13.04.2023 |

UNIQA: capital requirement ratio improves to 246 per cent

Publication of the Annual Report entitled “living better together – now more than ever” as well as the Capital Report and Sustainability Report for 2022

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  • UNIQA Group’s Solvency II capital requirement ratio up by a further 50 percentage points from its already high level
  • Annual Report 2022 entitled “living better together – now more than ever”, Capital Report 2022 and Sustainability Report 2022 all available to download
  • UNIQA posts a very strong result despite major challenges in 2022: a very good technical result in CEE, improved core business in Austria

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Vienna, 13 April 2023 – “2022 was an outstanding financial year for us, even though that appeared unlikely for a long time,” says Kurt Svoboda, CFO/CRO of UNIQA Insurance Group AG, looking back. He explains that the Group faced some sizeable challenges right up until the midpoint of the year, pointing to significant impairments on Russian bonds, fair values of fixed-income securities eroded by rising interest rates, considerable major losses suffered by Austrian corporate customers, and additional reserves for storm losses from summer 2021 that had to be set aside due to inflation. In the third quarter, however, the trend shifted, mainly thanks to a very strong technical result in CEE and a noticeable improvement in the Group’s core business in Austria, which continued in the fourth quarter. “We managed to improve our technical result further and increase our earnings before taxes to €422 million,” Svoboda explains. “Our premium volume rose by 3.9 per cent to €6,605.0 million, while our combined ratio improved significantly once again to a pleasing 92.9 per cent.”

This all came about thanks to considerable run-off gains in Austria from conservative reserves set aside in the past, a modest trend in so-called basic losses in the private customer business, and contributions from international reinsurance partners. More details can be found in the Annual Report 2022 entitled “living better together – now more than ever” and in the Capital Report 2022, both of which were published earlier today. Svoboda is optimistic: “We’re expecting our core underwriting business in both Austria and CEE to keep on making robust and resilient earnings contributions.” As in the previous year, the company is not making any specific forecasts for the current financial year due to the persistent uncertainty on the capital markets.

Capital requirement ratio improves to 246 per cent

UNIQA’s solvency capital requirement (SCR) ratio in accordance with Solvency II, which is seen as an indicator of how well capitalised a company is, was a healthy 246 per cent at 31 December 2022. This is a further 50 percentage points up on what was already a high level and can be put down to rising interest rates, which have a bigger impact on liabilities than they do on assets. The Group’s Solvency and Financial Condition Report will be published on 17 May 2023.

The SCR ratio, for which UNIQA is not making use of any transitional regulations, is based on own funds of €5,607 million (2021: €5,314 million) versus the equity requirement of €2,284 million (2021: €2,714 million). Tier 1 capital (core capital), which is regarded as particularly secure, currently accounts for 82 per cent of UNIQA’s own funds.

Internal model maps underwriting risks more accurately

In addition to the standard approach defined in the regulations, Solvency II also allows insurance companies to use a so-called internal model to calculate their risk capital requirements. The standard model makes the same assumptions for all insurers in Europe, meaning that their own individual circumstances and different business models are not taken into account. Adopting its own model allows a company to map the underwriting risks much more precisely in line with its individual structure. UNIQA has been using such an internal model for the underwriting risk in its property and casualty insurance business since 2017. An expansion of the model to incorporate market risks was approved by the Financial Market Authority Austria in 2019. The 2022 financial year was thus the fourth time that the expanded model had been used to calculate the capital requirement ratio.

Sustainability Report 2022 published

Sustainability is a fundamental and integral part of the UNIQA Group’s corporate strategy. UNIQA is committed to supporting the 1.5-degree target set by the Paris Climate Agreement and is a member of some important associations and initiatives in Austria and further afield. These include the Green Finance Alliance, an initiative launched by the Austrian Federal Ministry for Climate Action for forward-looking financial companies, which the Group joined in 2022. UNIQA is aiming to become climate-neutral in Austria by 2040 and Group-wide by 2050. After phasing out coal in early 2019, the company is intending to make an orderly withdrawal from oil (by 2030) and gas (by 2035) in terms of its investments and industrial activities. It will also be introducing a certified environmental management system (by 2025) as well as joining forces with customers to actively explore a more sustainable way of doing business.

The Sustainability Report 2022 details the economic, environmental and social impact of all the Group’s activities during the 2022 financial year.

Clause regarding predictions about the future

This communication contains statements that refer to the future development of UNIQA. These statements present estimations that were reached on the basis of all of the information available to us at the present time. If the assumptions on which they are based do not occur, the actual results may vary from the results currently expected. As a result, no guarantee can be provided for the information given.

 

Annual Report 2022 “living better together – now more than ever” - Download

Capital Report 2022 - Download

Sustainability Report 2022 - Download

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