An Introduction to Forenede Gruppeliv (FG)
A group of life and pension companies have chosen to let FG carry out all tasks involving group life in a separate administration company, namely FG. We work out proposals, administer agreements, collect premiums, pay out insurance sums, take care of customer service and provide sales and technical insurance assistance.
This gives the opportunity for large scale benefits, cheap administration and specialization. The essence of our business is the core product: cheap, uncomplicated, transparent and standardized life insurance that is easy to administer.
The owners, who have equal share holdings, are the following Danish life and pension companies:
The group life products
A group life insurance is a collective insurance without savings, a so-called "risk insurance". FG only sells life insurance to groups of at least 25 persons. The insurance can include different types of insurance coverage and sum amounts, and can be valid in both compulsory groups and in voluntary schemes.
Group members will typically be employees in a public or private company, members of a pension fund, an organisation or a union, or groups of customers in a bank or an insurance company.
Group life policies can be divided into three main categories, where compensation is paid out: on death, disability or specified critical illnesses.
Compensation and bonus
FG has a bonus system attached to the individual group life schemes, so that the total premium amount is paid back either as compensation or as a bonus. Hence, in 2011 we paid back 96.2%.
In 2011, we paid out DKK 1,672 million as compensation to policyholders and their surviving relatives/beneficiaries in 8,407 cases. This means 32.7% of the total premium amount of DKK 5.0 billion.
We paid out DKK 3,170 million as bonus to policyholders in 2011. This means 63.6% of the total premium amount.
The individual group life schemes can have very different claims experience. Bonus payment is dependent on the claims experience of each individual scheme.
FG's management
The company is managed by a board of directors with 6 shareholder representatives and 4 customer representatives. The latter are elected from a customer panel/representation, in which 30 of the most important and biggest customers participate and advise the board and management about products and service.
The administration company has 36 employees, who take care of the administration and sales of group life insurance in co-operation with the sales organisations of the owner companies.
Responsibility for the day to day management lies with the managing director, together with the two vice presidents.
Key financial figures for 2011
The premium income was approximately DKK 5.0 billion. The total insurance risk distributed among the 2 million policyholders totalled DKK 826 billion, and the financial result was DKK 99.6 million. Income from investment yield was DKK 68 million.
Administration of the total group life portfolio and commission expenses cost DKK 159,8 million, corresponding to 4.0% of the total premium income.