LEKS KINDLUSTUS

ANNOUNCEMENT

20.01.98

 

 

COMMENTARY TO THE ARTICLE OF ÄRIPÄEV

 

The figures disclosed in the newspaper Äripäev about the level 

of claims ratio of the insurance companies do not reflect the 

respective figure, but the ratio of gross premiums collected to 

claims paid instead. Since the figures disclosed do not show 

the share of re-insurers and insurance technical provisions 

(liabilities to clients), the mentioned ratios erroneously 

referred to as claims ratio are not objective. On calculating 

the insurance company’s net claims ratio, the figures of net 

premiums and net claims must be used (with the reinsurance 

amounts), since the gross figures do not reflect objectively 

the amount of premiums collected by the insurance company and 

claims actually incurred. The ratios used in the article are 

definitely not sufficient for the claims ratio analysis and 

comparison of the insurance companies. Also, the structure of 

insurance portfolio was not considered. Leks Kindlustus will 

disclose in March 1999 its year 1998 insurance technical 

results, including the claims ratio along with the audited 

balance sheet and income statement for the last year. 

 

As a commentary to the statement of Raul Kastan (Chairman of 

the Management Board of Leks Kindlustus) that without the 

merger with ETAS Kindlustus, the claims ratio of Leks 

Kindlustus could have been at a 10% level, we must admit that 

the above statement is unprofessional and does not originate 

from the Chairman of the Management Board of Leks Kindlustus. 

The merger of Leks Kindlustus and ETAS Kindlustus was 

definitely a right step on the way of further development and 

raising the effectiveness of the insurance companies. Also the 

development of the insurance company continued as forecasted - 

the market share of merged Leks Kindlustus on the Estonian 

damage insurance market increased from the 17% level in the 

beginning of 1998 to approximately 19% at the end of 1998. 

 

 

Additional information, 

 

Rivo Saarna					Aarne Orav

PR Manager					Financial Director

+372 626 7281, +372 506 5768  	+372 626 7204