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Insurer Dôvera rakes in profits

THE PRIVATE health insurer Dôvera, co-owned by Penta Investments and a Cyprus-based company, has earned hundreds of millions of euros more than its competitors in recent years, and paid a considerable part of it to its shareholders in dividends. The data from the Finance Ministry’s Financial Policy Institute (IFP) showed that the private health insurer Dôvera earned €619 million over the past five years, far exceeding the earnings of the other players on the market, the privately owned Union with €13 million and the state-run Všeobecná Zdravotná Poistovňa (VšZP), which lost €56 million over the same period.

THE PRIVATE health insurer Dôvera, co-owned by Penta Investments and a Cyprus-based company, has earned hundreds of millions of euros more than its competitors in recent years, and paid a considerable part of it to its shareholders in dividends. The data from the Finance Ministry’s Financial Policy Institute (IFP) showed that the private health insurer Dôvera earned €619 million over the past five years, far exceeding the earnings of the other players on the market, the privately owned Union with €13 million and the state-run Všeobecná Zdravotná Poistovňa (VšZP), which lost €56 million over the same period.

Dôvera, however, does not acknowledge the methodology used by the IFP, and claims that they have only earned €210 million since 2005. That sum still exceeds the profits returned by its competitors, but the company claims that they are simply more efficient, arguing they have the lowest number of employees per million clients and the lowest administration costs.

Different maths

The IFP pointed out that the profit of Dôvera makes up 14 percent of its revenues.

“For the sake of comparison, insurers on the well-established Dutch market achieve profits amounting to only single-digit percentage points ,” IFP claims as quoted by the Sme daily.
In VŠzP and Union, these come close to zero.

Dôvera argues that the IFP has calculated its profits in 2009 at €470 million, but the insurer claims this was not profits, but the value of its portfolio. In 2009, Dôvera merged with another private health insurer, Apollo, and the value of its portfolio increased by €470 million. This, however, did not represent any increase in money or property of the company, but merely the increase of the value of the insurance policies administered by the insurer.

“It makes no sense to include that profit from 2009 in the calculations, as it was not connected with the activities of Dôvera,” spokesman Branislav Cehlárik told the Sme daily.

The owners of Dôvera, the financial group Penta and the Cyprus-based company Prefto Holding Limited, have entered the sum into the company’s books as an obligation towards the shareholders, meaning that the owners could pay the sum off without having to tax it, Sme wrote.

Shareholders of Dôvera would be able to get the money out of the company even if the government banned the profits of health insurance companies, as the first government of Robert Fico did, Sme wrote.

“The shareholders perhaps wanted to protect their investment that was threatened by the harmful health policy of the Fico government,” Dušan Zachar, analyst with the INEKO think tank, told Sme.

Disclaimer: The Slovak Spectator is co-owned by Petit Press, where Penta has a 45 percent minority share.

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