fatum on the move! - guardian groupmyguardiangroup.com/135009_fatum_annualreport-lr.pdffatum on the...

Fatum on the move!“To go forward is To move Toward perfecTion.

march on, and fear noT The Thorns, or The sharp sTones on life’s paTh.” Khalil Gibran

faTum annual reporT 2012

Contentsa message from The supervisory Board of direcTors

Meet the members of the Supervisory Board

a message from The execuTive Board of direcTors

Meet the members of the Executive Board

faTum holding n.v. summary consolidaTed

financial sTaTemenTs 31 decemBer 2012

Consolidated Statement of Financial Position

31 December 2012

Consolidated Statement of comprehensive income 2012

Significant Accounting Policies

Independent Auditor’s Report

faTum on The move!

concluding remarks

company informaTion

Fatum Annual Report 2012

It is with great pleasure that we present our 2012 results, which once again reflect the strength of Fatum and the Guardian Holdings Limited (GHL) Group as a whole. The year 2012 has been a most satisfactory year for GHL. We have maintained a trend of excellent performance despite persistent weak economic conditions.

Financial performanceThe achievement of TT$353 million in after tax profits represents an increase of 35% over the TT$261 million of 2011. We realized excellent results from our insurance activities in 2012, with profits growing to TT$529 million from TT$360 million, a 47% increase over the previous year. Since the onset of the world financial crisis in 2008, our gross premiums written, or our top line, on a continuing operations basis, have delivered a 10% compounded annual growth rate and reached TT$4.4 billion in 2012. The Dutch Caribbean, one of our major Caribbean markets, contribute for 21% to this endeavor.

Insurance companies and in particular life insurance companies are long-term investors and seek long-term assets to support their life and pension liabilities which can stretch 40 years or more. Our investment activities represent a major source from which GHL derives revenue and profit. Net income from investments amounted to TT$922 million, a decline of 13% from the TT$1.1 billion in 2011. The main part of this decrease is attributable to the low interest policies that have been applied universally by Central Banks in their endeavor to stimulate economic growth.

Our balance sheet shows that assets increased by TT$1 billion to TT$22.5 billion in 2012 from the TT$21.5 billion in 2011. Equity grew by TT$85 million and now stands at TT$3.2 billion. All our insurance subsidiaries’ capital and solvency positions con-tinue to remain well above minimum requirements.

Meet the members of the

Supervisory Board

On December 31, 2012

Mr. J.S. Mack Chairman

A Message from the Supervisory Board of Directors


Mr. H.P. Ganteaume Mr. O.M. van der Dijs

Mr. J.W.H. Richters Mrs. E.R. Croes-Marugg Mr. R.A. Tewari Mr. R.G. de V. Espinet

Strategic Acquisitions GHL’s strategy continues to be the achievement and maintenance of a dominant market position in the Caribbean countries in which we operate. Guardian Life of the Caribbean as well as Guardian General are the region’s largest insurance com-pany. Fatum holds dominant positions in the Dutch Caribbean both in life, health and pensions and general insurance.

During 2012, we were able to acquire three companies. In November 2012 GHL acquired the Globe Insurance Company of Jamaica Limited. Globe will add $US28 million to consolidated revenue. With this acquisition, GHL will become the largest general insurance company in Jamaica.

In December 2012 Fatum signed an agreement to purchase Royal & Sun Alliance Antilles (RSA). This Dutch Caribbean based insurer was a joint venture between the Royal & Sun Alliance (the second largest general insurer in the U.K.) and Maduro and Curiel’s Bank (MCB), the largest Bank in the Dutch Caribbean. Following the merging of RSA and Fatum General Insurance, Fatum General Insurance will occupy the number one position when measured by market share.

Our third acquisition in 2012 also took place in December 2012, when Fatum purchased a Dutch insurance broker, Thoma Exploitatie B.V. This acquisition rein-forces Fatum’s expansion into the Dutch general insurance market.

The Supervisory Board of DirectorsIn 2012 the Board consisted of 7 members including 4 non-executive directors. All the powers of the Board have been duly exercised. The Board met four times in 2012. Major issues requiring an active engagement of the Board were the approval of the budget and strategic plan, the monitoring of the initiatives for keeping the company performance in line with shareholders’ expectations and the approval of the actions required throughout the acquisition process of RSA and Thoma.

The Audit, Compliance and Risk Committee (ACRC)The ACRC, consisting of three non-executive directors, resides under the Super-visory Board and is governed by a charter which sets out its responsibilities in respect of the financial statements, internal controls, the internal audit function, external audit, compliance and risk matters.



The Board is satisfied that the Internal Audit function as well as the Compliance function have been discharged in an objective and transparent manner and are not subject to management’s undue influence. Weaknesses in internal controls observed by the internal and external auditors and management’s risk corrective actions were presented to the ACRC. The ACRC members have confirmed that appropriate actions have remedied the weaknesses. Additional subjects receiving attention from the ACRC in 2012 were Compliance with legislation and regulatory requirements, Anti Money Laundering and Risk Management.

The ACRC met four times in 2012. All meetings were attended by representatives of the Supervisory and Executive Board and by the Fatum internal auditor and compli-ance officer. Ernst & Young, the external auditors, have a standing invitation to all ACRC meetings.

Acknowledgements We wish to thank the Board of Executive Directors of Fatum for their ongoing dedi-cation and commitment to move forward with excellent achievements, maintaining the course to sustainable growth and increased returns to our stakeholders. We extend our sincere gratitude to all our customers, clients and business partners for their loyalty and support, essential ingredients in our successes and to recommit to our partnership in achieving our mutual goals and aspirations. And last but defi-nitely not least, we give thanks to our employees at every level whose competence, sense of responsibility and commitment continue to contribute to our successes.

Future Prospects As described above, the Fatum insurance business has delivered most satisfactory results. While we recognize the difficulties of doing business in a highly challenging investment environment, we face the future with confidence as we continue with the measures and policies that have brought us to the strong position in which Fatum and the GHL Group finds itself today, moving forward to a continued delivery of growth in both revenue and profits.

Jeffrey Mack Chairman

A Message from the Supervisory Board of Directors


The year 2012 was certainly interesting for Fatum and the countries in which we operate. In Curaçao elections were held for the first time since the constitutional restructuring that took place in our Kingdom in 2010, after the ruling coalition could not count on a majority in Parliament anymore and came to an end in August 2012. It was replaced by a temporary interim Government, in anticipation of new elections which was held on October 19, 2012. Hereafter on December 31, 2012, a transition cabinet was installed, consisting of local pro-fessionals, to run the country constructively for a defined period. The main objective of this temporary cabinet was to implement neces-sary reforms in the old age government pension and in the health care system and tax system in such a way that the negative trend of the public debt would be reversed and the public finances would have a balanced sustainable outlook. Furthermore the necessary ini-tiatives should be envisioned and embarked on to create the neces-sary economic growth. This would lead to a sound starting position for a political cabinet to continue governing Curaçao. The Fatum President & CEO, Mr. Steven Martina has accepted to take the posi-tion of Minister of Economic Affairs and Vice Prime Minister in the transition cabinet and served his country from December 31, 2012 to June 7, 2013 as Minister of Economic Affairs. During his leave of absence, Mr. Diego Fränkel, Managing Director Aruba, Bonaire, Sint Maarten served as the Acting CEO. We are proud that a member of our Group has been asked to serve and has given a valuable contri-bution in realizing the so important objectives set forth.

Financial performanceFatum’s business performance in 2012 was strong despite the fragile economic situation. Fatum closed the year 2012 with a net profit of ANG 37,4 million, as compared with ANG 27,2 million in 2011. The results were positively influenced by fair value gains of ANG 8,6 million. The gross yield on investments was 6.0%.

The Life business showed an exceptional net profit of ANG 42,7 million, as compared with ANG 20,3 million in 2011. These exceptional results were boosted by one-off releases and were also affected by fair

A Message from the Executive Board of Directors

value gains. The Health business showed a net profit of ANG 1,8 million, as compared with ANG 4,9 million in 2011. The net profit of the General Insurance business was ANG 3,9 million, while in 2011 we registered a net profit of ANG 12,1 million. In 2012 the Dutch business contributed negatively to the performance of the General Insurance business due to less new business concluded than anticipated. Fatum’s solvency position continued to be exceptionally strong and above the local requirements of the Central Bank of Curaçao and Sint Maarten and the Central Bank of Aruba.

Market expansion Our Strategic Plan revolved around priorities which are designed to meet our finan-cial objectives as well as position Fatum for future growth. Our main objective is focused on remaining the leading provider of solutions for the protection of our customer’s financial needs.

Our growth objectives were realized by the benefits of where our businesses have a substantial presence in the Dutch Caribbean and also in the Netherlands. In 2012 we continued to penetrate these markets to the fullest. We are pleased with the progress that has been made by Fatum and the platforms that have been built for future sustainable growth. We are very proud to welcome the RSA Antilles col-leagues, customers and other stakeholders as part of the Fatum family. In the same way, we express a special word of welcome to the Netherlands based Thoma col-leagues and customers, as they too, are now part of the expanding Fatum Group.

Distribution In 2012 Fatum further diversified the distribution platform, among others through distribution agreements with key partners. Our focus will remain on being a custom-er-centric organization, while making optimal use of technology innovations. We continued to grow the direct sales channels in dedicated business groups in order to serve the customer segments that prefer to transact with us directly. While mov-ing forward, we will continue to introduce differentiating IT initiatives, which will fa-cilitate us in deepening our customer insights in order to better engage with our customers, and better collaborate and coordinate across departments and busi-ness units. Leveraging technology will enable us to gather information and insight to optimize the customer experience.

Operational excellenceOperational excellence will drive meaningful competitive advantage. Our values continuously drive us to continuously provide solutions to reflect the changing




needs of clients. Therefore in 2012 some main operational procedures (financial, underwriting procedures) were reviewed and modified, with the objective of developing a new approach to how our functions deliver their expertise to the daily business. At the same time, we preserved the competitive advantage derived from the strong alignment between the operational activities and the customers and markets we serve.

Employees: The main asset in our “people driven business”Successful businesses are built around the quality, capability and capacity of its people. Fatum considers people to be our most important asset and acknowledges the fact that our employees are our competitive advantage. The right people in the right jobs will mean effective and efficient processes which will contribute to a sat-isfactory customer experience and consequently sustainable, profitable businesses.

In 2012 several training programs were carried out, in groups as well as on an indi-vidual basis. The programs were being provided by Fatum, but also by external in-stitutions.

Fatum has implemented a target driven performance appraisal instrument. Targets are being agreed upon annually at the beginning of a new year, which facilitates the evaluation throughout the year as well as at year end, making it more transparent and more objective to evaluate the actual performance.

Risk management and risk appetite.Fatum has defined the risk appetite which is used to guide the overall decision taking. We maintain our overall risk profile and principal risks within our appetite and limits.In order to remain well aligned with our vision of being the “Insurer of Choice” in the markets in which we operate, we continue to commit ourselves to further embed-ding an Enterprise Risk Management (ERM) culture within Fatum. Our in-house risk management tools constantly evolve, hence providing the means to identify, mea-sure, monitor and mitigate the risks observed.

Corporate Social responsibilityIn 2012 too, Fatum was committed to remain a socially conscious corporate citizen, with the purpose to make a meaningful difference in the communities in which we operate and which we serve. In the end, we want to create value for the society, thereby establishing a win-win proposition. This is being done by actively encourag-ing individual and societal development by financially supporting efforts to improve


wellbeing and realize human potential in the communities and territories where Fatum operates. Corporate Social Responsibility was expressed throughout 2012 by a focus on the youth, a focus on sports and physical activity as well as through financial support for the work of various non-governmental organizations. Areas sponsored include among others health, culture (carnival parades), the elderly, those with special needs and many others.

Concluding remarksThroughout 2012 we have achieved several satisfactory results. We approach the future with new hope, new opportunities and a strengthened commitment to con-tinue the growth of Fatum for our customers, shareholders and the communities we serve. We have confidence that we are well prepared for the new challenges while continuing to be “on the move”!

The coming years will be dedicated to the process of amalgamating the Fatum and the RSA operations, resulting in a new business entity consisting of “the best of both companies”. We see this as a unique opportunity to reach significant synergies.

Fatum will proceed to move forward in a sustainable direction with the commitment and engagement of our stakeholders. While moving on, Fatum will continue to seek growth with profitability. We thank all our policyholders and customers, intermediaries, business partners and employees for their most valued trust, loyalty and presence along our moves. We also want to thank our shareholders, for the continued confidence in our ability to succeed and deliver results in the long term. With the commitment and trust of all stake-holders, we will ensure that Fatum remains a leader, and we will definitively remain on the move to celebrate more sig-nificant milestones in the future.

I.S. (Steven) Martina President & CEO Fatum Holding


Diego FränkelManaging Director Aruba, Bonaire, Sint Maarten

Marten O’NielManaging Director Commerce

Dorothy Romero-SprockelManaging Director Finance

Francis GijsberthaManaging Director Operations

Meet the members of the

Executive Board

On December 31, 2012



Consolidated Statement of Financial Position 31 December 2012(Expressed in thousands of Antillean Guilders)

Assets

Property, plant and equipment Investment properties Intangible assetsInvestment in associated companiesFinancial assetsFinancial assets of mutual fund unit holdersLoans and receivables including insurance receivablesPension plan assetsDeferred tax assetsReinsurance assetsDue from parent and affiliated companiesDeferred acquisition costsTaxation recoverableCash and cash equivalents

TOTAL ASSETS

Shareholder’s Equity and Liabilities

Shareholder’s EquityShare capitalShare premiumReservesRetained earningsTotal Equity

LiabilitiesInsurance contracts Financial liabilitiesPost retirement medical benefit obligationsDeferred tax liabilitiesDue to affiliatesProvision for taxationOther liabilitiesTotal liabilities

TOTAL EqUITY AND LIABILITES

2012 30,426 2,414 23,014 34,097 1,010,074 122 177,103 20,375 974 15,204 31,906 4,518 265 104,042

1,454,534

25,001 74,029 4,720 65,317 169,067

1,109,455 92,204 19,935 3,506 320 7,141 52,906 1,285,467

1,454,534

Restated 2011 30,889 2,813 1,034 33,371 1,010,889 120

169,897 22,512 84 19,082 2,333 4,691 265 75,486

1,373,466

25,001 74,029 6,812 40,717 146,559

1,051,796 91,713 16,998 4,393 431 4,095 57,481 1,226,907

1,373,466

Consolidated Statement of Comprehensive Income 2012(Expressed in thousands of Antillean Guilders)

Insurance activitiesInsurance premium incomeInsurance premium ceded to re-insurersReinsurance commission incomeNet underwriting revenue

Policy acquisition expensesNet insurance benefits and claimsUnderwriting expensesNet result from insurance activities

Investing activitiesInvestment incomeNet realized losses on financial instrumentsNet fair value gains on financial instrumentsFee incomeOther operating incomeInvestment contract benefits

Net income from all activities

Operating expensesFinance chargesOperating profit

Share of profit of associated companiesProfit before taxation

Taxation

Profit after taxation

Other comprehensive income (loss)Exchange differences on translating foreign operationsOther reserve movementsOther comprehensive income / (loss) for the period, net of tax

Total comprehensive income / (loss) for the period, net of tax

Total comprehensive income attributable to:Owners of the parentNon-controlling interests

2012 195,326 (12,722) 4,209 186,813

(17,853) (148,365) (166,218) 20,595

65,214 (37) 8,562 1,226 4,023 (162)

99,421

(47,412) (5,226) 46,783

3,081 49,864

(12,446)

37,418

(2,356) 0

(2,356)

35,062

35,062 - 35,062

Restated 2011 186,859 (24,795) 3,982 166,046

(19,908) (155,797) (175,705) (9,659)

64,200 (23) 13,714 1,214 3,178 (168)

78,220

(37,469) (2,444) 32,543

2,345 34,711

(7,635)

27,253

(287) 54

(233)

27,020

27,020 - 27,020



Significant Accounting Policies

The consolidated statement of financial position and consolidated statement of comprehensive income as presented on page 12 and 13 have been derived from the consolidated financial statements of Fatum Holding N.V. These explan-atory notes are an extract of the detailed notes included in the consolidated financial statements.

Basis of preparation

These consolidated financial statements are pre-pared in accordance with International Financial Reporting standards (IFRS). They have been pre-pared under the historical cost convention, as modified by the revaluation of land and buildings, investment properties and financial assets and financial liabilities at fair value through profit or loss.

The preparation of financial statements in confor-mity with IFRS requires the use of certain critical accounting estimates. It also requires manage-ment to exercise its judgment in the process of applying the Group’s accounting policies.

(a) New standards and amendments/revisions to published standards and interpretations effective in 2012

- IFRS 7 Financial Instruments: Disclosures (Amendment) The amendment requires additional quanti-

tative and qualitative disclosures relating to transfers of financial assets, when:

Financial assets are derecognized in their entirety, but the entity has a continuing involvement in them (e.g., options or guar-antees on the transferred assets)

Financial assets are not derecognized in their entirety

The amendment promotes transparency in the reporting of transfer transactions and im-prove users’ understanding of the risk expo-sures relating to transfers of financial assets

and the effect of those risks on an entity’s financial position, particularly those involving securitization of financial asset. The amend-ment did not have any impact on the financial position, performance or disclosures of the Group.

- IAS 12 Income taxes (Amendment) - Deferred Taxes : Recovery of Underlying Assets

The amendment to IAS 12 introduces a re-buttable presumption that deferred tax on investment properties measured at fair value will be recognized on a sale basis, unless an entity has a business model that would indi-cate the investment property will be consumed in the business. If consumed, an own use basis must be adopted. The amendment also introduces the requirement that deferred tax on non-depreciable assets measured using the revaluation model in IAS 16 should always be measured on a sale basis. As a result of this amendment, SIC-21 Income Taxes - Recovery of Revalued Non-Deprecia-ble Assets has been withdrawn. The amend-ment did not have any impact on the financial position or performance of the Group.

(b) New standards and amendments/revi-sions to published standards and interpre-tations effective in 2012 but not applicable to the Group

The following new and revised IFRS that has been issued does not apply to the activities of the Group:

IFRS 1 First-time Adoption of International Financial Reporting Standards (Amend-ment) - Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters - Effective July 1 2011

(c) New interpretations and revised or amended standards that are not yet effec-tive and have not been early adopted by the Group

The improvements become effective for an-nual periods on or after either 1 July 2012 or 1 January 2013. These changes are currently being evaluated by Management.

• IAS 1 Presentation of Items of Other Com-prehensive Income - Amendments to IAS 1- Effective 1 July 2012

• IAS 19 Employee Benefits (Revised) - Effec-tive January 1 2013

• IFRS 1 Government Loans - Amendments to IFRS 1 - Effective January 1 2013

• IFRS 7 Disclosures - Offsetting Financial As-sets and Financial Liabilities - Amendments to IFRS 7 - Effective January 1 2013

• IFRS 10 Consolidated Financial Statements, IAS 27 Separate Financial Statements - Effective January 1 2013

• IFRS 11 Joint Arrangements, IAS 28 Invest-ments and Associates and Joint Ventures - Effective January 1 2013

• IFRS 12 Disclosure of Interests in Other Enti-ties - Effective January 1 2013

• IFRS 13 Fair Value Measurement - Effective January 1 2013

• IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine - Effective January 1 2013

Annual Improvements to IFRSs 2009 - 2011 cycle - Effective January 1 2013:

• IFRS 1 First-time Adoption of International Financial Reporting Standards - Repeated application of IFRS 1 and borrowing costs

• IAS 1 Presentation of Financial Statements - Clarification of requirements for comparative information

• IAS 16 Property Plant and Equipment - Clas-sification of servicing equipment

• IAS 32 Financial Instruments, Presentation - Tax effect of distributions to holders of equity instruments

• IAS 34 Interim Financial Reporting - Interim financial reporting and segment information for total assets and liabilities

• IAS 32 Offsetting Financial Assets and Finan-cial Liabilities - Amendments to IAS 32 - Effective January 1 2014

• IFRS 9 Financial Instruments - Classification and Measurement - Effective January 1 2015

Consolidation

a) Subsidiaries

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies, generally accompany-ing a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exer-cisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.

The Group uses the purchase method of ac-

counting for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly at-tributable to the acquisition.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized in the consolidated income statement.

All inter-company transactions and balances are eliminated on consolidation. Subsidiaries’ accounting policies have been changed where necessary to ensure consistency with the poli-cies adopted by the Group.



The following subsidiaries have been included in the consolidation:

• Fatum Health N.V.• Fatum General Insurance N.V.• Fatum Life N.V.• Home and Properties N.V.• Fatum General Insurance Aruba N.V.• Fatum Life Aruba N.V.• Thoma Exploitatie B.V.

b) Thoma Exploitatie B.V.

The Group’s investment in its associated com-panies is accounted for using the equity method of accounting. An associate is an entity in which the Group has significant influence and which is neither a subsidiary nor a joint venture.

Under the equity method, the investment in associates is carried in the consolidated state-ment of financial position at cost plus post acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of the investment and is not amortized. The consolidated income statement reflects the share of the results of operations of the associ-ates. When there has been a change recog-nized directly in the equity of the associates, the Group recognizes its share of any changes and discloses this, when applicable, in the statement of changes in equity. Profits or losses resulting from transactions between the Group and the associates are eliminated to the extent of the interest in the associates.

The share of profit of associated companies is shown on the face of the consolidated income statement. This is profit attributable to the equity holders of the associates and therefore is profit after tax and non-controlling interests in the subsidiaries and associates.

The consolidated financial statements of the associates are prepared for the same reporting period as the parent company. Where neces-

sary, adjustments are made to bring its ac-counting policies in line with the Group.

After application of the equity method, the Group determines whether it is necessary to recognize an additional impairment loss on the Group’s investment in associates. The Group determines at each reporting date, whether there is any objective evidence that the invest-ment in associates is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associates and its carrying value and recognizes the amount in the consolidated income statement.

Financial Assets

The Group classifies its investments into the fol-lowing categories: financial assets at fair value through profit or loss, loans and receivable and held-to-maturity financial assets. The classification depends on the purpose for which the invest-ments were acquired. Management determines the classification of its investments at initial recog-nition and re-evaluates this at every reporting date.

(a) Financial assets at fair value through profit and loss

This category has two sub-categories: financial assets held for trading and those designated at fair value through profit and loss at inception. A financial asset is classified into this category at inception if acquired principally for the pur-pose of selling in the short term, if it forms part of a portfolio of financial assets in which there is evidence of short term profit-taking, or if so designated by management. Financial assets designated as at fair value through profit or loss at inception are those that are:

a. Held in internal funds to match insurance and investment contracts liabilities that are linked to changes in fair values of these as-

sets. The designation of these to be at fair value through profit or loss eliminates or sig-nificantly reduces a measurement or recog-nition inconsistency that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases.

b. Managed and whose performance is evalu-ated on a fair value basis. Information about these financial assets is provided internally on a fair value basis to the Group’s key man-agement personnel. The group’s investment strategy is to invest in equity and debt secu-rities, and to evaluate them with reference to their fair values. Assets that are part of these portfolios are designated upon initial recog-nition at fair value through profit or loss.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable pay-ments that are not quoted in an active market. The investments are initially recognized at cost, being the fair value of the consideration paid for the acquisition of the investment. All transaction costs directly attributable to the acquisition are included in the cost of the in-vestment. After initial measurement, loans and receivables are measured at amortized costs, using the effective interest rate method. Gains and losses are recognized in the income state-ment when the investments are derecognized or impaired, as well as through amortization process.

(c) Held-to-maturity financial assets

Held-to-maturity financial assets are non-deriv-ative financial assets with fixed or determinable payments and fixed maturities other than those that meet the definition of loans and receivables that the Group’s management has the positive intention and ability to hold maturity. These investments are initially recognized at cost, being the fair value of the consideration paid for the acquisition of the investment. All

transaction costs directly attributable to the acquisition are also included in the cost of investment. After initial measurement, held-to-maturity financial assets are measured at am-ortized cost, using the effective interest rate method. Gains and losses are recognized in the income statement when the investment are derecognized or impaired, as well as through the amortization process. Insurance contracts/Net insurance premium revenue/Net insurance benefits and claims

The Group issues contracts that transfer insur-ance risk or financial risk or both. Insurance contracts are those contracts that transfer sig-nificant insurance risk. Such contracts may also transfer financial risk.

(a) Short-term insurance contracts

These contracts are principally property, motor, casualty (employers’ liability, public liability), marine and health insurance contracts. Health insurance contracts include both group and individual health insurance.

Property insurance contracts indemnify the Group’s customers in the event of a loss from a specified insured peril such as fire, wind-storm or earthquake (not limited to these perils) up to the insured amount and within the terms of the policy conditions. These contracts are issued for both private and commercial risks. Customers who undertake commercial activi-ties on their premises could also receive compensation for consequential loss/business interruption caused by the insured perils.

(b) Long-term insurance contracts with fixed and guaranteed terms

These contracts insure events associated with human life (for example death, or survival) over a long duration. Premiums are recognized as revenue when they become payable by the contract holder. Premiums are shown before deduction of commission.


A liability for policyholders’ benefits that are expected to be incurred in the future is recorded when the premiums are recognized. Typically, the liability is determined as the sum of the expected discounted value of the benefit payments less the expected discounted value of the theoretical premiums that would be required to meet the benefits based on the valuation assumptions used (the valuation pre-miums). In particular, the liability is based on assumptions as to mortality and investment income. A margin for adverse deviations is included in the assumptions.

The liabilities are recalculated at each reporting date and the change in the liability is recog-nized as an expense in the consolidated in-come statement. The reserves for the long-term life insurance contracts are calculated on a Modified Net Premium Method in accordance with the re-quirements of the Central Banks of the Curaçao and Sint Maarten and of Aruba.

(c) Long-term insurance contracts without fixed terms

These contracts insure human life events (for example death or survival) over a long duration. Insurance premiums are recognized directly as liabilities whereas the change in the liabilities is reflected in the consolidated income statement. These liabilities are increased by credited interest or change in the unit prices and are decreased by policy administration fees, mortality and surrender charges and any withdrawals.

Solvency Margin

Restated 2012 2011 Regulatory required margin 56,134 52,924 Available margin 169,067 147,961 Surplus 112,933 95,037



Independent Auditors’ Report

The accompanying summary consolidated financial statements, which comprise the summary consolidated statement of financial position as at 31 December 2012, the summary consolidated statement of comprehensive income 2012 and related notes, are derived from the audited consolidated financial statements of Fatum Holding N.V. for the year ended 31 December 2012. We expressed an unqualified audit opinion on those consolidated financial statements in our report dated 24 June 2013. Those consolidated financial statements, and the summary consolidated financial statements, do not reflect the effects of events that occurred subsequent to the date of our report on those consolidated financial statements.

The summary consolidated financial statements do not contain all the disclosures required by International Financial Reporting Standards. Reading the summary consolidated financial statements, therefore, is not a substitute for reading the consolidated audited financial statements of Fatum Holding N.V.

Management’s responsibilityManagement is responsible for the preparation of a summary of the audited consolidated financial statements on the bases described under Significant Accounting Policies.

Auditor’s responsibilityOur responsibility is to express an opinion on the summary consolidated financial statements based on our procedures, which were conducted in accordance with International Standards on Auditing, including the Standard on Auditing 810 ‘Engagements to report on summary financial statements’.

OpinionIn our opinion, the summary consolidated financial statements derived from the audited consolidated financial statements of Fatum Holding N.V. for the year ended 31 December 2012 are consistent, in all material respects, with those consolidated financial statements, in accordance with International Financial Reporting Standards.

Curaçao, 23 August 2013

for Ernst & Young Accountants

C. Smorenburg RA AA drs. P.W. Aberson RA


Fatum on the move!

In 2012 the phrase “On the Move” was again fully applicable to Fatum. Since the onset of its operations in the Dutch Caribbean in 1904, Fatum has evolved into a sustainably leading market player and corporate citizen. Fatum succeeded by continuously looking forward and moving on, through all types of circumstances. Being “On the move” has typified Fatum throughout the past century. This has been done in a wide variety of ways. There is no better way to describe how Fatum has successfully moved along the years, than by elaborating upon the different meanings of “On the move”. These meanings, when combined, perfectly substantiate the everlasting past, present and future mobility of Fatum.

A journey along Fatum’s moves throughout the time

Fatum Annual Report 2012 Page 22

Office Curaçao

Office Aruba

“The meaning of life is not simply to exist, to survive, but to move ahead, to go up, to achieve, to conquer”.Arnold Schwarzenegger

1. “On the move”: Busily moving about, actively, Continuously moving forward from one place to another, from one function to another.

When looking back, the history of Fatum, depicts a clear pattern of constantly being “On the move”:

Fatum CuraçaoFatum was established in 1904 in Curaçao as “Assurantiemaatschappij tegen brand-schade en op het leven ‘De Nederlanden’ opgericht in 1845”. From 1904 to 1938 the company operated through several agents. In 1938, it began its own office at the Hoogstraat 63. In 1940, rapid expansions led to the office being moved to Wind-straat 7, at Helfrich Square (now the Da Costa Gomez Square). In 1947 a big his-toric mansion at Pietermaai 19 was bought. For many years, this beautiful neo-classical monument served as the Fatum building. Continuous growth led to the construction of the present location at the Cas Coraweg 2, which has been the head office since November 5, 1982.

Fatum ArubaAs early as 1937, Fatum was represent-ed in Aruba by the ‘Haagsche of 1805’ at the Aruba Bank, until Aruba was placed under the Curaçao office. Besides the Aruba Bank, the ‘Holland-sche Bank Unie’ (HBU) Aruba office also began selling Fatum policies, until the HBU was officially appointed as a Fatum agent in 1944.In January 1948 the growing Fatum portfolio led to the opening of the Aruba office, initially from the temporary “office” in a hotel room of ‘Pension Holland’. Later that year, the operation was moved to the first real office at the Nassau Street. Growth in business and personnel necessitated moving to a larger office at the upper story of the ‘Wimco’ building in 1950. In 1968, the company moved again, this time to an office at the Nassau Street 103. The growing independence from the Curaçao office led to ever increasing activities, also stimulated by the drive of several agents, so much so that a new office was built at Punta Bravo, where the current Aruba office opened its


Office Bonaire

Office Sint Maarten


doors on October 15, 1993. In 2009 the Aruba office became a sepa-rate legal entity and was no longer a branch office of the Curaçao head office.

Fatum BonaireIn Bonaire the Bonaire Trading Company Ltd. was officially ap-pointed as the Fatum general agent in 1946. In the years that followed, this agent built up a con-siderable portfolio, which consist-ed to a great extent of government property and the Catholic mission. The portfolio continued to grow and the Curaçao office regularly sent field workers to maintain contact with clients. As the client database kept growing, this situa-tion became impractical. In 1993, Fatum opened the current Bonaire office at Kaya Gobernador N. De-brot 35.

Fatum Sint MaartenIn 1950, Fatum saw an opportunity for establishing a Fatum presence in Sint Maarten, and appointed an agent. In 1954 another agent, Mr. A.C. Whathey was entrusted with the Fatum agency. He expanded activities to the other Windward Is-

lands, as well as to the French side of St. Maarten. The most important clients at the time were the government, the Roman Catholic Mission and a hotel company that ran the “Little Bay Hotel”.Due to the expansion of the insurance portfolio and of the client database on the Wind-ward Islands, Fatum decided to open a Sint Maarten office on January 1, 1969 in the Front Street. The company soon outgrew these facilities. In 1974, another location was found in the Emma building. In the 80s, this office also proved to be too small. In 1982, operations were moved to the current building on the A.J.C. Brouwer Road. In April of 1991, this building was expanded to accommodate the ever-growing activities.Fatum has always been active in Saba and St. Eustatius through agents, who now fall directly under the Sint Maarten office.


Mergers and acquisitionsFatum has continuously been faced with mergers and acquisitions, followed by further expansion of the company. A brief summary of these mergers and acquisitions:

November 26, 1917: The Dutch insurance company named Fatum Ongevallen Verzekering Maatschappij NV is taken over by ‘De Nederlanden van 1845’.

May 26, 1930: The locally used name “De Nederlanden van 1845” is changed to ‘Fatum’.

January 1, 1970: The locally insured insurance portfolio was transferred to the ‘Dutch Fire Insurance Company of de Nederlanden of 1845’, known as “Nationale-Nederlanden Schade’, part of the then largest insurance com-pany in the Netherlands.

March 2, 1991: A merger took place between “Nationale Nederlanden” and the NMB Postal Savings Bank, creating the International Nederlanden Group (ING), a holding company with an insurance and a banking branch.

October 15, 1993: Fatum’s name was changed into ING Fatum in the Dutch Caribbean. Fatum remained a solid company through its links with the mother company in Holland.

April 23, 2003: Fatum was purchased from ING by Guardian Holdings Lim-ited (GHL), the Caribbean’s largest insurance company. GHL maintains the name Fatum for its Dutch Caribbean operations.

As of October 6, 2008: Fatum is licensed for doing business in the Nether-lands. Fatum started its operations in the Netherlands through primarily reinsurance brokers and proxy agents.

December 15, 2012: Fatum acquires the 100% shares of Royal Sun Alliance Antilles, active in Curaçao, Aruba and Bonaire.

December 19, 2012: Fatum acquires the 100% shares of a broker, Thoma in the Netherlands.

2. “On the move”: Making progress, advancing, succeeding in extending our activities:

When looking back, the history of Fatum, depicts a clear and ongoing pattern of prog-ress, advance and success in extended activities is noticeable. A brief summary:

• From doing business solely though agents in 1904, to nowadays doing busi-ness through a wide variety of distribution channels: independent agents, own agents, proxy agents, direct channeling.

• From a “paper and pencil” business in 1904, to current and highly automated


and “smart” business applications and software programs (computers, laptops, calculation programs etc.).

• From a handful of employees at the onset of the Fatum office in 1938, to almost 250 staff members (including the RSA staff).

• When once all policy administrations were being done in Holland in 1904, to current proceedings where all policy administration are being done locally.

• From a limited range of products in 1904, to currently offering all lines of business: life and pensions, health, property and casualty, mortgages.

• Formerly to be known as a subsidiary of the mother company in 1904, during the second World War, the main office of the mother company was temporary officially transferred from Holland to Curaçao. Fatum Curaçao was during those years the center of all operations of the mother company from all over the world.

• From only a few competitors in 1904, whereas nowadays there is a wide variety of competitors. Fatum succeeded in maintaining its leading position in the mar-ket throughout the years despite many newcomers in the market.

3. “On the move”: Full of business, hard at work, in harness, in motion, in transit, occupied, on duty, on the job, under way. Busily moving about or active on the go, a reliable partner, a market trendsetter, a key player, a solid corporate citizen:

When looking at the history of Fatum, constantly being “on the move” and being actively on the go can be observed as a constant standard within Fatum:

• Actively on the go with a clear focus on the youth: Children and the youth continue to be a vulnerable sector within our societies,

in need of support, protection and care as they represent the most valuable re-source we have as in investment in the future. In this regard, Fatum is donating to a wide variety of youth related projects. In addition, Fatum organized a suc-cessful year end dinner for schoolchildren in 2012 for the 9th time. The “shoe-box” project was initiated in 2012, along with the other business units of the GHL Group, to delight a large group of kids with a box full of precious gifts.

• Actively on the move with a clear focus on sports and physical activity: For the 29th time the famous annual Fatum Loop was held on Curacao and Sint

Maarten. In 2013 the Fatumloop will also be held in Aruba for the first time. The Fatum Loop promotes and fosters a healthy and active lifestyle, where schools are particularly encouraged to participate in large scales.

In addition, Fatum has been sponsoring the local volleyball team of Stakamahachi for the past few years with ongoing successful results.

• Fatum is actively on the go as a good corporate citizen by granting financial support for the work of various non-governmental organizations: Areas sponsored include health, culture (carnival parades), the elderly and others.

Meet and greet RSA and Fatum employees

Shoeboxproject


Pension seminar


4. “On the move”: To have a regular motion, and never stand still or slow down, never staying put for a long time:

Looking back, Fatum represents a company that is constantly “on the move”, never standing still or slowing down by:

• Successfully organizing annual pension seminars on Curaçao, Aruba and Sint Maarten for the past eight years.

• The “Fatum Best in Business Award” which has been awarded to an innovative, promising entrepreneur for the 5th time in 2012.

• Also actively participating in the local Business Platform for Environmental Mat-ters.

• Recycling paper and water for several years, as a contribution to a sustainable environment.

• Currently sponsoring the rugby sports, with the intention of promoting this seemingly unknown sport within the younger community, thus encouraging the youth to stay active through a new alternative after school activity.

• Offering insurance related seminars and trainings for its staff and brokers through-out the years, therefor serving as a reliable “Knowledge Center”.

Fatum staff... on the move!

In general, the Fatum staff has moved with Fatum for many years, expressing their commitment, dedication and loyalty towards Fatum. Many staff members of Fatum have moved through several functions while employed at Fatum. The story of these staff members clearly depicts how Fatum is and will keep being “on the move”. The following stories told by some of Fatum’s colleagues may represent a collective opinion of the staff members: there is never a dull moment as long as you are willing to join the ever present challenges, and while the company moves forward, our staff, also proceeds to be, actively in motion.


Nadine Antersijn... on the move!


Nadine Antersijn Manager Customer Care & Collection

(Fatum Curaçao)

After finishing school in the Netherlands I returned to Curaçao to be with my mother for a while. I contacted a temporary employment agency, because I was not going to stay on the island for a very long time. That’s how I started working at Fatum in the General Insurance department. I was in charge of claims handling. At that time the claims activities were not automated. After a short while they asked me if I wanted to transfer to the Marketing department and I kindly accepted. After all, that is what I had studied for! I was excited and decided to give up my apartment in Rotterdam. During that period we worked on several very interesting projects. We also developed new

products and introduced manuals for the Fatum rates of life and claims for our brokers. After a cou-ple of years, if I am not mistaken, after 6 years, I was transferred to the Premium department of General Insurance. I started with data entry activities and after a while I started underwriting simple risks and commercial risks. After a couple of years the premium and claims departments in General Insurance merged and I started assisting the team-manager of the department. During that period I went on maternity leave and when I returned I was assigned a project, that after three months, resulted in the Customer Care department where I became the Manager. This year I was assigned an additional

department which is the collections department, where together with the Collection employees, we strive to imple-ment the tools necessary to optimize our service to our customers in order to achieve greater performance. What will the future bring? I am sure there are still many more moves to be made. Fatum keeps moving and I am pleased to keep moving together with Fatum!

Ricardo Hunte Manager Investments (Fatum Curaçao)

Ricardo Hunte... on the move!


When one speaks of being…’on the move’ one speaks of ‘making progress’, ‘ad-vancing/success’, ‘forward movement’ or ‘active development’. Also, I’ve learned that as one gets older, it is very important to be…’on the move’, in order maintain some measure of physical health.The same as it is with physical health, I have also learned that it is very important to be …’on the move’ in regards to spiritual health. I believe that these two aspects of health should never be taken for granted. The richness of life itself emanates from taking care of our physical and spiritual health.As a member of the Fatum Group/ Guardian Group of companies, I am very happy to be part of two organizations that are …’on the move’. The ability to ‘take care of generations’ through one’s secular organization is a tremendous privilege – one that brings tangible results not only to the Group itself, but to the scores of individuals who depend on our reliability and integrity in providing the best service, to the best of our ability.When one moves forward in life, no one expects to be the in the same ‘place’ as they were one or two years ago – one generally always looks forward to growth, progress, and forward movement.The Fatum Group/ Guardian Group of companies continue to be …’on the move’, and to the best of my ability I would like to complement that initiative. Therefore, in order to maintain a measure of physical health, when I can, I spend some time on the tennis courts – it often debatable how successful I am. Additionally, to maintain balance and sound thinking ability I make every effort acquire daily insight from the Holy Scriptures and to attend all of the meetings at the local Kingdom Hall of Jehovah’s Witnesses.Especially in these days, physical and moral integrity are very necessary in-gredients for a purposeful life and to keep up with a Group that is …’on the move’. Therefore, I encourage all of my colleagues to pay attention to our physical/mental and spiritual fitness. I’ve been told many times that noth-ing is more important than our health, for without it we will not be able to make progress, or move ahead.Therefore, let’s continue together as one Group, assisting ourselves and others to be always…’on the move’.


Robby Anches Account Manager (Fatum Aruba)

Robby Anches... on the move!

My journey in the Dutch Caribbean with Fatum:At first I had my insurance training of 1 year at the training facility in Noordwijk, Holland. Then I started in the insurance field on December 1, 1979 working as a sales-man for the largest insurance broker being N.C. Wathey Insurances N.V. representing the insurance companies Ennia and Fatum on St. Maarten.Working as a sales-man for an insurance broker, you become the advisor of the client which in turn means that you have to make sure that all the client’s necessary insurance needs are well covered.The 1½ year that I have been a sales-man for N.C. Wathey Insurances N.V. in the insurance field on St. Maarten, I picked up a lot of practical experience.My first move was on July 1, 1981, when I started to work for Fatum in Curaçao. The position was as a junior account-manager and one of Fatum’s objectives at that time was that I had to get my B-diploma in one year time.Another task I was appointed to was that when one of the other account-manager was on vacation I had to fill in their position for the time being.This was also to practice my skills of dealing with the insurance brokers. The second move was on July 1, 1982 when I was sent back to St. Maarten in the as an account-manager. This was no surprise to me because of the fact that I had already worked in St. Maarten but it was still a challenge because now I had to make sure that the brokers on St. Maarten, Saba, St. Eustatius, the French side of St. Maarten and St. Barth’s sold our insurance products instead of the ones from our competitor.Due to the good business relationships I had with the brokers on the Windward

Islands and their people, our life and general insurance portfolio was growing steadily. Together we did a lot of good insurance business.During the 5½ years that I lived on St. Maarten, I also experienced 2 hurricanes. We had to deal with several hurricane claims. This was an experience to remember.I can say that working as an account-manager and working with the insurance brokers on the several islands, I had a very nice time.

The third move was on August 1, 1987, when I was transferred back to the head office in Curaçao.I had more brokers in my portfolio to deal with and the culture of doing business was different. Doing business with the brokers was much faster and more direct. On January 1, 1993 I resigned and moved to Holland with my family, where I worked for an insurance broker called Meyen and Verwey in The Hague and this is where I picked up some experience with the Dutch insurance market.The fourth move was on August 15, 1994 when I was called back to work for Fatum Aruba. I actually started at the Aruba office on August 17, 1994 again as an account- manager and I currently still hold that position now.Finally I can say that working with the brokers on all three islands, is an experience and it is all about trusting each other in doing business. By trusting each other, we can then move in a constant motion towards the goals that are set every year. Due the acquisition of RSA and Thoma, the future for Fatum is to be a key player in the insurance market in the Dutch Caribbean.



Ivonne Badloe Office Representative (Fatum Bonaire)

Ivonne Badloe... on the move!

I have been on the move for some time now, if not in direct relation to Fatum, always physically and mentally for sure because I am a curious person and eager to learn new things.Nineteen years ago I started working for Fatum Bonaire. Before that, I worked for an Insurance company in Suriname. I left Suriname and moved to Bonaire. This was a good move and I am not regretting that at all.Bonaire was a completely different experience for me, it is a small island with few inhabitants and different rules and regulations.I learned things I did not know before because it was another country.When I started working for Fatum I worked alone for some time. I did not speak the Papiamento language but I managed! I had to deal with clients for different insur-ances, claims and complaints. I had to be all around because our office in Bonaire was and is still very small. It is a big responsibility.After some time I finally got a colleague and now we have a great team on Bonaire.It is also my responsibility to train my new colleague.

During those 19 years I have improved my knowledge through trainings because in this profession you have to stay up to date and constantly on the move. For moving

up you have to move on!!!Nowadays with the new Dutch regulations as Bonaire has become part of the Netherlands so many things have changed, so many new demands, rules and laws. Person-ally this is not a problem for me as I am always in the mood to learn new things.To stay sharp, focused and in order to maintain a strong and healthy body I engaged myself in yoga.Because of that I became better at handling stressful situ-ations and it helps me to relax, get energized and more confident.Recently Fatum took over RSA. It is not only a big move for Fatum, but also a new challenge for me. “New employees will be contracted and again new train-ings are necessary”Luckily I am an ambitious person, I cannot sit still. I am constantly on the move. My work taught me how to inter-act better with people and I am always aiming for the best.Thanks to Yoga I am focused, energized and I can keep a healthy and clear mind. Yoga can be part of anyone’s life, at any time, at any age, in any condition, yoga meets and supports me exactly where I am right now. The practice moves with me, it’s like a friend.

Linda Moise Flanders Supervisor (Fatum Sint Maarten)

When I look at my life, it has always been on the move. As I started to work at Fatum 34 years ago, I started in the motor vehicle department. After one year I requested to be moved to the Health department, where I worked for 10 years.In 1979 I made a challenging move to St. Maarten. In Fatum SXM your work is very diverse. You are required to learn all the branches, because this office operates in most cases as a broker.There are only a few branches, where we process a policy and claim from the beginning to the end product. You have to be able to know at least the basic coverage of all Fatum products. As a Supervisor your work is more challenging, it is expected of you to assist where ever its needed within the office.

In my private life I have always been very active. In Aruba, as a JCI member, I was awarded rookie of the year. I moved from being a member, through the different board positions, up to holding the post as president. In St. Maarten I was a member of the Parents Teachers Association, where again I ad-vanced through the different board member positions, including president. At Present I am a Toastmaster and also a reading grandmother.

To be a reading grandmother is a challenge, because reading to children is not just reading a story, but it’s about capturing their attention and keeping it. You need not only speak very clearly but your tone of voice and body language is of utmost importance. There were times where the school provided me with the story but it was also expected of me to choose my own story. I had to take into consideration the age group, it’s a Christian school and what message do I want to bring across to these students. Some-thing that by the end of the day, there is something that stays with them.As a reading grandmother I contribute to the development of the students at the Aisha Steven Hillside Campus school. The students have to keenly listen to my story as I de-liver it, and be able to answer question relating to my story. Not only their listening skills but also comprehension of a story is being developed.At my last reading session I had about 300 students to read too.

My plans are also to study life coaching in the near future. In Life you cannot be on a standstill. There is a Dutch saying stating: “met rust komt roest”, (whatever is on a standstill gets rusty)

You have to be on a positive move, this is not only for your mental state of mind but also for your inner being.

Linda Moise-Flanders... on the move!


Concluding remarks

It is Fatum’s solid intention to continue moving along with its wide array of services and activities throughout the next generations. As we move towards we are looking towards a future filled with tremendous opportunities.


Colofon

Editorial StaffRicheline Martina-Joe

Marketing Team Fatum

Design Ervina Design

PhotographyCaroline Castendijk

cover Terry van Ommen

page 10-11, 19, 27-31 Roberto Moentadj

page 14 Monique Harbers

page 2, 21 Hilary Fransina

page 27 Eric Boeldak

page 23, 32-33 Hubert Hermelijn

page 34 Marika Ringnalda

page 37

PrintingOne Media Group

[email protected]

Company information

Office ArubaL.G. Smith Boulevard 162P.O. Box 510ArubaTel.: (297) 582 1111Fax: (297) 582 6138

Office BonaireKaya Gobernador N. Debrot 35P.O. Box 152BonaireTel.: (599) 717 8811Fax: (599) 717 5222

Office NetherlandsBrainpark IILichtenauerlaan 102-1203062 ME RotterdamTel.: (31) 10 798 2455Fax: (31) 10 204 5555

Office CuraçaoCas Coraweg 2P.O. Box 3002CuraçaoTel.: (599-9) 777 7100Fax: (599-9) 736 6333

Office Sint MaartenA.J.C. Brouwers Road 6P.O. Box 201Sint MaartenTel.: (1-721) 542 2248Fax: (1-721) 542 3127

fatum on the move! - guardian groupmyguardiangroup.com/135009_fatum_annualreport-lr.pdffatum on the...

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