29.08.2011 |
- Net profit up by 6.8% to €53 million
- Clear growth (+5.3%) in recurring premium business in all regions with strong stimuli from Eastern Europe (+10.8%), single premium business down noticeably, retained Group premiums according to IFRS were increase by 1.5% to €2,638 million.
- The claims and benefits ratio deteriorated across all insurance lines by 6.2 percentage points to 71.3%.
- The one-time effect of writing off €58 million in Greek government bonds (planned participation of the private sectors) and first investments in the reorientation of the Group burden investment income and expenses
- Profit on ordinary activities is, thanks to the positive developments in the core operational business and despite the considerable one-time effects, at €72 million (-6.4%) still about the same as last year.
- Standard & Poor's confirms A rating
With a clear increase in recurring premiums of 5.3% while at the same time sinking the claims and benefits ratio by 6.2 percentage points, the UNIQA Group was on a growth course in the 1st half of 2011 and achieved a clear improvement in its core operational business. Despite considerable value adjustments of the Greek debt instruments - with a view to the intended participation of the private sector in Greece's debt refinancing - and the corresponding drop in investment income this entailed (-39.3%), the net profit could still be increased by 6.8% to €53 million. Profit on ordinary activities is, at €72 million, at about the same level of the previous year's adjusted value of €77 million (originally €71 million).
Increase in recurring premiums in all segments and regions
UNIQA was able to clearly increase its recurring premium volume written from 5.3% to €2,828 million. In Austria, the recurring premiums were increased by 3.1% to €1.873 million, while growth in international business increased 9.9%, reaching €955 million. Of this amount, €549 million (+10.8%) were generated by the UNIQA companies in the Eastern and South Eastern European markets, €406 million (+8.7%) by those in Western Europe.
The UNIQA Group's entire premium volume written (recurring and single premiums) amounted to €3,191 million in the first six months of 2011, compared to €3,226 million in the previous year. The 1.1% deterioration is solely a result of the smaller volume of single premium products. Retained premiums earned (according to IFRS) grew by 1.5% to €2,638 million.
In property and casualty insurance, the UNIQA Group was able to achieve a pleasing growth in premiums written of 5.5% to €1,497 million in the 1st half of 2011.
Premiums written in health insurance reached €506 million after an increase of 2.3%.
In life insurance, recurring premium business recorded a very positive development. This resulted in a group-wide premium volume of €824 million (+6.7%) for the 1st half of the year.
Single premiums, on the other hand, showed a clear deterioration from €540 million to €364 million. In life insurance, recurring premiums and single premiums together on a group-wide level reached €1,188 million (-9.5%) in the 1st half of the year.
Claims and benefits ratio noticeably reduced
Insurance benefits decreased compared to the same period in the previous year by 9.7% to €2,074 million. For this reason, the claims and benefits ratio improved across all insurance lines by 6.2 percentage points, to 71.3%. The combined ratio in property and casualty insurance before reinsurance could be reduced to 98.0% (1-6/2010: 101.8%) - after reinsurance the combined ratio was improved compared to the previous year from 105.2% to 100.7%.
Cost performance reflects initial investments in the restructuring
On the expenses side, increased social capital expenses (severance payments) and initial investments in the programmes focussing on a sustainable improvement of the income situation and implementation of the growth strategy were noticeable. Total operating expenses increased by 9.5% to €725 million. Acquisition expenses rose in accordance with new business volume by 8.6% to €496 million. Other operating expenses increased by 11.4% to €229 million.
Deterioration of investment income due to the write-off of Greek government bonds
As of 30 June 2011 the UNIQA Group's portfolio of investments amounted to €24,505 million (+3.3%). The continuing volatility on the financial markets and in particular the debt crisis in some European countries have had a negative influence on the growth of investment income in the 1st half of the year. The write-down of Greek government bonds, decreasing earnings by €58 million, concerned papers with a maturity term before 2020 and was made in light of the private sector's participation in the debt refinancing for Greece. Due to this impairment of value, the unfavourable trend of the US dollar and the - compared to the previous year - smaller amount of exchange gains, investment income sank 39.3% to €278 million.
Net profit increased, profit on ordinary activities decreased due to one-time effects
The positive development in core operational business meant that net profit, despite the decreases in capital income and the investments in sustainable earnings improvement of the Group could be increased 6.8% to €53 million. Profit (before taxes) (profit on ordinary activities) was €72 million for the 1st half of the year. This corresponds to a 6.4% deterioration compared to the adjusted value of the previous year.
Continuation of the positive trend in the core operational business is to be expected in the current year; special expenditures for the reorientation will weigh down the year-end results
For the rest of the 2011 financial year, the UNIQA Group is assuming that trend in operating results will continue to be positive, on the condition that there are no major claims due to natural disasters, no new negative developments on the capital markets, and the economic environment is positive. However, the measures required for the Group's reorientation in view of the capital increase planned for 2013 will affect results in the 2011 financial year in the form of special expenditures.
Reservations concerning statements about the future
This message contains statements that refer to future developments in the UNIQA Group Austria. These statements are appraisals that are made based on all information available to us at the current point in time. If the assumptions on which they are based do not occur, the actual events may vary from the results currently expected. For this reason, we cannot accept liability for these statements.
Vienna, 29. August 2011