Sjóvá’s consolidated pre-tax profit amounted to ISK 4,332 million in 2004, as compared to ISK 4,743 million in 2003. Profit after taxes was ISK 3,590 million, as compared to ISK 3,930 million in the preceding year. include performance-related remuneration, a provision
for pension liabilities and IT costs.

In October 2003 Glitnir acquired the entire shares of Sjóvá-Almennar which became a daughter company of the bank. Following this acquisition Sjóvá-Almennar acquired the entire shares of the life company Samlíf. Subsequently Samlíf’s name was changed to Sjóvá-Almennar
líftryggingar hf. and its activities transferred to Sjóvá-Almennar’s premises at Kringlan 5.

Broadly speaking, Sjóvá-Almennar largely met its operating and profitability forecasts in 2002. Profitability was marginally lower than had been forecasted. Insurance operations took a turn for the better during the year, but at the same time performance of financial activities deteriorated considerably compared with the previous year. Motor insurance appears to have reached the equilibrium that was aimed for when premiums were raised in 1999-2000. At the same time results in property have deteriorated. Many major losses took place in this category, especially in fire insurance on buildings. The main reasons for the decrease in investment income during the year were falling interest rates, less inflation and the strengthening of the Icelandic króna. Inflationary accounting principles have been abandoned, resulting in lower profits compared with the year before.

Although last year was a turbulent one in many respects, both in Iceland and internationally, a better balance in insurance operations was once again achieved after several difficult years. In recent years poor performance in insurance operations has been offset by good financial returns. In 2001 the reverse applied. Insurance operations went better than before, while the financial markets became tougher.

The year 2000 went mainly according to the Company’s plan. However it should be noted that the net profit which showed an increase of 22% was based on capital gains rather than satisfactory performance of regular insurance operations. A fact which is unacceptable.