Annual Report 2001

AXA Konzern AG / AXA Biztost Rt.

REPORT ON THE
2001 BUSINESS YEAR
of
AXA Konzern AG.

Contents
Members of the Supervisory Board........................................................ 3
Members of the Board of Directors ........................................................ 4
Status Report......................................................................................... 5
The 31st December 2001 balance sheet .............................................. 9
The 2001 income statement .................................................................. 11

Members of the
Supervisory Board

MEMBERS OF THE
SUPERVISORY BOARD
CHAIRMAN
Dr. Claus-Michael Dill
President of Board of Directors
of AXA Konzern Aktiengesellschaft, Kln
(from 15.02.2001)
Dr. Wolfram Nolte
Member of Board of Directors of
AXA Konzern Aktiengesellschaft, Kln
(until 15.2.2001)

DEPUTY CHAIRMAN
Claas Kleyboldt
Chairman of Supervisory Board
of AXA Konzern Aktiengesellschaft, Kln

MEMBERS
Christof W. Goeldi
Directeur International AXA
Central Europe, AXA GIE
(from 16.11.2001)
Nol Richardson
Director International
Central & Eastern Europe,
AXA GIE
Dr. Wolfram Nolte
Member of Board of Directors of
AXA Konzern Aktiengesellschaft,
Kln
(from 15.02.2001 to 15.11.2002)

Members of
Board of Directors

MEMBERS OF BOARD OF
DIRECTORS
CHAIRMAN
Franz Fuchs
(from 15.02.2001)
Dr. Claus-Michael Dill
(until 15.02.2001)
MEMBERS
Dipl.Vw. David Furtwngler

COMPANY LEADERS HAVING THE

PROCURATION
Wilhelm Brandstetter
Mag. Erich Eberdorfer
Dr. Lukas Haider
Mag. Herbert Hbl
Alfred Karasinski
Dr. Peter Loisel
Dr. Peter Lovrek
Leopold Raith

Dr. Ott Csurg

(until 31.12.2001)
Othmar Michl
(from 15.11.2001)

Status Report
ECONOMIC SITUATION
Economic development in 2001 was
characterized
by
recurrent
recession warnings related to both
the USA, and Europe and Austria.
The events on 11 September
reinforced the trend taking shape
earlier and led to a massive
depression.
Although,
equity
markets managed to show an
upward trend in the following
months,
development
was
characterized by lateral movements.
In the second half of 2001, boom
turned to a slight recession in
Austria, the GDP grew by 1.2% in
relation to the previous year and
lagged behind the 1.7% average of
the EU15.
After 6.7% in 1999 and 5.8% in
2000, the unemployment rate was
slightly higher again with 6.1% in
2001,
nevertheless,
it
was
significantly better than the EU15
average of 7.6% in 2001. Especially
in the two last months of 2001 and
in January 2002, a definitive
increase of the unemployment rate
could be observed reaching 8.9% in
January 2002, exceeding the usual
seasonal fluctuations.
The 1.8% inflation represented a
medium rate in Europe since the
EU15 indicated an average price
increase of 1.9%. Prosperity
measured by the gross domestic
product is expected to grow by
1.5% in 2002 in relation to its
growth rate in 2001, and will comply
through this through with the
average GDP growth rate of the 15
EU states. A more significant
growth rate of 2.7% forecast earlier

is now expected in 2003, the

earliest.
The fast extension of the sluggish
growth in America last year to
Europe
made
international
dependence visible and offered the
conclusion that the improving
prosperity in America cannot readily
be copied in Europe. After a 4.1%
growth rate improvement of the
American economy in 2000, this
rate reached only 1.1% in 2001. It is
clear that the growth rate of 0.7%
expected for 2002 still lags far
behind. An improvement to 3.8%
has been forecast for 2003 only,
probably exceeding the European
average.

THE EXPECTED DEVELOPMENT

OF THE COMPANY
Following the balance sheet date,
AXA Concern A.G. has developed
in compliance with the plan. No
material events, acquisition or sale
of stakes have taken place. We
expect development in line with our
plans and a positive course of
business for the whole year of 2002.

INSURANCE MARKET IN 2001

The unambiguous growth of the
Austrian insurance sector can be
attributed to life insurance, similarly
to previous years. According to the
calculation of the Austrian insurance
companies federation, the total
volume of insurance premium
increased by 6.6% in 2001 to ATS
172 billion (EUR 12.5 billion).
Growth in life insurance slightly
slowed down in relation to 1999 and
2000, and reached 8.4% in 2001
according to provisional figures.
With its 5.2%, the non-life insurance
has clearly overcome years the of
sluggish growth.
Austria Non-life insurance
The dynamic growth of premium
revenues in the field of non-life
insurance was first of all a result of
the increase of the motor vehicle
liability
insurance
that
has
overcome the long period of
prolonged
insurance
premium
decrease. By all means, other
branches have also shown more

conspicuous increase in revenues.

On the other hand, damages
decreased to 74.2% in 2001, which
is still over the 10-year average of
71.2% (1991-2000).
Austria Life insurance
The growth rate of life insurance
premium dropped from 14% to 10%
in the first quarter of 2001, to 8.4%
in the first six months that became
finally the annual average rate.
In the last quarter of 2001, due to
unforeseen changes of the stock
exchange, revenues decreased
particularly in case of the lump-sum
life insurance bound to investment
funds, and of the optional pension
insurance. Revenue from the
recurrent premium payments into
life insurance policies bound to
funds, on the other hand, more than
redoubled from a relatively low
level.
While the income dynamics related
to the policies with recurrent
premium payment stagnated at the
level of the previous year, the
growth rate of lump-sum policies
went down to about half of the 2000
growth rate (22%).
Hungary Property insurance
In the 2001 business year, AXA
Biztost Rt. was able to continue its
growth above the average. Gross
premium revenues from property
insurance have increased by 25% over the market average to EUR
64.4 million. The continued increase
of the number of motor vehicles
6

sold in Hungary had a positive

impact on Casco and motor vehicle
liability insurances. Besides, the
continuous expansion of the sales
network of the company played an
important role as well. In the field of
property insurance, due to major
loss events, insurance technical
proceeds worsened in the past year
in relation to 2000. The annual profit
decreased from EUR 2.7 million
(before dividend payment) to EUR
1.7 million. Due to the premium
increase above the average,
positive results can be expected for
the 2002 business year as well.
Hungary Life insurance
The premium revenues of AXA
Biztost Rt. increased by 13% to
EUR 20.5 million. This growth rate
exceeded the branch average
again. Unit-linked products had
been allocated successfully in the
business year. Revenues from
these products amounted to EUR
0.9 million. In the field of life
insurance,
annual
proceeds
increased from EUR 0.6 million in
the previous year to EUR 1.2
million.
Hungary Pension fund
AXA
Pnztrszolgltat
Kft.
Budapest functioning as a pension
fund asset manager is owned to
98.2% by AXA Konzern AG Austria,
Vienna. By intensive sales activity,
the membership of AXA Pension
Fund increased from 138,000 to
149,000 as of 31.12.2001. The
pension fund assets managed by
AXA Asset Management Ltd.

amounted to EUR 58.5 million in the

voluntary pension fund and to EUR
23.5 million in the statutory pension
fund as of 31.12.2001.
The concentration trend in the
pension fund market continued in
2001. In the statutory range, 85% of
the whole membership had been
registered by the 6 largest pension
funds. In the voluntary range, 75%
of the whole membership was
divided among the 14 largest
pension funds. In the next years,
the company is going to cooperate
in the continuing merger of pension
funds, and to further increase the
assets to be managed (EUR 89.5
million) through this. Since its
foundation in 1998, 2001 was the
first year when the proceeds
achieved by the firm were positive.
Liechtenstein AXA
Versicherung AG
The non-life insurance branch
together accounted a revenue
reduction from CHF 6.3 million in
the previous year to CHF 5.1
million. In 2001, we suffered major
losses in the direct business again.
The annual after-tax loss was CHF
1.6 million in the statement year.
With this, the equity capital
amounted to CHF 7.4 million.
Liechtenstein AXA
Lebensversicherung AG
In 2001, the accounted life
insurance premium increased by
93.4% to CHF 8.2 million.
The volume of capital investment
increased from CHF 21.1 million in
7

2000 to CHF 27.3 million in the

2001 business year. Investments
were focused on corporate shares
and on fix-rate securities.

BALANCE SHEET AS OF 31ST

DECEMBER 2001
Assets

A.
I.
1.
2.

Intangible assets
Intangible assets
Licenses
Advanced payments on intangible assets

II.
III.
1.
2.
3.

Tangible assets
Financial investments
Investments in related companies
Participations
Securities representing financial investments

B.
I.

Current assets
Receivables and other assets
1. Receivables from related parties
2. Other receivables and assets

II.

Liquid assets / Bank deposits

C.

Prepaid expenses and accrued income

CURRENT

CURRENT

YEAR TH.ATS

YEAR in EUR

PRIOR
YEAR
TH.ATS

6.622.120,00
4.101.670,22
10.723.790,22
9.911.053,58

481.248,23
298.080,00
779.328,23
720.264,35

2.991
0
2.991
4.107

924.857.803,80
15.550.377,21
188.987.556,59
1.129.395.737,60
1.150.030.581,40

67.212.037,80
1.130.089,98
13.734.261,36
82.076.389,14
83.575.981,72

900.535
8.550
171.434
1.080.519
1.087.617

7.184.209,91
37.644.064,40
44.828.274,31
77.917,74
44.906.192,05

522.096,90
2.735.700,85
3.257.797,75
5.662,50
3.263.460,25

331.525
7.525
339.050
30.030
369.080

472.481,10
1.195.409.254,55

34.336,54
86.873.778,51

206
1.456.903

_9_

Liabilities

A.
I.
II.
III.
IV.

Equity
Share Capital
Capital reserves
Fixed
Profit reserves
Other (free) reserves
Balance sheet profit/-loss
Profit thereof: retained earning ATS 801.643,07; prior
year TATS 749

B.
1.

Reserves non-taxed
Revaluation reserves based on valuation loss

2.

Other non-taxed reserves

C.
1.
2.
3.
4.

Reserves
Reserves for final settlements
Reserves for pensions
Tax reserves
Other reserves

D.
1.
2.

Liabilities
Liabilities to related parties
Other liabilities
Thereof: tax liabilities: ATS 1.890.856,89; prior year
TATS 0
Thereof: Social security
ATS 250.519,30; prior year TATS 79

E.

Accrued expenses and deferred income

Wien, 22. February 2002

CURRENT

CURRENT

YEAR TH.ATS

YEAR in EUR

PRIOR
YEAR
TH.ATS

107.650.000,00

7.823.230,60

107.650

474.890.843,39

34.511.663,51

474.891

602.000.000,00

43.749.046,17

602.000

(12.667.826,18)

(920.606,83)

255.202

1.171.873.017,21

85.163.333,45

1.439.743

444.725,00
934.225,00

35.573,35
32.319,43
67.892,78

2.862
445
3.307

343.639,00
11.572.152,00
148.160,00
5.832.094,30
17.896.045,30

24.973,22
840.981,08
10.767,21
423.834,82
1.300.556,33

184
9.381
100
2.610
12.275

3.337,20

242,52

142

3.990.259,19
3.993.596,39

289.983,44
290.225,96

1.005
1.147

712.370,65
1.195.409.254,55

51.769,99
86.873.778,51

431
1.456.903

489.500,00

AXA Konzern
Aktiengesellschaft
Franz Fuchs e.h.

Dipl.-Vw. David Furtwngler e.h.

Othmar Michl e.h.

_10_

INCOME STATEMENT 2001

CURRENT

CURRENT

YEAR TH.ATS YEAR in EUR

1.
2.
3.

Other income
Payments to personnel
Depreciation charge of intangibles and tangibles

4.
5.
6.

Other expenses
Total of lines 1 to 4
Income from investments (thereof: from related companies ATS
15.307.437,33; prior year TATS 268.648)
Income from securities of financial assets
Interest received and similar income
(thereof: received form related companies ATS 1.255.270,95; prior
year TATS 4.395)
Income from sales and other gains on financial assets
Expenditures of financial assets
(thereof: depreciation ATS 5.347.579,94; prior year TATS 3.248)
(thereof: given to related companies ATS 825,20; prior year TATS 0)
Interest paid and other similar charges
(thereof: given to related companies ATS 3.337,20; prior year TATS
5)
Total of lines 6 to 11
Profit on ordinary business
Tax
Profit/ loss of the year
Release of non-taxed reserves
Addition to non-taxed reserves
Retained earnings from prior years
Balance sheet profit/-loss

7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.

Wien, 22. Februar 2002

PRIOR
YEAR
TH.ATS

4.489.621,63
326.273,53
-17.360.035,25 -1.261.602,96

3.083
-17.175

-3.902.299,07
-283.591,13
-24.529.476,47 -1.782.626,58
-41.302.189,16 -3.001.547,14

-1.722
-4.448
-20.262

15.632.437,33
9.242.810,10

1.136.053,52
671.701,21

268.908
5.908

2.548.095,86
4.971.769,40

185.177,35
361.312,57

4.870
1.151

-5.378.405,21

-390.863,95

-3.247

-3.343,66

-242.99

-5

27.013.363,82 1.963.137,71
-14.288.825,34 -1.038.409,43
-1.553.643,91
-112.907,71
-15.842.469,25 -1.151.317,14
2.373.000,00
172.452,64
0,00
0,00
801.643,07
58.257,67
-12.667.826,18
-920.606,83

277.585
257.323
-2.425
254.898
0
- 445
749
255.202

AXA Konzern
Aktiengesellschaft
Franz Fuchs e.h. Dipl.-Vw. David Furtwngler e.h.
Othmar Michl e.h.

Since no complaints had been raised, we provide a non-qualified auditors clause as

per paragraph 1 article 274 of the Commercial Law to the annual statements of
AXA Concern AG, Vienna

as of 31 December 2001.
Pursuant to our statutory audit, the accounting and the annual report comply with the legal
requirements. With due consideration to the principles of proper accounting, the annual
statements shall provide a fair picture on the asset, financial and income relations of the
company. The status report is in compliance with the annual statements.
Vienna, 22 February 2002-05-27
PRICE WATERHOUSE Ltd.
Auditors and Consultants
Dkfm. Gogg e.h.
Auditor

ppa. Mag. Hirner e.h.

Auditor

_11_

A REPORT ON THE
2001 BUSINESS YEAR
OF
AXA Biztost Rt.

_12_

Contents
Members of the Supervisory Board........................................................ 14
Members of the Board of Directors ........................................................ 15
Directorate, Regional and National Directorates .................................... 16
Status Report......................................................................................... 18
Outlook to the 2002 Business Year........................................................ 23
Balance Sheet of 31st December 2001................................................... 25
Profit and Loss Statement for the 2001 Business Year .......................... 27

_13_

Members of the
Supervisory Board

MEMBERS OF THE
SUPERVISORY BOARD

CHAIRMAN

MEMBERS

Franz Fuchs
Chairman of Board of Directors
of AXA Konzern Aktiengesellschaft, Wien
(from 15.02.2001)

Othmar Michl
Member of Board of Directors
of AXA Versicherung AG
Dipl.Vw. David Furtwngler
Chairman of Board of Directors
of AXA Versicherung AG
Nol Richardson
Member of Board of Directors
of AXA Konzern Aktiengesellschaft, Kln
(from 1.4.2001)
Gerhard Ulmer
Member of Board of Directors
of AXA Versicherung AG
(from 15.11.2001)

_14_

Members of
Board of Directors

MEMBERS OF BOARD OF
DIRECTORS

CHAIRMAN

MEMBERS

Mag. Peter Hfinger

Sndor Kszegi
Andrs Juhos
Pl Ertl

_15_

Directorate,
Regional and
National Directorates
DECENTRALIZED
SALES AREAS

CENTER
1134 Budapest,
Rbert Kroly krt.76-78
Telefon: +36-1-2386-000
Fax:
+36-1-2386-060

REGIONAL DIRECTORATE
Central region and
Budapest
Director: Janos Bords
1134 Budapest,
Rbert Kroly krt.76-78.
Tel.: +36-1-2368-352
Fax: +36-1-386-350
Budapest (SC)
1134 Budapest, Rbert Kroly krt. 76-78.
Pest megye
1134 Budapest, Rbert Kroly krt. 76-78.
2600 Vc, Kztrsasg u. 6.
2700 Cegld, Kossuth tr 4.
Komrom County
2800 Tatabnya, Kos K. t 17/a.
Fejr County
8000 Szkesfehrvr, Tvirda u. 2.
2400 Dunajvros, Dzsa Gy. t
Ngrd County
3060 Pszt, Dek F. t 10.

Western Hungary
Director: Ott Karcsony
9700 Szombathely, Hunyadi u. 10-12.
Tel.: +36-94-513-570
Fax: +36-94-513-599

Zala County
8800 Nagykanizsa, Csengery u. 7.
8360 Keszthely, Erzsbet kirlyn tja12.
8900 Zalaegerszeg, Dek tr 2.
Veszprm County (SC)
8200 Veszprm, Kereszt u. 7.
Gyr-Moson-Sopron County (SC)
9021 Gyr, rpd u. 21.
9400 Sopron, j u. 1.

Northern Hungary
Director: Gyrgy Fldi
3525 Miskolc, Szchenyi u. 3-9
Tel.:+36-46-500-950
Fax:+36-46-500-979
Borsod-Abaj-Zempln County (SC)
3525 Miskolc, Szchenyi u. 3-9
3700 Kazincbarcika, F tr 35.
3900 Szerencs, Rkczi u. 102.
Heves County (SC)
3300 Eger, Brdy S. u. 4.
3200 Gyngys, Haniss tr 1.
Szabolcs-Szatmr-Bereg County (SC)
4400 Nyregyhza, Vasvri Pl u. 1.
Hajd-Bihar County (SC)
4025 Debrecen, Sumen u. 6.

Vas County (SC)

9700 Szombathely, Hunyadi u. 10-12.

_16_

Southern Hungary
Director: Zoltn Bihari
6000 Kecskemt, Csnyi J. u. 1-3.
Tel.:+36-76-500-330
Fax:+36-76-600-359
Bcs-Kiskun County (SC)
6000 Kecskemt, Csny J. u. 1-3.
6500 Baja, Etvs u. 6.
Jsz-Nagykun-Szolnok County (SC)
5000 Szolnok, Sznt krt. 16/a.
5100 Jszberny, Zirzen Janka u. 8.
Csongrd County (SC)
6723 Szeged, Gogol u. 3.
Bks County (SC)
5600 Bkscaba, Han Lajos u. 1.

AXA RC
CENTER

Director: Zoltn Kubovics

1025 Budapest, Frankel Le u. 45.
Tel.:+36-1-3362-323
Fax:+36-1-3362-320

REGIONAL DIRECTORATE
Pest County
1025 Budapest, Frankel Le u. 45.
2310 Szigetszentmikls, Bajcsy-Zs. u.1.

Southern Transdanubia (Pcs)

Gyr-Moson-Sopron County
9623 Gyr, Vasvri Pl u. 9.
9500 Celldmlk, Grfin tr 2.

Director: Dr. Jnos Marenics

7621 Pcs, Citrom u. 2.
Tel.:+36-72-513-850
Fax:+36-72-513-889

Csongrd County
6724 Szeged, Dni J. u. 1.

Baranya County (SC)

7621 Pcs, Citrom u. 2.

Szabolcs-Szatmr-Bereg County
4400 Nyregyhza, Luther tr 1.

Somogy County (SC)

7400 Kaposvr, Szchenyi tr 8.
Tolna County (SC)
7100 Szekszrd, Rkczi u. 22.
(SC) = Service Center

_17_

Status Report
ECONOMIC SITUATION
Slower but still dynamic growth,
intensively decreasing inflation rate
from the middle of the year,
surprisingly
improving
economic
conditions these were the features
having characterized the Hungarian
economy in 2001. These trends are
expected to prevail on the short run,
nevertheless, more difficult conditions
will emerge in the second half of the
year. It is getting more and more
important for the very open Hungarian
economy that the slowing down of the
growth of the world economy will not
turn to recession.
In 2001, similarly to the trend of the
last 5 years, economic growth in
Hungary
was
outstanding
in
international terms. According to
preliminary estimation, the GDP growth
rate was about 4% in Hungary in 2001.
This is not a bad result in comparison
to other countries in the region;
nevertheless, it is significantly worse
than the 5-5.5% GDP growth rate
expected early this year.
Concerning the objectives of the
government, the year 2001 can be
considered a failure of the struggle
against inflation since instead of the
average price dynamics of 7-7.5%,
actual price levels increased by 9.29.3%. In May, the annual price
increase was 10.8% representing the
highest rate in many years. In the
second half of the year processes
started which could result in fast
decreasing inflation.
The income of the population of
Hungary increased to a larger extent in
2001 than in the previous years.
According to official statistics, real

income increased by about 6.5-7%.

The growth of income was typical first
of all in the public sector due to central
wage interventions. The annual
average of the gross monthly earnings
was about EUR 420.
In 2001, the frame conditions of the
monetary policy changed significantly.
In early May 2001, the National Bank
of Hungary expanded the intervention
range of the forint. Due to this, the
forint can move in relation to the euro
in a range of +/-15%. On 1 October,
the crawling peg of the forint had been
eliminated and the middle forint/euro
rate has set at 267.1.
The event having the most decisive
impact on the capital market was the
terror attack against the USA on 11
September 2001. This unexpected
event strongly influenced international
insurance and reinsurance markets as
well. According to recent statements,
insurance companies gave account on
a loss of over EUR 19.6 billion.
According to the most pessimistic loan
assessments, total expenditures may
increase to EUR 45-57 billion since
further losses have been established in
the meantime.
Most of the capital market investors will
have rather unpleasant memories of
the year 2001 since in most of the
stock markets conversion rates
dropped even faster. In the course of
the year, fears related first of all to the
regression of the economic growth
prevailed in markets; later, overall
recession became the subject of this
fear. The Budapest Stock Exchange
was mostly touched by decreasing
exchange rates, dramatically reduced
turnover, buy-out, write-off, and
withdrawal.

_18_

Optimistic and crisis-like periods

alternated in the course of the year in
the domestic market of state securities.
From January to May, revenues were
characterized by a slight increase
reflecting the fears of investors
concerning inflation. The expansion of
the exchange rate range of forint and
the accompanying reinforcement of the
Hungarian currency along with the
reduction of raw material prices,
nevertheless,
had
unfavourable
impacts on the further course of
inflation. By September 2001, investors
could be reassured again since sales
revenues reached the normal levels,
but the terror attack against the USA
made investors uncertain again. In
Hungary, on the other hand, there
were no serious troubles in the
government bond market, a fact
proved by the evolution of the
government bond portfolio owned by
international investors.
In the first six months of 2002, the
trends of the second half of the
previous year continued along with the
regression in the world market and a
motivating economic policy in line with
expectations, while the economic
processes in the second half of 2002
will be determined by improving
external factors and the restriction of
the flow out of monetary reserves as
usually after elections.

Non-life insurance
In the 2001 business year, AXA
Biztost Rt. was able to further
progress above the average, like in the
previous year.

Evolution of referred insurance premium

(1997-2001) million HUF

5 332

6 785

97

98

9 763

99

12 990

00

15 494

01

Gross premium revenues in the field of

property insurance increased by 25%,
in contrary to the market trend, to EUR
64.4 million. The further increase of the
number of motor vehicles sold in
Hungary had a positive impact on
Casco and motor vehicle liability
insurances. Besides, the continuous
expansion of the sales networks of the
company played and important role as
well. The insurance technical proceeds
worsened most in the area of property
insurance. The reason for this was that
major losses emerged in the statement
year in relation to 2000.
Loss quota in % (1997-2001)
83,4
59,5

65,1

61,2

99

00

42,8

97

98

01

The annual profit decreased from EUR

2.7 million (before dividends) to EUR
1.7 million. Due to the premium
increase over the average, positive
proceeds can be expected for the 2002
business year as well.

Life insurance
The premium revenues of AXA
Biztost Rt. increased by 13% to EUR
20.5 million over the market average.
In line with the overall trend, the
increase of new policies stopped;
_19_

follow-up values and the higher

premium amounts of new insurance
policies played a considerable role in
the premium increase. The company
started the sale of unit-linked products
in the statement year; the premium
revenues of these products reached
EUR 0.9 million. Annual proceeds
increased from EUR 0.6 million in the
previous year to EUR 1.2 million.

particularly good policy conditions for

new and relatively young condominium
buildings.

In line with the practice followed in

previous years, focusing on retail
segments and on large customers,
efficient cost savings, and the
development and stabilization of the
sales network determined the 2001
proceeds of the company.

We managed to further improve the art

treasure insurance branch in 2001,
beginning with the involvement of the
private art collection galleries.

Evolution of deferred insurance premium

(1997-2001) million HUF

1 652

97

2 560

98

3 469

99

4 468

00

5 238

01

AXA Biztost Rt. has always laid great

emphasis on product innovation.
Motor vehicle insurance continued to
be of major importance for our
company. The liberalized new motor
vehicle liability insurance system had
been introduced on 1 January 2001.
Full liberalization did not take place,
premium maximization was applied to
the existing policies.
A new Casco insurance product was
introduced in 2001 with extended
scope of services and a so-called
exchange for second-hand vehicles,
offering the most favourable services
through selected service stations.
Another innovation product of 2001
was a new insurance product for
condominium
buildings
offering

In 2001, we were able to increase the

number of our MultiPartner customers
to 6000. MultiPartner customers
received premium refunding from us
amounting to EUR 56,000. The system
will further be developed in 2002.

In the framework of life insurances, we

appeared in the market not only with
the lump-sum policies bound to
investment funds (unit-linked) as
originally planned but we introduced
late in September a version with
recurring premium payment as well.
Among the lump-sum versions, there is
a policy unique in the Hungarian
market, bound to the euro, including a
process service guaranteed by the
policy issuer. On the other hand, this
shows the success of the introduction
of the product with recurring premium
payment since we could sell this at
considerable higher price than the
former average premium.
In 2001, we expanded the scope of
services offered to our customers by
establishing the AXA home credit aid
(AXA Lakshitel Asszisztencia) in
cooperation with an external partner.
Through these services, we provide
help in finding and realizing the proper
loan raising opportunity for those of our
partners who are holders of our
policies to be bound to loans.
2001 is the year of the full unfolding of
the agency concept. Our partners
accepted with extreme enthusiasm that
the agencies had been authorized to
make the most important decisions

_20_

locally and implement through this the

optimum settlement of issues close to
the partner. In order to provide highstandard services to our partners, the
agencies are at disposal with office,
regular opening time, and a staff
having experience in both international
and domestic services. 35 agencies
had been established by the end of
2001.
Loss settlement had been transferred
to the agencies as well in the case of
losses requiring fast settlement and
representing low value, emerging in
large numbers (minor glass damages
and accidents).
External service staff (1997-2001)
1 168
952

870

1 015

684

97

98

99

00

01

Through computer-supported sales

activity, the number of policies of our
company that had been transferred
reached almost 100% in 2001 as well.
Besides sales through our own
channels, due to our broker relations
getting closer, more than 50% of our
premium revenues came through the
broker companies.
In order to maintain the high standards
of
services,
we
performed
a
satisfaction assessment by phone
again in 2001, based on which we
were able to respond quickly and
accurately to the expectations of our
partners in terms of quality.
Our sales staff still comprises 900
people. The main task of the
conventional (combined) sales network
is the management of various existing

policies and the establishment of new

policies. On the other hand, RCC
continues to focus on life and accident
insurances, and on the acquisition of
new partners.
Through our products, actions, and
stable partner relations, AXA Biztost
Rt. became even better known in the
market; we managed to implement a
premium increase over the market
average, as usually in the past years,
and to achieve extraordinary success
in this year again.
Our company also joined the
international You&Us AXA offensive in
2000, the objective of which was the
improvement of services. In order to be
able to offer services of guaranteed
quality, as first step, we conducted a
wide action by phone to assess the
satisfaction and the demands of our
partners. Based on the evaluation of
this action, the development of
guaranteed services in compliance
with Hungarian requirements can be
started in 2002.

Capital investments
The capital investment portfolio
represented HUF 23,701 million (EUR
96.22 million; EUR/HUF 246.33) and
exceeded through this that of the
previous year by 28.5%.
Securities represented the bulk of
investments (over 96%) where new
investments were primarily made in
bonds of relatively short running
periods and in international equity
shares. By the end of the year, we
reached our objectives related to asset
allocation. All securities had been
evaluated on the basis of the lowest
value where treasury bonds had been
devaluated to their face value at
maximum.

_21_

The success of capital

investment
The last year was a very complex
challenge for the capital markets. The
Hungarian bond market was strongly
influenced by the interest rate
reductions
implemented
by
the
National Bank, and the decreasing
inflation in the fourth quarter. As a rule,
the fourth quarter already had a
positive impact on the equity markets
of
lower
earlier
performance,
particularly in the Hungarian stock
market.
In this difficult environment, financial
revenues increased from HUF 2,144.8
(EUR 8.03 million) to HUF 2,270.6
million (EUR 8.5 million). The evolution
of the equity markets in the bad
direction led to the steep increase of
value
corrections
concerning
securities, in the business life, and in
business processes.
Capital proceeds NL+L (1997-2001) million HUF
2 047
1 716

97

98

1 934

99

2 140

2 267

00

01

_22_

OUTLOOK TO THE BUSINESS

YEAR 2002
The board determined the most
important tasks of the company for
2002 in the following:
In the field of life insurance, our
intention is to expand the variety of
policies bound to investment funds
(unit-linked) in order to cover other
individual basic customer demands in
addition to general purpose savings.
Another important goal is to renew our
life insurance products by providing
loans through banks.
In the field of accident and health
insurance, our intention is to focus on
the development and sale of insurance
packages for groups.
Long-term market studies show that
property insurance in Hungary first of
all Casco will be the guarantee for
market expansion. On the medium run,
we reckon with an outstanding
efficiency of the whole property
insurance branch.
In the field of motor vehicle insurance,
the target is for 2002 to sustain the
excellent results of Casco and to
increase the success of motor vehicle
LIABILITY insurances, particularly in
the segments, which showed a
decreasing trend in recent years.
Our intention is to introduce a package
of services together with our strategic
partner in 2002 to offer further bank
and customer service benefits to our
multi-partners, in addition of the current
premium benefits.
We will expand the Customer Care
Center integrated in the central
customer service which will include
loss reports through the green line, the

customer service line, and the flowthrough phone operation system

providing basis for the main functions
of the CC system.
Another objective is for 2002 to expand
the scope of our banking partners in
order to offer our products in
connection with the increasing loan
demand of the population, including
those customers who already hold
policies bound to loan raising, and to
make the loan raising process easier
for
them
through
AXA
Loan
Assistance.
In the framework of the up-to-date
public communication media, we
continue to develop our Internet pages
and expand the scope of services
offered through the Internet.
The success of our activity can
primarily be attributed to the education
standards of our motivated staff. Here
we rely on our satisfaction assessment
performed in 2001 to get information
on the satisfaction levels of our staff
and
to
modify
the
success
achievement system of our internal
services staff by developing direct
relation between contribution to
success and earnings. Our intention is,
further more, to expand our training
system where we will offer new
opportunities first of all for our
specialists and managers. Our staff
members can select in the course of
the year the training courses most
expedient to their work from the variety
of
training
courses
supporting
management technique and skills.
We would like to thank our customers,
sales
partners,
domestic
and
international staff members on behalf
of the board. Their devoted and
professional activity laid down the
foundations of our success in 2001,

_23_

and also of the fact that as we do

hope we will represent the insurance

market as a benchmark corporate

group in 2002 as well.

_24_

AXA BIZTOST RT.

BALANCE SHEET AS
OF 31.12.2001
Assets
Description
A.
B.
I.
II.
III.
IV.
V.
C.
D.
I.
II.
III.
IV.
E.

Intangible assets
Investments
Real estate
Investments in affiliated companies
Other investments
Deposit receivables from reinsurers on inward reinsurance
Revaluation of investments
Investments made on policyholders own risk (life)
Receivables
Insurance receivables
Reinsurance receivables
Receivables from reinsurers on insurance technical reserves
Other receivables
Other assets
1. Fixed assets (without real estates) and inventories
2. Cash and bank
3. Treasury stock
4. Other
F. Prepaid expenses and accrued income
TOTAL ASSETS

in thousand HUF
31.12.2000

130.946
18.225.277
125.892
20.390
18.078.995
0
0
0
2.576.492
1.883.126
423.325
0
270.041
590.554
224.849
365.705
0
0
1.552.675
23.075.944

31.12.2001

295.676
23.342.830
124.388
20.390
23.198.052
0
0
188.645
2.425.419
1.855.617
326.215
0
243.587
882.064
399.534
482.530
0
0
1.802.580
28.937.214

Life

0
13.529.894
0
0
13.529.894
0
0
188.645
433.673
431.669
2.004
0
0
85.712
0
85.712
0
0
909.501
15.147.425

Liabilities
Description
A.
I.
II.
III.
IV.
V.
VI.
VII.
B.
C.

Equity
Share capital
Subscribed capital unpaid (-)
Capital reserves
Profit reserves ()
Non-distributable reserves
Revaluation reserves
Balance sheet profit ()
Subordinated loans
Insurance technical reserves
1. Reserves for unearned premiums
2. Mathematical reserves
3. Reserves for outstanding claims
4. Reserves for profit dependent and non-profit dependent
premium refunds
5. Claims equalization reserves
6. Other insurance technical reserves
D. Insurance technical reserves for financial assets of the UL
life assurance (1+2)
E. Provisions
F. Deposits from reinsurers
G. Payables
I. Payables from direct insurance activities
II. Reinsurance payables
III. Bonds payable
IV. Loans payable
V. Other payables
H. Accrued expenses and deferred income
TOTAL LIABILITIES

Non-Life

0
9.688.548
0
20.390
9.668.158
0
0
0
1.795.848
1.423.948
324.211
0
47.689
396.818
0
396.818
0
0
878.090
12.759.304

Non
separable
295.676
124.388
124.388
0
0
0
0
0
195.898
0
0
0
195.898
399.534
399.534
0
0
0
14.989
1.030.485

in thousand HUF

2.737.390
1.173.000
0
2.213.433
-1.303.320
0
0
654.277
0
16.351.209
1.244.554
8.412.986
4.942.792
841.094

3.476.876
1.173.000
0
2.213.433
-649.043
0
0
739.486
0
21.839.746
2.028.049
11.353.396
6.842.387
816.695

782.026
187.680
0
354.149
-52.317
0
0
292.514
0
12.676.773
737.188
11.103.397
51.468
743.477

2.694.850
985.320
0
1.859.284
-596.726
0
0
446.972
0
9.162.973
1.290.861
249.999
6.790.919
73.218

Non
separable
0
0
0
0
0
0
0
0
0
0
0
0
0
0

181.217
728.566
0

181.217
618.002
188.645

0
41.243
188.645

181.217
576.759
0

0
0
0

0
0
3.238.393
1.140.779
1.615.330
0
0
482.284
748.952
23.075.944

0
3.801
2.511.329
1.587.608
668.084
0
0
255.637
916.817
28.937.214

0
0
282.021
282.021
0
0
0
0
17.479
13.946.944

0
3.801
1.978.265
1.305.587
668.084
0
0
4.594
38.330
13.878.219

0
0
251.043
0
0
0
0
251.043
861.008
1.112.051

31.12.2000

31.12.2001

Life

Non-Life

_25_

AXA BIZTOST RT.

INCOME STATEMENT AS OF 31.12.2001
in thousand HUF
Description
A) Non-Life
01. Earned premiums, net earned premiums
a) Gross premium income
b) Premium ceded (-)
c) Change in reserves for unearned premiums ()
d) Change in reserves for unearned premiums ceded ()
02. Investment income refundable to policyholders (according to line C/06.)
03. Other insurance income
04. Claim expenditures
a) Claim expenditures and claim settlement expense
b) Change in reserves for outstanding claims () (Outstanding claims, IBNR)
05. Change in mathematical reserves ()
06. Change in reserves for profit and non-profit dependent premium refunds ()
07. Change in claims equalization reserves ()
08. Change in other insurance technical reserves ()
09. Net operating expenses
a) Acquisition costs incurred during the year
b) Change in deferred acquisition costs ()
c) Operating expenses
d) Commissions ceded and reinsurance profit sharing (-)
10. Other insurance technical expenses
A) INSURANCE TECHNICAL PROFIT/(LOSS)
(01+02+03-04050607+08-09-10)
B) Life
01. Earned premiums
a) Gross premium income
b) Premium ceded (-)
c) Change in reserves for unearned premiums ()
d) Change in reserves for unearned premiums ceded ()
02. Insurance income from investments
a) Dividends received and investments
b) Other investment income
c) Gain on sale of investments, other income from investments
d) Allocated investment income on life assurance (according to line C/05. )
(-)
03. Non-realized income from investments
04. Other insurance income
05. Claim expenditures
a) Claim expenses and claim settlements expense
b) Change in reserves for outstanding claims () (Outstanding claims, IBNR)
06. Change in mathematical reserves ()
07. Change in reserves for profit and non-profit dependent premium refunds ()
08. Change in claims equalization reserves ()
09. Change in other insurance technical reserves ()
10. Net operating expenses
a) Acquisition costs incurred during the year
b) Change in deferred acquisition costs ()
c) Operating expenses
d) Commissions ceded and reinsurance profit sharing (-)
11. Insurance technical expenses of investments
a) Investment expenses incl. interest paid and similar expenses
b) Impairment loss of investments and reversal of impairment ()
c) Loss on sale of investments, other expenses of investments
12. Non-realized loss of investments
13. Other insurance technical expenses
B) INSURANCE TECHNICAL PROFIT/(LOSS)
(01+02+03+04-0506070809-1011-12-13)

31.12.2000

31.12.2001

LIfe

Non-Life

11.331.573
13.084.644
-1.631.231
-95.182
-26.658
0
25.729
7.694.410
7.253.761
440.649
41.854
-44.819
0
-157.824
3.684.131
1.705.382
0
2.092.122
-113.373
160.724
-21.174

13.746.569
16.364.596
-1.848.912
-870.416
101.301
0
55.265
10.472.653
8.585.145
1.887.508
20.367
29.584
0
-151.808
3.755.916
2.187.666
-531.369
2.256.506
-156.887
148.715
-473.593

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

13.746.569
16.364.596
-1.848.912
-870.416
101.301
0
55.265
10.472.653
8.585.145
1.887.508
20.367
29.584
0
-151.808
3.755.916
2.187.666
-531.369
2.256.506
-156.887
148.715
-473.593

4.359.369
4.652.842
-108.418
-185.064
9
1.089.774
3.011
1.124.688
78.180
-116.105

5.192.832
5.252.812
-45.601
-14.450
71
1.332.569
3.506
1.288.143
133.664
-92.744

5.192.832
5.252.812
-45.601
-14.450
71
1.332.569
3.506
1.288.143
133.664
-92.744

0
0
0
0
0
0
0
0
0
0

0
1.149
409.135
393.396
15.739
2.524.046
56.415
0
0
2.117.647
1.125.653
19.799
972.229
-34
36.233
3.496
28.553
4.184
0
400
306.416

1.058
2.664
727.017
714.930
12.087
2.920.044
-53.982
0
229.888
2.187.716
882.744
141.614
1.163.397
-39
130.159
36.114
80.204
13.841
8.711
1.235
378.335

1.058
2.664
727.017
714.930
12.087
2.920.044
-53.982
0
229.888
2.187.716
882.744
141.614
1.163.397
-39
130.159
36.114
80.204
13.841
8.711
1.235
378.335

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

_26_

C)
01.
02.
03.
04.
05.
06.
07.
08.
09.
10.
11.
D)
12.
13.
14.
E)
15.
F)
16.
17.
G)

Description
NON-INSURANCE TECHNICAL RESULT
Dividends received and gain on financial investments
Interest received and other similar income
Income from tangible fixed assets of the insurance technical investments
Gain on sale of investments, other income from investments
Allocated investment income on life assurance (according to line B/02.d)
Investment income refundable to policyholders (-) (according to line A/02.)
Investment expenses incl. interest paid and similar expenses
Impairment loss of investments and reversal of impairment ()
Loss on sale of investments, other expenses of investments
Other revenues
Other expenditures
PROFIT/(LOSS) ON ORDINARY ACTIVITIES
(AB+01+02+03+04+05-06-07-08-09+10-11)
Extraordinary revenues
Extraordinary expenditures
Extraordinary PROFIT/(LOSS) (12-13)
PROFIT BEFORE TAX (D14)
Corporate tax
PROFIT AFTER TAX (E-15)
Use of retained earnings for dividend, participation
Dividend paid (payable)
BALANCE SHEET PROFIT/(LOSS) ( F+16-17)

31.12.2000

31.12.2001

LIfe

Non-Life

2.461
897.111
739
93.686
116.105
0
5.997
14.204
14.394
44.857
318.310
1.087.296

2.454
924.233
0
114.651
92.744
0
3.123
48.118
14.679
269.465
319.723
922.646

0
0
0
0
0
0
0
0
2.963
83.418
93.801
364.989

2.454
924.233
0
114.651
92.744
0
3.123
48.118
11.716
186.047
225.922
557.657

5.035
24.696
-19.661
1.067.635
213.358
854.277
0
200.000
654.277

481
0
481
923.127
183.641
739.486
0
0
739.486

167
0
167
365.156
72.642
292.514
0
0
292.514

314
0
314
557.971
110.999
446.972
0
0
446.972

_27_

AXA Biztost Rt. 1134 Budapest, Rbert Kroly krt. 76-78.

Tel.: (01) 238 - 6000 Fax: (01) 238 - 6060 Internet: www.axa.hu E-mail: info@axa.hu