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Croatia osiguranje d.d.
Annual Report • Apr 7, 2021
2087_10-k_2021-04-07_8bad32be-d59c-4a3f-833e-764facd31d50.pdf
Annual Report
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Annual Report for 2020
This document is a translation of the original Croatian version and is intended to be used for informational purposes only. While every effort has been made to ensure the accuracy and completeness of the translation, please note that the Croatian original is binding.
Contents
| Management Report for 20203 | |
|---|---|
| Corporate Governance Statement13 | |
| Consolidated and separate financial statements for 2020 19 | |
| Statements prescribed by the Ordinance of the Croatian Financial Services Supervisory Agency……………………172 |
CROATIA osiguranje d.d.
Management Report for 2020
Insurance market of the Republic of Croatia in 2020
During 2020 the insurance market of the Republic of Croatia has recorded gross written premium decrease of 0.5 percent (HRK 51m). On the market of the Republic of Croatia (including EU-based companies operating in the Republic of Croatia directly or through its subsidiaries), the decrease in premiums amounted to 2.6 percent or HRK 265m and primarily relates to life insurance while non-life insurance premiums recorded growth. Premiums recorded in EU-based market, where operates eight insurance companies including CROATIA osiguranje d.d., recorded growth of 49.3 percent or HRK 214m.
The total life insurance premium on the market of the Republic of Croatia in 2020 amounted to HRK 2.7 bn, which is 13.6 percent or HRK 425m less than in the previous year. Classic life products premium decreased by HRK 291m compared to the previous year, while insurance premium where the policyholder bears the investment risk has decreased (UL products) by HRK 134m.
The total non-life insurance premium on the market of the Republic of Croatia in 2020 amounted to HRK 7.3 billion, which is an increase by 2.2 percent or HRK 160m compared to the previous year. Motor vehicles insurance (liability insurance, casco insurance and automobile assistance) increased by 4 percent compared to the previous year, property insurance increased by 6 percent, while health insurance increased by 5 percent. Transport insurance premium stopped a negative trend and recorded 6 percent growth in 2020. Accident insurance records decrease by 3 percent, while loan insurance recorded decrease of 27 percent compared to previous year.
CROATIA osiguranje d.d., Jagićeva 33, Zagreb (hereinafter: the Company), is still the leading company in the Republic of Croatia with a total market share of 26.7 percent, which is 0.5 percentage points higher than in the previous year.
Operating results and financial position of the Company and the Group
Company
In 2020, CROATIA osiguranje d.d. strengthened its leading market position. For the first time after several years of decline, the trend was reversed and growth in market share was achieved. CROATIA osiguranje d.d. is a convincing leader on the Croatian market with a share of 26.7 percent, which is 0.5 percentage points more than in the previous year.
CROATIA osiguranje d.d.'s operations in 2020 were burdened by a number of one-off items, the largest being the costs of the earthquake in March and December and the decision of the Supreme Court of the Republic of Croatia to increase orientation criteria and the amount of immaterial damages. In the conditions of the corona crisis, the inflows from dividends and collection of receivables were also reduced. The net effect of the mentioned events and activities had a negative impact on the pre-tax result by more than HRK 100m. This negative impact was significantly offset by the operational excellence and positive effects of the company's transformation programs, and in 2020 the CO Group generated a net profit of HRK 328m.
As a market and digital leader, CROATIA osiguranje d.d. is currently investing more than HRK 200 million in digitalization and development of new products. In 2020, a number of successful projects were launched, from the remote claims reporting process, the new Moja Croatia application and the company's new website, to the launch of a completely new product, Laqo osiguranje - the first Croatian 100 percent digital insurance. A specialist postgraduate study Products, Digital Innovations and Technologies in Insurance (Insurtech) was developed and launched with the Faculty of Electrical Engineering and Computing in Zagreb. The trend of strengthening the internal and expanding the external sales network continued, and a new call centre was opened in Vukovar.
CROATIA osiguranje d.d. has been going through a transformation process since the privatization in 2014. At the beginning, a financial restructuring was performed with a share capital increase amounting to HRK 840m, thus reaching a strong capital adequacy for the year 2020 of 268 percent for the Company. The organisational restructuring began in a situation where only about 23 percent of employees were in sales and by the end of 2020, this share increased to 62 percent in sales services. The process continues, so that in the coming years there will be at least 70 percent of those who work in sales services and are directly oriented to clients and the market.
The restructuring results are visible in the financial results. In 2020, CROATIA osiguranje d.d. reported profit before tax in the amount of HRK 274.1m (profit after tax of HRK 229.6m).
The total gross written premium (before adjustments for the net increase in the provision for premium receivables and related write-offs) increased by 0.1 percent and amounted to HRK 2,742m. Earned premiums amounted to HRK 2,499m and increased by 0.5 percent. The written premium in non-life insurance amounted to HRK 2,288m, which is an increase of 3.0 percent compared to the same period last year.
The largest relative increase of premium is recorded in insurance against fire and natural disasters and motor third party liability insurance, while the largest decrease of premium is recorded in life insurance.
From the non-life and life insurance investments, finance net result was realised in the amount of HRK 269m, which is a decrease by 22.7 percent compared to the previous year.
Gross paid claims amounted to HRK 1,725m representing an increase of 7 percent compared to the previous year.
Total administrative costs amounted to HRK 390m, recording a decrease of 3.9 percent compared to 2019. Acquisition costs amounted to HRK 478m, recording a decrease of 6.7 percent compared to the previous year, as a result of continued cost savings measures.
As of 1 January 2019, the Group started applying the new accounting standard IFRS 16 Leases.
The following is a summary of key business indicators which the Company monitors as alternative performance indicators which together with other measures defined by International Financial Reporting Standards provide useful information regarding the Company's operational performance. They are calculated based on HANFA reports, but according to the formulas shown below:
| Change in | |||
|---|---|---|---|
| Key performance indicators | 31 Dec. 2019 | 31 Dec. 2020 | percentage points (p.p.) |
| Claims ratio (non-life) * | 54.0% | 56.2% | +2.2 |
| Cost ratio (non-life) ** | 42.3% | 39.1% | -3.2 |
| Combined ratio (non-life) | 96.3% | 95.3% | -1.0 |
* Claims ratio = (Income from commissions and fees + Other insurance-technical income + Net claims incurred + Change in mathematical provisions and other technical provisions + Cost for premium returns + Other technical expenses) / Net Earned premiums
** Cost ratio = Acquisition costs and administrative expenses / Net Earned premiums
The combined ratio represents a sum of claims and cost ratio and is the most important financial operative performance indicator for non-life insurance. It is normally presented as percentage, and ratio below 100 percent indicates profitable insurance result, while result above 100 percent represents non-profitable result. Combined ratio amounted to 95.3 percent in 2020, which is a decrease of 1.0 percentage point compared to the same period of 2019. The claims ratio has increased by 2.2 percentage points and amounted to 56.2 percent. The cost ratio amounted to 39.1 percent which is 3.2 percentage points lower than in 2019.
Total assets of the Company as at 31 December 2020 amount to HRK 11.5 billion, which represents an increase of 4.2 percent compared to 31 December 2019.
Technical provisions amounted to HRK 7.0 billion and are 4.5 percent higher than the technical provisions as of 31 December 2019.
The structure of financial assets (HRK billion)
Group
In 2020, the CROATIA osiguranje d.d. group (hereinafter: the Group) generated consolidated profit after tax and non-controlling interest in the amount of HRK 328m.
In 2020, the total gross written premium (before adjustments for the net increase in the provision for premium receivables and related write-offs) at the Group level amounted to HRK 3,240m, which represents a decrease by 2.0 percent. The gross written premium of non-life insurance amounted to HRK 2,689m which represents an increase by 1.1 percent, while gross written premium of life insurance amounted to HRK 551m which represents a decrease by 14.7 percent.
Earned premiums in the reporting period amounted to HRK 2,980m which represents a decrease by 0.8 percent compared to the same period last year.
From the non-life and life insurance investments, the Group generated finance income in the amount of HRK 499m which represents an increase of 2.6 percent, with a finance cost of HRK 149m which represents an increase of 41.8 percent.
Gross claims in 2020 amounted to HRK 1,955m, which is an increase of 6.0 percent compared to the same period last year.
Acquisition costs and administrative expenses amounted to a total of HRK 1,161m and represent a decrease by 4.2 percent in which administrative expenses increased by 1.3 percent, and acquisition cost increased by 6.9 percent. The decrease in acquisition costs and administrative expenses is the result of, among other things, further business reorganization.
| Key performance indicators | 31 Dec. 2019 | 31 Dec. 2020 | Change in percentage points (p.p.) |
|---|---|---|---|
| Claims ratio (non-life)*** | 54.2% | 55.8% | +1.6 |
| Cost ratio (non-life)*** | 41.7% | 39.2% | -2.5 |
| Combined ratio (non-life)*** | 95.9% | 95.0% | -0.9 |
***Only members of the Group performing insurance and reinsurance activities were taken into consideration while calculating Group ratios.
Combined ratio for 2020 is 95.0 percent, which is a decrease of 0.9 percentage points compared to the same period in 2019. The claims ratio increased by 1.6 percentage points to 55.8 percent. The cost ratio is 39.2 percent or 2.5 percentage points lower than in 2019.
Total assets of the Group as at 31 December 2020 amount to HRK 13.3 billion, which represents an increase by 4.9 percent compared to 31 December 2019.
Technical provisions amounted to HRK 8.0 billion, which represents an increase by 4.4 percent compared to the technical provisions as at 31 December 2019.
Significant business events in the reporting period
Approvals from the Croatian Financial Services Supervisory Agency to perform the functions of members of the Management Board
The Croatian Financial Services Supervisory Agency (HANFA), at its meeting of the Governing Board held on 5 March 2020, issued a resolution authorising Vančo Balen to act as a member of the Management Board of CROATIA osiguranje d.d. for a term of office until 31 December 2022 beginning on the date of appointment to the function.
Also, at the meeting of the Governing Board held on 12 March 2020, HANFA issued a resolution authorising Robert Vučković to act as a member of the Management Board of CROATIA osiguranje d.d. for a term of office until 31 December 2022, beginning on the date of appointment to the function.
Furthermore, at the meeting of the Governing Board held on 9 April 2020, HANFA issued a resolution authorizing Luka Babić to act as a member of the Management Board of CROATIA osiguranje d.d. for a term of office until 31 December 2022, beginning on the date of appointment to the function.
At its meeting held on April 17, 2020, the Supervisory Board appointed members of the Management Board to the mentioned functions.
Impact of the COVID-19 outbreak on the Company's operations
The existence of the coronavirus (COVID-19) was confirmed in early 2020 and spread to mainland China and beyond, and in late February 2020 to Croatia, causing disruption in business and economic activities.
From the information available at the time of preparation of these financial statements and based on numerous publicly available macroeconomic projections (CNB), despite the improvement in the epidemiological situation in the third quarter of 2020, the subsequent unfavourable development of the epidemiological situation has impact on a strong slowdown in recovery in the last quarter and this trend is expected to continue in early 2021. It is expected that the pandemic will be relatively successfully controlled during 2021, and with the application of an effective vaccine, the gradual recovery of economic activity could begin in the second quarter. The recovery in personal consumption affects the demand for insurance services since the volume of insurance premiums written is related to GDP trends.
In addition, Group has identified the following key areas that could be affected by adverse economic conditions:
- volatility of comprehensive income from investments, as a result of developments on the financial markets,
- increased credit risk and increased impairment provisions for insurance receivables,
- increased number of life insurance policy surrenders.
After the significant volatility of domestic and foreign markets at the beginning of 2020, at the end of the year there was a partial slowdown but with a further decline in the value of companies whose activities are closely related to the sectors most affected by the pandemic (transport, especially air transport, tourism and hotel business, service activities).
The credit risk of the companies cannot be assessed exactly at this time, and the correction is expected after the announcement of the financial results for 2020. In addition, the assessment of the effects on banks' operations is expected in the first quarter of 2021, when the results will be known after the moratorium due to the COVID-19 pandemic, among citizens and legal entities.
As part of the own risk and solvency assessment process (ORSA), a scenario of prolonged impact of the COVID-19 pandemic was created, which includes a graded analysis of the possible impact of the pandemic on business, results and solvency ratio of the Company and the Group, taking into consideration current knowledge about the impact of the pandemic, and also the measures which can be taken to minimize negative impacts as much as possible. The results of the scenario imply a certain decrease in the solvency ratio, but it should remain at levels significantly higher than the regulatory ones, and the Company's and the Group's solvency should not be questioned in any way. Also, last solvency calculation which was performed as at 31.12.2020. showed that despite the negative effects of COVID-19, the Company and the Group is still operating with a very high solvency ratio of 268% for the Company (as at 31.12.2019.: 277%) and 229% for the Group (31.12.2019.: 239%). Regarding liquidity, the Company and the Group still have the satisfactory amounts of liquid resources that are sufficient for discharging all obligations that have become due and also has at its disposal instruments available for obtaining additional liquidity if necessary.
The Company and the Group will continue to actively monitor the development of the COVID-19 outbreak and if it should be considered to significantly affect the Company's business and financial position, it will fully comply with the Capital Market Act.
Earthquakes in the area of the Republic of Croatia
On 22 March 2020, in the area of the City of Zagreb and on 29 December 2020, in the area of the City of Petrinja, a series of earthquakes were recorded. In some insurance contracts, the Group also provides insurance for earthquake insurance risk. The amount of claims from Group's insurance contracts caused by this event (after reinsurance) amount to more than HRK 40m per individual event, i.e. a total to more than HRK 80m (after reinsurance).
Decision of the Supreme Court of the Republic of Croatia on increase of Orientation criteria for determining the amount of fair financial compensation for immaterial damages
As at 15.6.2020 the Supreme Court of the Republic of Croatia has adopted a decision on increase of Orientation criteria for determining the amount of fair financial compensation for immaterial damages, by 50%, and it will be applied to all future compensation proceedings, but also at those that are in progress. This decision led to an increase in technical provisions from insurance that is, it has an effect on profit before tax (after reinsurance) in the reporting period in the amount of over HRK 80m. In addition to the effect on the reporting period, the consequences of the decision are higher future expenses for insurance claims.
HANFA's Decision regarding prohibition of dividend payment
The Governing Board of HANFA, at its session held on 26 March 2020, adopted a decision prohibiting CROATIA osiguranje d.d., Zagreb, payment of dividends until 30 April 2021.
Such a decision was made for insurance companies in the Republic of Croatia due to exceptional market circumstances, with the aim of ensuring stable operations of insurance companies and maintaining the stability of the financial system. Also, the regulator's intention is to strength the liquidity of insurance companies in the context of the coronavirus pandemic, but also in light of the recent earthquake in the capital city of the Republic of Croatia.
Resignation of the member of the Supervisory Board of CROATIA osiguranje d.d.
Mr. Damir Vanđelić, the member of the Supervisory Board of CROATIA osiguranje d.d., resigned from his membership in the Supervisory Board of CROATIA osiguranje d.d. as of 31 December 2020.
Significant events after the end of the reporting date
No events occurring after the reporting date were material to the financial statements for the reporting period. This is also described in Note 34 Events after the balance sheet date of the Consolidated and separate financial statements for 2020.
Expected development in the future
In 2020, real GDP decrease of 8.4 percentage is expected. The insurance market also fell in 2020, but at a much lower rate of 2.6%. Economic growth for 2021 will strongly depend on the speed of COVID-19 pandemic suppression in the country (speed of population vaccination) and abroad (speed of border opening and abolition of measures, especially in EU countries) as well as the moment of abolition of all measures. If the tourist season is at the level of expectations, then the insurance market will recover, otherwise a further decline in the market and intensification of competition is expected.
In accordance with the above, the company will in the coming period improve and refine digital communication channels:
- development of a new company website
- new functionalities of the mobile application Moja Croatia
- remote damage reporting
- additional emphasis on digital communication (delivery of IDD documentation by e-mail, digital signatures, delivery of invoices by e-mail, "pay-by-link"…)
Furthermore, the earthquakes in city of Zagreb and Banija county left long-term consequences on people's lives and property, but also opened the door to raising awareness of the need to insure property. In the coming period, the company will try to raise awareness of the need for insurance through various campaigns and will simplify the conditions for accepting certain insurance conditions.
In the forthcoming period, the goal is to continue the best practice of transferring operational excellence from the parent to subsidiaries in the region. New sources of growth in the future are combinations of organic and acquisition activities. New acquisitions are aimed at strengthening the insurance business and further development of healthcare offering in addition to using the synergies arising from the insurance offer.
Research and development activities
Customer focus and continuous innovations are the values of the Group that underlie research activities and new product development. The aim is to provide fast and quality service and increasing client satisfaction.
In accordance with the above, the company launched a completely new product, Laqo osiguranje - the first Croatian 100 percent digital insurance. With the launch of this innovative product whose quality is at the level of the best modern digital solutions, Croatia joins a small number of European countries with this type of insurance.
A specialist postgraduate study Products, Digital Innovations and Technologies in Insurance (Insurtech) was developed and launched with the Faculty of Electrical Engineering and Computing in Zagreb. The aim of the study is to further improve the insurance profession through the education of experts who will handle the development of industry in Croatia and the region.
Education of employees in the field of artificial intelligence has begun. More than 130 employees enrolled in the "Elements of AI" training. The goal is to use new knowledge and ideas to improve various business processes and services to ensure and increase the satisfaction of both customers and employees of the company.
Company branch
As at 31 December 2020, the Company has one registered branch (Branch Ljubljana). In its legal transactions, the branch operates under CROATIA osiguranje d.d. branch Ljubljana, in Croatian, and under CROATIA ZAVAROVANJE d.d. branch Ljubljana, in Slovenian.
Financial risk management
Financial risk management is described in Note 2.38. Financial risk management to the Consolidated and separate financial statements for 2020.
Other
In accordance with the statutory obligation and the permitted exemption pursuant to Art. 21.a of the Accounting Act, the Company has prepared a nonfinancial report to be published as part of the annual financial report of the parent company Adris Grupa d.d.
During 2019 and 2020, PricewaterhouseCoopers d.o.o. (PwC) provided education services.
Corporate Governance Statement
CROATIA osiguranje d.d., PIN 26187994862, Vatroslava Jagića 33, Zagreb (hereinafter: the Company), applies the Corporate Governance Code, which was jointly adopted by the Croatian Financial Services Supervisory Agency (HANFA) and Zagreb Stock Exchange and is available on their web sites.
By applying the provisions of the Corporate Governance Code, Rules of the Zagreb Stock Exchange (which are available Zagreb Stock Exchange's website), the Companies Act (Official Gazette 111/93, 34/99, 121/99, 52/00, 118/03, 107/07, 146/08, 137/09, 125/11, 152/11, 111/12, 68/13, 110/15; 40/19) and the Capital Market Act (Official Gazette 65/18, 17/20), the Company makes its operations and operating results transparent and accessible to the public. All explanations and possible deviations from the above rules are going to be published in the Compliance Questionnaire, in accordance with the Corporate Governance Code.
In order to take the necessary measures to achieve its business objectives, the Company has established a system of internal controls as a totality of elements: an adequate organisational structure, an implemented management system with the establishment of key and control functions, prescribed control activities for portfolio management, administrative and accounting procedures, security and adequate information system including a reporting system at all levels of the Company.
The system of internal controls in financial reporting ensures that the Company's financial statements present its financial results and financial position with reasonable accuracy and that they comply with International Financial Reporting Standards.
The Company's accounting policies represent the principles, rules and practices that the Company applies in preparing and presenting financial statements. The Company's accounting policies are defined by a special Rulebook. A summary of significant accounting policies is disclosed in the Company's financial statements.
The internal accounting control procedures include the control of formal, substantive and computational accuracy of an accounting document:
-
Control of formal accuracy of an accounting document determines whether the document has been prepared in accordance with applicable regulations,
-
Substantive control of an accounting document determines whether the business changes actually occurred and in the range as indicated,
-
Control of computational accuracy of an accounting document means the control of mathematical operations (division, multiplication, addition and subtraction), based on which the results are obtained in the document.
The control of accounting documents is carried out in accordance with the Company's organizational structure and internal regulations by a person holding authorisation to do so as defined in the internal documents of the Company. The organisational chart is located on the internal network and is available to all employees. The control of formal, substantive and computational accuracy is confirmed by a physical and/or electronic signature of the person who has signed it.
In accordance with the provisions of the Insurance Act, the Company has formed an internal audit function at the highest organizational level which structurally reports directly to the Management Board and functionally to the Audit Committee and the Supervisory Board. Activities of the internal audit function are based on the work plans adopted by the Supervisory Board following a positive opinion of the Management Board. The internal audit function analyses and evaluates the activities of the Company and provides expert advice, recommendations and advice on controls. Internal audit assists the Company in meeting the set goals by introducing a systematic and disciplined approach to assessing and improving the effectiveness of risk management, control and corporate governance.
The Company has established a risk management function in the form of an independent organisational unit directly responsible to the Management Board. This function established a risk management system consisting of a set of internal acts, procedures and methodologies to identify, estimate or measure, control and report risks. The risk management system is regularly being improved in line with best market practices and the requirements of external regulations. More detailed information on risk management can be found in the Notes to the financial statements.
In accordance with the Insurance Act, the Company has formed an effective compliance function which includes advising and reporting to the Management Board and Supervisory Board on Company compliance with the Insurance Act and other regulations governing the operation of an insurance company, carrying out an assessment of the possible impact of changes in the legal environment on Company operations, and determining and assessing compliance risk.
The Company has established an effective actuarial function that according to the Insurance Act coordinates calculation of technical reserves, ensures the appropriateness of methodologies and models, evaluates the adequacy and quality of data needed to evaluate technical reserves, compares the assumptions and experience, and gives its opinion to the Management Board and Supervisory Board about calculating technical reserves, insurance risk takeovers, the appropriateness of the reinsurance program and participation of actuarial function in the implementation of the Company's risk management system.
In accordance with the Insurance Act, the Company has appointed a certified actuary who verifies data, methods and underlying documents for the calculation of technical provisions according to accounting regulations, and whether the technical provisions and premiums are designed to enable a permanent fulfilment of all Company obligations under the insurance or reinsurance contract regarding which the actuary provides an Opinion and Report to the Management Board and Supervisory Board.
Under the Insurance Act, the Company applies internal control systems to Group companies involved in the insurance part of business, while the companies concerned apply systems of internal controls in accordance with its legal framework.
As at 31 December 2020, significant direct holders of shares in the Company are:
- − ADRIS GRUPA d.d. with a share of 66.39% and
- − Restructuring and Sales Centre, for the Republic of Croatia, with a share of 30.62%.
The data on the 10 largest shareholders is available on the website of the Central Depository and Clearing Company.
According to the Company's applicable Articles of Association, the limitation of voting rights of shareholders or partial restriction of voting rights does not exist.
The members of the Management Board and the Supervisory Board are not shareholders of the Company.
The Company does not own treasury shares, and the General Assembly did not authorise the Company to acquire treasury shares
The bodies of the Company are the General Assembly, the Supervisory Board and the Management Board.
Corporate Governance Statement
General Assembly
The General Assembly of the Company consists of all shareholders of the Company.
The General Assembly of the Company, in accordance with the provisions of the Articles of Association, makes decisions by public voting at sessions, convened usually by the Management Board and the Supervisory Board only when it deemed this necessary for the benefit of the Company. The powers of the General Assembly are regulated by the Company's Articles of Association and do not deviate from the powers which General Assembly of a public limited company has under the Companies Acts. A shareholder has the right to participate and vote at the General Assembly only if he / she has registered his / her participation in writing to the Management Board no later than six days before the General Assembly.
The Company's Articles of Association may be amended at the General Assembly in accordance with the provisions of the Companies Act, and the Supervisory Board is authorized to amend the provisions of the Articles of Association based on the decision of the General Assembly to the extent of editorial changes.
Supervisory Board
The rightto appoint individual members of the Supervisory Board are set out in Article 24 of the Articles of Association in favour of the Republic of Croatia and employees of the Company. In accordance with the provisions of the Articles of Association, and in connection with the provision of Article 256, paragraph 3 of the Companies Act, the Republic of Croatia has the right to directly appoint two members of the Supervisory Board, as long as it holds at least 25% of the Company's ordinary shares plus one ordinary share; however, as long as it holds at least 10% of ordinary shares of the Company, pursuant to the same statutory provisions, and in connection with the provision of Article 256 paragraph 3 of the Companies Act, the Republic of Croatia has the right to directly appoint one member of the Supervisory Board. One member of the Supervisory Board is appointed by the work council of the Company, i.e. by employees, through direct and secret elections in the manner prescribed for the election by the work council, and they are entitled to this right as long as the conditions prescribed by the Labour Act are met.
The Supervisory Board has competencies prescribed by law and the Company's Articles of Association. In the period from 1 January 2020 to 31 December 2020, the Supervisory Board of the Company consisted of:
- Roberto Škopac President
- Željko Lovrinčević, PhD Vice President
- Vitomir Palinec Member
- Damir Vanđelić Member until 31 December 2020
- Hrvoje Patajac Member
- Vlasta Pavličević Member
During 2020, the Supervisory Board held a total of 10 meetings, and all members of the Supervisory Board attended all meetings of the Supervisory Board during 2020.
The Supervisory Board formed the Audit Committee and the Nomination and Remuneration Committee.
The Audit Committee consists of three members appointed by the Supervisory Board from among its members.
In the period from 1 January 2020 to 31 December 2020, the Audit Committee consisted of:
- Hrvoje Patajac President
- Željko Lovrinčević, PhD Member
- Vitomir Palinec Member
CROATIA osiguranje d.d.
Corporate Governance Statement
Report on the work of the Audit Committee for the period from 1 January 2020 to 31 December 2020.
The Audit Committee is an expert body that provides support to the Supervisory Board in terms of improving the quality of supervision that the Supervisory Board is obliged to conduct in accordance with the prescribed competencies.
The Audit Committee performs the tasks determined by the Audit Committee's Rules and Procedures, and in accordance with the provisions of the Audit Act, Regulation (EU) no. 537/2014, Code of Corporate Governance of the Zagreb Stock Exchange d.d. and the The Croatian Financial Services Supervisory Agency and other applicable regulations. The task description of the Audit Committee is publicly available, free of charge, on the website of CROATIA osiguranje d.d.
The organization and manner of work of the Audit Committee are regulated in more detail by the Audit Committee's Rules and Procedures. During 2020, the Audit Committee held a total of 6 sessions and all members of the Audit Committee attended all sessions of the Audit Committee during 2020.
At its sessions during 2020, the Audit Committee discussed the following:
- reports on the Company's operations,
- report on risk and solvency assessment,
- report on the solvency and financial condition of the CROATIA osiguranje Group,
- strategic plan and annual internal audit plan,
- internal audit reports,
- actuarial function reports,
- risk management report,
- unaudited consolidated and non-consolidated financial statements,
- reports to the Audit Committee by the Company's auditors,
- audit engagement for 2020,
- auditor's questionnaire regarding the Auditor's Report on the report on the relations of the company CROATIA osiguranje d.d. with affiliated companies,
- procurement of additional audit services for 2020,
- decision on the adoption of the Company's investment limit,
- Internal Audit Charter,
- Rulebook on non-audit services.
The Audit Committee regularly reported to the Supervisory Board on the recommendations made at its meetings in form of the submitted minutes of the Committee meetings.
The Nomination and Remuneration Committee consists of three members appointed by the Supervisory Board from among its members.
In the period from 1 January 2020 to 31 December 2020, Nomination and Remuneration Committee consisted of:
- Roberto Škopac President
- Vitomir Palinec Member
- Hrvoje Patajac Member
Corporate Governance Statement
Report on the work of the Nomination and Remuneration Committee for the period from 1 January 2020 to 31 December 2020.
The Nomination and Remuneration Committee is an expert body that provides support to the Supervisory Board in terms of improving the quality of supervision that the Supervisory Board is obliged to carry out in accordance with the prescribed competencies.
The Nomination and Remuneration Committee performs tasks determined by the Decision of the Supervisory Board on the establishment of the Nomination and Remuneration Committee and the appointment of the members of the Committee, and in accordance with the provisions of the Corporate Governance Code of the Zagreb Stock Exchange and the Croatian Financial Services Supervisory Agency applicable to the role of the Board. The task description of the Nomination and Remuneration Committee is publicly available, free of charge, on the website of CROATIA osiguranje d.d.
The Committee on Appointments and Remuneration shall apply the Rules of Procedure of the Supervisory Board to the manner of work, as well as to other issues that are important for the work of the Committee.
During 2020, the Nomination and Remuneration Committee held a total of 7 sessions, and all members of the Nomination and Remuneration Committee attended all sessions of the Nomination and Remuneration Committee in 2020.
At its sessions during 2020, the Nomination and Receipts Committee performed the following tasks:
- consideration of candidates for members of the Management Board of CROATIA osiguranje d.d.
- assessment of the existence of conditions for performing the function of a member of the Management Board for candidates for members of the Management Board of CROATIA osiguranje d.d.
- assessment of the suitability of candidates for members of the Management Board of CROATIA osiguranje d.d.
- regular annual assessment of the existence of conditions for performing the function of a member of the Management Board
- consideration of the terms of the contract for performing the function of a member of the Management Board
- consideration of the terms of the agreement on the regulation of mutual relations with a member of the Management Board
- consideration of concluding an annex to the contract with the members of the Management Board
- Remuneration policies for members of the Management Board
- payment of bonuses for 2019 to members of the Management Board
The Nomination and Remuneration Committee regularly reported to the Supervisory Board on the recommendations made at its meetings, in form of the submitted minutes from the Committee meetings.
Management Board
According to the Company's Articles of Association, the Management Board consists of a minimum of three and a maximum of seven members, one of whom is the President of the Management Board. As of December 31, 2020, the Management Board consisted of four members.
The Management Board of the Company manages all the affairs of the Company jointly, and the Company is represented jointly by at least two members of the Management Board. Members of the Management Board, in conducting the Company's affairs, must adhere to the restrictions prescribed by positive legal regulations, the Company's Articles of Association, decisions of the Supervisory Board and the General Assembly of the Company.
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Consolidated and separate financial statements for 2020
| Responsibility for the financial statements20 | ||
|---|---|---|
| Independent Auditor's Report24 | ||
| Statement of comprehensive income 30 | ||
| Statement of financial position32 | ||
| Statement of changes in equity33 | ||
| Cash flow statement35 | ||
| Notes to the financial statements37 | ||
| 1. | GENERAL INFORMATION ON THE COMPANY 37 | |
| 1.1. | Legal framework, activities and employees37 | |
| 1.2. | Company bodies37 | |
| 1.3. | Subsidiaries38 | |
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 39 | |
| 2.1. | Statement of compliance and basis of presentation39 | |
| 2.2. | Basis of preparation39 | |
| 2.3. | Adoption of new and amended International Financial Reporting Standards ("IFRSs")39 | |
| 2.4. | Critical accounting judgements and key sources of estimation uncertainty45 | |
| 2.5. | Consolidation46 | |
| 2.6. | Presentation currency47 | |
| 2.7. | Foreign currency transactions47 | |
| 2.8. | Gross premium written47 | |
| 2.9. | Investment income and expenses48 | |
| 2.10. | Claims incurred48 | |
| 2.11. | Operating expenses48 | |
| 2.12. | Intangible assets49 | |
| 2.13. | Property and equipment50 | |
| 2.14. | Leases50 | |
| 2.15. | Investment property52 | |
| 2.16. | Investments in subsidiaries and associates52 | |
| 2.17. | Financial instruments52 | |
| 2.18. | Receivables57 | |
| 2.19. | Cash and cash equivalents and short-term deposits57 | |
| 2.20. | Income tax58 | |
| 2.21. | Capital58 | |
| 2.22. | Technical provisions59 | |
| 2.23. | Technical life insurance provisions where the policy holder bears the investment risk59 | |
| 2.24. | Reinsurance60 | |
| 2.25. | Liabilities and related assets under liability adequacy test60 | |
| 2.26. | Other liabilities60 | |
| 2.27. | Employee benefits and pension plans61 | |
| 2.28. | Provisions61 | |
| 2.29. | Impairment of non-financial assets62 | |
| 2.30. | Contingent liabilities and assets62 | |
| 2.31. | Events after the balance sheet date62 | |
| 2.32. | Earnings per share62 | |
| 2.33. | Classification of contracts63 | |
| 2.34. | Segment reporting 64 | |
| 2.35. | Key sources of estimation uncertainty and critical accounting judgments in applying the Group's accounting | |
| policies………………………………………………………………………………………………………………………………………………………………64 | ||
| 2.36. | Insurance risk management65 | |
| 2.37. | Principal assumptions that have the greatest effect on recognised insurance assets, liabilities, income and | |
| expenses…………………………………………………………………………………………………………………………………………………………….73 | ||
| 2.38. | Financial risk management75 | |
| 2.39. | Capital management93 | |
| 3. | Segment reporting 94 | |
| 4. | Premiums 101 | |
| 5. | Commission and fee income 102 | |
| 6. | Finance income 103 | |
| 6.2. | Income from investment property103 | |
|---|---|---|
| 6.3. | Realised gains from financial assets104 | |
| 6.4. | Foreign exchange gains104 | |
| 7. | Other operating income 105 | |
| 8. | Claims incurred, net of reinsurance 106 | |
| 9. | Acquisition costs 108 | |
| 9.1. | Commission108 | |
| 9.2. | Other acquisition costs109 | |
| 10. | Administrative expenses 109 | |
| 10.1 | Amortisation and depreciation109 | |
| 10.2 | Salaries, taxes and contributions from and on salaries109 | |
| 10.3 | Other administrative expenses110 | |
| 11. | Other operating expenses 110 | |
| 12. | Finance costs 111 | |
| 12.1. | Impairment of investments111 | |
| 12.2. | Realised losses on investments111 | |
| 12.3. | Foreign exchange losses112 | |
| 12.4. | Staff costs -investments112 | |
| 13. | Income tax 112 | |
| 14. | Earnings per share 113 | |
| 15. | Intangible assets 114 | |
| 15.1. | Deferred acquisition costs116 | |
| 16. | Property and equipment 117 | |
| 17. | Investment property 119 | |
| 18. | Investments in subsidiaries, associates and participation in joint ventures 120 | |
| 18.1. | The Company's investments in subsidiaries and associates and participation in joint ventures121 | |
| 18.2. | The Group's investments in subsidiaries and associates and participation in joint ventures122 | |
| 18.3. | Movements in investments in subsidiaries, associates and participation in joint ventures124 | |
| 19. | Financial assets 126 | |
| 19.1. | Overview of investments126 | |
| 19.2. | Financial investments exposed to credit risk130 | |
| 19.3. | Held-to-maturity investments131 | |
| 19.4. | Loans131 | |
| 19.5. | Derivative financial instruments134 | |
| 20. | Reinsurance share in technical provisions 134 | |
| 21. | Deferred tax assets 135 | |
| 22. | Insurance contract and other receivables 140 | |
| 22.1. | Receivables from policyholders140 | |
| 22.2. | Receivables from reinsurance and coinsurance140 | |
| 22.3. | Receivables from other insurance business141 | |
| 22.4. | Receivables for returns on investments141 | |
| 22.5. | Other receivables142 | |
| 22.6. | Analysis of receivables from insurance business and other receivables by maturity143 | |
| 22.7. | Credit quality of receivables neither past due nor impaired145 | |
| 22.8. | Analysis of receivables past due but not impaired by the number of days up to maturity146 | |
| 22.9. | Movements in impairment of receivables147 | |
| 23. | Cash and cash equivalents 149 | |
| 24. | Capital and reserves 149 | |
| 24.1. | Subscribed share capital149 | |
| 24.2. | Reserves150 | |
| 24.3. | Revaluation reserve151 | |
| 25. | Technical provisions 152 | |
| 25.1. | Movements in provision for reported but not settled claims, gross152 | |
| 25.2. | ||
| Movements in provision for incurred but not reported claims153 | ||
| 25.3. | Movements in provisions for unearned premiums153 | |
| 25.4. | Movements in mathematical insurance provisions, gross154 | |
| 25.5. | Movements in technical provisions for life insurance where the policyholder bears the investment risk154 |
| 25.7. | Maturity of gross technical provisions157 | |
|---|---|---|
| 25.8. | Analysis of claim (loss) ratios, cost ratios and combined ratios for the Company and Group158 | |
| 26. | Provisions 161 | |
| 27. | Financial liabilities 162 | |
| 28. | Insurance contract and other liabilities and deferred income 165 | |
| 29. | Off-balance-sheet items 167 | |
| 30. | Related party transactions 167 | |
| 31. | Contingent liabilities 171 | |
| 32. | Commitments 171 | |
| 33. | Audit of financial statements 171 | |
| 34. | Events after the balance sheet date 171 | |
| Statements prescribed by the Ordinance of the Croatian Financial Services Supervisory Agency172 |
Independent Auditor's Report
To the Shareholders of CROATIA osiguranje d.d.
Report on the audit of the separate and consolidated financial statements
Our opinion
In our opinion, the separate and consolidated financial statements present fairly, in all material respects, the separate and consolidated financial position of CROATIA oisiguranje d.d. (the "Company") and its subsidiaries (together - the "Group") as at 31 December 2020, and the Company's and the Group's separate and consolidated financial performance and separate and consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.
Our opinion is consistent with our additional report to the Audit Committee dated 31 March 2021.
What we have audited
The Company's and the Group's separate and consolidated financial statements comprise:
- the separate and consolidated statements of comprehensive income for the year ended 31 December 2020;
- the separate and consolidated statements of financial position as at 31 December 2020;
- the separate and consolidated statements of changes in equity for the year then ended;
- the separate and consolidated cash flow statements for the year then ended; and
- the notes to the separate and consolidated financial statements, which include significant accounting policies and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the separate and consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Company and the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code). We have fulfilled our other ethical responsibilities in accordance with the IESBA Code.
To the best of our knowledge and belief, we declare that we have not provided non-audit services that are prohibited under Article 5(1) of Regulation (EU) No 537/2014, and furthermore, we have not provided any non-audit services to the Company and the Group in the period from 1 January 2020 to 31 December 2020.
PricewaterhouseCoopers d.o.o., Heinzelova 70, 10000 Zagreb, Croatia T: +385 (1) 6328 888, F:+385 (1)6111 556, www.pwc.hr
Commercial Court in Zagreb, no. Tt-99/7257-2, Reg. No.: 080238978; Company ID No.: 81744835353; Founding capital: HRK 1,810,000.00, paid in full; Management Board: J. M. Gasparac, President; S. Dusic, Member; T. Macasovic, Member; Giro-Account: Raiffeisenbank Austria d.d., Petrinjska 59, Zagreb, IBAN: HR8124840081105514875.
Our audit approach
Overview
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the separate and consolidated financial statements. In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the separate and consolidated financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the separate and consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the separate and consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, if any, both individually and in aggregate on the separate and consolidated financial statements as a whole.
| Overall materiality for the Company and the Group |
The Company: HRK 27 million The Group: HRK 32 million |
|---|---|
| How we determined it | The Company: 1 % of gross written premiums The Group: 1 % of gross written premiums |
| Rationale for the materiality benchmark applied |
We chose gross written premium as the appropriate benchmark because it is the benchmark against which the performance of the Company and the Group is measured, in terms of both its market share and customer base. |
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate and consolidated financial statements of the current period. These matters were addressed in the context of our audit of the separate and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Estimates used in calculation of insurance contract liabilities and Liability Adequacy Test (LAT)
Refer to Note 2.22 "Summary of significant accounting policies – Technical provisions'' and Note 25 "Technical provisions''.
As at 31 December 2020, the Group and the Company recorded technical provisions of HRK 8 billion and HRK 7 billion, respectively, representing 87% of the Group's total liabilities (the Company: 88%). This is an area that involves significant judgement over uncertain future outcomes, including primarily the timing and ultimate full settlement of long term policyholder liabilities, and therefore we considered it a key audit matter.
Consistent with the insurance industry practice, the Group uses valuation models to support the calculations of technical provisions. The complexity of the models may give rise to errors due to
inadequate/incomplete data or the design or application of the models.
Economic assumptions such as investment return and interest rates and actuarial assumptions such as mortality, longevity, customer behaviour, loss ratio and cost ratio are key inputs used to estimate these mainly long-term liabilities. Significant judgement is applied in determining these assumptions.
The Group's and the Company's IFRS liability adequacy test was performed in order to confirm that technical provisions were adequate in the context of expected future cash outflows.
We used our own actuarial specialists to assist us in performing our audit procedures.
In particular, our audit focused on the models considered more complex and/or requiring significant judgement in determining the assumptions used in calculating technical provisions or performing the liability adequacy test.
We obtained an understanding of the internal actuarial process and assessed how management determined and approved economic and actuarial assumptions.
Our assessments also included challenging, as necessary, the specified economic and actuarial assumptions considering management's rationale for the actuarial judgments applied and comparing them with applicable industry practices.
We considered the appropriateness of actuarial judgements used in the models, which may vary depending on the product and/or the product features. We also assessed whether the models comply with the applicable accounting standards.
Furthermore, in our recalculations we determined whether the technical provisions calculations performed by the models and systems are accurate and complete.
We tested the validity of the management's liability adequacy testing, which is a key test performed to verify whether the liabilities are adequate as compared to expected future contract liabilities. The inputs used were reconciled with the accounting records.
Our work on the liability adequacy tests included assessing the reasonableness of the projected cash flows and challenging the assumptions adopted both by the Group and the Company considering industry practices and specific product features.
How we tailored our Group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.
Reporting on other information including the Management Report
Management is responsible for the other information. The other information comprises the Management Report and Corporate Governance Statement, but does not include the separate and consolidated financial statements and our auditor's report thereon.
Our opinion on the separate and consolidated financial statements does not cover the other information.
In connection with our audit of the separate and consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the separate and consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
With respect to the Management Report and Corporate Governance Statement, we also performed procedures required by the Accounting Act in Croatia. Those procedures include considering whether the Management Report is prepared in accordance with the requirements of Article 21 and 24 of the Accounting Act, and whether the Corporate Governance Statement includes the information specified in Article 22 of the Accounting Act.
Based on the work undertaken in the course of our audit, in our opinion:
- the information given in the Management Report and the Corporate Governance Statement for the financial year for which the separate and consolidated financial statements are prepared is consistent, in all material respects, with the separate and consolidated financial statements;
- the Management Report has been prepared in accordance with the requirements of Article 21 and 24 of the Accounting Act; and
- the Corporate Governance Statement includes the information specified in Article 22 of the Accounting Act.
In addition, in light of the knowledge and understanding of the Company and the Group and their environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the Management Report, Corporate Governance Statement and other information that we obtained prior to the date of this auditor's report. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the separate and consolidated financial statements
Management is responsible for the preparation and fair presentation of the separate and consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and for such internal control as management determines is necessary to enable the preparation of separate and consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the separate and consolidated financial statements, management is responsible for assessing the Company's and the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's and the Group's financial reporting process.
Auditor's responsibilities for the audit of the separate and consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the separate and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these separate and consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the separate and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's and Group's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's and Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our independent auditor's report to the related disclosures in the separate and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our independent auditor's report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the separate and consolidated financial statements, including the disclosures, and whether the separate and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the separate and consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our independent auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirements
Appointment
We were first appointed as auditors of the Company and the Group on 17 July 2014. Our appointment has been renewed annually by shareholder resolution with the most recent reappointment on 3 July 2020, representing a total period of uninterrupted engagement appointment of 7 years.
Forms in accordance with Regulatory Requirements
Based on the Ordinance on the form and content of financial statements and additional reports of insurance and reinsurance companies (Official Gazette 37/16, 96/18, 50/19, 98/20), "Ordinance"), the Management Board of the Company prepared forms for the Company and the Group presented in section Statements prescribed by the Ordinance of the Croatian Financial Services Supervisory Agency, entitled the Statement of financial position as at 31 December 2020, and the Statement of comprehensive income, Statement of Cash flows (indirect method) and Statement of changes in equity for the period from 1 January until 31 December 2020 together with information to reconcile the forms to the Company's and the Group's financial statements presented in the section Reconciliation of the financial statements and statements for the Croatian Financial Services Supervisory Agency. The Company's management is responsible for the preparation of these forms and information on reconciliation and they do not represent an integral part of these audited financial statements, but contain information required by the Ordinance. The financial information in the forms is derived from the Company's and the Group's audited financial statements prepared in accordance with International Financial Reporting Standards as adopted by the European Union as presented on pages 30 to 171 adjusted for the purposes of the Ordinance.
The engagement partner on the audit resulting in this independent auditor's report is Siniša Dušić.
PricewaterhouseCoopers d.o.o. Heinzelova 70, Zagreb 07 April 2021
This version of our report is a translation from the original, which was prepared in Croatian language. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.
Statement of comprehensive income
for 2020
| Company | Company | Group | Group | ||
|---|---|---|---|---|---|
| Note | 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| Gross written premiums | 4 | 2,744,594 | 2,742,508 | 3,237,398 | 3,303,158 |
| Premiums ceded to reinsurance and coinsurance | 4 | (248,776) | (247,808) | (277,861) | (273,725) |
| Written premiums, net of reinsurance and coinsurance |
4 | 2,495,818 | 2,494,700 | 2,959,537 | 3,029,433 |
| Change in gross provisions for unearned premiums |
4 | (13,442) | 3,929 | 3,767 | (11,068) |
| Change in provision for unearned premiums, reinsurance and coinsurance share |
4 | 16,510 | (13,110) | 16,234 | (15,710) |
| Earned premiums, net of reinsurance and coinsurance |
4 | 2,498,886 | 2,485,519 | 2,979,538 | 3,002,655 |
| Commission and fee income | 5 | 41,578 | 36,083 | 43,168 | 37,545 |
| Finance income | 6 | 408,679 | 406,620 | 498,950 | 486,149 |
| Other operating income | 7 | 41,418 | 46,693 | 172,721 | 162,128 |
| Net operating income | 2,990,561 | 2,974,915 | 3,694,377 | 3,688,477 | |
| Claims incurred | 8 | (2,016,952) | (1,726,491) | (2,289,926) | (2,034,428) |
| Reinsurance and coinsurance share of claims incurred |
8 | 348,100 | 125,425 | 353,285 | 129,989 |
| Claims incurred, net of reinsurance and coinsurance |
(1,668,852) | (1,601,066) | (1,936,641) | (1,904,439) | |
| Acquisition costs | 9 | (477,748) | (512,063) | (577,716) | (620,748) |
| Administrative expenses | 10 | (389,786) | (405,605) | (583,136) | (590,966) |
| Other operating expenses | 11 | (40,722) | (44,543) | (66,954) | (67,797) |
| Finance costs | 12 | (139,313) | (58,252) | (148,679) | (104,841) |
| Share in profit of associates | - | - | 10,339 | 11,947 | |
| Profit before tax | 274,140 | 353,386 | 391,590 | 411,633 | |
| Income tax | 13 | (44,551) | (60,255) | (63,388) | (71,894) |
| Profit for the year | 229,589 | 293,131 | 328,202 | 339,739 |
Statement of comprehensive income (continued)
for 2020
| Company | Company | Group | Group | ||
|---|---|---|---|---|---|
| Note | 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| Other comprehensive income for the year | |||||
| Items that will not be recognised in profit or loss Change in fair value of property for own use, net of deferred tax |
24.3/i/ | (216) | 543 | (5,511) | 19,609 |
| Items that can be subsequently recognised in profit or loss Change in fair value of available-for-sale financial |
|||||
| assets, net of realised amounts and net of deferred tax |
24.3/ii/ | (44,127) | 243,437 | (36,512) | 250,064 |
| Foreign exchange differences | 24.3/ii/ | (107) | (30) | 3,048 | 1,159 |
| Other comprehensive income/(loss) for the year | (44,450) | 243,950 | (38,975) | 270,832 | |
| Total comprehensive income for the year | 185,139 | 537,081 | 289,227 | 610,571 | |
| Profit attributable to: | |||||
| - Company shareholders | 229,589 | 293,131 | 327,902 | 339,392 | |
| - Non-controlling interest | - | - | 300 | 347 | |
| 229,589 | 293,131 | 328,202 | 339,739 | ||
| Total comprehensive income attributable to: | |||||
| - Company shareholders | 185,139 | 537,081 | 288,931 | 610,122 | |
| - Non-controlling interest | - | - | 296 | 449 | |
| 185,139 | 537,081 | 289,227 | 610,571 | ||
| Earnings per share attributable to the Company's shareholders |
|||||
| Basic and diluted earnings per share (HRK) | 14 | - | - | 778,96 | 806.26 |
Statement of financial position
as at 31 December 2020
| Company | Company | Group | Group | ||
|---|---|---|---|---|---|
| 31 Dec. | 31 Dec. | 31 Dec. | 31 Dec. | ||
| Note | 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| Assets | |||||
| Intangible assets | 15 | 96,858 | 36,993 | 107,873 | 48,727 |
| Deferred acquisition costs | 15.1 | 208,350 | 226,110 | 247,354 | 268,986 |
| Property and equipment | 16 | 552,906 | 641,461 | 874,386 | 906,627 |
| Investment property | 17 | 456,653 | 367,521 | 1,013,247 | 873,653 |
| Investments in subsidiaries, associates and participation in joint ventures |
18 | 376,516 | 279,111 | 76,593 | 77,590 |
| Held-to-maturity investments | 19 | 2,082,335 | 2,172,387 | 2,169,783 | 2,315,261 |
| Available-for-sale financial assets | 19 | 4,536,162 | 4,446,779 | 5,123,648 | 4,912,345 |
| Financial assets at fair value through profit or loss |
19 | 421,553 | 493,577 | 459,435 | 518,625 |
| Loans and receivables | 19 | 1,018,935 | 1,205,330 | 1,171,522 | 1,352,160 |
| Reinsurance share in technical provisions | 20 | 474,869 | 213,533 | 488,265 | 226,379 |
| Deferred tax assets | 21 | - | - | 1,653 | 1,740 |
| Insurance contract and other receivables | 22 | 791,014 | 861,021 | 902,044 | 966,207 |
| Cash and cash equivalents | 23 | 512,936 | 125,320 | 669,425 | 217,367 |
| Total assets | 11,529,087 | 11,069,143 | 13,305,228 | 12,685,667 | |
| Capital and reserves | 24 | ||||
| Subscribed share capital | 24.1 | 589,326 | 589,326 | 589,326 | 589,326 |
| Premium on issued shares | 681,483 | 681,483 | 681,483 | 681,483 | |
| Reserves | 24.2 | 402,038 | 402,038 | 402,038 | 402,038 |
| Revaluation reserve | 24.3 | 471,124 | 516,656 | 568,449 | 609,338 |
| Retained earnings | 1,389,868 | 1,158,961 | 1,866,055 | 1,537,454 | |
| Equity attributable to shareholders of the | |||||
| Company | 3,533,839 | 3,348,464 | 4,107,351 | 3,819,639 | |
| Non-controlling interests | 1.3 | - | - | 12,654 | 12,553 |
| Total capital and reserves | 3,533,839 | 3,348,464 | 4,120,005 | 3,832,192 | |
| Liabilities | |||||
| Technical provisions | 25 | 7,035,256 | 6,730,428 | 8,036,019 | 7,693,668 |
| Provisions | 26 | 86,539 | 102,717 | 97,959 | 114,287 |
| Deferred tax liability | 21 | 35,980 | 45,117 | 84,756 | 80,898 |
| Financial liabilities | 27 | 284,278 | 271,667 | 323,892 | 302,016 |
| Liabilities arising from insurance | |||||
| contracts, other liabilities and | 28 | 548,849 | 557,719 | 622,611 | 634,011 |
| deferred income Current income tax liability |
4,346 | 13,031 | 19,986 | 28,595 | |
| Total liabilities | 7,995,248 | 7,720,679 | 9,185,223 | 8,853,475 | |
| Total capital, reserves and liabilities | 11,529,087 | 11,069,143 | 13,305,228 | 12,685,667 |
Statement of changes in equity
for 2020
| Company | Subscribed share capital |
Premium on issued shares |
Reserves | Revaluation reserve |
Retained earnings |
Total capital and reserves |
|---|---|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Balance at 1 January 2019 | 589,326 | 681,483 | 402,038 | 273,429 | 864,948 | 2,811,224 |
| Total comprehensive income for the year | ||||||
| Change in fair value of property for own use (Note 16) | - | - | - | 662 | - | 662 |
| Deferred tax on change in fair value of property for own use (Note 21) |
- | - | - | (119) | - | (119) |
| Change in fair value of available-for-sale financial assets, net of amounts realised |
- | - | - | 296,874 | - | 296,874 |
| Deferred tax on change in fair value of available-for-sale financial assets, net of amounts realised (Note 21) |
- | - | - | (53,437) | - | (53,437) |
| Foreign exchange differences on translation of foreign operations |
- | - | - | (30) | - | (30) |
| Other comprehensive income | - | - | - | 243,950 | - | 243,950 |
| Profit for the year | - | - | - | - | 293,131 | 293,131 |
| Total comprehensive income for the year | - | - | - | 243,950 | 293,131 | 537,081 |
| Transactions with owners, recognised directly in equity | ||||||
| Transfer due to depreciation and sale of revalued property for own use |
- | - | - | (882) | 882 | - |
| Deferred tax on transfer due to depreciation and sale of revalued property for own use (Note 21) |
- | - | - | 159 | - | 159 |
| Balance at 31 December 2019 | 589,326 | 681,483 | 402,038 | 516,656 | 1,158,961 | 3,348,464 |
| Total comprehensive income for the year | 589,326 | 681,483 | 402,038 | 516,656 | 1,158,961 | 3,348,464 |
| Change in fair value of property for own use (Note 16) | - | - | - | (264) | - | (264) |
| Deferred tax on change in fair value of property for own use (Note 21) |
- | - | - | 48 | - | 48 |
| Change in fair value of available-for-sale financial assets, net of amounts realized |
- | - | - | (53,813) | - | (53,813) |
| Deferred tax on change in fair value of available-for-sale financial assets, net of amounts realised (Note 21) |
- | - | - | 9,686 | - | 9,686 |
| Foreign exchange differences on translation of foreign operations |
- | - | - | (107) | - | (107) |
| Other comprehensive income | - | - | - | (44,450) | - | (44,450) |
| Profit for the year | - | - | - | - | 229,589 | 229,589 |
| Total comprehensive income for the year | - | - | - | (44,450) | 229,589 | 185,139 |
| Transactions with owners, recognised directly in equity | - | - | - | - | - | - |
| Transfer due to depreciation and sale of revalued property for own use |
- | - | - | (1,318) | 1,318 | - |
| Deferred tax on transfer due to depreciation and sale of revalued property for own use (Note 21) |
- | - | - | 236 | - | 236 |
| Balance at 31 December 2020 | 589,326 | 681,483 | 402,038 | 471,124 | 1,389,868 | 3,533,839 |
Statement of changes in equity (continued)
for 2020
| Group | Subscribed share capital |
Premium on issued shares |
Reserves | Revaluation reserve |
Retained earnings |
Total | Non controlling interest |
Total capital and reserves |
|---|---|---|---|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Balance at 1 January 2019 | 589,326 | 681,483 | 402,038 | 340,282 | 1,195,981 | 3,209,110 | 12,214 | 3,221,324 |
| Total comprehensive income for the year | - | |||||||
| Change in fair value of property for own use (Note 16) |
- | - | - | 23,736 | - | 23,736 | 26 | 23,762 |
| Deferred tax on change in value of property for own use (Note 21) |
- | - | - | (4,153) | - | (4,153) | - | (4,153) |
| Change in fair value of available-for-sale financial assets, net of amounts realized |
- | - | - | 303,955 | - | 303,955 | 58 | 304,013 |
| Deferred tax on change in fair value of available-for-sale financial assets, net of amounts realized (Note 21) |
- | - | - | (53,949) | - | (53,949) | - | (53,949) |
| Foreign exchange differences on translation of foreign operations |
- | - | - | 1,141 | - | 1,141 | 18 | 1,159 |
| Other comprehensive income | - | - | - | 270,730 | - | 270,730 | 102 | 270,832 |
| Profit for the year | 339,392 | 339,392 | 347 | 339,739 | ||||
| Total comprehensive income for the year | - | - | - | 270,730 | 339,392 | 610,122 | 449 | 610,571 |
| Transactions with owners, recognised directly in equity |
||||||||
| Dividends paid | - | - | - | - | - | - | (113) | (113) |
| Other transactions | - | - | - | 33 | 7 | 40 | 3 | 43 |
| Transfer due to depreciation and sale of revalued property for own use |
- | - | - | (2,074) | 2,074 | - | - | - |
| Deferred tax on transfer due to depreciation and sale of revalued property for own use (Note 21) |
- | - | - | 367 | - | 367 | - | 367 |
| Balance at 31 December 2019 | 589,326 | 681,483 | 402,038 | 609,338 | 1,537,454 | 3,819,639 | 12,553 | 3,832,192 |
| Total comprehensive income for the year | ||||||||
| Change in fair value of property for own | 589,326 | 681,483 | 402,038 | 609,338 | 1,537,454 | 3,819,639 | 12,553 | 3,832,192 |
| use (Note 16) Deferred tax on change in value of |
- | - | - | (6,354) | - | (6,354) | (7) | (6,361) |
| property for own use (Note 21) Change in fair value of available-for-sale |
- | - | - | 850 | - | 850 | - | 850 |
| financial assets, net of amounts realised |
- | - | - | (45,265) | - | (45,265) | (63) | (45,328) |
| Deferred tax on change in fair value of available-for-sale financial assets, net of amounts realized (Note 21) |
- | - | - | 8,816 | - | 8,816 | - | 8,816 |
| Foreign exchange differences on | ||||||||
| translation of foreign operations | - | - | - | 2,982 | - | 2,982 | 66 | 3,048 |
| Other comprehensive income | - | - | - | (38,971) | - | (38,971) | (4) | (38,975) |
| Profit for the year | - | - | - | - | 327,902 | 327,902 | 300 | 328,202 |
| Total comprehensive income for the year | - | - | - | (38,971) | 327,902 | 288,931 | 296 | 289,227 |
| Transactions with owners, recognised directly in equity |
||||||||
| Dividends paid | - | - | - | - | - | - | (157) | (157) |
| Other transactions | - | - | - | - | (1,625) | (1,625) | (38) | (1,663) |
| Transfer due to depreciation and sale of revalued property for own use Deferred tax on transfer due to |
- | - | - | (2,324) | 2,324 | - | - | - |
| depreciation and sale of revalued property for own use (Note 21) |
- | - | - | 406 | - | 406 | - | 406 |
| Balance at 31 December 2020 | 589,326 | 681,483 | 402,038 | 568,449 | 1,866,055 | 4,107,351 | 12,654 | 4,120,005 |
Cash flow statement
for 2020
| Company | Company | Group | Group | ||
|---|---|---|---|---|---|
| Note | 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| Cash flows from operating activities | |||||
| Profit before tax | 274,140 | 353,386 | 391,590 | 411,633 | |
| Adjustments for: | |||||
| Depreciation and amortisation | 15, 16 | 57,063 | 57,935 | 81,982 | 78,171 |
| Change in deferred acquisition costs | 15.1 | 17,760 | 25,293 | 21,632 | 19,717 |
| Net impairment of loans | 6, 12.1 | (14,244) | (11,204) | (14,624) | (11,339) |
| Impairment of property and equipment | 7, 11 | 325 | (6,352) | 2,430 | (6,609) |
| Impairment of shares in subsidiaries and associates |
12.1 | (376) | (32,182) | - | - |
| Interest expense | 12 | 10,651 | 10,253 | 12,145 | 11,706 |
| Interest income | 6.1. | (92,372) | (119,632) | (83,965) | (112,152) |
| Dividend income and share in profit of associates |
(25,698) | (44,953) | (19,749) | (37,538) | |
| Net foreign exchange differences on held-to maturity investments and loans |
6.4 12.3 |
(18,662) | (5,132) | (18,712) | (5,033) |
| (Gains)/losses on sale of investment property and tangible assets and changes in fair value of investment property |
16,675 | 15,666 | (1,044) | 163 | |
| Net provisions for legal disputes, termination benefits, etc. |
12,772 | 26,500 | 14,403 | 31,239 | |
| Gain on bargain purchase | 18.3 | - | - | (5,628) | - |
| Other adjustments | 4,561 | 1,779 | 18,117 | 16,648 | |
| Cash flows before changes in operating assets and liabilities |
242,595 | 271,357 | 398,577 | 396,606 | |
| Changes in available-for-sale financial assets | (143,196) | (452,747) | (256,568) | (581,717) | |
| Changes in financial assets at fair value through profit or loss |
72,024 | 111,466 | 59,190 | 122,414 | |
| Changes in loans and receivables | 178,265 | (240,447) | 172,665 | (284,299) | |
| Changes in reinsurance share in technical provisions |
(261,336) | 2,026 | (261,886) | 8,001 | |
| Changes in insurance contract and other receivables |
(7,805) | 9,117 | (12,099) | 8,954 | |
| Changes in technical provisions | 304,828 | 126,081 | 342,351 | 228,164 | |
| Payment of termination benefits, jubilee awards and other provisions |
(28,950) | (22,647) | (30,978) | (24,967) | |
| Changes in insurance contract and other liabilities and financial liabilities |
(8,916) | (28,818) | (13,676) | (15,086) | |
| Income tax paid | (51,376) | (51,025) | (68,716) | (59,403) | |
| Changes in operating assets and liabilities | 53,538 | (546,994) | (69,717) | (597,939) | |
| Net cash flows (used in)/from operating activities |
296,133 | (275,637) | 328,860 | (201,333) |
Cash flow statement (continued)
for 2020
Continued:
| Company | Company | Group | Group | ||
|---|---|---|---|---|---|
| Note | 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| Cash flows from investing activities | |||||
| Proceeds from sale of tangible assets | 2,613 | 5,417 | 2,178 | 17,912 | |
| Purchase of tangible assets | (19,926) | (25,969) | (46,376) | (57,524) | |
| Proceeds from sale of intangible assets | - | 628 | 70 | 628 | |
| Purchase of intangible assets | (78,165) | (27,541) | (79,808) | (29,715) | |
| Proceeds from sale of investment property | 80,780 | 16,750 | 81,330 | 16,750 | |
| Purchase of investment property | (24,369) | (4,259) | (28,240) | (7,032) | |
| Acquisition of subsidiaries (net of cash acquired) |
18.3 | (78,897) | - | (77,987) | - |
| Capital increase of subsidiaries | 18.3 | (18,132) | - | - | - |
| Proceeds from held- to-maturity investments | 292,133 | 258,164 | 365,269 | 283,893 | |
| Purchase of held- to-maturity investments | (191,657) | (386,589) | (207,437) | (387,959) | |
| Proceeds from dividends and share in profit | 25,443 | 43,886 | 9,155 | 24,524 | |
| Proceeds received from short-term and long term loans granted |
72,118 | 66,604 | 73,857 | 47,126 | |
| Short-term and long-term loans granted | (48,756) | (21,590) | (29,143) | (35,328) | |
| Interest income received | 98,364 | 125,818 | 89,440 | 115,571 | |
| Net cash flows from investing activities | 111,549 | 51,319 | 152,308 | (11,154) | |
| Cash flows from financing activities | |||||
| Cash outflows for repayment of principal element of lease liabilities |
(20,066) | (19,096) | (28,953) | (25,770) | |
| Cash outflows for payment of share in profit (dividend) |
- | (980) | (157) | (1,093) | |
| Net cash flows from financing activities | (20,066) | (20,076) | (29,110) | (26,863) | |
| Cash and cash equivalents at beginning of period |
23 | 125,320 | 369,714 | 217,367 | 456,717 |
| Cash and cash equivalents at end of period | 23 | 512,936 | 125,320 | 669,425 | 217,367 |
| Net (decrease)/ increase in cash and cash equivalents |
387,616 | (244,394) | 452,058 | (239,350) |
Notes to the financial statements
1. GENERAL INFORMATION ON THE COMPANY
1.1. Legal framework, activities and employees
CROATIA osiguranje d.d., Zagreb, Vatroslava Jagića 33 (the "Company") is registered in the Court Register of the Commercial Court in Zagreb under the Company's Court Reg. No. ("MBS") 080051022 and PIN ("OIB") 26187994862.
The Company's principal activity is non-life and life insurance business and reinsurance business in the nonlife insurance group. Since 2004 the Company's shares have been listed at Official Market of the Zagreb Stock Exchange, Zagreb.
The Company is the parent company of the CROATIA osiguranje d.d. Group (the "Group").
Company is majorly owned by ADRIS GRUPA d.d., Rovinj and is included in the consolidated financial statements of ADRIS GRUPA d.d. which are available on the ADRIS GRUPA d.d.'s website, Zagreb Stock Exchange and the Officially appointed mechanism for the central storage of regulated information.
Average number of employees of the Company is 2,222 (2019: 2,248), and of the Group 3,362 (2019: 3,404).
1.2. Company bodies
The Company's bodies are the General Assembly, the Supervisory Board and the Management Board.
Members of the Supervisory Board:
| • | Robert Škopac | President |
|---|---|---|
| --- | --------------- | ----------- |
- Željko Lovrinčević, PhD Viceesident
- Vitomir Palinec Member
- Damir Vanđelić Member until 31 December 2020
- Hrvoje Patajac Member
- Vlasta Pavličević Member
Members of the Management Board:
| • | Davor Tomašković | President |
|---|---|---|
- Robert Vučković Member
- Miroslav Klepač Member until 17 April 2020
- Luka Babić Member from 18 April 2020
- Vančo Balen Member from 18 April 2020
1.3. Subsidiaries
The Group consolidated the following entities as at 31 December 2020:
| 31 December 2020 | ||||
|---|---|---|---|---|
| Shares | Shares held | |||
| directly | Shares | by non | ||
| Principal activity | held by | held by the | controlling | |
| parent | Group | interests | ||
| Group | (%) | (%) | (%) | |
| Subsidiaries registered in Croatia | ||||
| which are consolidated: | ||||
| Croatia premium d.o.o., Zagreb | Real estate | 100 | 100 | - |
| Histria Construct d.o.o., Zagreb | Real estate | 100 | 100 | - |
| Core 1 d.o.o., Zagreb | Real estate | 100 | 100 | |
| Razne usluge d.o.o. (currently being wound up), Zagreb |
100 | 100 | - | |
| Auto Maksimir Vozila d.o.o., Zagreb | Insurance agency | 100 | 100 | - |
| AK Polica d.o.o., Varaždin | Insurance agency | 100 | 100 | - |
| CO Zdravlje d.o.o., Zagreb | Consulting and services |
100 | 100 | - |
| - CROATIA Poliklinika Zagreb | Healthcare | 100 | - | |
| Croatia-Tehnički pregledi d.o.o., Zagreb | MOT* | 100 | 100 | - |
| - Herz d.d., Požega | MOT | - | 100 | - |
| - Slavonijatrans-Tehnički pregledi | ||||
| d.o.o., Sl. Brod | MOT | - | 76 | 24 |
| - STP Pitomača, Pitomača | MOT | - | 100 | - |
| - STP Blato | MOT | - | 100 | - |
| - Autoprijevoz d.d. | MOT | - | 79.12 | 20.88 |
| - Crotehna d.o.o., Ljubuški | MOT | - | 100 | - |
| - Ponte d.o.o., Mostar | MOT | - | 100 | - |
| Croatia osiguranje mirovinsko društvo | Fund management | 100 | 100 | - |
| d.o.o., Zagreb | ||||
| ASTORIA d.o.o. | Real estate | 100 | 100 | - |
| Subsidiaries registered abroad which | ||||
| are consolidated: | ||||
| Milenijum osiguranje a.d.o., Belgrade | Insurance | 100 | 100 | - |
| Croatia osiguranje d.d., Mostar | Insurance | 95.02 | 95.02 | 4.98 |
| - Croatia remont d.d., | MOT | - | 69.79 | 30.21 |
| Čapljina*** | ||||
| - Croauto d.o.o., Mostar | MOT | - | 66.79 | 33.21 |
| - Hotel Hum d.o.o., Ljubuški** | Hospitality | - | 80 | 20 |
| Croatia osiguranje d.d., društvo za osiguranje neživota, Skopje |
Insurance | 100 | 100 | - |
| Croatia osiguranje d.d., društvo za osiguranje života, Skopje |
Insurance | 95 | 100 | - |
* MOT - Motor vehicle examination stations
** Croatia osiguranje d.d. Mostar holds an 80% share, and CROTEHNA d.o.o. Ljubuški holds an 20% share
*** Crotehna d.o.o., Ljubuški additionally holds an 0.87% share of Croatia remont d.d.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies adopted in the preparation of financial statements is set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Hereinafter, the policies applied by the Group also mean the policies applied by the Company, unless otherwise stated.
2.1. Statement of compliance and basis of presentation
The financial statements for 2020 have been prepared in accordance with the Accounting Act (Official Gazette 78/15, 134/15, 120/16, 116/18, 42/20 and 47/20) and International Financial Reporting Standards ('IFRS') as adopted in the European Union and in accordance with the Ordinance on the structure and content of the financial statements for insurance or reinsurance companies (Official Gazette 37/16, 96/18, 50/19 and 98/20).
These are consolidated financial statements of the Group that also include separate financial statements of the Company ("Parent" of the Group) as defined in International Accounting Standard 27 "Separate Financial Statements" and International Financial Reporting Standard 10 "Consolidated financial statements".
2.2. Basis of preparation
The consolidated and separate financial statements of the Company and the Group have been prepared in conformity with International Financial Reporting Standards (IFRS) as adopted in the EU and IFRS Interpretations Committee (IFRS IC) interpretations applicable to companies reporting under IFRS. The consolidated and separate financial statements have been prepared under the historical cost convention, as modified by the revaluation of land and buildings, investment property, available-for-sale financial assets, and financial assets at fair value through profit or loss.
The preparation of financial statements in conformity with IFRS as adopted in the EU requires the use of certain critical accounting estimates. It also requires the Management Board to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated and separate financial statements, are disclosed in Note 2.35.
2.3. Adoption of new and amended International Financial Reporting Standards ("IFRSs")
The accounting policies adopted are consistent with those of the previous financial year, unless otherwise stated and disclosed.
The Group has adopted the following new and amended IFRS and IFRIC interpretations during the year which were endorsed by the EU. When the adoption of the standard or interpretation is deemed to have an impact on the financial statements or performance of the Group, its impact is described below.
(a) New and amended standards adopted by the Group:
• COVID-19-Related Rent Concessions Amendment to IFRS 16 issued on 28 May 2020 and effective for annual periods beginning on or after 1 June 2020.
The amendment provides lessees with relief in the form of an optional exemption from assessing whether a rent concession related to COVID-19 is a lease modification. Lessees can elect to account for rent concessions in the same way as if they were not lease modifications. The practical expedient only applies to rent concessions occurring as a direct consequence of the COVID-19 pandemic and only if all of the following conditions are met: the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change; any reduction in lease payments affects only payments due on or before 30 June 2021; and there is no substantive change to other terms and conditions of the lease.
The Group had no material lease reliefs and did not applied this practical expedient.
The following amended standards became effective from 1 January 2020, but did not have any material impact on the Group:
- Amendments to the Conceptual Framework for Financial Reporting (issued on 29 March 2018 and effective for annual periods beginning on or after 1 January 2020).
- Definition of a business – Amendments to IFRS 3 (issued on 22 October 2018 and effective for acquisitions from the beginning of annual reporting period that starts on or after 1 January 2020).
- Definition of materiality – Amendments to IAS 1 and IAS 8 (issued on 31 October 2018 and effective for annual periods beginning on or after 1 January 2020).
- Interest rate benchmark reform - Amendments to IFRS 9, IAS 39 and IFRS 7 (issued on 26 September 2019 and effective for annual periods beginning on or after 1 January 2020).
(b) Standards and interpretations not yet adopted:
Certain new standards and interpretations have been published that are not mandatory for 31 December 2020 reporting periods and have not been early adopted by the Group. The Group's assessment of the impact of these new standards and interpretations is set out below:
• IFRS 17 Insurance contracts (effective for annual periods beginning on or after January 1, 2023).
IFRS 17 was issued in May 2017 as a replacement for IFRS 4 Insurance Contracts. The Standard requires a measurement model based on current best estimates, whereby estimates are remeasured in each reporting period. The contracts are measured by using the following parameters:
- discounted probability-weighted cash flows
- explicit risk adjustment for unfulfillment of estimated cash flows
- contractual service margin CSM which represents the unearned profit under the contract which is recognised as income over the coverage period of the insurance contract.
According to the Standard, the Group may choose where to present the change in the discount rates - either in profit or loss or in other comprehensive income. The final choice will reflect the manner in which insurers disclose their financial assets in accordance with IFRS 9.
An alternative, simplified approach to premium allocation is permitted for the liability for remaining coverage for insurance contracts with short-term coverage, frequently drawn up by non-life insurers.
A variation of the general measurement model, called the "variable fee approach", is also envisaged, which can be applied to certain life insurance contracts where the policyholders participate in the returns from the underlying contracts. When applying the variable fee approach, the insurer's share of the fair value changes is included in the contractual service margin. Consequently, the results of the insurers using this model are likely to be less volatile than under the general measurement model.
Amendments to IFRS 17 and an amendment to IFRS 4 (issued on 25 June 2020 and effective for annual periods beginning on or after 1 January 2023).
The amendments include a number of clarifications intended to ease implementation of IFRS 17, simplify some requirements of the standard and transition. The amendments relate to eight areas of IFRS 17, and they are not intended to change the fundamental principles of the standard. The following amendments to IFRS 17 were made:
- Effective date: The effective date of IFRS 17 (incorporating the amendments) has been deferred by two years to annual reporting periods beginning on or after 1 January 2023; and the fixed expiry date of the temporary exemption from applying IFRS 9 in IFRS 4 has also been deferred to annual reporting periods beginning on or after 1 January 2023.
- Expected recovery of insurance acquisition cash flows: An entity is required to allocate part of the acquisition costs to related expected contract renewals, and to recognise those costs as an asset until the entity recognises the contract renewals. Entities are required to assess the recoverability of the asset at each reporting date, and to provide specific information about the asset in the notes to the financial statements.
- Contractual service margin attributable to investment services: Coverage units should be identified, considering the quantity of benefits and expected period of both insurance coverage and investment services, for contracts under the variable fee approach and for other contracts with an 'investment-
return service' under the general model. Costs related to investment activities should be included as cash flows within the boundary of an insurance contract, to the extent that the entity performs such activities to enhance benefits from insurance coverage for the policyholder.
- Reinsurance contracts held – recovery of losses: When an entity recognises a loss on initial recognition of an onerous group of underlying insurance contracts, or on addition of onerous underlying contracts to a group, an entity should adjust the contractual service margin of a related group of reinsurance contracts held and recognise a gain on the reinsurance contracts held. The amount of the loss recovered from a reinsurance contract held is determined by multiplying the loss recognised on underlying insurance contracts and the percentage of claims on underlying insurance contracts that the entity expects to recover from the reinsurance contract held. This requirement would apply only when the reinsurance contract held is recognised before or at the same time as the loss is recognised on the underlying insurance contracts.
- Other amendments: Other amendments include scope exclusions for some credit card (or similar) contracts, and some loan contracts; presentation of insurance contract assets and liabilities in the statement of financial position in portfolios instead of groups; applicability of the risk mitigation option when mitigating financial risks using reinsurance contracts held and non-derivative financial instruments at fair value through profit or loss; an accounting policy choice to change the estimates made in previous interim financial statements when applying IFRS 17; inclusion of income tax payments and receipts that are specifically chargeable to the policyholder under the terms of an insurance contract in the fulfilment cash flows; and selected transition reliefs and other minor amendments.
The Group has started the IFRS 17 implementation project, monitors the process of updating IFRS 17 by the International Accounting Standards Board (IASB), and performs an impact assessment on its financial statements together with an assessment of the effects of IFRS 9. The Group expects the new standard to result in a material change in accounting policies for insurance contract liabilities, will have an impact on profit and equity, and will result in changes in presentation and disclosures in the financial statements. Given the significant impact of the standard, the Group has hired additional resources in terms of human resources (experts) and is in the process of developing IT systems to meet the requirements of the standard. At the balance sheet date, given the early stage of the implementation project, the potential combined effect of the two standards on the financial position and performance of the Company and the Group cannot be calculated at this time and more detailed assessments of the impact of the standard on the financial statements will be made during the following periods. The Company and the Group intend to adopt the standard with the effective date.
• IFRS 9 Financial instruments and associated amendments to various other standards (effective for annual periods beginning on or after 1 January 2018 or later for insurance companies with the exception for insurance companies until 1 January 2023 when the adoption of the new insurance standard is expected) and Amendment of IFRS 4 – Applying of IFRS 9 Financial instruments with IFRS 4 Insurance contracts ( in May 2020, the IASB decided to defer the effective date of IFRS 9 to periods beginning on or after 1 January 2023, in order to be implemented together with IFRS 17).
IFRS 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities and introduces new rules for hedge accounting. In December 2014, IASB made further changes to the classification and measurement rules and also introduced a new impairment model.
In 2016, the IASB adopted an amendment to IFRS 4 that allows insurers to apply IAS 39 instead of IFRS 9 for annual periods beginning before IFRS 17 comes into force, provided that certain prerequisites are met. These prerequisites applying to entities whose activities are predominantly connected with insurance, are met by the Group, and the Management intends to use this option to defer the application of IFRS 9.
• Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – Amendments to IFRS 10 and IAS 28 (issued on 11 September 2014 and effective for annual periods beginning on or after a date to be determined by the IASB).
These amendments address an inconsistency between the requirements in IFRS 10 and those in IAS 28 in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a business. A partial gain or loss is recognised when a transaction involves assets that do not constitute a business, even if these assets are held by a subsidiary.
• Classification of liabilities as current or non-current – Amendments to IAS 1 (issued on 23 January 2020 and effective for annual periods beginning on or after 1 January 2022).
These narrow scope amendments clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Liabilities are non-current if the entity has a substantive right, at the end of the reporting period, to defer settlement for at least twelve months. The guidance no longer requires such a right to be unconditional. Management's expectations whether they will subsequently exercise the right to defer settlement do not affect classification of liabilities. The right to defer only exists if the entity complies with any relevant conditions as of the end of the reporting period. A liability is classified as current if a condition is breached at or before the reporting date even if a waiver of that condition is obtained from the lender after the end of the reporting period. Conversely, a loan is classified as non-current if a loan covenant is breached only after the reporting date. In addition, the amendments include clarifying the classification requirements for debt a company might settle by converting it into equity. 'Settlement' is defined as the extinguishment of a liability with cash, other resources embodying economic benefits or an entity's own equity instruments. There is an exception for convertible instruments that might be converted into equity, but only for those instruments where the conversion option is classified as an equity instrument as a separate component of a compound financial instrument. The Company and the Group are currently assessing the impact of the amendments on its consolidated financial statements.
• Classification of liabilities as current or non-current, deferral of effective date – Amendments to IAS 1 (issued on 15 July 2020 and effective for annual periods beginning on or after 1 January 2023).
The amendment to IAS 1 on classification of liabilities as current or non-current was issued in January 2020 with an original effective date 1 January 2022. However, in response to the Covid-19 pandemic, the effective date was deferred by one year to provide companies with more time to implement classification changes resulting from the amended guidance.
• Proceeds before intended use, Onerous contracts – cost of fulfilling a contract, Reference to the Conceptual Framework – narrow scope amendments to IAS 16, IAS 37 and IFRS 3, and Annual Improvements to IFRSs 2018-2020 – amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41 (issued on 14 May 2020 and effective for annual periods beginning on or after 1 January 2022).
The amendment to IAS 16 prohibits an entity from deducting from the cost of an item of PPE any proceeds received from selling items produced while the entity is preparing the asset for its intended use. The proceeds from selling such items, together with the costs of producing them, are now recognised in profit or loss. An entity will use IAS 2 to measure the cost of those items. Cost will not include depreciation of the asset being tested because it is not ready for its intended use. The amendment to IAS 16 also clarifies that an entity is 'testing whether the asset is functioning properly' when it assesses the technical and physical performance of the asset.
The financial performance of the asset is not relevant to this assessment. An asset might therefore be capable of operating as intended by management and subject to depreciation before it has achieved the level of operating performance expected by management.
The amendment to IAS 37 clarifies the meaning of 'costs to fulfil a contract'. The amendment explains that the direct cost of fulfilling a contract comprises the incremental costs of fulfilling that contract; and an allocation of other costs that relate directly to fulfilling. The amendment also clarifies that, before a separate provision for an onerous contract is established, an entity recognises any impairment loss that has occurred on assets used in fulfilling the contract, rather than on assets dedicated to that contract.
IFRS 3 was amended to refer to the 2018 Conceptual Framework for Financial Reporting, in order to determine what constitutes an asset or a liability in a business combination. Prior to the amendment, IFRS 3 referred to the 2001 Conceptual Framework for Financial Reporting. In addition, a new exception in IFRS 3 was added for liabilities and contingent liabilities. The exception specifies that, for some types of liabilities and contingent liabilities, an entity applying IFRS 3 should instead refer to IAS 37 or IFRIC 21, rather than the 2018 Conceptual Framework. Without this new exception, an entity would have recognised some liabilities in a business combination that it would not recognise under IAS 37. Therefore, immediately after the acquisition, the entity would have had to derecognise such liabilities and recognise a gain that did not depict an economic gain. It was also clarified that the acquirer should not recognise contingent assets, as defined in IAS 37, at the acquisition date.
The amendment to IFRS 9 addresses which fees should be included in the 10% test for derecognition of financial liabilities. Costs or fees could be paid to either third parties or the lender. Under the amendment, costs or fees paid to third parties will not be included in the 10% test.
Illustrative Example 13 that accompanies IFRS 16 was amended to remove the illustration of payments from the lessor relating to leasehold improvements. The reason for the amendment is to remove any potential confusion about the treatment of lease incentives.
IFRS 1 allows an exemption if a subsidiary adopts IFRS at a later date than its parent. The subsidiary can measure its assets and liabilities at the carrying amounts that would be included in its parent's consolidated financial statements, based on the parent's date of transition to IFRS, if no adjustments were made for consolidation procedures and for the effects of the business combination in which the parent acquired the subsidiary. IFRS 1 was amended to allow entities that have taken this IFRS 1 exemption to also measure cumulative translation differences using the amounts reported by the parent, based on the parent's date of transition to IFRS. The amendment to IFRS 1 extends the above exemption to cumulative translation differences, in order to reduce costs for first-time adopters. This amendment will also apply to associates and joint ventures that have taken the same IFRS 1 exemption.
The Company and the Group are currently assessing the impact of the amendments on its consolidated financial statements.
• Interest rate benchmark (IBOR) reform – phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (issued on 27 August 2020 and effective for annual periods beginning on or after 1 January 2021).
The Phase 2 amendments address issues that arise from the implementation of the reforms, including the replacement of one benchmark with an alternative one. The amendments cover the following areas:
• Accounting for changes in the basis for determining contractual cash flows as a result of IBOR reform: For instruments to which the amortised cost measurement applies, the amendments require entities, as a practical expedient, to account for a change in the basis for determining the contractual cash flows as a result of IBOR reform by updating the effective interest rate using the guidance in paragraph B5.4.5 of IFRS 9. As a result, no immediate gain or loss is recognised. This practical expedient applies only to such a change and only to the extent it is necessary as a direct consequence of IBOR reform, and the new basis is economically equivalent to the previous basis. Insurers applying the temporary exemption from IFRS 9 are also required to apply the same practical expedient. IFRS 16 was also amended to require lessees to use a similar practical expedient when accounting for lease modifications that change the basis for determining future lease payments as a result of IBOR reform.
- End date for Phase 1 relief for non-contractually specified risk components in hedging relationships: The Phase 2 amendments require an entity to prospectively cease to apply the Phase 1 reliefs to a non-contractually specified risk component at the earlier of when changes are made to the noncontractually specified risk component, or when the hedging relationship is discontinued. No end date was provided in the Phase 1 amendments for risk components.
- Additional temporary exceptions from applying specific hedge accounting requirements: The Phase 2 amendments provide some additional temporary reliefs from applying specific IAS 39 and IFRS 9 hedge accounting requirements to hedging relationships directly affected by IBOR reform.
- Additional IFRS 7 disclosures related to IBOR reform: The amendments require disclosure of: (i) how the entity is managing the transition to alternative benchmark rates, its progress and the risks arising from the transition; (ii) quantitative information about derivatives and non-derivatives that have yet to transition, disaggregated by significant interest rate benchmark; and (iii) a description of any changes to the risk management strategy as a result of IBOR reform.
Unless otherwise described above, the new standards and interpretations are not expected to affect significantly the separate and consolidated financial statements of the Company and the Group.
2.4. Critical accounting judgements and key sources of estimation uncertainty
In preparing these financial statements, certain estimates were used which influence the presentation of assets and liabilities of the Group, the income and expenses of the Group and the disclosure of contingent liabilities of the Group.
Future events and their effects cannot be reliably anticipated, and therefore actual results may differ from these estimates. The accounting estimates used in the preparation of the financial statements are subject to change as new events occur, as more experience is gained, additional information is obtained and due to the changing environment in which the Group operates.
The key estimates used in applying accounting policies in the preparation of the financial statements relate to impairment losses on loans and receivables, calculation of technical provisions and determining fair value of investment property.
Information about the assessments of the Management regarding the application of IFRS, which have a significant impact on the financial statements, and the information about the estimates with a high risk of likely significant adjustment in the next year, is presented in Note 2.35.
Impact of the COVID-19 outbreak on the Company's operations
The existence of the coronavirus (COVID-19) was confirmed in early 2020 and spread to mainland China and beyond, and in late February 2020 to Croatia, causing disruption in business and economic activities.
From the information available at the time of preparation of these financial statements and based on numerous publicly available macroeconomic projections (CNB), despite the improvement in the epidemiological situation in the third quarter of 2020, the subsequent unfavourable development of the epidemiological situation has impact on a strong slowdown in recovery in the last quarter and this trend is expected to continue in early 2021. It is expected that the pandemic will be relatively successfully controlled during 2021, and with the application of an effective vaccine, the gradual recovery of economic activity could begin in the second quarter.
The recovery in personal consumption affects the demand for insurance services since the volume of insurance premiums written is related to GDP trends.
In addition, Group has identified the following key areas that could be affected by adverse economic conditions:
- volatility of comprehensive income from investments, as a result of developments on the financial markets,
- increased credit risk and increased impairment provisions for insurance receivables,
- increased number of life insurance policy surrenders.
Despite the unfavourable economic situation caused by COVID 19, there was no significant decline in premium income as well as the collection of claims under insurance contracts. The moratorium on foreclosures that was in force during 2020, reduced the forced collection of receivables, but did not have a significant adverse impact on the liquidity of the Company and the Group.
As part of the own risk and solvency assessment process (ORSA), a scenario of prolonged impact of the COVID-19 pandemic was created, which includes a graded analysis of the possible impact of the pandemic on business, results and solvency ratio of the Company and the Group, taking into consideration current knowledge about the impact of the pandemic, and also the measures which can be taken to minimize negative impacts as much as possible. The results of the scenario imply a certain decrease in the solvency ratio, but it should remain at levels significantly higher than the regulatory ones, and the Company's and the Group's solvency should not be questioned in any way. Also, last solvency calculation for the Company and the Group which was performed as at 31.12.2020. showed that despite the negative effects of COVID-19, the Company and the Group is still operating with a very high solvency ratio of 268% for the Company (as at 31.12.2019.: 277%) and 229% for the Group (31.12.2019.: 239%). Regarding liquidity, the Company and the Group still have the satisfactory amounts of liquid resources that are sufficient for discharging all obligations that have become due and also has at its disposal instruments available for obtaining additional liquidity if necessary.
The Company will continue to actively monitor the development of the COVID-19 outbreak and if it should be considered to significantly affect the Company's business and financial position, it will fully comply with the Capital Market Act.
Earthquakes in the area of the Republic of Croatia
On 22 March 2020, in the area of the City of Zagreb and on 29 December 2020, in the area of the City of Petrinja, a series of earthquakes were recorded. In some insurance contracts, the Group also provides insurance for earthquake insurance risk. The amount of claims from Group's insurance contracts caused by this event (after reinsurance) amount to more than HRK 40m per individual event, i.e. a total to more than HRK 80m (after reinsurance).
The earthquake also affected the valuation of investment property and property and equipment. An independent appraisal of investment property was performed by external appraisers to determine fair value at 31 December 2020 and the effects are shown in Note 17. Also, in 2020, the Group reviewed property and equipment whether there are indications of impairment (including possible impairment due to earthquakes) and the effects are presented in Note 16.
Decision of the Supreme Court of the Republic of Croatia on increase of Orientation criteria for determining the amount of fair financial compensation for immaterial damages
As at 15.6.2020 the Supreme Court of the Republic of Croatia has adopted a decision on increase of Orientation criteria for determining the amount of fair financial compensation for immaterial damages, by 50%, and it will be applied to all future compensation proceedings, but also at those that are in progress. This decision led to an increase in technical provisions from insurance that is, it has an effect on profit before tax (after reinsurance) in the reporting period in the amount of over HRK 80m. In addition to the effect on the reporting period, the consequences of the decision are higher future expenses for insurance claims.
2.5. Consolidation
The consolidated financial statements comprise the Company and its subsidiaries (together "the Group").
Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and are de-consolidated from the date that control ceases.
Transactions eliminated at consolidation
Balances and transactions between Group members and any unrealised income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses are also eliminated in the same way as unrealised gains, but only if there are no indicators of impairment.
Non-controlling interests
Non-controlling interests in subsidiaries are included in the total equity of the Group.
Losses applicable to non-controlling interests in subsidiaries are added to non-controlling interests in situations where this causes non-controlling interests to be disclosed with negative value. The reconciliation of non-controlling interest is based on the proportionate amount of the net assets of the subsidiary, with no adjustment to goodwill and recognition of profit or loss in the income statement.
Loss of control
At the moment of loss of control, the Group derecognises assets and liabilities of subsidiaries, interests of minority shareholders and other elements of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any share in the subsidiary, such share is measured at fair value at the date that control ceases. After that, this is reported as an investment valued using the equity method or as available-for-sale financial assets, depending on the level of influence retained.
Joint arrangements
The Group applies IFRS 11 to all joint arrangements. Under IFRS 11 investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures. Joint ventures are accounted for using the equity method.
Merger of entities under common control
A merger or a business combination involving business entities under common control is a business combination in which all of the combining business entities are controlled by the same party (or parties) both before and after the business combination, and that control is not transitory. The predecessor method of accounting is used to account for the mergers of entities under common control. According to the predecessor method of accounting, the carrying amount of the assets (including goodwill, if any) and liabilities of the acquired or merged company (or the company that has ceased to exist as a result of the merger) are transferred to the successor company from the consolidated financial statements of the highest entity that has common control and which prepares consolidated financial statements or a lower level entity if justified.
The merged entity's results and balance sheet are incorporated prospectively from the date on which the merger or business combination between entities under common control occurred.
On the date of the merger, inter-company transactions, balances and unrealised gains and losses on mutual transactions are eliminated.
The difference between the transferred fee and the carrying amount of the net assets of the acquired company is recognised in equity (in retained earnings).
2.6. Presentation currency
The Group's financial statements are presented in Croatian kuna (HRK) as the functional currency of the Company and subsidiaries in Croatia and presentation currency of the Group.
2.7. Foreign currency transactions
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated into the functional currency using the exchange rate effective at the reporting day. Non-monetary assets and liabilities denominated in foreign currency and measured at fair value are translated into the functional currency using the exchange rate effective on the date their fair value is determined.
Changes in the fair value of monetary securities denominated in or linked to a foreign currency and classified as available-for-sale are analysed between translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amount of the security. Foreign exchange rate differences resulting from the conversion of monetary assets and liabilities are recognised through profit or loss and are presented within finance income or finance cost. As at 31 December 2020, the official HRK exchange rate was HRK 7.536898 for EUR 1 (31 December 2019: HRK 7.442580).
2.8. Gross premium written
/i/ Gross written premiums represent basic operating revenue and they comprise the non-life and life insurance written premiums.
/ii/ Non-life insurance gross written premiums include all amounts of premiums written in the current accounting period, irrespective of the fact whether these amounts partially or completely pertain to a later accounting period.
Non-life insurance gross written premiums include all gross premiums written in the accounting period, whose beginning of the insurance year falls within the accounting period, irrespective of the fact whether they pertain in whole or in part to later accounting periods. The premiums are presented in gross amounts, that is, they include brokers' commissions, but exclude taxes and charges levied with premiums. Written premiums include the adjustment of the premium written in the prior accounting periods as well as estimates of premiums written at the end of the period. Written premiums, that is, gross written premiums and unearned premiums include adjustments for the write-off of receivables from policyholder as a result of insurance termination. Net impairment losses on receivables for premium of the insured party are recognised as a deduction of gross written premium.
The earned portion of received premiums is recognised as income. Premiums are earned from the date of the risk occurrence during the insurance period, based on the assumption of risk patterns.
/iii/ Life insurance gross written premiums include all amounts of premiums collected until the end of the accounting period.
In accordance with the exception permitted by IFRS 4, life insurance premiums are recorded in books on a cash basis, Supplemental insurance premiums are also recorded on a cash basis.
2.9. Investment income and expenses
/i/ Investment income comprises the income realised through participating interests (dividends, profit share), gains on investments in land and buildings, interest income, unrealised gains on investments at fair value through profit or loss, gain on sale of investment, net foreign exchange gains and other gains on investment.
Gains on investments in land and buildings consist of income realized due to an increase in the value of land and buildings, gains on sale of land and buildings, land and buildings rental income and other gains on investments in land and buildings. Land and buildings rental income and income from other operating leases are recognised in profit or loss on a straight-line basis over the entire term of the lease.
Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the assets. Interest on monetary assets at fair value through profit or loss is recognized using the effective interest rate method and is presented in interest income. Dividend income is recognised in the income statement on the date that the dividend is declared. The accounting policy in relation to the finance income recognition is disclosed in Note 2.17 "Financial instruments".
/ii/ Investment expenses include interest expense, investment impairment, losses realised on the sale of investments, net foreign exchange losses and other investment expenses.
2.10. Claims incurred
Claims incurred include settled amounts for claims, plus claims provisions, mathematical provisions, other technical provisions and special provisions for life insurance where the policyholder bears the investment risk in the accounting period.
Gross claims paid include the costs related to claims payment (appraisals, attorneys' fees, staff costs of the claims management sector etc.), surrenders and recourse claims expenditures.
2.11. Operating expenses
Operating expenses include the costs of insurance sale and administration costs. The sales costs include all direct costs incurred in concluding insurance contracts, such as agents' costs, costs of salaries of sales staff, commissions and marketing costs.
Non-life insurance commission expenses are recognised on a straight-line basis over the accounting period in accordance with the recognition of the premium income to which they relate. Commission expenses for nonlife insurances are recognised on a pay-as-you-go basis. Administration costs include the costs incurred in connection with portfolio management, expenses for employees as well as other material and non-material costs.
2.12. Intangible assets
Intangible assets are initially carried at cost, which includes the purchase price, including import duties and non-refundable tax after deducting trade discounts and rebates, as well as all other costs directly attributable to bringing the asset to their working condition for their intended use.
Non-current intangible assets are recognised if it is probable that future economic benefits associated with the item will flow to the Group, if the cost of the asset can be reliably measured, and if the cost exceeds HRK 3,500.
After initial recognition, assets are measured at cost less accumulated amortisation and any accumulated impairment losses.
The amortisation of assets commences when the assets are ready for use, i.e. when the assets are at the required location and the conditions necessary for use have been met. The amortisation of assets ceases when the assets are fully amortised or classified as assets held for sale. The amortisation is calculated by writing off the purchase cost of each particular asset during the estimated useful life of the asset, by applying the straight-line method. The estimated useful life of intangible assets is from 3 to 10 years (2019: from 3 to 4 years).
Deferred acquisition costs
Deferred acquisition costs for non-life insurance comprise commissions calculated for the internal and external sales network incurred in concluding insurance policies during the financial year. In this regard, the commission charged to the sales network represents the total acquisition commission for each insurance policy, Indirect or general sales costs are not deferred.
For non-life insurance, at the reporting date deferred acquisition costs are calculated using the methodology comparable to the method of calculating the provision for unearned premiums at the reporting date.
By introducing the accounting policy of deferral of acquisition costs, the Group has also introduced recording liabilities for undue commission. Liabilities for undue commission is the difference between the total commission to be calculated for a particular insurance policy and the accrued commission. The basis for calculating the total commission is the value of the written (charged) premium, while the basis for calculating the accrued commission is the amount of the charged premium by each policy.
The recoverable amount of deferred acquisition costs is assessed at each reporting date as part of the liability adequacy test of non-life insurance.
2.13. Property and equipment
Property, plant and equipment are initially carried at cost, which includes the purchase price, including import duties and non-refundable tax after deducting trade discounts and rebates, as well as all other costs directly attributable to bringing the asset to their working condition for their intended use.
Property, plant and equipment are recognised if it is probable that future economic benefits associated with the item will flow to the Company, if the cost of the asset can be reliably measured, and if the cost exceeds HRK 3,500.
After initial recognition, land and buildings are carried at revalued amount, being their fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The increase in value of assets due to the revaluation is recognised in other comprehensive income. A revaluation is performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date. The Group assessed the fair value of these assets during 2019.
After initial recognition, equipment and other tangible assets are measured at cost less accumulated depreciation and any accumulated impairment losses.
Maintenance and repairs, replacements and improvements of minor scale are expensed when incurred. In situations where it can be clearly demonstrated that the expenditures have resulted in an increase in the future economic benefits expected to be obtained from the use of an asset beyond its originally assessed standard performance, the expenditures are capitalised and included in the carrying value of the asset.
Gains or losses on the retirement or disposal of assets are included in the income statement in the period when incurred.
The depreciation of assets commences when the assets are ready for use, i.e. when the assets are at the required location and the conditions necessary for use have been met. The depreciation of assets ceases when the assets are fully depreciated or classified as assets held for sale. Depreciation is charged so as to write off the cost of each asset, other than land and tangible assets under construction, over their estimated useful lives, using the straight-line method, as follows:
| 2020 Estimated |
2019 Estimated |
|
|---|---|---|
| useful life | useful life | |
| Buildings | 40 years | 40 years |
| Furniture and equipment | 4-10 years | 4-10 years |
| Computer equipment | 3-4 years | 3-4 years |
| Vehicles | 5 years | 5 years |
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
2.14. Leases
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-ofuse asset is initially measured at cost, which comprises:
- the amount of the initial measurement of the lease liability,
- any lease payments made at or before the commencement date, less any lease incentives received,
- initial direct costs incurred,
- an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. The lessee incurs the obligation for those costs either at the commencement date or as a consequence of having used the underlying asset during a particular period.
After the commencement date, the Group measures the right-of-use asset applying a cost model. To apply a cost model, the Group measures the right-of-use asset at cost, less any accumulated depreciation and any accumulated impairment losses and adjusted for any remeasurement of the lease liability.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. Lease agreements are made for fixed and indefinite periods. For a lease that is made for an indefinite period, the Group estimates the lease term with respect to the possibility of extension or termination, the historical lease term or the significant cost of replacing the leased asset. The same was applied to lease agreements with a fixed period, and the lease term was reviewed on a case-bycase basis.
The Group mainly leases offices, vehicles and IT equipment.
At the commencement date, a lease liability is measured at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined (mostly in case of office premises lease), the Group use the incremental borrowing rate. As of 31.12.2020 the weighted average incremental borrowing rate applied to lease liabilities recognised under IFRS 16 ranged from 2.57% to 7.29% (31.12.2019: from 3.17% to 5.28%). The Group determines its incremental borrowing rate based on publicly available information, considering various factors such as the lease term, the value of the leased asset, the economic environment, and the specifics related to the creditworthiness of the lessee.
At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:
- fixed payments less any lease incentives receivable,
- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date,
- amounts expected to be payable by the lessee under residual value guarantees,
- the exercise price of a purchase option if the lessee is reasonably certain to exercise that option,
- payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.
After the commencement date, a Group measure the lease liability by:
- increasing the carrying amount to reflect interest on the lease liability,
- reducing the carrying amount to reflect the lease payments made,
- remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect revised in-substance fixed lease payments.
Interest on the lease liability in each period during the lease term is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability. The periodic rate of interest is the discount rate, or if applicable the revised discount rate.
The Group as lessee, in accordance with IFRS 16, elected not to apply the requirements of standard to:
- short-term leases (lease term of 12 months or less),
- leases for which the underlying asset is of low value.
In that case, the Group recognise the lease payments associated with those leases as an expense on a straightline basis over the lease term.
In statement of financial position, right-of-use assets are presented within Property and equipment, while lease liabilities are presented within Financial liabilities.
Lease income in which the Group is lessor, are recognised in the statement of comprehensive income on a straight-line basis over the lease term in note 6.2 Income from Investment property. The Group leases business premises for a period of 1 to 8 years. Lease receivables are disclosed as Trade receivables in note 22.5.
2.15. Investment property
Investment property (land, buildings) that are not used for operations and that are owned by the Group or held under a finance lease and that are held to enable the Group to earn rental income and/or for capital appreciation and are measured at fair value through profit or loss.
The Group measures the fair value of its investment property at the end of each accounting period, and such measurement is based on the appraisal by a hired appraiser.
Subsequent expenditure is capitalised only when it is probable that future economic benefits associated with it will flow to the Group and the cost can be measured reliably. All other repairs and maintenance costs are expensed when incurred. If an investment property becomes owner-occupied, it is reclassified to property and equipment, and its carrying amount at the date of reclassification becomes its deemed cost to be subsequently depreciated.
2.16. Investments in subsidiaries and associates
Subsidiaries are companies in which the Company controls the adoption and implementation of financial and operating policies.
Associates are companies in which the Company has significant influence but not control over the adoption and implementation of financial and operating policies.
Investments in subsidiaries and associates are presented in separate financial statements using the cost method.
2.17. Financial instruments
/i/ Classification and recognition
The Group classifies its financial instruments into the following categories: financial assets at fair value through profit or loss, loans and receivables, available-for-sale financial assets, held-to-maturity investments and other financial liabilities. The classification depends on the purpose for which the financial assets and liabilities were acquired.
The Management Board determines the classification of financial assets and financial liabilities at initial recognition and, where appropriate, re-evaluates this designation at each reporting date.
Financial assets and financial liabilities at fair value through profit or loss
Financial assets and financial liabilities at fair value through profit or loss are those that are classified as assets and liabilities held for trading or those that the Group initially classified as at fair value through profit or loss. Trading assets and liabilities are those assets and liabilities that the Group acquires or incurs principally for the purpose of selling or repurchasing in the near term or holds as a part of a portfolio that is managed together for short-term profit or position taking.
The Group designates financial assets and liabilities at fair value through profit or loss when either:
- the assets and liabilities are managed, evaluated and reported internally on a fair value basis;
- the designation eliminates or significantly reduces an accounting mismatch which would otherwise arise; or
- the asset or liability contains an embedded derivative that significantly modifies the cash flows that would otherwise be required under the contract.
Financial assets at fair value through profit or loss is included in debt and equity securities, investments funds and other financial assets held for trading. Derivatives are classified as assets held for trading. The Group does not use hedge accounting.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than those:
- that the entity intends to sell immediately or in a short period of time and that will be classified as financial assets held for trading, and that which the Management classifies at initial recognition as assets at fair value through profit or loss;
- that the entity, upon initial recognition, classifies as available for sale; or
• for which it is unlikely that the entity will recover the larger portion of the initial investment value, except in the case of credit rating deterioration, and which will be classified as available for sale.
Loans and receivables are created when the Group approves financial resources to clients without the intention to trade in such receivables, and they include deposits with credit institutions, loans secured mostly by mortgages and loans given to the insured parties from mathematical provisions for life insurance, secured by life insurance policies.
Accounting of receivables arising from insurance contracts is disclosed in Note 2.18 - "Receivables".
Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity. Held-to-maturity investments include state and corporate bonds with fixed income.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. Financial assets designated as available for sale are intended to be held for an indefinite period of time, but may be sold in response to needs for liquidity or changes in interest rates, foreign exchange rates, or equity prices.
Other financial liabilities
Other financial liabilities include all financial liabilities that are not classified in the category at fair value through profit or loss (preference shares) and derivative financial instruments at fair value through profit or loss (Note 2.17 /iv/).
/ii/ Recognition and derecognition
Regular way purchases and sales of financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets are recognised on the trading date, that is, the date on which the Group commits to purchasing or selling the instrument. Loans and receivables as well as financial liabilities are initially recognized on the date of occurrence, that is, on the day they are advanced to borrowers or received from lenders.
The Group derecognises financial assets (in full or in part) when the contractual rights to receive cash flows from the financial asset have expired or when it loses control over the contractual rights to such financial assets. This occurs when the Group essentially transfers all equity risks and benefits to another business entity, or when the rights are exercised, surrendered or expired.
The Group derocognises financial liabilities only when are extinguished, that is, when they are discharged, cancelled or expire, or when they are transferred. Should the terms of financial liabilities substantially change, the Group shall derecognise that particular liability and at the same time recognise a new financial liability, with new terms.
Initial and subsequent measurement
Financial assets and liabilities are recognised initially at their fair value plus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
After initial recognition, the Group measures financial instruments at fair value through profit or loss, and available-for-sale financial assets at their fair value, without any deduction for selling costs.
For financial instruments traded in active markets, the determination of fair values of financial assets and financial liabilities is based on quoted market prices. This includes listed equity securities and quoted debt instruments on official stock exchanges.
For all other financial instruments, fair value is determined using valuation techniques. In these techniques, fair values are estimated from observable financial information based on which value is determined using the discounted cash flow method and/or the method of comparable companies and transactions.
In cases where the fair value of unlisted equity instruments cannot be determined reliably, the instruments are carried at cost.
Loans and receivables and held-to-maturity investments are measured at amortised cost net of impairment. Financial liabilities not classified at fair value through profit or loss are measured at amortised cost. Premiums and discounts, including initial transaction costs, are included in the carrying amount of the associated instrument and amortized using the effective interest rate of that instrument.
Gains and losses
Gains and losses arising from a change in the fair value of financial assets or financial liabilities at fair value through profit or loss are recognised in profit or loss.
Gains and losses arising from changes in the fair value of available-for-sale monetary assets are recognised directly in other comprehensive income. Impairment losses, foreign exchange gains and losses, interest income and amortisation of premium or discount using the effective interest method on available-for-sale monetary assets are recognised in profit or loss. Foreign exchange differences resulting from revaluation of non-monetary financial assets denominated in or linked to foreign currency that are classified as available for sale are recognised within other comprehensive income, along with all other changes in their fair value, whereas income earned from dividends is recognised through profit or loss. Upon sale or other derecognition of available-for-sale financial assets, all cumulative gains or losses are transferred from other comprehensive income to profit or loss.
Gains and losses on financial instruments carried at amortised cost may also arise, and are recognised in profit or loss, when a financial instrument is derecognized or when its value is impaired.
Apart from gains and losses arising from the change in fair value of available-for-sale financial assets which are recognized in other comprehensive income, as described above, all other gains and losses and interest are recognised in profit or loss in line items "Finance income" and "Finance costs".
Fair value measurement principles
The fair value of financial assets and liabilities at fair value through profit or loss and financial assets available for sale is their quoted market price at the reporting date without any deduction for estimated future costs to sell. If the financial assets market (including the unlisted securities market) is not active, or if, for any other reason the fair value cannot be reliably measured on the basis of the market price, the Group determines the fair value based on observable prices (prices of similar or identical items), and when this is not available, it applies various estimation techniques that use all relevant information and inputs that can help in estimating the fair value. This includes the use of prices attained in recent transactions between knowledgeable and willing parties, reference to other essentially similar instruments, discounted cash flow analysis and option pricing models, maximising the use of observable market data and relying as little as possible on entityspecific estimates.
Where discounted cash flow techniques are used, estimated future cash flows are based on the Management Board's best estimates and the discount rate is the market rate effective at the reporting date and used for financial instruments with similar conditions. Where a pricing model is used, the market related rates effective at the reporting date are used.
/iii/ Impairment of financial assets
At each reporting date the Group assesses whether there is objective evidence that financial assets not classified as financial assets at fair value through profit or loss are impaired. Financial assets are impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the asset, and that the loss event has an impact on the future cash flows of the asset that can be estimated reliably.
The Group considers the evidence of impairment for both a specific asset and at group level. All individually significant financial assets are tested for impairment. All individually significant financial assets where impairment has not been identified are included in the base for testing for impairment on a collective basis for impairment that has occurred but has yet to be identified. Assets that are not individually significant are tested for impairment by grouping together financial assets (presented at amortised cost) on the basis of shared risk characteristics.
Objective evidence of impairment of financial assets (including equity securities) includes default or delinquency by a borrower, restructuring of loans or advances by the Group on terms that the Group would not otherwise consider, indications that a borrower or issuer will enter bankruptcy, or other available data relating to a group of assets, such as adverse changes in the payment status of borrowers or issuers within the group, or economic conditions that are connected with defaults within the group.
For the purposes of assessing impairment at group level, the Group relies on historical experience in terms of loss rates, periods of loss recognition, adjusted for the purposes of the Management Board's assessment as to whether current economic and credit conditions are such that the actual losses may be higher or lower than before. Loss rates and the expected recognition period are reviewed regularly.
Impairment losses on assets carried at amortised cost are measured as the difference between the carrying amount of the financial assets and the present value of estimated cash flows discounted at the assets' original effective interest rate. Losses are recognised through profit or loss and reflected in impairment provisions.
In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the investment below its cost is considered as an indicator of impairment. If any such evidence exists for available-for-sale financial assets, the cumulative loss, calculated as the difference between the cost and current fair value, less any loss on impairment of that financial asset that was previously recognised in profit or loss, is transferred from other comprehensive income and recognised in profit or loss. Impairment losses recognised in profit or loss on equity securities cannot be subsequently reversed through profit or loss, but all value increases are recognised in other comprehensive income until the final sale.
If a subsequent event results in the decrease in the amount of impairment loss for financial assets that are presented at amortised cost and for debt securities available for sale, the previously recognised impairment loss is reversed and recognised through profit or loss. Changes in the amount of impairment related to the time value of money are recognised as a component of interest income.
/iv/ Specific instruments
Debt securities
Debt securities are classified as held-to-maturity investments or financial assets at fair value through profit or loss, or as financial assets available for sale, depending on the purpose for which the debt security has been acquired.
Loans and advances to banks
Deposits with banks are classified as loans and receivables and valued at amortised cost less impairment losses.
Equity securities
Equity securities are classified as assets at fair value through profit or loss or as available-for-sale financial assets and measured at fair value, unless it is impossible to reliably establish the fair value (as described above) when they are measured at cost.
Loans and receivables from policyholders
Loans and receivables from policyholders are presented at amortised cost less impairment to reflect the estimated recoverable amounts.
Investments in funds
Investments in open-end investment funds are classified as financial assets at fair value through profit or loss or as financial assets available for sale and they are measured at current fair value.
Investments for the account and risk of life insurance policyholders
Investments for the account and risk of life insurance policyholders include investments in unit-linked products and are classified as financial assets at fair value through profit or loss.
Receivables from insurance and other receivables
Receivables from direct insurance and other receivables are recognised initially at fair value and subsequently at amortised cost less value impairment.
Trade and other payables
Trade and other payables are recognised initially at fair value and subsequently at amortised cost.
Derivative financial instruments
As part of its regular operations, the Group concludes contracts on derivative financial instruments for the purpose of managing currency risk and therefore these financial instruments are classified as Financial assets or liabilities held for trading - derivatives. Derivatives of the Group include foreign exchange forward contracts.
Derivatives are recorded in the off-balance sheet records at the nominal value of financial instruments and are measured at fair value. Increase / decrease in fair value is recognized as an asset if their fair value is positive and liabilities if their fair value is negative and changes in fair value of derivatives are included in profit or loss i.e. in financial income and expenses.
Embedded derivatives within insurance contracts and investment contracts
Sometimes, a derivative may be a component of a hybrid (combined) financial instrument or insurance contract that includes both the derivative and host contract with the effect that some of the cash flows of the combined instrument vary in a similar way to a stand-alone derivative. Such derivatives are known as embedded derivatives.
Embedded derivatives are separated from their host contract, measured at fair value and changes in their fair value included in profit or loss if they meet the following conditions:
- the economic characteristics and risks of embedded derivatives are not closely connected with the economic characteristics and risks of the host contract,
- a separate instrument with the same characteristics as those of the embedded derivative would satisfy the definition of a derivative,
- the hybrid instrument is not measured at fair value and changes in its fair value are not recognised in profit or loss,
Embedded derivatives that meet the definition of an insurance contract need not be separated from the host contract. Furthermore, the Group has used the exemption provided in IFRS 4, 'Insurance Contracts':
- it does not separate or measure at fair value the option of the policyholder to repurchase the insurance contract at a fixed price (or the amount based on the fixed amount and interest rate), even if the price is different from the book value of the insurance liability in the host contract,
- it does not separate or measure at fair value the option of the policyholder to repurchase the contract with discretionary participation features.
Offsetting of financial instruments
Financial assets and liabilities are offset and presented in the financial statement on a net basis when there is a legally enforceable right to offset the recognised amounts and an intention to settle on a net basis, or the acquisition of assets and settlement of liabilities take place simultaneously.
2.18. Receivables
/i/ Insurance receivables include receivables from insured parties based on non-life insurance premiums. Receivables based on non-life insurance premiums comprise receivables for written, but not yet invoiced premium and receivables for invoiced, but not paid premium.
Recognition of insurance premium is described in Note 2.8., – ''Gross written premiums''.
/ii/ Receivables for invoiced but unpaid premiums are presented at nominal value, and doubtful and uncollectible receivables are impaired. Impairment is recognised for all outstanding receivables which were due and payable 180 days prior to the balance sheet date. Impairment can be decreased for receivables which are used as basis for payment of claim to the debtor (provision for claims).
/iii/ Receivables under the right to recourse are recognised for all recourse cases from an out-of-court procedure arising from receivables from another insurance company and recourses for which a financial settlement was concluded with the counterparty. Recourse receivables are impaired for all receivables 180 past due. The determined impairment can be decreased by recourse receivables that are likely to be collected. Recognition of income from recourses is deferred due to uncertainty of collection. Income from recourses is deferred for recourses which are not settled in cash with the exception of recourses from other insurance companies which are recognised in profit or loss immediately.
/iv/ Other receivables pertain to receivables arising from interest on loans and deposits, receivables arising from advance payments, receivables arising from received payment instruments, trade receivables etc.
Group recognise other operating income not directly related to insurance operations and sales income from subsidiaries which main activities are not insurance operations. Other operating income is recognised when an invoice is issued.
The Group provides vehicle inspection services and similar services under fixed price contracts, where price lists are an integral part of each contract. The services are delivered in a short time (all throughout one day), and revenue is recognized on the basis of the actual service after the Group fulfils the obligation to perform. Purchase contracts are simple and usually involve a single performance obligation. Customers are invoiced immediately after the delivery of the service, and payment follows the delivery of the service at the point of sale.
2.19. Cash and cash equivalents and short-term deposits
Cash consists of balances with banks. Cash equivalents are short-term, high-liquidity investments that can be converted at any time into known amounts of cash and are not exposed to significant changes in value. The carrying amounts of cash and cash equivalents generally approximate their fair value.
For the purposes of reporting on cash flows, cash and cash equivalents refer to cash with banks and in hand, as well as deposits with original maturity up to three months.
2.20. Income tax
The tax expense represents the sum of the current tax liability and deferred tax.
Current tax
The current tax liability is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates enacted or substantively enacted at the end of the reporting period.
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition, other than in a business combination, of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognized on the basis of revaluation of land and buildings and of financial assets available for sale.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax laws that have been enacted or substantively enacted by the end of the reporting period. The calculation of deferred tax liabilities and assets reflects the amount at which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are not discounted and are classified as non-current assets and/or liabilities.
Current and deferred income tax for the period
Current and deferred tax is recognised as an expense or income in profit or loss, except when they relate to items credited or debited to other comprehensive income in which case the deferred tax is also recognised in comprehensive income.
2.21. Capital
In its financial records the Group records capital categorized as follows: subscribed capital, share premium, fair value reserve, statutory reserves, legal reserves, other reserves, retained profit and current year profit/(loss).
/i/ Subscribed capital represents the indivisible share capital of the Company, paid in full.
/ii/ Revaluation reserve
The revaluation reserve includes profits from the revaluation of properties, net of taxes. The revaluation reserve is transferred directly to retained profit in proportion to the depreciation of the asset.
The revaluation reserve of available-for-sale financial assets includes unrealised gains and losses from changes in fair value of available-for-sale financial assets, net of impairment and deferred tax.
/iii/ Allocations to statutory reserves, legal reserves, other reserves and retained profit are regulated by the Decisions of the Company's General Assembly.
/iv/ The current year income is presented according to the balance as at reporting date and it is transferred to the upcoming fiscal year. The utilization or allocation of profit is determined by the Decision of the Company's General Assembly.
2.22. Technical provisions
Technical provisions of the Group presented in the financial statements pertain to provisions for unearned premiums, mathematical reserve, provisions for claims, fluctuation provisions, provisions for bonuses and discounts and other insurance-technical provisions. They are formed in accordance with the Ordinance on minimum standards, methods of calculating and guidelines for calculating technical provisions in insurance based on the accounting regulations as well as in accordance with the Company's and the Group's internal regulations. All technical provisions have been granted a positive opinion of the appointed certified actuary for life insurance and the appointed certified actuary for the Company's non-life insurance.
/i/ Provisions for unearned premiums
Provisions for unearned premiums is calculated for those types of insurance where the insurance coverage lasts even after the end of the reporting period, since the insurance year and the reporting period do not overlap. The basis for calculation of gross unearned premium of non-life insurance and reinsurance is the accrued (written) premium, while the basis for the calculation of gross unearned premium of supplemental insurance with life insurance is the collected premium.
Provisions for unearned premiums are calculated according to the pro rata temporis method, except for the types of loan insurance where a decrease of insurance cover throughout the contract term is taken into consideration. The reinsurance share of the gross written premium is determined depending on the reinsurance contract and the method used for the calculation of the corresponding gross written premium,
/ii/ Mathematical provision
Mathematical provisions are calculated individually for every insurance contract by using the prospective net method in accordance with legal regulations and internal Ordinances of HANFA.
/iii/ Claims provisions
Claims provisions contain provisions for reported claims, provisions for incurred but not reported claims, provisions for costs of processing claims.
Provisions for reported claims are determined by individual assessment. Actuarial methods are applied upon determining provisions for the costs of processing claims and for incurred but unreported claims.
The reinsurance share in provisions for claims incurred is determined in accordance with reinsurance contracts.
/iv/ Provisions for unexpired risks
Provisions for unexpired risks are created where the expected value of claims and costs pertaining to unexpired periods of policies, which are valid on the reporting date, exceeds the provisions for unearned premiums pertaining to such policies. Provisions for unexpired risks are calculated separately for individual types of insurance, i.e. homogeneous risk groups.
/v/ Provision for bonuses and discounts
The provision for bonuses and discounts is established according to the provisions of insurance contracts and the Ordinance on minimum standards, methods of calculating and guidelines for calculating technical provisions in insurance in line with accounting regulations and internal regulations.
2.23. Technical life insurance provisions where the policy holder bears the investment risk
Forthe life insurance policies where the policy holder bears the investment risk, adequate separate provisions are created for every such insurance contract.
2.24. Reinsurance
The Group cedes premiums to reinsurance in the regular course of business for the purpose of limiting its net loss potential through risk diversification. Reinsurance contracts do not relieve the Group from its direct obligations to policyholders.
Premiums ceded and recoverable amounts are presented through profit or loss on a gross basis. Only the contracts that give rise to a significant transfer of insurance risk are accounted for as reinsurance contracts. Amounts recoverable under such contracts are recognised in the same year as the corresponding claim. Contracts, through which significant insurance risk (financial reinsurance) is not transferred, are recorded as deposits. During 2020 and 2019, the Group did not conclude any such contracts.
Reinsurance assets include amounts receivable from reinsurance companies for ceded insurance liabilities. Receivables from reinsurers are estimated in a manner consistent with the provisions for unpaid claims and claims paid by reinsured policies. Reinsurance assets include the actual or estimated receivables from reinsurers in respect of technical provisions. Reinsurance assets relating to technical provisions are created on the basis of the terms of reinsurance contracts and measured on the same basis as the corresponding reinsured liabilities.
Reinsurance receivables are tested for impairment at each reporting date.
2.25. Liabilities and related assets under liability adequacy test
IFRS 4 provides for the implementation of mandatory liability adequacy test under the insurance contract. At each reporting date the Group estimates whether its reported insurance liabilities are adequate, using current estimates of future cash flows for all its insurance contracts. Should the above assessment show that the book value of insurance liabilities is insufficient in relation to the estimated future cash flows, the shortage is charged to profit or loss. Estimates of future cash flows are based on realistic actuarial assumptions, taking into account experience of the occurrence of claims, latest demographic tables, aspects of mortality, morbidity, return on investment, costs and inflation.
2.26. Other liabilities
/i/ Liabilities arising from direct insurance pertain to liabilities under claims,
/ii/ Liabilities arising from direct reinsurance pertain to liabilities under reinsurance premium,
/iii/ Other liabilities pertain to liabilities toward domestic suppliers, liabilities for advances received, liabilities to employees, commission liabilities etc.
/vi/ The Company makes monthly payments to the guarantee fund of the Croatian Insurance Bureau for the settlement of claims for damages caused by uninsured and unknown vehicles. The monthly fee is determined according to the premium market share of each insurer, expressed in percentage. The guarantee funds of the Croatian Insurance Bureau are utilised to settle claims for damages caused by uninsured and unknown vehicles.
2.27. Employee benefits and pension plans
Pension obligations
For defined contribution plans, the Group pays contributions to state-owned pension and health insurance funds, in accordance with legal requirements or individual choice. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as an expense in profit or loss as they accrue.
Short-term employee benefits
Short-term employee benefits are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under the short-term cash bonus or profit-sharing plans if the Group has a present legal obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Other employee benefits
Liabilities based on other long-term employee benefits, such as jubilee awards and termination benefits at retirement, are recorded as the net present value of the liability for defined benefits at the balance sheet date. The discounted future cash flow method is used for the calculation of the present value of the liability.
Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits, The Group recognises termination benefits at the earlier of the following dates:
(a) when the Group can no longer withdraw the offer of those benefits and
(b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits.
In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer.
2.28. Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are reviewed at each balance sheet date and adjusted to reflect the best current estimate.
Provisions are determined for costs of legal disputes and costs of employee benefits for the number of years of service and retirement (regular jubilee awards and termination benefits) and stimulation termination benefits as part of the redundancy plan.
Provisions for employee benefits for long-term employment and retirement (regular jubilee awards and termination benefits) are determined in such a manner that in each year of work, the present value of the proportional part of the expected amount of regular jubilee rewards and termination benefit depends on the total time remaining until the jubilee award is paid, less expected employee turnover. The discount rate applied is the yield on the respective bonds.
2.29. Impairment of non-financial assets
The net book value of the Group's assets, other than financial assets (see Note 2.17 - "Financial instruments") and income tax (see Note 2.20 - "Income tax"), are reviewed at each reporting date to determine whether there is any indication of value impairment. If any such indication exists, the asset's recoverable amount of the asset is estimated. For intangible assets with no finite useful life (the Group had no such assets on the date of reporting) and intangible assets not yet in use, the recoverable amount is estimated at each reporting date.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups. Impairment losses are recognised in profit or loss. Exceptionally, the impairment of property measured by using the revaluation model is debited to fair value reserves, if any, and the remaining amount of the impairment after these reserves have been exhausted is recognised in profit or loss for the period.
The recoverable amount of an asset and cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
The value impairment loss recognised in prior periods is assessed on each reporting date in order to establish whether the loss has decreased or no longer exists. Impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of accumulated depreciation or amortisation, if no impairment loss had been recognised.
2.30. Contingent liabilities and assets
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity, or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are recognised as a provision in the financial statements when it is more likely than not that there will be a cash outflow. Other contingent liabilities are only disclosed in the notes to the financial statements.
Contingent assets are not recognised in the financial statements, rather they are recognized when an inflow of economic benefits is nearly certain.
2.31. Events after the balance sheet date
Events after the balance sheet date, which provide additional information on the Group's position at the balance sheet date (adjusting events), are reflected in the financial statements. Events that are not adjusting events are disclosed in the notes to the financial statements, if material.
2.32. Earnings per share
Earnings per share are calculated as profit of the period attributable to Company shareholders decreased by dividends of preference shares (in the case of shares classified as equity, not financial liabilities) divided by the weighted average of ordinary shares (without treasury shares).
2.33. Classification of contracts
Contracts through which the Group undertakes significant underwriting risk on behalf of the other party (policyholder) by accepting to indemnify the policyholder or another insurance beneficiary, if a particular future event occurs (insured event) which has a negative effect on the policyholder or other insurance beneficiary, are classified as insurance contracts. The underwriting risk differs from financial risk.
Financial risk is the risk of possible future change in one or more of the defined interest rates, prices of securities, prices of assets, foreign exchange rates, price or rate indexes, credit rating or credit indexes or other variables, provided that when it comes to a non-financial variable, this variable is not specific to one of the contractual parties. Insurance contracts can also transfer financial risk to some extent.
Contracts where the transfer of risk from the policyholder to the Group is not significant are classified as investment contracts.
Both insurance and investment contracts may contain discretionary participation features. A contract with a discretionary participation feature is a contractual right held by a policyholder to receive as a supplement to guaranteed minimum payments, additional payments that are likely to be a significant portion of the total contractual payments, and whose amount or timing is contractually at the discretion of the issuer and that are contractually based on:
-
the performance of a specified pool of contracts or a specified type of contract,
-
realised and/or unrealised investment returns on a specified pool of assets held by the issuer or
-
the profit or loss of the company that issues the contracts.
The discretionary element of those contracts is accounted for as a liability within the mathematical provision. The provision for discretionary bonus within the mathematical provision may comprise amounts arising in relation to participating policies, for which the allocation of funds has not been determined at the reporting date. When the allocation of funds is determined, appropriate transfers are made out of this fund. At the reporting date, the Company has no provisions for discretionary allocation of profit (2019: HRK 0 thousand), and the provisions for the Group amounts to HRK 867 thousand (2019: HRK 856 thousand).
2.34. Segment reporting
A segment is an integral part of the Company that carries out business activities from which it can earn income or have expenses incurred, including income and expenses relating to transactions with other constituents of the Company, whose business results are regularly reviewed by the chief operating decision maker. Profit before tax is mostly used as performance measure for segment reporting. The review is carried out in order to make decisions about resources to be allocated to a particular segment and to assess its performance, and for which there is separate financial information. Segments of the Group and the Company include the life insurance and non-life insurance segments.
Distribution of costs between life and non-life insurance segments
Investment income, realised and unrealised profits and losses, expenses and compensations arising from nonlife insurance, are distributed to the non-life segment.
Investment income, realised and unrealised profits and losses, expenses and compensations related to life insurance are included directly in the life insurance segment.
Income and expenses from investments, realized and unrealized profits and losses, expenses and compensations arising from the investment of capital and reserves are distributed to life and non-life segments depending on the allocation of the related assets or shares in the Group's provisions.
A significant amount of direct administrative costs are directly debited to life and non-life insurance segments. The Group allocates administrative costs that cannot be allocated directly to life or non-life insurance on the basis of an analysis of the time spent by the administration employee on life-insurance and non-life insurance matters. The allocation of stated costs within a particular segment to the corresponding type of insurance is made on the basis of the share in the gross premium policy of the appropriate type of insurance. Commissions are recorded separately to the life and non-life insurance segments.
Allocation of capital, reserves and assets
Property and equipment, intangible assets and investment property are allocated to the non-life segment, unless directly related to life insurance segment. Financial investments are allocated in accordance with sources of funding. Provisions are allocated according to the source of related financial assets while legal and other provisions are allocated to each segment based on the results of the related segment. Other receivables and liabilities are allocated to those segments from which they arise.
2.35. Key sources of estimation uncertainty and critical accounting judgments in applying the Group's accounting policies
/i/ Impairment losses on loans and receivables
The need for impairment of assets carried at amortised cost is estimated as described in Note 2.17/iii/ impairment of financial assets. The provision for impairment of a certain receivable is based on the Management's best estimate of the present value of expected future cash flows.
In estimating such cash flows, the Management assesses the debtor's financial position and the estimated fair value of insurance instruments. Any asset which has undergone impairment is evaluated individually and the function of credit risk helps to independently approve a recovery strategy and assessment of realizable cash flows.
The gross amount of loans and receivables, and the rate of recognised impairment loss at the end of the year are as follows:
| Company | Company | Group | Group | ||
|---|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | ||
| Gross exposure (HRK'000) | 648,392 | 672,798 | 400,962 | 425,203 | |
| Impairment rate (%) | 21% | 23% | 34% | 36% |
The change in the impairment rate by 1 pp (as a result of a change in the expected cash flows and/or fair value of the collaterals) on the gross amount of the above loans and receivables would lead to an increase/reversal of impairment in the amount of HRK 6,484 thousand (31 December 2019: HRK 6,728 thousand) for the Company and HRK 4,010 thousand (2019: HRK 4,252 thousand) for the Group.
/ii/ Estimation uncertainty relating to the forming of provisions
The most significant estimates in terms of the Group's financial statements pertain to the forming of technical reserves. In the forming of technical reserves, the Group applies legal regulations. Actuaries included in valuation of technical provisions have adequate knowledge and experience. The Group's staff includes certified actuaries. The Management believes that the current level of technical provisions is sufficient.
The Group forms reserves for unexpired risks arising from non-life insurance where it is expected that the claims and administrative expenses likely to arise upon the expiry of the financial year for contracts concluded before that date will exceed the unearned premium from such contracts.
Expected cash flows relating to claims and expenses are estimated on the basis of experience of the previous contract term and adjusted for significant individual losses which are not expected to recur. The liability adequacy test was performed on all types of insurance. The Management believes that the current amount of provisions is sufficient.
Insurance risk management is described in detail in Note 2.36, while the reserves for insurance contracts are analysed in Note 2.22. The sensitivity analysis of technical provisions is presented in Note 2.36.
/iii/ Fair valuation of investment property
Fair valuation of investment property of the Company and the Group is subjective in nature due to individual nature of each property, location and the expected future rental income. The management engages external appraisers to determine the fair value of the property. Fair value techniques, key inputs and sensitivity analysis are presented in Note 2.38 Fair value.
/iv/ Estimation of the useful life of right-of-use assets
We distinguish between lease agreements made for a fixed period, for an indefinite period or for a fixed period with an extension option.
In the case of real property and office leases, the Company and the Group consider each lease contract and evaluate whether it is possible to extend it after its planned completion if it is defined as a fixed term contract or estimate the duration of the lease in case of contract made for indefinite period. The estimated life expectancy is based on historical experience and business plans for the future operations of the Company and the Group.
In case of lease agreements made for fixed period, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option.
During the current financial year, the financial effect of revising lease terms to reflect the effect of exercising extension options was an increase in recognised lease liabilities and right-of-use assets of HRK 1.2 million for the Company and the Group ( 2019: HRK 1.3 million).
2.36. Insurance risk management
Underwriting risk pertains to the risk that may arise if actual payments of claims and compensations exceed the net book amount of insurance liabilities due to coincidence, error and/or change in circumstances. Underwriting risk includes the risk of the occurrence of a loss event, risk of determining the amount of premium (setting the tariff), the risk of forming provisions and the risk of reinsurance.
Premium risk is present at the moment of issuing the policy, before the insured event occurs. There is a risk that the costs and losses which may occur might be greater than the premiums received. The provision risk represents the risk of having the absolute amount of technical provisions wrongly assessed or of having the actual losses vary around the statistical mean value. Non-life underwriting risk also includes the risk of disaster which arises from highly extraordinary events which are not sufficiently covered by the premium risk or provision risk. Life underwriting risk includes biometrical risk (which involves mortality, longevity, risk of becoming ill or disability risk) and the lapse risk. Lapse risk represents a higher or lower rate of withdrawal from policies, interruptions, changes in capitalization (cessation of payments of premium) and surrender.
The Group manages its underwriting risk through underwriting limits, approval procedures for transactions that involve new products or that exceed set limits, through tariff determination, product design and management of reinsurance. The underwriting strategy aims at diversity which will ensure a balanced portfolio, and which is based on a large portfolio of similar risks for several years, which reduces the variability of results. As a rule, all non-life insurance contracts are concluded on a yearly basis and the policyholders have the right to decline renewal of contract or to change the contract terms upon renewal.
The Group transfers a portion of the risk to reinsurance in order to control its exposure to losses and protect capital resources. The Group purchases a combination of proportional and non-proportional reinsurance contracts to reduce the net exposure to a particular risk depending on the type of insurance.
Underwriting risk in the Group is monitored by the actuaries within the scope of their tasks and the Risk Management Department, in agreement with them, takes the indicators in order to include the risks in the risk management process at the overall Group level.
A report on the adequacy of provisions and insurance premium is submitted by the appointed certified actuary, while a report on the adequacy of reinsurance program based on which is confirmed adequacy of its own part is submitted by the actuarial function.
Concentration of insurance risk
A key aspect of underwriting risk is that the Group is exposed to is the degree of underwriting risk concentration which determines the extent to which a particular event or a series of events may affect the Group's liabilities. Such concentrations may arise from a single insurance contract or through a number of related contracts which may result in a similar liability. An important aspect of the insurance risk concentration is that it may arise from the accumulation of risk through different types of insurance.
Concentration risk may arise from events that are not frequent but with considerable consequences such as natural disasters, in situations where the Group is exposed to unexpected changes in trends, for example unexpected changes in human mortality or in policyholder behaviour; or where significant litigation or regulatory risks could cause a large single loss or have a pervasive effect on a large number of contracts.
The concentration of insurance risk before and after reinsurance, or retrocession in relation to the type of accepted insurance risk is shown below with reference to the carrying value of claims and benefits (gross and net of reinsurance) arising under the insurance contract:
| Company | 31 Dec. 2020 | 31 Dec. 2019 | ||||
|---|---|---|---|---|---|---|
| Gross claims incurred |
Reinsuranc e share of claims incurred |
Net claims incurred |
Gross claims incurred |
Reinsuranc e share of claims incurred |
Net claims incurred |
|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Accident insurance | 31,174 | (8) | 31,166 | 30,456 | (409) | 30,047 |
| Health insurance | 160,902 | 11 | 160,913 | 189,647 | - | 189,647 |
| Road motor vehicle insurance | 217,794 | (1,059) | 216,735 | 253,627 | (3,133) | 250,494 |
| Railroad insurance | 2,346 | - | 2,346 | 1,089 | - | 1,089 |
| Aircraft insurance | 1,116 | (427) | 689 | (2,944) | 3,642 | 698 |
| Vessel insurance | 4,662 | (3,609) | 1,053 | 20,410 | (16,409) | 4,001 |
| Insurance for goods in transit | 1,330 | (607) | 723 | 3,635 | (822) | 2,813 |
| Insurance against fire and natural disasters |
387,688 | (258,380) | 129,308 | 102,068 | (48,057) | 54,011 |
| Other property insurance | 247,734 | (13,703) | 234,031 | 311,480 | (45,072) | 266,408 |
| Motor liability insurance | 321,338 | (12,001) | 309,337 | 277,743 | (12,946) | 264,797 |
| Aircraft liability insurance | 177 | (6) | 171 | 97 | (1) | 96 |
| Vessel liability insurance | (12,218) | 354 | (11,864) | (5,084) | 845 | (4,239) |
| Other types of liability insurance |
127,674 | (6,153) | 121,521 | 90,699 | (1,547) | 89,152 |
| Loan insurance/credit insurance |
(30,999) | (1,916) | (32,915) | (69,572) | (1,575) | (71,147) |
| Guarantee insurance | 767 | (65) | 702 | 317 | - | 317 |
| Miscellaneous financial loss insurance |
63,271 | (50,550) | 12,721 | 5,839 | 64 | 5,903 |
| Legal expenses insurance | 421 | 9 | 430 | 330 | 5 | 335 |
| Assistance | 5,334 | - | 5,334 | 3,695 | - | 3,695 |
| Total non-life insurance | 1,530,511 | (348,110) | 1,182,401 | 1,213,532 | (125,415) | 1,088,117 |
| Life insurance | 477,237 | 10 | 477,247 | 496,070 | (10) | 496,060 |
| Annuity insurance | 2,887 | - | 2,887 | 14,756 | - | 14,756 |
| Additional insurance with life insurance |
1,514 | - | 1,514 | 2,299 | - | 2,299 |
| Life or annuity insurance where the policyholder bears the investment risk |
4,803 | - | 4,803 | (166) | - | (166) |
| Total life insurance | 486,441 | 10 | 486,451 | 512,959 | (10) | 512,949 |
| Total | 2,016,952 | (348,100) | 1,668,852 | 1,726,491 | (125,425) | 1,601,066 |
Group:
| 31 Dec. 2020 | 31 Dec. 2019 | |||||
|---|---|---|---|---|---|---|
| Gross | Reinsurance | Gross | Reinsurance | |||
| claims | share of claims |
Net claims | claims | share of | Net claims | |
| incurred | incurred | incurred | claims | incurred | ||
| incurred | incurred | |||||
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Accident insurance | 44,726 | (46) | 44,680 | 38,526 | (319) | 38,207 |
| Health insurance | 150,260 | 105 | 150,365 | 179,773 | 64 | 179,837 |
| Road motor vehicle insurance | 256,861 | (1,433) | 255,428 | 294,775 | (2,932) | 291,843 |
| Railroad insurance | 2,346 | - | 2,346 | 1,089 | - | 1,089 |
| Aircraft insurance | 1,116 | (427) | 689 | (2,944) | 3,642 | 698 |
| Vessel insurance | 4,661 | (3,609) | 1,052 | 20,410 | (16,409) | 4,001 |
| Insurance for goods in transit | 994 | (569) | 425 | 3,570 | (778) | 2,792 |
| Insurance against fire and natural disasters |
391,852 | (259,343) | 132,509 | 107,566 | (47,635) | 59,931 |
| Other property insurance | 253,020 | (14,403) | 238,617 | 322,057 | (47,812) | 274,245 |
| Motor liability insurance | 445,159 | (12,897) | 432,262 | 403,105 | (13,315) | 389,790 |
| Aircraft liability insurance | 177 | (6) | 171 | 97 | (1) | 96 |
| Vessel liability insurance | (12,218) | 354 | (11,864) | (5,084) | 845 | (4,239) |
| Other types of liability | ||||||
| insurance | 127,646 | (6,327) | 121,319 | 90,871 | (1,694) | 89,177 |
| Loan insurance/credit | ||||||
| insurance | (18,137) | (3,961) | (22,098) | (62,402) | (3,702) | (66,104) |
| Guarantee insurance | 769 | (65) | 704 | 430 | - | 430 |
| Miscellaneous financial loss | ||||||
| insurance | 64,176 | (50,550) | 13,626 | 6,628 | 63 | 6,691 |
| Legal expenses insurance | 423 | 11 | 434 | 329 | 4 | 333 |
| Assistance | 7,720 | - | 7,720 | 10,366 | - | 10,366 |
| Total non-life insurance | 1,721,551 | (353,166) | 1,368,385 | 1,409,162 | (129,979) | 1,279,183 |
| Life insurance | 549,535 | (119) | 549,416 | 602,751 | (10) | 602,741 |
| Annuity insurance | 2,888 | - | 2,888 | 14,757 | - | 14,757 |
| Additional insurance with life | ||||||
| insurance | 2,690 | - | 2,690 | 3,690 | - | 3,690 |
| Life or annuity insurance | ||||||
| where the policyholder | 13,262 | - | 13,262 | 4,068 | - | 4,068 |
| bears the investment risk | ||||||
| Total life insurance | 568,375 | (119) | 568,256 | 625,266 | (10) | 625,256 |
| Total | 2,289,926 | (353,285) | 1,936,641 | 2,034,428 | (129,989) | 1,904,439 |
The Management believes that the non-life insurance has no significant exposure to any client group insured by social, professional, generation or similar criteria. The greatest likelihood of significant losses could arise from catastrophic events, such as floods, hail, storms or earthquake damage. The techniques and assumptions that the Group uses to calculate these risks include:
- Measurement of geographical accumulations,
- Assessment of probable maximum losses,
- Excess of loss reinsurance,
| 31 Dec. 2020 | 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2019 | |
|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Reinsurance coverage |
Retention | Reinsurance coverage |
Retention | |
| Motor – third party liability | Unlimited | 7,500 | Unlimited | 3,750 |
| Fire | 551,250 | 11,250 | 551,250 | 11,250 |
| Motor hull insurance | - | 11,250 | 14,438 | 563 |
| Machinery breakage | 551,250 | 11,250 | 551,250 | 11,250 |
| Construction /assembly | 551,250 | 11,250 | 551,250 | 11,250 |
| Theft | 551,250 | 11,250 | 551,250 | 11,250 |
| Vessels | 157,625 | 4,875 | 84,375 | 5,625 |
| Other liability | 71,250 | 3,750 | 73,125 | 1,875 |
| Earthquake | 1,155,000 | 45,000 | 551,250 | 11,250 |
| Flood | 551,250 | 11,250 | 551,250 | 11,250 |
The table below presents reinsurance coverage and retention of the Company by type of insured event:
The table below presents reinsurance coverage and retention of the Group by type of insured event:
| 31 Dec. 2020 | 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2019 | |
|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Reinsurance coverage |
Retention | Reinsurance coverage |
Retention | |
| Motor – third party liability | Unlimited | 11,301 | Unlimited | 7,503 |
| Fire | 856,493 | 12,755 | 855,579 | 12,748 |
| Motor hull insurance | 6,182 | 11,777 | 20,439 | 1,013 |
| Machinery breakage | 806,752 | 12,755 | 806,459 | 12,748 |
| Construction /assembly | 806,752 | 12,755 | 806,459 | 12,748 |
| Theft | 767,665 | 12,755 | 764,981 | 12,761 |
| Vessels | 157,914 | 4,894 | 84,664 | 5,648 |
| Other liability | 77,657 | 4,992 | 79,512 | 3,108 |
| Earthquake | 1,500,189 | 47,260 | 896,477 | 13,494 |
| Flood | 826,346 | 12,755 | 825,808 | 12,748 |
Non-life insurance
The basic indicator of underwriting risk is the claims (loss) ratio. The following tables present claims ratios, cost ratios and combined ratios as well as the claims ratio net of reinsurance.
Comparison of claims and costs ratio for 2020 and 2019:
| Company | Company | Group | Group | |
|---|---|---|---|---|
| Non-life insurance | 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 |
| Claims ratio | 66.98% | 54.10% | 64.11% | 53.21% |
| Cost ratio | 35.40% | 37.72% | 36.00% | 38.00% |
| Combined ratio | 102.38% | 91.82% | 100.11% | 91.22% |
| Claims ratio, net | 55.77% | 55.77% | 57.35% | 54.96% |
Note: The ratio calculation method is set out in Note 25.8. Analysis of claim (loss) ratios, cost ratios and combined ratios. In the ratio calculation for the Group, only Group companies involved in the insurance and reinsurance activities were considered.
Life insurance
The primary risks in life insurance and non-life insurance for which mathematical provision is formed are interest rate risk and biometrical risks. Interest rate risk is processed through market risks, and biometrical risks are monitored on the basis of actuarial analyses.
| Interest included in the | Mathematical provisions* |
Share | Mathematical provisions* |
Share | |
|---|---|---|---|---|---|
| tariff is in the range of | as at 31 Dec. 2020 | as at 31 Dec. 2019 | |||
| in HRK'000 | % | in HRK'000 | % | ||
| [0, 1] | 331,998 | 13% | 90,030 | 4% | |
| [1, 3] | 1,246,441 | 49% | 1,402,910 | 56% | |
| [3, 4] | 719,251 | 28% | 735,011 | 29% | |
| [4, 5] | 265,683 | 10% | 293,188 | 12% | |
| [5, 6] | 2,112 | 0% | 2,450 | 0% | |
| 2,565,485 | 100% | 2,523,589 | 100% |
Analysis of mathematical provisions according to guaranteed interest rate for the Company is as follows:
* The mathematical provision is the mathematical provision for agreed sums and mathematical provision for additional sums.
| Interest included in the tariff is in the range of |
Mathematical provisions* as at 31 Dec. 2020 |
Share | Mathematical provisions* as at 31 Dec. 2019 |
Share |
|---|---|---|---|---|
| in HRK'000 | % | in HRK'000 | % | |
| [0, 1] | 331,998 | 11% | 90,030 | 3% |
| [1, 3] | 1,481,787 | 49% | 1,595,359 | 54% |
| [3, 4] | 940,268 | 31% | 973,742 | 33% |
| [4, 5] | 266,083 | 9% | 293,540 | 10% |
| [5, 6] | 2,112 | 0% | 2,450 | 0% |
| 3,022,248 | 100% | 2,955,121 | 100% |
The analysis of mathematical provisions for the Group according to guaranteed interest rate is as follows:
* The mathematical provision is the mathematical provision for agreed sums and mathematical provision for additional sums.
The table above shows the mathematical provision according to guaranteed interest rates. The yield on life insurance investment is presented in the following table and it is sufficient to cover the required interest for the life insurance portfolio.
Yield on mathematical provision
| Company | 2020 | 2019 |
|---|---|---|
| in HRK'000 | in HRK'000 | |
| Average balance of mathematical provision | 2,513,947 | 2,417,608 |
| Yield on investment in mathematical provision | 83,195 | 116,564 |
| Annual yield on mathematical provision | 3.31% | 4.82% |
| Average annual yield on mathematical provision for the past 2 years | 4.05% | 4.88% |
| Group | 2020 | 2019 |
| in HRK'000 | in HRK'000 | |
| Average balance of mathematical provision | 2,959,791 | 2,818,211 |
| Yield on investment in mathematical provision | 98,884 | 131,107 |
| Annual yield on mathematical provision | 3.34% | 4.65% |
| Average annual yield on mathematical provision for the past 2 years | 3.98% | 5.22% |
The sensitivity of the present value of future profits to changes in significant variables
Profit or loss and insurance liabilities are mainly sensitive to changes in mortality, rates costs and the discount rate used for the purposes of the liability adequacy test.
The Group assessed the impact of changes in key variables that may have a material effect on the present value of future profits (PVFP) at the end of the year. For each period, the projection is the calculated profit (vector profit), and PVFP is calculated as the present value of profits with a discount rate risk.
The table below shows the sensitivity analysis for life insurance.
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Change in liabilities | Change in liabilities | Change in liabilities | Change in liabilities | |
| Interest rate -0,5% | 9,484 | 101,755 | 21,755 | 114,987 |
| Mortality +10% | 1,333 | 1,717 | 4,443 | 6,283 |
| Expenses +10% | 25,968 | 28,240 | 29,862 | 34,784 |
For life assurance contracts that cover policyholder's death, there is no significant geographical concentration of risk, although the concentration of the amount at risk may impact the ratio of insurance payment on the portfolio level. Amounts at risk for life assurance are as follows:
| Company | 2020 | 2019 | ||
|---|---|---|---|---|
| Insurance type | in HRK'000 | % | in HRK'000 | % |
| Life assurance – traditional products | 2,186,744 | 91% | 2,480,309 | 90.6% |
| Unit-linked life assurance products | 220,116 | 9% | 256,351 | 9.4% |
| As at 31 December | 2,406,860 | 100% | 2,736,660 | 100% |
| Group | 2020 | 2019 | ||
| Insurance type | in HRK'000 | % | in HRK'000 | % |
| Life assurance – traditional products | 5,039,369 | 93.4% | 6,432,541 | 94.6% |
| Unit-linked life assurance products | 355,839 | 6.6% | 369,478 | 5.4% |
| Company | Group | ||||
|---|---|---|---|---|---|
| Sum insured per policy | Total sum insured before reinsurance | Total sum insured before reinsurance | |||
| in HRK | in HRK'000 | % | in HRK'000 | % | |
| < 40,000 | 1,687,947 | 32.1% | 3,215,282 | 35.8% | |
| 40,001 - 60,000 | 548,029 | 10.4% | 932,803 | 10.4% | |
| 60,001 - 80,000 | 813,842 | 15.5% | 1,229,617 | 13.7% | |
| 80,001 - 100,000 | 369,302 | 7.0% | 676,381 | 7.5% | |
| 100,001 - 125,000 | 466,487 | 8.9% | 798,284 | 8.9% | |
| 125,001 - 150,000 | 203,126 | 3.9% | 352,065 | 3.9% | |
| 150,001 - 250,000 | 714,917 | 13.6% | 1,056,526 | 11.8% | |
| 250,001 - 500,000 | 260,106 | 5.0% | 461,649 | 5.1% | |
| > 500,001 | 187,860 | 3.6% | 255,621 | 2.8% | |
| As at 31 December 2020 | 5,251,616 | 100% | 8,978,228 | 100% | |
| < 40,000 | 1,784,501 | 32.1% | 3,574,492 | 36.7% | |
| 40,001 - 60,000 | 574,453 | 10.3% | 915,741 | 9.4% | |
| 60,001 - 80,000 | 857,550 | 15.4% | 1,376,917 | 14.2% | |
| 80,001 - 100,000 | 418,199 | 7.5% | 677,933 | 7.0% | |
| 100,001 - 125,000 | 516,091 | 9.3% | 909,958 | 9.4% | |
| 125,001 - 150,000 | 287,293 | 5.2% | 564,471 | 5.8% | |
| 150,001 - 250,000 | 662,568 | 11.9% | 981,236 | 10.1% | |
| 250,001 - 500,000 | 266,491 | 4.8% | 463,752 | 4.8% | |
| > 500,001 | 184,945 | 3.3% | 264,643 | 2.7% | |
| As at 31 December 2019 | 5,552,091 | 100% | 9,729,143 | 100% |
Tables for long-term insurance contracts are presented below and provide an overview of the concentration of risk through nine groups of contracts grouped by sum insured per policy.
The Group applies the calculation of the present value of future profits or PVFP for the purposes of managing insurance risk sensitivity. The base run refers to the calculation of liabilities using assumptions for the best estimate calculation. The base run represents the calculation by applying the assumptions set out in in Note 2.37 during the liability adequacy test. For each policy income from premiums and investments is calculated, and costs are calculated on the basis of administrative costs and claims expenses.
Changes in variables represent reasonable possible changes which, had they occurred, have led to significant changes in insurance liabilities at the reporting date. The reasonably possible changes represent neither expected changes in variables nor worst case scenarios. Changes in each variable were analysed, whereby all other assumptions remained unchanged, and changes in value of the underlying assets were ignored.
The sensitivity to changes in mortality was calculated by reduction in mortality for pension products by 10% and an increase in mortality for other products by 10%, while the sensitivity to changes in costs was calculated by increasing the costs of portfolio maintenance by 10%.
The PVFP results show that changes in interest rates have the most significant effect on profit or loss and the amount of technical provisions.
Non-life insurance
In non-life insurance variables, which would have the greatest impact on insurance liabilities relate to legal claims from auto insurance liability. Obligations relating to judicial damages are sensitive to legal, judicial, political, economic and social trends. The Management Board believes that it is not practicable to quantify the sensitivity of non-life insurance to changes in these variables.
2.37. Principal assumptions that have the greatest effect on recognised insurance assets, liabilities, income and expenses
/i/ Non-life insurance
On the balance sheet date provisions are created for the estimated final cost of settling all claims resulting from events occurred by that date, whether reported or not, together with relevant costs of processing such claims, decreased by amounts already paid. The liability for reported but unsettled claims is estimated separately for every individual claim, taking into consideration the circumstances, available information from the claims adjuster and historical evidence of amounts of similar claims. Individual claims are regularly examined and provisions are regularly updated when new information is available. The assessment of provision for incurred, but unreported losses (IBNR) are generally subject to a greater degree of uncertainty than the provision for reported losses. IBNR provisions are estimated by the Company's actuaries.
Depending on the feature of each insurance type, the Group's portfolio and the form and quality of available data, IBNR provisions are formed using the most appropriate model which is based on deterministic or stochastic methods whose basis is the claims triangle. In order to describe as best as possible future claims development, the selected model may contain one or a combination of several methods.
IBNR provisions are formed according to the lines of business, i.e. homogeneous risk groups.
For long-tail claims, the level of provision greatly depends on the assessment of claims development for which there is historical data until the final development. The residual factor of claims development is prudently assessed by using mathematical methods of curves which serve as projections of observed factors or which are based on actuarial assessment.
The actual method which is used depends on the year of claim occurrence and the observed historical development of claims. To the extent that these methods use historical claim rates, the past pattern of claim rates is assumed to recur in the future. There are reasons for partial fulfilment of the above, so the methods should be modified. Possible reasons may be:
- economic, political and social trends (which cause a different level of inflation than expected);
- changes in the combination of the types of insurance contracts which are acquired;
- random variations, including the effect of major losses,
IBNR provisions are initially estimated in gross amount and a special calculation is performed in order to assess the reinsurance portion.
Discounting
Except for reported rental claims, non-life insurance provisions are not discounted. The provisions for liability insurance which are payable in annuities are determined as the current value of future liabilities based on an interest rate curve of own portfolio, the annual rate of adjustment of the rent and the Mortality Tables for the Republic of Croatia for the period from 2010 – 2012.
/ii/ Life insurance
Mathematical provisions are calculated by the net prospective method using rational actuarial assumptions, in accordance with the guidelines issued by HANFA or Group companies regulator. The guaranteed technical interest rate in insurance policies ranges from 0 % to 6 %, depending on the original (historic) tariff.
In the case of death and survival, policyholders are entitled to a share in the Company's profit realised by life insurance funds management. For policies concluded after 31 December 2017, cost and mortality are the only possible sources of profit. Shares in profit are calculated once a year, at the earliest at the end of the first or second year of the insurance term, depending on the tariff. The amount of the share in the profit is determined by the Management Board.
The Company uses mortality tables for Croatia for the period 2010 to 2012 for the calculation of mathematical reserves.
/ii/ Life insurance (continued)
For the purpose of the calculation of mathematical reserves the Company:
-
for insurance contracts concluded before 2010, an interest rate of 3% was used (the maximum rate prescribed by HANFA is 3.3%),
-
for insurance contracts concluded in 2010 the interest rate used was 3% and 2.75% (the maximum rate prescribed by HANFA is 3%),
-
for insurance contracts concluded after 2010 until 30 June 2016, the interest rate used was in range 2.75%- 1% (the maximum rate prescribed by HANFA is 2.75%).
-
for insurance contracts concluded after 1 July 2016, the interest rate used was in range 1.75%-0%, (the maximum rate prescribed by HANFA is 1.75% for contracts with a currency clause and 2% for contracts in HRK),
-
for insurance contracts concluded after 1 January 2018, the interest rate used was 1%-0%, and interest rate of 1.20% was used for insurance contracts with a contractual duration of 5 years (the maximum rate prescribed by HANFA is 1%, and 1,75% for insurance contracts with a contractual duration of 5 years).
Additionally, in the Group, for purpose of the calculation of mathematical reserves in Bosnia and Herzegovina for insurance contracts concluded before 1.11.2017, an interest rate of 2% was used, and for insurance contracts concluded after 1.11.2017, an interest rate of 1.7% and 1.5%. For contracts concluded until 30.6.2015. the Insurance Supervision Agency of the Federation of BiH prescribed a maximum rate of 5%, and 2.75% for contracts concluded after that period. For the purpose of the calculation of mathematical reserves in Northern Macedonia for insurance contracts concluded before 2014, an interest rate of 3.5% and 4% for collective insurance contracts was used, for insurance contracts concluded before 2014, and an interest rate 3% is used for insurance contracts contracted during the first two months of 2014 (this was the maximum rate prescribed by the Insurance Supervision Regulatory Agency in that period). For insurance contracts contracted after March 2014 and during 2015, the interest rate is 2.75% (which is also the maximum rate prescribed by the Insurance Supervision Regulatory Agency). For insurance contracts contracted after 2016, the interest rate is 2.5% (the maximum rate prescribed by the Insurance Supervision Regulatory Agency is 2.5%). For the purposes of calculating the mathematical reserve for insurance contracts contracted during 2018, the interest rate for CroInvest Flexi and malignant diseases tariffs is 1%, and for insurance contracts contracted with the start of insurance after June 1, 2020, the interest rate is 2%.
Profit or loss and equity sensitivity to changes in significant variables
Profit or loss and insurance liabilities are mainly sensitive to changes in the rate of investment and the rate of costs estimated for the calculation of the liability adequacy.
Terms and conditions of insurance contracts that have a significant effect on the amount, duration, and uncertainty of future cash flows
The Group offers different types of non-life insurance, mainly motor vehicles, property, liability insurance, marine insurance, transport insurance, and accident insurance. The main source of uncertainty affecting the amount and timing of future cash flows arises from the uncertainty of the occurrence of future insured events as well as the uncertainty associated with their amounts. The amount payable under individual claims is limited by the insured amount as established in the insurance policy.
Other significant sources of uncertainty related to non-life insurance result from legislation that entitles policyholders to report a claim before the statute of limitation, which occurs three years from the first notification of the claim, but not later than five years from the beginning of the year after the year of occurrence. This stipulation is particularly important in cases of permanent disability under accident insurance, due to difficulties in estimating the period between the occurrence of the accident and the confirmation of permanent consequences thereof.
The portfolio of non-life insurance does not include products that warrant unlimited coverage, while the maximum amount for which the insurer may be held liable per each policy due to the occurrence of one loss event is always limited by the contractually agreed insured sum. The exception to this rule is motor vehicles liability insurance in the Green Card Insurance System member states that have unlimited coverage. Since legal provisions in motor vehicles liability insurance prescribe the application of insured sums in the state where the damage occurred, this risk cannot be completely avoided, but it can be transferred through appropriate reinsurance contracts.
2.38. Financial risk management
The Group's primary objective in financial and underwriting risk management is to maintain a level of capital which is adequate for the scope and types of insurance it transacts, and with due consideration of the risks it is exposed to. The Management recognizes the importance of having an efficient and effective risk management system.
Competent regulatory bodies control the Company's and Group solvency in order to ensure that there is coverage for liabilities arising from possible economic changes or natural disasters.
The Group actively manages its assets by using an approach which balances quality, diversification, harmonization of assets and liabilities, liquidity and return on investments. Management examines and approves portfolios, determines the limits and supervises the process of managing assets and liabilities. Due attention is also given to the compliance with the rules established by the Insurance Act.
Transactions with financial instruments result in the Group assuming financial risks. These risks include market risk, credit risk and liquidity risk. Each of these risks is described below, together with a summary of the methods used by the Group to manage such risks.
Market risk
Market risk includes currency risk, interest rate risk and price risk. Market risk is the fluctuation risk of future cash flows fair value of financial instruments resulting from changes in market prices. The comprehensive system of market risk management is prescribed by a series of internal acts of the Group.
a) Currency risk - the risk of fluctuation of fair value or cash flows under financial instruments resulting from changes in foreign currency exchange rates.
The Group is exposed to the risk of exchange rate fluctuations through its transactions in foreign currencies, mostly in euros. The Group is exposed to currency risk through its investments in debt securities, deposits, loans and other investments, and through premiums, claims and technical provisions under insurance policies with a currency clause. The Group manages foreign exchange risk by attempting to reduce the difference between assets and liabilities denominated in foreign currency or with a currency clause. Investments for covering mathematical provisions are mostly denominated in Euro, since most of the mathematical provisions are also denominated in Euro. The Group actively uses derivatives in order to hedge against currency risk exposure. An analysis of the sensitivity of financial assets to the exchange rate fluctuations is given below, noting that the stated effects of financial assets and liabilities on profit/loss would be partially compensated by the effects on non-financial liabilities (technical or mathematical provisions):
| 2020 | 2019 | ||||
|---|---|---|---|---|---|
| Impact on profit before tax |
Impact on comprehensive income |
Impact on profit before tax |
Impact on comprehensive income |
||
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| Company | |||||
| Change of exchange rate by 1% | 14,367 | 5,805 | 16,444 | 4,379 | |
| Group | |||||
| Change of exchange rate by 1% | 18,419 | 5,805 | 17,839 | 4,651 |
At the reporting date, the currency structure of the Company's assets and liabilities is as follows:
| Company in HRK'000 | 31 December 2020 | 31 December 2019 | ||||||
|---|---|---|---|---|---|---|---|---|
| HRK | EUR | Other currencies |
Total | HRK | EUR | Other currencies |
Total | |
| Assets | ||||||||
| Investments in subsidiaries, associates and participation in joint ventures |
376,516 | - | - | 376,516 | 279,111 | - | - | 279,111 |
| Held-to-maturity investments | 1,279,168 | 803,167 | - | 2,082,335 | 1,208,906 | 963,481 | - | 2,172,387 |
| Available-for-sale financial assets | 1,717,419 | 2,649,645 | 169,098 | 4,536,162 | 2,190,151 | 2,099,086 | 157,542 | 4,446,779 |
| Financial assets at fair value through profit or loss | 4,168 | 315,912 | 101,473 | 421,553 | 24,464 | 361,905 | 107,208 | 493,577 |
| Loans and receivables | 680,007 | 338,928 | - | 1,018,935 | 745,184 | 460,146 | - | 1,205,330 |
| Reinsurance share in technical provisions | 271,654 | 60,388 | 142,827 | 474,869 | 174,602 | 24,376 | 14,555 | 213,533 |
| Insurance contract and other receivables | 706,625 | 79,594 | 4,795 | 791,014 | 717,217 | 136,209 | 7,595 | 861,021 |
| Cash and cash equivalents | 383,521 | 111,815 | 17,600 | 512,936 | 100,619 | 23,772 | 929 | 125,320 |
| Total assets | 5,419,078 | 4,359,449 | 435,793 | 10,214,320 | 5,440,254 | 4,068,975 | 287,829 | 9,797,058 |
| Liabilities | ||||||||
| Technical provisions | 3,602,085 | 3,151,795 | 281,376 | 7,035,256 | 3,466,287 | 3,087,521 | 176,620 | 6,730,428 |
| Provisions | 86,539 | - | - | 86,539 | 102,717 | - | - | 102,717 |
| Financial liabilities | 49,790 | 234,488 | - | 284,278 | 40,528 | 231,139 | - | 271,667 |
| Liabilities arising from insurance contracts, other liabilities and deferred income |
446,904 | 94,617 | 7,328 | 548,849 | 510,248 | 38,123 | 9,348 | 557,719 |
| Total liabilities | 4,185,318 | 3,480,900 | 288,704 | 7,954,922 | 4,119,780 | 3,356,783 | 185,968 | 7,662,531 |
| Foreign currency gap | 1,233,760 | 878,549 | 147,089 | 2,259,398 | 1,320,474 | 712,192 | 101,861 | 2,134,527 |
The analysis of the currency structure of the Group's assets and liabilities at the reporting date is as follows:
| Group in HRK'000 | 31 December 2020 31 December 2019 |
|||||||
|---|---|---|---|---|---|---|---|---|
| HRK | EUR | Other currencies |
Total | HRK | EUR | Other currencies |
Total | |
| Assets | ||||||||
| Investments in subsidiaries, associates and participation in joint ventures |
75,211 | - | 1,382 | 76,593 | 76,281 | - | 1,309 | 77,590 |
| Held-to-maturity investments | 1,279,168 | 852,056 | 38,559 | 2,169,783 | 1,208,906 | 1,035,301 | 71,054 | 2,315,261 |
| Available-for-sale financial assets | 1,738,033 | 2,957,182 | 428,433 | 5,123,648 | 2,207,639 | 2,423,456 | 281,250 | 4,912,345 |
| Financial assets at fair value through profit or loss | 4,168 | 315,912 | 139,355 | 459,435 | 24,464 | 367,033 | 127,128 | 518,625 |
| Loans and receivables | 429,737 | 345,619 | 396,166 | 1,171,522 | 495,940 | 466,423 | 389,797 | 1,352,160 |
| Reinsurance share in technical provisions | 271,654 | 52,359 | 164,252 | 488,265 | 174,602 | 24,533 | 27,244 | 226,379 |
| Insurance contract and other receivables | 743,751 | 81,954 | 76,339 | 902,044 | 748,583 | 139,847 | 77,777 | 966,207 |
| Cash and cash equivalents | 465,827 | 149,277 | 54,321 | 669,425 | 142,745 | 25,381 | 49,241 | 217,367 |
| Total assets | 5,007,549 | 4,754,359 | 1,298,807 | 11,060,715 | 5,079,160 | 4,481,974 | 1,024,800 | 10,585,934 |
| Liabilities | ||||||||
| Technical provisions | 3,602,085 | 3,483,994 | 949,940 | 8,036,019 | 3,466,287 | 3,393,367 | 834,014 | 7,693,668 |
| Provisions | 94,063 | - | 3,896 | 97,959 | 109,578 | - | 4,709 | 114,287 |
| Financial liabilities | 63,972 | 223,857 | 36,063 | 323,892 | 40,872 | 218,344 | 42,800 | 302,016 |
| Liabilities arising from insurance contracts, other liabilities and deferred income |
470,059 | 97,463 | 55,089 | 622,611 | 541,412 | 41,421 | 51,178 | 634,011 |
| Total liabilities | 4,230,179 | 3,805,314 | 1,044,988 | 9,080,481 | 4,158,149 | 3,653,132 | 932,701 | 8,743,982 |
| Foreign currency gap | 777,370 | 949,045 | 253,819 | 1,980,234 | 921,011 | 828,842 | 92,099 | 1,841,952 |
b) Interest rate risk
Interest rate risk is the risk of fluctuation in fair value or cash flows under financial instruments resulting from changes in market interest rates. The Group is exposed to interest rate risk on the basis of financial instruments whose value is sensitive to interest rate changes.
Interest rate changes do not affect the level of technical non-life provisions, while the mathematical life reserve is discounted using the technical rate of interest of a particular product or the maximum interest rate stipulated by HANFA, which cannot be higher than the weighted average yield on mathematical reserve assets in the last three years.
The Group monitors this exposure through periodic reviews of its asset and liability positions. The Group intends to harmonize future earnings from such assets with liabilities under insurance by purchasing state bonds and other financial instruments with defined cash flows or for which cash flows can be estimated. However, considering the relatively short duration of such assets and longer period of duration of liabilities under life insurance, the Group is exposed to interest rate risk.
An analysis of the sensitivity of financial assets to a change in market interest rates is given below:
| 2020 | 2019 | |||||
|---|---|---|---|---|---|---|
| Impact on Impact on profit/loss comprehensive before tax income |
Impact on profit/loss before tax |
Impact on comprehensive income |
||||
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |||
| Company | ||||||
| Change in interest rate by +/- 100 bps |
- | (199,268)/199,268 | - | (233,486)/233,486 | ||
| Group | ||||||
| Change in interest rate by +/- 100 bps |
- | (239,851)/239,851 | - | (267,239)/267,239 |
c) Other price risks
The equity securities risk is caused by the fluctuation of fair value or cash flows in connection with financial instruments resulting from changes in market prices (which are not the result of interest rate risk or foreign exchange risk), whether this involves changes caused by factors relatable to an individual financial instrument or its issuer or if there are other factors which effect all similar financial instruments being traded in the market.
The marketable equity securities portfolio, which is presented in the balance sheet at fair value, exposes the Group to this risk. The Group's portfolio comprises securities of various issuers, and the concentration risk in any individual company is monitored and limited by legal requirements and the adopted limits.
The Group assesses, or measures, and controls the exposure to market risk by monitoring exposure to investment, establishing the limits and powers of investment, and through a series of statistical and other quantitative risk measures.
Price risk analysis
| 2020 | 2019 | ||||
|---|---|---|---|---|---|
| Impact on profit/loss after tax |
Impact on comprehensive income |
Impact on profit/loss after tax |
Impact on comprehensive income |
||
| Company | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Change in price by +/- 5% | 859/(859) | 36,410/(36,410) | 2,229/(2,229) | 30,469/(30,469) | |
| Group | |||||
| Change in price by +/- 5% | 2,161/(2,161) | 37,237/(37,237) | 3,199/(3,199) | 30,498/(30,498) |
Credit risk
Credit risk is the risk that one contractual party to a financial instrument might cause the other party to suffer financial losses as a result of failure to fulfil its obligations.
The Group is exposed to credit risk through the following financial assets:
- reinsurance share in claims provisions
- receivables from reinsurance under settled claims
- receivables from policyholders
- deposits and given loans
- debt securities (bonds and commercial bills)
- receivables from insurance brokers and other receivables
- cash at bank
The Group manages this risk by a rigorous up-front analysis of credit risk and exposure monitoring, regular reviews carried out by the Management and regular meetings held to monitor the credit risk development. The Group manages credit risk and continuously monitors exposure to credit risk. Assessments of creditworthiness of all policyholders are made, and collaterals are collected prior to payment of granted loans or renewal of such loans.
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
| Credit risk exposure | Company | Company | Group | Group | |
|---|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | ||
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| Investments in debt securities | 5,890,289 | 6,009,794 | 6,564,658 | 6,617,634 | |
| Investments in bank deposits | 508,031 | 686,296 | 908,343 | 1,081,008 | |
| Loans | 510,904 | 519,034 | 263,179 | 271,152 | |
| Reinsurance share in technical provisions | 474,869 | 213,533 | 488,265 | 226,379 | |
| Insurance contract and other receivables | 738,282 | 847,495 | 827,503 | 939,550 | |
| Cash and cash equivalents | 512,936 | 125,320 | 669,425 | 217,367 | |
| 8,635,311 | 8,401,472 | 9,721,373 | 9,353,090 |
Concentration of receivables from the Republic of Croatia as at 31 December
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Government bonds | 5,493,510 | 5,629,545 | 5,528,786 | 5,643,952 |
| Bonds of other state institutions | - | 101,048 | - | 118,416 |
| Undue interest on bonds | 81,756 | 86,796 | 81,911 | 87,238 |
| Other receivables | 1,709 | 1,731 | 14,300 | 12,002 |
| 5,576,975 | 5,819,120 | 5,624,997 | 5,861,608 |
The table below shows the company's asset analysis by category according to the ratings by the agencies Standard&Poor's (S&P).
| 2020 | 2019 | Company | Company | |
|---|---|---|---|---|
| S&P | S&P | 31 Dec. 2020 | 31 Dec. 2019 | |
| u 000 HRK | u 000 HRK | |||
| Held-to-maturity investments | 2,082,335 | 2,172,387 | ||
| Ministry of Finance of the Republic of Croatia | BBB- | BBB- | 2,038,398 | 2,089,838 |
| Croatian Bank for Reconstruction and Development | - | BBB- | - | 38,654 |
| (CBRD) | ||||
| No rating | - | - | 43,937 | 43,895 |
| Available-for-sale financial assets Ministry of Finance of the Republic of Croatia |
BBB- | BBB- | 3,807,954 3,536,868 |
3,837,407 3,622,603 |
| Croatian Bank for Reconstruction and Development | ||||
| (CBRD) | - | BBB- | - | 66,294 |
| Ministry of Finance of Romania | BBB- | - | 54,962 | - |
| Ministry of Finance of Hungary | BBB | BBB | 46,619 | 22,008 |
| Ministry of Finance of United States | - | AA+ | - | 40,765 |
| Rated corporations | B- | - | 10,127 | - |
| - | B+ | - | 13,867 | |
| BB+ | BB+ | 63,463 | 24,968 | |
| BBB- | - | 38,379 | - | |
| A- | - | 25,062 | - | |
| No rating | - | - | 32,474 | 46,902 |
| Loans and receivables | 1,018,935 | 1,205,330 | ||
| Rated banks | - A |
BBB- - |
- 6,482 |
342,485 - |
| Other banks and financial institutions* | - | - | 501,549 | 343,811 |
| No rating** | - | - | 510,904 | 519,034 |
| Reinsurance share in technical provisions | 474,869 | 213,533 | ||
| Rated reinsurers | A− | A− | 28,038 | 6,791 |
| A | A | 36,487 | 22,722 | |
| A+ | A+ | 204,849 | 75,090 | |
| AA− | AA− | 164,632 | 85,121 | |
| AA | AA | 4,239 | 1,291 | |
| AA+ | AA+ | 8,911 | 4,848 | |
| Reinsurers rated by another agency | - | - | 24,337 | 15,020 |
| No rating | - | - | 3,376 | 2,650 |
| Insurance contract and other receivables | 738,282 | 847,495 | ||
| No rating | - | - | 738,282 | 847,495 |
| Cash and cash equivalents | 512,936 | 125,320 | ||
| Rated banks Other banks and financial institutions* |
- - |
BBB- - |
- 512,936 |
10,338 114,982 |
| 8,635,311 | 8,401,472 |
* Other banks and financial institutions mostly include banks and financial institutions that have no rating and banks and financial institutions that have no rating, but their parent banks have a rating.
** Loans and receivables with no rating relate to loans to related parties, domestic companies with no rating and retail loans that are insured.
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
| 2020 | 2019 | Group | Group | |
|---|---|---|---|---|
| S&P | S&P | 31 Dec. 2020 | 31 Dec. 2019 | |
| u 000 HRK | u 000 HRK | |||
| Held-to-maturity investments | 2,169,783 | 2,315,261 | ||
| Ministry of Finance of the Republic of Croatia | BBB- | BBB- | 2,044,591 | 2,095,954 |
| Croatian Bank for Reconstruction and | BBB- | BBB- | - | 38,654 |
| Development (CBRD) | ||||
| Ministry of Finance of Macedonia | BB- | BB- | 48,666 | 50,669 |
| Ministry of Finance of Serbia | BB+ | BB+ | 17,044 | 78,428 |
| No rating | - | - | 59,482 | 51,556 |
| Available-for-sale financial assets | 4,394,875 | 4,302,373 | ||
| Ministry of Finance of the Republic of Croatia Croatian Bank for Reconstruction and |
BBB- | BBB- | 3,566,106 | 3,648,704 |
| Development (CBRD) | BBB- | BBB- | - | 66,294 |
| Ministry of Finance of Hungary | BBB | BBB | 46,619 | 22,008 |
| Ministry of Finance of Macedonia | BB- | BB- | 332,157 | 293,634 |
| Ministry of Finance of Serbia | BB+ | BB+ | 225,526 | 145,231 |
| Ministry of Finance of Romania | BBB- | - | 54,962 | - |
| Ministry of Finance of United States | - | AA+ | - | 40,765 |
| Rated corporations | B- | - | 10,127 | - |
| - | B+ | - | 13,867 | |
| BB+ | BB+ | 63,463 | 24,968 | |
| BBB- | - | 38,379 | - | |
| A- | - | 25,062 | - | |
| No rating | - | - | 32,474 | 46,902 |
| Loans and receivables | 1,171,522 | 1,352,160 | ||
| Rated banks | - | BBB- | - | 342,485 |
| A | - | 6,482 | - | |
| Other banks and financial institutions* | - | - | 901,861 | 738,523 |
| No rating** | - | - | 263,179 | 271,152 |
| Reinsurance share in technical provisions | 488,265 | 226,379 | ||
| Rated reinsurers | A− A |
A− A |
28,038 36,487 |
6,791 22,722 |
| A+ | A+ | 204,849 | 75,090 | |
| AA− | AA− | 164,632 | 85,121 | |
| AA | AA | 4,239 | 1,291 | |
| AA+ | AA+ | 8,911 | 4,848 | |
| Reinsurers rated by another agency | - | - | 24,337 | 15,020 |
| No rating | - | - | 16,772 | 15,496 |
| Insurance contract and other receivables | - | 827,503 | 939,550 | |
| No rating | - | - | 827,503 | 939,550 |
| Cash and cash equivalents | 669,425 | 217,367 | ||
| Rated banks | - | BBB- | - | 29,095 |
| Other banks and financial institutions* | - | - | 669,425 | 188,272 |
| 9,721,373 | 9,353,090 |
* Other banks and financial institutions mostly include banks and financial institutions that have no rating and banks and financial institutions that have no rating, but their parent banks have a rating.
** Loans and receivables with no rating relate to loans to related parties, domestic companies with no rating and retail loans that are insured.
Liquidity risk
Liquidity risk is the risk that a sudden and unexpected withdrawal of liabilities might require the Group to liquidate assets in a short time and at a low price. It includes both the risk of being unable to fund assets at appropriate maturities and rates and the risk of being unable to liquidate an asset at a reasonable price and in an appropriate timeframe. The Group has a portfolio of liquid assets as a part of liquidity risk management strategy, which ensures continuation of business and satisfies legal requirements.
Legal claims for damages have been met in a timely manner. The Organizational units for finance monitor the inflows and outflows on a daily basis and develop monthly plans as well as scenarios of deteriorated liquidity. Liquidity risk is taken into account in the assessment of matching assets and liabilities.
The following table shows the amounts of contracted discounted cash flows for financial assets and, for insurance liabilities, the estimated maturity of the amounts recognized in the statement of financial position.
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
The maturity analysis on the reporting date is as follows:
| Company in HRK'000 | 31 December 2020 | 31 December 2019 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Assets | No later than 1 year |
1-3 years | 3-5 years | 5-10 years | More than 10 years |
Total | No later than 1 year |
1-3 years | 3-5 years | 5-10 years | More than 10 years |
Total |
| Investments in subsidiaries, associates and participation in joint ventures |
- | - | - | - | 376,516 | 376,516 | - | - | - | - | 279,111 | 279,111 |
| Held-to-maturity investments | 93,011 | 351,973 | 468,063 | 541,334 | 627,954 | 2,082,335 | 328,838 | 364,050 | 451,618 | 510,163 | 517,718 | 2,172,387 |
| Available-for-sale financial assets | 117,317 | 660,825 | 1,382,448 | 1,878,909 | 496,663 | 4,536,162 | 195,850 | 360,976 | 1,552,812 | 1,571,555 | 765,586 | 4,446,779 |
| Financial assets at fair value through profit or loss | 2,390 | 1,725 | 4,168 | 413,270 | - | 421,553 | 27,524 | 1,573 | 6,506 | 457,974 | 0 | 493,577 |
| Loans and receivables | 494,006 | 245,037 | 106,781 | 123,731 | 49,380 | 1,018,935 | 346,501 | 486,534 | 144,413 | 173,786 | 54,096 | 1,205,330 |
| Reinsurance share in technical provisions | 349,027 | 62,783 | 20,476 | 20,604 | 21,979 | 474,869 | 121,788 | 36,964 | 14,469 | 17,367 | 22,945 | 213,533 |
| Insurance contract and other receivables | 791,014 | - | - | - | - | 791,014 | 861,021 | - | - | - | - | 861,021 |
| Cash and cash equivalents | 512,936 | - | - | - | - | 512,936 | 125,320 | - | - | - | - | 125,320 |
| Total | 2,359,701 | 1,322,343 | 1,981,936 | 2,977,848 | 1,572,492 | 10,214,320 | 2,006,842 | 1,250,097 | 2,169,818 | 2,730,845 | 1,639,456 | 9,797,058 |
| Liabilities | ||||||||||||
| Technical provisions | 2,637,566 | 1,321,695 | 1,134,644 | 884,907 | 1,056,444 | 7,035,256 | 2,373,893 | 1,155,077 | 1,174,891 | 921,196 | 1,105,371 | 6,730,428 |
| Provisions | 8,993 | 29,773 | 29,899 | 8,730 | 9,144 | 86,539 | 17,169 | 33,709 | 31,845 | 9,555 | 10,439 | 102,717 |
| Financial liabilities | 16,399 | 29,495 | 23,408 | 57,511 | 157,465 | 284,278 | 17,677 | 21,028 | 19,804 | 51,669 | 161,489 | 271,667 |
| Liabilities arising from insurance contracts, other liabilities and deferred income |
503,971 | 26,805 | 2,714 | 6,086 | 9,273 | 548,849 | 523,084 | 16,487 | 2,460 | 5,517 | 10,171 | 557,719 |
| Total | 3,166,929 | 1,407,768 | 1,190,665 | 957,234 | 1,232,326 | 7,954,922 | 2,931,823 | 1,226,301 | 1,229,000 | 987,937 | 1,287,470 | 7,662,531 |
| Maturity mismatch | (807,228) | (85,425) | 791,271 | 2,020,614 | 340,166 | 2,259,398 | (924,981) | 23,796 | 940,818 | 1,742,908 | 351,986 | 2,134,527 |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
The maturity analysis at the Group's reporting date is as follows:
| Group in HRK'000 | 31 December 2020 | 31 December 2019 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Assets | No later than 1 year |
1-3 years | 3-5 years | 5-10 years | More than 10 years |
Total | No later than 1 year |
1-3 years | 3-5 years | 5-10 years | More than 10 years |
Total |
| Investments in subsidiaries, associates and participation in joint ventures |
- | - | - | - | 76,593 | 76,593 | - | - | - | - | 77,590 | 77,590 |
| Held-to-maturity investments | 114,766 | 356,015 | 512,245 | 558,803 | 627,954 | 2,169,783 | 403,376 | 387,137 | 472,399 | 517,960 | 534,389 | 2,315,261 |
| Available-for-sale financial assets | 157,921 | 752,892 | 1,484,303 | 1,997,808 | 730,724 | 5,123,648 | 225,363 | 470,699 | 1,590,810 | 1,595,765 | 1,029,708 | 4,912,345 |
| Financial assets at fair value through profit or loss | 18,887 | 3,605 | 10,653 | 423,878 | 2,412 | 459,435 | 37,305 | 2,953 | 9,697 | 467,778 | 892 | 518,625 |
| Loans and receivables | 627,518 | 347,668 | 134,415 | 60,408 | 1,513 | 1,171,522 | 411,669 | 679,126 | 170,839 | 89,014 | 1,512 | 1,352,160 |
| Reinsurance share in technical provisions | 358,627 | 63,997 | 21,661 | 21,123 | 22,857 | 488,265 | 132,259 | 38,627 | 15,182 | 17,367 | 22,944 | 226,379 |
| Insurance contract and other receivables | 897,517 | 3,192 | 1,333 | - | 2 | 902,044 | 964,910 | 1,069 | 65 | 163 | - | 966,207 |
| Cash and cash equivalents | 669,425 | - | - | - | - | 669,425 | 217,367 | - | - | - | - | 217,367 |
| Total | 2,844,661 | 1,527,369 | 2,164,610 | 3,062,020 | 1,462,055 | 11,060,715 | 2,392,249 | 1,579,611 | 2,258,992 | 2,688,047 | 1,667,035 | 10,585,934 |
| Liabilities | ||||||||||||
| Technical provisions | 3,006,864 | 1,469,926 | 1,244,734 | 1,072,938 | 1,241,557 | 8,036,019 | 2,704,646 | 1,321,293 | 1,276,741 | 1,113,617 | 1,277,371 | 7,693,668 |
| Provisions | 10,283 | 34,763 | 30,997 | 10,399 | 11,517 | 97,959 | 19,078 | 39,104 | 32,936 | 11,109 | 12,060 | 114,287 |
| Financial liabilities | 24,534 | 45,843 | 30,660 | 62,297 | 160,558 | 323,892 | 22,260 | 27,452 | 24,595 | 58,670 | 169,039 | 302,016 |
| Liabilities arising from insurance contracts, other liabilities and deferred income |
572,109 | 29,073 | 3,791 | 8,018 | 9,620 | 622,611 | 594,416 | 17,757 | 3,644 | 7,702 | 10,492 | 634,011 |
| Total | 3,613,790 | 1,579,605 | 1,310,182 | 1,153,652 | 1,423,252 | 9,080,481 | 3,340,400 | 1,405,606 | 1,337,916 | 1,191,098 | 1,468,962 | 8,743,982 |
| Maturity mismatch | (769,129) | (52,236) | 854,428 | 1,908,368 | 38,803 | 1,980,234 | (948,151) | 174,005 | 921,076 | 1,496,949 | 198,073 | 1,841,952 |
The table below shows the future undiscounted cash flows of lease liabilities:
| Lease liabilities | Company in HRK'000 | Group in HRK'000 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No later than 1 year |
1-3 years | 3-5 years | 5-10 years | More than 10 years |
Total | No later than 1 year |
1-3 years | 3-5 years | 5-10 years | More than 10 years |
Total | |
| 31 December 2020 | 21,816 | 40,200 | 37,620 | 84,933 | 232,253 | 416,822 | 30,670 | 56,380 | 48,211 | 89,029 | 249,962 | 474,252 |
| 31 December 2019 | 21,883 | 37,484 | 34,965 | 82,663 | 237,632 | 414,627 | 27,882 | 48,232 | 42,479 | 85,490 | 245,227 | 449,310 |
The table below shows the contractual obligations for future investments (note 32):
| Contractual obligations for future investments | Company in HRK'000 | Group in HRK'000 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No later than 1 year |
1-3 years | 3-5 years | 5-10 years | More than 10 years |
Total | No later than 1 year |
1-3 years | 3-5 years | 5-10 years | More than 10 years |
Total | |
| 31 December 2020 | - | 9,921 | - | - | 148,972 | 158,893 | - | 9,921 | - | - | 148,972 | 158,893 |
| 31 December 2019 | - | 3,801 | - | - | 110,968 | 114,769 | - | 3,801 | - | - | 110,968 | 114,769 |
Fair value
Fair value is the amount that should be received for an asset sold or paid to settle a liability in an arm's length transaction between market participants at the value measurement date. Fair value is based on quoted market prices, where available. If market prices are not available, fair value is estimated by using discounted cash flow models or other appropriate pricing techniques. Changes in assumptions on which the estimates are based, including discount rates and estimated future cash flows, significantly affect the estimates. Therefore, at this point the estimated fair value cannot be achieved from the sale of a financial instrument. The fair value of investments at amortised cost is presented below:
| 31 Dec. 2020 | 31 Dec. 2019 | |||||
|---|---|---|---|---|---|---|
| Net book value |
Fair value | Difference | Net book value |
Fair value | Difference | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Company | ||||||
| Debt securities | 2,082,335 | 2,339,165 | 256,830 | 2,172,387 | 2,476,605 | 304,218 |
| Loans | 510,904 | 525,899 | 14,995 | 519,034 | 530,852 | 11,818 |
| Deposits | 508,031 | 509,435 | 1,404 | 686,296 | 692,933 | 6,637 |
| 3,101,270 | 3,374,499 | 273,229 | 3,377,717 | 3,700,390 | 322,673 | |
| Group | ||||||
| Debt securities | 2,169,783 | 2,434,028 | 264,245 | 2,315,261 | 2,620,028 | 304,767 |
| Loans | 263,179 | 264,052 | 873 | 271,152 | 271,374 | 222 |
| Deposits | 908,343 | 909,746 | 1,403 | 1,081,008 | 1,087,645 | 6,637 |
| 3,341,305 | 3,607,826 | 266,521 | 3,667,421 | 3,979,047 | 311,626 |
Methods of assessment or assumptions in determining fair value
For measuring the fair value, the Group takes into account the IFRS fair value hierarchy rules that reflect the significance of inputs used in the assessment process. Each instrument is assessed individually and in detail. The levels of the fair value hierarchy are determined on the basis of the lowest level and the input data that are important for determining the fair value of the instrument.
Different levels have been defined as follows:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1),
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices or interest rate data) or indirectly (that is, derived from prices or using interest rates) (Level 2),
- Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
The overview of fair value by individual levels for investments at amortized cost is presented below:
| 31 Dec. 2020 | 31 Dec. 2019 | |||||||
|---|---|---|---|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |
| Company | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 |
| Debt securities | 1,074,835 | 1,264,330 | - | 2,339,165 | 2,432,742 | 43,863 | - | 2,476,605 |
| Loans | - | 525,899 | - | 525,899 | - | 530,852 | - | 530,852 |
| Deposits | - | - | 509,435 | 509,435 | - | - | 692,933 | 692,933 |
| 1,074,835 | 1,790,229 | 509,435 | 3,374,499 | 2,432,742 | 574,715 | 692,933 | 3,700,390 |
| 31 Dec. 2020 | 31 Dec. 2019 | |||||||
|---|---|---|---|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |
| Group | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 |
| Debt securities | 1,114,435 | 1,319,593 | - | 2,434,028 | 2,524,947 | 95,081 | - | 2,620,028 |
| Loans | - | 261,272 | 2,780 | 264,052 | - | 268,458 | 2,916 | 271,374 |
| Deposits | - | - | 909,746 | 909,746 | - | - | 1,087,645 | 1,087,645 |
| 1,114,435 | 1,580,865 | 912,526 | 3,607,826 | 2,524,947 | 363,539 | 1,090,561 | 3,979,047 |
The table below analyses financial instruments carried at fair value using the valuation method.
The Company's assets measured at fair value as at 31 December 2020 are presented as follows:
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Property for own use | - | - | 264,386 | 264,386 |
| Investment property | - | - | 456,653 | 456,653 |
| Equity securities | 505,893 | - | 30,241 | 536,134 |
| Debt securities | 3,028,770 | 777,054 | 2,130 | 3,807,954 |
| Investment funds | 60,338 | 128,707 | 3,029 | 192,074 |
| Available-for-sale financial assets | 3,595,001 | 905,761 | 35,400 | 4,536,162 |
| Equity securities | 17,188 | - | - | 17,188 |
| Debt securities | - | - | - | - |
| Investment funds | 400,250 | - | - | 400,250 |
| Foreign currency forward contracts | - | 4,115 | - | 4,115 |
| Financial assets at fair value through profit or loss | 417,438 | 4,115 | - | 421,553 |
| Total assets at fair value | 4,012,439 | 909,876 | 756,439 | 5,678,754 |
The Company's assets measured at fair value as at 31 December 2019 are presented as follows:
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Property for own use | - | - | 355,252 | 355,252 |
| Investment property | - | - | 367,521 | 367,521 |
| Equity securities | 497,175 | - | 25,405 | 522,580 |
| Debt securities | 2,048,645 | 1,772,023 | 16,739 | 3,837,407 |
| Investment funds | 59,172 | 20,879 | 6,741 | 86,792 |
| Available-for-sale financial assets | 2,604,992 | 1,792,902 | 48,885 | 4,446,779 |
| Equity securities | 17,071 | - | - | 17,071 |
| Debt securities | - | - | - | - |
| Investment funds | 472,836 | - | - | 472,836 |
| Foreign currency forward contracts | - | 3,670 | - | 3,670 |
| Financial assets at fair value through profit or loss | 489,907 | 3,670 | - | 493,577 |
| Total assets at fair value | 3,094,899 | 1,796,572 | 771,658 | 5,663,129 |
The Group's assets measured at fair value as at 31 December 2020 are presented as follows:
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Property for own use | - | - | 496,661 | 496,661 |
| Investment property | - | - | 1,013,247 | 1,013,247 |
| Equity securities | 506,401 | - | 30,298 | 536,699 |
| Debt securities | 3,270,975 | 1,121,770 | 2,130 | 4,394,875 |
| Investment funds | 60,338 | 128,707 | 3,029 | 192,074 |
| Available-for-sale financial assets | 3,837,714 | 1,250,477 | 35,457 | 5,123,648 |
| Equity securities | 17,187 | - | - | 17,187 |
| Debt securities | - | - | - | - |
| Investment funds | 438,133 | - | - | 438,133 |
| Foreign currency forward contracts | - | 4,115 | - | 4,115 |
| Financial assets at fair value through profit or loss | 455,320 | 4,115 | - | 459,435 |
| Total assets at fair value | 4,293,034 | 1,254,592 | 1,545,365 | 7,092,991 |
The Group's assets measured at fair value as at 31 December 2019 are presented as follows:
| Level 1 in HRK'000 |
Level 2 in HRK'000 |
Level 3 in HRK'000 |
Total in HRK'000 |
|
|---|---|---|---|---|
| Property for own use | - | - | 552,633 | 552,633 |
| Investment property | - | - | 873,653 | 873,653 |
| Equity securities | 497,718 | - | 25,462 | 523,180 |
| Debt securities | 2,219,978 | 2,065,657 | 16,738 | 4,302,373 |
| Investment funds | 59,172 | 20,879 | 6,741 | 86,792 |
| Available-for-sale financial assets | 2,776,868 | 2,086,536 | 48,941 | 4,912,345 |
| Equity securities | 17,071 | - | - | 17,071 |
| Debt securities | - | - | - | - |
| Investment funds | 497,884 | - | - | 497,884 |
| Foreign currency forward contracts | - | 3,670 | - | 3,670 |
| Financial assets at fair value through profit or loss | 514,955 | 3,670 | - | 518,625 |
| Total assets at fair value | 3,291,823 | 2,090,206 | 1,475,227 | 6,857,256 |
The following table presents the changes in level 3 items for the Company:
| Company | Equity securities |
Debt securities |
Investment funds |
Total |
|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| 31 December 2018 | 2,025 | 8,686 | 7,552 | 18,263 |
| Acquisitions | 23,023 | 6,765 | - | 29,788 |
| Disposals | - | - | - | - |
| (Losses) recognised in other comprehensive income | - | - | (811) | (811) |
| Gains recognised in other comprehensive income | 357 | 1,288 | - | 1,645 |
| 31 December 2019 | 25,405 | 16,739 | 6,741 | 48,885 |
| Acquisitions | 4,987 | - | - | 4,987 |
| Disposals | - | (14,636) | - | (14,636) |
| (Losses) recognised in other comprehensive income | (151) | - | (3,712) | (3,863) |
| Gains recognised in other comprehensive income | - | 27 | - | 27 |
| 31 December 2020 | 30,241 | 2,130 | 3,029 | 35,400 |
The following table presents the changes in level 3 items for the Group:
| Group | Equity securities |
Debt securities |
Investment funds |
Total |
|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| 31 December 2018 | 2,082 | 8,686 | 7,552 | 18,320 |
| Acquisitions | 23,023 | 6,765 | - | 29.788 |
| Disposals | - | - | - | - |
| (Losses) recognised in other comprehensive income | - | - | (811) | (811) |
| Gains recognised in other comprehensive income | 357 | 1,287 | - | 1,644 |
| 31 December 2019 | 25,462 | 16,738 | 6,741 | 48,941 |
| Acquisitions | 4,987 | - | - | 4,987 |
| Disposals | - | (14,636) | - | (14,636) |
| (Losses) recognised in other comprehensive income | (151) | - | (3,712) | (3,863) |
| Gains recognised in other comprehensive income | - | 28 | - | 28 |
| 31 December 2020 | 30,298 | 2,130 | 3,029 | 35,457 |
Information on fair value measurements of equity securities, debt securities and investment funds which included significant parameters that are not available on the market (level 3)
| Fair value at 31 Dec. 2020 |
Unob servable inputs |
Range of inputs (probability weighted |
Relationship of unobservable inputs to fair value | |
|---|---|---|---|---|
| in HRK'000 | average) | |||
| Equity securities |
30,241 | Discount rate |
6.96%-8.96% (7.96%) |
An increase in the discount rate by 100 bps would decrease the fair value by HRK 208 thousand. A decrease in the discount rate by 100 bps would increase the fair value by HRK 266 thousand. |
| Debt securities |
2,130 | Discount rate |
12.5% - 14.5% (13.5%) |
An increase in the discount rate by 100 bps would decrease the fair value by HRK 70 thousand. A decrease in the discount rate by 100 bps would increase the fair value by HRK 75 thousand. |
| Investment funds |
3,029 | Discount rate |
38.6% - 46.2% (42.41%) |
An increase in the discount rate by 379 bps would decrease the fair value by HRK 187 thousand. A decrease in the discount rate by 379 bps would increase the fair value by HRK 187 thousand. |
| Fair value at 31 Dec. 2019 |
Unob servable |
Range of inputs (probability |
Relationship of unobservable inputs to fair value | |
| inputs in HRK'000 |
weighted |
| average) | ||||
|---|---|---|---|---|
| Equity securities |
25,405 | Discount rate |
7.72%-9.72% (8.72%) |
An increase in the discount rate by 100 bps would decrease the fair value by HRK 179 thousand. A decrease in the discount rate by 100 bps would increase the fair value by HRK 222 thousand. |
| Debt securities |
16,739 | Discount rate |
22.89% - 24.89% (23.89%) |
An increase in the discount rate by 100 bps would decrease the fair value by HRK 475 thousand. A decrease in the discount rate by 100 bps would increase the fair value by HRK 496 thousand. |
| Investment funds |
6,741 | Discount rate |
-10% - +10% (0%) |
An increase in the discount rate by 10 b.p. would decrease the fair value by HRK 225 thousand. A decrease in the discount rate by 10 b.p. would increase the fair value by HRK 224 thousand. |
The Company has adopted IFRS 13, pursuant to which it is required to disclose the fair value hierarchy of financial assets that are not measured at fair value as well as a description of valuation techniques and inputs used.
Financial liabilities are recorded at amortised cost. Since the interest rate they bear is aligned with market rates, the Management Board believes that the carrying value of these instruments is not significantly different from their fair value.
The fair value of deposits, loans and financial liabilities are estimated on the basis of inputs that are not commercially available rates, and would therefore be classified as level 3, or by using publicly available rates published by the Croatian national bank (for the Company's loans) and would therefore be classified as level 2 in the fair value hierarchy. Investments with available market prices that are classified in the portfolio of held-to-maturity investments would be classified as level 1.
The fair values of cash and cash equivalents and insurance contract and other receivables do not differ significantly from their carrying amounts due to the short-term nature of these financial instruments. Fair value is determined based on level 2 inputs for cash and cash equivalents and based on level 3 inputs for insurance contract and other receivable.
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The fair value of financial instruments that are classified as level 3 is determined by using discontinued cash flow techniques or other valuation techniques by using relevant observable market data, information about current business and estimation of issuer's future business.
There have been no significant reclassifications from level 1 and level 2 to level 3 and vice versa of financial assets at fair value through profit or loss in statement of financial position.
The fair value of held-to-maturity investments is based on the available market prices and is classified as level 1 in accordance with IFRS 13.
Fair value of properties
An independent valuation of the Company's investment property was conducted by external valuators in order to determine the fair value as at 31 December 2020 and 31 December 2019.
To determine fair value of the property for own use, the Group use real estate appraisals conducted by independent certified authorized external valuatorsin 2019, whereas in 2020 it reviewed whether there were any indications of impairment and recognized impairment of the property for own use where there was a significant difference in its net book value in comparison to the previously determined value. The effects are listed in Note 16.
Valuation techniques used for determining fair value on Level 3
The fair value of investment property is derived primarily by applying a sales comparison and income approach, and sometimes lacking information on market parameters by applying the cost method, depending on a particular property.
The fair value of the property for own use for was carried out primarily by applying the income method.
The most significant inputs in the valuations were prices or rental income per square meter, generated based on comparable properties in the immediate vicinity and then adjusted by differences in key characteristics.
Information on fair value measurement of investment property which included significant parameters that are not available on the market (level 3)
| Description | Fair value as at 31 December 2020 |
Fair value as at 31 December 2019 |
Valuation technique(s) |
Unavailable parameters |
Range of unavailable parameters | |
|---|---|---|---|---|---|---|
| 2020 | 2019 | |||||
| 456,653 | 367,521 | Income approach |
Capitalization rate |
5.5-10% | 6.5-9% | |
| Company | Cost approach | Building unit price per m2 (HRK) |
100-6,053 | 375-5.250 | ||
| Sales comparison approach |
Average price per m2 (HRK) |
1-23,794 | 1-26.318 | |||
| 1,013,247 | 873,653 | Income | Capitalization rate |
5.5%-10.5% | 6.5%-10.5% | |
| approach | Discount rate | 10% | 10% | |||
| Group | Cost approach | Building unit price (HRK) |
100-6,053 | 375-5.589 | ||
| Sales comparison approach |
Building unit price per m2 (HRK) |
1-34,036 | 1-26.318 |
A significant increase (decrease) in the estimated capitalization rate, average building price and the average price per m2, with other variables held constant, would have an impact on a significant increase (decrease) in the fair value of investment property. A significant increase (decrease) in the discount rate, with other variables held constant, would have an impact on a significant decrease (increase) in the fair value of investment property.
There is no significant interaction between invisible inputs used in estimates that would have a significant effect on fair value.
2.39. Capital management
The Company's objectives when managing capital are:
- Ensuring the Company's going concern;
- Compliance with Croatian and EU laws and subordinate legislation, regulations and instructions of the regulatory body governing capital management;
- Maintaining a high level of capitalization and consequently financial stability, thus providing an adequate level of security to the insurers and the insured party;
- Achieving efficient and optimal capital allocation as well as maximizing return on capital;
- Ensuring continuous compliance of the Company's and the Group's business strategy with risk appetite and targeted levels of capital adequacy;
- Providing a high level of capitalization or sufficient surplus capital for further investment in the development and growth of the Company and the Group.
The Company and the Group are subject to the statutory and subordinate regulations of the Republic of Croatia and the EU governing capital management, which also define the minimum levels of capital that the Company and the Group must maintain (regulatory framework Sovereignty 2 applied since 2016). The above-mentioned regulatory framework defines the rules governing the method of calculation and reporting on capital adequacy. In particular, it stipulates that the Company and the Group must at all times maintain acceptable own funds (available capital) in such a manner as to cover the Minimum Capital Requirement (the so-called MCR), as well as the Solvency Capital Requirement SCR).
The SCR ratio is defined as the ratio of the amount of total eligible own funds to cover the required solvency capital (SCR) and the amount of solvent capital required. The MCR ratio is defined as the ratio of the amount of total eligible own funds to cover the Minimum Capital Requirement (MCR) and the amount of minimum required capital.
| Regulatory requirement | Company | Company | ||
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | |||
| SCR ratio | >100% | 268% | 277% | |
| MCR ratio | >100% | 930% | 898% |
Based on information provided internally to key management personnel, the Company and the Group comply with the legal and subordinate regulations governing the capital adequacy, as follows:
| Regulatory requirement | Group | Group | |
|---|---|---|---|
| 31 Dec. 2020* | 31 Dec. 2019** | ||
| SCR ratio | >100% | 229% | 239% |
| MCR ratio | >100% | 728% | 698% |
* Temporary data for the last reference date for which the data is available at the time of this Report are presented. The Group will disclose the final data for 31 December 2020 as part of the Solvency and Financial Condition Report of CROATIA osiguranje Group for 2020, which will be published on the Company's website within the stipulated deadlines.
** Data presented for 31 December 2019 are the data that are published in the Solvency and Financial Condition Report of CROATIA osiguranje Group for 2019.
The Company and the Group regularly monitor capital adequacy and conduct stress tests of capital and its adequacy in order to prevent the possibility of capital shortages in time.
3. Segment reporting
The Company's statement of comprehensive income by segments for the year is as follows:
| 2020 | 2020 | 2020 | 2019 | 2019 | 2019 | |
|---|---|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| NON-LIFE | LIFE | TOTAL | NON-LIFE | LIFE | TOTAL | |
| Gross written premiums | 2,290,996 | 453,598 | 2,744,594 | 2,225,101 | 517,407 | 2,742,508 |
| Premiums ceded to reinsurance and coinsurance |
(248,704) | (72) | (248,776) | (247,719) | (89) | (247,808) |
| Written premiums, net of reinsurance and coinsurance |
2,042,292 | 453,526 | 2,495,818 | 1,977,382 | 517,318 | 2,494,700 |
| Change in gross provisions for unearned premiums |
(13,289) | (153) | (13,442) | 4,452 | (523) | 3,929 |
| Change in provision for unearned premiums, reinsurance and coinsurance share |
16,514 | (4) | 16,510 | (13,113) | 3 | (13,110) |
| Earned premiums, net of reinsurance and coinsurance |
2,045,517 | 453,369 | 2,498,886 | 1,968,721 | 516,798 | 2,485,519 |
| Commission and fee income | 39,478 | 2,100 | 41,578 | 33,928 | 2,155 | 36,083 |
| Finance income | 260,307 | 148,372 | 408,679 | 272,303 | 134,317 | 406,620 |
| Other operating income | 40,976 | 442 | 41,418 | 46,362 | 331 | 46,693 |
| Net operating income | 2,386,278 | 604,283 | 2,990,561 | 2,321,314 | 653,601 | 2,974,915 |
| Claims incurred | (1,530,511) | (486,441) | (2,016,952) | (1,213,531) | (512,960) | (1,726,491) |
| Reinsurance share of claims incurred | 348,110 | (10) | 348,100 | 125,415 | 10 | 125,425 |
| Claims incurred, net of reinsurance and coinsurance |
(1,182,401) | (486,451) | (1,668,852) | (1,088,116) | (512,950) | (1,601,066) |
| Acquisition costs | (448,796) | (28,952) | (477,748) | (474,736) | (37,327) | (512,063) |
| Administrative expenses | (353,292) | (36,494) | (389,786) | (358,459) | (47,146) | (405,605) |
| Other operating expenses | (40,005) | (717) | (40,722) | (44,135) | (408) | (44,543) |
| Finance costs | (115,315) | (23,998) | (139,313) | (50,973) | (7,279) | (58,252) |
| Profit before tax | 246,469 | 27,671 | 274,140 | 304,895 | 48,491 | 353,386 |
| Taxation | (39,647) | (4,904) | (44,551) | (51,440) | (8,815) | (60,255) |
| Profit for the year | 206,822 | 22,767 | 229,589 | 253,455 | 39,676 | 293,131 |
The Company's statement of financial position by segments at the reporting date is as follows:
| 31 Dec. 2020 | 31 Dec. 2020 | 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2019 | 31 Dec. 2019 | |
|---|---|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Assets | NON-LIFE | LIFE | TOTAL | NON-LIFE | LIFE | TOTAL |
| Intangible assets | 96,858 | - | 96,858 | 36,993 | - | 36,993 |
| Deferred acquisition costs | 208,350 | - | 208,350 | 226,110 | - | 226,110 |
| Property and equipment | 552,892 | 14 | 552,906 | 641,451 | 10 | 641,461 |
| Investment property | 456,653 | - | 456,653 | 367,521 | - | 367,521 |
| Investments in subsidiaries, associates and participation in joint ventures |
376,516 | - | 376,516 | 279,111 | - | 279,111 |
| Held-to-maturity investments | 998,547 | 1,083,788 | 2,082,335 | 944,029 | 1,228,358 | 2,172,387 |
| Available-for-sale financial assets |
2,731,918 | 1,804,244 | 4,536,162 | 2,817,919 | 1,628,860 | 4,446,779 |
| Financial assets at fair value through profit or loss |
20,985 | 400,568 | 421,553 | 47,661 | 445,916 | 493,577 |
| Loans and receivables | 792,317 | 226,618 | 1,018,935 | 1,009,106 | 196,224 | 1,205,330 |
| Reinsurance share in technical provisions |
474,856 | 13 | 474,869 | 213,507 | 26 | 213,533 |
| Deferred tax assets | - | - | - | - | - | - |
| Insurance contract and other receivables |
794,075 | 621 | 794,696 | 868,256 | 503 | 868,759 |
| Cash and cash equivalents | 450,515 | 62,421 | 512,936 | 100,317 | 25,003 | 125,320 |
| Total assets | 7,954,482 | 3,578,287 | 11,532,769 | 7,551,981 | 3,524,900 | 11,076,881 |
| Capital and reserves | ||||||
| Subscribed share capital | 545,037 | 44,289 | 589,326 | 545,037 | 44,289 | 589,326 |
| Premium on issued shares | 681,483 | - | 681,483 | 681,483 | - | 681,483 |
| Reserves | 316,742 | 85,296 | 402,038 | 316,742 | 85,296 | 402,038 |
| Revaluation reserve | 326,932 | 144,192 | 471,124 | 368,661 | 147,995 | 516,656 |
| Retained earnings | 1,209,882 | 179,986 | 1,389,868 | 1,001,742 | 157,219 | 1,158,961 |
| Total capital and reserves | 3,080,076 | 453,763 | 3,533,839 | 2,913,665 | 434,799 | 3,348,464 |
| Liabilities | ||||||
| Technical provisions | 3,980,977 | 3,054,279 | 7,035,256 | 3,712,920 | 3,017,508 | 6,730,428 |
| Provisions | 83,968 | 2,571 | 86,539 | 99,786 | 2,931 | 102,717 |
| Deferred tax liability | 6,105 | 29,875 | 35,980 | 14,659 | 30,458 | 45,117 |
| Financial liabilities | 282,749 | 1,529 | 284,278 | 271,367 | 300 | 271,667 |
| Liabilities arising from insurance contracts, other liabilities and deferred income |
516,261 | 36,270 | 552,531 | 526,553 | 38,904 | 565,457 |
| Current income tax liabilities | 4,346 | - | 4,346 | 13,031 | - | 13,031 |
| Total liabilities | 4,874,406 | 3,124,524 | 7,998,930 | 4,638,316 | 3,090,101 | 7,728,417 |
| Total capital, reserves and liabilities |
7,954,482 | 3,578,287 | 11,532,769 | 7,551,981 | 3,524,900 | 11,076,881 |
The Group's statement of comprehensive income by segments for the year is as follows:
| 2020 | 2020 | 2020 | 2019 | 2019 | 2019 | |
|---|---|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| NON-LIFE | LIFE | TOTAL | NON-LIFE | LIFE | TOTAL | |
| Gross written premiums | 2,686,345 | 551,053 | 3,237,398 | 2,657,337 | 645,821 | 3,303,158 |
| Premiums ceded to reinsurance and coinsurance |
(277,526) | (335) | (277,861) | (273,529) | (196) | (273,725) |
| Written premiums, net of reinsurance and coinsurance |
2,408,819 | 550,718 | 2,959,537 | 2,383,808 | 645,625 | 3,029,433 |
| Change in gross provisions for unearned premiums |
3,943 | -176 | 3,767 | (10,532) | (536) | (11,068) |
| Change in provision for unearned premiums, reinsurance and coinsurance share |
16,181 | 53 | 16,234 | (15,734) | 24 | (15,710) |
| Earned premiums, net of reinsurance and coinsurance |
2,428,943 | 550,595 | 2,428,943 | 2,357,542 | 645,113 | 3,002,655 |
| Commission and fee income | 41,068 | 2,100 | 43,168 | 35,390 | 2,155 | 37,545 |
| Finance income | 330,071 | 168,879 | 498,950 | 334,100 | 152,049 | 486,149 |
| Other operating income | 171,658 | 1,063 | 172,721 | 161,678 | 450 | 162,128 |
| Net operating income | 2,971,740 | 722,637 | 3,694,377 | 2,888,710 | 799,767 | 3,688,477 |
| Claims incurred | (1,721,551) | (568,375) | (2,289,926) | (1,409,162) | (625,266) | (2,034,428) |
| Reinsurance share of claims incurred |
353,166 | 119 | 353,285 | 129,979 | 10 | 129,989 |
| Claims incurred, net of reinsurance and coinsurance |
(1,368,385) | (568,256) | (1,936,641) | (1,279,183) | (625,256) | (1,904,439) |
| Acquisition costs | (536,132) | (41,584) | (577,716) | (558,419) | (62,329) | (620,748) |
| Administrative expenses | (539,660) | (43,476) | (583,136) | (535,558) | (55,408) | (590,966) |
| Other operating expenses | (65,456) | (1,498) | (66,954) | (66,790) | (1,007) | (67,797) |
| Finance costs | (122,793) | (25,886) | (148,679) | (96,002) | (8,839) | (104,841) |
| Share in profit of associates | 10,339 | - | 10,339 | 11,947 | - | 11,947 |
| Profit before tax | 349,653 | 41,937 | 391,590 | 364,705 | 46,928 | 411,633 |
| Income tax | (56,957) | (6,431) | (63,388) | (62,364) | (9,530) | (71,894) |
| Profit for the year | 292,696 | 35,506 | 328,202 | 302,341 | 37,398 | 339,739 |
| 31 Dec. 2020 | 31 Dec. 2020 | 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2019 | 31 Dec. 2019 | |
|---|---|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Assets | NON-LIFE | LIFE | TOTAL | NON-LIFE | LIFE | TOTAL |
| Intangible assets | 107,472 | 401 | 107,873 | 48,319 | 408 | 48,727 |
| Deferred acquisition costs | 247,354 | - | 247,354 | 268,986 | - | 268,986 |
| Property and equipment | 854,413 | 19,973 | 874,386 | 885,503 | 21,124 | 906,627 |
| Investment property | 1,011,390 | 1,857 | 1,013,247 | 872,024 | 1,629 | 873,653 |
| Investments in subsidiaries, associates and participation in joint ventures |
76,593 | - | 76,593 | 77,590 | - | 77,590 |
| Held-to-maturity investments | 1,037,924 | 1,131,859 | 2,169,783 | 1,037,567 | 1,277,694 | 2,315,261 |
| Available-for-sale financial assets |
2,994,697 | 2,128,951 | 5,123,648 | 2,990,715 | 1,921,630 | 4,912,345 |
| Financial assets at fair value through profit or loss |
39,729 | 419,706 | 459,435 | 62,445 | 456,180 | 518,625 |
| Loans and receivables | 774,800 | 396,722 | 1,171,522 | 991,674 | 360,486 | 1,352,160 |
| Reinsurance share in technical provisions |
488,141 | 124 | 488,265 | 226,299 | 80 | 226,379 |
| Deferred tax assets | 1,653 | - | 1,653 | 1,740 | - | 1,740 |
| Insurance contract and other receivables |
940,660 | 18,454 | 959,114 | 1,012,116 | 23,439 | 1,035,555 |
| Cash and cash equivalents | 581,552 | 87,873 | 669,425 | 177,986 | 39,381 | 217,367 |
| Total assets | 9,156,378 | 4,205,920 | 13,362,298 | 8,652,964 | 4,102,051 | 12,755,015 |
| Capital and reserves | ||||||
| Subscribed share capital | 545,037 | 44,289 | 589,326 | 545,037 | 44,289 | 589,326 |
| Premium on issued shares | 681,483 | - | 681,483 | 681,483 | - | 681,483 |
| Reserves | 316,742 | 85,296 | 402,038 | 316,742 | 85,296 | 402,038 |
| Fair value reserve | 386,496 | 181,953 | 568,449 | 432,714 | 176,624 | 609,338 |
| Retained earnings | 1,628,770 | 237,285 | 1,866,055 | 1,335,581 | 201,873 | 1,537,454 |
| Equity attributable to owners of the parent |
3,558,528 | 548,823 | 4,107,351 | 3,311,557 | 508,082 | 3,819,639 |
| Non-controlling interest | 11,908 | 746 | 12,654 | 11,923 | 630 | 12,553 |
| Total capital and reserves | 3,570,436 | 549,569 | 4,120,005 | 3,323,480 | 508,712 | 3,832,192 |
| Liabilities | ||||||
| Technical provisions | 4,505,579 | 3,530,440 | 8,036,019 | 4,233,605 | 3,460,063 | 7,693,668 |
| Provisions | 95,351 | 2,608 | 97,959 | 111,329 | 2,958 | 114,287 |
| Deferred tax liability | 50,751 | 34,005 | 84,756 | 47,246 | 33,652 | 80,898 |
| Financial liabilities | 318,779 | 5,113 | 323,892 | 297,695 | 4,321 | 302,016 |
| Liabilities arising from insurance contracts, other liabilities and deferred income |
597,026 | 82,655 | 679,681 | 611,737 | 91,622 | 703,359 |
| Current income tax payable | 18,456 | 1,530 | 19,986 | 27,872 | 723 | 28,595 |
| Total liabilities | 5,585,942 | 3,656,351 | 9,242,293 | 5,329,484 | 3,593,339 | 8,922,823 |
| Total capital, reserves and liabilities |
9,156,378 | 4,205,920 | 13,362,298 | 8,652,964 | 4,102,051 | 12,755,015 |
The Group's statement of financial position by segments at the reporting date is as follows:
The measurement of the assets and liabilities segment and the revenues and result segment is based on the accounting policies set out in the notes on accounting policies. Based on the internal management reports, the key performance measure for measurement of profitability of each segment and insurance type identified by the Group is gross written premium and profit before tax.
The Group's main reportable segments are non-life and life. The Group performs insurance business in segments of non-life and life insurance. Among other important activities, the Group also carries out activities of pension fund management, technical examinations and providing medical services of clinics within the segment of nonlife.
Segment results, assets and liabilities include items directly attributable to the segment as well as those that are allocated on a reasonable basis.
The main products offered by reportable segments include:
Non-life:
- Accident insurance
- Health insurance
- Road motor vehicle insurance
- Railroad rolling stock insurance
- Aircraft insurance
- Vessel insurance
- Insurance for goods in transit
- Insurance against fire and natural disasters
- Other types of property insurance
- Motor third party liability insurance
- Aircraft liability insurance
- Vessel liability insurance
- Other types of liability insurance
- Loan insurance/credit insurance
- Surety insurance
- Miscellaneous financial loss insurance
- Legal expenses insurance
- Assistance
Life:
- Life insurance
- Annuity insurance
- Additional insurance with life insurance
- Life or annuity insurance where the policyholder bears the investment risk
An overview of gross written premium (after value adjustment) by type of insurance is shown below:
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Accident insurance | 113,650 | 114,899 | 135,181 | 135,112 |
| Health insurance | 356,071 | 349,640 | 362,095 | 351,213 |
| Road motor vehicle insurance | 372,238 | 369,021 | 423,623 | 418,432 |
| Railroad rolling stock insurance | 2,193 | 1,539 | 2,193 | 1,539 |
| Aircraft insurance | 4,706 | 4,416 | 4,706 | 4,416 |
| Vessel insurance | 34,341 | 32,002 | 34,341 | 32,002 |
| Insurance for goods in transit | 17,060 | 16,907 | 18,224 | 17,786 |
| Insurance against fire and natural disasters | 237,345 | 221,889 | 257,648 | 241,648 |
| Other types of property insurance | 403,058 | 390,946 | 418,536 | 403,164 |
| Motor third party liability insurance | 538,823 | 512,043 | 793,958 | 772,901 |
| Aircraft liability insurance | 2,646 | 2,713 | 2,646 | 2,713 |
| Vessel liability insurance | 7,213 | 6,479 | 7,215 | 6,481 |
| Other types of liability insurance | 138,207 | 132,273 | 143,490 | 135,696 |
| Loan insurance/credit insurance | 14,984 | 18,976 | 23,521 | 57,789 |
| Surety insurance | 1,833 | 2,258 | 4,596 | 7,459 |
| Miscellaneous financial loss insurance | 38,154 | 36,198 | 39,838 | 37,834 |
| Legal expenses insurance | 138 | 1,897 | 138 | 1,898 |
| Assistance | 8,336 | 11,005 | 14,396 | 29,254 |
| Total non-life insurance | 2,290,996 | 2,225,101 | 2,686,345 | 2,657,337 |
| Life insurance | 433,025 | 500,005 | 518,007 | 619,672 |
| Annuity insurance | 4,177 | 4,039 | 4,177 | 4,039 |
| Additional insurance with life insurance | 12,225 | 13,358 | 16,218 | 17,679 |
| Life or annuity insurance where the policyholder bears the | ||||
| investment risk | 4,171 | 5 | 12,651 | 4,431 |
| Total life insurance | 453,598 | 517,407 | 551,053 | 645,821 |
| Total | 2,744,594 | 2,742,508 | 3,237,398 | 3,303,158 |
An overview of the Company's and the Group's revenues by geographical area is shown below:
| Company in HRK'000 | 2020 | ||||||
|---|---|---|---|---|---|---|---|
| Republic of Croatia |
Slovenia | Other countries |
TOTAL | ||||
| Written premiums, net of reinsurance and coinsurance | 23,528 | 17,303 | 2,498,886 | ||||
| Commission and fee income, Finance income and Other operating income | 2,458,055 491,432 |
243 | - | 491,675 | |||
| Net operating income | 2,949,487 | 23,771 | 17,303 | 2,990,561 | |||
| Company in HRK'000 | 2019 | ||||||
| Republic of Croatia |
Slovenia | Other countries |
TOTAL | ||||
| Written premiums, net of reinsurance and coinsurance | 2,479,042 | 5,459 | 1,018 | 2,485,519 | |||
| Commission and fee income, Finance income and Other operating income | 489,357 | 39 | - | 489,396 | |||
| Net operating income | 2,968,399 | 5,498 | 1,018 | 2,974,915 | |||
| Group in HRK'000 | 2020 | ||||||
| Republic of Croatia |
Republic of Serbia |
Bosnia and Herzegovina |
North Macedonia |
Other countries |
TOTAL | ||
| Written premiums, net of reinsurance and coinsurance Commission and fee income, Finance |
2,449,293 | 208,673 | 146,002 | 134,739 | 40,831 | 2,979,538 | |
| income and Other operating income | 658,122 | 22,967 | 12,788 | 20,719 | 243 | 714,839 | |
| Net operating income | 3,107,415 | 231,640 | 158,790 | 155,458 | 41,074 | 3,694,377 | |
| Group in HRK'000 | 2019 | ||||||
| Republic of Croatia |
Republic of Serbia |
Bosnia and Herzegovina |
North Macedonia |
Other countries |
TOTAL | ||
| Written premiums, net of reinsurance and coinsurance Commission and fee income, Finance |
2,468,549 | 211,723 | 164,627 | 151,279 | 6,477 | 3,002,655 | |
| income and Other operating income | 633,064 | 16,644 | 18,134 | 17,941 | 39 685,822 |
||
| Net operating income | 3,101,613 | 228,367 | 182,761 | 169,220 | 6,516 | 3,688,477 |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
4. Premiums
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| TOTAL LIFE AND NON-LIFE | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 |
| Gross written premiums | 2,741,819 | 2,738,698 | 3,240,231 | 3,304,975 |
| Impairment and collected premium impairment |
2,775 | 3,810 | (2,833) | (1,817) |
| Gross premiums written | 2,744,594 | 2,742,508 | 3,237,398 | 3,303,158 |
| Reinsurance premium in the country | (19) | (98) | (9,256) | (7,961) |
| Reinsurance premium abroad | (242,804) | (243,547) | (259,265) | (259,087) |
| Co-insurance premium in the country | (5,953) | (4,163) | (9,340) | (6,677) |
| Gross premiums ceded to reinsurance and co- insurance |
(248,776) | (247,808) | (277,861) | (273,725) |
| Written premiums, net of reinsurance and coinsurance |
2,495,818 | 2,494,700 | 2,959,537 | 3,029,433 |
| Gross provisions for unearned premiums | (13,442) | 3,929 | 3,768 | (11,068) |
| Provisions for unearned premiums, reinsurance share |
15,749 | (13,098) | 15,272 | (15,711) |
| Provisions for unearned premiums, coinsurance share |
761 | (12) | 961 | 1 |
| Change in provisions for unearned premiums | 3,068 | (9,181) | 20,001 | (26,778) |
| Earned premiums, net of reinsurance and coinsurance |
2,498,886 | 2,485,519 | 2,979,538 | 3,002,655 |
| Company | Company | Group | Group | |
| 2020 | 2019 | 2020 | 2019 | |
| LIFE | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 |
| Gross written premiums | 453,598 | 517,407 | 551,053 | 645,821 |
| Reinsurance premium abroad | (72) | (89) | (335) | (196) |
| Premium ceded to reinsurance | (72) | (89) | (335) | (196) |
| Written premiums, net of reinsurance | 453,526 | 517,318 | 550,718 | 645,625 |
| Gross provisions for unearned premiums | (153) | (523) | (176) | (536) |
| Provisions for unearned premiums, reinsurance share |
(4) | 3 | 53 | 24 |
| Change in provisions for unearned premiums | (157) | (520) | (123) | (512) |
| Earned premiums, net of reinsurance | 453,369 | 516,798 | 550,595 | 645,113 |
4. Premiums (continued)
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| NON-LIFE | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 |
| Gross written premiums | 2,288,221 | 2,221,291 | 2,689,178 | 2,659,154 |
| Impairment and collected premium impairment | 2,775 | 3,810 | (2,833) | (1,817) |
| Gross premiums written | 2,290,996 | 2,225,101 | 2,686,345 | 2,657,337 |
| Reinsurance premium in the country | (19) | (98) | (9,256) | (7,961) |
| Reinsurance premium abroad | (242,732) | (243,458) | (258,930) | (258,891) |
| Co-insurance premium in the country | (5,953) | (4,163) | (9,340) | (6,677) |
| Premium ceded to reinsurance | (248,704) | (247,719) | (277,526) | (273,529) |
| Written premiums, net of reinsurance | 2,042,292 | 1,977,382 | 2,408,819 | 2,383,808 |
| Gross provisions for unearned premiums | (13,289) | 4,452 | 3,944 | (10,532) |
| Provisions for unearned premiums, reinsurance share |
15,753 | (13,101) | 15,219 | (15,735) |
| Provisions for unearned premiums, coinsurance share |
761 | (12) | 961 | 1 |
| Change in provisions for unearned premiums | 3,225 | (8,661) | 20,124 | (26,266) |
| Earned premiums, net of reinsurance | 2,045,517 | 1,968,721 | 2,428,943 | 2,357,542 |
5. Commission and fee income
Commission and fee income in the amount of HRK 41,578 thousand (2019: HRK 36,083 thousand) for the Company and HRK 43,168 thousand (2019: HRK 37,545 thousand) for the Group relate to commissions from reinsurance companies under reinsurance contracts.
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
6. Finance income
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Interest income | 179,496 | 215,930 | 195,584 | 229,541 |
| Dividend income | 25,698 | 44,953 | 9,410 | 25,591 |
| Gains on investment property | 25,350 | 25,299 | 105,946 | 106,967 |
| Gain on bargain purchase | - | - | 5,628 | - |
| Foreign exchange gains | 63,301 | 23,846 | 64,480 | 25,385 |
| Realised gains from financial assets | 89,829 | 60,572 | 89,878 | 60,922 |
| Unrealised gains from financial assets at fair value through profit or loss |
212 | 3,825 | 2,105 | 4,891 |
| Unrealised gains on change in fair value of derivative financial instruments |
3,825 | 3,976 | 3,825 | 3,976 |
| Reversal of impairment and collection of amounts previously written off - loans |
14,313 | 10,662 | 14,709 | 10,662 |
| Collection of amounts previously written off - other |
798 | 1,496 | 799 | 1,496 |
| Other income | 5,857 | 16,061 | 6,586 | 16,718 |
| 408,679 | 406,620 | 498,950 | 486,149 |
6.1. Interest income
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Interest on held-to-maturity investments | 74,834 | 96,813 | 78,751 | 102,231 |
| Interest on available-for-sale financial assets | 80,540 | 89,098 | 96,609 | 102,031 |
| Given deposits | 6,584 | 7,200 | 15,010 | 15,358 |
| Given loans and other placements | 17,538 | 22,819 | 5,214 | 9,921 |
| 179,496 | 215,930 | 195,584 | 229,541 |
6.2. Income from investment property
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Rental income | 22,945 | 21,254 | 89,635 | 84,349 |
| Income from increase in the value of land and buildings (Note 17) |
3,778 | 3,028 | 19,431 | 21,601 |
| Net (loss)/income from the sale of land and buildings |
(1,373) | 1,017 | (3,120) | 1,017 |
| 25,350 | 25,299 | 105,946 | 106,967 |
The table below presents future minimum lease payments from uncancellable operating lease contracts:
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Up to 1 year | 14,931 | 13,425 | 26,860 | 20,762 |
| From 1-5 years | 15,546 | 18,187 | 56,562 | 47,960 |
| Over 5 years | 1,989 | 2,980 | 85,420 | 94,373 |
| 32,466 | 34,592 | 168,842 | 163,095 |
6.3. Realised gains from financial assets
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Financial assets at fair value through profit or loss |
104 | 1,050 | 153 | 1,155 |
| Available-for-sale financial assets | 84,682 | 47,471 | 84,682 | 47,716 |
| Derivative financial instruments | 5,043 | 12,051 | 5,043 | 12,051 |
| 89,829 | 60,572 | 89,878 | 60,922 |
6.4. Foreign exchange gains
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Held-to-maturity investments | 17,990 | 4,899 | 18,191 | 5,305 |
| Available-for-sale financial assets | 22,138 | 8,430 | 23,086 | 9,535 |
| Financial assets at fair value through profit or loss |
189 | 58 | 189 | 58 |
| Deposits | 6,047 | 3,423 | 6,047 | 3,423 |
| Borrowings | 2,960 | 1,512 | 2,982 | 1,538 |
| Foreign currency accounts | 12,745 | 5,476 | 12,750 | 5,477 |
| Derivative financial instruments | 1,226 | 47 | 1,226 | 47 |
| Other | 6 | 1 | 9 | 2 |
| 63,301 | 23,846 | 64,480 | 25,385 |
7. Other operating income
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Income from liabilities and collected receivables written off |
2,348 | 3,594 | 4,271 | 3,969 |
| Income from guarantee fund | 174 | 351 | 174 | 351 |
| Income from penalty interest | 8,392 | 5,419 | 8,547 | 5,502 |
| Net recourse income | 547 | 564 | 5,767 | 1,623 |
| Income from claims incurred abroad | 3,670 | 4,929 | 4,318 | 5,457 |
| Income from assessment services | 3,515 | 4,802 | 3,368 | 4,604 |
| Income from reversal of long-term provisions | 3,042 | 1,300 | 5,149 | 2,958 |
| Gain on sale of tangible assets | 924 | 119 | 3,104 | 17 |
| Income from estimation of property for own use |
- | 11,678 | 150 | 11,901 |
| Income from collection of the premium claimed |
4,877 | 4,415 | 4,896 | 4,415 |
| Other income - insurance | 13,929 | 9,522 | 25,256 | 18,287 |
| Income from motor vehicle examination | - | - | 73,284 | 75,223 |
| Revenue from the provision of polyclinic medical services |
- | - | 22,395 | 17,001 |
| Income from entry and management fees | - | - | 12,042 | 10,629 |
| Other income – non-insurance | - | - | - | 191 |
| 41,418 | 46,693 | 172,721 | 162,128 |
Income from motor vehicle examination, polyclinic medical services and income from entry and management fees by geographical area mostly relate to the Republic of Croatia and to non-life reportable segment.
8. Claims incurred, net of reinsurance
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Claims incurred Reinsurance and coinsurance share in claims incurred |
2,016,952 (348,100) |
1,726,491 (125,425) |
2,289,926 (353,285) |
2,034,428 (129,989) |
| 1,668,852 | 1,601,066 | 1,936,641 | 1,904,439 |
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| TOTAL LIFE AND NON-LIFE | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 |
| Expenditure for insured events, net | 1,687,741 | 1,461,133 | 1,928,681 | 1,703,812 |
| Claims paid | 1,621,634 | 1,503,989 | 1,847,088 | 1,721,973 |
| Gross amount | 1,724,909 | 1,618,331 | 1,954,896 | 1,844,291 |
| Coinsurance share | (2,972) | (4,618) | (2,907) | (2,777) |
| Reinsurance share | (100,303) | (109,724) | (104,900) | (119,541) |
| Change in claims provisions, net | 66,107 | (42,856) | 81,593 | (18,161) |
| Gross amount | 310,942 | (31,783) | 327,081 | (10,500) |
| Coinsurance share | 1,988 | (1,834) | 1,961 | (1,842) |
| Reinsurance share | (246,823) | (9,239) | (247,449) | (5,819) |
| Change in mathematical provision and other technical provisions, net |
25,528 | 151,248 | 46,085 | 209,487 |
| Change in insurance mathematical provisions |
41,905 | 156,374 | 62,786 | 217,843 |
| Gross amount | 41,895 | 156,384 | 62,776 | 217,853 |
| Reinsurance share | 10 | (10) | 10 | (10) |
| Change in other technical provisions, net of reinsurance |
(16,377) | (5,126) | (16,701) | (8,356) |
| Change in special provision for life insurance group where the policyholder |
(44,417) | (11,315) | (38,125) | (8,860) |
| bears the investment risk, net | ||||
| Gross amount | 2,016,952 | 1,726,491 | 2,289,926 | 2,034,428 |
| Reinsurance and coinsurance share | (348,100) | (125,425) | (353,285) | (129,989) |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| NON-LIFE | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 |
| Expenditure for insured events, net | 1,205,378 | 1,104,584 | 1,391,686 | 1,298,881 |
| Claims paid | 1,172,469 | 1,140,206 | 1,345,357 | 1,311,674 |
| Gross amount | 1,275,744 | 1,254,548 | 1,453,035 | 1,433,992 |
| Coinsurance share | (2,972) | (4,618) | (2,907) | (2,777) |
| Reinsurance share | (100,303) | (109,724) | (104,771) | (119,541) |
| Change in claims provisions, net | 32,909 | (35,622) | 46,329 | (12,793) |
| Gross amount | 277,744 | (24,549) | 291,817 | (5,132) |
| Coinsurance share | 1,988 | (1,834) | 1,961 | (1,842) |
| Reinsurance share | (246,823) | (9,239) | (247,449) | (5,819) |
| Change in mathematical provision and other technical provisions, net |
(22,977) | (16,468) | (23,301) | (19,698) |
| Change in insurance mathematical provisions |
(6,600) | (11,342) | (6,600) | (11,342) |
| Gross amount | (6,600) | (11,342) | (6,600) | (11,342) |
| Reinsurance share | - | - | - | - |
| Change in other technical provisions, net of reinsurance |
(16,377) | (5,126) | (16,701) | (8,356) |
| Gross amount | (16,377) | (5,126) | (16,701) | (8,356) |
| Gross amount | 1,530,511 | 1,213,531 | 1,721,551 | 1,409,162 |
| Reinsurance and co-insurance share | (348,110) | (125,415) | (353,166) | (129,979) |
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| LIFE | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 |
| Expenditure for insured events, net | 482,363 | 356,549 | 536,995 | 404,931 |
| Claims paid, gross | 449,165 | 363,783 | 501,860 | 410,299 |
| Change in claims provisions, gross | 33,198 | (7,234) | 35,264 | (5,368) |
| Reinsurance share | - | - | (129) | - |
| Change in mathematical provision and other technical provisions, net of reinsurance |
48,505 | 167,716 | 69,386 | 229,185 |
| Change in insurance mathematical provisions |
48,505 | 167,716 | 69,386 | 229,185 |
| Gross amount | 48,495 | 167,726 | 69,376 | 229,195 |
| Reinsurance share | 10 | (10) | 10 | (10) |
| Change in other technical provisions, net of reinsurance |
- | - | - | - |
| Gross amount | - | - | - | - |
| Change in special provision for life insurance group where the policyholder bears the investment risk, net of reinsurance |
(44,417) | (11,315) | (38,125) | (8,860) |
| Gross amount | 486,441 | 512,960 | 568,375 | 625,266 |
| Reinsurance share | 10 | (10) | (119) | (10) |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
| Company | Company | Group | Group | |
|---|---|---|---|---|
| Claims paid - gross amount | 2020 | 2019 | 2020 | 2019 |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Expenses for claims | 1,676,072 | 1,603,955 | 1,898,163 | 1,821,041 |
| Staff costs | 57,661 | 60,786 | 65,313 | 68,473 |
| Interest expense on claims | 11,457 | 15,553 | 11,828 | 15,805 |
| Claims paid | 38,544 | 41,887 | 42,557 | 46,299 |
| Collected recourses | (65,122) | (113,781) | (69,262) | (117,256) |
| Recourse costs | 6,297 | 9,931 | 6,296 | 9,929 |
| 1,724,909 | 1,618,331 | 1,954,895 | 1,844,291 |
| Company | Company | Group | Group | |
|---|---|---|---|---|
| Staff costs | 2020 | 2019 | 2020 | 2019 |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Net salaries and fees | 28,959 | 31,547 | 34,610 | 37,290 |
| Contributions from salaries | 8,185 | 8,809 | 9,543 | 10,216 |
| Taxes and surtaxes | 4,222 | 4,646 | 4,365 | 4,803 |
| Contributions on salaries | 6,580 | 7,253 | 6,900 | 7,599 |
| Other employee costs | 9,715 | 8,531 | 9,895 | 8,565 |
| 57,661 | 60,786 | 65,313 | 68,473 |
9. Acquisition costs
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Commission | 248,858 | 263,989 | 266,672 | 296,122 |
| Other acquisition costs | 182,176 | 185,454 | 247,303 | 242,427 |
| Change in deferred acquisition costs | 17,760 | 25,293 | 22,158 | 19,869 |
| NON-LIFE | 448,794 | 474,736 | 536,133 | 558,418 |
| Commission | 7,465 | 11,400 | 14,966 | 31,101 |
| Other acquisition costs | 21,489 | 25,927 | 26,617 | 31,229 |
| LIFE | 28,954 | 37,327 | 41,583 | 62,330 |
| Commission | 256,323 | 275,389 | 281,638 | 327,223 |
| Other acquisition costs | 203,665 | 211,381 | 273,920 | 273,656 |
| Change in deferred acquisition costs (Note 15.1) |
17,760 | 25,293 | 22,158 | 19,869 |
| TOTAL LIFE AND NON-LIFE | 477,748 | 512,063 | 577,716 | 620,748 |
9.1. Commission
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Commission expenses - agents | 6,643 | 7,261 | 8,945 | 8,670 |
| Commission expenses - employees | 75,370 | 75,788 | 75,370 | 79,438 |
| Commission for banks, agencies and brokers |
174,310 | 192,340 | 197,323 | 239,115 |
| 256,323 | 275,389 | 281,638 | 327,223 |
9.2. Other acquisition costs
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Marketing costs | 37,338 | 31,075 | 43,432 | 35,111 |
| Sales staff costs | 152,339 | 170,799 | 212,729 | 224,020 |
| Other direct sales costs | 13,988 | 9,507 | 17,759 | 14,525 |
| 203,665 | 211,381 | 273,920 | 273,656 | |
| Company | Company | Group | Group | |
| Sales staff costs | 2020 | 2019 | 2020 | 2019 |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Net salaries and fees | 78,311 | 80,343 | 133,351 | 126,645 |
| Contributions from salaries | 20,978 | 21,950 | 20,979 | 21,950 |
| Taxes and surtaxes | 11,039 | 12,309 | 11,100 | 12,863 |
| Contributions on salaries | 16,497 | 17,480 | 21,237 | 22,324 |
| Other employee costs | 25,514 | 38,717 | 26,062 | 40,238 |
| 152,339 | 170,799 | 212,729 | 224,020 |
10. Administrative expenses
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Amortisation and depreciation of assets Salaries, taxes and contributions from and on |
57,063 | 57,935 | 81,982 | 78,171 |
| salaries | 131,335 | 143,740 | 209,664 | 214,529 |
| Other administrative expenses | 201,388 | 203,930 | 291,490 | 298,266 |
| 389,786 | 405,605 | 583,136 | 590,966 |
10.1 Amortisation and depreciation
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Amortisation (Note 15) | 18,299 | 17,294 | 20,703 | 19,494 |
| Depreciation (Note 16) | 24,162 | 27,162 | 40,229 | 38,742 |
| Depreciation – right-of-use assets (Note 16) | 14,602 | 13,479 | 21,050 | 19,935 |
| 57,063 | 57,935 | 81,982 | 78,171 |
10.2 Salaries, taxes and contributions from and on salaries
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Net salaries and fees | 75,149 | 81,632 | 128,123 | 127,873 |
| Contributions from salaries | 21,753 | 23,567 | 33,046 | 34,379 |
| Taxes and surtaxes | 16,948 | 19,100 | 22,746 | 24,902 |
| Contributions on salaries | 17,485 | 19,441 | 25,749 | 27,375 |
| 131,335 | 143,740 | 209,664 | 214,529 |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
10.3 Other administrative expenses
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Services | 137,539 | 116,514 | 169,810 | 148,837 |
| Vacation allowance to employees | 579 | 595 | 1,400 | 1,549 |
| Net provision for jubilee awards and termination benefits |
6,405 | 5,030 | 7,248 | 7,846 |
| Other employee benefits in line with collective agreement |
4,398 | 5,041 | 5,290 | 6,797 |
| Net provisions for unused vacation days | (1,711) | 926 | (989) | 1,196 |
| Other provisions, net | (1,325) | (2,507) | (782) | 1,507 |
| Provisions for legal disputes, net (Note 26) | (3,756) | 2,966 | (1,606) | 5,106 |
| Materials used | 3,369 | 2,549 | 10,632 | 7,851 |
| Energy consumed | 7,414 | 10,184 | 12,051 | 14,444 |
| Transportation to and from work | 1,738 | 3,934 | 4,007 | 6,082 |
| Insurance premiums | 11,974 | 12,464 | 13,897 | 13,720 |
| Entertainment | 2,747 | 5,199 | 3,874 | 7,266 |
| Commission expenses of credit card companies | 8,927 | 9,349 | 9,275 | 9,712 |
| Other contributions and fees | 10,930 | 12,772 | 21,639 | 23,307 |
| Daily allowances and transportation expenses | 788 | 2,660 | 1,019 | 3,426 |
| Bank services | 113 | 509 | 3,227 | 4,695 |
| Other various costs and expenditures | 11,259 | 15,745 | 31,498 | 34,925 |
| 201,388 | 203,930 | 291,490 | 298,266 |
11. Other operating expenses
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Guarantee fund fee | 7,468 | 4,129 | 10,670 | 7,257 |
| Fee to Croatian Insurance Bureau | 1,541 | 1,625 | 1,541 | 1,625 |
| Fire Department fee | 5,845 | 5,368 | 6,871 | 6,974 |
| Fee to Croatian Financial Services Supervisory Agency |
2,261 | 2,044 | 3,668 | 3,288 |
| Contributions for health insurance from motor liability premium |
11,147 | 10,900 | 19,895 | 19,530 |
| Other insurance-technical expenses | 7,447 | 8,481 | 15,148 | 15,332 |
| Impairment of property and equipment (Note 16) |
325 | 5,326 | 2,580 | 5,292 |
| Other impairment | 1,830 | 2,502 | 2,401 | 2,835 |
| Other expenses | 2,858 | 4,168 | 4,180 | 5,664 |
| 40,722 | 44,543 | 66,954 | 67,797 |
12. Finance costs
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Reversal of impairment of investments | (4,588) | (60,464) | - | - |
| Impairment of investments | 31,566 | 56,238 | 25,880 | 30,927 |
| Impairment of investments, net | 26,978 | (4,226) | 25,880 | 30,927 |
| Realised losses on investments | 34,570 | 17,046 | 34,570 | 17,046 |
| Foreign exchange losses | 26,108 | 9,819 | 26,474 | 11,991 |
| Unrealised losses on investments in financial assets at fair value through profit or loss |
255 | - | 1,620 | 95 |
| Unrealised losses on changes in fair value of derivative financial instruments |
10,516 | 5,625 | 10,516 | 5,625 |
| Payment transaction fees | 5,974 | 6,189 | 6,456 | 6,552 |
| Interest expense | 1,154 | 993 | 1,154 | 993 |
| Interest on lease liabilities | 9,497 | 9,260 | 10,991 | 10,713 |
| Utilities - investments | 12,806 | 5,352 | 19,547 | 12,573 |
| Staff costs - investments | 7,216 | 6,470 | 7,323 | 6,567 |
| Other investment costs | 4,239 | 1,724 | 4,148 | 1,759 |
| 139,313 | 58,252 | 148,679 | 104,841 |
12.1. Impairment of investments
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Investments in subsidiaries and associates (Note 18.3) | (376) | (32,182) | - | - |
| Available-for-sale financial assets | 7,282 | 6,204 | 7,283 | 6,204 |
| Cash and cash equivalents | - | - | 141 | - |
| Impairment of loans given | 69 | 1,922 | 85 | 1,925 |
| Losses from changes in fair value of property (Note 17) |
20,003 | 19,830 | 18,371 | 22,798 |
| 26,978 | (4,226) | 25,880 | 30,927 |
12.2. Realised losses on investments
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Realised losses on available-for-sale financial assets | 21,875 | 14,537 | 21,875 | 14,537 |
| Realised losses on derivative financial instruments | 12,695 | 2,508 | 12,695 | 2,508 |
| Realised losses on investments at fair value through profit or loss |
- | 1 | - | 1 |
| 34,570 | 17,046 | 34,570 | 17,046 |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
12.3. Foreign exchange losses
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Held-to-maturity investments | 309 | 1 | 481 | 503 |
| Available-for-sale financial assets | 10,220 | - | 10,316 | 1,474 |
| Financial assets at fair value through profit or loss | 24 | 21 | 24 | 21 |
| Deposits | 357 | 1,020 | 357 | 1,023 |
| Loans | 1,979 | 1,278 | 1,980 | 1,307 |
| Foreign currency accounts | 12,644 | 7,239 | 12,670 | 7,273 |
| Derivative financial instruments | 564 | 258 | 564 | 258 |
| Other | 11 | 2 | 82 | 132 |
| 26,108 | 9,819 | 26,474 | 11,991 |
12.4. Staff costs - investments
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Net salaries and fees | 3,640 | 3,043 | 3,640 | 3,043 |
| Contributions from salaries | 1,039 | 899 | 1,039 | 899 |
| Taxes and surtaxes | 850 | 713 | 850 | 713 |
| Contributions on salaries | 847 | 733 | 847 | 733 |
| Other employee costs | 840 | 1,082 | 947 | 1,179 |
| 7,216 | 6,470 | 7,323 | 6,567 |
13. Income tax
Income tax is calculated in accordance with legal regulations on the tax base, which represents the difference between the realised income and expenditures in the accounting period for which the tax base is determined. The initial tax base was increased by tax non-deductible expenditure and decreased by income in accordance with the tax regulations in effect in the countries of Group members.
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Net deferred tax expense (Note 21) | 1,863 | 16,279 | 818 | 12,002 |
| Current tax expense | 42,688 | 43,976 | 62,570 | 59,892 |
| Net income tax expense for the year | 44,551 | 60,255 | 63,388 | 71,894 |
The reconciliation between income tax and the profit before tax reported in the income statement is set out below:
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Profit before tax | 274,141 | 353,386 | 391,589 | 411,633 |
| Income tax at 18% | 49,345 | 63,609 | 70,486 | 74,094 |
| Non-deductible expenses | 12,093 | 21,688 | 18,030 | 29,948 |
| Income not subject to tax | (16,887) | (25,042) | (25,128) | (32,148) |
| Income tax | 44,551 | 60,255 | 63,388 | 71,894 |
| Effective tax rate | 16.25% | 17.05% | 16.19% | 17.47% |
As at 31 December 2020, the Company has no tax losses that can be carried forward for covering the Company's future profits. The remaining Group companies have no significant tax losses that can be carried forward to cover future profits.
In accordance with local regulations, the Tax Administration may at any time inspect the Company's books and records within 3 years following the year in which the tax liability is reported and may impose additional tax liabilities and penalties. The Company's Management Board is not aware of any circumstances, which may give rise to a potential material liability in this respect.
14. Earnings per share
| Group | Group | ||
|---|---|---|---|
| 2020 | 2019 | ||
| in HRK'000 | in HRK'000 | ||
| Profit for the year attributable to the Company's shareholders | 327,902 | 339,392 | |
| Weighted average of ordinary shares | 420,947 | 420,947 | |
| ════ | ════ | ||
| Earnings per share attributable to the Company's shareholders | |||
| Basic and diluted earnings per share in HRK | 778.96 | 806.26 | |
| ════ | ════ |
For the purpose of calculating earnings per share, earnings are calculated as the profit for the period attributable to the Company's shareholders. The number of ordinary shares is the weighted average number of ordinary shares in circulation during the year. The weighted average number of ordinary shares used for the calculation of basic earnings per share was 420,947 (2019: 420,947). In addition, since there is no effect of options, convertible bonds or similar effects, the weighted average number of ordinary shares used to calculate diluted earnings per share was the same as the one used to calculate basic earnings per share.
15. Intangible assets
| Company | in HRK'000 |
|||
|---|---|---|---|---|
| Other intangible |
Software | Intangible assets in |
Total | |
| assets | progress | |||
| Cost | ||||
| At 31 December 2018 | 6,521 | 127,566 | 1,644 | 135,731 |
| Additions | - | 24,598 | 2,943 | 27,541 |
| Transfer to use | - | 2,178 | (2,178) | - |
| Disposals or retirements | - | (807) | - | (807) |
| At 31 December 2019 | 6,521 | 153,535 | 2,409 | 162,465 |
| Additions | - | 56,596 | 21,568 | 78,164 |
| Transfer to use | - | - | - | - |
| Disposals or retirements | - | - | - | - |
| At 31 December 2020 | 6,521 | 210,131 | 23,977 | 240,629 |
| Accumulated amortisation | ||||
| At 31 December 2018 | 6,521 | 101,835 | - | 108,356 |
| Amortisation charge for 2019 | - | 17,294 | - | 17,294 |
| Disposals or retirements | - | (178) | - | (178) |
| At 31 December 2019 | 6,521 | 118,951 | - | 125,472 |
| Amortisation charge for 2020 | - | 18,299 | - | 18,299 |
| Disposals or retirements | - | - | - | - |
| At 31 December 2020 | 6,521 | 137,250 | - | 143,771 |
| Net book amount | ||||
| At 31 December 2020 | - | 72,881 | 23,977 | 96,858 |
| At 31 December 2019 | - | 34,584 | 2,409 | 36,993 |
The Company capitalized costs of net salaries in the amount of HRK 5,734 thousand, costs of contributions from salaries in the amount of HRK 1,701 thousand, costs of taxes and surcharges from salaries in the amount of HRK 1,347 thousand, costs of contributions to salaries in the amount of HRK 1,365 thousand and other costs of employees in the amount of HRK 1,233 thousand.
| Group | in HRK'000 | |||
|---|---|---|---|---|
| Other | Intangible | |||
| intangible | Software | assets in | Total | |
| assets | progress | |||
| Cost | ||||
| At 31 December 2018 | 26,093 | 145,746 | 3,470 | 175,309 |
| Additions | 724 | 25,671 | 3,349 | 29,744 |
| Transfer to use | - | 4,409 | (4,409) | - |
| Disposals or retirements | - | (1,007) | - | (1,007) |
| Foreign exchange differences arising on translation of | ||||
| financial statements of foreign operations | - | 88 | (1) | 87 |
| At 31 December 2019 | 26,817 | 174,907 | 2,409 | 204,133 |
| Additions | 895 | 57,105 | 21,809 | 79,809 |
| Transfer to use | - | 143 | (143) | - |
| Disposals or retirements | - | (110) | - | (110) |
| Foreign exchange differences arising on translation of | ||||
| financial statements of foreign operations | - | 196 | - | 196 |
| At 31 December 2020 | 27,712 | 232,241 | 24,075 | 284,028 |
| Accumulated amortisation | ||||
| At 31 December 2018 | 19,059 | 117,115 | - | 136,174 |
| Amortisation charge for 2019 | 825 | 18,669 | - | 19,494 |
| Disposals or retirements | - | (312) | - | (312) |
| Foreign exchange differences arising on translation of financial statements of foreign operations |
- | 50 | - | 50 |
| At 31 December 2019 | 19,884 | 135,522 | - | 155,406 |
| Amortisation charge for 2020 | 819 | 19,884 | - | 20,703 |
| Disposals or retirements | - | (88) | - | (88) |
| Foreign exchange differences arising on translation of | ||||
| financial statements of foreign operations | - | 134 | - | 134 |
| At 31 December 2020 | 20,703 | 155,452 | - | 176,155 |
| Net book amount | ||||
| At 31 December 2020 | 7,009 | 76,789 | 24,075 | 107,873 |
| At 31 December 2019 | 6,933 | 39,385 | 2,409 | 48,727 |
Group capitalized costs of net salaries in the amount of HRK 5,734 thousand, costs of contributions from salaries in the amount of HRK 1,701 thousand, costs of taxes and surcharges from salaries in the amount of HRK 1,347 thousand, costs of contributions to salaries in the amount of HRK 1,365 thousand and other costs of employees. in the amount of HRK 1,233 thousand.
15.1. Deferred acquisition costs
| Company | Company | Group | Group | ||
|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | ||
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| At 31 December | 226,110 | 251,403 | 268,986 | 288,703 | |
| Increase | 96,744 | 90,417 | 97,441 | 95,947 | |
| Decrease | (114,504) | (115,710) | (119,599) | (115,816) | |
| Foreign exchange differences | - | - | 526 | 152 | |
| At 31 December | 208,350 | 226,110 | 247,354 | 268,986 |
16. Property and equipment
| Company | in HRK'000 | |||||||
|---|---|---|---|---|---|---|---|---|
| Cost | Land | Buildings | Equipment and furniture |
Other tangible assets |
Assets under construction |
Right- of-use assets - Buildings |
Right- of-use assets - Other tangible assets |
Total |
| At 31 December 2018 | 67,675 | 608,494 | 186,879 | 18,559 | 2,349 | - | - | 883,956 |
| Initial recognition IFRS 16 - 1 January 2019 |
- | - | - | - | - | 247,771 | 4,240 | 252,011 |
| Change in fair value (through OCI) | (832) | 1,494 | - | - | - | - | - | 662 |
| Change in fair value (P&L) (Note 7 and Note 11) | 493 | 5,859 | - | - | - | - | - | 6,352 |
| Additions | - | 8,222 | 5,546 | 2,603 | 9,600 | 10,412 | 802 | 37,185 |
| Transfer from assets under construction to use | - | 831 | 100 | 55 | (986) | - | - | - |
| Transfer to investment property (Note 17) | (8,032) | (82,678) | - | - | - | - | - | (90,710) |
| Disposals or retirements | (201) | (3,758) | (3,004) | (294) | - | (628) | - | (7,885) |
| At 31 December 2019 | 59,103 | 538,464 | 189,521 | 20,923 | 10,963 | 257,555 | 5,042 | 1,081,571 |
| Change in fair value (through OCI) | (12) | (252) | - | - | - | - | - | (264) |
| Change in fair value (P&L) (Note 7 and Note 11) | (2) | (323) | - | - | - | - | - | (325) |
| Additions | - | 482 | 13,264 | 1 | 6,181 | 12,208 | 10,549 | 42,685 |
| Transfer from assets under construction to use | 46 | 8,837 | 4,927 | 544 | (14,354) | - | - | - |
| Transfer to property and equipment (Note 16) | - | (3,157) | 3,157 | - | - | - | - | - |
| Transfer to investment property (Note 17) | (28,529) | (131,896) | - | - | - | - | - | (160,425) |
| Disposals or retirements | (56) | (1,094) | (1,231) | (3,903) | - | (5,111) | (960) | (12,355) |
| At 31 December 2020 | 30,550 | 411,061 | 209,638 | 17,565 | 2,790 | 264,652 | 14,631 | 950,887 |
| Accumulated depreciation and impairment | ||||||||
| At 31 December 2018 | - | 257,415 | 163,864 | 10,350 | - | - | - | 431,629 |
| Depreciation charge for 2019 | - | 13,239 | 11,842 | 1,316 | - | 11,461 | 2,018 | 39,876 |
| Depreciation on revaluation effect | - | 765 | - | - | - | - | - | 765 |
| Transfer to investment property (Note 17) | - | (28,845) | - | - | - | - | - | (28,845) |
| Disposals or retirements | - | (259) | (2,930) | (127) | - | 1 | - | (3,315) |
| At 31 December 2019 | - | 242,315 | 172,776 | 11,539 | - | 11,462 | 2,018 | 440,110 |
| Depreciation charge for 2020 | - | 11,183 | 11,043 | 1,242 | - | 11,840 | 2,762 | 38,070 |
| Depreciation on revaluation effect | - | 694 | - | - | - | - | - | 694 |
| Transfer to property and equipment (Note 16) | - | (484) | 484 | - | - | - | - | - |
| Transfer to investment property (Note 17) | - | (76,294) | - | - | - | - | - | (76,294) |
| Disposals or retirements | - | (189) | (1,216) | (3,194) | - | - | - | (4,599) |
| At 31 December 2020 | - | 177,225 | 183,087 | 9,587 | - | 23,302 | 4,780 | 397,981 |
| Net book amount | ||||||||
| At 31 December 2020 | 30,550 | 233,836 | 26,551 | 7,978 | 2,790 | 241,350 | 9,851 | 552,906 |
| At 31 December 2019 | 59,103 | 296,149 | 16,745 | 9,384 | 10,963 | 246,093 | 3,024 | 641,461 |
| Group | in HRK'000 | |||||||
|---|---|---|---|---|---|---|---|---|
| Cost | Land | Buildings | Equipment and furniture |
Other tangible assets |
Assets under construction |
Right- of-use assets - Buildings |
Right- of-use assets - Other tangible assets |
Total |
| At 31 December 2018 | 93,673 | 799,290 | 274,728 | 54,765 | 2,748 | - | - | 1,225,204 |
| Initial recognition IFRS 16 - 1 January 2019 |
- | - | - | - | - | 277,369 | 5,460 | 282,829 |
| Change in fair value (through OCI) | 5,174 | 18,588 | - | - | - | - | - | 23,762 |
| Change in fair value (P&L) (Note 7 and Note 11) | 493 | 6,116 | - | - | - | - | - | 6,609 |
| Additions | - | 8,226 | 23,356 | 3,246 | 9,775 | 11,336 | 2,423 | 58,362 |
| Transfer from assets under construction to use | - | 838 | 613 | 55 | (1,506) | - | - | - |
| Transfer to investment property (Note 17) | (8,032) | (82,678) | - | - | - | - | - | (90,710) |
| Foreign exchange differences arising on translation of financial statements of foreign operations |
14 | 274 | 102 | 118 | - | 230 | 9 | 747 |
| Disposals or retirements | (197) | (3,710) | (5,540) | (2,558) | - | (614) | - | (12,619) |
| At 31 December 2019 | 91,125 | 746,944 | 293,259 | 55,626 | 11,017 | 288,321 | 7,892 | 1,494,184 |
| Change in fair value (through OCI) | (66) | (6,295) | - | - | - | - | - | (6,361) |
| Change in fair value (P&L) (Note 7 and Note 11) | 104 | (1,029) | - | - | - | - | - | (925) |
| Additions | - | 474 | 34,946 | 4,149 | 7,048 | 27,121 | 9,375 | 83,113 |
| Transfer from assets under construction to use | 46 | 9,129 | 5,422 | 544 | (15,141) | - | - | - |
| Transfer to property and equipment (Note 16) | - | (3,157) | 3,157 | - | - | - | - | - |
| Transfer to investment property (Note 17) | (24,301) | (90,800) | - | - | - | - | - | (115,101) |
| FX diff. arising on translation of FS of foreign operation | 67 | 1,018 | 328 | 356 | - | 574 | 26 | 2,369 |
| Disposals or retirements | - | (190) | (5,699) | (5,425) | - | (4,713) | (961) | (16,988) |
| At 31 December 2020 | 66,975 | 656,094 | 331,413 | 55,250 | 2,924 | 311,303 | 16,332 | 1,440,291 |
| Accumulated depreciation and impairment | ||||||||
| At 31 December 2018 | - | 296,776 | 230,132 | 38,391 | - | - | - | 565,299 |
| Depreciation charge for 2019 | - | 15,218 | 18,571 | 2,455 | - | 17,174 | 2,761 | 56,179 |
| Depreciation on revaluation effect | - | 2,498 | - | - | - | - | - | 2,498 |
| Transfer to investment property (Note 17) | - | (28,845) | - | - | - | - | - | (28,845) |
| FX diff. arising on translation of FS of foreign operation | - | 48 | 74 | 89 | - | 33 | 2 | 246 |
| Disposals or retirements | - | (259) | (5,638) | (1,388) | - | (535) | - | (7,820) |
| At 31 December 2019 | - | 285,436 | 243,139 | 39,547 | - | 16,672 | 2,763 | 587,557 |
| Depreciation charge for 2020 | - | 13,418 | 21,750 | 2,251 | - | 17,951 | 3,099 | 58,469 |
| Depreciation on revaluation effect | - | 2,810 | - | - | - | - | - | 2,810 |
| Change in fair value (P&L) (Note 7 and Note 11) | - | 1,505 | - | - | - | - | - | 1,505 |
| Transfer to property and equipment (Note 16) | - | (484) | 484 | - | - | - | - | - |
| Transfer to investment property (Note 17) | - | (76,294) | - | - | - | - | - | (76,294) |
| FX diff. arising on translation of FS of foreign operation | - | 207 | 248 | 289 | - | 75 | 5 | 824 |
| Disposals or retirements | - | (190) | (4,553) | (4,223) | - | - | - | (8,966) |
| At 31 December 2020 | - | 226,408 | 261,068 | 37,864 | - | 34,698 | 5,867 | 565,905 |
| Net book amount | ||||||||
| At 31 December 2020 | 66,975 | 429,686 | 70,345 | 17,386 | 2,924 | 276,605 | 10,465 | 874,386 |
| At 31 December 2019 | 91,125 | 461,508 | 50,120 | 16,079 | 11,017 | 271,649 | 5,129 | 906,627 |
The carrying amount of land and buildings that would have been recognised had the assets been carried under the cost method would have amounted to HRK 223,117 thousand (31 December 2019: HRK 312,291 thousand) for the Company and HRK 376,064 thousand (31 December 2019: HRK 404,330 thousand) for the Group.
17. Investment property
| Company | Group | |
|---|---|---|
| in HRK'000 | in HRK'000 | |
| At 31 December 2018 | 333,932 | 821,794 |
| Foreign exchange differences arising on translation of financial statements of foreign operations |
- | 127 |
| Transfer from property and equipment (Note 16) | 61,865 | 61,865 |
| Increase in fair value recognised in the income statement (Note 6.2) | 3,031 | 21,601 |
| Decrease in fair value recognised in the income statement (Note 12.1) | (19,830) | (22,798) |
| Additions | 4,259 | 6,782 |
| Disposals | (15,736) | (15,718) |
| At 31 December 2019 | 367,521 | 873,653 |
| Foreign exchange differences arising on translation of financial statements of foreign operations |
- | 307 |
| Transfer from property and equipment (Note 16) | 84,131 | 38,807 |
| Increase in fair value recognized in the income statement (Note 6.2) | 3,778 | 19,431 |
| Decrease in fair value recognized in the income statement (Note 12.1) | (20,003) | (18,371) |
| Assets under construction | - | 238 |
| Additions | 24,369 | 28,032 |
| Effect of acquisition (Note 18.3. /i/) | - | 76,579 |
| Disposals | (3,143) | (5,429) |
| At 31 December 2020 | 456,653 | 1,013,247 |
The Group measures investment property in accordance with IAS 40 - "Investment Property", by applying the fair value model. Accordingly, the Group recognises profit or loss arising from changes in the fair value of investment property as profit or loss for the period in which it occurred, based on the valuation provided by independent appraisers.
18. Investments in subsidiaries, associates and participation in joint ventures
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Investments in subsidiaries | 561,298 | 464,269 | - | - |
| Impairment of investments in subsidiaries |
(218,470) | (218,846) | - | - |
| 342,828 | 245,423 | - | - | |
| Investments in joint ventures | 28,000 | 28,000 | 66,502 | 67,961 |
| Investments in associates | 8,601 | 8,601 | 13,004 | 12,542 |
| Impairment of investments in associates |
(2,913) | (2,913) | (2,913) | (2,913) |
| 5,688 | 5,688 | 10,091 | 9,629 | |
| 376,516 | 279,111 | 76,593 | 77,590 |
| 31 Dec. 2020 | 31 Dec. 2019 | |||||
|---|---|---|---|---|---|---|
| Ownership | Amount of | Ownership | Amount of | |||
| Activity | Country | percentage | investment | percentage | investment | |
| % | in HRK'000 | % | in HRK'000 | |||
| Subsidiaries | ||||||
| Croatia Premium d.o.o., Zagreb | Services | Croatia | 100 | 12,162 | 100 | 8,423 |
| Histria construct d.o.o., Zagreb | Real estate | Croatia | 100 | 4,976 | 100 | 5,067 |
| Core 1 d.o.o., Zagreb | Real estate | Croatia | 100 | 20 | 100 | 20 |
| Auto Maksimir Vozila d.o.o., Zagreb |
Insurance representation |
Croatia | 100 | 100 | 100 | 100 |
| AK polica d.o.o., Varaždin | Insurance representation |
Croatia | 100 | - | 100 | - |
| CO Zdravlje d.o.o., Zagreb | Consulting and services |
Croatia | 100 | 33,164 | 100 | 24,164 |
| Astoria d.o.o. | Real estate | Croatia | 100 | 78,897 | - | - |
| Milenijum osiguranje a.d., Belgrade |
Insurance | Serbia | 100 | 61,514 | 100 | 60,665 |
| Croatia osiguranje d.d., Ljubuški | Insurance | Bosnia and Herzegovina |
95 | 18,560 | 95 | 18,679 |
| Croatia osiguranje - život a.d., Skopje |
Insurance | Macedonia | 95 | 22,272 | 95 | 22,272 |
| Croatia osiguranje - neživot a.d., Skopje |
Insurance | Macedonia | 100 | 9,396 | 100 | 4,266 |
| Croatia-Tehnički pregledi d.o.o., Zagreb |
Motor vehicle services |
Croatia | 100 | 71,767 | 100 | 71,767 |
| Croatia osiguranje mirovinsko društvo d.o.o., Zagreb |
Pension fund management |
Croatia | 100 | 30,000 | 100 | 30,000 |
| Razne usluge d.o.o. – currently being wound up, Zagreb |
Services | Croatia | 100 | - | 100 | - |
| 342,828 | 245,423 | |||||
| Joint ventures | ||||||
| PBZ Croatia osiguranje d.d., Zagreb | Pension fund management |
Croatia | 50 | 28,000 | 50 | 28,000 |
| Associates | ||||||
| Strmec projekt d.o.o., Samobor | Real estate | Croatia | 49.76 | 5,688 | 49.76 | 5,688 |
| 5,688 | 5,688 | |||||
| 376,516 | 279,111 |
18.1. The Company's investments in subsidiaries and associates and participation in joint ventures
18.2. The Group's investments in subsidiaries and associates and participation in joint ventures
| Group | ||||||
|---|---|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | |||||
| Ownership | Amount of | Ownership | Amount of | |||
| Activity | Country | percentage | investment | percentage | investment | |
| % | in HRK'000 | % | in HRK'000 | |||
| Joint ventures | ||||||
| PBZ Croatia osiguranje d.d., Zagreb |
Pension fund management |
Croatia | 50 | 65,120 | 50 | 66,652 |
| Nacionalni biro za osiguranje Skopje |
Insurance | Macedonia | - | 1,382 | - | 1,309 |
| 66,502 | 67,961 | |||||
| Associates | ||||||
| Strmec projekt d.o.o., Samobor |
Real estate | Croatia | 49.76 | 5,688 | 49.76 | 5,688 |
| STP Agroservis d.o.o., Virovitica |
Technical testing and analysis |
Croatia | 37 | 4,403 | 37 | 3,941 |
| 10,091 | 9,629 | |||||
| 76,593 | 77,590 |
Summary financial information for joint ventures
The summary financial information for PBZ Croatia osiguranje d.d.is presented below. For the Group, the information was presented using the equity method.
| Summary statement of financial position | 31 Dec. 2020 | 31 Dec. 2019 |
|---|---|---|
| in HRK'000 | in HRK'000 | |
| Financial assets | 102,892 | 116,178 |
| Other assets | 34,225 | 24,773 |
| Total assets | 137,117 | 140,951 |
| Liabilities | 6,877 | 7,647 |
| Capital and reserves | 130,240 | 133,304 |
| Total equity and liabilities | 137,117 | 140,951 |
| Summary statement of comprehensive income | ||
| Income | 67,007 | 70,518 |
| Expenses | (42,813) | (42,500) |
| Profit before tax | 24,194 | 28,018 |
| Income tax | (4,358) | (5,052) |
| Profit for the year | 19,836 | 22,966 |
| Share in profit of joint venture @ 50% | 9,918 | 11,483 |
Reconciliation of the presented summary financial information with the carrying amount of shares in the joint venture.
| Summary financial information | 31 Dec. 2020 | 31 Dec. 2019 | |
|---|---|---|---|
| in HRK'000 | in HRK'000 | ||
| Opening balance of net assets at 1 January | 133,304 | 137,338 | |
| Profit for the period | 19,836 | 22,966 | |
| Dividends | (22,900) | (27,000) | |
| Closing balance of net assets | 130,240 | 133,304 | |
| Share in profit of joint venture @ 50% | 65,120 | 66,652 | |
| Carrying amount | 65,120 | 66,652 |
18.3. Movements in investments in subsidiaries, associates and participation in joint ventures
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 201 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| At 1 January | 279,111 | 246,929 | 77,590 | 79,249 |
| Increase in investments (purchase) (i) | 78,897 | - | - | - |
| Increase in investments through capital increase of companies (ii) |
18,132 | - | - | - |
| Increase by using the equity method | - | - | (1,111) | (1,553) |
| Impairment of investments (iii) | (4,212) | (28,281) | - | - |
| Reversal of impairment of investments (iii) | 4,588 | 60,463 | - | - |
| Foreign exchange differences | - | - | 114 | (106) |
| At 31 December | 376,516 | 279,111 | 76,593 | 77,590 |
/i/ At 31 March 2020, the Company acquired 100% of shares with voting rights of the company ASTORIA d.o.o. The principal activity of the acquired company is real estate.
Details on the fair value of identifiable assets and liabilities of Astoria d.o.o. at the acquisition date, gain on bargain purchase and the purchase consideration are shown below:
| in HRK'000 | |
|---|---|
| Asset | |
| Investment property | 76,579 |
| Loans | 20,700 |
| Receivables | 553 |
| Cash at bank and cash in hand | 910 |
| Liabilities | |
| Deferred and current tax liability | (12,634) |
| Provisions | (247) |
| Other liabilities | (1,283) |
| Other accrued expenses and deferred income | (53) |
| Total net assets at fair value | 84,525 |
| Gain on bargain purchase | (5,628) |
| Purchase consideration | 78,897 |
| Cash flow on acquisition: | |
| Cash and cash equivalents acquired | 910 |
| Purchase consideration paid in cash | (78,897) |
| Cash flow on acquisition | (77,987) |
As part of strengthening the investment strategy, the Company has acquired the 100% stake in Astoria d.o.o. The purchase of the acquired company resulted in a gain on bargain purchase, since the fair value of the acquired assets and liabilities exceeds the purchase consideration. The gain on bargain purchase in the amount of HRK 5,628 thousand is recognised in the consolidated statement of comprehensive income within Finance income.
In the consolidated income statement of the Group, in the period from 1 April to 31 December 2020, Astoria d.o.o. contributed HRK 6,654 thousand in revenue and HRK 3,926 thousand in profit before tax.
If Astoria d.o.o. has been consolidated on January 1, 2020, the consolidated profit and loss statement would show higher revenues by HRK 1,940 thousand and profit before tax by HRK 1,463 thousand.
/ii/ Increase in investments relates to Croatia osiguranje - neživot a.d., Skopje in the amount of HRK 9,132 thousand, and CO Zdravlje d.o.o. in the amount of HRK 9,000 thousand for the purpose of capital increase.
/iii/ In 2020, a lower value was determined as a result of the fair value estimation, and therefore the investments in the following subsidiaries were impaired: Croatia osiguranje d.d., Mostar by an amount of HRK 119 thousand (2019: HRK 15,975 thousand), Croatia osiguranje - neživot a.d., Skopje, by an amount of HRK 4,002 thousand (2019: HRK 12,086 thousand), Histria Construct by an amount of HRK 91 thousand (2019: HRK 74 thousand) and AK polica d.o.o. by an amount of HRK 147 thousand in 2019, while as a result of the fair value estimation, the investments in the following subsidiaries were increased, i.e. the impairment of the share in these companies was reversed: Croatia Premium d.o.o. in the amount of HRK 3,739 thousand, Milenijum osiguranje a.d. in the amount of HRK 849 thousand (2019: 41,261) and Croatia osiguranje, mirovinsko društvo d.o.o. in the amount of HRK 19,203 thousand in 2019 (Note 12.1). An impairment or impairment reversal is determined by calculating the recoverable amount of cash flows of an individual subsidiary. The subsidiaries were valued according to the discounted cash flow valuation (mostly dividend discount model and free cash flow to equity model) using the planned net income for the next 5 years (forecasted balance sheets and income statements), discount rates etc. The differences in the estimated fair value valuations for an individual subsidiary are due to the differences in future net income, assumptions of dividend distribution and/or other constituents of the discount rates (risk free rate, equity risk premium and beta) according to the Capital Asset Pricing model. The discount rates for the subsidiaries that were impaired or had a reversal of impairment (listed above) vary from 10.39% to 15.61%.
19. Financial assets
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Held-to-maturity investments | 2,082,335 | 2,172,387 | 2,169,783 | 2,315,261 |
| Available-for-sale financial assets | 4,536,162 | 4,446,779 | 5,123,648 | 4,912,345 |
| Financial assets at fair value through profit or loss - for trading |
421,553 | 493,577 | 459,435 | 518,625 |
| Loans and receivables | 1,018,935 | 1,205,330 | 1,171,522 | 1,352,160 |
| 8,058,985 | 8,318,073 | 8,924,388 | 9,098,391 |
19.1. Overview of investments
The Company's investment structure as at 31 December 2020 was as follows:
| Company | |||||
|---|---|---|---|---|---|
| Held-to maturity investments |
Available for-sale financial assets |
Financial assets at fair value through profit or loss - for trading |
Loans and receivables |
Total | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Shares | |||||
| Shares, listed | - | 534,218 | 17,188 | - | 551,406 |
| Shares, not listed | - | 1,916 | - | - | 1,916 |
| - | 536,134 | 17,188 | - | 553,322 | |
| Debt securities | |||||
| Government bonds | 2,038,398 | 3,638,449 | - | - | 5,676,847 |
| Corporate bonds | 43,937 | 169,505 | - | - | 213,442 |
| 2,082,335 | 3,807,954 | - | - | 5,890,289 | |
| Derivative financial instruments | |||||
| Foreign currency forward contracts | - | - | 4,115 | - | 4,115 |
| - | - | 4,115 | - | 4,115 | |
| Investment funds | |||||
| Open-ended investment funds | - | 192,074 | - | - | 192,074 |
| Open-ended investment funds - assets for coverage of unit-linked products |
- | - | 400,250 | - | 400,250 |
| - | 192,074 | 400,250 | 592,324 | ||
| Loans and receivables | |||||
| Deposits with credit institutions | - | - | - | 508,031 | 508,031 |
| Loans | - | - | - | 510,904 | 510,904 |
| - | - | - | 1,018,935 | 1,018,935 | |
| 2,082,335 | 4,536,162 | 421,553 | 1,018,935 | 8,058,985 |
19.1. Overview of investments (continued)
The Company's investment structure as at 31 December 2019 was as follows:
| Company | |||||
|---|---|---|---|---|---|
| Held-to maturity investments |
Available for-sale financial assets |
Financial assets at fair value through profit or loss - for trading |
Loans and receivables |
Total | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Shares | |||||
| Shares, listed | - | 520,596 | 17,071 | - | 537,667 |
| Shares, not listed | - | 1,984 | - | - | 1,984 |
| - | 522,580 | 17,071 | - | 539,651 | |
| Debt securities | |||||
| Government bonds | 2,128,493 | 3,751,669 | - | - | 5,880,162 |
| Corporate bonds | 43,894 | 85,738 | - | - | 129,632 |
| 2,172,387 | 3,837,407 | - | - | 6,009,794 | |
| Derivative financial instruments | |||||
| Foreign currency forward contracts | - | - | 3,670 | - | 3,670 |
| - | - | 3,670 | - | 3,670 | |
| Investment funds | |||||
| Open-ended investment funds | - | 86,792 | 27,510 | - | 114,302 |
| Open-ended investment funds - assets for coverage of unit-linked products |
- | - | 445,326 | - | 445,326 |
| - | 86,792 | 472,836 | - | 559,628 | |
| Loans and receivables | |||||
| Deposits with credit institutions | - | - | - | 686,296 | 686,296 |
| Loans | - | - | - | 519,034 | 519,034 |
| - | - | - | 1,205,330 | 1,205,330 | |
| 2,172,387 | 4,446,779 | 493,577 | 1,205,330 | 8,318,073 |
19.1. Overview of investments (continued)
The Group's investment structure as at 31 December 2020 was as follows:
| Group | |||||
|---|---|---|---|---|---|
| Held-to maturity investments |
Available for-sale financial assets |
Financial assets at fair value through profit or loss - for trading |
Loans and receivables |
Total | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Shares | |||||
| Shares, listed | - | 534,724 | 17,187 | - | 551,911 |
| Shares, not listed | - | 1,975 | - | - | 1,975 |
| - | 536,699 | 17,187 | - | 553,886 | |
| Debt securities | |||||
| Government bonds | 2,125,846 | 4,225,370 | - | - | 6,351,216 |
| Corporate bonds | 43,937 | 169,505 | - | - | 213,442 |
| 2,169,783 | 4,394,875 | - | - | 6,564,658 | |
| Derivative financial instruments | |||||
| Foreign currency forward contracts | - | - | 4,115 | - | 4,115 |
| - | - | 4,115 | - | 4,115 | |
| Investment funds | |||||
| Open-ended investment funds | - | 192,074 | 26,048 | - | 218,122 |
| Open-ended investment funds - assets for coverage of unit-linked products |
- | - | 412,085 | - | 412,085 |
| - | 192,074 | 438,133 | - | 630,207 | |
| Loans and receivables | |||||
| Deposits with credit institutions | - | - | - | 908,343 | 908,343 |
| Loans | - | - | - | 263,179 | 263,179 |
| - | - | - | 1,171,522 | 1,171,522 | |
| 2,169,783 | 5,123,648 | 459,435 | 1,171,522 | 8,924,388 |
19.1. Overview of investments (continued)
The Group's investment structure as at 31 December 2019 was as follows:
| Group | |||||
|---|---|---|---|---|---|
| Held-to maturity investments |
Available for-sale financial assets |
Financial assets at fair value through profit or loss - for trading |
Loans and receivables |
Total | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Shares | |||||
| Shares, listed | - | 521,139 | 17,071 | - | 538,210 |
| Shares, not listed | - | 2,041 | - | - | 2,041 |
| - | 523,180 | 17,071 | - | 540,251 | |
| Debt securities | |||||
| Government bonds | 2,263,706 | 4,216,636 | - | - | 6,480,342 |
| Corporate bonds | 51,555 | 85,737 | - | - | 137,292 |
| 2,315,261 | 4,302,373 | - | - | 6,617,634 | |
| Derivative financial instruments | |||||
| Foreign currency forward contracts | - | - | 3,670 | - | 3,670 |
| - | - | 3,670 | - | 3,670 | |
| Investment funds | |||||
| Open-ended investment funds | - | 86,792 | 46,947 | - | 133,739 |
| Open-ended investment funds - assets for coverage of unit-linked products |
- | - | 450,937 | - | 450,937 |
| - | 86,792 | 497,884 | - | 584,676 | |
| Loans and receivables | |||||
| Deposits with credit institutions | - | - | - | 1,081,008 | 1,081,008 |
| Loans | - | - | - | 271,152 | 271,152 |
| - | - | - | 1,352,160 | 1,352,160 | |
| 2,315,261 | 4,912,345 | 518,625 | 1,352,160 | 9,098,391 |
19.2. Financial investments exposed to credit risk
| Company | 31 Dec. 2020 | 31 Dec. 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| in HRK'000 | in HRK'000 | |||||||||
| Neither past due nor |
Past due but | Neither past due nor |
Past due but | |||||||
| impaired | not impaired | Impaired | Impairment | Total | impaired | not impaired | Impaired | Impairment | Total | |
| Held-to-maturity investments Available-for-sale debt securities |
2,082,335 3,807,954 |
- - |
7,500 - |
(7,500) - |
2,082,335 3,807,954 |
2,172,387 3,837,407 |
- - |
7,500 4,771 |
(7,500) (4,771) |
2,172,387 3,837,407 |
| Deposits | 508,031 | - | - | - | 508,031 | 686,296 | - | - | - | 686,296 |
| Loans | 487,674 | 23,230 | 137,488 | (137,488) | 510,904 | 487,700 | 31,334 | 153,764 | (153,764) | 519,034 |
| 6,885,994 | 23,230 | 144,988 | (144,988) | 6,909,224 | 7,183,790 | 31,334 | 166,035 | (166,035) | 7,215,124 | |
| Group | 31 Dec. 2020 | 31 Dec. 2019 | ||||||||
| in HRK'000 | in HRK'000 | |||||||||
| Neither past due nor |
Past due but | Neither past due nor |
Past due but | |||||||
| impaired | not impaired | Impaired | Impairment | Total | impaired | not impaired | Impaired | Impairment | Total | |
| Held-to-maturity investments | 2,169,783 | - | 7,500 | (7,500) | 2,169,783 | 2,315,261 | - | 7,500 | (7,500) | 2,315,261 |
| Available-for-sale debt securities | 4,394,875 | - | - | - | 4,394,875 | 4,302,373 | - | 4,771 | (4,771) | 4,302,373 |
| Deposits | 908,343 | - | - | - | 908,343 | 1,081,008 | - | - | - | 1,081,008 |
| Loans | 238,709 | 24,470 | 137,783 | (137,783) | 238,902 | 32,250 | 154,051 | (154,051) | 271,152 | |
| 263,179 |
19.3. Held-to-maturity investments
| Company | Company | Group | Group | |
|---|---|---|---|---|
| Movement in impairment losses | 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| At 1 January | 7,500 | 18,125 | 7,500 | 18,125 |
| Decrease | - | (10,625) | - | (10,625) |
| At 31 December | 7,500 | 7,500 | 7,500 | 7,500 |
19.4. Loans
| Company | Company | Group | Group | |
|---|---|---|---|---|
| The maturity dates of granted loans are presented as follows: |
31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Up to 1 year | 102,098 | 84,302 | 79,936 | 59,985 |
| From 1 to 5 years | 235,696 | 206,850 | 131,448 | 128,205 |
| More than 5 years | 173,110 | 227,882 | 51,795 | 82,962 |
| 510,904 | 519,034 | 263,179 | 271,152 |
Analysis of due not impaired loan receivables is as follows:
| Company | Group | |||||||
|---|---|---|---|---|---|---|---|---|
| <90 days | 90-180 days |
> 180 days |
Total | <90 days | 90-180 days |
> 180 days |
Total | |
| in | in | in | in | in | in | in | in | |
| HRK'000 | HRK'000 | HRK'000 | HRK'000 | HRK'000 | HRK'000 | HRK'000 | HRK'000 | |
| 31 December 2019 | 1,217 | 333 | 29,784 | 31,334 | 1,281 | 1,185 | 29,784 | 32,250 |
| 31 December 2020 | 20 | - | 23,210 | 23,230 | 375 | 885 | 23,210 | 24,470 |
Movement in impairment of loans:
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| At 1 January | 153,764 | 170,169 | 154,051 | 170,456 |
| Increase | - | 6,487 | 6 | 6,487 |
| Write-off | - | - | - | - |
| Transfer to off-balance | (1,963) | (12,230) | (1,963) | (12,231) |
| Decrease | (14,313) | (10,662) | (14,315) | (10,662) |
| Foreign exchange differences | - | - | 4 | 1 |
| At 31 December | 137,488 | 153,764 | 137,783 | 154,051 |
The structure of loans by type of collateral:
| Company | Group | ||||
|---|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | ||
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| Collateralised loans: | |||||
| - vinculated life insurance policies | 22,292 | 21,211 | 29,811 | 28,799 | |
| - mortgages and real estate fiduciaries | 587,337 | 629,953 | 362,642 | 380,528 | |
| - other collaterals | 38,763 | 21,634 | 8,509 | 15,876 | |
| 648,392 | 672,798 | 400,962 | 425,203 | ||
| Value adjustment | (137,488) | (153,764) | (137,783) | (154,051) | |
| Total | 510,904 | 519,034 | 263,179 | 271,152 |
The quality of loans mainly depends on the quality of the collateral. The best security instrument is considered the vinculated life insurance policy issued by the Group. Vinculated life insurance policies almost fully cover the loan exposure.
For loans neither past due nor impaired, which are secured by mortgages, mortgages are considered a secondary source of repayment only and do not impact the carrying amount of the loan. However, loans and receivables past due but not impaired would be fully impaired if there were no collaterals.
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
Company:
| Excessively secured assets | Insufficiently secured assets | Total | ||||
|---|---|---|---|---|---|---|
| 31 December 2020 | Net book value of loans |
Fair value of collaterals |
Net book value of loans |
Fair value of collaterals |
Net book value of loans |
Fair value of collaterals |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Loans given based on life insurance policies | 22,292 | 22,292 | - | - | 22,292 | 22,292 |
| Loans given to legal entities | 180,841 | 365,577 | 5,630 | - | 186,471 | 365,577 |
| Loans given to related parties | 269,008 | 690,451 | 33,133 | - | 302,141 | 690,451 |
| 472,141 | 1,078,320 | 38,763 | - | 510,904 | 1,078,320 | |
| 31 December 2019 | ||||||
| Loans given based on life insurance policies | 21,211 | 21,211 | - | - | 21,211 | 21,211 |
| Loans given to legal entities | 179,080 | 763,206 | 6,487 | - | 185,567 | 763,206 |
| Loans given to related parties | 306,302 | 828,626 | 5,954 | - | 312,256 | 828,626 |
| 506,593 | 1,613,043 | 12,441 | - | 519,034 | 1,613,043 |
Group:
| Excessively secured assets | Insufficiently | secured assets | Total | |||
|---|---|---|---|---|---|---|
| 31 December 2020 | Net book value of loans |
Fair value of collaterals |
Net book value of loans |
Fair value of collaterals |
Net book value of loans |
Fair value of collaterals |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Loans given based on life insurance policies | 29,741 | 34,923 | - | - | 29,741 | 34,923 |
| Loans given to legal entities | 182,058 | 370,571 | 5,676 | - | 187,734 | 370,571 |
| Loans given to related parties | 43,714 | 192,420 | 1,990 | - | 45,704 | 192,420 |
| 255,513 | 597,914 | 7,666 | - | 263,179 | 597,914 | |
| 31 December 2019 | ||||||
| Loans given based on life insurance policies | 28,515 | 32,011 | - | - | 28,515 | 32,011 |
| Loans given to legal entities | 180,201 | 767,808 | 6,487 | - | 186,688 | 767,808 |
| Loans given to related parties | 55,949 | 192,420 | - | - | 55,949 | 192,420 |
| 264,665 | 992,239 | 6,487 | - | 271,152 | 992,239 |
19.5. Derivative financial instruments
| 31 Dec. 2020 | 31 Dec. 2019 | ||||||
|---|---|---|---|---|---|---|---|
| Nominal amount off balance sheet |
Assets | Fair value balance sheet Liabilities |
Nominal amount off balance sheet |
Fair value balance sheet Assets Liabilities |
|||
| HRK'000 | HRK'000 | HRK'000 | HRK'000 | HRK'000 | HRK'000 | ||
| Company | |||||||
| Foreign currency forward contracts | 1,943,791 | 4,115 | (7,426) | 1,690,544 | 3,670 | (5,625) | |
| Group | |||||||
| Foreign currency forward contracts | 1,943,791 | 4,115 | (7,426) | 1,690,544 | 3,670 | (5,625) |
The following table presents the fair value of derivative financial instruments at the balance sheet date:
20. Reinsurance share in technical provisions
| Company | Company | Group | Group | ||
|---|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | ||
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| Reinsurance share in unearned premium reserve |
58,699 | 42,189 | 64,700 | 48,384 | |
| Reinsurance share in reported but not settled claims reserve |
254,320 | 160,664 | 261,715 | 167,179 | |
| Reinsurance share in mathematical provisions | 12 | 22 | 12 | 22 | |
| Reinsurance share in provisions for incurred, but not reported claims (IBNR) |
161,838 | 10,658 | 161,838 | 10,794 | |
| 474,869 | 213,533 | 488,265 | 226,379 |
21. Deferred tax assets
(i) Movements in deferred tax assets:
| Company | in HRK'000 | |||||||
|---|---|---|---|---|---|---|---|---|
| Impairment of investments in subsidiaries and associates |
Financial assets at fair value through profit or loss |
Impairment of available-for sale financial assets |
Impairment of held-to maturity investments |
Impairment of loans and deposits |
Fair valuation losses on investment property |
Other | TOTAL | |
| At 31 December 2018 | 7,448 | 2,754 | 18,065 | 2,019 | 20,526 | 34,082 | - | 84,894 |
| Utilised deferred tax assets through profit or loss | (6,774) | (1,646) | (748) | (2,019) | (6,114) | (6,308) | - | (23,609) |
| Deferred tax assets recognised in profit or loss | - | 4,994 | 1,118 | - | 281 | - | 844 | 7,237 |
| At 31 December 2019 | 674 | 6,102 | 18,435 | - | 14,693 | 27,774 | 844 | 68,522 |
| Reclassifications | - | - | - | - | - | - | 1,030 | 1,030 |
| Utilised deferred tax assets through profit or loss | - | (3,227) | (4,886) | - | (53) | (2,805) | (1,030) | (12,001) |
| Deferred tax assets recognised in profit or loss | - | 1,939 | 1,310 | - | 2,088 | 3,447 | 1,133 | 9,917 |
| At 31 December 2020 | 674 | 4,814 | 14,859 | - | 16,728 | 28,416 | 1,977 | 67,468 |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
| in HRK'000 | |||
|---|---|---|---|
| (ii) Movements in deferred tax liabilities: | Property for own use | Financial assets available for sale |
Total |
| At 31 December 2018 | 11,119 | 49,215 | 60,334 |
| Utilisation through profit of loss | - | (92) | (92) |
| Utilisation through equity | (159) | - | (159) |
| Change in fair value of available-for-sale financial assets through other comprehensive income |
- | 53,437 | 53,437 |
| Change in fair value (impairment) of property through other comprehensive income |
119 | - | 119 |
| At 31 December 2019 | 11,079 | 102,560 | 113,639 |
| Utilisation through profit of loss | - | (221) | (221) |
| Utilisation through equity | (236) | - | (236) |
| Change in fair value of available-for-sale financial assets through other comprehensive income |
- | (9,686) | (9,686) |
| Change in fair value (impairment) of property through other comprehensive income |
(48) | - | (48) |
| At 31 December 2020 | 10,795 | 92,653 | 103,448 |
| (iii) Netting deferred taxes: | 31 Dec. 2020 | 31 Dec. 2019 |
|---|---|---|
| in HRK'000 | in HRK'000 | |
| Balance of deferred tax assets | 67,468 | 68,522 |
| Balance of deferred tax liabilities | (103,448) | (113,639) |
| Net deferred tax (liability)/assets at 31 December | (35,980) | (45,117) |
21. Deferred tax assets (continued)
(i) Movements in deferred tax assets:
| Group | in HRK'000 | ||||||
|---|---|---|---|---|---|---|---|
| Financial assets at fair value through profit or loss |
Impairment of available for-sale financial assets |
Impairment of held-to maturity investments |
Impairment of loans and deposits |
Fair valuation losses on investment property |
Other | TOTAL | |
| At 31 December 2018 | 3,050 | 18,610 | 2,144 | 20,598 | 34,238 | 977 | 79,617 |
| Reclassifications | - | - | - | - | - | (132) | (132) |
| Foreign exchange differences arising on translation of financial statements of foreign operations |
1 | (2) | (1) | 1 | - | 4 | 3 |
| Utilised deferred tax assets through profit or loss | (1,646) | (748) | (2,019) | (6,114) | (6,308) | (42) | (16,877) |
| Deferred tax assets recognised in profit or loss | 4,994 | 1,117 | - | 281 | (115) | 1,188 | 7,465 |
| At 31 December 2019 | 6,399 | 18,977 | 124 | 14,766 | 27,815 | 1,995 | 70,076 |
| Reclassifications | - | - | - | - | - | 1,028 | 1,028 |
| Foreign exchange differences arising on translation of financial statements of foreign operations |
- | - | - | - | (1) | 4 | 3 |
| Utilised deferred tax assets through profit or loss | (3,227) | (4,886) | - | (53) | (2,971) | (1,013) | (12,150) |
| Deferred tax assets recognised in profit or loss | 1,939 | 1,311 | - | 2,088 | 3,448 | 1,575 | 10,361 |
| At 31 December 2020 | 5,111 | 15,402 | 124 | 16,801 | 28,291 | 3,589 | 69,318 |
21. Deferred tax assets (continued)
| (ii) Movements in deferred tax liabilities: | in HRK'000 | ||||
|---|---|---|---|---|---|
| Property for own use |
Investment property |
Financial assets available for sale |
Other | Total | |
| At 31 December 2018 | 20,994 | 11,784 | 51,252 | 3,172 | 87,202 |
| Utilisation through profit or loss | - | 1,545 | (94) | - | 1,451 |
| Utilisation through other comprehensive income | (367) | - | - | - | (367) |
| Change in fair value of available-for-sale investments through other comprehensive income | - | - | 53,949 | - | 53,949 |
| Impairment of property for own use recognised in profit or loss | - | 2,832 | - | - | 2,832 |
| Impairment of property for own use recognised through other comprehensive income | 4,153 | - | - | - | 4,153 |
| Foreign exchange differences | - | - | 14 | - | 14 |
| At 31 December 2019 | 24,780 | 16,161 | 105,121 | 3,172 | 149,234 |
| Effect of acquisition (Note 18.3. /i/) |
- | 12,634 | - | - | 12,634 |
| Utilisation through profit or loss | - | 1,267 | (219) | (2,687) | (1,639) |
| Utilisation through other comprehensive income | (406) | - | - | - | (406) |
| Change in fair value of available-for-sale investments through other comprehensive income | - | - | (8,816) | - | (8,816) |
| Impairment of property for own use recognised in profit or loss | - | 2,234 | - | - | 2,234 |
| Impairment of property for own use recognised through other comprehensive income | (850) | - | - | - | (850) |
| Foreign exchange differences | - | - | 30 | - | 30 |
| At 31 December 2020 | 23,524 | 32,296 | 96,116 | 485 | 152,421 |
(iii) Netting deferred taxes:
| 31 Dec. 2020 | 31 Dec. 2019 | |
|---|---|---|
| in HRK'000 | in HRK'000 | |
| Total deferred tax assets | 69,318 | 70,076 |
| Netting deferred taxes (i) | (67,665) | (68,336) |
| Net movement in deferred tax assets | 1,653 | 1,740 |
| Total deferred tax liabilities | 152,421 | 149,234 |
| Netting deferred taxes (i) | (67,665) | (68,336) |
| Net movement in deferred tax liabilities | 84,756 | 80,898 |
(i) Netting deferred taxes is recognised where it is possible to net the future tax liability with tax receivables at the level of each Group company.
22. Insurance contract and other receivables
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Receivables from policyholders, net | 485,690 | 464,919 | 525,674 | 502,591 |
| Receivables from reinsurance and coinsurance | 59,038 | 46,717 | 60,077 | 47,250 |
| Receivables from other insurance business, net | 164,158 | 199,852 | 166,273 | 202,998 |
| Receivables for return on investments, net | 1,034 | 1,260 | 516 | 847 |
| Other receivables, net | 28,362 | 134,747 | 74,963 | 185,864 |
| 738,282 | 847,495 | 827,503 | 939,550 | |
| Prepaid expenses and accrued income | 52,401 | 13,197 | 63,409 | 18,424 |
| Other assets | 331 | 329 | 11,132 | 8,233 |
| 791,014 | 861,021 | 902,044 | 966,207 |
22.1. Receivables from policyholders
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Written but not invoiced premium | 205,127 | 178,147 | 254,790 | 222,260 |
| Invoiced uncollected premium | 452,105 | 467,987 | 474,576 | 489,474 |
| Receivables from policyholders, gross | 657,232 | 646,134 | 729,366 | 711,734 |
| Impairment | (171,542) | (181,215) | (203,692) | (209,143) |
| Receivables from policyholders, net | 485,690 | 464,919 | 525,674 | 502,591 |
22.2. Receivables from reinsurance and coinsurance
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Receivables from reinsurance provision | 1,761 | 106 | 1,761 | 106 |
| Receivables from reinsurance claims | 39,638 | 41,354 | 40,677 | 41,887 |
| Receivables from coinsurance claims | 17,639 | 5,257 | 17,639 | 5,257 |
| 59,038 | 46,717 | 60,077 | 47,250 |
22.3. Receivables from other insurance business
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Recourse receivables | 214,949 | 256,049 | 229,032 | 270,241 |
| Impairment | (60,330) | (64,291) | (74,348) | (77,776) |
| Net receivables | 154,619 | 191,758 | 154,684 | 192,465 |
| Receivables for foreign claims | 10,069 | 7,422 | 11,372 | 9,194 |
| Impairment | (2,344) | (2,268) | (2,344) | (2,268) |
| Net receivables | 7,725 | 5,154 | 9,028 | 6,926 |
| Other receivables | 1,814 | 2,940 | 2,561 | 3,607 |
| 1,814 | 2,940 | 2,561 | 3,607 | |
| Receivables from other insurance business, gross |
226,832 | 266,411 | 242,965 | 283,042 |
| Impairment | (62,674) | (66,559) | (76,692) | (80,044) |
| Receivables from other insurance business, net | 164,158 | 199,852 | 166,273 | 202,998 |
22.4. Receivables for returns on investments
| Company | Company | Group | Group | ||
|---|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | ||
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| Receivables for regular interest on given loans | 15,661 | 16,400 | 15,093 | 15,919 | |
| Receivables for regular interest on deposits | 4,559 | 4,888 | 4,612 | 4,961 | |
| Receivables for returns on investments, gross | 20,220 | 21,288 | 19,705 | 20,880 | |
| Impairment | (19,186) | (20,028) | (19,189) | (20,033) | |
| Receivables for returns on investments, net | 1,034 | 1,260 | 516 | 847 |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
22.5. Other receivables
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Receivables for sold tangible assets | 6,228 | 90,766 | 6,231 | 90,770 |
| Receivables for advances given | 4,287 | 5,098 | 5,013 | 6,936 |
| Trade receivables | 5,369 | 6,381 | 26,477 | 27,602 |
| Receivables from the state and state institutions | 1,709 | 1,731 | 18,067 | 16,339 |
| Receivables from credit card companies | 5,188 | 5,827 | 6,121 | 6,765 |
| Receivables obtained through cession | 4,464 | 4,460 | 4,464 | 4,466 |
| Receivables under court decisions | 301 | 289 | 301 | 289 |
| Receivables from employees | 1,345 | 1,343 | 2,164 | 2,333 |
| Receivables from agents | 1,349 | 1,831 | 1,349 | 1,831 |
| Receivables for funds on blocked accounts | 25,373 | 25,373 | 25,373 | 25,373 |
| Receivables for default interest | 6,663 | 5,218 | 6,663 | 5,218 |
| Other receivables | 16,128 | 36,605 | 30,577 | 55,732 |
| Other receivables, gross | 78,404 | 184,922 | 132,800 | 243,654 |
| Impairment | (50,042) | (50,175) | (57,837) | (57,790) |
| Other receivables, net | 28,362 | 134,747 | 74,963 | 185,864 |
22.6. Analysis of receivables from insurance business and other receivables by maturity:
| Receivables from | Receivables for | Receivables from other insurance business | ||||||
|---|---|---|---|---|---|---|---|---|
| Company | Receivables from policyholders |
coinsurance and reinsurance business |
returns on investments |
Recourse receivables |
Receivables for foreign claims |
Other receivables |
Other receivables |
TOTAL |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Neither past due nor impaired | 328,973 | 42,773 | 510 | 191,743 | 4,217 | 2,935 | 120,975 | 692,126 |
| Past due but not impaired | 135,946 | 3,944 | 750 | 15 | 937 | 5 | 13,772 | 155,369 |
| Impaired | 181,215 | 827 | 20,028 | 64,292 | 2,267 | - | 50,177 | 318,806 |
| Impairment | (181,215) | (827) | (20,028) | (64,292) | (2,267) | - | (50,177) | (318,806) |
| 31 December 2019 | 464,919 | 46,717 | 1,260 | 191,758 | 5,154 | 2,940 | 134,747 | 847,495 |
| Neither past due nor impaired | 363,868 | 24,191 | 18 | 154,546 | 5,388 | 1,813 | 8,759 | 558,583 |
| Past due but not impaired | 121,822 | 34,847 | 1,016 | 74 | 2,337 | - | 19,603 | 179,699 |
| Impaired | 171,542 | 313 | 19,186 | 60,330 | 2,344 | - | 50,042 | 303,757 |
| Impairment | (171,542) | (313) | (19,186) | (60,330) | (2,344) | - | (50,042) | (303,757) |
| 31 December 2020 | 485,690 | 59,038 | 1,034 | 154,620 | 7,725 | 1,813 | 28,362 | 738,282 |
22.6. Analysis of receivables from insurance business and other receivables by maturity (continued)
| Group | Receivables from | Receivables for | Receivables from other insurance business | |||||
|---|---|---|---|---|---|---|---|---|
| Receivables from policyholders |
coinsurance and reinsurance business |
returns on investments |
Recourse receivables |
Receivables for foreign claims |
Other receivables |
Other receivables |
TOTAL | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Neither past due nor impaired | 351,832 | 42,796 | 510 | 191,958 | 4,305 | 2,935 | 150,309 | 744,645 |
| Past due but not impaired | 150,759 | 4,454 | 337 | 507 | 2,621 | 672 | 35,555 | 194,905 |
| Impaired | 209,142 | 827 | 20,032 | 77,775 | 2,268 | - | 57,792 | 367,836 |
| Impairment | (209,142) | (827) | (20,032) | (77,775) | (2,268) | - | (57,792) | (367,836) |
| 31 December 2019 | 502,591 | 47,250 | 847 | 192,465 | 6,926 | 3,607 | 185,864 | 939,550 |
| Neither past due nor impaired | 392,037 | 25,172 | 71 | 154,609 | 6,676 | 1,813 | 33,432 | 613,810 |
| Past due but not impaired | 133,637 | 34,905 | 445 | 75 | 2,352 | 748 | 41,531 | 213,693 |
| Impaired | 203,692 | 326 | 19,189 | 74,348 | 2,344 | - | 57,837 | 357,736 |
| Impairment | (203,692) | (326) | (19,189) | (74,348) | (2,344) | - | (57,837) | (357,736) |
| 31 December 2020 | 525,674 | 60,077 | 516 | 154,684 | 9,028 | 2,561 | 74,963 | 827,503 |
22.7. Credit quality of receivables neither past due nor impaired:
| Receivables from other insurance business | ||||||||
|---|---|---|---|---|---|---|---|---|
| Company | Insurance receivables |
Receivables from coinsurance and reinsurance business |
Receivables for returns on investments |
Recourse receivables |
Receivables for foreign claims |
Other receivables |
Other receivables |
TOTAL |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| High quality | - | - | - | - | - | - | - | - |
| Standard quality | 328,973 | 42,773 | 510 | 191,743 | 4,217 | 2,935 | 120,975 | 692,126 |
| 31 December 2019 | 328,973 | 42,773 | 510 | 191,743 | 4,217 | 2,935 | 120,975 | 692,126 |
| High quality | - | - | - | - | - | - | - | - |
| Standard quality | 363,868 | 24,192 | 18 | 154,545 | 5,388 | 1,813 | 8,759 | 558,583 |
| 31 December 2020 | 363,868 | 24,192 | 18 | 154,545 | 5,388 | 1,813 | 8,759 | 558,583 |
| Group | Receivables from other insurance business Receivables from Receivables |
|||||||
|---|---|---|---|---|---|---|---|---|
| Insurance receivables |
coinsurance and reinsurance business |
for returns on investments |
Recourse receivables |
Receivables for foreign claims |
Other receivables |
Other receivables |
TOTAL | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| High quality | - | - | - | - | - | - | 425 | 425 |
| Standard quality | 351,832 | 42,796 | 510 | 191,958 | 4,305 | 2,935 | 149,884 | 744,220 |
| 31 December 2019 | 351,832 | 42,796 | 510 | 191,958 | 4,305 | 2,935 | 150,309 | 744,645 |
| High quality | - | - | - | - | - | - | 710 | 710 |
| Standard quality | 392,037 | 25,172 | 71 | 154,609 | 6,676 | 1,813 | 32,722 | 613,100 |
| 31 December 2020 | 392,037 | 25,172 | 71 | 154,609 | 6,676 | 1,813 | 33,432 | 613,810 |
High quality means receivables from companies that have a high credit rating and the possibility that receivables become uncollectable is extremely low. The Group monitors the collection of receivables and has established a process for issuing reminders, forced collection and possible court claims.
22.8. Analysis of receivables past due but not impaired by the number of days up to maturity
| Company | Group | |||||||
|---|---|---|---|---|---|---|---|---|
| <90 days | 90-180 days | > 180 days | Total | <90 days | 90-180 days | > 180 days | Total | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Receivables from insurance business | 97,643 | 38,303 | - | 135,946 | 109,620 | 39,903 | 1,236 | 150,759 |
| Receivables from coinsurance and reinsurance business |
2,081 | 1,632 | 231 | 3,944 | 2,538 | 1,632 | 284 | 4,454 |
| Receivables for returns on investments | 727 | 23 | - | 750 | 314 | 23 | - | 337 |
| Receivables from other insurance business: | 572 | 372 | 13 | 957 | 2,610 | 1,176 | 14 | 3,800 |
| recourse receivables | - | 2 | 13 | 15 | 354 | 139 | 14 | 507 |
| receivables for foreign claims | 569 | 368 | - | 937 | 2,253 | 368 | - | 2,621 |
| other receivables | 3 | 2 | - | 5 | 3 | 669 | - | 672 |
| Other receivables | 9,213 | 2,645 | 1,914 | 13,772 | 28,967 | 3,873 | 2,715 | 35,555 |
| 31 December 2019 | 110,236 | 42,975 | 2,158 | 155,369 | 144,049 | 46,607 | 4,249 | 194,905 |
| Receivables from insurance business | 85,594 | 36,228 | - | 121,822 | 94,229 | 38,200 | 1,208 | 133,637 |
| Receivables from coinsurance and reinsurance business |
28,394 | 6,453 | - | 34,847 | 28,453 | 6,452 | - | 34,905 |
| Receivables for returns on investments | 388 | 628 | - | 1,016 | - | 445 | - | 445 |
| Receivables from other insurance business: | 1,884 | 453 | 74 | 2,411 | 2,647 | 453 | 75 | 3,175 |
| recourse receivables | - | - | 74 | 74 | - | - | 75 | 75 |
| receivables for foreign claims | 1,884 | 453 | - | 2,337 | 1,899 | 453 | - | 2,352 |
| other receivables | - | - | - | - | 748 | - | - | 748 |
| Other receivables | 13,139 | 3,570 | 2,894 | 19,603 | 33,006 | 4,497 | 4,028 | 41,531 |
| 31 December 2020 | 129,399 | 47,332 | 2,968 | 179,699 | 158,335 | 50,047 | 5,311 | 213,693 |
22.9. Movements in impairment of receivables
| Receivables from | Receivables from coinsurance and |
Receivables for | Receivables from other insurance business |
Other | |||
|---|---|---|---|---|---|---|---|
| Company | insurance business | reinsurance business |
returns on investments |
Recourse receivables |
Receivables for foreign claims |
receivables | TOTAL |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| At 1 January 2019 | 210,086 | 1,569 | 21,909 | 70,905 | 2,743 | 55,325 | 362,537 |
| Other transfers | - | - | - | - | - | (4,678) | (4,678) |
| Increase of impairment | 114,393 | 1,036 | 1,090 | 2,044 | 1,245 | 878 | 120,686 |
| Collection of previously impaired amounts |
(115,771) | (1,701) | (2,388) | (7,527) | (1,721) | (504) | (129,612) |
| Write-offs | (27,493) | (77) | (583) | (1,130) | - | (844) | (30,127) |
| At 31 December 2019 | 181,215 | 827 | 20,028 | 64,292 | 2,267 | 50,177 | 318,806 |
| Other transfers | - | - | - | - | - | - | - |
| Increase of impairment | 74,110 | 980 | 69 | 855 | 725 | 510 | 77,249 |
| Collection of previously impaired amounts |
(76,604) | (1,494) | (230) | (3,489) | (626) | (585) | (83,028) |
| Write-offs | (7,179) | - | (681) | (1,328) | (22) | (60) | (9,270) |
| At 31 December 2020 | 171,542 | 313 | 19,186 | 60,330 | 2,344 | 50,042 | 303,757 |
22.9. Movements in impairment of receivables (continued)
| Receivables | Receivables from coinsurance and reinsurance business |
Receivables from other insurance business | ||||||
|---|---|---|---|---|---|---|---|---|
| Group | from insurance business |
Receivables for returns on investments |
Recourse receivables |
Receivables for foreign claims |
Other receivables |
Other receivables |
TOTAL | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| At 1 January 2019 | 233,179 | 1,567 | 21,914 | 77,387 | 2,742 | - | 62,206 | 398,995 |
| Other transfers | - | - | - | - | - | - | (4,678) | (4,678) |
| Increase of impairment | 122,216 | 1,036 | 1,091 | 9,007 | 1,245 | - | 2,163 | 136,758 |
| Collection of previously impaired amounts |
(117,951) | (1,699) | (2,389) | (7,544) | (1,719) | - | (826) | (132,128) |
| Write-offs | (28,429) | (77) | (584) | (1,156) | - | - | (1,087) | (31,333) |
| Foreign exchange differences | 127 | - | - | 81 | - | - | 14 | 222 |
| At 31 December 2019 | 209,142 | 827 | 20,032 | 77,775 | 2,268 | - | 57,792 | 367,836 |
| Other transfers | - | - | - | - | - | - | - | - |
| Increase of impairment | 83,244 | 993 | 69 | 1,260 | 726 | - | 2,055 | 88,347 |
| Collection of previously impaired amounts |
(80,837) | (1,494) | (231) | (3,511) | (628) | - | (1,060) | (87,761) |
| Write-offs | (8,187) | - | (681) | (1,329) | (28) | - | (989) | (11,214) |
| Foreign exchange differences | 330 | - | - | 153 | 6 | - | 39 | 528 |
| At 31 December 2020 | 203,692 | 326 | 19,189 | 74,348 | 2,344 | - | 57,837 | 357,736 |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
23. Cash and cash equivalents
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Cash on bank accounts | 383,520 | 100,620 | 476,062 | 143,521 |
| Cash on foreign currency accounts | 129,416 | 24,700 | 177,865 | 70,917 |
| Cash on hand | - | - | 437 | 581 |
| Deposits with maturity up to three months | - | - | 15,061 | 2,348 |
| Total cash and cash equivalents | 512,936 | 125,320 | 669,425 | 217,367 |
24. Capital and reserves
24.1. Subscribed share capital
The Company's share capital with a nominal value of HRK 601,576 thousand (31 December 2019: HRK 601,576 thousand) is divided among 429,697 shares with a nominal value of HRK 1,400, which have been paid entirely in cash, entered into the register of the Commercial Court in Zagreb.
The shares are marked as follows:
| Number of shares | Nominal amount (in HRK): |
|---|---|
| 307,598 ordinary shares I, emission with ticker CROS-R-A/CROS | 430,637,200 |
| 113,349 ordinary shares II, emission with ticker CROS-R-A/CROS | 158,688,600 |
| TOTAL ORDINARY SHARES | 589,325,800 |
| 8,750 preference shares I, emission with ticker CROS-P-A/CROS2 | 12,250,000 |
| TOTAL PREFERENCE SHARES | 12,250,000 |
| TOTAL ORDINARY AND PREFERENCE SHARES | 601,575,800 |
Preference shares provide their holders with the following rights:
- voting rights equal to the holders of ordinary shares;
- dividend payment in the amount of 8% annually on the revalued value of shares, for the year in which an appropriate profit was realised;
- cumulative dividend payment is guaranteed provided that the Company's result enables the payment;
- cumulative dividend payment if the Company's result enables the payment of a higher dividend to all shareholders than the dividend from the previous point, as well as for the years when the liability cannot be settled due to insufficient profit.
Due to the guaranteed dividend payment, preference shares are classified as financial liabilities (Note 27).
| 31 Dec. 2020 | ||||||
|---|---|---|---|---|---|---|
| Shareholder | Number | Nominal amount |
Equity | Number | Nominal amount |
Equity |
| of shares | in HRK'000 | share % | of shares | in HRK'000 | share % | |
| ADRIS GRUPA d.d. | 263,419 | 368,787 | 61.3 | 263,419 | 368,787 | 61.3 |
| CERP/ Republic of Croatia | 128,787 | 180,302 | 30.0 | 128,787 | 180,302 | 30.0 |
| Raiffeisenbank Austria d.d. - custodian account |
19,449 | 27,229 | 4.5 | 19,456 | 27,238 | 4.5 |
| Interkapital vrijednosni papiri d.o.o./summary ac. |
3,130 | 4,382 | 0.7 | 3,113 | 4,358 | 0.7 |
| HPB d.d./Republika Hrvatska basic and summary ac. |
3,032 | 4,245 | 0.7 | 2,941 | 4,117 | 0.7 |
| Other shareholders | 11,880 | 16,631 | 2.8 | 11,981 | 16,774 | 2.8 |
| 429,697 | 601,576 | 100.0 | 429,697 | 601,576 | 100.0 |
The ownership structure as at 31 December 2020 and 31 December 2019 was as follows:
As at 31 December 2020, percentage of ownership of ADRIS GRUPA d.d. consists of the own share of 61.3% increased by the shares on its custodian accounts of 5.1%, while percentage of ownership of CERP consists of the own share of 30% increased by the shares on its custodian accounts of 0.6%.
24.2. Reserves
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Legal reserves | 30,079 | 30,079 | 30,079 | 30,079 |
| Statutory reserves | 147,220 | 147,220 | 147,220 | 147,220 |
| Other reserves | 224,739 | 224,739 | 224,739 | 224,739 |
| 402,038 | 402,038 | 402,038 | 402,038 |
Pursuant to the Companies Act, 5% of profit for the year is allocated to the legal reserve until total legal reserve reaches 5% of the share capital.
Statutory reserves and other reserves were established based on the decision on profit distribution from previous years.
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
24.3. Revaluation reserve
The revaluation reserve is presented as follows:
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Property for own use | 59,967 | 61,549 | 135,946 | 144,567 |
| Deferred tax from change in revaluation reserve of property for own use |
(10,795) | (11,079) | (23,524) | (24,779) |
| Available-for-sale financial assets | 514,744 | 568,557 | 559,201 | 604,522 |
| Deferred tax from change in revaluation reserve of available-for-sale financial assets |
(92,654) | (102,340) | (96,893) | (105,709) |
| Foreign exchange differences arising on translation of financial statements of foreign operations |
(138) | (31) | (6,281) | (9,263) |
| 471,124 | 516,656 | 568,449 | 609,338 |
/i/ Revaluation reserve of property for own use, net of deferred tax
| Company | Group | |
|---|---|---|
| in HRK'000 | in HRK'000 | |
| 31 December 2018 | 50,650 | 101,886 |
| Reclassification | - | - |
| Increase in revaluation reserve | 543 | 19,609 |
| Decrease in revaluation reserve | - | - |
| Release of revaluation reserve, realised portion (depreciation and sale) | (723) | (1,707) |
| 31 December 2019 | 50,470 | 119,788 |
| Reclassification | - | 56 |
| Increase in revaluation reserve | - | - |
| Decrease in revaluation reserve | (216) | (5,504) |
| Release of revaluation reserve, realised portion (depreciation and sale) | (1,082) | (1,918) |
| 31 December 2020 | 49,172 | 112,422 |
/ii/ Revaluation reserve of available-for-sale financial assets, net of deferred tax
| Company | Group | |
|---|---|---|
| in HRK'000 | in HRK'000 | |
| 31 December 2018 | 222,779 | 238,396 |
| Changes in fair value of available-for-sale financial assets | 264,867 | 271,444 |
| Impairment of financial assets, net of tax | 5,576 | 5,820 |
| Realised gains on available-for-sale financial assets, net of tax (through profit) | (27,006) | (27,250) |
| Foreign exchange differences | (30) | 1,141 |
| 31 December 2019 | 466,186 | 489,551 |
| Reclassification | - | (57) |
| Changes in fair value of available-for-sale financial assets | 1,404 | 9,082 |
| Impairment of financial assets, net of tax | 5,971 | 5,972 |
| Realised gains of available-for-sale financial assets, net of tax (through profit) | (51,502) | (51,503) |
| Foreign exchange differences | (107) | 2,982 |
| 31 December 2020 | 421,952 | 456,027 |
25. Technical provisions
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Claims provisions, gross | ||||
| Provisions for reported but not settled claims | 1,694,098 | 1,577,212 | 1,788,641 | 1,665,698 |
| Provisions for incurred, but not reported claims (IBNR) |
1,074,698 | 883,516 | 1,201,901 | 997,701 |
| Provisions for costs of claims handling | 136,646 | 133,772 | 149,989 | 146,437 |
| 2,905,442 | 2,594,500 | 3,140,531 | 2,809,836 | |
| Unearned premiums, gross | 1,148,879 | 1,135,436 | 1,435,263 | 1,435,319 |
| Mathematical insurance provisions, gross | 2,565,485 | 2,523,589 | 3,022,248 | 2,955,121 |
| Other insurance-technical provisions, gross | 15,200 | 31,577 | 25,892 | 42,455 |
| Technical provisions for life insurance where the policyholder bears the investment risk |
400,250 | 445,326 | 412,085 | 450,937 |
| Total technical provisions | 7,035,256 | 6,730,428 | 8,036,019 | 7,693,668 |
Other insurance-technical provisions include unexpired risk reserves.
25.1. Movements in provision for reported but not settled claims, gross
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| LIFE | ||||
| At 1 January | 57,655 | 64,287 | 61,470 | 66,271 |
| Foreign exchange differences arising on | ||||
| translation of financial statements of foreign operations |
- | - | 46 | 14 |
| Claims incurred in the current year | 60,968 | 33,170 | 68,661 | 39,222 |
| Transfer from provisions for incurred, but not reported claims |
244 | 114 | 244 | 114 |
| Change in claims from the previous year | (19,659) | (26,886) | (20,538) | (27,185) |
| Settled claims | (9,231) | (13,030) | (13,934) | (16,966) |
| At 31 December | 89,977 | 57,655 | 95,949 | 61,470 |
| NON-LIFE | ||||
| At 1 January | 1,519,557 | 1,480,406 | 1,604,228 | 1,554,628 |
| Foreign exchange differences arising on | ||||
| translation of financial statements of foreign operations |
- | 1,024 | 483 | |
| Claims incurred in the current year | 304,313 | 274,782 | 329,746 | 301,576 |
| Transfer from provisions for incurred, but not reported claims |
108,957 | 111,378 | 128,433 | 122,749 |
| Change in claims from the previous year | (24,445) | (27,586) | (16,006) | (7,607) |
| Settled claims | (304,261) | (319,423) | (354,733) | (367,601) |
| At 31 December | 1,604,121 | 1,519,557 | 1,692,692 | 1,604,228 |
| TOTAL LIFE AND NON-LIFE At 31 December |
1,694,098 | 1,577,212 | 1,788,641 | 1,665,698 |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
25.2. Movements in provision for incurred but not reported claims
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| LIFE | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 |
| At 1 January | 1,547 | 1,859 | 1,904 | 2,176 |
| Foreign exchange differences arising on | ||||
| translation of financial statements of foreign | - | - | 4 | 1 |
| operations | ||||
| Increases recognised during the year | 635 | 982 | 539 | 1,021 |
| Transfer to provisions for reported claims | (244) | (114) | (244) | (114) |
| Settled claims | (776) | (1,180) | (776) | (1,180) |
| At 31 December | 1,162 | 1,547 | 1,427 | 1,904 |
| NON-LIFE | ||||
| At 1 January | 881,969 | 943,482 | 995,797 | 1,046,595 |
| Foreign exchange differences | - | 1,406 | 772 | |
| Increases recognised during the year | 437,041 | 177,420 | 499,784 | 230,540 |
| Transfer to provisions for reported claims | (108,957) | (111,378) | (128,433) | (122,749) |
| Settled claims | (136,517) | (127,555) | (168,080) | (159,361) |
| At 31 December | 1,073,536 | 881,969 | 1,200,474 | 995,797 |
| TOTAL LIFE AND NON-LIFE At 31 December |
1,074,698 | 883,516 | 1,201,901 | 997,701 |
25.3. Movements in provisions for unearned premiums
| Company Company |
Group | Group | |||
|---|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | ||
| LIFE | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| At 1 January | 4,870 | 4,346 | 5,909 | 5,369 | |
| Foreign exchange differences arising on | |||||
| translation of financial statements of foreign operations |
- | - | 12 | 4 | |
| Written premiums during the year | 453,598 | 517,408 | 551,053 | 645,821 | |
| Earned premiums during the year | (453,445) | (516,884) | (550,877) | (645,285) | |
| At 31 December | 5,023 | 4,870 | 6,097 | 5,909 | |
| NON-LIFE | |||||
| At 1 January | 1,130,566 | 1,135,019 | 1,429,410 | 1,417,281 | |
| Foreign exchange differences arising on | |||||
| translation of financial statements of foreign operations |
- | - | 3,700 | 1,597 | |
| Written premiums during the year | 2,288,221 | 2,221,291 | 2,689,178 | 2,659,154 | |
| Earned premiums during the year | (2,274,931) | (2,225,744) | (2,693,122) | (2,648,622) | |
| At 31 December | 1,143,856 | 1,130,566 | 1,429,166 | 1,429,410 | |
| TOTAL LIFE AND NON-LIFE At 31 December |
1,148,879 | 1,135,436 | 1,435,263 | 1,435,319 |
25.4. Movements in mathematical insurance provisions, gross
| Company Company |
Group | Group | |||
|---|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | ||
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| At 1 January | 2,523,589 | 2,367,205 | 2,955,121 | 2,731,290 | |
| Foreign exchange differences arising on | |||||
| translation of financial statements of foreign | - | - | 4,351 | 1,674 | |
| operations | |||||
| Allocated premium | 403,894 | 454,645 | 451,335 | 537,217 | |
| Reversal of liabilities due to benefits paid, surrenders and other terminations |
(426,303) | (360,979) | (453,186) | (377,338) | |
| Capitalised technical interest | 62,734 | 62,144 | 63,430 | 62,144 | |
| Change in discretionary bonus | - | (20,539) | (374) | (20,979) | |
| Change of liabilities based on the Liability Adequacy Test (LAT) |
1,571 | 21,113 | 1,571 | 21,113 | |
| At 31 December | 2,565,485 | 2,523,589 | 3,022,248 | 2,955,121 |
25.5. Movements in technical provisions for life insurance where the policyholder bears the investment risk
| Company Company |
Group | Group | |||
|---|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | ||
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| LIFE | |||||
| At 1 January | 445,326 | 434,791 | 450,937 | 437,973 | |
| Foreign exchange differences | - | - | 48 | 28 | |
| Allocated premium | 4,170 | 6 | 10,346 | 2,407 | |
| Reversal of liabilities due to benefits paid, surrenders and other terminations |
(49,218) | (11,320) | (49,218) | (11,320) | |
| Unrealised gains on assets in which the policyholders' funds are invested |
(28) | 21,849 | (28) | 21,849 | |
| At 31 December | 400,250 | 445,326 | 412,085 | 450,937 |
25.6. Analysis of movements in claims provisions (RBNS and IBNR) for non-life insurance
Company
| in HRK'000 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Before 2014 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | Total | |
| Assessment of cumulative claims at the end of the year of the accident | - | 1,244,991 | 1,192,854 | 1,148,645 | 1,229,855 | 1,288,855 | 1,369,563 | 1,563,797 | - |
| One year later | - | 1,216,132 | 1,134,791 | 1,101,945 | 1,183,797 | 1,236,615 | 1,373,304 | - | - |
| Two years later | - | 1,191,619 | 1,123,941 | 1,083,401 | 1,159,530 | 1,226,430 | - | - | - |
| Three years later | - | 1,192,149 | 1,119,131 | 1,077,326 | 1,154,557 | - | - | - | - |
| Four years later | - | 1,182,435 | 1,114,181 | 1,070,166 | - | - | - | - | - |
| Five years later | - | 1,174,729 | 1,095,820 | - | - | - | - | - | - |
| Six years later | - | 1,158,343 | - | - | - | - | - | - | - |
| Assessment of cumulative claims at the end of the accident | - | 1,158,343 | 1,095,820 | 1,070,166 | 1,154,557 | 1,226,430 | 1,373,304 | 1,563,797 | 8,642,417 |
| Cumulative payments | - | 1,096,612 | 993,132 | 964,573 | 1,033,307 | 1,071,930 | 1,107,201 | 825,384 | 7,092,139 |
| Provision for previous years | 1,127,379 | - | - | - | - | - | - | - | 1,127,379 |
| Claims handling costs | 57,304 | 2,810 | 5,073 | 5,402 | 6,794 | 8,910 | 15,079 | 31,582 | 132,954 |
| Amount recognised in the statement of financial position | 1,184,683 | 64,541 | 107,761 | 110,995 | 128,044 | 163,410 | 281,182 | 769,995 | 2,810,611 |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
Group
| in HRK'000 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Before 2014 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | Total | |
| Assessment of cumulative claims at the end of the year of the accident | - | 1,347,965 | 1,309,826 | 1,257,320 | 1,341,302 | 1,411,597 | 1,516,538 | 1,752,318 | - |
| One year later | - | 1,288,162 | 1,219,273 | 1,190,266 | 1,279,261 | 1,344,975 | 1,506,580 | - | - |
| Two years later | - | 1,250,562 | 1,192,796 | 1,153,317 | 1,231,173 | 1,332,198 | - | - | - |
| Three years later | - | 1,247,936 | 1,186,804 | 1,146,146 | 1,236,807 | - | - | - | - |
| Four years later | - | 1,238,607 | 1,181,070 | 1,145,313 | - | - | - | - | - |
| Five years later | - | 1,228,863 | 1,167,732 | - | - | - | - | - | - |
| Six years later | - | 1,214,080 | - | - | - | - | - | - | - |
| Assessment of cumulative claims at the end of the accident | - | 1,214,080 | 1,167,732 | 1,145,313 | 1,236,807 | 1,332,198 | 1,506,580 | 1,752,318 | 9,355,028 |
| Cumulative payments | - | 1,146,512 | 1,055,883 | 1,028,087 | 1,100,842 | 1,152,909 | 1,208,711 | 929,975 | 7,622,919 |
| Provision for previous years | 1,160,971 | - | - | - | - | - | - | - | 1,160,971 |
| Claims handling costs | 61,647 | 3,536 | 6,025 | 6,375 | 7,804 | 10,150 | 16,461 | 34,133 | 146,131 |
| Amount recognised in the statement of financial position | 1,222,618 | 71,104 | 117,874 | 123,601 | 143,769 | 189,439 | 314,330 | 856,476 | 3,039,211 |
25.7. Maturity of gross technical provisions
The expected maturity of technical provisions is presented below:
| Company | in HRK'000 | |||||
|---|---|---|---|---|---|---|
| Less than 1 year |
Between 1 and 5 years |
Between 5 and 10 years |
More than 10 years |
Total | ||
| 2020 | ||||||
| Unearned premiums, gross | 1,042,807 | 92,472 | 11,490 | 2,110 | 1,148,879 | |
| Mathematical insurance provisions, gross | 318,528 | 1,277,388 | 496,278 | 473,291 | 2,565,485 | |
| Claims provisions, gross | 1,212,365 | 735,038 | 377,097 | 580,942 | 2,905,442 | |
| Other insurance-technical provisions, gross | 14,638 | 562 | - | - | 15,200 | |
| Technical provisions for life insurance where the policyholder bears the investment risk |
49,228 | 350,879 | 42 | 101 | 400,250 | |
| 2,637,566 | 2,456,339 | 884,907 | 1,056,444 | 7,035,256 | ||
| 2019 | ||||||
| Unearned premiums, gross | 1,001,786 | 112,239 | 18,826 | 2,585 | 1,135,436 | |
| Mathematical insurance provisions, gross | 387,222 | 1,150,841 | 525,028 | 460,498 | 2,523,589 | |
| Claims provisions, gross | 921,010 | 654,001 | 377,299 | 642,190 | 2,594,500 | |
| Other insurance-technical provisions, gross | 31,233 | 342 | 1 | 1 | 31,577 | |
| Technical provisions for life insurance where the policyholder bears the investment risk |
32,642 | 412,545 | 42 | 97 | 445,326 | |
| 2,373,893 | 2,329,968 | 921,196 | 1,105,371 | 6,730,428 |
| Group | in HRK'000 | |||||
|---|---|---|---|---|---|---|
| Less than 1 year |
Between 1 and 5 years |
Between 5 and 10 years |
More than 10 years |
Total | ||
| 2020 | ||||||
| Unearned premiums, gross | 1,249,256 | 153,186 | 30,711 | 2,110 | 1,435,263 | |
| Mathematical insurance provisions, gross | 350,829 | 1,396,390 | 637,670 | 637,359 | 3,022,248 | |
| Claims provisions, gross | 1,331,876 | 805,278 | 403,803 | 599,574 | 3,140,531 | |
| Other insurance-technical provisions, gross | 25,330 | 562 | - | - | 25,892 | |
| Technical provisions for life insurance where the policyholder bears the investment risk |
49,573 | 359,244 | 754 | 2,514 | 412,085 | |
| 3,006,864 | 2,714,660 | 1,072,938 | 1,241,557 | 8,036,019 | ||
| 2019 | ||||||
| Unearned premiums, gross | 1,188,682 | 199,338 | 44,714 | 2,585 | 1,435,319 | |
| Mathematical insurance provisions, gross | 419,171 | 1,254,371 | 667,476 | 614,103 | 2,955,121 | |
| Claims provisions, gross | 1,022,040 | 726,867 | 401,235 | 659,694 | 2,809,836 | |
| Other insurance-technical provisions, gross | 42,111 | 342 | 1 | 1 | 42,455 | |
| Technical provisions for life insurance where the policyholder bears the investment risk |
32,642 | 417,116 | 191 | 988 | 450,937 | |
| 2,704,646 | 2,598,034 | 1,113,617 | 1,277,371 | 7,693,668 |
25.8. Analysis of claim (loss) ratios, cost ratios and combined ratios for the Company and Group:
| Types of non-life insurance | Claims ratio | Cost ratio | Combined ratio |
Claims ratio |
Cost ratio | Combined ratio |
|---|---|---|---|---|---|---|
| 2020 | 2020 | 2020 | 2019 | 2019 | 2019 | |
| Accident insurance | 27.43% | 35.76% | 63.19% | 26.23% | 42.59% | 68.82% |
| Health insurance | 46.56% | 33.97% | 80.53% | 55.77% | 35.88% | 91.66% |
| Road vehicle insurance | 59.58% | 32.88% | 92.46% | 73.54% | 29.53% | 103.06% |
| Railroad rolling stock insurance |
106.48% | 32.80% | 139.28% | 39.06% | 78.72% | 117.78% |
| Aircraft insurance | 26.90% | 25.18% | 52.08% | -64.98% | 37.74% | -27.25% |
| Vessel insurance | 13.09% | 33.54% | 46.63% | 52.15% | 41.44% | 93.59% |
| Insurance for goods in transit |
7.66% | 33.99% | 41.65% | 20.17% | 36.73% | 56.91% |
| Insurance against fire and natural disasters |
170.22% | 36.09% | 206.31% | 45.92% | 42.66% | 88.58% |
| Other types of property insurance |
63.62% | 31.51% | 95.12% | 80.38% | 36.47% | 116.85% |
| Motor liability insurance | 61.57% | 37.51% | 99.08% | 55.52% | 35.34% | 90.86% |
| Aircraft liability insurance | 6.70% | 38.93% | 45.63% | 3.10% | 31.22% | 34.32% |
| Vessel liability insurance | -176.74% | 34.67% | -142.07% | -72.01% | 48.63% | -23.38% |
| Other types of liability insurance |
94.28% | 30.75% | 125.04% | 68.11% | 37.69% | 105.80% |
| Loan insurance/credit insurance |
-44.88% | 72.91% | 28.03% | -91.10% | 82.86% | -8.24% |
| Surety insurance | 39.03% | 28.28% | 67.30% | 15.50% | 23.37% | 38.87% |
| Miscellaneous financial loss insurance |
166.70% | 29.58% | 196.28% | 16.20% | 30.52% | 46.72% |
| Legal expenses insurance | 308.37% | 268.48% | 576.84% | 17.32% | 19.66% | 36.97% |
| Assistance | 61.88% | 38.72% | 100.60% | 34.72% | 43.90% | 78.62% |
| Total non-life insurance | 66.98% | 35.40% | 102.38% | 54.10% | 37.72% | 91.82% |
| Group: Types of non-life insurance |
Claims ratio | Cost ratio | Combined ratio |
Claims ratio |
Cost ratio | Combined ratio |
|---|---|---|---|---|---|---|
| 2020 | 2020 | 2020 | 2019 | 2019 | 2019 | |
| Accident insurance | 32.86% | 36.09% | 68.96% | 28.76% | 42.55% | 71.31% |
| Health insurance | 46.53% | 34.12% | 80.65% | 55.82% | 35.80% | 91.62% |
| Road vehicle insurance | 61.48% | 34.58% | 96.06% | 75.29% | 30.51% | 105.80% |
| Railroad rolling stock insurance |
106.48% | 32.80% | 139.28% | 39.06% | 78.72% | 117.78% |
| Aircraft insurance | 26.90% | 25.17% | 52.07% | -64.98% | 37.74% | -27.25% |
| Vessel insurance | 13.09% | 33.54% | 46.62% | 52.15% | 41.44% | 93.59% |
| Insurance for goods in transit |
5.26% | 33.66% | 38.92% | 18.96% | 35.42% | 54.38% |
| Insurance against fire and natural disasters |
157.47% | 36.43% | 193.90% | 43.41% | 42.44% | 85.85% |
| Other types of property insurance |
62.35% | 31.74% | 94.09% | 79.67% | 35.93% | 115.60% |
| Motor liability insurance | 56.87% | 37.87% | 94.74% | 53.16% | 36.11% | 89.26% |
| Aircraft liability insurance | 6.70% | 38.93% | 45.63% | 3.10% | 31.22% | 34.32% |
| Vessel liability insurance | -176.68% | 34.66% | -142.02% | -71.97% | 48.62% | -23.36% |
| Other types of liability insurance |
91.05% | 30.92% | 121.98% | 66.45% | 37.41% | 103.87% |
| Loan insurance/credit insurance |
-19.74% | 62.45% | 42.71% | -60.10% | 82.04% | 21.94% |
| Surety insurance | 16.40% | 28.71% | 45.12% | 5.77% | 21.07% | 26.84% |
| Miscellaneous financial loss insurance |
162.26% | 30.38% | 192.64% | 17.69% | 30.74% | 48.43% |
| Legal expenses insurance | 305.40% | 265.95% | 571.35% | 17.31% | 19.66% | 36.96% |
| Assistance | 47.91% | 40.40% | 88.31% | 36.37% | 35.95% | 72.32% |
| Total non-life insurance | 64.11% | 36.00% | 100.11% | 53.21% | 38.00% | 91.22% |
The above ratios are calculated in accordance with the Ordinance on the structure and contents of financial and additional statements of insurance and reinsurance companies (Official Gazette No. 37/16, 96/18, 50/19 and 98/20) and Instructions for completing the financial and supplementary reports of insurance or reinsurance companies by the Croatian Financial Services Supervisory Agency.
The claims ratio, cost ratio and combined ratio by types of non-life insurance are calculated as follows:
- Claims ratio = (Settled claims, gross amount + Change in provisions for claims, gross amount + Change in other technical provisions, gross amount) / (Gross premium written + Impairment of value and charged value of premium + Change in gross provisions of unearned premiums) * (- 100)
- Cost ratio = (Operating expenses (business-related expenses), net + Other insurance-technical income, net of reinsurance + Other technical costs, net of reinsurance) / (Gross premium written + Impairment of value and charged value of premium + Change in gross provisions of unearned premiums) *(-100)
- Combined ratio = claims ratio + cost ratio.
The claims ratio by types of non-life insurance for which mathematical provision is recognized is calculated as follows:
• Claims ratio = (Settled claims, gross amount + Change in provisions for claims, gross amount + Change in mathematical provisions, gross amount+ Change in other technical provisions, gross amount) + (Investment income from investment of mathematical provision + Investment expense from investment of mathematical provision)/ (Gross premium written + Impairment of value and charged value of premium + Change in gross provisions of unearned premiums) * (- 100)
Movements in annual return on mathematical provision
In the case of death and survival, policyholders are entitled to a share in the Company's profit realised by life insurance funds management. For policies concluded after 31 December 2017, cost and mortality are the only possible sources of profit. Shares in profit are calculated once a year, at the earliest at the end of the first or second year of the insurance term, depending on the tariff. The amount of the share in the profit is determined by the Management Board.
The Company uses mortality tables for Croatia for the period 2010 to 2012 for the calculation of mathematical reserves.
For the purpose of the calculation of mathematical reserves:
-
for insurance contracts concluded before 2010, an interest rate of 3.25% or 3% was used (the maximum rate prescribed by HANFA is 3.3%),
-
for insurance contracts concluded in 2010 the interest rate used was 3% and 2.75% (the maximum rate prescribed by HANFA is 3%),
-
for insurance contracts concluded after 2010 until 30 June 2016, the interest rate used was 2.75%-1% (the maximum rate prescribed by HANFA is 2.75%).
-
for insurance contracts concluded after 1 July 2016, the interest rate used was 1.75%-0%, (the maximum rate prescribed by HANFA is 1.75% for contracts with a currency clause and 2% for contracts in HRK),
-
for insurance contracts concluded after 1 January 2018, the interest rate used was 1%-0%, and interest rate of 1.20% was used for insurance contracts with a contractual duration of 5 years (the maximum rate prescribed by HANFA is 1%, and 1,75% for insurance contracts with a contractual duration of 5 years).
The average return is calculated as a weighted average return from the mathematical provision in the last two years, where the weights represent the average value of mathematical provision during the year.
The following table shows the movements in the annual return realised from investment of assets covering mathematical provisions for 2020 and 2019:
| 2020 | 2019 | |
|---|---|---|
| in HRK'000 | in HRK'000 | |
| Average balance of mathematical provisions | 2,513,947 | 2,417,608 |
| Return on investments from mathematical provisions | 83,195 | 116,564 |
| Rate of annual return on mathematical provisions | 3.31% | 4.82% |
| Average return on mathematical provisions for the past 2 years | 4.05% | 4.88% |
26. Provisions
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Provisions for jubilee awards | 27,370 | 30,070 | 30,764 | 33,177 |
| Provisions for retirement benefits | 2,659 | 2,946 | 6,715 | 7,162 |
| Provisions for jubilee awards and retirement benefits /i/ |
30,029 | 33,016 | 37,479 | 40,339 |
| Provisions for termination benefits | 7,305 | 16,740 | 7,515 | 16,740 |
| Provisions for legal disputes | 49,205 | 52,961 | 52,965 | 55,325 |
| Other long-term provisions | - | - | - | 1,883 |
| 86,539 | 102,717 | 97,959 | 114,287 |
Movements in provisions for jubilee awards, pensions, legal disputes and other long-term provisions are shown in the table below:
| Company | Provisions for legal disputes |
Provisions for jubilee awards and retirement benefits |
Provisions for termination benefits |
Other long term provisions |
Total |
|---|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| At 1 January 2019 | 49,994 | 31,302 | 17,568 | - | 98,864 |
| Additional provisions | 11,768 | 1,714 | 13,018 | - | 26,500 |
| Decrease in provisions (utilisation) | (8,801) | - | (13,846) | - | (22,647) |
| At 31 December 2019 | 52,961 | 33,016 | 16,740 | - | 102,717 |
| Additional provisions | 8,454 | - | 7,305 | - | 15,759 |
| Decrease in provisions (utilisation) | (12,210) | - | (16,740) | - | (28,950) |
| Decrease in provisions (reversal) | - | (2,987) | - | - | (2,987) |
| At 31 December 2020 | 49,205 | 30,029 | 7,305 | - | 86,539 |
| Group | Provisions for legal disputes |
Provisions for jubilee awards and retirement benefits |
Provisions for termination benefits |
Other long-term provisions |
Total |
|---|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| At 1 January 2019 | 51,928 | 38,519 | 17,568 | - | 108,015 |
| Foreign exchange differences | 7 | 9 | - | 7 | 23 |
| Additional provisions | 13,907 | 3,893 | 13,018 | 1,876 | 32,694 |
| Decrease in provisions (utilisation) | (10,517) | (604) | (13,846) | - | (24,967) |
| Decrease in provisions (reversal) | - | (1,478) | - | - | (1,478) |
| At 31 December 2019 | 55,325 | 40,339 | 16,740 | 1,883 | 114,287 |
| Effect of acquisition (Note 18.3. /i/) | 247 | - | - | - | 247 |
| Foreign exchange differences | 14 | 26 | - | 23 | 63 |
| Additional provisions | 10,755 | 980 | 7,515 | - | 19,250 |
| Decrease in provisions (utilisation) | (13,376) | (862) | (16,740) | - | (30,978) |
| Decrease in provisions (reversal) | - | (3,004) | - | (1,906) | (4,910) |
| At 31 December 2020 | 52,965 | 37,479 | 7,515 | - | 97,959 |
/i/ The following assumptions were used for the calculation:
- The employment termination rate for the Company is 5.72% (2019: 5.32%), while for the Group the average is 6.76% (2019: 5.97%)
- The expected annual salary increase for the Company is 1%, while for the Group is 0.65%;
- The present value of the liability is calculated using the discount rate of 0.45% (2019: 0.45%) for the Company and 0.45%-2.94% for the Group (2019: 0.45%-2.53%).
The table below shows the sensitivity analysis for significant assumptions:
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Change in liabilities | Change in liabilities | Change in liabilities | Change in liabilities | |
| Discount rate -10% | 105 | 119 | 151 | 165 |
| Discount rate +10% | (105) | (118) | (149) | (163) |
| Employment termination rate -10% |
1,665 | 1,712 | 2,028 | 2,074 |
| Employment termination rate +10% |
(1,544) | (1,594) | (1,880) | (1,928) |
27. Financial liabilities
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Lease liabilities | 261,999 | 253,792 | 301,613 | 284,141 |
| Preference shares | 12,250 | 12,250 | 12,250 | 12,250 |
| Other financial liabilities | 2,603 | - | 2,603 | - |
| Derivative financial instruments (Note 19.5) | 7,426 | 5,625 | 7,426 | 5,625 |
| 284,278 | 271,667 | 323,892 | 302,016 |
Net debt:
| Company | Company | Group | Group | |||
|---|---|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |||
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |||
| Cash and cash equivalents | 512,936 | 125,320 | 669,425 | 217,367 | ||
| Lease liabilities | (261,999) | (253,792) | (301,613) | (284,141) | ||
| Net debt | 250,937 | (128,472) | 367,812 | (66,774) | ||
Net debt reconciliation:
| Company | Company | Company | Group | Group | Group | |
|---|---|---|---|---|---|---|
| Cash and cash equivalents |
Lease liabilities |
Total | Cash and cash equivalents |
Lease liabilities |
Total | |
| 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| At 1 January | 125,320 | (253,792) | (128,472) | 217,367 | (284,141) | (66,774) |
| Cash flow | 387,616 | - | 387,616 | 452,058 | - | 452,058 |
| Lease payments | - | 20,066 | 20,066 | - | 28,953 | 28,953 |
| Increases based on new contracts | - | (22,343) | (22,343) | - | (39,934) | (39,934) |
| Canceled contracts | - | 6,316 | 6,316 | - | 7,686 | 7,686 |
| Interest expense | - | (9,497) | (9,497) | - | (10,991) | (10,991) |
| Foreign exchange differences | - | (2,748) | (2,748) | - | (2,991) | (2,991) |
| Foreign exchange differences arising on translation of financial statements of foreign operations |
- | (1) | (1) | - | (195) | (195) |
| At 31 December | 512,936 | (261,999) | 250,937 | 669,425 | (301,613) | 367,812 |
| Company | Company | Company | Group | Group | Group | |
|---|---|---|---|---|---|---|
| Cash and cash equivalents |
Lease liabilities |
Total | Cash and cash equivalents |
Lease liabilities |
Total | |
| 2019 | 2019 | 2019 | 2019 | 2019 | 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| At 1 January | 369,714 | - | 369,714 | 456,717 | (2,458) | 454,259 |
| Cash flow | (244,394) | - | (244,394) | (239,350) | - | (239,350) |
| Initial recognition IFRS 16 - 1 January 2019 |
- | (252,011) | (252,011) | - | (282,829) | (282,829) |
| Lease payments | - | 19,096 | 19,096 | - | 25,770 | 25,770 |
| Increases based on new contracts | - | (10,585) | (10,585) | - | (13,680) | (13,680) |
| Interest expense | - | (9,260) | (9,260) | - | (10,713) | (10,713) |
| Foreign exchange differences | - | (1,032) | (1,032) | - | (898) | (898) |
| Foreign exchange differences arising on translation of financial statements of foreign operations |
- | - | - | - | 667 | 667 |
| At 31 December | 125,320 | (253,792) | (128,472) | 217,367 | (284,141) | (66,774) |
27.1. Lease liabilities
The maturity of lease liabilities is presented below:
| Company | Group |
|---|---|
| 31 Dec. 2020 | 31 Dec. 2020 |
| in HRK'000 | in HRK'000 |
| 12,060 | 20,196 |
| 12,033 | 21,886 |
| 11,773 | 18,259 |
| 11,520 | 15,267 |
| 11,888 | 15,393 |
| 202,725 | 210,612 |
| 261,999 | 301,613 |
| Company | Group | ||
|---|---|---|---|
| 31 Dec. 2019 | 31 Dec. 2019 | ||
| in HRK'000 | in HRK'000 | ||
| 2020 | 12,328 | 16,918 | |
| 2021 | 10,888 | 14,309 | |
| 2022 | 9,888 | 12,958 | |
| 2023 | 9,812 | 12,951 | |
| 2024 | 9,968 | 11,694 | |
| 2025 and later | 200,908 | 215,311 | |
| 253,792 | 284,141 |
The amounts recognised in the statement of financial position and movements of right-of-use assets during the year are presented in Note 16 Property and equipment.
The following is presented in Statement of comprehensive income:
| Company | Company | Group | Group | ||
|---|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | ||
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | ||
| Depreciation expense of right-of-use assets | |||||
| Buildings | 11,840 | 11,461 | 18,108 | 17,199 | |
| Vehicles | 2,762 | 2,018 | 2,724 | 2,736 | |
| Other | - | - | 218 | - | |
| 14,602 | 13,479 | 21,050 | 19,935 | ||
| Interest on lease liabilities | 9,497 | 9,260 | 10,857 | 10,585 | |
| Expenses relating to short-term leases | 3,443 | 4,639 | 3,443 | 5,508 | |
| Expenses relating to leases of low-value assets | 8,528 | 7,939 | 9,390 | 7,939 |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
28. Insurance contract and other liabilities and deferred income
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Insurance contract liabilities | 79,842 | 83,028 | 92,699 | 98,302 |
| Reinsurance liabilities | 90,290 | 43,715 | 96,612 | 46,631 |
| Other liabilities | 92,211 | 96,074 | 133,831 | 143,307 |
| Accrued expenses | 117,890 | 132,093 | 125,596 | 137,036 |
| Deferred income | 168,616 | 202,809 | 173,873 | 208,735 |
| 548,849 | 557,719 | 622,611 | 634,011 |
/i/ Insurance contract liabilities
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Liabilities for claims and contracted insurance amounts |
16,773 | 21,422 | 22,259 | 26,212 |
| Liabilities for contribution to the Fire Department |
589 | 565 | 1,063 | 1,243 |
| Liabilities for the guarantee fund | 37,081 | 33,539 | 37,404 | 33,929 |
| Liabilities for advances received for the insurance premium |
9,004 | 10,899 | 10,373 | 12,543 |
| Liabilities to the Croatian Insurance Bureau | 60 | 77 | 60 | 77 |
| Fee payable to the Croatian Financial Services Supervisory Agency |
186 | 173 | 428 | 173 |
| Liabilities for health insurance under motor liability premium |
845 | 813 | 1,469 | 1,525 |
| Other liabilities | 15,304 | 15,540 | 19,643 | 22,600 |
| 79,842 | 83,028 | 92,699 | 98,302 |
/ii/ Liabilities from coinsurance and reinsurance
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Reinsurance premiums payable | 88,001 | 40,822 | 91,377 | 42,735 |
| Coinsurance premiums payable - domestic | 2,289 | 2,893 | 4,620 | 3,505 |
| Coinsurance premiums payable - foreign | - | - | 615 | 391 |
| 90,290 | 43,715 | 96,612 | 46,631 |
CROATIA osiguranje d.d., Zagreb Notes to the financial statements for 2020
/iii/ Other liabilities
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Trade payables | 42,806 | 47,724 | 53,321 | 68,138 |
| Advances received | 328 | 639 | 3,595 | 2,678 |
| Liabilities for net salaries | 20,943 | 20,383 | 28,010 | 25,871 |
| Liabilities for contributions from salaries | 5,380 | 5,134 | 6,797 | 6,022 |
| Liabilities for tax and surtax from salaries | 2,733 | 3,168 | 2,992 | 3,423 |
| Liabilities for contributions on salaries | 4,334 | 4,214 | 5,599 | 5,098 |
| Dividends payable | 2,443 | 1,432 | 2,469 | 1,458 |
| Liability to the state for sold flats | 204 | 660 | 204 | 660 |
| Due to employees | 105 | 272 | 2,055 | 1,585 |
| Liabilities for tax on motor liability and motor hull insurance |
8,184 | 7,828 | 8,914 | 8,653 |
| Other liabilities | 4,751 | 4,620 | 19,875 | 19,721 |
| 92,211 | 96,074 | 133,831 | 143,307 |
/iv/ Accrued expenses and deferred income
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Accrued expenses for unused vacation days | 13,533 | 15,160 | 14,742 | 16,004 |
| Other accrued expenses | 104,357 | 116,933 | 110,854 | 121,032 |
| Total accrued expenses | 117,890 | 132,093 | 125,596 | 137,036 |
| Deferred income from recourses /i/ | 154,960 | 192,744 | 154,960 | 192,744 |
| Other deferred income | 13,656 | 10,065 | 18,913 | 15,991 |
| Total deferred income | 168,616 | 202,809 | 173,873 | 208,735 |
| 286,506 | 334,902 | 299,469 | 345,771 |
/i/ Deferred income from recourses, due to uncertainty of collection, in the amount of HRK 154,960 thousand (31 December 2019: HRK 192,744 thousand) relates to deferred income from recourses which are either open or subject to a final settlement for payment (see Note 22.3). When the refusal of payment leads to these recourse receivables being sued, then the recourse receivable and deferred income are transferred to off-balance-sheet records.
29. Off-balance-sheet items
| Company | Company | Group | Group | |
|---|---|---|---|---|
| 31 Dec. 2020 | 31 Dec. 2019 | 31 Dec. 2020 | 31 Dec. 2019 | |
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Forward contracts | 1,943,791 | 1,690,544 | 1,943,791 | 1,690,544 |
| Premium receivables from companies in bankruptcy |
205,153 | 200,190 | 224,257 | 219,144 |
| Shares and stakes of companies in bankruptcy | 22,878 | 22,878 | 36,189 | 34,588 |
| Placements and interest from companies in bankruptcy |
66,480 | 63,937 | 76,028 | 73,416 |
| Default interest on placements | 34,882 | 34,880 | 34,882 | 34,880 |
| Other off-balance-sheet items | 1,539 | 1,539 | 1,539 | 1,539 |
| 2,274,723 | 2,013,968 | 2,316,686 | 2,054,111 | |
| Recourse receivables | 775,315 | 770,013 | 792,908 | 788,155 |
| 3,050,038 | 2,783,981 | 3,109,594 | 2,842,266 |
30. Related party transactions
The Company considers that it has an immediate related party relationship with its ultimate controlling party, the company ADRIS grupa d.d. and the Republic of Croatia (CERP) and companies with majority state ownership or in which the state has significant influence, companies under control, under common control or under influence of key management personnel and their close family members in accordance with the definitions contained in International Accounting Standard 24 "Related Party Disclosures" (IAS 24). The Group considers the members of the Management Board and Supervisory Board, and directors of departments as key management.
Key related party transactions
The Company pays income tax in the Republic of Croatia, as described in Note 13. The Company also pays personal income tax as described in Notes 9 and 10.2. With regard to taxes, the Company has no outstanding liabilities towards the Republic of Croatia. The Company invests in securities of the Republic of Croatia and other state-owned companies as listed in the table below with interest rates ranging from 0.25% to 6.50% and with maturities of 2021-2034.
The Company has given loans to the related company Croatia-tehnički pregled d.o.o. in the total value of HRK 181.4 million at an interest rate of 5%, to the company Core 1 d.o.o. in the total amount of HRK 95 million at an interest rate of 4% and 5.14% respectively, to the company Croatia osiguranje d.d., non-life insurance company, Skopje in the amount of HRK 6 million at an interest rate of 2.3%, to the company CO Zdravlje d.o.o. in the amount of HRK 19 million at an interest rate of 6.10%, and to the company CROATIA Premium d.o.o. in the total amount of HRK 7 million at an interest rate of 3.46%, for the purpose of additional investments.
Other relationships with subsidiaries, joint ventures and associates within the Group and other companies that have a significant impact on the Company's financial statements as well as companies in which the state has majority ownership or significant influence are presented in the following tables for 2020 and 2019:
| Subsidiaries | Associates | ADRIS GRUPA d.d. (parent company) |
Other ADRIS GRUPA companies |
|
|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Loans and receivables | 256,438 | 1,990 | - | 43,714 |
| Receivables from insurance | 1,184 | 1 | 73 | 2,298 |
| Other receivables | 993 | 54 | 164 | 328 |
| Insurance liabilities | 721 | - | - | - |
| Technical provisions | 19,075 | - | - | - |
| Other liabilities | 1,011 | - | 1,660 | 965 |
| Written premiums | 5,210 | 222 | 632 | 19,414 |
| Change in gross provisions for unearned premiums |
3,551 | - | - | - |
| Investment income | 20,022 | 11,542 | - | 2,416 |
| Other income | 1,185 | - | 148 | - |
| Claims incurred | 14,690 | - | 2 | 8,784 |
| Operating expenses | 4,545 | - | 14,415 | 2,678 |
Transactions and balances with the parent company and other related entities of the Company for 2020:
Transactions and balances with the parent company and other related entities of the Group for 2020:
| Associates | ADRIS GRUPA d.d. (Parent company) |
Other ADRIS GRUPA companies |
||
|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | ||
| Loans and receivables | 1,990 | - | 43,714 | |
| Receivables from insurance | 1 | 73 | 2,298 | |
| Other receivables | 54 | 171 | 415 | |
| Insurance liabilities | - | - | - | |
| Technical provisions | - | - | - | |
| Other liabilities | - | 1,694 | 1,016 | |
| Written premiums | 222 | 632 | 19,414 | |
| Change in gross provisions for unearned premiums | - | - | - | |
| Investment income | 11,542 | - | 2,416 | |
| Other income | - | 157 | 96 | |
| Claims incurred | - | 2 | 8,784 | |
| Operating expenses | - | 14,839 | 2,708 |
Transactions and balances with parties related to the shareholder with significant influence on the Company and the Group (Republic of Croatia and all companies with majority state ownership) for 2020:
| Company | Group | |
|---|---|---|
| in HRK'000 | in HRK'000 | |
| Debt securities | 5,578,021 | 5,598,634 |
| Loans and receivables | - | - |
| Receivables from insurance business | 13,359 | 13,359 |
| Other receivables | 1,691 | 1,692 |
| Insurance liabilities | - | - |
| Other liabilities | 1,332 | 1,506 |
| Insurance income | 108,718 | 108,718 |
| Interest income | 150,235 | 150,551 |
| Other income | 11,779 | 11,779 |
| Insurance expenses | 16,923 | 16,923 |
| Other expenses | 26,471 | 27,932 |
Transactions and balances with the parent company and other related entities of the Company for 2019:
| Subsidiaries | Associates | ADRIS GRUPA d.d. (Parent company) |
Other ADRIS GRUPA companies |
|
|---|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | in HRK'000 | |
| Loans and receivables | 256,307 | 1,990 | - | 53,959 |
| Receivables from insurance | 361 | 1 | 3 | 964 |
| Other receivables | 914 | - | 95 | 207 |
| Insurance liabilities | 596 | - | - | 23 |
| Technical provisions | 18,564 | - | - | - |
| Other liabilities | 189 | - | 1,613 | 403 |
| Written premiums | 4,716 | 227 | 482 | 17,216 |
| Change in gross provisions for unearned premiums |
5,776 | - | - | - |
| Investment income | 20,581 | 13,592 | - | 2,823 |
| Other income | 1,020 | - | 125 | - |
| Claims incurred | 15,046 | - | 67 | 38,745 |
| Operating expenses | 2,486 | - | 14,312 | 1,906 |
Transactions and balances with the parent company and other related entities of the Group for 2019:
| Associates | ADRIS GRUPA d.d. (Parent company) |
Other ADRIS GRUPA companies |
|
|---|---|---|---|
| in HRK'000 | in HRK'000 | in HRK'000 | |
| Loans and receivables | 1,990 | - | 53,959 |
| Receivables from insurance | 1 | 3 | 964 |
| Other receivables | - | 96 | 227 |
| Insurance liabilities | - | - | 23 |
| Technical provisions | - | - | - |
| Other liabilities | - | 1,646 | 403 |
| Written premiums | 227 | 482 | 17,216 |
| Change in gross provisions for unearned premiums | - | - | - |
| Investment income | 13,592 | - | 2,823 |
| Other income | - | 125 | 37 |
| Claims incurred | - | 67 | 38,745 |
| Operating expenses | - | 14,728 | 1,934 |
Transactions and balances with parties related to the shareholder with significant influence on the Company and the Group (Republic of Croatia and all companies with majority state ownership) for 2019:
| Company | Group | |
|---|---|---|
| in HRK'000 | in HRK'000 | |
| Debt securities | 5,781,723 | 5,799,211 |
| Loans and receivables | 32,108 | 32,108 |
| Receivables from insurance business | 13,235 | 13,235 |
| Other receivables | 1,972 | 1,979 |
| Insurance liabilities | 77 | 77 |
| Other liabilities | 3,211 | 3,463 |
| Insurance income | 97,527 | 97,527 |
| Interest income | 164,557 | 164,851 |
| Other income | 11,656 | 11,656 |
| Insurance expenses | 18,868 | 18,868 |
| Other expenses | 34,440 | 35,017 |
/i/ Key management compensation
Company:
| 31 Dec.2020 in HRK '000 |
31 Dec.2019 in HRK '000 |
|||||||
|---|---|---|---|---|---|---|---|---|
| Management | Department directors |
Supervisory Board |
Total | Management | Department directors |
Supervisory Board |
Total | |
| Key management compensation |
13,272 | 20,201 | 90 | 33,563 | 15,268 | 20,627 | 84 | 35,979 |
| Termination benefits | - | 1,448 | - | 1,448 | 1,486 | 641 | - | 2,127 |
| 13,272 | 21.649 | 90 | 35.011 | 16,754 | 21,268 | 84 | 38,106 |
| 31 Dec.2020 | 31 Dec.2019 | |||||||
|---|---|---|---|---|---|---|---|---|
| in HRK '000 | in HRK '000 | |||||||
| Management | Department directors |
Supervisory Board |
Total | Management | Department directors |
Supervisory Board |
Total | |
| Key management compensation |
23,751 | 25,411 | 219 | 49,381 | 25,183 | 29,270 | 208 | 54,661 |
| Termination benefits | 754 | 1,448 | - | 2,202 | 1,837 | 1,111 | - | 2,948 |
| 24,505 | 26,859 | 219 | 51,583 | 27,020 | 30,381 | 208 | 57,609 |
Group:
The key management personnel of the Group are members of the Management Board and Supervisory Board and directors of departments.
Key management compensation includes gross salary, life insurance premiums, benefits in kind, bonuses, termination benefits and compensation of the Supervisory Board.
31. Contingent liabilities
The Group has contingent liabilities in terms of issued collection instruments in the course of its business operations. It is unlikely that significant obligations could result from the above.
On account of its principal activity, the Group is subject to legal disputes initiated by injured parties. Based on the opinions of legal advisors, the Management Board has assessed which legal disputes require provisions, since it is probable that the court will not rule in the Group's favour. Legal disputes for which no provision have been made and were designated as contingent liabilities, it has been estimated that the final outcome will be in favour of the Group and that no outflow of resources will occur.
Provisions for legal disputes arising from claims incurred were provided for within claims provisions. The Management Board believes that these provisions are sufficient.
32. Commitments
As at 31 December 2020, the Company's contractual obligations for future investments amount to HRK 158,893 thousand based on binding bids for investments in venture capital funds (31 December 2019: HRK 114,769 thousand).
33. Audit of financial statements
The auditors of the Group's financial statements have provided services in 2020 in the amount of HRK 2,390 thousand plus value added tax (2019: HRK 2,208 thousand plus value added tax). The Company was provided services in the amount of HRK 1,522 thousand plus value added tax (2019: HRK 1,315 thousand plus value added tax). Services in 2020 and 2019 relate to the costs of the statutory audit of annual financial statements and related audit services.
During 2019 and 2020, PricewaterhouseCoopers d.o.o. ("PwC") provided educational services.
34. Events after the balance sheet date
There were no significant events after the end of the reporting period.
Statements prescribed by the Ordinance of the Croatian Financial Services Supervisory Agency
Pursuant to the Ordinance on the structure and content of financial statements and additional reports of insurance and reinsurance companies (Official Gazette 37/16, 96/18, 50/19 and 98/20) which was issued by the Croatian Financial Services Supervisory Agency on the basis of the Insurance Act and the Accounting Act, below we present the separate and consolidated financial statements of the company CROATIA osiguranje d.d., Zagreb in the form required by the stated Ordinance.
The reconciliation between the financial statements, as prescribed by the Ordinance on the structure and content of the financial statements of insurance and reinsurance Companies, and the annual financial statements prepared in accordance with the IFRS reporting framework is presented in section entitled "Reconciliation of the financial statements and supplementary statements for the Croatian Financial Services Supervisory Agency".
| Position | Sum | Position | Previous year | Current year | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| no. | elements | code | Position description | Life | Non-life | Total | Life | Non-life | Total | ||
| 001 | 002+003 | I | INTANGIBLE ASSETS | 0 | 36,992,651 | 36,992,651 | 0 | 96,858,015 | 96,858,015 | ||
| 002 003 |
1 2 |
Goodwill Other intangible assets |
0 0 |
0 36,992,651 |
0 36,992,651 |
0 0 |
0 96,858,015 |
0 96,858,015 |
|||
| 004 | 005+006+00 | II | TANGIBLE ASSETS | 9,973 | 641,779,864 | 641,789,837 | 14,133 | 553,220,673 | 553,234,805 | ||
| 005 | 7 | 1 | Land and buildings used for business | 0 | 355,254,200 | 355,254,200 | 0 | 264,388,018 | 264,388,018 | ||
| 006 | 2 | activities Equipment |
9,973 | 18,585,898 | 18,595,871 | 14,051 | 26,833,703 | 26,847,754 | |||
| 007 | 3 | Other tangible assets and inventories | 0 | 267,939,766 | 267,939,766 | 82 | 261,998,952 | 261,999,034 | |||
| 008 | 009+010+01 4+033 |
III | INVESTMENTS | 3,054,031,686 | 5,465,347,333 | 8,519,379,019 | 3,114,967,355 | 5,376,935,615 | 8,491,902,970 | ||
| 009 | A | Investments in land and buildings not used for business activities |
0 | 367,521,081 | 367,521,081 | 0 | 456,652,567 | 456,652,567 | |||
| 010 | 011+012+01 | B | Investments in subsidiaries, associates and participation in joint |
0 | 279,110,925 | 279,110,925 | 0 | 376,515,932 | 376,515,932 | ||
| 3 | ventures | ||||||||||
| 011 012 |
1 2 |
Shares and stakes in subsidiaries Shares and stakes in associates |
0 0 |
245,422,632 5,688,293 |
245,422,632 5,688,293 |
0 0 |
342,827,639 5,688,293 |
342,827,639 5,688,293 |
|||
| 013 | 3 | Shares and stakes in joint ventures | 0 | 28,000,000 | 28,000,000 | 0 | 28,000,000 | 28,000,000 | |||
| 014 | 015+018+02 3+029 |
C | Financial assets | 3,054,031,686 | 4,818,715,327 | 7,872,747,013 | 3,114,967,355 | 4,543,767,116 | 7,658,734,471 | ||
| 015 016 |
016+017 | 1 1.1 |
Held-to-maturity financial assets Debt financial instruments |
1,228,357,915 1,228,357,915 |
944,029,371 944,029,371 |
2,172,387,286 2,172,387,286 |
1,083,787,700 1,083,787,700 |
998,546,873 998,546,873 |
2,082,334,573 2,082,334,573 |
||
| 017 | 1.2 | Other | 0 | 0 | 0 | 0 | |||||
| 018 | 019+020+02 1+022 |
2 | Financial assets available for sale | 1,628,859,849 | 2,817,918,673 | 4,446,778,522 | 1,804,243,755 | 2,731,918,505 | 4,536,162,260 | ||
| 019 | 2.1 | Equity financial instruments | 24,551,993 | 498,028,031 | 522,580,024 | 29,250,178 | 506,883,860 | 536,134,038 | |||
| 020 021 |
2.2 2.3 |
Debt financial instruments Shares in investment funds |
1,582,180,361 22,127,495 |
2,255,225,971 64,664,672 |
3,837,406,331 86,792,167 |
1,718,133,233 56,860,343 |
2,089,821,103 135,213,542 |
3,807,954,336 192,073,886 |
|||
| 022 | 2.4 | Other | 0 | 0 | 0 | 0 | 0 | 0 | |||
| 023 | 024+025+02 6+027+028 |
3 | Financial assets at fair value through profit or loss |
589,945 | 47,661,095 | 48,251,040 | 318,108 | 20,984,620 | 21,302,728 | ||
| 024 025 |
3.1 3.2 |
Equity financial instruments Debt financial instruments |
0 0 |
17,070,930 0 |
17,070,930 0 |
0 0 |
17,187,511 0 |
17,187,511 0 |
|||
| 026 | 3.3 | Derivative financial instruments | 589,945 | 3,080,534 | 3,670,479 | 318,108 | 3,797,109 | 4,115,217 | |||
| 027 028 |
3.4 3.5 |
Shares in investment funds Other |
0 0 |
27,509,631 0 |
27,509,631 0 |
0 0 |
0 0 |
0 0 |
|||
| 029 | 030+031+03 | 4 | Loans and receivables | 196,223,977 | 1,009,106,188 | 1,205,330,165 | 226,617,793 | 792,317,117 | 1,018,934,910 | ||
| 030 | 2 | 4.1 | Deposits with credit institutions | 144,001,733 | 540,294,540 | 684,296,274 | 175,737,297 | 317,322,719 | 493,060,016 | ||
| 031 | 4.2 | Loans | 52,222,244 | 312,837,084 | 365,059,328 | 47,414,600 | 301,235,373 | 348,649,973 | |||
| 032 033 |
4.3 D |
Other Deposits with cedent |
0 0 |
155,974,564 0 |
155,974,564 0 |
3,465,895 0 |
173,759,025 0 |
177,224,921 0 |
|||
| 034 | IV | INVESTMENTS FOR THE ACCOUNT AND RISK OF LIFE INSURANCE POLICYHOLDER |
445,325,559 | 0 | 445,325,559 | 400,250,132 | 0 | 400,250,132 | |||
| 035 | 036+037+03 8+039+040+ 041+042 |
V | REINSURANCE SHARE IN TECHNICAL PROVISIONS |
25,753 | 213,507,427 | 213,533,180 | 12,263 | 474,856,240 | 474,868,503 | ||
| 036 | 1 | Unearned premiums, reinsurance share Mathematical provisions for insurance, |
3,724 | 42,185,167 | 42,188,891 | 0 | 58,699,359 | 58,699,359 | |||
| 037 | 2 | reinsurance share | 22,030 | 0 | 22,030 | 12,263 | 0 | 12,263 | |||
| 038 | 3 | Claims provisions, reinsurance share Provisions for bonuses and discounts, |
0 | 171,322,260 | 171,322,260 | 0 | 416,156,881 | 416,156,881 | |||
| 039 | 4 | reinsurance share Provisions for claims fluctuation, |
0 | 0 | 0 | 0 | 0 | 0 | |||
| 040 | 5 | reinsurance share | 0 | 0 | 0 | 0 | 0 | 0 | |||
| 041 | 6 | Other technical provisions for insurance, reinsurance share |
0 | 0 | 0 | 0 | 0 | 0 | |||
| 042 | 7 | Special provisions for life insurance where the policyholder bears the investment risk, reinsurance share |
0 | 0 | 0 | 0 | 0 | 0 | |||
| 043 | 044+045 | VI | DEFERRED AND CURRENT TAX ASSETS |
2,028,656 | 66,492,988 | 68,521,644 | 1,777,335 | 65,691,032 | 67,468,366 | ||
| 044 | 1 | Deferred tax assets | 2,028,656 | 66,492,988 | 68,521,644 | 1,777,335 | 65,691,032 | 67,468,366 | |||
| 045 | 047+050+05 | 2 | Current tax assets | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 046 | 1 | VII | RECEIVABLES | 503,661 | 854,729,992 | 855,233,653 | 622,574 | 741,344,471 | 741,967,045 | ||
| 047 048 |
048+049 | 1 1.1 |
Receivables from insurance business From policyholders |
235,763 0 |
465,705,701 464,918,705 |
465,941,464 464,918,705 |
234,219 0 |
486,139,966 485,689,766 |
486,374,186 485,689,766 |
||
| 049 | 1.2 | From agents or insurance brokers Receivables from reinsurance |
235,763 | 786,996 | 1,022,759 | 234,219 | 450,201 | 684,420 | |||
| 050 | 052+053+05 | 2 | business | 879 | 46,715,736 | 46,716,615 | 413 | 59,037,983 | 59,038,396 | ||
| 051 | 4 | 3 | Other receivables | 267,020 | 342,308,555 | 342,575,575 | 387,941 | 196,166,521 | 196,554,462 | ||
| 052 | 3.1 | Receivables from other insurance business |
0 | 199,851,589 | 199,851,589 | 0 | 164,158,334 | 164,158,334 | |||
| 053 054 |
3.2 3.3 |
Receivables for returns on investments Other receivables |
262,624 4,396 |
997,458 141,459,508 |
1,260,083 141,463,904 |
277,389 110,552 |
756,947 31,251,240 |
1,034,336 31,361,792 |
|||
| 055 | 056-060+061 | VIII | OTHER ASSETS | 25,003,071 | 100,317,264 | 125,320,335 | 62,420,478 | 450,515,970 | 512,936,448 | ||
| 056 | 057+058+05 9 |
1 | Cash at bank and on hand | 25,003,071 | 100,316,752 | 125,319,823 | 62,420,478 | 450,515,458 | 512,935,936 | ||
| 057 | 1.1 | Funds in the business account | 0 | 100,316,752 | 100,316,752 | 0 | 450,515,458 | 450,515,458 | |||
| 058 | 1.2 | Funds in the account of assets covering mathematical provisions |
25,003,071 | 0 | 25,003,071 | 62,420,478 | 0 | 62,420,478 | |||
| 059 | 1.3 | Cash on hand Non-current assets held for sale and |
0 | 0 | 0 | 0 | 0 | 0 | |||
| 060 | 2 | discontinued operations | 0 | 0 | 0 | 0 | 0 | 0 | |||
| 061 | 063+064+06 | 3 | Other PREPAID EXPENSES AND ACCRUED |
0 | 512 | 512 | 0 | 512 | 512 | ||
| 062 063 |
5 | IX 1 |
INCOME Accrued interest and rent |
0 0 |
239,306,560 0 |
239,306,560 0 |
0 0 |
260,751,069 10,000 |
260,751,069 10,000 |
||
| 064 | 2 | Deferred acquisition costs | 0 | 226,109,778 | 226,109,778 | 0 | 208,349,670 | 208,349,670 | |||
| 065 | 3 | Other prepaid expenses and accrued income |
0 | 13,196,782 | 13,196,782 | 0 | 52,391,399 | 52,391,399 | |||
| 066 | 001+004+00 8+034+035+ 043+046+05 |
X | TOTAL ASSETS | 3,526,928,359 | 7,618,474,078 | 11,145,402,437 | 3,580,064,270 | 8,020,173,083 | 11,600,237,353 | ||
| 067 | 5+062 | XI | OFF BALANCE-SHEET ITEMS | 265,956,261 | 2,518,024,767 | 2,783,981,028 | 368,537,309 | 2,681,501,745 | 3,050,039,054 |
STATEMENT OF FINANCIAL POSITION as at 31 December 2020
| Position | Positio | Previous year | Current year | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| no. | Sum elements | n code |
Position description | Life | Non-life | Total | Life | Non-life | Total | |
| 068 | 069+072+073+0 77+081+084 |
XII | EQUITY | 434,798,823 | 2,913,664,885 | 3,348,463,708 | 453,763,908 | 3,080,075,800 | 3,533,839,709 | |
| 069 | 070+071 | 1 | Share capital | 44,288,720 | 545,037,080 | 589,325,800 | 44,288,720 | 545,037,080 | 589,325,800 | |
| 070 | 1.1 | Paid-up capital - ordinary shares | 44,288,720 | 545,037,080 | 589,325,800 | 44,288,720 | 545,037,080 | 589,325,800 | ||
| 071 | 1.2 | Paid-up capital - preference shares | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 072 | 2 | Share premium (capital reserves) | 0 | 681,482,525 | 681,482,525 | 0 | 681,482,525 | 681,482,525 | ||
| 073 | 074+075+076 | 3 | Revaluation reserves | 147,994,829 | 368,660,865 | 516,655,694 | 144,192,801 | 326,931,603 | 471,124,404 | |
| 074 | 3.1 | Land and buildings | 0 | 50,470,925 | 50,470,925 | 0 | 49,173,638 | 49,173,638 | ||
| 075 | 3.2 | Financial assets available for sale | 147,994,829 | 318,189,940 | 466,184,769 | 144,192,801 | 277,757,965 | 421,950,766 | ||
| 076 | 3.3 | Other revaluation reserves | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 077 | 078+079+080 | 4 | Reserves | 85,295,937 | 316,742,639 | 402,038,576 | 85,295,937 | 316,742,639 | 402,038,576 | |
| 078 | 4.1 | Legal reserves | 2,214,436 | 27,864,354 | 30,078,790 | 2,214,436 | 27,864,354 | 30,078,790 | ||
| 079 | 4.2 | Statutory reserves | 7,581,501 | 139,638,995 | 147,220,496 | 7,581,501 | 139,638,995 | 147,220,496 | ||
| 080 | 4.3. | Other reserves | 75,500,000 | 149,239,289 | 224,739,289 | 75,500,000 | 149,239,289 | 224,739,289 | ||
| 081 | 082+083 | 5 | Retained earnings or accumulated loss | 117,543,395 | 748,287,005 | 865,830,400 | 157,219,337 | 1,003,059,796 | 1,160,279,132 | |
| 082 | 5.1 | Retained earnings | 117,543,395 | 748,287,005 | 865,830,400 | 157,219,337 | 1,003,059,796 | 1,160,279,132 | ||
| 083 | 5.2 | Accumulated loss (-) | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 084 | 085+086 | 6 | Profit or loss for the period | 39,675,942 | 253,454,771 | 293,130,713 | 22,767,114 | 206,822,158 | 229,589,272 | |
| 085 | 6.1 | Profit for the period | 39,675,942 | 253,454,771 | 293,130,713 | 22,767,114 | 206,822,158 | 229,589,272 | ||
| 086 | 6.2 | Loss for the period ( - ) | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 087 | XIII | MINORITY LIABILITIES (SUBORDINATED LIABILITIES) |
0 | 0 | 0 | 0 | 0 | 0 | ||
| 088 | XIV | MINORITY INTEREST | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 089 | 090+091+092+0 93+094+095 |
XV | TECHNICAL PROVISIONS | 2,572,182,413 | 3,712,920,109 | 6,285,102,522 | 2,654,028,927 | 3,980,977,359 | 6,635,006,286 | |
| 090 | 1 | Unearned premiums, gross amount | 4,869,308 | 1,130,567,020 | 1,135,436,328 | 5,022,484 | 1,143,856,246 | 1,148,878,729 | ||
| 091 | 2 | Mathematical provisions, gross amount | 2,505,680,869 | 17,908,413 | 2,523,589,282 | 2,554,176,172 | 11,308,894 | 2,565,485,066 | ||
| 092 | 3 | Claims provisions, gross amount | 61,632,236 | 2,532,867,656 | 2,594,499,892 | 94,830,271 | 2,810,611,741 | 2,905,442,012 | ||
| 093 | 4 | Provisions for bonuses and discounts, gross amount |
0 | 7,653,600 | 7,653,600 | 0 | 7,213,900 | 7,213,900 | ||
| 094 | 5 | Provisions for claims fluctuation, gross amount | 0 | 7,055,533 | 7,055,533 | 0 | 7,055,533 | 7,055,533 | ||
| 095 | 6 | Other technical provisions, gross amount | 0 | 16,867,887 | 16,867,887 | 0 | 931,045 | 931,045 | ||
| 096 | XVI | SPECIAL PROVISIONS FOR LIFE INSURANCE WHERE THE POLICYHOLDER BEARS THE INVESTMENT RISK, gross amount |
445,325,559 | 0 | 445,325,559 | 400,250,132 | 0 | 400,250,132 | ||
| 097 | 098+099 | XVII | OTHER PROVISIONS | 2,930,875 | 104,301,522 | 107,232,397 | 2,570,940 | 87,002,391 | 89,573,331 | |
| 098 | 1 | Provisions for pensions and similar obligations | 2,930,875 | 99,785,773 | 102,716,648 | 2,570,940 | 83,967,933 | 86,538,873 | ||
| 099 | 2 | Other provisions | 0 | 4,515,749 | 4,515,749 | 0 | 3,034,458 | 3,034,458 | ||
| 100 | 101+102 | XVIII | DEFERRED AND CURRENT TAX LIABILITY | 32,486,670 | 94,182,105 | 126,668,775 | 31,652,078 | 76,140,059 | 107,792,137 | |
| 101 | 1 | Deferred tax liabilities | 32,486,670 | 81,151,686 | 113,638,356 | 31,652,078 | 71,795,993 | 103,448,072 | ||
| 102 | 2 | Current tax liability | 0 | 13,030,419 | 13,030,419 | 0 | 4,344,066 | 4,344,066 | ||
| 103 | XIX | DEPOSITS RETAINED FROM BUSINESS CEDED TO REINSURANCE |
0 | 0 | 0 | 0 | 0 | 0 | ||
| 104 | 105+106+107 | XX | FINANCIAL LIABILITIES | 300,004 | 271,366,763 | 271,666,767 | 1,528,948 | 282,748,677 | 284,277,625 | |
| 105 | 1 | Loan liabilities | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 106 | 2 | Liabilities for issued financial instruments | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 107 | 3 | Other financial liabilities | 300,004 | 271,366,763 | 271,666,767 | 1,528,948 | 282,748,677 | 284,277,625 | ||
| 108 | 109+110+111+ 112 |
XXI | OTHER LIABILITIES | 16,312,650 | 209,728,028 | 226,040,678 | 9,389,826 | 253,603,409 | 262,993,236 | |
| 109 | 1 | Liabilities from direct insurance business | 4,067,620 | 78,960,077 | 83,027,697 | 3,266,164 | 76,576,333 | 79,842,497 | ||
| 110 | 2 | Liabilities from coinsurance and reinsurance | 21,961 | 43,692,666 | 43,714,627 | 10,330 | 90,279,328 | 90,289,658 | ||
| 111 | 3 | Liabilities for disposal and discontinued operations |
0 | 0 | 0 | 0 | 0 | 0 | ||
| 112 | 4 | Other liabilities | 12,223,070 | 87,075,284 | 99,298,354 | 6,113,332 | 86,747,749 | 92,861,081 | ||
| 113 | 114+115 | XXII | ACCRUED EXPENSES AND DEFERRED INCOME | 22,591,365 | 312,310,666 | 334,902,031 | 26,879,509 | 259,625,388 | 286,504,897 | |
| 114 | 1 | Deferred reinsurance commission | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 115 | 2 | Other accrued expenses and deferred income | 22,591,365 | 312,310,666 | 334,902,031 | 26,879,509 | 259,625,388 | 286,504,897 | ||
| 116 | 068+087+088+0 89+096+097+10 0+103+104+108 +113 |
XXIII | TOTAL EQUITY AND LIABILITIES | 3,526,928,359 | 7,618,474,078 | 11,145,402,437 | 3,580,064,270 | 8,020,173,083 | 11,600,237,353 | |
| 117 | XXIV | OFF-BALANCE-SHEET ITEMS | 265,956,261 | 2,518,024,767 | 2,783,981,028 | 368,537,309 | 2,681,501,745 | 3,050,039,054 |
STATEMENT OF FINANCIAL POSITION as at 31 December 2020
Note: position 088 is completed by companies preparing consolidated financial statements.
in HRK
| in HRK | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Posit ion |
Sum elements | Position | Previous year | Current year | ||||||
| no. | code | Position description | Total | Life | Non-life | Total | ||||
| 002+003+004+0 | Life | Non-life | ||||||||
| 001 | 05+006 | I | Earned premiums (income) | 516,797,292 | 1,968,720,774 | 2,485,518,066 | 453,368,816 | 2,045,516,759 | 2,498,885,575 | |
| 002 003 |
1 2 |
Gross written premiums Value adjustment and charged premium value adjustment |
517,407,481 0 |
2,221,290,222 3,810,299 |
2,738,697,702 3,810,299 |
453,598,194 0 |
2,288,220,230 2,775,347 |
2,741,818,424 2,775,347 |
||
| 004 | 3 | Premiums ceded to reinsurance (-) | -89,149 | -247,719,321 | -247,808,470 | -72,479 | -248,703,784 | -248,776,263 | ||
| 005 | 4 | Change in gross provisions for unearned premiums (+/-) | -523,834 | 4,452,474 | 3,928,640 | -153,175 | -13,289,226 | -13,442,401 | ||
| 006 | 5 | Change in provisions for unearned premiums, reinsurance share (+/-) |
2,794 | -13,112,899 | -13,110,105 | -3,724 | 16,514,192 | 16,510,468 | ||
| 007 | 008+009+010+0 11+012+013+01 4 |
II | Investment income | 131,978,406 | 363,146,323 | 495,124,729 | 141,183,338 | 245,380,706 | 386,564,044 | |
| 008 | 1 | Income from subsidiaries, associates and participation in joint ventures |
1,229,923 | 43,723,450 | 44,953,373 | 2,103,298 | 23,594,252 | 25,697,549 | ||
| 009 | 2 | Income from investments in land and buildings | 0 | 41,040,287 | 41,040,287 | 0 | 28,494,465 | 28,494,465 | ||
| 010 011 |
3 4 |
Interest income Unrealized gains on investments |
106,303,691 475,060 |
109,626,509 7,325,949 |
215,930,200 7,801,009 |
88,370,335 280,468 |
91,126,147 3,756,462 |
179,496,482 4,036,930 |
||
| 012 | 5 | Realised gains on investments | 15,191,219 | 45,380,715 | 60,571,933 | 20,090,027 | 69,738,695 | 89,828,722 | ||
| 013 | 6 | Net foreign exchange gains | 8,768,666 | 5,258,179 | 14,026,845 | 30,327,779 | 6,864,874 | 37,192,653 | ||
| 014 015 |
7 III |
Other investment income Income from fees and commissions |
9,848 2,154,864 |
110,791,234 33,928,007 |
110,801,082 36,082,871 |
11,431 2,100,261 |
21,805,810 39,477,927 |
21,817,241 41,578,188 |
||
| 016 | IV | Other insurance - technical income, net of reinsurance | 203,030 | 27,839,650 | 28,042,680 | 441,516 | 30,605,116 | 31,046,632 | ||
| 017 | V | Other income | 3,949 | 21,285,273 | 21,289,222 | 846 | 9,017,435 | 9,018,281 | ||
| 018 019 |
019+022 020+021 |
VI 1 |
Claims incurred, net Settled claims |
-356,548,481 -363,782,364 |
-1,095,772,610 -1,132,561,442 |
-1,452,321,091 -1,496,343,806 |
-482,361,296 -449,163,260 |
-1,200,100,950 -1,167,191,487 |
-1,682,462,246 -1,616,354,746 |
|
| 020 | 1.1 | Gross amount (-) | -363,782,364 | -1,246,902,469 | -1,610,684,833 | -449,163,260 | -1,270,466,176 | -1,719,629,436 | ||
| 021 | 1.2 | Reinsurance share (+) | 0 | 114,341,027 | 114,341,027 | 0 | 103,274,690 | 103,274,690 | ||
| 022 023 |
023+024 | 2 2.1 |
Change in claims provisions (+/-) Gross amount (-) |
7,233,883 7,233,883 |
36,788,832 25,714,963 |
44,022,715 32,948,846 |
-33,198,036 -33,198,036 |
-32,909,464 -277,744,085 |
-66,107,500 -310,942,121 |
|
| 024 | 2.2 | Reinsurance share (+) | 0 | 11,073,869 | 11,073,869 | 0 | 244,834,621 | 244,834,621 | ||
| 025 | 026+029 | VII | Change in mathematical and other technical provisions, | -167,716,110 | 15,302,095 | -152,414,015 | -48,505,070 | 22,976,061 | -25,529,009 | |
| 026 | 027+028 | 1 | net of reinsurance Change in mathematical provisions (+/-) |
-167,716,110 | 11,342,252 | -156,373,858 | -48,505,070 | 6,599,519 | -41,905,551 | |
| 027 | 1.1 | Gross amount (-) | -167,726,381 | 11,342,252 | -156,384,128 | -48,495,303 | 6,599,519 | -41,895,784 | ||
| 028 | 1.2 | Reinsurance share (+) | 10,271 | 0 | 10,271 | -9,767 | 0 | -9,767 | ||
| 029 | 030+031 | 2 | Change in other technical provisions, net of reinsurance (+/-) |
0 | 3,959,843 | 3,959,843 | 0 | 16,376,542 | 16,376,542 | |
| 030 | 2.1 | Gross amount (-) | 0 | 3,959,843 | 3,959,843 | 0 | 16,376,542 | 16,376,542 | ||
| 031 | 2.2 | Reinsurance share (+) | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 032 | 033+034 | VIII | Change in special provisions for life insurance where the policyholder bears the investment risk, net of reinsurance (+/-) |
11,314,972 | 0 | 11,314,972 | 44,416,501 | 0 | 44,416,501 | |
| 033 | 1 | Gross amount (-) | 11,314,972 | 0 | 11,314,972 | 44,416,501 | 0 | 44,416,501 | ||
| 034 | 2 | Reinsurance share (+) Expenses for premium returns (bonuses and discounts), |
0 | 0 | 0 | 0 | 0 | 0 | ||
| 035 | 036+037 | IX | net of reinsurance | 0 | -7,645,260 | -7,645,260 | 0 | -5,277,788 | -5,277,788 | |
| 036 037 |
1 2 |
Depending on the result (bonuses) Irrespective of result (discounts) |
-7,645,260 | -7,645,260 0 |
0 0 |
-5,277,788 0 |
-5,277,788 0 |
|||
| 038 | 039+043 | X | Operating expenses (business expenditures), net | -84,348,495 | -832,018,936 | -916,367,431 | -65,446,336 | -799,044,691 | -864,491,027 | |
| 039 | 040+041+042 | 1 | Acquisition costs | -37,326,726 | -474,735,492 | -512,062,219 | -28,951,976 | -448,794,543 | -477,746,519 | |
| 040 | 1.1 | Commission Other acquisition costs |
-11,400,130 | -263,988,593 | -275,388,723 | -7,464,637 | -248,858,271 | -256,322,908 | ||
| 041 042 |
1.2 1.3 |
Change in deferred acquisition costs (+/-) | -25,926,596 0 |
-185,454,230 -25,292,670 |
-211,380,826 -25,292,670 |
-21,487,339 0 |
-182,176,164 -17,760,108 |
-203,663,503 -17,760,108 |
||
| 043 | 044+045+046 | 2 | Administration costs (administrative expenses) | -47,021,768 | -357,283,444 | -404,305,213 | -36,494,360 | -350,250,148 | -386,744,508 | |
| 044 | 2.1 | Depreciation | -3,686,062 | -54,248,874 | -57,934,937 | -3,241,179 | -53,822,008 | -57,063,187 | ||
| 045 046 |
2.2 2.3 |
Salaries, taxes and contributions from and on salaries Other administrative expenses |
-19,365,586 -23,970,120 |
-124,374,460 -178,660,109 |
-143,740,046 -202,630,230 |
-15,326,618 -17,926,563 |
-116,008,796 -180,419,344 |
-131,335,414 -198,345,907 |
||
| 047 | 048+049+050+0 51+052+053+05 4 |
XI | Investment expenses | -4,940,320 | -141,817,186 | -146,757,505 | -16,810,587 | -100,387,576 | -117,198,163 | |
| 048 | 1 | Depreciation of land and buildings not intended for | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 049 | 2 | business activities Interest |
-1,321,372 | -8,932,083 | -10,253,455 | -1,280,485 | -9,369,907 | -10,650,392 | ||
| 050 | 3 | Impairment of investments | 0 | -34,485,331 | -34,485,331 | -1,013,854 | -6,741,194 | -7,755,048 | ||
| 051 | 4 | Realised losses on investments | -864,282 | -16,181,820 | -17,046,101 | -9,667,064 | -24,903,404 | -34,570,468 | ||
| 052 | 5 | Unrealised losses on investments Net foreign exchange losses |
-300,004 | -5,324,927 | -5,624,931 | -2,079,253 | -8,691,697 | -10,770,951 | ||
| 053 054 |
6 7 |
Other investment expenses | 0 -2,454,662 |
0 -76,893,026 |
0 -79,347,688 |
0 -2,769,930 |
0 -50,681,374 |
0 -53,451,304 |
||
| 055 | 056+057 | XII | Other technical expenses, net of reinsurance | -407,137 | -36,775,208 | -37,182,345 | -707,601 | -37,967,306 | -38,674,907 | |
| 056 | 1 | Prevention activities expenses | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 057 058 |
2 XIII |
Other technical expenses of insurance Other expenses, including value adjustments |
-407,137 -989 |
-36,775,208 -11,298,523 |
-37,182,345 -11,299,512 |
-707,601 -9,233 |
-37,967,306 -3,726,536 |
-38,674,907 -3,735,769 |
||
| 059 | 001+007+015+0 16+017+018+02 5+032+035+038 +047+055+058 |
XIV | Profit or loss for the period before tax (+/-) | 48,490,981 | 304,894,400 | 353,385,381 | 27,671,156 | 246,469,155 | 274,140,311 | |
| 060 | 061+062 | XV | Income or loss tax | -8,815,039 | -51,439,629 | -60,254,668 | -4,904,042 | -39,646,997 | -44,551,039 | |
| 061 | 1 | Current tax expense | -8,731,189 | -35,245,008 | -43,976,197 | -4,652,720,89 | -38,036,452,19 | -42,689,173 | ||
| 062 063 |
059+060 | 2 XVI |
Deferred tax expense (income) Profit or loss for the period after tax (+/-) |
-83,850 39,675,942 |
-16,194,621 253,454,771 |
-16,278,471 293,130,713 |
-251,321,21 22,767,114 |
-1,610,545,02 206,822,158 |
-1,861,866 229,589,272 |
|
| 064 | 1 | Attributable to equity holders of the parent company | 0 | 0 | 0 | 0 | ||||
| 065 | 2 | Attributable to non-controlling interest | 0 | 0 | 0 | 0 | ||||
| 066 | 001+007+015+0 16+017+062 |
XVII | TOTAL INCOME | 651,053,691 | 2,398,725,407 | 3,049,779,098 | 596,843,457 | 2,368,387,397 | 2,965,230,854 | |
| 067 | 018+025+032+0 35+038+047+05 5+058+061 |
XVIII | TOTAL EXPENSE | -611,377,749 | -2,145,270,636 | -2,756,648,385 | -574,076,343 | -2,161,565,239 | -2,735,641,582 | |
| 068 | 069+070+071+0 72+073+074+07 5+076 |
XIX | Other comprehensive income | 81,013,025 | 162,936,979 | 243,950,005 | -3,802,028 | -40,648,486 | -44,450,514 | |
| 069 | 1 | Gains / losses on translation of financial statements of foreign operations |
0 | -30,198 | -30,198 | 0 | -107,321 | -107,321 | ||
| 070 | 2 | Gains / losses on revaluation of financial assets available for sale |
98,796,373 | 198,076,792 | 296,873,164 | -4,636,620 | -49,176,408 | -53,813,027 | ||
| 071 | 3 | Gains / losses on revaluation of land and buildings | 0 | 663,668 | 663,668 | 0 | -264,037 | -264,037 | ||
| intended for business activities Gains / losses on revaluation of other tangible (except for |
||||||||||
| 072 | 4 | land and buildings) and intangible assets | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 073 074 |
5 6 |
Effects of cash flow hedging instruments Actuarial gains / losses on defined benefit pension plans |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
||
| 075 | 7 | Share in other comprehensive income of associates | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 076 | 8 | Income tax on other comprehensive income | -17,783,347 | -35,773,283 | -53,556,630 | 834,592 | 8,899,280 | 9,733,872 | ||
| 077 078 |
078+079 | XX 1 |
Total comprehensive income Attributable to equity holders of the parent company |
120,688,967 0 |
416,391,751 0 |
537,080,718 0 |
18,965,086 | 166,173,672 | 185,138,757 0 |
|
| 079 | 2 | Attributable to non-controlling interest | 0 | 0 | 0 | 0 | ||||
| 080 | XXI | Reclassification adjustments | 0 | 0 | 0 | 0 |
STATEMENT OF COMPREHENSIVE INCOME for the period 1 January 2020 – 31 December 2020
Note: position 088 is completed by companies preparing consolidated financial statements.
| Position no. |
Sum elements | Position code |
Position description | Current period | Previous period | |
|---|---|---|---|---|---|---|
| 001 | 002+013+031 | I | CASH FLOW FROM OPERATING ACTIVITIES | 333,325,166 | -247,534,975 | |
| 002 | 003+004 | 1 | Cash flow before changes in operating assets and liabilities | 152,931,889 | 129,937,345 | |
| 003 | 1.1 | Profit/loss before tax | 274,140,311 | 353,385,381 | ||
| 004 | 005+006+007+008+009+ 010+011+012 |
1.2 | Adjustments: | -121,208,422 | -223,448,036 | |
| 005 | 1.2.1 | Depreciation of property and equipment | 38,763,846 | 40,640,873 | ||
| 006 | 1.2.2 | Amortization | 18,299,342 | 17,294,064 | ||
| 007 | 1.2.3 | Impairment and gains/losses on fair valuation | 15,531,917 | -28,969,476 | ||
| 008 009 |
1.2.4 1.2.5 |
Interest expense Interest income |
10,650,392 -179,496,482 |
10,253,455 -215,930,200 |
||
| 010 | 1.2.6 | Share in profit of associates | 0 | |||
| Gains/losses on sale of tangible assets (including land and | ||||||
| 011 | 1.2.7 | buildings) | 449,307 | -1,135,517 | ||
| 012 | 1.2.8 | Other adjustments | -25,406,744 | -45,601,234 | ||
| 013 | 014+015+…+030 | 2 | Increase/decrease in operating assets and liabilities | 231,768,803 | -326,447,670 | |
| 014 | 2.1 | Increase/decrease in investments available for sale | -58,020,322 | -361,421,935 | ||
| 015 | 2.2 | Increase/decrease in investments valued at fair value through profit or loss |
21,040,620 | 124,003,667 | ||
| 016 | 2.3 | Increase/decrease in loans and receivables | 183,955,033 | -223,962,355 | ||
| 017 | 2.4 | Increase/decrease in deposits at insurance business ceded to | 0 | 0 | ||
| reinsurance | ||||||
| 018 | 2.5 | Increase/decrease in investments for the account and risk of life insurance policyholder |
45,075,427 | -10,534,151 | ||
| 019 | 2.6 | Increase/decrease in reinsurance share in technical provisions | -261,335,323 | 2,025,965 | ||
| 020 | 2.7 | Increase/decrease in tax assets | -808,588 | 94,308 | ||
| 021 | 2.8 | Increase/decrease in receivables | 42,453,567 | 21,377,957 | ||
| 022 | 2.9 | Increase/decrease in other assets | 0 | 0 | ||
| 023 | 2.10 | Increase/decrease in prepaid expenses and accrued income | -21,444,509 | 21,757,998 | ||
| 024 | 2.11 | Increase/decrease in technical provisions | 349,903,764 | 115,546,800 | ||
| 025 | 2.12 | Increase/decrease in technical provisions for life insurance when the policyholder bears the investment risk |
-45,075,427 | 10,534,151 | ||
| 026 | 2.13 | Increase/decrease in tax liabilities | -219,169 | -115,427 | ||
| 027 | 2.14 | Increase/decrease in deposits retained from business ceded to | 0 | 0 | ||
| reinsurance | ||||||
| 028 | 2.15 | Increase/decrease in financial liabilities | 5,347,410 | 625,430 | ||
| 029 | 2.16 | Increase/decrease in other liabilities | 19,293,455 | -8,356,374 | ||
| 030 | 2.17 | Increase/decrease in accrued expenses and deferred income | -48,397,134 | -18,023,705 | ||
| 031 032 |
033+034+…+046 | 3 II |
Income tax paid CASH FLOW FROM INVESTING ACTIVITIES |
-51,375,526 111,550,055 |
-51,024,651 51,319,006 |
|
| 033 | 1 | Proceeds from sale of tangible assets | 2,612,835 | 5,417,096 | ||
| 034 | 2 | Purchases of tangible assets | -19,926,098 | -25,969,189 | ||
| 035 | 3 | Proceeds from sale of intangible assets | 0 | 628,124 | ||
| 036 | 4 | Purchases of intangible assets | -78,164,706 | -27,541,961 | ||
| 037 | 5 | Proceeds from the sale of land and buildings not used for | 80,780,300 | 16,750,126 | ||
| 038 | 6 | business activities Purchase of land and buildings not used for business activities |
-24,368,531 | -4,259,498 | ||
| Increase/decrease in investments in subsidiaries, associates and | ||||||
| 039 | 7 | participation in joint ventures | -97,029,427 | 0 | ||
| 040 | 8 | Proceeds from held-to-maturity investments | 374,224,065 | 357,560,988 | ||
| 041 | 9 | Payments for held-to-maturity investments | -191,656,958 | -386,588,725 | ||
| 042 | 10 | Proceeds from sale of financial instruments | 0 | 0 | ||
| 043 | 11 | Payments for investments in financial instruments | 0 | 0 | ||
| 044 | 12 | Proceeds from dividends and share in profit Proceeds from repayment of given short-term and long-term |
25,443,331 | 43,886,354 | ||
| 045 | 13 | loans | 88,391,016 | 93,026,128 | ||
| 046 | 14 | Payments for given long-term and short-term loans | -48,755,770 | -21,590,437 | ||
| 047 | 048+049+050 +051+052 |
III | CASH FLOW FROM FINANCING ACTIVITIES | -20,066,455 | -20,077,306 | |
| 048 | 1 | Proceeds from share capital increase | 0 | 0 | ||
| 049 | 2 | Proceeds from received short-term and long-term loans | 0 | 0 | ||
| 050 | 3 | Repayment of short-term and long-term loans | -20,066,455 | -19,097,306 | ||
| 051 | 4 | Purchase of treasury shares | 0 | 0 | ||
| 052 | 5 | Payment of shares in profit (dividends) | 0 | -980,000 | ||
| 053 | 001+032+047 | NET CASH FLOW EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES ON CASH |
424,808,766 | -216,293,275 | ||
| 054 | IV | AND CASH EQUIVALENTS | -37,192,653 | -14,026,845 | ||
| 055 | 053+054 | V | NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS | 387,616,112 | -230,320,120 | |
| 056 | 1 | Cash and cash equivalents at beginning of period | 125,320,335 | 355,640,455 | ||
| 057 | 055+056 | 2 | Cash and cash equivalents at end of period | 512,936,448 | 125,320,335 |
Note: position 088 is completed by companies preparing consolidated financial statements.
| Attributable to owners of the parent company | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Position no. |
Position description | Paid-up capital (ordinary and preference shares) |
Share premium | Revaluation reserves |
Reserves (legal, statutory, other) |
Retained earnings or accumulated loss |
Profit/loss for the year |
Total equity | Attributable to non-controlling interests |
Attributable to non-controlling interests |
| I. | Balance at 1 January of previous year | 589,325,800 | 681,482,525 | 273,428,913 | 402,038,576 | 594,530,662 | 270,417,757 | 2,811,224,234 | 0 | 2,811,224,234 |
| 1. | Changes in accounting policies | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. | Correction of prior periods errors | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| II. | Balance at 1 January of previous year (restated) | 589,325,800 | 681,482,525 | 273,428,913 | 402,038,576 | 594,530,662 | 270,417,757 | 2,811,224,234 | 0 | 2,811,224,234 |
| III. | Comprehensive income or loss of the previous year | 0 | 0 | 243,950,005 | 0 | 0 | 293,130,713 | 537,080,718 | 0 | 537,080,718 |
| 1. | Profit or loss for the period | 0 | 0 | 0 | 0 | 0 | 293,130,713 | 293,130,713 | 0 | 293,130,713 |
| 2. | Other comprehensive income or loss of the previous year | 0 | 0 | 243,950,005 | 0 | 0 | 0 | 243,950,005 | 0 | 243,950,005 |
| 2.1. | Unrealized gains or losses from tangible assets (land and buildings) | 0 | 0 | 544,208 | 0 | 0 | 0 | 544,208 | 0 | 544,208 |
| 2.2. | Unrealized gains or losses from financial assets available for sale | 0 | 0 | 270,441,738 | 0 | 0 | 0 | 270,441,738 | 0 | 270,441,738 |
| 2.3. | Realized gains or losses from financial assets available for sale | 0 | 0 | -27,005,744 | 0 | 0 | 0 | -27,005,744 | 0 | -27,005,744 |
| 2.4. | Other non-owner changes in equity | 0 | 0 | -30,198 | 0 | 0 | 0 | -30,198 | 0 | -30,198 |
| IV. | Transactions with owners (previous period) | 0 | 0 | -723,224 | 0 | 271,299,737 | -270,417,757 | 158,757 | 0 | 158,757 |
| 1. | Increase/decrease in share capital | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. | Other payments by owners | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. | Payment of shares in profit/dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. | Other distributions to owners | 0 | 0 | -723,224 | 0 | 271,299,737 | -270,417,757 | 158,757 | 0 | 158,757 |
| V. | Balance at the last day of the reporting period in the previous year | 589,325,800 | 681,482,525 | 516,655,694 | 402,038,576 | 865,830,400 | 293,130,713 | 3,348,463,708 | 0 | 3,348,463,708 |
| VI. | Balance at 1 January of current year | 589,325,800 | 681,482,525 | 516,655,694 | 402,038,576 | 865,830,400 | 293,130,713 | 3,348,463,708 | 0 | 3,348,463,708 |
| 1. | Changes in accounting policies | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. | Correction of prior periods errors | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| VII. | Balance at 1 January of current year (restated) | 589,325,800 | 681,482,525 | 516,655,694 | 402,038,576 | 865,830,400 | 293,130,713 | 3,348,463,708 | 0 | 3,348,463,708 |
| VIII. | Comprehensive income or loss of the current year | 0 | 0 | -44,450,514 | 0 | 0 | 229,589,272 | 185,138,758 | 0 | 185,138,758 |
| 1. | Profit or loss for the period | 0 | 0 | 0 | 0 | 0 | 229,589,272 | 229,589,272 | 0 | 229,589,272 |
| 2. | Other comprehensive income or loss of the current year | 0 | 0 | -44,450,514 | 0 | 0 | 0 | -44,450,514 | 0 | -44,450,514 |
| 2.1. | Unrealized gains or losses from tangible assets (land and buildings) | 0 | 0 | -216,511 | 0 | 0 | 0 | -216,511 | 0 | -216,511 |
| 2.2. | Unrealized gains or losses from financial assets available for sale | 0 | 0 | 7,374,940 | 0 | 0 | 0 | 7,374,940 | 0 | 7,374,940 |
| 2.3. | Realized gains or losses from financial assets available for sale | 0 | 0 | -51,501,622 | 0 | 0 | 0 | -51,501,622 | 0 | -51,501,622 |
| 2.4. | Other non-owner changes in equity | 0 | 0 | -107,321 | 0 | 0 | 0 | -107,321 | 0 | -107,321 |
| IX. | Transactions with owners (current period) | 0 | 0 | -1,080,776 | 0 | 294,448,732 | -293,130,713 | 237,243 | 0 | 237,243 |
| 1. | Increase/decrease of share capital | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. | Other payments by owners | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. | Payment of shares in profit/dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. | Other distributions to owners | 0 | 0 | -1,080,776 | 0 | 294,448,732 | -293,130,713 | 237,243 | 0 | 237,243 |
| X. | Balance at the last day of the reporting period in the current year | 589,325,800 | 681,482,525 | 471,124,404 | 402,038,576 | 1,160,279,132 | 229,589,272 | 3,533,839,709 | 0 | 3,533,839,709 |
STATEMENT OF CHANGES IN EQUITY for the period 1 January 2020 – 31 December 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 December 2020
| Position | Sum | Position | Previous year | Current year | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| No. | elements | code | Position description | Life Non-life |
Total | Life | Non-life | Total | ||
| 001 | 002+003 | I | INTANGIBLE ASSETS | 407,778 | 48,318,959 | 48,726,737 | 400,575 | 107,472,364 | 107,872,939 | |
| 002 003 |
1 2 |
Goodwill Other intangible assets |
0 407,778 |
0 48,318,959 |
0 48,726,737 |
0 400,575 |
0 107,472,364 |
0 107,872,939 |
||
| 004 | 005+006+00 | II | TANGIBLE ASSETS | 21,127,013 | 888,164,071 | 909,291,084 | 19,988,408 | 856,977,245 | 876,965,653 | |
| 005 | 7 | 1 | Land and buildings used for business | 16,259,682 | 536,376,413 | 552,636,095 | 15,950,768 | 480,712,555 | 496,663,323 | |
| 006 | 2 | activities Equipment |
602,616 | 55,612,530 | 56,215,146 | 337,421 | 77,673,901 | 78,011,322 | ||
| 007 | 3 | Other tangible assets and inventories | 4,264,715 | 296,175,128 | 300,439,843 | 3,700,219 | 298,590,789 | 302,291,008 | ||
| 008 | 009+010+01 4+033 |
III | INVESTMENTS | 3,566,682,133 | 6,034,361,455 | 9,601,043,588 | 3,681,060,107 | 5,936,144,775 | 9,617,204,882 | |
| 009 | A | Investments in land and buildings not used for business activities |
1,629,143 | 872,023,596 | 873,652,739 | 1,856,338 | 1,011,390,353 | 1,013,246,691 | ||
| 010 | 011+012+01 3 |
B | Investments in subsidiaries, associates and participation in joint ventures |
0 | 77,589,581 | 77,589,581 | 0 | 76,592,895 | 76,592,895 | |
| 011 012 |
1 2 |
Shares and stakes in subsidiaries Shares and stakes in associates |
0 0 |
0 9,628,386 |
0 9,628,386 |
0 0 |
0 10,091,232 |
0 10,091,232 |
||
| 013 | 3 | Shares and stakes in joint ventures | 0 | 67,961,195 | 67,961,195 | 0 | 66,501,663 | 66,501,663 | ||
| 014 | 015+018+02 3+029 |
C | Financial assets | 3,565,052,990 | 5,084,748,278 | 8,649,801,268 | 3,679,203,769 | 4,848,161,527 | 8,527,365,296 | |
| 015 016 |
016+017 | 1 1.1 |
Held-to-maturity financial assets Debt financial instruments |
1,277,694,188 1,277,694,188 |
1,037,566,857 1,037,566,857 |
2,315,261,045 2,315,261,045 |
1,131,858,940 1,131,858,940 |
1,037,923,909 1,037,923,909 |
2,169,782,849 2,169,782,849 |
|
| 017 | 1.2 | Other | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 018 | 019+020+02 1+022 |
2 | Financial assets available for sale | 1,921,629,783 | 2,990,714,858 | 4,912,344,641 | 2,128,951,896 | 2,994,696,576 | 5,123,648,472 | |
| 019 | 2.1 | Equity financial instruments | 24,590,609 | 498,588,974 | 523,179,583 | 29,289,284 | 507,409,895 | 536,699,179 | ||
| 020 021 |
2.2 2.3 |
Debt financial instruments Shares in investment funds |
1,874,911,679 22,127,495 |
2,427,461,212 64,664,672 |
4,302,372,891 86,792,167 |
2,042,802,269 56,860,343 |
2,352,073,139 135,213,542 |
4,394,875,408 192,073,885 |
||
| 022 | 2.4 | Other | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 023 | 024+025+02 6+027+028 |
3 | Financial assets at fair value through profit or loss |
5,242,699 | 62,444,827 | 67,687,526 | 7,622,144 | 39,728,669 | 47,350,813 | |
| 024 025 |
3.1 3.2 |
Equity financial instruments Debt financial instruments |
0 0 |
17,070,930 0 |
17,070,930 0 |
0 0 |
17,187,511 0 |
17,187,511 0 |
||
| 026 | 3.3 | Derivative financial instruments | 589,945 | 3,080,534 | 3,670,479 | 318,108 | 3,797,109 | 4,115,217 | ||
| 027 028 |
3.4 3.5 |
Shares in investment funds Other |
4,652,754 0 |
42,293,363 0 |
46,946,117 0 |
7,304,036 0 |
18,744,049 0 |
26,048,085 0 |
||
| 029 | 030+031+03 | 4 | Loans and receivables | 360,486,320 | 994,021,736 | 1,354,508,056 | 410,770,789 | 775,812,373 | 1,186,583,162 | |
| 030 | 2 | 4.1 | Deposits with credit institutions | 299,097,268 | 782,258,687 | 1,081,355,955 | 350,460,991 | 557,971,929 | 908,432,920 | |
| 031 | 4.2 | Loans | 61,389,052 | 55,788,485 | 117,177,537 | 56,843,903 | 44,081,419 | 100,925,322 | ||
| 032 033 |
4.3 D |
Other Deposits with cedent |
0 0 |
155,974,564 0 |
155,974,564 0 |
3,465,895 0 |
173,759,025 0 |
177,224,920 0 |
||
| 034 | IV | INVESTMENTS FOR THE ACCOUNT AND RISK OF LIFE INSURANCE POLICYHOLDER |
450,937,458 | 0 | 450,937,458 | 412,084,501 | 0 | 412,084,501 | ||
| 035 | 036+037+03 8+039+040+ 041+042 |
V | REINSURANCE SHARE IN TECHNICAL PROVISIONS |
79,965 | 226,299,397 | 226,379,362 | 124,074 | 488,140,677 | 488,264,751 | |
| 036 | 1 | Unearned premiums, reinsurance share | 57,935 | 48,326,106 | 48,384,041 | 111,811 | 64,588,462 | 64,700,273 | ||
| 037 | 2 | Mathematical provisions for insurance, reinsurance share |
22,030 | 0 | 22,030 | 12,263 | 0 | 12,263 | ||
| 038 | 3 | Claims provisions, reinsurance share Provisions for bonuses and discounts, |
0 | 177,973,291 | 177,973,291 | 0 | 423,552,215 | 423,552,215 | ||
| 039 | 4 | reinsurance share | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 040 | 5 | Provisions for claims fluctuation, reinsurance share |
0 | 0 | 0 | 0 | 0 | 0 | ||
| 041 | 6 | Other technical provisions for insurance, reinsurance share |
0 | 0 | 0 | 0 | 0 | 0 | ||
| 042 | 7 | Special provisions for life insurance where the policyholder bears the investment risk, reinsurance share |
0 | 0 | 0 | 0 | 0 | 0 | ||
| 043 | 044+045 | VI | DEFERRED AND CURRENT TAX ASSETS |
2,028,656 | 75,768,736 | 77,797,392 | 1,777,335 | 74,974,491 | 76,751,826 | |
| 044 | 1 | Deferred tax assets | 2,028,656 | 68,047,649 | 70,076,305 | 1,777,335 | 67,540,416 | 69,317,751 | ||
| 045 | 047+050+05 | 2 | Current tax assets | 0 | 7,721,087 | 7,721,087 | 0 | 7,434,075 | 7,434,075 | |
| 046 047 |
1 048+049 |
VII 1 |
RECEIVABLES Receivables from insurance business |
22,010,878 235,763 |
979,166,004 503,377,921 |
1,001,176,882 503,613,684 |
17,189,750 234,219 |
859,948,848 526,124,255 |
877,138,598 526,358,474 |
|
| 048 | 1.1 | From policyholders | 0 | 502,590,925 | 502,590,925 | 0 | 525,674,054 | 525,674,054 | ||
| 049 | 1.2 | From agents or insurance brokers Receivables from reinsurance |
235,763 | 786,996 | 1,022,759 | 234,219 | 450,201 | 684,420 | ||
| 050 | 052+053+05 | 2 | business | 879 | 47,249,357 | 47,250,236 | 128,917 | 59,948,347 | 60,077,264 | |
| 051 | 4 | 3 | Other receivables Receivables from other insurance |
21,774,236 | 428,538,726 | 450,312,962 | 16,826,614 | 273,876,246 | 290,702,860 | |
| 052 053 |
3.1 3.2 |
business Receivables for returns on investments |
0 268,543 |
202,997,642 578,032 |
202,997,642 846,575 |
0 281,512 |
166,272,633 234,653 |
166,272,633 516,165 |
||
| 054 | 3.3 | Other receivables | 21,505,693 | 224,963,052 | 246,468,745 | 16,545,102 | 107,368,960 | 123,914,062 | ||
| 055 056 |
056-060+061 057+058+05 |
VIII 1 |
OTHER ASSETS Cash at bank and on hand |
39,381,104 39,381,104 |
180,970,286 175,637,699 |
220,351,390 215,018,803 |
73,823,213 73,823,213 |
588,625,771 580,540,248 |
662,448,984 654,363,461 |
|
| 057 | 9 | 1.1 | Funds in the business account | 13,915,217 | 175,060,566 | 188,975,783 | 10,877,390 | 580,104,610 | 590,982,000 | |
| 058 | 1.2 | Funds in the account of assets covering | 25,462,256 | 0 | 25,462,256 | 62,944,474 | 0 | 62,944,474 | ||
| 059 | 1.3 | mathematical provisions Cash on hand |
3,631 | 577,133 | 580,764 | 1,349 | 435,638 | 436,987 | ||
| 060 | 2 | Non-current assets held for sale and | 0 | 1,963,217 | 1,963,217 | 0 | 1,938,705 | 1,938,705 | ||
| 061 | 3 | discontinued operations Other |
0 | 3,369,370 | 3,369,370 | 0 | 6,146,818 | 6,146,818 | ||
| 062 | 063+064+06 5 |
IX | PREPAID EXPENSES AND ACCRUED INCOME |
1,425,135 | 286,222,521 | 287,647,656 | 1,247,594 | 309,981,881 | 311,229,475 | |
| 063 | 1 | Accrued interest and rent | 0 | 1,454,551 | 1,454,551 | 0 | 1,103,855 | 1,103,855 | ||
| 064 | 2 | Deferred acquisition costs Other prepaid expenses and accrued |
0 | 268,986,430 | 268,986,430 | 0 | 247,354,173 | 247,354,173 | ||
| 065 066 |
001+004+00 8+034+035+ |
3 X |
income TOTAL ASSETS |
1,425,135 4,104,080,120 |
15,781,540 8,719,271,429 |
17,206,675 12,823,351,549 |
1,247,594 4,207,695,557 |
61,523,853 9,222,266,052 |
62,771,447 13,429,961,609 |
|
| 067 | 043+046+05 5+062 |
XI | OFF BALANCE-SHEET ITEMS | 269,163,441 | 2,573,102,420 | 2,842,265,861 | 371,785,133 | 2,737,809,222 | 3,109,594,355 | |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 December 2020
| no. elements code Life Non-life Total Life Non-life Total 069+072+073+ 068 XII EQUITY 508,083,314 3,311,557,118 3,819,640,432 548,823,726 3,558,528,083 4,107,351,809 077+081+084 069 070+071 1 Share capital 44,288,720 545,037,080 589,325,800 44,288,720 545,037,080 589,325,800 070 1.1 Paid-up capital - ordinary shares 44,288,720 545,037,080 589,325,800 44,288,720 545,037,080 589,325,800 071 1.2 Paid-up capital - preference shares 0 0 0 0 0 0 072 2 Share premium (capital reserves) 0 681,482,525 681,482,525 0 681,482,525 681,482,525 073 074+075+076 3 Revaluation reserves 176,625,491 432,713,780 609,339,271 181,953,464 386,496,159 568,449,623 074 3.1 Land and buildings 0 119,622,869 119,622,869 0 112,256,678 112,256,678 075 3.2 Financial assets available for sale 176,625,491 312,925,487 489,550,978 181,953,464 274,074,057 456,027,521 076 3.3 Other revaluation reserves 0 165,424 165,424 0 165,424 165,424 077 078+079+080 4 Reserves 85,295,937 316,742,638 402,038,575 85,295,937 316,742,638 402,038,575 078 4.1 Legal reserves 2,214,436 27,864,354 30,078,790 2,214,436 27,864,354 30,078,790 079 4.2 Statutory reserves 7,581,501 139,638,995 147,220,496 7,581,501 139,638,995 147,220,496 080 4.3. Other reserves 75,500,000 149,239,289 224,739,289 75,500,000 149,239,289 224,739,289 081 082+083 5 Retained earnings or accumulated loss 164,008,543 1,034,053,589 1,198,062,132 201,886,061 1,336,267,156 1,538,153,217 082 5.1 Retained earnings 164,008,543 1,034,053,589 1,198,062,132 201,886,061 1,336,267,156 1,538,153,217 083 5.2 Accumulated loss (-) 0 0 0 0 0 0 084 6 Profit or loss for the period 339,392,129 327,902,069 085+086 37,864,623 301,527,506 35,399,544 292,502,525 085 6.1 Profit for the period 37,864,623 301,527,506 339,392,129 35,399,544 292,502,525 327,902,069 086 6.2 Loss for the period ( - ) 0 0 0 0 0 0 MINORITY LIABILITIES (SUBORDINATED 087 XIII 0 0 0 0 0 0 LIABILITIES) 088 XIV MINORITY INTEREST 630,567 11,922,791 12,553,358 746,627 11,907,814 12,654,441 090+091+092+ 089 XV TECHNICAL PROVISIONS 3,009,126,063 4,233,604,886 7,242,730,949 3,118,356,079 4,505,578,686 7,623,934,765 093+094+095 090 1 Unearned premiums, gross amount 5,909,255 1,429,409,694 1,435,318,949 6,096,801 1,429,166,624 1,435,263,425 091 2 Mathematical provisions, gross amount 2,937,212,325 17,908,413 2,955,120,738 3,010,939,268 11,308,894 3,022,248,162 092 3 Claims provisions, gross amount 66,004,483 2,743,831,653 2,809,836,136 101,320,010 3,039,211,216 3,140,531,226 093 4 Provisions for bonuses and discounts, gross amount 0 8,770,594 8,770,594 0 9,463,967 9,463,967 094 5 Provisions for claims fluctuation, gross amount 0 7,055,533 7,055,533 0 7,055,533 7,055,533 095 6 Other technical provisions, gross amount 0 26,628,999 26,628,999 0 9,372,452 9,372,452 SPECIAL PROVISIONS FOR LIFE INSURANCE 096 XVI WHERE THE POLICYHOLDER BEARS THE 450,937,458 0 450,937,458 412,084,501 0 412,084,501 INVESTMENT RISK, gross amount 097 098+099 XVII OTHER PROVISIONS 118,921,710 101,230,769 3,076,787 115,844,923 2,845,537 98,385,232 098 1 Provisions for pensions and similar obligations 2,957,741 111,329,174 114,286,915 2,608,688 95,350,774 97,959,462 099 2 Other provisions 119,046 4,515,749 4,634,795 236,849 3,034,458 3,271,307 100 101+102 XVIII DEFERRED AND CURRENT TAX LIABILITY 36,401,392 141,425,157 177,826,549 37,308,321 135,095,733 172,404,054 101 1 Deferred tax liabilities 35,681,180 113,553,295 149,234,475 35,781,836 116,639,392 152,421,228 102 2 Current tax liability 720,212 27,871,862 28,592,074 1,526,485 18,456,341 19,982,826 DEPOSITS RETAINED FROM BUSINESS CEDED TO 103 XIX 0 0 0 0 0 0 REINSURANCE 104 105+106+107 XX FINANCIAL LIABILITIES 4,320,559 297,695,442 302,016,001 5,112,667 318,779,203 323,891,870 105 1 Loan liabilities 0 0 0 0 0 0 106 2 Liabilities for issued financial instruments 0 0 0 0 0 0 107 3 Other financial liabilities 4,320,559 297,695,442 302,016,001 5,112,667 318,779,203 323,891,870 109+110+111+ 108 XXI OTHER LIABILITIES 68,558,512 284,395,259 352,953,771 55,374,068 321,566,127 376,940,195 112 109 1 Liabilities from direct insurance business 6,788,834 91,501,162 98,289,996 4,968,998 87,717,976 92,686,974 110 2 Liabilities from coinsurance and reinsurance 21,961 46,608,944 46,630,905 242,461 96,369,663 96,612,124 111 3 Liabilities for disposal and discontinued operations 0 11,832 11,832 0 11,742 11,742 112 4 Other liabilities 61,747,717 146,273,321 208,021,038 50,162,609 137,466,746 187,629,355 113 114+115 XXII ACCRUED EXPENSES AND DEFERRED INCOME 22,945,468 322,825,853 345,771,321 27,044,031 272,425,174 299,469,205 114 1 Deferred reinsurance commission 0 0 0 0 0 0 115 2 Other accrued expenses and deferred income 22,945,468 322,825,853 345,771,321 27,044,031 272,425,174 299,469,205 068+087+088+ 089+096+097+ TOTAL EQUITY AND LIABILITIES 116 XXIII 4,104,080,120 8,719,271,429 12,823,351,549 4,207,695,557 9,222,266,052 13,429,961,609 100+103+104+ 108+113 |
Position | Sum | Position | Previous year | Current year | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Position description | |||||||||||
| 117 | XXIV | OFF-BALANCE-SHEET ITEMS | 269,163,441 | 2,573,102,420 | 2,842,265,861 | 371,785,133 | 2,737,809,222 | 3,109,594,355 |
Note: position 088 is completed by companies preparing consolidated financial statements.
| Posit ion |
Sum elements | Position | Previous year | Current year | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| no. | code | Position description | Life | Non-life Total |
Life | Non-life | Total | |||
| 001 | 002+003+004+0 | I | Earned premiums (income) | 645,113,174 | 2,357,542,519 | 3,002,655,693 | 550,593,781 | 2,428,943,426 | 2,979,537,207 | |
| 002 | 05+006 | 1 | Gross written premiums | 645,821,466 | 2,659,153,749 | 3,304,975,215 | 551,053,061 | 2,689,177,414 | 3,240,230,475 | |
| 003 | 2 | Value adjustment and charged premium value adjustment | 0 | -1,816,753 | -1,816,753 | 0 | -2,832,769 | -2,832,769 | ||
| 004 005 |
3 4 |
Premiums ceded to reinsurance (-) Change in gross provisions for unearned premiums (+/-) |
-195,724 -536,305 |
-273,529,164 -10,531,954 |
-273,724,888 -11,068,259 |
-334,900 -177,798 |
-277,525,967 3,944,452 |
-277,860,867 3,766,654 |
||
| 006 | 5 | Change in provisions for unearned premiums, reinsurance | 23,737 | -15,733,359 | -15,709,622 | 53,418 | 16,180,296 | 16,233,714 | ||
| 007 | 008+009+010+0 11+012+013+01 |
II | share (+/-) Investment income |
148,493,960 | 375,471,435 | 523,965,395 | 161,665,763 | 326,039,789 | 487,705,552 | |
| 4 | Income from subsidiaries, associates and participation in | |||||||||
| 008 | 1 | joint ventures | 1,229,923 | 36,307,864 | 37,537,787 | 2,103,298 | 17,645,743 | 19,749,041 | ||
| 009 010 |
2 3 |
Income from investments in land and buildings Interest income |
118,209 121,579,598 |
122,590,004 107,960,928 |
122,708,213 229,540,526 |
73,948 105,700,578 |
110,762,708 89,883,190 |
110,836,656 195,583,768 |
||
| 011 | 4 | Unrealized gains on investments | 1,088,812 | 7,777,884 | 8,866,696 | 2,009,774 | 3,920,526 | 5,930,300 | ||
| 012 013 |
5 6 |
Realised gains on investments Net foreign exchange gains |
15,291,944 8,725,227 |
45,629,700 4,669,020 |
60,921,644 13,394,247 |
20,138,618 31,170,680 |
69,738,961 6,835,220 |
89,877,579 38,005,900 |
||
| 014 | 7 | Other investment income | 460,247 | 50,536,035 | 50,996,282 | 468,867 | 27,253,441 | 27,722,308 | ||
| 015 016 |
III IV |
Income from fees and commissions Other insurance - technical income, net of reinsurance |
2,154,864 219,029 |
35,390,442 36,652,458 |
37,545,306 36,871,487 |
2,100,261 441,577 |
41,067,267 44,648,093 |
43,167,528 45,089,670 |
||
| 017 | V | Other income | 106,224 | 126,277,090 | 126,383,314 | 623,748 | 123,644,686 | 124,268,434 | ||
| 018 019 |
019+022 020+021 |
VI 1 |
Claims incurred, net Settled claims |
-404,930,653 -410,298,893 |
-1,286,537,680 -1,300,487,652 |
-1,691,468,333 -1,710,786,545 |
-536,993,740 -501,729,864 |
-1,383,264,676 -1,336,935,303 |
-1,920,258,416 -1,838,665,167 |
|
| 020 | 1.1 | Gross amount (-) | -410,298,893 | -1,422,805,316 | -1,833,104,209 | -501,858,465 | -1,444,613,813 | -1,946,472,278 | ||
| 021 022 |
023+024 | 1.2 2 |
Reinsurance share (+) Change in claims provisions (+/-) |
0 5,368,240 |
122,317,664 13,949,972 |
122,317,664 19,318,212 |
128,601 -35,263,876 |
107,678,510 -46,329,373 |
107,807,111 -81,593,249 |
|
| 023 | 2.1 | Gross amount (-) | 5,368,240 | 6,288,634 | 11,656,874 | -35,263,876 | -291,817,132 | -327,081,008 | ||
| 024 | 2.2 | Reinsurance share (+) Change in mathematical and other technical provisions, |
0 | 7,661,338 | 7,661,338 | 0 | 245,487,759 | 245,487,759 | ||
| 025 | 026+029 | VII | net of reinsurance | -229,184,315 | 18,540,852 | -210,643,463 | -69,385,592 | 23,300,703 | -46,084,889 | |
| 026 027 |
027+028 | 1 1.1 |
Change in mathematical provisions (+/-) Gross amount (-) |
-229,184,315 -229,194,586 |
11,342,252 11,342,252 |
-217,842,063 -217,852,334 |
-69,385,592 -69,375,825 |
6,599,519 6,599,519 |
-62,786,073 -62,776,306 |
|
| 028 | 1.2 | Reinsurance share (+) | 10,271 | 0 | 10,271 | -9,767 | 0 | -9,767 | ||
| 029 | 030+031 | 2 | Change in other technical provisions, net of reinsurance (+/-) |
0 | 7,198,600 | 7,198,600 | 0 | 16,701,184 | 16,701,184 | |
| 030 | 2.1 | Gross amount (-) | 0 | 7,198,600 | 7,198,600 | 0 | 16,701,184 | 16,701,184 | ||
| 031 | 2.2 | Reinsurance share (+) Change in special provisions for life insurance where the |
0 | 0 | 0 | 0 | 0 | 0 | ||
| 032 | 033+034 | VIII | policyholder bears the investment risk, net of | 8,859,975 | 0 | 8,859,975 | 38,124,519 | 0 | 38,124,519 | |
| 033 | 1 | reinsurance (+/-) Gross amount (-) |
8,859,975 | 0 | 8,859,975 | 38,124,519 | 0 | 38,124,519 | ||
| 034 | 2 | Reinsurance share (+) | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 035 | 036+037 | IX | Expenses for premium returns (bonuses and discounts), net of reinsurance |
0 | -11,186,693 | -11,186,693 | 0 | -8,421,708 | -8,421,708 | |
| 036 037 |
1 2 |
Depending on the result (bonuses) Irrespective of result (discounts) |
0 0 |
-8,119,251 -3,067,442 |
-8,119,251 -3,067,442 |
0 0 |
-5,277,788 -3,143,920 |
-5,277,788 -3,143,920 |
||
| 038 | 039+043 | X | Operating expenses (business expenditures), net | -117,613,900 | -1,089,532,718 | -1,207,146,618 | -85,059,638 | -1,070,602,948 | -1,155,662,586 | |
| 039 | 040+041+042 | 1 | Acquisition costs | -62,329,869 | -558,418,527 | -620,748,396 | -41,583,462 | -536,132,467 | -577,715,929 | |
| 040 041 |
1.1 1.2 |
Commission Other acquisition costs |
-31,100,648 -31,229,221 |
-296,122,090 -242,427,261 |
-327,222,738 -273,656,482 |
-14,965,878 -26,617,584 |
-266,672,201 -247,302,551 |
-281,638,079 -273,920,135 |
||
| 042 | 1.3 | Change in deferred acquisition costs (+/-) | 0 | -19,869,176 | -19,869,176 | 0 | -22,157,715 | -22,157,715 | ||
| 043 044 |
044+045+046 | 2 2.1 |
Administration costs (administrative expenses) Depreciation |
-55,284,031 -4,915,380 |
-531,114,191 -73,255,859 |
-586,398,222 -78,171,239 |
-43,476,176 -4,530,040 |
-534,470,481 -77,452,048 |
-577,946,657 -81,982,088 |
|
| 045 | 2.2 | Salaries, taxes and contributions from and on salaries | -21,543,631 | -192,985,575 | -214,529,206 | -17,670,782 | -191,993,441 | -209,664,223 | ||
| 046 047 |
048+049+050+0 51+052+053+05 |
2.3 XI |
Other administrative expenses Investment expenses |
-28,825,020 -5,283,299 |
-264,872,757 -127,037,705 |
-293,697,777 -132,321,004 |
-21,275,354 -18,673,547 |
-265,024,992 -108,422,268 |
-286,300,346 -127,095,815 |
|
| 048 | 4 | 1 | Depreciation of land and buildings not intended for business activities |
0 | 0 | 0 | 0 | 0 | 0 | |
| 049 | 2 | Interest | -1,497,672 | -10,208,393 | -11,706,065 | -1,436,726 | -10,707,963 | -12,144,689 | ||
| 050 | 3 | Impairment of investments | 0 | -6,207,261 | -6,207,261 | -1,159,548 | -6,280,048 | -7,439,596 | ||
| 051 052 |
4 5 |
Realised losses on investments Unrealised losses on investments |
-864,282 -333,394 |
-16,181,820 -5,386,094 |
-17,046,102 -5,719,488 |
-9,667,064 -3,442,073 |
-24,903,404 -8,693,886 |
-34,570,468 -12,135,959 |
||
| 053 | 6 | Net foreign exchange losses | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 054 055 |
056+057 | 7 XII |
Other investment expenses Other technical expenses, net of reinsurance |
-2,587,951 -1,005,705 |
-89,054,137 -59,000,492 |
-91,642,088 -60,006,197 |
-2,968,136 -1,482,507 |
-57,836,967 -60,622,778 |
-60,805,103 -62,105,285 |
|
| 056 | 1 | Prevention activities expenses | 0 | -960,874 | -960,874 | 0 | -1,342,950 | -1,342,950 | ||
| 057 058 |
2 XIII |
Other technical expenses of insurance Other expenses, including value adjustments |
-1,005,705 -989 |
-58,039,618 -11,874,464 |
-59,045,323 -11,875,453 |
-1,482,507 -15,422 |
-59,279,828 -6,660,003 |
-60,762,335 -6,675,425 |
||
| 059 | 001+007+015+0 16+017+018+02 5+032+035+038 |
XIV | Profit or loss for the period before tax (+/-) | 46,928,365 | 364,705,044 | 411,633,409 | 41,939,203 | 349,649,583 | 391,588,786 | |
| 060 | +047+055+058 061+062 |
XV | Income or loss tax | -9,530,319 | -62,363,599 | -71,893,918 | -6,431,326 | -56,956,605 | -63,387,931 | |
| 061 | 1 | Current tax expense | -9,446,469 | -50,445,094 | -59,891,563 | -6,180,005 | -56,390,321 | -62,570,326 | ||
| 062 063 |
059+060 | 2 XVI |
Deferred tax expense (income) Profit or loss for the period after tax (+/-) |
-83,850 37,398,046 |
-11,918,505 302,341,445 |
-12,002,355 339,739,491 |
-251,321 35,507,877 |
-566,284 292,692,978 |
-817,605 328,200,855 |
|
| 064 | 1 | Attributable to equity holders of the parent company | 37,864,623 | 301,527,506 | 339,392,129 | 35,399,544 | 292,502,525 | 327,902,069 | ||
| 065 | 001+007+015+0 | 2 | Attributable to non-controlling interest | -466,577 | 813,939 | 347,362 | 108,333 | 190,453 | 298,786 | |
| 066 | 16+017+062 018+025+032+0 |
XVII | TOTAL INCOME | 796,003,401 | 2,919,415,439 | 3,715,418,840 | 715,173,809 | 2,963,776,977 | 3,678,950,786 | |
| 067 | 35+038+047+05 5+058+061 069+070+071+0 |
XVIII | TOTAL EXPENSE | -758,605,355 | -2,617,073,994 | -3,375,679,349 | -679,665,932 | -2,671,083,999 | -3,350,749,931 | |
| 068 | 72+073+074+07 5+076 |
XIX | Other comprehensive income Gains / losses on translation of financial statements of |
85,280,343 | 185,551,146 | 270,831,489 | 5,335,699 | -44,310,267 | -38,974,568 | |
| 069 | 1 | foreign operations Gains / losses on revaluation of financial assets available |
388,887 | 769,314 | 1,158,201 | 980,379 | 2,067,723 | 3,048,102 | ||
| 070 | 2 | for sale Gains / losses on revaluation of land and buildings |
103,105,740 | 200,907,706 | 304,013,446 | 4,427,101 | -49,754,967 | -45,327,866 | ||
| 071 | 3 | intended for business activities | 0 | 23,762,189 | 23,762,189 | 0 | -6,360,768 | -6,360,768 | ||
| 072 | 4 | Gains / losses on revaluation of other tangible (except for land and buildings) and intangible assets |
0 | 0 | 0 | 0 | 0 | 0 | ||
| 073 | 5 | Effects of cash flow hedging instruments | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 074 075 |
6 7 |
Actuarial gains / losses on defined benefit pension plans Share in other comprehensive income of associates |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
||
| 076 | 8 | Income tax on other comprehensive income | -18,214,284 | -39,888,063 | -58,102,347 | -71,781 | 9,737,745 | 9,665,964 | ||
| 077 078 |
078+079 | XX 1 |
Total comprehensive income Attributable to equity holders of the parent company |
122,678,389 123,143,177 |
487,892,591 486,978,576 |
610,570,980 610,121,753 |
40,843,576 40,727,515 |
248,382,711 248,203,386 |
289,226,287 288,930,901 |
|
| 079 | 2 | Attributable to non-controlling interest | -464,788 0 |
914,015 0 |
449,227 0 |
116,061 0 |
179,325 0 |
295,386 | ||
| 080 | XXI | Reclassification adjustments | 0 |
Note: positions 064, 065, 078 and 079 are completed by companies preparing consolidated financial statements.
CROATIA osiguranje d.d., Zagreb Statements prescribed by the Ordinance of the Croatian Financial Services Supervisory Agency
CONSOLIDATED STATEMENT OF CASH FLOWS (INDIRECT METHOD) for the period 1 January 2020 – 31 December 2020
| Position no. |
Sum elements | Position code |
Position description | Current period | Previous period | |
|---|---|---|---|---|---|---|
| 001 | 002+013+031 | I | CASH FLOW FROM OPERATING ACTIVITIES | 345,452,951 | -187,946,464 | |
| 002 | 003+004 | 1 | Cash flow before changes in operating assets and liabilities | 265,874,114 | 239,689,953 | |
| 003 | 1.1 | Profit/loss before tax | 391,588,786 | 411,633,409 | ||
| 004 | 005+006+007+008+009+ 010+011+012 |
1.2 | Adjustments: | -125,714,672 | -171,943,456 | |
| 005 | 1.2.1 | Depreciation of property and equipment | 61,279,076 | 58,677,524 | ||
| 006 | 1.2.2 | Amortization | 20,703,012 | 19,493,715 | ||
| 007 | 1.2.3 | Impairment and gains/losses on fair valuation | -190,713 | 4,752,902 | ||
| 008 | 1.2.4 | Interest expense | 12,144,689 | 11,706,065 | ||
| 009 | 1.2.5 | Interest income | -195,583,768 | -229,540,526 | ||
| 010 | 1.2.6 | Share in profit of associates | -10,338,927 | -11,947,061 | ||
| 011 | 1.2.7 | Gains/losses on sale of tangible assets (including land and buildings) | 76,333 | -1,033,698 | ||
| 012 | 1.2.8 | Other adjustments | -13,804,374 | -24,052,377 | ||
| 013 | 014+015+…+030 | 2 | Increase/decrease in operating assets and liabilities | 148,295,051 | -368,233,585 | |
| 014 | 2.1 | Increase/decrease in investments available for sale | -154,535,490 | -477,769,731 | ||
| 015 | 2.2 | Increase/decrease in investments valued at fair value through profit or loss |
14,945,210 | 139,985,599 | ||
| 016 | 2.3 | Increase/decrease in loans and receivables | 165,641,811 | -265,050,427 | ||
| 017 | 2.4 | Increase/decrease in deposits at insurance business ceded to reinsurance |
0 | 0 | ||
| 018 | 2.5 | Increase/decrease in investments for the account and risk of life insurance policyholder |
38,852,956 | -12,964,129 | ||
| 019 | 2.6 | Increase/decrease in reinsurance share in technical provisions | -261,885,390 | 8,001,418 | ||
| 020 | 2.7 | Increase/decrease in tax assets | 227,960 | -3,838,004 | ||
| 021 | 2.8 | Increase/decrease in receivables | 63,157,156 | 21,623,953 | ||
| 022 | 2.9 | Increase/decrease in other assets | 0 | 0 | ||
| 023 | 2.10 | Increase/decrease in prepaid expenses and accrued income | -23,534,522 | 15,090,608 | ||
| 024 | 2.11 | Increase/decrease in technical provisions | 380,443,682 | 215,200,543 | ||
| 025 | 2.12 | Increase/decrease in technical provisions for life insurance when the policyholder bears the investment risk |
-38,852,956 | 12,964,129 | ||
| 026 | 2.13 | Increase/decrease in tax liabilities | -2,170,246 | 571,297 | ||
| 027 | 2.14 | Increase/decrease in deposits retained from business ceded to reinsurance |
0 | 0 | ||
| 028 | 2.15 | Increase/decrease in financial liabilities | 8,117,538 | -925,746 | ||
| 029 | 2.16 | Increase/decrease in other liabilities | 4,240,687 | -1,830,259 | ||
| 030 | 2.17 | Increase/decrease in accrued expenses and deferred income | -46,353,345 | -19,292,836 | ||
| 031 | 3 | Income tax paid | -68,716,214 | -59,402,832 | ||
| 032 | 033+034+…+046 | II | CASH FLOW FROM INVESTING ACTIVITIES | 163,760,406 | 2,346,287 | |
| 033 | 1 | Proceeds from sale of tangible assets | 2,177,887 | 17,912,181 | ||
| 034 | 2 | Purchases of tangible assets | -46,375,848 | -57,523,511 | ||
| 035 | 3 | Proceeds from sale of intangible assets | 69,895 | 628,124 | ||
| 036 | 4 | Purchases of intangible assets | -79,808,256 | -29,714,695 | ||
| 037 | 5 | Proceeds from the sale of land and buildings not used for business activities |
81,330,444 | 16,750,126 | ||
| 038 | 6 | Purchase of land and buildings not used for business activities | -28,239,135 | -7,031,848 | ||
| 039 | 7 | Increase/decrease in investments in subsidiaries, associates and participation in joint ventures |
-66,537,290 | 13,500,000 | ||
| 040 | 8 | Proceeds from held-to-maturity investments | 450,695,373 | 385,857,840 | ||
| 041 | 9 | Payments for held-to-maturity investments | -207,436,962 | -387,959,348 | ||
| 042 | 10 | Proceeds from sale of financial instruments | 0 | 0 | ||
| 043 | 11 | Payments for investments in financial instruments | 0 | 0 | ||
| 044 | 12 | Proceeds from dividends and share in profit | 9,155,896 | 24,523,707 | ||
| 045 | 13 | Proceeds from repayment of given short-term and long-term loans | 77,870,911 | 60,731,843 | ||
| 046 | 14 | Payments for given long-term and short-term loans | -29,142,509 | -35,328,132 | ||
| 047 | 048+049+050 +051+052 |
III | CASH FLOW FROM FINANCING ACTIVITIES | -29,109,863 | -26,862,157 | |
| 048 | 1 | Proceeds from share capital increase | 0 | 0 | ||
| 049 | 2 | Proceeds from received short-term and long-term loans | 0 | 0 | ||
| 050 | 3 | Repayment of short-term and long-term loans | -28,953,112 | -25,769,594 | ||
| 051 | 4 | Purchase of treasury shares | 0 | 0 | ||
| 052 | 5 | Payment of shares in profit (dividends) | -156,751 | -1,092,563 | ||
| 053 | 001+032+047 | NET CASH FLOW | 480,103,494 | -212,462,334 | ||
| 054 | IV | EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS |
-38,005,900 | -13,394,247 | ||
| 055 | 053+054 | V | NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS | 442,097,594 | -225,856,581 | |
| 056 | 1 | Cash and cash equivalents at beginning of period | 220,351,390 | 446,207,971 | ||
| 057 | 055+056 | 2 | Cash and cash equivalents at end of period | 662,448,984 | 220,351,390 |
Note: Positions reducing the cash flow are entered with a minus.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the period 1 January 2020 – 31 December 2020
| Attributable to owners of the parent company | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Position | Paid-up capital | Reserves | Retained | Attributable to | Attributable to | |||||
| no. | Position description | (ordinary and | Share premium | Revaluation | (legal, | earnings or | Profit/loss for | Total equity | non-controlling | non-controlling |
| preference shares) |
reserves | statutory, other) |
accumulated loss |
the year | interests | interests | ||||
| I. | Balance at 1 January of previous year | 589,325,800 | 681,482,525 | 340,283,451 | 402,038,575 | 858,901,275 | 337,079,883 | 3,209,111,509 | 12,213,767 | 3,221,325,276 |
| 1. | Changes in accounting policies | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. | Correction of prior periods errors | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| II. | Balance at 1 January of previous year (restated) | 589,325,800 | 681,482,525 | 340,283,451 | 402,038,575 | 858,901,275 | 337,079,883 | 3,209,111,509 | 12,213,767 | 3,221,325,276 |
| III. | Comprehensive income or loss of the previous year | 0 | 0 | 270,729,624 | 0 | 0 | 339,392,129 | 610,121,753 | 449,227 | 610,570,980 |
| 1. | Profit or loss for the period | 0 | 0 | 0 | 0 | 0 | 339,392,129 | 339,392,129 | 347,362 | 339,739,491 |
| 2. | Other comprehensive income or loss of the previous year | 0 | 0 | 270,729,624 | 0 | 0 | 0 | 270,729,624 | 101,865 | 270,831,489 |
| 2.1. | Unrealized gains or losses from tangible assets (land and buildings) | 0 | 0 | 19,583,202 | 0 | 0 | 0 | 19,583,202 | 25,970 | 19,609,172 |
| 2.2. | Unrealized gains or losses from financial assets available for sale | 0 | 0 | 277,011,573 | 0 | 0 | 0 | 277,011,573 | 58,287 | 277,069,860 |
| 2.3. | Realized gains or losses from financial assets available for sale | 0 | 0 | -27,005,744 | 0 | 0 | 0 | -27,005,744 | 0 | -27,005,744 |
| 2.4. | Other non-owner changes in equity | 0 | 0 | 1,140,593 | 0 | 0 | 0 | 1,140,593 | 17,608 | 1,158,201 |
| IV. | Transactions with owners (previous period) | 0 | 0 | -1,673,804 | 0 | 339,160,857 | -337,079,883 | 407,170 | -109,636 | 297,534 |
| 1. | Increase/decrease in share capital | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. | Other payments by owners | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. | Payment of shares in profit/dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -112,563 | -112,563 |
| 4. | Other distributions to owners | 0 | 0 | -1,673,804 | 0 | 339,160,857 | -337,079,883 | 407,170 | 2,927 | 410,097 |
| V. | Balance at the last day of the reporting period in the previous year | 589,325,800 | 681,482,525 | 609,339,271 | 402,038,575 | 1,198,062,132 | 339,392,129 | 3,819,640,432 | 12,553,358 | 3,832,193,790 |
| VI. | Balance at 1 January of current year | 589,325,800 | 681,482,525 | 609,339,271 | 402,038,575 | 1,198,062,132 | 339,392,129 | 3,819,640,432 | 12,553,358 | 3,832,193,790 |
| 1. | Changes in accounting policies | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. | Correction of prior periods errors | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| VII. | Balance at 1 January of current year (restated) | 589,325,800 | 681,482,525 | 609,339,271 | 402,038,575 | 1,198,062,132 | 339,392,129 | 3,819,640,432 | 12,553,358 | 3,832,193,790 |
| VIII. | Comprehensive income or loss of the current year | 0 | 0 | -38,971,168 | 0 | 0 | 327,902,069 | 288,930,901 | 295,386 | 289,226,287 |
| 1. | Profit or loss for the period | 0 | 0 | 0 | 0 | 0 | 327,902,069 | 327,902,069 | 298,786 | 328,200,855 |
| 2. | Other comprehensive income or loss of the current year | 0 | 0 | -38,971,168 | 0 | 0 | 0 | -38,971,168 | -3,400 | -38,974,568 |
| 2.1. | Unrealized gains or losses from tangible assets (land and buildings) | 0 | 0 | -5,448,093 | 0 | 0 | 0 | -5,448,093 | -63,084 | -5,511,177 |
| 2.2. | Unrealized gains or losses from financial assets available for sale | 0 | 0 | 14,993,777 | 0 | 0 | 0 | 14,993,777 | -6,590 | 14,987,187 |
| 2.3. | Realized gains or losses from financial assets available for sale | 0 | 0 | -51,498,680 | 0 | 0 | 0 | -51,498,680 | 0 | -51,498,680 |
| 2.4. | Other non-owner changes in equity | 0 | 0 | 2,981,828 | 0 | 0 | 0 | 2,981,828 | 66,274 | 3,048,102 |
| IX. | Transactions with owners (current period) | 0 | 0 | -1,918,480 | 0 | 340,091,085 | -339,392,129 | -1,219,524 | -194,303 | -1,413,827 |
| 1. | Increase/decrease of share capital | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. | Other payments by owners | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. | Payment of shares in profit/dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -156,751 | -156,751 |
| 4. | Other distributions to owners | 0 | 0 | -1,918,480 | 0 | 340,091,085 | -339,392,129 | -1,219,524 | -37,552 | -1,257,076 |
| X. | Balance at the last day of the reporting period in the current year | 589,325,800 | 681,482,525 | 568,449,623 | 402,038,575 | 1,538,153,217 | 327,902,069 | 4,107,351,809 | 12,654,441 | 4,120,006,250 |
Reconciliation of the financial statements and statements for the Croatian Financial Services Supervisory Agency
The reconciliation between the financial statements as prescribed by the Ordinance on the structure and content of financial statements of insurance and reinsurance companies, and the annual financial statements prepared in accordance with the IFRS reporting framework is presented below.
- Reconciliation of the statement of comprehensive income prepared in accordance with the HANFA format and the format of the financial statements prepared in accordance with the IFRS reporting framework
| Report for the Croatian Financial Services Supervisory | Basic financial statements | |||||||
|---|---|---|---|---|---|---|---|---|
| Agency Position description |
HRK '000 | 1 | 2 | 3 | 4 | 5 | HRK '000 | HRK '000 |
| Earned premiums (recognised in revenue) | 2,498,886 | 2,498,886 | Net earned premiums | |||||
| Gross written premiums | 2,741,819 | |||||||
| Impairment and collected premium impairment |
2,775 | |||||||
| Premiums ceded to reinsurance (-) | (248,776) | |||||||
| Change in gross provisions for unearned premiums (+/-) |
(13,442) | |||||||
| Change in provision for unearned premiums, | ||||||||
| reinsurance share (+/-) | 16,510 | |||||||
| Investment income Income from subsidiaries, associates and |
386,564 | (3,993) | 26,108 | - | - | - | 408,679 | Finance income |
| joint ventures | 25,698 | |||||||
| Income from investments in land and | 28,494 | (3,144) | ||||||
| buildings Interest income |
179,496 | |||||||
| Unrealised gain on investments | 4,037 | |||||||
| Realised gain on investments | 89,829 | |||||||
| Net foreign exchange gains Other investment income |
37,193 21,817 |
(849) | 26,108 | |||||
| Income from commissions and fees | 41,578 | 41,578 | Income from commissions and | |||||
| fees | ||||||||
| Other insurance-technical income, net of reinsurance |
31,047 | (31,047) | ||||||
| Other income | 9,018 | 29,358 | 3,042 | 41,418 | Other operating income | |||
| Net claims incurred | (1,682,462) | 13,610 | (1,668,852) | Claims incurred, net of reinsurance and coinsurance |
||||
| Settled claims | (1,616,354) | |||||||
| Gross amount (-) | (1,719,629) | |||||||
| Reinsurer's share (+) | 103,275 | |||||||
| Change in claims provisions (+/-) Gross amount (-) |
(66,107) (310,942) |
|||||||
| Reinsurer's share (+) | 244,835 | |||||||
| Change in mathematical provision and | ||||||||
| other technical provisions, net of reinsurance |
(25,529) | 25,529 | - | |||||
| Change in mathematical provision (+/-) | (41,906) | 41,906 | - | |||||
| Gross amount (-) | (41,896) (10) |
41,896 10 |
- - |
|||||
| Reinsurer's share (+) Change in other technical provisions, net of |
||||||||
| reinsurance (+/-) | 16,377 | (16,377) | - | |||||
| Gross amount (-) Reinsurer's share (+) |
16,377 - |
(16,377) | - - |
|||||
| Special provisions for unit-linked life | ||||||||
| insurance group, net of reinsurance (+/-) | 44,417 | (44,417) | - | |||||
| Gross amount (-) Reinsurer's share (+) |
44,417 - |
(44,417) | - - |
|||||
| Expenditures for return of premium | ||||||||
| (bonuses and rebates), net of reinsurance | (5,278) | 5,278 | - | |||||
| Depending on the result (bonuses) Not depending on the result (rebates) |
(5,278) - |
5,278 | - | |||||
| Operating expenditures (for business | (864,492) | (3,042) | (867,534) | |||||
| operations), net | ||||||||
| Acquisition costs Commission |
(477,748) (256,323) |
(477,748) | Acquisition costs | |||||
| Other acquisition costs | (203,665) | |||||||
| Change in deferred acquisition costs (+/-) | (17,760) | |||||||
| Administration costs (administrative | (386,744) | (3,042) | (389,786) | Administration costs | ||||
| expenses) | ||||||||
| Depreciation charge Salaries, taxes and contributions from and on |
(57,063) | |||||||
| salaries | (131,335) | |||||||
| Other administrative expenses Investment charges |
(198,346) (117,198) |
3,993 | (26,108) | - | (3,042) - |
- | (139,313) | Finance costs |
| Depreciation of land and buildings not | ||||||||
| intended for business operations of the | - | |||||||
| company Interest expense |
(10,650) | |||||||
| Impairment of investments | (7,755) | |||||||
| Realised losses on investments | (34,570) | |||||||
| Unrealised losses on investments Net foreign exchange losses |
(10,771) - |
(26,108) | ||||||
| Other investment costs | (53,451) | 3,993 | ||||||
| Other technical expenses, net of reinsurance |
(38,675) | 38,675 | ||||||
| Expenses for preventive operations | - | |||||||
| Other technical expenses of insurance | (38,675) | 38,675 | ||||||
| Other expenses, including value adjustments |
(3,736) | (36,986) | (40,722) | Other operating expenses | ||||
| Profit or loss for the accounting period | 274,140 | - | - | - | - | - | 274,140 | Profit/(loss) before tax |
| before tax (+/-) | ||||||||
| Income tax or loss Current tax expense |
(44,551) (42,689) |
(44,551) | Income tax | |||||
| Deferred tax expense (income) | (1,862) | |||||||
| Profit or loss for the accounting period after tax (+/-) |
229,589 | 229,589 | Profit/(loss) for the period |
Reconciliation of the statement of comprehensive income prepared in accordance with the HANFA format and the format of these financial statements (continued)
-
- Income and expenses from the sale of land and buildings and income from reversal of impairment of investments are recorded on a net basis
-
- Foreign exchange differences are recorded on a net basis.
-
- Reclassification of other insurance and technical income, net of reinsurance to other operating income and reclassification of other technical costs, net of reinsurance to other operating expenses and netting of income from sale of tangible assets.
-
- Reclassification of other income and other administrative expenses are presented at net basis in position other operating income/administrative costs.
-
- The change in mathematical provision, special provision for life assurance policies where the policyholder bears the risk of insurance and expenditure for return of premium (bonuses and rebates) are recorded within claims incurred, net of reinsurance and coinsurance.
-
Reconciliation of the statement of financial position prepared in accordance with the HANFA format and the financial statements in accordance with the IFRS reporting framework
| Report for the Croatian Financial Services Supervisory Agency | Basic financial statements | ||||||
|---|---|---|---|---|---|---|---|
| Position description | HRK'000 | 1 | 2 | 3 | 4 | HRK'000 | Position description |
| INTANGIBLE ASSETS | 96,858 | 96,858 | Intangible assets | ||||
| Goodwill | |||||||
| Other intangible assets | 96,858 | ||||||
| TANGIBLE ASSETS | 553,235 | (329) | 552,906 | Property and equipment | |||
| Land and buildings intended for company business | |||||||
| operations | 264,388 | ||||||
| Equipment | 26,848 | ||||||
| Other tangible assets and inventories | 261,999 | (329) | |||||
| INVESTMENTS | 8,491,904 | 400,250 | - | ||||
| Investments in land and buildings not intended for | 456,653 | 456,653 | Investment property | ||||
| company business operations | |||||||
| Investments in subsidiaries, associates and joint | 376,516 | 376,516 | Investments in subsidiaries | ||||
| ventures | associates and joint ventures | ||||||
| Shares and stakes in subsidiaries Shares and stakes in associates |
342,828 5,688 |
||||||
| Shares and stakes in joint ventures | 28,000 | ||||||
| Financial assets | 7,658,735 | 400,250 | |||||
| Held-to-maturity financial assets | 2,082,335 | 2,082,335 | Held-to-maturity investments | ||||
| Debt financial instruments | 2,082,335 | ||||||
| Other | |||||||
| Available-for-sale financial | |||||||
| Available-for-sale financial assets | 4,536,162 | 4,536,162 | assets | ||||
| Equity financial instruments | 536,134 | ||||||
| Debt financial instruments | 3,807,954 | ||||||
| Shares in investment funds | 192,074 | ||||||
| Other | |||||||
| Financial assets at fair value through profit or loss | 21,303 | 400,250 | 421,553 | Financial assets at fair value | |||
| through profit or loss | |||||||
| Equity financial instruments | 17,188 | ||||||
| Debt financial instruments | |||||||
| Derivative financial instruments | 4,115 | ||||||
| Shares in investment funds | 400,250 | ||||||
| Other | |||||||
| Loans and receivables | 1,018,935 | - | 1,018,935 | Loans and receivables | |||
| Deposits with credit institutions | 493,060 | ||||||
| Loans | 348,650 | ||||||
| Other | 177,225 | ||||||
| Deposits with cedent | |||||||
| INVESTMENTS FOR THE ACCOUNT AND RISK OF LIFE INSURANCE POLICYHOLDERS |
400,250 | (400,250) | |||||
| REINSURER'S SHARE IN TECHNICAL | Reinsurance share in insurance | ||||||
| PROVISIONS | 474,869 | 474,869 | contract provisions | ||||
| Provision for unearned premiums, reinsurance share | 58,699 | ||||||
| Mathematical provisions, reinsurance share | 12 | ||||||
| Claims provisions, reinsurance share | 416,158 | ||||||
| Provisions for bonuses and discounts, reinsurance | |||||||
| share | |||||||
| Equalisation provisions, reinsurance share | |||||||
| Other technical provisions, reinsurance share | |||||||
| Special provision for unit-linked life insurance group, | |||||||
| reinsurance share | |||||||
| DEFERRED AND CURRENT TAX ASSETS | 67,468 | (67,468) | - | - | |||
| Deferred tax assets | 67,468 | (67,468) | - | Deferred tax assets | |||
| Current tax assets | - | ||||||
| RECEIVABLES | 741,966 | (3,683) | 52,731 | 791,014 | Insurance contracts and other | ||
| receivables | |||||||
| Receivables from insurance business From policyholders |
486,374 485,690 |
||||||
| From insurance agents, or insurance brokers | 684 | ||||||
| Reinsurance receivables | 59,038 | ||||||
| Other receivables | 196,554 | (3,683) | 52,731 | ||||
| Receivables from other insurance business | 164,158 | ||||||
| Receivables for income from investments | 1,034 | ||||||
| Other receivables | 31,362 | (3,683) | 52,731 | ||||
| Other receivables | 512,937 | (1) | |||||
| Cash at bank and in hand | 512,936 | 512,936 | Cash and cash equivalents | ||||
| Funds in the business account | 450,515 | ||||||
| Funds in the account of assets backing mathematical | |||||||
| provision | 62,420 | ||||||
| Cash on hand | |||||||
| Non-current assets held for sale and discontinued | - | ||||||
| operation | |||||||
| Other | 1 | (1) | |||||
| PREPAID EXPENSES AND ACCRUED INCOME | 260,751 | (52,401) | |||||
| Deferred interest and rent | 10 | (10) | |||||
| Deferred acquisition costs | 208,350 | 208,350 | Deferred acquisition costs | ||||
| Other prepayments and accrued income | 52,391 | (52,391) | |||||
| TOTAL ASSETS | 11,600,238 | - | (67,468) | (3,683) | - | 11,529,087 | Total assets |
| OFF-BALANCE-SHEET ITEMS | 3,050,039 |
Reconciliation of the statement of financial position prepared in accordance with the HANFA format and the format of the financial statements prepared in accordance with the IFRS reporting framework (continued)
-
- Investments held on account and at risk of unit-linked life assurance policyholders are recorded together with financial assets at fair value through profit or loss.
-
- Deferred tax assets and liabilities are recorded on a net basis in the Basic financial statements.
-
- Internal liabilities are offset with corresponding receivables in the Basic financial statements.
-
- Inventories, other assets and prepaid expenses and accrued income are recorded together with insurance receivables and other receivables.
| Report for the Croatian Financial Services Supervisory Agency | Basic financial statements | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Position description | HRK'000 | 1 | 2 | 3 | 4 | 5 | HRK'000 | Position description | |
| CAPITAL AND RESERVES | 3,533,840 | - | - | ||||||
| Subscribed share capital | 589,326 | - | - | 589,326 | Share capital | ||||
| Paid-up capital - ordinary shares | 589,326 | ||||||||
| Paid-up capital - preference shares | |||||||||
| Issued shares premiums (capital reserves) | 681,483 | 681,483 | Issued shares premiums | ||||||
| Revaluation reserves | 471,124 | - | - | 471,124 | Revaluation reserves | ||||
| Land and buildings | 49,174 | ||||||||
| Financial assets available-for-sale | 421,951 | ||||||||
| Other revaluation reserves | - | - | |||||||
| Reserves | 402,038 | - | - | 402,038 | Reserves | ||||
| Legal reserves | 30,079 | ||||||||
| Statutory reserves | 147,220 | ||||||||
| Other reserves | 224,739 | ||||||||
| Retained profit or transferred loss | 1,160,279 | - | 229,589 | - | 1,389,868 | Retained profit | |||
| Retained profit | 1,160,279 | - | 229,589 | ||||||
| Accumulated loss (-) | - | - | |||||||
| Profit or loss for the current accounting period | 229,589 | - | (229,589) | - | |||||
| Profit for the current accounting period | 229,589 | (229,589) | |||||||
| Loss for the current accounting period ( - ) | |||||||||
| SUBORDINATED LIABILITIES | |||||||||
| NON-CONTROLLING INTEREST | |||||||||
| Insurance contract | |||||||||
| TECHNICAL PROVISIONS | 6,635,006 | 400,250 | - | 7,035,256 | provisions | ||||
| Provisions for unearned premiums, gross amount | 1,148,879 | ||||||||
| Mathematical provisions, gross amount | 2,565,485 | ||||||||
| Claims provisions, gross amount | 2,905,442 | ||||||||
| Provisions for bonuses and discounts, gross amount | 7,214 | ||||||||
| Equalisation provisions, gross amount | 7,056 | ||||||||
| Other technical provisions, gross amount | 931 | ||||||||
| SPECIAL PROVISIONS FOR UNIT-LINKED LIFE | 400,250 | (400,250) | |||||||
| INSURANCE GROUP, gross amount | |||||||||
| OTHER PROVISIONS | 89,573 | - | (3,034) | ||||||
| Provisions for pensions and similar liabilities | 86,539 | 86,539 | Provisions | ||||||
| Other provisions | 3,034 | (3,034) | |||||||
| DEFERRED AND CURRENT TAX LIABILITY | 107,794 | (67,468) | - | ||||||
| Deferred tax liability | 103,448 | (67,468) | 35,980 | Deferred tax liability | |||||
| Current tax liability | 4,346 | 4,346 | Current tax liability | ||||||
| DEPOSIT RETAINED FROM BUSINESS CEDED | |||||||||
| TO REINSURANCE | |||||||||
| FINANCIAL LIABILITIES | 284,278 | 284,278 | Financial liabilities | ||||||
| Borrowings | |||||||||
| Issued financial instruments payable | |||||||||
| Other financial liabilities | 284,278 | ||||||||
| OTHER LIABILITIES | 262,993 | - | (3,683) | 289,539 | 548,849 | Insurance contracts and other payables and deferred income |
|||
| Liabilities from direct insurance business | 79,842 | ||||||||
| Liabilities from co-insurance and reinsurance | |||||||||
| business | 90,290 | ||||||||
| Liabilities for sale and discontinued operation | |||||||||
| Other liabilities | 92,861 | (3,683) | 289,539 | ||||||
| ACCRUED EXPENSES AND DEFERRED INCOME | 286,505 | (286,505) | |||||||
| Deferred reinsurance commission | |||||||||
| Other accrued expenses and deferred income | 286,505 | (286,505) | |||||||
| TOTAL EQUITY AND LIABILITIES | 11,600,238 | - | (67,468) | - | (3,683) | - | 11,529,087 | Total equity and liabilities | |
| OFF-BALANCE-SHEET ITEMS | 3,050,039 |
-
- A special provision for unit-linked life insurance group is recorded within Technical provision.
-
- Deferred tax assets and liabilities are offset in the Basic financial statements.
-
- Profit or loss for the current accounting period is presented together with retained earnings in the financial statements prepared in accordance with the IFRS reporting framework.
-
- Internal liabilities are offset with corresponding receivables in the Basic financial statements.
-
- Other provisions and accrued expenses and deferred income are recorded in the financial statements prepared in accordance with the IFRS reporting framework within Insurance and other liabilities, provisions and deferred income.
-
Reconciliation of the consolidated statement of comprehensive income prepared in accordance with the HANFA format and the format of the financial statements prepared in accordance with the IFRS reporting framework
| Report for the Croatian Financial Services Supervisory | Basic financial statements | |||||||
|---|---|---|---|---|---|---|---|---|
| Agency Position description |
HRK '000 | 1 | 2 | 3 | 4 | 5 | HRK '000 | Position description |
| Earned premiums (recognised in revenue) | 2,979,538 | 2,979,538 | Net earned premiums | |||||
| Gross written premiums | 3,240,231 | |||||||
| Impairment and collected premium impairment |
(2,833) | |||||||
| Premiums ceded to reinsurance (-) | (277,861) | |||||||
| Change in gross provisions for unearned | 3,767 | |||||||
| premiums (+/-) | ||||||||
| Change in provision for unearned premiums, reinsurance share (+/-) |
16,234 | |||||||
| Investment income | 487,706 | (4,891) | 16,135 | - | - | - | 498,950 | Finance income |
| Income from subsidiaries, associates and | 19,749 | (10,339) | ||||||
| joint ventures Income from investments in land and |
||||||||
| buildings | 110,837 | (4,891) | ||||||
| Interest income | 195,584 | |||||||
| Unrealised gain on investments Realised gain on investments |
5,930 89,878 |
|||||||
| Net foreign exchange gains | 38,006 | 26,474 | ||||||
| Other investment income | 27,722 | - | ||||||
| 10,339 | 10,339 | Share in profit of associates | ||||||
| Income from commissions and fees | 43,168 | 43,168 | Income from commissions and fees |
|||||
| Other insurance-technical income, net of | 45,090 | (45,090) | ||||||
| reinsurance | ||||||||
| Other income | 124,268 | 43,304 | 5,149 | 172,721 | Other operating income Claims incurred, net of |
|||
| Net claims incurred | (1,920,259) | (16,382) | (1,936,641) | reinsurance and coinsurance | ||||
| Settled claims | (1,838,666) | |||||||
| Gross amount (-) | (1,946,473) 107,807 |
|||||||
| Reinsurer's share (+) Change in claims provisions (+/-) |
(81,593) | |||||||
| Gross amount (-) | (327,081) | |||||||
| Reinsurer's share (+) | 245,488 | |||||||
| Change in mathematical provision and other technical provisions, net of |
(46,085) | 46,085 | - | |||||
| reinsurance | ||||||||
| Change in mathematical provision (+/-) | (62,786) | 62,786 | - | |||||
| Gross amount (-) | (62,776) | 62,776 | - | |||||
| Reinsurer's share (+) Change in other technical provisions, net of |
(10) | 10 | - | |||||
| reinsurance (+/-) | 16,701 | (16,701) | - | |||||
| Gross amount (-) | 16,701 | (16,701) | - | |||||
| Reinsurer's share (+) Special provisions for unit-linked life |
- | - | ||||||
| insurance group, net of reinsurance (+/-) | 38,125 | (38,125) | - | |||||
| Gross amount (-) | 38,125 | (38,125) | - | |||||
| Reinsurer's share (+) Expenditures for return of premium |
- | - | ||||||
| (bonuses and rebates), net of reinsurance | (8,422) | 8,422 | - | |||||
| Depending on the result (bonuses) | (5,278) | 5,278 | - | |||||
| Not depending on the result (rebates) | (3,144) | 3,144 | ||||||
| Operating expenditures (for business operations), net |
(1,155,663) | (5,189) | (1,160,852) | |||||
| Acquisition costs | (577,716) | (577,716) | Acquisition costs | |||||
| Commission | (281,638) | |||||||
| Other acquisition costs Change in deferred acquisition costs (+/-) |
(273,920) (22,158) |
|||||||
| Administration costs (administrative expenses) |
(577,947) | (5,189) | (583,136) | Administration costs | ||||
| Depreciation charge | (81,982) | |||||||
| Salaries, taxes and contributions from and on | (209,664) | |||||||
| salaries | ||||||||
| Other administrative expenses Investment charges |
(286,300) (127,096) |
4,891 | (26,474) | - | (5,189) - |
- | (148,679) | Finance costs |
| Depreciation of land and buildings not | ||||||||
| intended for business operations of the | - | |||||||
| company Interest expense |
(12,145) | |||||||
| Impairment of investments | (7,440) | |||||||
| Realised losses on investments | (34,570) | |||||||
| Unrealised losses on investments Net foreign exchange losses |
(12,136) - |
(26,474) | ||||||
| Other investment costs | (60,805) | 4,891 | - | |||||
| Other technical expenses, net of | (62,105) | 62,105 | ||||||
| reinsurance | ||||||||
| Expenses for preventive operations Other technical expenses of insurance |
(1,343) (60,762) |
1,343 60,762 |
||||||
| Other expenses, including value | (6,675) | (60,319) | 41 | (66,954) | Other operating expenses | |||
| adjustments | ||||||||
| Profit or loss for the accounting period before tax (+/-) |
391,590 | - | - | - | - | - | 391,590 | Profit/(loss) before tax |
| Income tax or loss | (63,388) | (63,388) | Income tax | |||||
| Current tax expense | (62,570) | |||||||
| Deferred tax expense (income) Profit or loss for the accounting period |
(818) | |||||||
| after tax (+/-) | 328,202 | 328,202 | Profit/(loss) for the period |
Reconciliation of the statement of comprehensive income prepared in accordance with the HANFA format and the format of these financial statements (continued)
-
- Income and expenses from the sale of land and buildings are recorded on a net basis.
-
- Foreign exchange differences are recorded on a gross basis and share in profit of associates is presented as a separate line in the Basic financial statements.
-
- Reclassification of other insurance and technical income, net of reinsurance to other operating income and reclassification of other technical costs, net of reinsurance to other operating expenses and netting of income from the sale of tangible assets.
-
- Reclassification of other revenues and other administrative expenses are presented at net basis in position other operating income/administrative costs.
-
- The change in mathematical provision, special provision for life assurance policies where the policyholder bears the risk of insurance and expenditure for return of premium (bonuses and rebates) are recorded within claims incurred, net of reinsurance and coinsurance.
-
Reconciliation of the consolidated statement of financial position prepared in accordance with the HANFA format and the financial statements in accordance with the IFRS reporting framework
| Report for the Croatian Financial Services Supervisory Agency | Basic financial statements | |||||||
|---|---|---|---|---|---|---|---|---|
| Position description | HRK'000 | 1 | 2 | 3 | 4 | 5 | HRK'000 | Position description |
| INTANGIBLE ASSETS | 107,873 | 107,873 | Intangible assets | |||||
| Goodwill | ||||||||
| Other intangible assets | 107,873 | |||||||
| TANGIBLE ASSETS | 876,965 | (2,579) | 874,386 | Property and equipment | ||||
| Land and buildings intended for company business | ||||||||
| operations | 496,663 | |||||||
| Equipment | 78,011 | |||||||
| Other tangible assets and inventories | 302,291 | (2,579) | ||||||
| INVESTMENTS | 9,617,205 | 412,084 | (15,061) | |||||
| Investments in land and buildings not intended for | ||||||||
| company business operations | 1,013,247 | 1,013,247 | Investment property | |||||
| Investments in subsidiaries, associates and joint | Investments in subsidiaries | |||||||
| ventures | 76,593 | 76,593 | associates and joint ventures | |||||
| Shares and stakes in subsidiaries | ||||||||
| Shares and stakes in associates | 10,091 | |||||||
| Shares and stakes in joint ventures | 66,502 | |||||||
| Financial assets | 8,527,365 | 412,084 | (15,061) | |||||
| Held-to-maturity financial assets | 2,169,783 | 2,169,783 | Held-to-maturity investments | |||||
| Debt financial instruments | 2,169,783 | |||||||
| Other | ||||||||
| Available-for-sale financial | ||||||||
| Available-for-sale financial assets | 5,123,648 | 5,123,648 | assets | |||||
| Equity financial instruments | 536,699 | |||||||
| Debt financial instruments | 4,394,875 | |||||||
| Shares in investment funds | 192,074 | |||||||
| Other | ||||||||
| Financial assets at fair value through profit or loss | 47,351 | 412,084 | 459,435 | Financial assets at fair value | ||||
| through profit or loss | ||||||||
| Equity financial instruments | 17,188 | |||||||
| Debt financial instruments | ||||||||
| Derivative financial instruments | 4,115 | |||||||
| Shares in investment funds | 26,048 | 412,084 | ||||||
| Other | ||||||||
| Loans and receivables | 1,186,583 | (15,061) | 1,171,522 | Loans and receivables | ||||
| Deposits with credit institutions | 908,433 | (15,061) | ||||||
| Loans | 100,925 | |||||||
| Other | 177,225 | |||||||
| Deposits with cedent | ||||||||
| INVESTMENTS FOR THE ACCOUNT AND RISK OF | 412,084 | (412,084) | ||||||
| LIFE INSURANCE POLICYHOLDERS | ||||||||
| REINSURER'S SHARE IN TECHNICAL PROVISIONS | 488,265 | 488,265 | Reinsurance share in | |||||
| insurance contract provisions | ||||||||
| Provision for unearned premiums, reinsurance share | 64,700 | |||||||
| Mathematical provisions, reinsurance share | 12 | |||||||
| Claims provisions, reinsurance share | 423,553 | |||||||
| Provisions for bonuses and discounts, reinsurance | ||||||||
| share | ||||||||
| Equalisation provisions, reinsurance share | ||||||||
| Other technical provisions, reinsurance share | ||||||||
| Special provision for unit-linked life insurance group, | ||||||||
| reinsurance share | ||||||||
| DEFERRED AND CURRENT TAX ASSETS | 76,752 | - | (67,665) | (7,434) | ||||
| Deferred tax assets | 69,318 | (67,665) | 1,653 | Deferred tax assets | ||||
| Current tax assets | 7,434 | (7,434) | ||||||
| RECEIVABLES | 877,139 | (57,069) | 81,974 | 902,044 | Insurance contract and other receivables |
|||
| Receivables from insurance business | 526,358 | |||||||
| From policyholders | 525,674 | |||||||
| From insurance agents, or insurance brokers | 684 | |||||||
| Reinsurance receivables | 60,077 | |||||||
| Other receivables | 290,703 | (57,069) | 81,974 | |||||
| Receivables from other insurance business | 166,273 | |||||||
| Receivables for income from investments | 516 | |||||||
| Other receivables | 123,914 | (57,069) | 81,974 | |||||
| Other receivables | 662,450 | 15,061 | (8,086) | |||||
| Cash at bank and in hand | 654,364 | 15,061 | 669,425 | Cash and cash equivalents | ||||
| Funds in the business account | 590,982 | 15,061 | ||||||
| Funds in the account of assets backing mathematical | ||||||||
| provision | 62,945 | |||||||
| Cash on hand | 437 | |||||||
| Non-current assets held for sale and discontinued | ||||||||
| operation | 1,939 | (1,939) | ||||||
| Other | 6,147 | (6,147) | ||||||
| PREPAID EXPENSES AND ACCRUED INCOME | 311,229 | (63,875) | ||||||
| Deferred interest and rent | 1,104 | (1,104) | ||||||
| Deferred acquisition costs | 247,354 | 247,354 | Deferred acquisition costs | |||||
| Other prepayments and accrued income | 62,771 | (62,771) | ||||||
| TOTAL ASSETS | 13,429,962 | - | - | (67,665) | (57,069) | - | 13,305,228 | Total assets |
| OFF-BALANCE-SHEET ITEMS | 3,109,594 |
Reconciliation of the statement of financial position prepared in accordance with the HANFA format and the format of the financial statements prepared in accordance with the IFRS reporting framework (continued)
-
- Investments held on account and at risk of unit-linked life assurance policyholders is recorded together with financial assets at fair value through profit or loss.
-
- Deposits with contractual maturity up to 3 months are recorded together with cash and cash equivalents.
-
- Deferred tax assets and liabilities are recorded on a net basis in the Basic financial statements.
-
- Internal receivables are offset with corresponding liabilities in the Basic financial statements.
-
- Inventories, current tax assets, other assets and prepaid expenses and accrued income are recorded together with insurance contract and other receivables.
| Report for the Croatian Financial Services Supervisory Agency | Basic financial statements | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Position description | HRK'000 | 1 | 2 | 3 | 4 | 5 | HRK'000 | Position description | |
| CAPITAL AND RESERVES | 4,107,351 | - | - | ||||||
| Subscribed share capital | 589,326 | - | - | 589,326 | Share capital | ||||
| Paid-up capital - ordinary shares | 589,326 | ||||||||
| Paid-up capital - preference shares | |||||||||
| Issued shares premiums (capital reserves) | 681,483 | 681,483 | Issued shares premiums | ||||||
| Revaluation reserves | 568,450 | - | - | 568,450 | Revaluation reserves | ||||
| Land and buildings | 112,257 | ||||||||
| Financial assets available-for-sale | 456,028 | ||||||||
| Other revaluation reserves | 165 | - | - | ||||||
| Reserves | 402,038 | - | - | 402,038 | Reserves | ||||
| Legal reserves | 30,079 | ||||||||
| Statutory reserves | 147,220 | ||||||||
| Other reserves | 224,739 | ||||||||
| Retained profit or transferred loss | 1,538,153 | - | 327,902 | - | 1,866,055 | Retained profit | |||
| Retained profit | 1,538,153 | - | 327,902 | ||||||
| Accumulated loss (-) | - | - | |||||||
| Profit or loss for the current accounting period | 327,902 | - | (327,902) | - | |||||
| Profit for the current accounting period | 327,902 | (327,902) | |||||||
| Loss for the current accounting period ( - ) | |||||||||
| SUBORDINATED LIABILITIES | |||||||||
| NON-CONTROLLING INTEREST | 12,654 | 12,654 | |||||||
| TECHNICAL PROVISIONS | 7,623,934 | 412,085 | - | 8,036,019 | Technical provisions | ||||
| Provisions for unearned premiums, gross amount | 1,435,263 | ||||||||
| Mathematical provisions, gross amount | 3,022,248 | ||||||||
| Claims provisions, gross amount | 3,140,531 | ||||||||
| Provisions for bonuses and discounts, gross amount | 9,464 | ||||||||
| Equalisation provisions, gross amount | 7,056 | ||||||||
| Other technical provisions, gross amount | 9,372 | ||||||||
| SPECIAL PROVISIONS FOR UNIT-LINKED LIFE | |||||||||
| INSURANCE GROUP, gross amount | 412,085 | (412,085) | |||||||
| OTHER PROVISIONS | 101,230 | - | (3,271) | ||||||
| Provisions for pensions and similar liabilities | 97,959 | 97,959 | Provisions | ||||||
| Other provisions | 3,271 | (3,271) | |||||||
| DEFERRED AND CURRENT TAX LIABILITY | 172,407 | - | (67,665) | ||||||
| Deferred tax liability | 152,421 | (67,665) | 84,756 | Deferred tax liability | |||||
| Current tax liability | 19,986 | 19,986 | Current tax liability | ||||||
| DEPOSIT RETAINED FROM BUSINESS CEDED | |||||||||
| TO REINSURANCE | |||||||||
| FINANCIAL LIABILITIES | 323,892 | 323,892 | Financial liabilities | ||||||
| Borrowings | |||||||||
| Issued financial instruments payable | |||||||||
| Other financial liabilities | 323,892 | ||||||||
| OTHER LIABILITIES | 376,940 | - | (57,069) | 302,740 | 622,611 | Insurance contract and other payables and deferred income |
|||
| Liabilities from direct insurance business | 92,687 | ||||||||
| Liabilities from co-insurance and reinsurance business |
96,612 | ||||||||
| Liabilities for sale and discontinued operation | 12 | ||||||||
| Other liabilities | 187,629 | (57,069) | 302,740 | ||||||
| ACCRUED EXPENSES AND DEFERRED INCOME | 299,469 | (299,469) | |||||||
| Deferred reinsurance commission | |||||||||
| Other accrued expenses and deferred income | 299,469 | (299,469) | |||||||
| TOTAL EQUITY AND LIABILITIES | 13,429,962 | - | - | (67,665) | (57,069) | - | 13,305,228 | Total equity and liabilities | |
| OFF-BALANCE-SHEET ITEMS | 3,109,594 |
-
A special provision for unit-linked life insurance group is recorded within Technical provision.
-
- Profit or loss for the current accounting period is presented together with retained earnings in the financial statements prepared in accordance with the IFRS reporting framework.
-
- Deferred tax assets and liabilities are recorded on a net basis in the Basic financial statements.
-
- Internal receivables are offset with corresponding liabilities in the Basic financial statements.
-
- Other provisions and accrued expenses and deferred income are recorded in the financial statements prepared in accordance with the IFRS reporting framework within Insurance and other liabilities, provisions and deferred income.
Statement of cash flow
The statement of cash flows has been prepared in accordance with the Ordinance on the structure and content of financial statements of insurance and reinsurance companies ("the Ordinance"), and its preparation is described in detail in the Instructions for completing financial statements of insurance and reinsurance companies, but its presentation differs from the statement of cash flows in the financial statements.
The main differences in presentation are described below:
-
Differences in the positions of increase or decrease in assets and liabilities in the statement of cash flows in the financial statements prepared in accordance with the IFRS reporting framework and the statement of cash flows under the Ordinance arise due to differences in the relevant positions of assets and liabilities due to the different presentation in the financial statements compared to the Ordinance. These differences are presented in the adjustments of the statement of financial position (balance sheet).
-
Cash and cash equivalents at the beginning and end of the period presented in the basic financial statements include deposits with contractual maturity up to 3 months as opposed to cash and cash equivalents at the beginning and end of the period presented in the statement of cash flows under the Ordinance.
Statement of changes in equity
In the statements under the Ordinance, profit/loss for the current year is presented in the eponymous column and in the subsequent period, upon adoption of the Decision of the General Assembly and the Supervisory Board, profit/loss is transferred through Other non-owner changes in equity to Retained earnings, while in the basic financial statements it is presented under Retained earnings.