Theory& Practice
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GREATER OPPORTUNITIES. GREATER RESPONSIBILITY. / theory& practice Operational efficiency and sustainability, flexibil- ity and consistency, availability and professional- ism, versatility and competency in the areas of expertise… These are only a few key factors supporting success in the insurance business. The SOGAZ Group success story, as well as its rep- utation and positions in the Russian insurance market prove that the company is fully in position to meet those challenging requirements. SOGAZ meets expectations of its clients, shareholders and partners, thus creating for them an oasis of stability and confidence in the future. annual report for / for 2005 CONTENT ANNUAL REPORT ANNUAL /// Pages Pages Pages / Board of Directors / About SOGAZ Group / Cooperation Chairman's Appeal with Gas Industry / SOGAZ Group Members Management Board Group's Business / JSC / Chairman's Appeal / SOGAZ Management Diversification Board Up-to-date Approaches JSC / / SOGAZ Management and Technologies Board / Social Activity / 2005 Key Events and Charities / Activities of SOGAZ Group in 2005 – Main Results theory&practice theory&practice of successful business of better decisions SOGAZ GROUP ANNUAL REPORT ANNUAL CHAIRMAN'S APPEAL MANAGEMENT BOARD MANAGEMENT BOARD OF DIRECTORS BOARD CHAIRMAN'S APPEAL AND / Greater Opportunities. Greater Responsibility. SOGAZ GROUP INSURANCE /// Pages Pages Pages JSC / SOGAZ Group / SOGAZ / Contact Information Regional Policy Financial Report / Representatives JSC JSC / Russian Insurance / SOGAZ Profit of SOGAZ Market Development and Loss Statement / Representatives Trends LLC LLC / SK Neftepolis of SK Neftepolis / Group's Development Financial Report / Representatives Trends for 2005-2007 LLC JSC / SK Neftepolis Profit of Gazprommedstrakh and Loss Statement JSC / Gazprommedstrakh Financial Report JSC / Gazprommedstrakh Profit and Loss Statement LLC / SK SOGAZ-Life Financial Report LLC / SK SOGAZ-Life Profit and Loss Statement theory&practice theory&practice theory&practice of development strategy of exact settlements of unlimited opportunities CONTACT CONTACT JSC SOGAZ JSC SOGAZ INFORMATION LLC SK SOGAZ-Life LLC FINANCIAL REPORT LLC SK NEFTEPOLIS LLC SK NEFTEPOLIS LLC JSC GAZPROMMEDSTRAKH JSC GAZPROMMEDSTRAKH / Greater Opportunities. Greater Responsibility. SOGAZ GROUP INSURANCE / Ladies and gentlemen, Dear colleagues, In 2005, the SOGAZ Group has taken new steps to strengthen its position on the Russian insurance market. SOGAZ has been consistently expanding its activity. This means devel- oping branch network, strengthening regional presence, being actively involved in all types of insurance activity and acquiring assets. And it is only logical that the company sees its authority increasing, credibility building up, and number of clients expanding. The SOGAZ Group initially formed as an insurance organization exploring the industrial segment of the insurance market is currently wide- ly known as one the nation-wide leading full-service insurer. The company's activity con- tributes to the social stability and favorable investment climate. ARD With all my heart, I am wishing the SOGAZ Group success in the further development of its insurance business, and its clients – confidence in the future, prosperity and welfare. JSC BO i / Chairman of the Management Board, Gazprom Chairman of the Board of Directors, JSCSOGAZ A.B. Miller OF DIRECTORS CHAIRMAN'S APPEAL / www.sogaz.ru / / Greater Opportunities. Greater Responsibility. SOGAZ GROUP INSURANCE / Dear shareholders, clients and partners, Dear friends and colleagues, The last year has become the first milestone in the course of implementation of the SOGAZ Group 2005–2007 development strategy aimed to strengthen the Group's leadership in the national insurance market. This year appeared indicative in many respects, and that is why we were ever so eager to summarize its results. The results shown over this period were cru- cial to our vision of the Group's future and the key principles and priorities of its development over the next few years. In this context, I am especially pleased to acknowledge our achievements made in 2005. A considerable progress was made in all strategic areas of our activity. The Group member- ship has been enlarged, the number of large-scale market clients has increased dramatically, the management structure has been set to the reorganization process, and the number of SOGAZ regional offices has almost doubled. Today we may assert with certainty that the adopted development strategy proved fully jus- tified. The SOGAZ Group's financial performance appears the natural outcome and the main proof of same. More detailed information is provided on the below pages of this report. APPEAL It may worth noting now that the growth rate shown by SOGAZ insurance premiums almost GEMENT doubled the growth rate of insurance market in general. The Group's consolidated premium got immediately close to the benchmark peg of $1 bln, which exceeds the target figures by more than a quarter. I think it would not be an exaggeration to say that 2005 has become one of the most successful years in the SOGAZ Insurance Group's history. Summarizing the results of the preceding year, I would like to express my thanks to all SOGAZ employees whose energy and dedication prove a plentiful source of the Group's dynamic growth. I express my gratitude to the management team for their toughness and will to win. MANA ii In many ways, you were behind the success achieved by the Group. I am also truly grateful to the shareholders, clients and partners of the SOGAZ Group for constant support and effec- tive cooperation. ARD CHAIRMAN'S Our efforts have one and the same focus – reducing risks for businesses and providing finan- cial coverage for their interests, as well as making life in our country more safe and pre- dictable. There is no doubt that during the past year we made a significant contribution BO to our common deal. / Chairman of the Management Board, JSC SOGAZ Chairman of the Board of Directors, JSCGazprommedstrakh E.G. Leskin / www.sogaz.ru / annual report | 2005 theory&practice of successful business /ANNUAL iii. About SOGAZ Group REPORT iv. SOGAZ Group Members SECTIONS v. SOGAZ Group Management vi. JSC SOGAZ Management Board vii. 2005 Key Events viii. Activities of SOGAZ Group in 2005 – Main Results The SOGAZ Group's success story builds on a long-term experience in the national financial market. Each member company of the Group is an expert in its area of expertise, and the coordination of their activities makes it possible for the Group to enjoy synergies. The impeccable reputation and the highest reliability rating of A++ add to the confidence on the part of both Russian and international clients and partners. As a result, the Group's premium growth almost doubled the average insurance market growth rate. / theory&practice of successful business/about SOGAZ Group/ SOGAZ Group members/ for 2005 ANNUAL REPORT ANNUAL Being on top and public, man could not afford Among the overseas projects providing for the SOGAZ to be brusque. Group participation worth mentioning are the Blue Napoleon I Stream (main gas pipeline construction from Russia through Turkey to Southern Europe), new North- European gas pipeline construction designed to tie up gas fields of Western Siberia directly to customers in Germany and other West-European countries. SOGAZ annually confirms its status of one of the most The SOGAZ Group is one of the most long-standing insur- stable Russian insurers, which it proved by the A++ reli- ance associations of the new Russia relying on a long- ability rating. The rating applies to the three Group term story of successful operations in the national companies: JSC SOGAZ, LLC SK Neftepolis and JSC financial market. Gazprommedstrakh. The high professional rating helps The Group enjoys the leadership in corporate segment SOGAZ successfully cooperate with its foreign partners GROUP and is one of the leading insurance institutions in the (specifically, in the field of reinsurance), as well as country. In SOGAZ, special attention is paid to the devel- to draw client represented by major Russian and inter- opment of private insurance. The extensive branch net- national firms. work and the availability of licenses for all types The Group's reinsurance policy focuses on collaboration of insurance activities provide the Group with a unique with the leading and globally recognized reinsurance ABOUT iii competitive edge in all its core business activities. companies having unblemished reputation, such as The SOGAZ Insurance Group comprises the full-service Munich Re, Swiss Re, SCOR Lloyds of London. insurance companies JSC SOGAZ and LLC SK Neftepolis, Looking to be as close as possible to its clients, SOGAZ specialized companies JSC Gazprommedstrakh and LLC SK make sustainable efforts towards the strengthening SOGAZ SOGAZ-Life, as well as the service medical company of its regional presence. Nowadays, The Group operates LLC Gazprommedservice. over 350 regional branches across Russia, and the num- Each member company of the Group has its own opera- ber is increasing. tional priorities based on its specialization and clearly formulated in the SOGAZ Insurance Group's general busi- ness development strategy, which makes it function as a single mechanism focused to consistently pursue the established goals. In addition to JSC Gazprom and JSC NK Rosneft, major cor- porate clients of the SOGAZ Insurance Group include, among many others, JSC Russian Railway, JSC RAO UES of Russia,