2007 - April

3.0
Information on the company’s activities
Furthermore, APRIL GROUP’s portfolios do not include any CDO or other securitization vehicles.
APRIL GROUP is also subject to a credit risk through reinsurers, to which companies transfer part of the risks on their insurance
policies. The Group only works with a restricted number of reinsurers whose solvency is recognized: over 75% of reinsurance
transfers are carried out with reinsurers that are rated at least A by Standard & Poor’s.
At December 31 st , 2007, the breakdown of reinsured premiums by reinsurer rating was as follows:
3.6.2.3. Follow-up procedures and resources in place
With a view to improving performance and building up a
clearer picture of market risks, the asset management
activities of insurance companies are delegated to a
specialized management company, accredited by the French
securities regulator (Autorité des Marchés Financiers, AMF).
BREAKDOWN OF PREMIUMS CEDED BY REINSURER
RATING (%)
N.D. AAA AA
A+ to
A-
BBB+
to BBB-
% of premiums ceded 22.7% 1.3% 52.6% 23.0% 0.4% 100.0%
< BBB
Total
Under this delegation, limits are set in terms of the
percentage of the portfolio that may be invested on various
bond and equity resources (dispersion ratios, influence
ratios, restrictions in terms of issuer ratings, etc.).
Sensivity of the securities portfolio
Fixed-income markets:
On a regular basis, i.e. every quarter, a report presenting
the sensitivity of the portfolio and liabilities to changes in
interest rates is submitted to the supervisory authorities.
At December 31 st , 2007, the average sensitivity of APRIL
GROUP’s bond portfolio to changes in interest rates came
out at 2.79 (2.40 at December 31 st , 2006) and if we factor in
the entire portfolio (including equities and other assets), this
drops to 1.61 (1.56 at December 31 st , 2006).
This means that if interest rates go up by 1% in absolute
value (e.g. if they rise from 4% to 5%), the bond portfolio’s
value will decrease by 1.61%.
Equity markets:
The equity portfolio is sensitive to an upturn or downturn on
the financial markets for shares.
In this respect, and in light of the portfolio’s makeup, the risk
on the equity portfolio can be assimilated with the risk on the
main financial market indexes such as the EUROSTOXX 50.
In this way, a 10% reduction in the EUROSTOXX 50 index
would result in a 5,251 thousand euro reduction for the
entire portfolio.
In addition, the French Insurance Code, which governs
insurance companies, also sets investment caps.
Thanks to comprehensive reports provided by the authorized
manager, notably including accounting elements (inventory,
book income, unrealized capital gains or losses, etc.) and a
summary of performances and various levels of exposure to
the markets, the financial portfolio is monitored on a monthly
basis.
The members of the Finance Committee, the APRIL GROUP’s
governance body, includes the heads of the various
companies as well as representatives from the authorized
manager. This Committee meets every quarter and plays an
essential role in the monitoring and management of market
risks. During its meetings, it is responsible for analyzing
the various markets as well as the economic and financial
environment, taking stock of management over the past
period, and setting the general financial management
strategies, as well as future management restrictions.
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