhichthe
Companyisauthorisedtocarryoninsuranceactivities.
78Pojišťovna České spořitelny, a.s., Vienna Insurance Group
(b) other capital funds
(in thousands CZK) 2012 2011Revaluationofassetsandliabilitiesatfairvalue 95,721 56,168
total 95,721 56,168
Revaluation of assets and liabilities at fair value
(in thousands CZK) 2012 2011Balance at 1/1 56,168 8,978
Changeinfairvalueoffinancialplacement 48,831 58,259
Changeindeferredtax -9,278 -11,069Balance at 31/12 95,721 56,168
Planned distribution of the current period profit
(in thousands CZK)
Profit for the current period 1,018,418
Transfertostatutoryreservefund 50,921
Transfertosocialfund 4,730
Dividend(CZK36.84pershare) 865,655Profit to be added to retained earnings 97,112
Proposeddistributionofprofitissubjecttotheapprovalofthegeneralmeeting.
79Annual Report 2012INotestotheFinancialStatementsfor2012
II. 9. Technical provisions(a) Life assurance provision
(in thousands CZK) 2012 2011Unzillmerisedprovision 6,621,381 6,718,895
Zillmeradjustment 11,557 8,162
Eliminationofnegativereserves 2,342 3Zillmerised provision presented in the balance sheet 6,612,166 6,710,736Flexiprovision 12,378,190 12,323,713
Provisionforprofitsharecommitments 325,383 259,859
Annuityprovision 8,366 8,626
Provisionforbonuses 204,863 77,861total life assurance provision 19,528,968 19,380,795
(b) Provision for outstanding claimsTheprovisionforoutstandingclaimsattheendofthefinancialyeariscreatedasfollows:
(in thousands CZK) 2012 2011RBNS 351,912 253,200
IBNR 935,985 1,022,031total 1,287,897 1,275,231
Claims run-off result
Theclaimsrun-offresult isthedifferencebetweentheprovisionforoutstandingclaimsasat31December2011,theclaims
paymentsduring2012 (with respect toclaims includedwithin thisprovision)and the residualamountof thisprovisionasat
31December2012.
80Pojišťovna České spořitelny, a.s., Vienna Insurance Group
(in thousands CZK) 2012 2011Grossprovisionforoutstandingclaimsasat1January 1,764,107 1,489,871
Claimspaymentsinthecurrentperiodinrespectofpriorperiodclaims 963,580 840,117
Provisionforoutstandingclaimsasat31Decemberintendedforpriorperiodclaims
notpaidyet 654,114 458,322
Run-offresult 146,413 191,432
Thegrossrun-offresultbyclassesofinsurance:
Class of insurance (in thousands CZK) 2012 2011Accidentandsickness–non-lifeinsurance 12,619 47,952
Otherlosses–non-lifeinsurance 5,238 14,702
Assuranceondeath,assuranceonsurvival 13,223 -5,059
Accidentandsicknessinsuranceasarider 79,439 142,602
Marriageinsurance 96 19
Lifeassuranceconnectedwithaninvestmentfund/unit-linked
(notincludingaccidentalriders) 35,798 -8,784total 146,413 191,432
II. 10. Provisions
type of provision (in thousands CZK)opening balance Creation Release
Closing balance
Provisionfortaxes 100,837 244,011 100,837 244,011total 100,837 244,011 100,837 244,011
TheincometaxprepaymentsofTCZK119,967(2011:TCZK150,353)arerecognisedinOtherreceivables.
81Annual Report 2012INotestotheFinancialStatementsfor2012
II. 11. Payables
31. December 2012
(in thousands CZK)Payables to
policyholders
Payables to insurance
intermediaries
Payables from reinsurance operations other payables total
Due 173,534 132,332 381,156 94,660 781,682
Overdue 0 308 2,127 2,435total 173,534 132,640 381,156 96,787 784,117
31. December 2011
(in thousands CZK) Payables to
policyholders
Payables to insurance
intermediaries
Payables from reinsurance operations other payables total
Vesplatnosti 210,644 146,494 281,839 34,034 673,011
Posplatnosti 27 112 3,769 3,908total 210,671 146,606 281,839 37,803 676,919
Otherpayablescomprisethefollowingitems:
(in thousands CZK) 2012 2011Payablestoemployees 37,517 6,466
Socialsecurityandhealthinsuranceliabilities 10,685 3,119
Payablestosuppliers 12,927 9,421
Deferredtaxliability 25,692 16,307
Othertaxliabilities 9,966 2,490
total 97,787 37,803
82Pojišťovna České spořitelny, a.s., Vienna Insurance Group
(a) Social security and health insurance liabilitiesLiabilitiesinrespectofsocialsecurityandhealthinsurancetotalTCZK10,685(2011:TCZK3,119)ofwhichTCZK6,773(2011:
TCZK2,183)relatestosocialsecurityandTCZK3,912(2011:TCZK936)relatestohealthinsurance.Noneoftheseliabilitiesare
overdue.
(b) tax liabilitiesTaxliabilitiesamounttoTCZK9,966(2011:TCZK2,490),noneofwhichisoverdue.
(c) Long-term payables (maturity over five years)TheCompanydoesnothaveanylong-termpayableswithremainingmaturityoverfiveyears.
(d) Payables and receivables due to or from reinsurersTheCompanyhasanetpayabletoreinsurersintheamountgiveninthefollowingtable:
(in thousands CZK) 2012 2011Receivablesfromreinsurers 312,307 229,377
Payablestoreinsurers 381,156 281,839
Depositsduetocedents 635,780 370,142
Net (+ receivable, - payable) -704,629 -422,604
ThedepositofTCZK635,780(2011:TCZK370,142) isrelatingtoreinsurancecontractswithVIENNAINSURANCEGROUPAG
WienerVersicherungGruppe.
83Annual Report 2012INotestotheFinancialStatementsfor2012
II. 12. Temporary liability accounts(a) other temporary liability accounts
(in thousands CZK) 2012 2011
Accruedexpenses 2,906
Estimatedpayables 235,922 263,857
total 235,922 266,763
Adetailedbreakdownofestimatedpayablesisasfollows:
(b) estimated payables
(in thousands CZK) 2012 2011Alliancepartnercommission 84,958 81,449
Performance-basedcommissionofinsuranceintermediaries 28,000 36,114
Lawsuitsandlitigations 5,721 5,820
Annualextraordinarybonusesanduntakenholidays 14,095 57,802
Assetmanagementfees 26,751 11,469
Operatingsystemrepairsandmaintenance 6,717 1,270
Reinsurancepremiumsonpremiumnotyetrecorded 60,786 61,533
Advancepaymentsforservicesrelatingtorent 2,837 2,627
Servicesnotyetinvoicedbyothercreditors 6,057 5,773total 235,922 263,857
84Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Alliance partner commission
TheCompanydisclosesunderalliancepartnercommissiontheexpectedamountofcommissionrelatingtoadistributionagree-
mentbetweenentitiesofErsteBankfinancialgroupandentitiesofViennaInsuranceGroup.
estimated reinsurance premiums
TheCompanydisclosesunderestimatedreinsurancepremiumsanestimateoftherelevantreinsurers’shareintheestimateof
grosspremiumwrittendisclosedintheestimatedreceivables,seepointII.7.(b).
II. 13. Inter-company receivables and payables(a) other inter-company receivables and payables
Company name
(in thousands CZK) 2012 2011 2012 2011Short-term 286,931 202,123 308,960 203,776
Kooperativapojišťovna,a.s.,
ViennaInsuranceGroup 3,257 2,461 2,149 242
VIENNAINSURANCEGROUPAGWiener
VersicherungGruppe 283,674 199,662 306,811 203,534total 286,931 202,123 308,960 203,776
AsspecifiedinsectionII.11.(d),theCompanyalsorecordsadepositrelatingtoreinsurancecontractswithVIENNAINSURANCE
GROUPAGWienerVersicherungGruppe.
Allsignificanttransactionswithrelatedpartieswerecarriedoutundercommonmarketconditions.
Receivables Payables
85Annual Report 2012INotestotheFinancialStatementsfor2012
III. ADDItIoNAL DISCLoSuReS IN ReSPeCt of tHe PRofIt AND LoSS ACCouNt
III. 1. Non-life insuranceNon-lifeinsurancefor2012and2011dividedbyclassesofinsurance:
(in thousands CZK)Class of
insurance
Gross premiums
written
Gross premiums
earnedGross
claims paid
Gross operating expenses
Reinsurance balance
Direct insuranceAccidentandsickness 1,2
2012 545,026 544,765 180,218 9,594 -91,946
2011 544,068 542,947 175,541 16,836 -86,626
Miscellaneouslosses 16
2012 259,899 259,899 19,012 1,511 -72,339
2011 243,445 243,445 17,179 928 -66,896
total
2012 804,925 804,664 199,230 11,105 -164,285
2011 787,513 786,392 192,720 17,764 -153,522
86Pojišťovna České spořitelny, a.s., Vienna Insurance Group
III. 2. Life assuranceGrosspremiumswritteninlifeassurance:
(in thousands CZK) 2012 2011Individualpremium 9,191,499 9,218,323
Premiumsundergroupcontracts 705,842 673,857total 9,897,341 9,892,180Regularpremium 5,266,241 4,801,345
Singlepremium 4,631,100 5,090,835total 9,897,341 9,892,180Premiumsfromnonprofit-sharingcontracts 1,323,291 1,011,139
Premiumsfromprofit-sharingcontracts 6,341,932 7,509,061
Premiumsfromcontractswheretheinvestmentrisk
isbornebypolicyholders 2,232,118 1,371,980total 9,897,341 9,892,180Reinsurance balance -108,188 -74,464
III. 3. Total amount of gross premiums written by countryIn2012and2011,thetotalamountofgrosspremiumswrittenwasgeneratedoncontractsconcludedintheCzechRepublic.
87Annual Report 2012INotestotheFinancialStatementsfor2012
III. 4. Bonuses and rebatesTheCompanygrantedthefollowingbonusesandrebatesbasedonpolicytermsandconditionsandinsurancecontracts:
(in thousands CZK) 2012 2011Gross
Non-lifeinsurance 369,727 334,018
Lifeassurance 274,831 266,491total gross amount 644,558 600,509Reinsurers’share(non-lifeinsurance) 367,592 332,536total net amount 276,966 267,973
InaccordancewiththeproceduresstatedinpointII.9.(d)oftheNotestheCompanyaccountedforthefollowingchangesinthe
provisionforbonusesandrebates:
2012 (in thousands CZK) Hrubá výše Podíl zajišťovatelů Čistá výšeNon-life insurance
Creation 405,325 403,235 2,090
Release 371,662 369,591 2,071
Changeofbalance 33,663 33,644 19Life assurance Creation 274,501 274,501
Release 274,831 274,831
Changeofbalance -330 -330total change of balance 33,333 33,644 -311
88Pojišťovna České spořitelny, a.s., Vienna Insurance Group
2011 (in thousands CZK) Gross Reinsurer’s share NetNon-life insurance
Creation 371,032 369,469 1,563
Release 335,566 334,084 1,482
Changeofbalance 35,466 35,385 81Life assurance Creation 268,384 268,384
Release 266,595 266,595
Changeofbalance 1,789 1,789total change of balance 37,255 35,385 1,870
III. 5. Commissions and other acquisition costs for insurance contracts
2012 2011
(in thousands CZK)Non-life
insuranceLife
assurance totalNon-life
insuranceLife
assurance totalCommissions
Initial 491 1,315,890 1,316,381 5,406 1,473,586 1,478,992
Renewal 4,567 252,594 257,161 7,199 235,337 242,536total commissions 5,058 1,568,484 1,573,542 12,605 1,708,923 1,721,528Otheracquisitioncosts 1,548 195,959 197,507 1,308 203,122 204,430
Changeindeferredacquisitioncosts 194 -77,817 -77,623 -153 -147,976 -148,129total commissions and other acquisition costs 6,800 1,686,626 1,693,426 13,760 1,764,069 1,777,829
TheCompanydisclosesrenewalcommissionsinadministrativeexpenses.
89Annual Report 2012INotestotheFinancialStatementsfor2012
Otheracquisitioncostsprimarilycomprisecostsforwagesandsalaries,promotion,advertisingandotheradministrativeexpenses
associatedwiththeconclusionofinsurancecontracts.
III. 6. Administrative expenses
(in thousands CZK) 2012 2011Personnelexpenses(payroll,socialsecurityandhealthinsurance,remunerationtomembersoftheSupervisoryBoard,BoardofDirectorsandAuditCommittee) 90,377 82,680
Renewalcommissions 257,161 242,536
Rentandrelatedservices 7,173 6,772
Consultancyandexternalaudit 20,127 2,676
Consumptionoflow-valuetangibleandintangibleassetsandothermaterial 8,775 9,904
Depreciationandrepairsandmaintenanceoftangibleassets 25,814 16,430
Operatingsystemsadministrationandmaintenance 28,560 20,978
Postalandtelecommunicationservices 26,460 23,847
Bankfees 12,893 12,030
Otherservices 21,020 22,173
Otheradministrativeexpenses 41,608 44,666total administrative expenses 539,968 484,692
Otherpersonnelexpensesareincludedinotheradministrativeexpenses.
90Pojišťovna České spořitelny, a.s., Vienna Insurance Group
III. 7. Other technical expenses and income
2012 (in thousands CZK) Gross Reinsurer’s share NetNon-life insuranceOthertechnicalexpenses 20,653 20,653
Othertechnicalincome -24,774 -24,774Balance – non-life insurance -4,121 0 -4,121Life assurance
Othertechnicalexpenses 84,991 84,991
Othertechnicalincome -97,824 -97,824Balance – life assurance -12,833 0 -12,833
2011 (in thousands CZK) Gross Reinsurer’s share NetNon-life insuranceOthertechnicalexpenses 21,290 21,290
Othertechnicalincome -25,731 -25,731Balance – non-life insurance -4,441 0 -4,441Life assuranceOthertechnicalexpenses 47,119 47,119
Othertechnicalincome -57,104 -57,104Balance – life assurance -9,985 0 -9,985
91Annual Report 2012INotestotheFinancialStatementsfor2012
III. 8. Employees and managementPersonnelexpensesandaveragecalculatednumberofemployeesbyindividualcategoriesfor2012and2011:
Personnel expense – type
(in thousands CZK) year
employee category
totalAcquisition, sales Claims handling Administration
Payrollexpense2012 69,187 10,013 76,342 155,542
2011 64,994 9,494 66,226 140,714
Socialsecurityandhealthinsurance2012 18,648 3,504 15,669 37,821
2011 21,899 3,259 18,525 43,683
Otherpersonnelexpenses2012 3,604 1,021 3,416 8,041
2011 3,234 922 3,106 7,262
total personnel expenses2012 91,439 14,538 95,427 201,404
2011 90,127 13,675 87,857 191,659
Averagenumberofemployees2012 109 29 101 239
2011 98 27 96 221
Theabovefiguresdonotincluderemunerationpaidtostatutory,executiveandsupervisoryboardmembers.
Asat31December2012,themanagementoftheCompanycomprised12managers:theCEO,3deputyCEOsand8sectiondirec-
tors.Personnelexpenses(payroll,socialsecurityandhealthinsurance,otherpersonnelexpenses)relatingtomanagerstotalled
TCZK39,978in2012(2011:TCZK43,677).
ExpensesrelatingtothejobpositionsofdeputyCEOinchargeofthesalesdivision,salesdivisionsectiondirectorsandproduct
managementdirectorarepresentedunderacquisitioncosts.Expensesrelatingtoothermanagementpositionsarepresented
underadministrativeexpenses.
92Pojišťovna České spořitelny, a.s., Vienna Insurance Group
(a) Statutory, executive and Supervisory Board members’ remunerationTheCompanyhasprovidedthefollowingmonetaryandnon-monetaryremunerationtothestatutory,executiveandsupervisory
boardmembersforthefinancialyears2012and2011:
(in thousands CZK) 2012 2011MembersoftheBoardofDirectors 180 180
Proxyholder 60 60
MembersoftheSupervisoryBoard 830 658
AuditCommittee 13 13total remuneration paid 1,082 911
ThemembersoftheCompany’sBoardofDirectorsareatthesametimeemployeesoftheCompanyexercisingtheofficesof
DeputyCEOsortheCEOoftheCompany.
TheproxyholderisalsoanemployeeoftheCompany,exercisingtheofficeofDeputyCEO.
Themembersof theBoardofDirectorsandtheproxyholder receivemonthly remunerationofCZK5,000.TheChairmanand
Vice-chairmanoftheSupervisoryBoardreceiveannualremunerationofEUR5,000;theothermembersoftheSupervisoryBoard
receiveannualremunerationofEUR4,000.
ThemembersoftheAuditCommitteereceiveannualremunerationofEUR500undertheconditionthattheydonotreceiveremu-
nerationasmembersofanyotherexecutiveorsupervisorybodyoftheCompany.
TheCompanypresentednoreceivablesfrommembersoftheBoardofDirectors,SupervisoryBoard,AuditCommitteeortheproxy
holderrelatingtoloansgrantedoradvancespaid,eitherin2012or2011.
93Annual Report 2012INotestotheFinancialStatementsfor2012
(b) Information on remuneration for statutory auditorsRemunerationforstatutoryauditorsisincludedintheCompany’sadministrativeexpenses.ThetotalamountofTCZK1,308(2011:
TCZK1,497)consistsofthefollowingitems:
(in thousands CZK) 2012 2011Statutoryaudit 1,284 1,344
Othernon-auditingservices 24 153total remuneration 1,308 1,497
III. 9. Expense allocation between technical accounts and non-technical accountAsatthebalancesheetdate,thetotalamountofexpensesallocatedbetweenthetechnicalaccountsforlifeassurance,non-lifeins-
uranceandthenon-technicalaccountbymeansofthemethodstatedinnoteI.4.(t)amountedtoTCZK58,112(2011:TCZK48,732).
III. 10. Result of non-technical accountTheresultofthenon-technicalaccountasat31December2012amountedtoTCZK23(2011:TCZK0).
III. 11. Result before taxTheresultbeforetaxasat31December2012amountedtoTCZK1,262,785(2011:TCZK517,339).
94Pojišťovna České spořitelny, a.s., Vienna Insurance Group
III. 12. Taxation(a) Income tax in the profit and loss account
(in thousands CZK) 2012 2011Provisionforcurrentperiodincometax 244,011 100,837
Differencebetweenthecurrentincometaxrelatingtopriorperiodsandreleaseoftheprovisionforincometaxrelatingtopriorperiods 249 -551
Changeindeferredtaxasset/Changeindeferredtaxliability 107 -562Income tax in profit and loss account 244,367 99,724
95Annual Report 2012INotestotheFinancialStatementsfor2012
(b) Deferred tax assets and liabilitiesDeferredtaxassetsandliabilitiesareasfollows:
temporary differences Assets Liabilities Net(in thousands CZK) 2012 2011 2012 2011 2012 2011Tangiblefixedassets 5,930 4,846 -5,930 -4,846
Intangiblefixedassets 2,114 2,005 -2,114 -2,005
Receivables 1,045 1,045 1,045 1,045
OthertemporarydifferencerecordedinProfitandlossaccount 3,760 2,675 3,760 2,675
Effectonprofitandlossaccount 4,805 3,720 8,044 6,851 -3,239 -3,131
Revaluationofassetsandliabilities 22,453 13,175 -22,453 -13,175
Effectonequity 22,453 13,175 -22,453 -13,175
Deferredtaxasset/(liability) 4,805 3,720 30,497 20,026 -25,692 -16,306
Off-settingofrelatingdeferredtaxassetsandliabilities -4,805 -3,720 -4,805 -3,720Deferred tax asset/(liability) 0 0 25,692 16,306 -25,692 -16,306
InaccordancewiththeaccountingpolicydescribedinpointI.4.(g),deferredtaxwascalculatedusingthetaxratesvalidforthe
periodsinwhichthetaxasset/liabilityisexpectedtobeutilised,i.e.19%.
IV. OTHER DISCLOSURES
IV. 1. Group relationsTheCompanyhasnotconcludedacontrollingagreementwithitsmajorityshareholderVIENNAINSURANCEGROUPAGWiener
VersicherungGruppehavingitsregisteredofficeinVienna,Austria.Areportonrelationsbetweenrelatedpartieswillbeapartof
theannualreport.
96Pojišťovna České spořitelny, a.s., Vienna Insurance Group
IV. 2. Transactions not disclosed in the balance sheetTheCompanyisnotawareofanyevenpotentialcommitmentsnotdisclosedinthebalancesheet.
IV. 3. Contingent liabilities(a) LitigationsTheCompanyisthedefendantinalawsuitarisingfromdisagreementoverthesizeofsettlementasregardsclaimsreportedand
settledinthetotalamountofTCZK9,982.AprovisionforreportedclaimsofTCZK11,164hasbeenestablishedtoprovidefor
thesecontingentliabilities,whichcompriseanestimateofthesettlementandotherexpenses,primarilytherelatedcourtfees.
IV. 4. Subsequent eventsTheCompany’smanagementisnotawareofanymaterialsubsequenteventsthathaveoccurredsincethebalancesheetdatethat
wouldrequireanadjustmenttothefinancialstatementsasat31December2012.
InPardubice,on22February2013
RNDr. Petr Zapletal, MBA Ing. Jaroslav KulhánekChairmanoftheBoardofDirectors Vice-chairmanoftheBoardofDirectors
97Annual Report 2012IReportonRelationsfor2012
Pojišťovna České spořitelny, a.s., Vienna Insurance Group, with its main office in Pardubice,nám.Republiky115,postcode53002
BusinessIDNo.:47452820,registeredintheCommercialRegisterkeptattheRegionalCourtinHradecKrálové,sectionB,insert
855(hereinafterreferredtoas“the Compiler”)ispartoftheGroup(concern)VIENNAINSURANCEGROUPAGWienerVersicherung
Gruppe,inwhichtherelationsreferredtoinAnnexNo.1existbetweentheCompilerandthecontrollingpersonsandfurtherbetween
theCompilerandthepersonscontrolledbythesamecontrollingpersons(hereinafterreferredtoas“relatedpersons”).
ThisreportonrelationsbetweenthepersonslistedbelowwaspreparedinaccordancewiththeprovisionsofSection66a(9)of
ActNo.513/1991Coll.,theCommercialCode,asamended,fortheaccountingperiod1.1.2012to31.12.2012(hereinafter
the“accountingperiod”).IntheaccountingperiodthefollowingagreementsweresignedbetweentheCompilerandthepersons
listedbelowandthefollowinglegalactsandotherdefactomeasureswereadoptedorimplemented:
Report on Relations in accoradance with § 66a of the Commercial Code for 2012
98Pojišťovna České spořitelny, a.s., Vienna Insurance Group
AN OVERVIEW OF THE ENTIRE CONCERN OF VIENNA INSURANCE GROUP AG WIENER VERSICHERUNG GRUPPE, OR PERSONS WHOSE RELATIONSHIPS ARE DESCRIBED
A. VIG consolidated financial statements – equity participation as of 31 December 2004, including equity
VIeNNA INSuRANCe GRouP AG, Wiener Gruppe Verischerung insurance company, Schottenring30,A1010Vienna,registeredin
theCommercialRegisterheldattheCommercialCourtinViennasectionFN,insert75687F(hereinafterthe“WienerStädtische”)
Share in capital Last in % (controlling equity annual financialACCouNtING uNIt holding pursuant to IfRS) (thous. euR) statementConsolidated companies“GrünerBaum“Errichtungs-undVerwaltungsges.m.b.H,Vienna 100.00 26,311 2012“Schwarzatal“GemeinnützigeWohnungs-undSiedlungsanlagen-GmbH,Vienna 55.00 104,423 2012“WIENERRE“akcionarskodrustvozareosiguranje,Belgrade 100.00 6,515 2012“WIENERSTÄDTISCHEOSIGURANJE“akcionarskodrustvozaosiguranje,Belgrade 100.00 12,375 2012AlpenländischeHeimstätteGemeinnützigeWohnungsbau-undSiedlungsgesellschaftm.b.H.,Innsbruck 94.00 94,954 2012AndělInvestmentPrahas.r.o.,Prague 100.00 26,747 2012ARITHMETICAVersicherungs-undFinanzmathematischeBeratungs-Gesellschaftm.b.H.,Vienna 100.00 387 2012ASIGURAREAROMANEASCA–ASIROMVIENNAINSURANCEGROUPS.A.,Bucharest 99.10 75,265 2012BENEFIATowarzystwoUbezpieczennaZycieS.A.ViennaInsuranceGroup,Warsaw 100.00 23,021 2012BENEFIATowarzystwoUbezpieczenS.A.ViennaInsuranceGroup,Warsaw 100.00 18,973 2012BlizzardRealSp.zo.o.,Warsaw 100.00 1,675 2012BMLVersicherungsmaklerGmbH,Vienna 100.00 821,799 2012BULSTRADLIFEVIENNAINSURANCEGROUPJointStockCompany,Sofia 95.11 4,832 2012BULSTRADVIENNAINSURANCEGROUPPUBLICLIMITEDCOMPANY,Sofia 98.00 38,625 2012
99Annual Report 2012IReportonRelationsfor2012
Share in capital Last in % (controlling equity annual financialACCouNtING uNIt holding pursuant to IfRS) (thous. euR) statementBusinessInsuranceApplicationConsultingGmbH,Vienna 100.00 2,172 2012BusinessparkBrunnEntwicklungsGmbH,Vienna 100.00 1,817 2012CALICAL“Globus“,Kiev 80.00 5,281 2012CAMEHoldingGmbH,Vienna 100.00 28,318 2012CAPITOL,a.s.,Bratislava 100.00 637 2012CENTERHotelbetriebsGmbH,Vienna 80.00 633 2012CentralPointInsuranceIT-SolutionsGmbH,Vienna 100.00 96,002 2012Českápodnikatelskápojišťovnaa.s.,ViennaInsuranceGroup,Prague 100.00 94,203 2012COMPENSAHoldingGmbH,Wiesbaden 100.00 20,740 2012CompensaLifeViennaInsuranceGroupSE,Tallinn 100.00 10,880 2012CompensaTowarzystwoUbezpieczenNaZycieSpolkaAkcyjnaViennaInsuranceGroup,Warsaw 100.00 51,194 2012CompensaTowarzystwoUbezpieczenSpolkaAkcyjnaViennaInsuranceGroup,Warsaw 99.89 72,247 2012DBR-LiegenschaftenGmbH&CoKG,Stuttgart 100.00 11,932 2012DBR-LiegenschaftenVerwaltungsGmbH,Stuttgart 100.00 23 2012Deutschmeisterplatz2ObjektverwaltungGmbH,Vienna 100.00 3,203 2012DonauBrokerlineVersicherungs-ServiceGmbH,Vienna 100.00 27,004 2012DONAUVersicherungAGViennaInsuranceGroup,Vienna 99.24 155,842 2012DVIBGmbH,Vienna 100.00 29,199 2012ELVPBeteiligungenGmbH 100.00 19,532 2012ErsteosiguranjeViennaInsuranceGroupd.d.,Zagreb 95.00 10,493 2012ERSTEViennaInsuranceGroupBiztositóZrt.,Budapest 95.00 6,586 2012GemeinnützigeIndustrie-Wohnungsaktiengesellschaft,Leonding 55.00 208,783 2012GemeinnützigeMürz-YbbsSiedlungsanlagen-GmbH,Kapfenberg 55.00 90,005 2012GesundheitsparkWien-OberlaaGesellschaftm.b.H.,Vienna 100.00 26,587 2012GPIHB.V.,Amsterdam 91.11 6,811 2012HELIOSViennaInsuranceGroupd.d.,Zagreb 100.00 26,987 2012InteralbanianSh.a.,Tirana 78.33 3,255 2012InternationalInsuranceCompanyIRAOLtd.,Tiflis 100.00 7,061 2012
100Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Share in capital Last in % (controlling equity annual financialACCouNtING uNIt holding pursuant to IfRS) (thous. euR) statementInterRiskLebensversicherungs-AGViennaInsuranceGroup,Wiesbaden 100.00 25,338 2012InterRiskTowarzystwoUbezpieczenSpolkaAkcyjnaViennaInsuranceGroup,Warsaw 99.98 92,806 2012InterRiskVersicherungs-AGViennaInsuranceGroup,Wiesbaden 100.00 43,460 2012INTERSIGSh.A.,Tirana 75.00 3,887 2012JAHORINAOSIGURANJEa.d.,Pale 97.56 11,937 2012JointStockInsuranceCompanyWINNER-ViennaInsuranceGroup,Skopje 100.00 3,778 2012JSC“GPIInsuranceCompanyHolding“,Tiflis 90.00 9,427 2012KÁLVINTOWERImmobilienentwicklungs-undInvestitionsgesellschaftm.b.H.,Budapest 100.00 2,222 2012Kapitolpojišťovacíafinančníporadenství,a.s.,Brno 100.00 6,735 2012Komunálnapoisťovna,a.s.ViennaInsuranceGroup,Bratislava 100.00 42,025 2012KOOPERATIVApoist’ovna,a.s.ViennaInsuranceGroup,Bratislava 100.00 276,629 2012Kooperativa,pojišťovna,a.s.ViennaInsuranceGroup,Prague 98.39 553,203 2012KvarnerViennaInsuranceGroupdionickodrustvozaosiguranje,Rijeka 99.36 42,249 2012KvarnerWienerStädtischeNekretnined.o.o.,Zagreb 100.00 381 2012LVPHoldingGmbH,Vienna 100.00 670,539 2012MAPBürodienstleistungGesellschaftm.b.H.,Vienna 100.00 70,040 2012MH54ImmobilienanlageGmbH,Vienna 100.00 26,322 2012NEUEHEIMATGemeinnützigeWohnungs-undSiedlungsgesmbH,Linz 99.81 110,107 2012NeueHeimatOberösterreichHoldingGmbH,Vienna 90.00 59,212 2012OMNIASIGVIENNAINSURANCEGROUPS.A.,Bucharest 98.56 42,595 2012PassatRealSp.zo.o.,Warsaw 100.00 2,797 2012PFGHoldingGmbH,Vienna 89.23 113,271 2012PFGLiegenschaftsbewirtschaftungsGmbH&CoKG,Vienna 92.88 53,704 2012Poist’ovnaSlovenskejsporitel’ne,a.s.ViennaInsuranceGroup,Bratislava 95.00 30,353 2012PojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup,Pardubice 95.00 133,417 2012Privatejoint-stockcompanyInsuranceCompany“UkrainianInsuranceGroup“,Kiev 100.00 13,138 2012PrivateJoint-StockCompany“JUPITERLIFEINSURANCEVIENNAINSURANCEGROUP“,Kiev 97.80 3,736 2012PRIVATEJOINT-STOCKCOMPANYUKRAINIANINSURANCECOMPANY“KNIAZHAVIENNAINSURANCEGROUP“,Kiev 99.99 11,572 2012
101Annual Report 2012IReportonRelationsfor2012
Share in capital Last in % (controlling equity annual financialACCouNtING uNIt holding pursuant to IfRS) (thous. euR) statementPROGRESSBeteiligungsges.m.b.H.,Vienna 60.00 15,278 2012ProjektbauGesmbH,Vienna 100.00 19,558 2012ProjektbauHoldingGmbH,Vienna 90.00 21,327 2012RaySigortaA.S.,Istanbul 94.26 38,299 2012S.C.BCRAsigurarideViataViennaInsuranceGroupS.A.,Bucharest 92.36 26,150 2012SECURIAmajetkovosprávnaapodielovás.r.o.,Bratislava 100.00 9,400 2012SeniorenResidenzFultererparkErrichtungs-undVerwaltungsGmbH,Innsbruck 100.00 4,356 2012SeniorenResidenzVeldidenaparkErrichtungs-undVerwaltungsGmbH,Innsbruck 66.70 8,869 2012SIGURIAEMAHDEVIENNAINSURANCEGROUPSh.A.,Tirana 87.01 11,000 2012SparkassenVersicherungAGViennaInsuranceGroup,Vienna 95.00 529,787 2012SVZGmbH,Vienna 100.00 26,429 2012SVZIGmbH,Vienna 100.00 26,429 2012TBIBULGARIAEAD,Sofia 100.00 41,089 2012TBIHFinancialServicesGroupN.V.,Amsterdam 100.00 259,092 2012UNIONViennaInsuranceGroupBiztositóZrt.,Budapest 100.00 33,168 2012V.I.G.ND,uzavřenýinvestičnífonda.s.,Prague 100.00 124,209 2012Vienna-LifeLebensversicherungAktiengesellschaft,Bendern 100.00 11,502 2012VIGFUNDuzavřenýinvestičnífond,a.s.,Prague 100.00 99,955 2012VIGREzajišťovna,a.s.,Prague 100.00 127,034 2012VIGREALESTATEDOO,Bělehrad 100.00 12,890 2012VIGRealEstateGmbH,Vienna 100.00 71,494 2012VIG-CZRealEstateGmbH,Vienna 100.00 71,431 2012VLTAVAmajetkovosprávníapodílováspol.sr.o.,Prague 100.00 5,134 2012WGPVHoldingGmbH,Vienna 100.00 77,585 2012WIENERSTÄDTISCHEBeteiligungsGmbH,Vienna 100.00 853,823 2012WIENERSTÄDTISCHEFinanzierungsdienstleistungsGmbH,Vienna 100.00 847,239 2012WIENERSTÄDTISCHEVERSICHERUNGAGViennaInsuranceGroup,Vienna 99.90 937,962 2012WienerVereinBestattungs-undVersicherungsserviceGesellschaftm.b.H.,Vienna 100.00 1,624 2012WSVImmoholdingGmbH,Wien 100.00 169,178 2012
102Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Share in capital Last in % (controlling equity annual financialACCouNtING uNIt holding pursuant to IfRS) (thous. euR) statementCompanies consolidated by the equity methodAISServis,s.r.o.,Brno 100.00 2,594 2012Benefita,a.s.,Prague 100.00 619 2012CeskaKooperativaLondonLtd.,London 100.00 844 2012CPPServis,s.r.o.,Prague 100.00 31 2012CROWN-WSFspol.sr.o.,Prague 30.00 13,791 2012ErstegemeinnützigeWohnungsgesellschaftHeimstätteGesellschaftm.b.H.,Vienna 99.77 205,735 2012Gewista-Werbegesellschaftm.b.H.,Vienna 33.00 56,024 2012GlobalExpert,s.r.o.,Pardubice 100.00 553 2012HOTELYSRNI,a.s.,Prague 72.43 7,678 2012KámenOstromeř,s.r.o.,Ostroměř 100.00 251 2012KIP,a.s.,Prague 100.00 9,027 2012MedialBeteiligungs-Gesellschaftm.b.H.,Vienna 29.63 33,482 2012Mělnickázdravotní,a.s.,Prague 100.00 4,846 2012NeulandgemeinnützigeWohnbau-Gesellschaftm.b.H.,Vienna 50.12 62,129 2012SIMMOAG,Vienna 10.04 500,060 2012SanatoriumAstoria,a.s.,KarlovyVary 75.06 4,031 2012SOZIALBAUgemeinnützigeWohnungsaktiengesellschaft,Vienna 50.12 264,687 2012SURPMO,a.s.,Prague 100.00 1,034 2012TECHGATEVIENNAWissenschafts-undTechnologieparkGmbH,Vienna 60.00 31,388 2012Unigeo,a.s.,Ostrava-Hrabová 100.00 6,586 2012UrbanbauGemeinnützigeBau-,Wohnungs-undStadterneuerungsgesellschaftm.b.H.,Vienna 50.12 89,331 2012
unconsolidated companies AkcionarskodrustvozazivotnoosiguranjeWienerStädtischePodgorica,Podgorica 100.00 1,130 2011AREALISLiegenschaftsmanagementGmbH,Vienna 50.00 403 2011BBC-BuildingC,s.r.o.,Prague 100.00 18,884 2012Beteiligungs-undImmobilienGmbH,Linz 25.00 14,085 2011
103Annual Report 2012IReportonRelationsfor2012
Share in capital Last in % (controlling equity annual financialACCouNtING uNIt holding pursuant to IfRS) (thous. euR) statementBeteiligungs-undWohnungsanlagenGmbH,Linz 25.00 136,081 2011BulstradHealthInsuranceAD,Sofia 97.00 998 2011CAPITOLSpolkazo.o.,Warsaw 100.00 668 2011DIRECT-LINEDirektvertriebs-GmbH,Vienna 100.00 43 2011EBSWohnungsgesellschaftmbHLinz,Linz 99.99 24,281 2011EXPERTASchadenregulierungs-Gesellschaftm.b.H.,Vienna 100.00 853 2011GEOHOSPITALSLLC,Tiflis 100.00 25,289 2012HORIZONTPersonal-,Team-undOrganisationsentwicklungGmbH,Vienna 100.00 202 2011JointStockInsuranceCompanyWINNERLIFE-ViennaInsuranceGroupSkopje 100.00 2,735 2011ÖsterreichischesVerkehrsbüroAktiengesellschaft,Vienna 36.58 134,563 2011PACDoverieAD,Sofia 92.58 17,366 2011PalaisHansenImmobilienentwicklungGmbH,Vienna 43.26 16,120 2011PFGLiegenschaftsbewirtschaftungsGmbH,Vienna 74.64 47 2011RenaissanceHotelRealbesitzGmbH,Vienna 40.00 1,235 2011RISKCONSULTSicherheits-undRisiko-ManagementberatungGesellschaftm.b.H.,Vienna 51.00 551 2011Schulring21BürohausErrichtungs-undVermietungsGmbH&CoKG,Vienna 100.00 4,812 2011Schulring21BürohausErrichtungs-undVermietungsGmbH,Vienna 100.00 14 2011SeniorenResidenzgemeinnützigeBetriebsgesellschaftmbH,Vienna 100.00 462 2011TowarzystwoUbezpieczennaZycie“Polisa–Zycie“SpolkaAkcyjna,Warsaw 96.49 7,166 2011UntereDonaulände40GmbH&CoKG,Vienna 100.00 13 2011UntereDonaulände40GmbH,Vienna 100.00 15 2011VBV-BetrieblicheAltersvorsorgeAG,Vienna 23.56 48,854 2011Versicherungsaktiengesellschaft“Kupala“,Minsk 98.26 1,901 2011ViennaInsuranceGroupPolskaSpolkazograniczonaodpowiedzialnoscia,Warsaw 100.00 5,914 2011ViennaInternationalUnderwritersGmbH,Vienna 100.00 108 2011WILAGmbH,Vienna 100.00 Established2012WNHLiegenschaftsbesitzGmbH,Vienna 100.00 Established2012WohnungsanlagenGesellschaftm.b.H.,Linz 100.00 231,852 2011WSVVermögensverwaltungGmbH,Vienna 100.00 Established2012
104Pojišťovna České spořitelny, a.s., Vienna Insurance Group
B. CONCLUSION
WithregardtothelegalrelationsbetweentheCompilerandrelatedpersonsthatwehavereviewed,itisclearthattheCompilerhas
notsufferedanyinjuryasaresultofagreements,otherlegalactsorothermeasurestaken,adoptedorconcludedbytheCompiler
inthefinancialyear2012intheinterestoforattheinitiativeofindividualrelatedpersons.
Pardubice,4February2013
Pojišťovna České spořitelny, a.s., Vienna Insurace Group
RNDr. Petr Zapletal, MBA Ing. Jaroslav Kulhánek Ing. Libor MánekChairmanoftheBoard Vice-chairmanoftheBoard Boardmember
105Annual Report 2012IReportonRelationsfor2012
DESCRIPTION OF THE RELATIONS TO THE CONTROLLED PERSONS: VIENNA INSURANCE GROUP AG WIENER VERSICHERUNG GRUPPE ANNEX NO. 1 TO THE REPORT ON RELATIONS
1. AGREEMENTS1.1. Sales services
IntheaccountingperiodtheCompilerhasprovided/receivedservicesonthebasisofagreementsenteredintoinpreviousaccoun-
tingperiodsorinthecurrentaccountingperiod:
Name of contract
AgreementonCooperationwhenusingbuildingNo.115andNo.1400inPardubiceNo.02/10
Agreementonsublet-tingnon-residentialspacesforaspeci-fiedperiod,inthewordingofAddendumNo.9of5.6.2012andAddendumNo.10of25.10.2012(No.129/04)
Contracting party
Kooperativapojiš-ťovna,a.s.,ViennaInsuranceGroup,Templová747,11001Prague
Kooperativapojiš-ťovna,a.s.,ViennaInsuranceGroup,Templová747,11001Prague
Date concluded
20.1.2010
10.12.2004
effective date
1.1.2010
2.1.2004
Subject of the contract
Regulationofmutualrightsandobligationswhenusingnon-residentialspaceinbothpropertiesservingbothparties
RentingofofficesNos.241,361and431withatotalfloorspaceof1378,74m2inthebuildingatnám.Republiky1400,Pardubice
Note
106Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Name of contract
Agreementonsublettingnon-residentialspaceNo.01/10(foraspecifiedperioduntil30.9.2013–subletterKooperativa)
Liabilityinsurancefordamagecausedbyvehicleoperation
InsurancepolicyNo.2268707823
InsurancepolicyNo.2268651903
InsurancepolicyNo.7720541430
InsurancepolicyNo.2060001407aboutsupplementaryinsurance–H73inthewordingofsupplements1to31
Contracting party
Kooperativapojiš-ťovna,a.s.,ViennaInsuranceGroup,Templová747,11001Prague
Kooperativapojišťovna,a.s.,Templová,747,11001Prague
Kooperativapojiš-ťovna,a.s.,ViennaInsuranceGroup,Templová747,11001Prague
Kooperativapojiš-ťovna,a.s.,ViennaInsuranceGroup,Templová747,11001Prague
Kooperativapojiš-ťovna,a.s.,ViennaInsuranceGroup,Templová747,11001Prague
Date concluded
20.1.2010
17.12.1999
29.2.2012
16.2.2011
30.12.2010
29.10.2010
effective date
1.1.2010
from1.1.2000
1.3.2012until28.2.2015
1.3.2011until29.2.2012
1.1.2011until31.12.2013
1.11.2010
Subject of the contract
RentofofficeNo.371,withatotalareaof298,22m2atnám.Republiky1400,Pardubice
Compulsorycorporatevehicleinsurancepolicy
Corporatevehicleaccidentinsurance
Corporatepropertyinsuranceandliabilityinsurancepolicy
VehicleinsuranceNA100PRO–thirdpartyaccident
Note
107Annual Report 2012IReportonRelationsfor2012
Name of contract
InsurancepolicyNo.8602886978
AgreementonsettlementofthecostsincurredinconnectionwithcarryingoutthedutiesofamemberoftheBoardofDirectorsrefNo.64/2011
Agreementoncostsharing
Contracting party
Kooperativapojiš-ťovna,a.s.,ViennaInsuranceGroup,Templová747,11001Prague
Kooperativapojiš-ťovna,a.s.,ViennaInsuranceGroup,Templová747,11001Prague
Kooperativapojiš-ťovna,a.s.,ViennaInsuranceGroup,Templová747,11001Prague
Date concluded
22.7.2011
30.6.2011
16.12.2010
effective date
1.8.2011until30.7.2014
1.1.2011
1.1.2011
Subject of the contract
GroupliabilityinsuranceforemployeesofPojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroup,fordamagecausedwhilstcarryingouttheirprofession
Thesubjectoftheagreementisregulationoftheconditionsforcostaccounting
Outsourcingintheareasof:–internalaudit,
includingthecontinuousmonitoringofthecontrolandmonitoringsystem;
–informationtechnologies
–processingselectedsalaryadministrationactivities
Note
108Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Name of contract
LicenseagreementMOSES102/07
QuotasharereinsuranceAgreement–Personalaccidentbusiness
Generalconditions(43/11)Specialconditions(44/11)
SAPCPmaintenanceandlicences
ServiceagreementMoSesKnow-howtransferSparkassenVersicherungAG
Contracting party
SparkassenVersicherungAktiengesellschaft
VIENNAINSURANCEGROUPAGWienerVersicherungGruppe
VIENNAINSURANCEGROUPAGWienerVersicherungGruppe
SparkassenVersicherungAGViennaInsuranceGroupWiplingerstrasse36-38,1010Vienna,Austria
Date concluded
14.11.2007
10.5.2011
3.5.2012
30.6.2009
27.9.2011
effective date
1.10.2007
1.1.2011
1.1.2012
1.1.2010
1.7.2011
Subject of the contract
LicenceandmaintenancefortheMOSESsystem
50%ofthequotashareforaccidentinsurance
LicensesandmaintenancefortheSAPsystemmod.CP
AgreementonsupportandtrainingforPČSworkersintheuseofprojectionsoftware
Note
109Annual Report 2012IReportonRelationsfor2012
1.2 Agreement on Mediating Activities
TheCompilerhasenteredintothefollowingAgreementonMediatingActivities,onthebasisofwhichitprovidedthefollowing:
Name of contract
Agreementonexclusivecommercialrepresentation,No.4600-400500/01-2005-A(134/04)
Agreementoncommercialrepresentation
Contracting party
Kooperativapojiš-ťovna,a.s.,ViennaInsuranceGroup,Templová747,11001Prague
Kooperativapojiš-ťovna,a.s.,ViennaInsuranceGroup,Templová747,11001Prague
Date concluded
29.12.2004
1.4.2010or22.12.2011
effective date
1.1.2005
1.4.2010or1.1.2012
Subject of the contract
Mediatingthesaleofnon-lifeinsurance
MediatingthesigningofinsurancepoliciesforComprehensiveInsuranceforParticipantsofPensionSchemes,i.e.FLEXILifeAssurance
Note
AddendumNo.6–pilotsaleofCarInsuranceČSproductCS3witheffectfrom16.1.2012AddendumNo.7–rightsandobligationsofparticipants,salesovertheinternetwitheffectfrom1.9.2012
SalebymeansofthecompanyKapitol,22.12.2011newcontractconcludedwithsalesextendedtoFLEXILifeAssurancewitheffectfrom1.1.2012
110Pojišťovna České spořitelny, a.s., Vienna Insurance Group
Comments:
Allrelationsreferredtointhisannexhavearisenbetweenrelatedpersons,thosebeingPojišťovnaČeskéspořitelny,a.s.,Vienna
InsuranceGroupandtheVIENNAINSURANCEGROUPAG,WienerVerischerungGruppe.Whenenteringintotheserelations,the
lawsinforceintheCzechRepublicwererespectedandthepricesweredeterminedwithregardtotheprovisionsofthelawon
incometax,i.e.atnormalmarketpricesatthetimeofenteringintothesecontractualrelations.Duringtheaccountingperiodnot
oneofthecontractingpartiesappliedforanypropertydamage.
PursuanttoActNo.38/2004Coll.,insurancemediationisgovernedinthecontractualrelationsbydefiningthemutualrightsand
obligationsofthecontractingparties,withthecurrentdefinitionoftheconditionsfortheprocess,aclaimandthepaymentof
feesforservicesprovidedrelatedtosellinginsurance.Partoftheseagreementsisauthorisationgrantedbytherelatedperson
forprovidingtheseservicesundertheconditionslaiddownbytheabove-mentionedact.
Annual Report 2012INon-financialSection 111
Non-financial Section
1. FURTHER FORESEEABLE DEVELOPMENTS IN THE COMPANY’S ACTIVITIESWith its written premiums Pojišťovna České spořitelny, a.s.,
ViennaInsuranceGroup,(hereinaftertheCompany)holdsthird
placeinthelifeassurancemarket.
TheCompany’slong-termbusinessstrategyisgroundedinthe
managementandplanningofproductinnovations,buildingloy-
altyamongourclientsandbusinesspartners,increasingthe
stabilityoftheinsuranceportfolioandcontinuouslyimproving
the client service for business partners and the end-consu-
mersofinsuranceservices.
Further developmentwill be led by an attempt to ensure the
demands for continuously meeting the Company’s business
objectivesand itsfinancialstability.Meeting this taskwillbe
verychallenging.TheCompany’sactivityislimitedbytheever-
growingcompetition,bothasconcernsproductsinthecontext
oflifeassurance,aswellasinthefieldofsubstitutionproducts,
whichareprovidedintheframeworkofimplementingthepen-
sion reform. The economic situation has been worsening for
some timenow. This is reflected in the lowest interest rates
ever,whichreducestheinvestmentattractivenessofthepro-
ductsofferedandincreasesthepressureonthecostsalloca-
ted.Thisenvironmentisdeterminedintermsoftighterregula-
tionof the insurance industryandrapidlyevolving legislation.
In themedium term, theCompanywill have to dealwith the
approved reforms in taxation, thepensionandhealthsystem
andwithanamendmentoftheCivilCode.
Pojišťovna České spořitelny, a.s., Vienna Insurance Group 112
In2012theCompanycontinuedwithitscommunicationsbased
ontheconceptof“Welikechanges”,themainfootingofwhichis
theFLEXILifeAssuranceproduct.Thephilosophyofthisproject
willchangetheformof“enteringintoaninsurancecontract”used
sofarandwillreplaceitwithanewconcept,basedontheconcept
of“openinsurancecontracts”.Inaddition,in2012theCompa-
ny’scommunicationsputagreateraccentonthetrulyseriousris-
ksassociatedwithnormallife,and,inassociationwiththis,revi-
sedthetermsofsettlinginsuranceclaimsinfavouroftheserisks.
Attheendof2012,therewerechangesintheproductssothat
theseproductscomplywiththerequirementslaiddownbythe
EuropeanCourtofJusticeDecisionontheunificationofprices
forinsuringmenandwomen.Atthesametimeasthischange
therewerecertainotherchangestoproducts,inparticular:dou-
bleindemnityintheeventofdeathinatrafficaccident,achoice
ofinsuranceforseriousdiseases,insuranceoflong-termcare
fordisabilityinsuranceandmore.
TomaintainloyaltyandresponsibilitytheCompanyiscontinuing
intheloyaltyprogramme,whichencouragesitsclientstowards
a long-term partnership. This programme provides no-claims
bonuses. For the first timesince introducing thisprogramme
this year clientswill be informedabout thestatusof thebo-
nusesfor2012intheirinsurancecontracts.
The Company is constantly innovating its insurance manage-
mentprocedures.Proofofthiscareistheongoingcomputeris-
ationofinsurancecontractadministration.LastyeartheCom-
pany further developed these innovations, which were aimed
atstreamlining theacquisitionprocessby the introductionof
electronicinsurancecontractformsforourbusinesspartners.
AnewversionoftheInternetInsuranceCalculatorwasprepa-
red,whichallowsourclientstosetupindividualinsurancetai-
loredtotheirrequirements.AfterarrangingwithČeskáspořitel-
na,itslargestdistributor,theCompanyaddedanapplicationto
oneofitsmostpopularservices“SERVIS24”.Thisapplication
supportsinsurance.Inthismannerourjointclientsobtaincom-
prehensive information about their insurance, they canmake
selectedchangestoinsuranceand,through“E-document”and
“E-invoice”,gettherequisitedocumentsandevenpayinsuran-
cepremiumsinthismanner.
Theentireprocessofinnovatinginsurancemanagementisfo-
cusedonincreasingproductivity,savingtimeandmoney,inclu-
dingraisingthequalityoftheoutputsrelatedtoprocessingin-
surancecontracts.TheCompanywillcontinueinthistrendin
thenextperiod.
113Annual Report 2012INon-financialSection
2. ACTIVITIES IN THE FIELD OF RESEARCH AND DEVELOPMENTDue to the nature of its activities, the Company has limited
options in the field of research and development. Therefore,
developmentconcentratesonintegratingnewinformationtech-
nologiesandformsofcommunicationintotheprocessofprovi-
dinginsuranceservices.
3. ENVIRONMENTAL PROTECTION AND LABOUR RELATIONS
ThenatureoftheCompany’sbusinessputstheminimumbur-
denontheenvironment.Duringitsactivitiesitmeetstherequi-
rementsplacedonitbyCzechlaw.Despitethelimitedoptions,
giventhesubjectmatterofthebusiness,theCompanyalways
bearstheissueofenvironmentalprotectioninmind.Lastyear
webegansortingwasteanddisposingof itdependingon its
character.Averysignificantdecisionwasmadeinthefieldof
renewingtheITinfrastructurewiththeaimofnotonlyensuring
ithasadequatecapacityandquality,butalsowithregardtofull
recyclingandsignificantenergysavingsinrunningtheCompany.
Intheareaoflabourrelations,theCompanystrivestobeamuch-
sought-afteremployer.Thereforeitalwayspaysagreatdealof
attention todeveloping itsemploymentpolicyandsocialpro-
grammes,withtheaimofbeinganattractiveemployer inthe
labourmarket.TheCompanyusesmodernmethodsforincen-
tive systems in human resourcesmanagement,with the use
ofsurveysforbonuses,carriedoutincooperationwiththeHay
Group.TheCompanyprovidesemployeeswithawiderangeof
financialandnon-financialbenefits.TheCompanycontinuously
assessestheconditionsoftheworkingenvironment,tomeet
theconditionsforfulfillingworktasksandcomplyingwithsafety
atworkprinciples,includingregularandcontractuallyensured
healthcareforitsemployees.Employeetrainingandprofessio-
nal development is oneof theCompany’s developmental pri-
orities. The company has introduced a system for assessing
anddevelopingemployees,onthebasisofwhichitsstaffare
allowed various forms of education, including increasing and
broadeningtheirqualifications.
4. THE COMPANY’S ORGANISATIONAL BODIES ABROADThecompanyhasnoorganisationalbodiesabroad.
5. ADDITIONAL REQUIREMENTS UNDER SPECIFIC LEGISLATION The Company meets the requirements for the subject of bu-
siness–insurance–inparticular,thoselaiddownbytheIns-
uranceAct,or,bytheActonInsuranceIntermediariesandon
IndependentLossAdjusters.Therearenomorespecificrequi-
rementsfortheCompany’sactivities.
114Pojišťovna České spořitelny, a.s., Vienna Insurance Group
PojišťovnaČeskéspořitelny,a.s.,ViennaInsuranceGroupPardubice,nám.Republiky115,53002CompanyNo.:47452820Infoline:+420800207207E-mail:[email protected]:www.flexi.cz
AnnualReport2012Consultation,productionanddesign:©Sandstudios,2013