Growth in times of crisis Advocard presents positive 2008 financial statements

Growth in times of crisis
Advocard presents positive 2008 financial statements

Advocard Rechtsschutzversicherung AG, the Hamburg-based legal expenses insurer, witnessed its sixth consecutive year of growth in core business, despite a weak economic environment. Following a strategic expansion of its product range, the company considers itself to be well prepared even for a longer period of an economic downturn.

Hamburg, April 1, 2009. The Hamburg-based legal expenses insurer continued to increase its turnover in the closed business year 2008. This has been announced by Oliver Brüß, Chief Executive of Advocard, in Hamburg today. The new business volume rose by 5% to € 15.3 m in terms of premiums for the total policy duration. As a whole, the legal expenses insurer achieved a premium income of € 189.4 m. This represents growth of 1.7% (2.2% in individual business) over the previous year (€ 186.2 m). Like in previous years, the subsidiary of Generali Deutschland thus witnessed a better development than the market as a whole.
At the same time the combined ratio – the most significant key figure for indicating the profitability of property and casualty business – was maintained at 94%. Advocard is thus 3%-points better than the average level expected for the market. The technical result of its core business was € 11.7 m before tax, which equals an increase of € 0.4 m over the level of 2007. Following write-downs on securities, the total net profit (after tax) decreased, but still remained positive at € 6.8 m.

Growth gift in the anniversary year
On the basis of the figures now presented, Oliver Brüß draws a positive balance: “In the past five years we have increased premium income by about € 30 m, and in the year of our 40th anniversary we achieved a new record in turnover. The success story of Advocard thus goes on, despite a difficult economic environment”, Brüß explains. He adds that, of course, the economic crisis has not left Advocard unaffected. The company’s net investment income reflects the dramatic development in stock markets. “We have responded accordingly in our financial statements by making full write-downs and choosing not to apply the option of art. 341b of the German Commercial Code. We are certainly not pleased with this situation but it will avoid subsequent corrections in the coming year”, Brüß states.

Two aces against recession
Besides a solid management, new and innovative products are the adequate response to recession. According to the Chief Executive of Advocard it is necessary to make customers see that a legal expenses policy is not a luxury in times of economic crisis but that this cover is an important element in providing for the personal risks of life.
The Hamburg-based legal expenses insurer, which is one of the biggest in the German market and has about 1.4 million customers, focuses on two special service features for private and corporate clients in the current business year: the legal expenses product “Rechtsschutz Plus XL”, which is unique in the German market, and the cover package for the collection of receivables “Forderungsmanagement Exklusiv”. “We thus continue our successful strategy of providing premium products. With “Rechtsschutz Plus XL” we underline the important advisory function of the lawyer”, underlines Peter Stahl, in charge of the benefits division within Advocard’s Board of Management. Under the “Rechtsschutz Plus XL” cover, Advocard pays the costs for two advisory meetings with the lawyer and subsequent lawyer activities in the field of private law up to € 1,000 per year. This also applies to cases not involving actual litigation and without any exclusions of risks, i.e. also for the verification of an employment contract or a contract for the purchase of real estate before the contract is signed in order to avoid future litigation. The “Forderungsmanagement Exklusiv” product is designed for corporate clients and combines the comprehensive analysis of credit quality with all steps of the judicial and extra-judicial collection of receivables. With these two new products, Advocard provides a targeted response to the safety requirements of customers during an economic downturn. This generates new business and further emphasizes the strong services offered by the Advocard brand. Advocard’s Board of Management is therefore optimistic about the current business year, despite the financial crisis.

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