Ardaf, a top ten insurer domestically, has registered losses topping 100m euros in the past three years of operations, of which around 50m euros in 2008, as a result of both the rising claims rate, and the financial problems the company had in 2006.
The company in 2008 felt the strong impact of the decision by the Insurance Supervision Commission (CSA) to change some norms, in the wake of which the provisions insurers set up for auto liability and comprehensive policies went up.
"Losses were influenced by technical factors and changes in the accounting methodology. The company implemented a new method of calculating incurred but not reported claims for auto liability and comprehensive insurance," stated Stanislav Uma, Ardaf CEO, appointed in this position in February, approximately one year after Generali PPF decided to take over the company from PPF Investments.
Ardaf started posting massive losses in 2006, the most difficult year for the company, when liquidity and solvency indicators dropped below legal stipulations, and the insurer was placed under special administration by the CSA. In 2006, the firm was still held by businessman Ovidiu Tender, who in 2007 sold his stake to PPF Investments Czech fund. The company was saved in the wake of an over 30m-euro capital injection.
The year it was bought by PPF Investments, Ardaf recorded a loss of above 17m euros, but its new shareholder started to clean up its portfolio and changed part of its management team, bringing Daniel Tudor, a former stakeholder in RAI Asigurari, a small firm the Czechs took over with Ardaf, as CEO. As a matter of fact, in 2007 and 2008 annual reports, the company specifies losses were caused by events that happened ahead of management and shareholder structure changes.
In 2008, after a joint venture between Generali and PPF was set up, the new entity took over Ardaf and RAI from PPF Investments, with the value of the deal being put at 80m euros.
Though Ardaf CEO last year expected the firm to turn profitable and double its turnover, his estimates came true only partially. The insurer's turnover doubled, to 96.7m euros, but losses tripled, to some 50m euros.
"Ardaf and its shareholders are ready at any time to ensure the financial stability of the company," says Uma, the new CEO.
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