€ 79.6 million withdrawal from equalization provision
The overall underwriting account shows a deficit of € 727.2 million (p.y. € 278.2 million) after withdrawal from the equalization provision. Owing to the negative result in the Property classes, further with- drawals were made from equalization and major risks provisions, espe- cially in the Fire, Fire Consequential Loss and Aviation classes. Overall, the sum of € 79.6 million was withdrawn, after which adjustment the underwriting account showed a deficit of € 647.6 million (p.y. € –292.8 million).
Investment income significantly decreased
Results in the non-underwriting account were depressed by the nega- tive developments seen in capital markets in the year under review. General business in the financial year 2001 produced a surplus of € 186.7 million, which was significantly less than the € 327.6 million realized in the preceding year, although a change in Section 341 b of the German Commercial Code (HGB) enabling the value of securities to be assessed on the basis of a moderated lower-of-cost-or-market princi- ple meant that depreciation was lower.
To cover future risks, especially Motor risks, our parent company effect- ed a capital injection of € 102.0 million for the financial year 2001. This was treated as a special allocation to the provision for outstanding claims.
After deduction of the underwriting deficit, the Profit and Loss Account showed a deficit of € 562.8 million from ordinary activities (p.y. € 34.8 million income). After the extraordinary income resulting from the par- ent company’s capital injection, the Profit and Loss Account showed a deficit of € 460.8 million before taxes. The overall tax income of € 19.4 million was essentially due to a withdrawal from tax provisions. After taxes, the net deficit for the year stood at € 441.5 million. Including the € 5.1 million retained profit brought forward from the preceding year and after a withdrawal of € 363.2 million from the capital reserve and a € 24.6 million withdrawal from revenue reserves, a net retained loss of € 48.5 million was carried forward.
Gerling-Konzern Globale Rückversicherungs-AG/Management Report 39