ASA KINDLUSTUS AS

ANNOUNCEMENT

25.01.99

 

 

ADDITIONAL INFORMATION ABOUT CHANGES IN THE SALES STRUCTURE OF 

ASA KINDLUSTUS 

 

According to the restructuring plan of AB Kindlustuse Grupp, the 

sales department of ASA Kindlustus AS will be transferred to AS 

AB Kindlustuse Grupp. Based on the contract concluded between 

parties, the gradual transition process will be finished by March 

31, 1999. The respective reform does not concern other structural 

units of ASA Kindlustus AS.

 

During the transition period, the salaries of the sales 

department’s employees will be paid on the same basis as 

previously - commission payment conditions for agents and salary 

conditions for administrative workers will remain the same. The 

rooms and equipment (furniture, computers, telephones etc.) used 

by the sales department will be rented by AS AB Kindlustuse Grupp 

at current market prices. According to the above scheme, ASA 

Kindlustus AS will cover the expenses of the sales department 

during the transition period accordingly with the real sales 

costs, i.e. ensures marketing of the products at original cost. 

 

After March 31, the sales system of AS AB Kindlustuse Grupp 

becomes an operator company, which based on the contract 

concluded with both ASA Kindlustus and AB Elukindlustus starts to 

sell all insurance products for a commission fee. The respective 

contract will be concluded proceeding from the average service 

fees of the brokerage companies on the Estonian insurance market. 

The conditions of the contract will be disclosed via the 

information system of the Tallinn Stock Exchange immediately 

after signing the contract.

 

The above-mentioned changes in sales system do not affect the 

assets and liabilities of ASA Kindlustus AS. According to the 

forecasts, the planned changes will have a positive effect on the 

company’s profit-earning potential, since they ensure the sales 

structure’s effectiveness and optimal level of the sales expenses 

of ASA Kindlustus in the conditions of market competition. 

 

As of 9 months 1998, contracting expenses of ASA Kindlustus AS 

accounted for 27% of the amount of premiums collected (26 million 

EEK during the respective period). In the framework of the 1999 

financial plans and general cut-back of expenses, the Management 

Board of company also plans to decrease the share of these 

expenses. According to the Management Board’s opinion, the 

synergy created upon the merger of the current agencies, sales 

structures and clientele of ASA Kindlustus and AB Elukindlustus 

should bring along an increase in the sales volume (i.e. total 

volume of premiums). 

 

Since AS AB Kindlustuse Grupp is a major shareholder of ASA 

Kindlustus AS, the Rules and Regulations of the Tallinn Stock 

Exchange define it as transaction between connected parties.

 

 

Nadezda Tarmak

AS AB Kindlustuse Grupp

Manager of Financial Division

Tel. +372 644 0542