The Ethniki Insurance Group''s 2006 pre-tax profit amounted to Euro2.054 thousand and after tax loss of Euro2.341 thousand, as compared with Euro25.155 thousand after tax profit for the year ended 31 December 2005.
These results include certain non-recurring costs, which if excluded, the Group''s pre-tax profit would amount to Euro37.621 thousand. These costs include an amount of Euro11.376 thousand, which relates to the early retirement scheme involving 98 employees and Euro24.191 thousand, which relates to the reinforcement of outstanding claims reserves for the Motor Third Party Liability, resulted from the analytical file by file review of the reserves. Consequently, the Parent Company will not be distributing any dividend.
The combined ratio for Property & Casualty, excluding the above mentioned non-recurring costs, is 95% (96% for 2005), depicting the quality of the portfolio.
The Group''s activities in Romania showed significant growth, with profit after tax for the subsidiaries GARANTA S.A. and NBG Assigurari S.A. amounting to Euro3.943 thousand versus Euro395 thousand in 2005, whereas total after tax profit for the subsidiaries amounted to Euro5.039 thousand (1.930 thousand in 2005).
PREMIUM INCOME:
Developments in the Greek insurance market were radical in 2006, with Ethniki Insurance taking the first position with 16% market share. This success is mainly attributed to the significant increase in the Life Business by 41%, versus an 18% for the market, while in Property & Casualty gross written premiums for the Parent Company increased by 2%, versus a 5% increase for the market. The Group''s gross written premiums and related revenues for 2006 amounted to Euro724.088 thousand, compared to Euro621.911 thousand in 2005, an increase of 16%. Life business amounted to Euro343.507 thousand, versus Euro243.572 in 2005, showing an increase of 41%, while Euro380.581 thousand represents Property & Casualty business, compared to Euro378.339 in 2005. Group Life income showed a 381% increase compared to 2005. This outstanding achievement is attributed to the Bancassurance products PROSTHETO+ and FRONTIZO. The life coverage of mortgage borrowers continued with accelerating success and penetration reached 62% for new mortgage loans. The above-mentioned products are exclusively distributed by the National Bank of Greece network. Total income for Bancassurance Life amounted to Euro102.621 thousand. Individual Life new business increased by 30%, compared to 2005, outperforming by far the market. Our new commercial policy in the Motor business delivered remarkable results in the 4th quarter 2006, achieving an increase of 36% in new applications for the year and a reduction in the cancellations by 16% versus 2005. The average insurance premium per vehicle remained at levels similar to prior year. Moreover, it should be noted, that Ethniki Insurance''s agency sales network accomplishments were impressive in selling mortgage loans. Assurebanking in 2007 will be offering additional financial products of National Bank of Greece Group, such as Consumer Loans, Credit cards and Mutual Funds.
OUTLOOK FOR 2007:
The outlook for the Greek insurance market is highly promising, taking into account the expected increase in insurance penetration as a percentage of GDP. The relative percentage for 2006 reached 2.6% for Greece, compared to an 8% average for the eurozone countries. The Group expects a significant increase in premium income for 2007. The main growth driver remains Bancassurance Life, where 3 new products will be released. Additional growth is expected in the Life Business, given that all 2006 production targets were exceeded by the agency sales network. Strengthening of the first market position in Property & Casualty is expected in the coming year. The success of the Company''s commercial policy and a fairer competition expected to prevail in the market, will result to a more posilook for the Motor business. Exploitation of synergies through cross-selling in the Company''s portfolio, reaching 1.000.000 clients, will constitute an immediate development target. The expansion of our international activities will focus in countries where National Bank of Greece already has a strong presence.