Alea Group Holdings (Bermuda) Ltd.

Preliminary Results for the year ended 31 December 2003 - Part 6 of 7

    London (ots) -

Unaudited
Consolidated cash flow statement
                                                                                                              

                                                                                        Restated
                                                              Year ended      Year ended
                                                Notes        31 Dec 03        31 Dec 02
                                                                      $'000              $'000
Net cash inflow
from operating activities          6            250,979            99,394

Servicing of finance
Interest paid                                            (4,718)          (6,530)

Taxation
Taxation (paid)/refunded                          (1,674)            1,222

Capital expenditure
Purchase of tangible assets                    (10,266)          (9,237)
Proceeds on disposal of tangible assets    5,977

Financing
Issue of common share capital                 291,968              7,092
Purchase of subordinated
preferred shares
issued by subsidiaries                            (42,500)
Receipt of cash from Capital
Enhancement Program                                                         30,000
Capital raising expenses                         (23,723)              (172)
                                                                ---------        ---------
                                                                 466,043          121,769
                                                                =========        =========

Cash flows were invested as follows:
Increase/(decrease) in cash holdings        13,752            (3,243)

Net portfolio investments
Shares and other variable
yield securities                                          (331)              (704)
Debt securities
- unit trusts - Listed                                 6,973              6,978
Debt securities and other fixed income
securities                                                 453,123          414,079
Deposits with credit institutions              (7,474)        (295,341)

                                                                 ---------        ---------
                                                                  452,291          125,012
                                                                 ---------        ---------

Net investment of cash flows                      466,043          121,769

                                                                 =========        =========

    Unaudited

    Notes to the Financial Statements

    1. ACCOUNTING POLICIES

    Basis of preparation

    The financial information is prepared in accordance with applicable United  Kingdom accounting standards and under the historical cost accounting rules  as modified by the revaluation of investments. The principal accounting  policies, which have all been applied consistently throughout the periods  covered by this report with the exception of the policy for the recognition of equalisation provision explained below, and which comply with the recommendations of the United Kingdom Statement of Recommended Practice on Accounting for Insurance Business issued by the Association of British Insurers in December 1998 (the ''ABI SORP'') are set out below.

    The Company is a registered Bermuda company. As such it is obliged to prepare its financial information in accordance with the Bermuda Companies Act 1981,  which permits the Company to prepare its financial information under generally accepted accounting principles of the United Kingdom (''UK GAAP'').  Accordingly, the financial information has been prepared in accordance with  Bermuda Law and under the historical cost accounting rules as modified by the revaluation of investments.

    This preliminary announcement does not constitute statutory accounts for the financial year ended 31 December 2003. The auditors have not reported on these  accounts.

    This preliminary announcement uses the accounting policies set out in the Group's Listing Particulars except for the policy in respect of employing the  longer term rate of return for investments as recommended for UK listed  companies by the ABI SORP. This policy has changed since the publication of the Listing Particulars and details of the change are disclosed further below.

    The financial information in this preliminary announcement for the year ended 31 December 2003 does not constitute statutory accounts for that period but is  derived from those accounts, which are currently unaudited, and have been  restated for the effects of the change in accounting policy.

    Basis of consolidation

    The consolidated financial statements incorporate the financial statements of the Company and all its subsidiary undertakings.

    From 1 January 2001 to 26 February 2002 the parent company of the Group was Alea Group Holdings AG, a company incorporated in Switzerland. On 7 December 2001 the Company was incorporated in Bermuda to become the new ultimate parent company of the Group. As at 31 December 2001 following a series of capital injections from existing shareholders and share for share exchanges, certain subsidiaries of Alea Group Holdings AG were partially owned by both the Company and Alea Group Holdings AG, in varying percentages. Alea Group Holdings AG remained the controlling entity as at 31 December 2001.

    As at 26 February 2002 following completion of regulatory approvals, Alea Group Holdings AG became a 94.49% subsidiary of the Company by way of a share for share exchange and the Company became the new ultimate parentcompany. Following the staff equity exchange becoming effective on 3 April 2002, and certain repurchases from terminating employees, the Company's interest in Alea Group Holdings AG increased to 100%.

    The above share for share exchanges qualify as a Group reorganisation as the ultimate shareholders and their rights remained the same and no minority interests have been affected. Accordingly, as permitted under FRS 6 ''Acquisitions and Mergers'' this Group reconstruction has been accounted for using merger accounting.

    Change in accounting policies

    The Group has determined that it is appropriate to record in the accounts of the Group the claims equalisation provision established by Alea London Limited. This is a change in accounting policy. The Group has opted to comply with the ABI SORP recommendation for UK listed companies of allocating investment return to the technical account based on the longer term rate of return, which the Group has selected as 4.5%. This is a change in accounting policy and has no impact on the profit on ordinary activities after tax.  The cumulative effect of the prior year adjustments is shown in the statement of total recognised gains and losses and detailed in note 4.

    Unaudited

    Notes to the Financial Statements

    2. SEGMENTAL INFORMATION

    Underwriting results by operating segment before intra-group quota share arrangements

    The Group's business is composed of four underwriting segments, consisting of London, Alternative Risk, North America (treaty reinsurance) and Europe.

    The following tables summarise the underwriting results for the Group's business segments as of and for the years ended 31 December 2003 and 31 December 2002.  Net premiums written and net premiums earned are presented prior to intra-group  quota share arrangements, the underwriting results are also stated before quota share arrangements, and the impact of quota share arrangements on these pre-quota segmental results is presented separately.

Year ended 31    London            AAR         North          Europe      Total
December 2003                                      America
                            $'000         $'000        $'000            $'000        $'000
Gross
Premiums          566,042      261,141      282,921        190,078 1,300,182
Written
Outwards          (78,198)  (129,172)    (33,222)    (30,879) (271,471)
reinsurance      
premiums                  
-----------------------------------------------------------------
Net
premiums
written          487,844      131,969      249,699        159,199 1,028,711
                  
------------------------------------------------------------------
            
Gross
premiums
earned            482,701      205,062      228,361        198,151 1,114,275
Net
premiums
earned            407,656        97,856      189,324        163,645    858,481
Allocated
investment
return              13,995        12,681        19,022         12,113      57,811

Claims incurred, net of reinsurance  (224,988)    (70,556)  (130,024)    (103,082)(528,650)

Total net
expenses
comprise :
Acquisition
costs            (92,521)      (19,654)    (55,268)      (27,958)(195,401)
Administrative
expenses        (32,122)      (15,880)    (20,984)      (21,112) (90,098)
Fee income        1,654                 -            545              165      2,364
Other
technical
charges          (5,611)            (24)         (700)      (12,669) (19,004)
Other
expenses        (128,600)    (35,558)    (76,407)      (61,574)(302,139)
--------    ------------    --------  --------      -------- --------
Under
writing
result(1)        68,063          4,423         1,915         11,102    85,503
=========    ===========    ========  ========      ======== ========

Restated
Year
ended 31         London              AAR         North         Europe      Total
December                                            America
2002                                                    
                         $'000          $'000         $'000          $'000      $'000
Gross
Premiums              
Written         376,428        141,394      257,377        156,432    931,631
Outwards
reinsurance
premiums        (76,245)    (66,767)    (48,328)      (32,059) (223,399)
                  
----------
Net premiums 300,183        74,627      209,049        124,373      708,232
written                    
----------

Gross
premiums
earned          278,535        54,064      176,375        165,054        674,028
Net
premiums
earned          220,885        22,044      142,663        132,459        518,051
Allocated
investment
return              9,398         9,334        17,334         10,886         46,952

Claims incurred, net of reinsurance (108,997)    (14,344)    (87,632)    (110,881)  (321,854)

Total net
expenses
comprise :
Acquisition
costs          (49,694)      (6,851)    (44,904)      (26,070)    (127,519)
Administrative
expenses      (30,572)      (5,779)    (21,076)      (19,035)      (76,462)
Fee income      5,807            228                -            (364)         5,671
Other
technical
charges         (5,965)          (95)         (611)      (10,007)      (16,678)
Other
expenses      (80,424)    (12,497)    (66,591)      (55,476)    (214,988)
--------    ---------    --------    --------      --------      --------
Underwriting
result (1)    40,862         4,537         5,774        (23,012)        28,161
=========  ==========    ========    ========      ========    ========

    (1) Balance on the technical account for general business before claims equalisation provision

    Intra-group quota share arrangements

    For the year ended 31 December 2002 and 31 December 2003 intra-group quota share arrangements comprise of the following: a 35% quota share of Alea London business to Alea Europe, a 50% quota share of certain 2000 and prior underwriting year business from Alea Europe to Alea Bermuda, a 70% quota share of Alea North America to Alea Bermuda and an intra-group aggregate excess contract from Alea Europe to Alea Bermuda. The effect of all of these arrangements are detailed below :


Year ended            London        Bermuda              US      Europe      Total
31 December            $'000          $'000         $'000        $'000      $'000
2003

                                            
Net premiums
earned                 407,656          2,520      284,660    163,645 858,481
Intercompany
reinsurance        (142,397)      203,005    (197,151)  36,543            -
                            -------      -------      -------    -------    -------
Net premiums
earned after
intercompany
reinsurance        265,259         205,525        87,509    300,188  858,481
Underwriting
result
Before
intercompany
reinsurance         68,063         (10,841)      17,180      11,101    85,503
After
intercompany
reinsurance         45,468          (5,046)      (1,168)    46,249    85,503


Year ended         London          Bermuda              US      Europe    Total
31 December         $'000              $'000         $'000        $'000    $'000
2002
                              
Net premiums
earned              220,885          85,325        79,382    132,459    518,051
Intercompany
reinsurance      (75,604)         75,030      (55,567)    56,141              -
                          -------        -------      -------    -------    -------
Net premiums
earned after
intercompany
reinsurance      145,281         160,355        23,815    188,600    518,051
Underwriting
result
Before
intercompany
reinsurance        40,862            9,143         1,168    (23,012)    28,161
After
intercompany
reinsurance        25,094            7,902        (2,566)    (2,269)    28,161


                                              Year ended                    Year ended
                                                31 Dec 03                      31 Dec 02
                                                      $'000                            $'000
Gross premiums written
      Insurance
      Casualty                                339,342                         125,308
      Property                                 92,226                          69,963
      Marine, aviation &
      transport                                      88                                (77)
      Other                                          745                                215
                                                ---------                      ---------
      Total insurance                    432,401                         195,409
                                                ---------                      ---------

      Reinsurance
      Casualty                                584,463                         365,182
      Property                                232,198                         294,760
      Marine, aviation &
      transport                                32,414                          54,709
      Other                                      18,706                          21,571
                                                ---------                      ---------
      Total reinsurance                 867,781                         736,222
                                                ---------                      ---------
      Total                                 1,300,182                         931,631
                                                =========                      =========


                                              Year ended                    Year ended
                                                31 Dec 03                      31 Dec 02
                                                      $'000                            $'000

Gross premiums earned
      Insurance
      Casualty                                243,787                          57,353
      Property                                 82,466                          50,950
      Marine, aviation &
      transport                                      88                                394
      Other                                          619                                665
                                                ---------                      ---------
      Total insurance                    326,960                         109,362
                                                ---------                      ---------


      Reinsurance
      Casualty                                481,901                         285,193
      Property                                250,377                         210,055
      Marine, aviation &
      transport                                40,176                          48,853
      Other                                      14,861                          20,565
                                                ---------                      ---------
      Total reinsurance                 787,315                         564,666
                                                ---------                      ---------
      Total                                 1,114,275                         674,028
                                                =========                      =========


                                              Year ended                  Year ended
                                                31 Dec 03                    31 Dec 02
                                                      $'000                          $'000
Net premiums written
         Insurance
         Casualty                            432,537                         55,925
         Property                              64,311                         59,163
         Marine, aviation &
         transport                                  88                            (67)
         Other                                        649                            131
                                                ---------                  ---------
         Total insurance                 497,585                      115,152

                                                ---------                  ---------

         Reinsurance
         Casualty                            288,674                      305,024
         Property                            207,047                      225,375
         Marine, aviation &
         transport                            16,242                        40,333
         Other                                  19,163                        22,348
                                                ---------                  ---------
         Total reinsurance              531,126                      593,080
                                                ---------                  ---------
         Total                              1,028,711                      708,232
                                                =========                  =========

                                              Year ended                 Year ended
                                                31 Dec 03                  31 Dec 02
                                                      $'000                         $'000
Net premiums earned
         Insurance
         Casualty                            108,613                        29,927
         Property                              69,703                        41,777
         Marine, aviation
         & transport                                88                            491
         Other                                        523                            581
                                                ---------                  ---------
         Total insurance                 178,927                        72,776
                                                ---------                  ---------

         Reinsurance
         Casualty                            426,111                    239,817
         Property                            213,541                    150,065
         Marine, aviation &
         transport                            24,600                      34,235
         Other                                  15,302                      21,158
                                                ---------                 ---------
         Total reinsurance              679,554                    445,275
                                                ---------                ---------
         Total                                  858,481                  518,051
                                                 =========                =========

    3. EARNINGS PER ORDINARY SHARE

    Basic earnings per ordinary share is based on the profits after tax and the weighted average ordinary shares in issue as follows :


                                                                Year ended      Year ended
                                                                 31 Dec 03        31 Dec 02
                                                                      Number            Number

Weighted average ordinary
shares in issue                                    114,269,807    105,872,303
                                                                
Fully diluted number of shares            116,266,620    107,965,776

                                                                  
    Operating earnings per ordinary share based on the investment
income are shown because it is considered to be a more appropriate
measure of operating performance than earnings per share including
short term fluctuations in investment return. Furthermore, as
detailed in the note relating to prior year adjustments, transfers to
or from claims equalisation provision are transfers to or from a
statutory reserve and not a deduction or credit in arriving at
operating profit. The gain on the purchase of subordinated preferred
shares issued by subsidiaries has also been excluded in calculating
operating profit.

    The Company has re-denominated the Swiss Franc 110.79 option price to $64.41 for all options issued at that strike price (CHF 5.54 and $3.22, respectively after adjustment for the bonus share grant, comparable to a 20:1 stock split). The Company reports in United States Dollars and the original Swiss Franc price was retained only as a result of the original status of the parent company (AGHAG) before the establishment of the new Bermudan ultimate parent company Alea Group Holdings (Bermuda) Ltd. The impact of converting the Swiss Franc options to United States Dollars options does not change the fully diluted earnings per share and reduces the fully diluted operating earnings per share in 2003 from 55 cents to 54 cents per share.

    The reconciliation between earnings per ordinary share and operating earnings per ordinary share is as follows:

                                            
                                                                                         Restated
                                                                Year ended      Year ended
                                                                 31 Dec 03        31 Dec 02
                                                                        $'000              $'000

Profit for the financial year attributable
to equity shareholders                                 48,510            54,579
                                                                 ---------        ---------

Less  Gain on purchase of
          subordinated preferred                         7,500                    -
          shares issued by subsidiaries
          Short term fluctuations in
          investment return                              (22,477)          33,322
          Movement in claims equalisation         (3,771)          (2,368)
          provisions                                        ---------        ---------
                                                                    (18,748)          30,954
          Tax thereon                                          4,251            (1,989)
                                                                  ---------        ---------
                                                                    (14,497)          28,965
                                                                  ---------        ---------
Operating profit after tax                          63,007            25,614


Earnings per share - basic ($)                        0.42                0.52
Earnings per share - fully diluted ($)          0.42                0.51  
Operating earnings per share - basic ($)        0.55                 0.2
Operating earnings per share
- fully diluted ($)                                         0.54                0.24
                                                          

    4. PRIOR YEAR ADJUSTMENTS

    Reinsurers' share of technical provisions - claims outstanding - aggregate excess reinsurance

    As part of the Listing process the Group reviewed the application of the deficit payback provisions of each of the Inter-Ocean Adverse Development cover, the Inter-Ocean Aggregate Excess Cover and the OPL Adverse Development Cover and determined that the previous financial statements made a fundamental error in that they did not fully reflect the consequences of the deficit payback and commutation/termination provisions of the contracts. Accordingly reinsurance recoverables were reduced by $24 million in respect of the 2000 annual financial result and by $6 million in respect of the 2001 annual financial result. These amounts have been accounted for as prior year adjustments in these financial statements.

    Claims equalisation provision

    Also as part of the Listing process the Group has determined that it is appropriate to record in the accounts of the Group the Claims Equalisation Provision established by Alea London Limited. This change in accounting policy has been accounted for as a prior year adjustment.

    A claims equalisation provision for the UK subsidiary has been established in accordance with Chapter 6 of the Interim Prudential Sourcebook for UK Insurers (prior to 1 December 2001, the requirements of the Insurance (Reserves) Act 1995 and the Insurance Companies (Reserves) Regulations 1996) for the purposes of mitigating exceptionally high loss ratios in future years. The amounts provided are not liabilities because they are in addition to the provisions required to meet the anticipated ultimate cost of settlement of outstanding claims at the balance sheet date.

    Longer term rate of return

    The Group has chosen to allocate investment income to the technical account from the non-technical account using the longer-term rate of return as recommended for listed companies per the ABI SORP. As this is a reallocation of the investment return within the Profit and Loss Account it has no impact on prior year reserves.

    The impact of the change in accounting policy and the other prior year adjustment is as follows:


                                                                         Year ended Year ended
                                                                          31 Dec 03  31 Dec 02
                                                                                 $'000        $'000

Profit on ordinary activities after tax under
previous accounting policy                                    43,650      56,238
Change in the claims equalisation provision         (3,771)    (2,368)
Tax credit                                                                1,131          709
                                                                              -------- --------
                                                                                (2,640)    (1,659)
                                                                              -------- --------
Restated profit on ordinary activities after         41,010    54,579
tax                                                                        ======== ========

Shareholders' funds attributable to equity
interests as previously reported                          728,042  442,198
Net effect of the change in accounting policy
as above                                                                  (2,640) (1,659)

Prior year adjustment - reinsurers' share of
technical provisions - claims outstanding -
aggregate excess reinsurance                                          -  (30,000)
                                                                                -------- --------
                                                                                 (2,640) (31,659)
                                                                                -------- --------
Restated shareholders' funds attributable to
equity interests                                                    725,402  410,540
                                                                              ========  ========
Profit and loss account as previously reported      17,598  (18,628)
Net effect of the change in accounting policy
as above                                                                 (2,640)  (1,659)

Prior year adjustment - reinsurers' share of
technical provisions - claims outstanding -
aggregate excess reinsurance                                         -    (30,000)
                                                                              --------  --------
                                                                                (2,640)  (31,659)
                                                                              --------  --------
Restated profit and loss account                          14,958    (50,287)
                                                                              ========  ========

    Part 7 follows



Weitere Meldungen: Alea Group Holdings (Bermuda) Ltd.

Das könnte Sie auch interessieren: