- Group embedded value up by 7.3 per cent: major driver was again strong operational performance
- Profitability of new business in life and health increased considerably to 4.3 per cent
- Economic capital requirement ratio according to internal steering approach at a strong 215 per cent
Today UNIQA announced the group embedded value, the capital requirement ratios and the risk position for the past financial year. The reported economic capital requirement ratio and the group embedded value already reflect the sale of shares in Italy – closing expected in the second Quarter 2017.
The market consistent embedded value after minority interests of the UNIQA Group improved by 7.3 per cent in the past year to € 5,068 million (2015: € 4,725 million). The market consistent embedded value compiled according to international guidelines measures the value of the portfolio of insurance policies and comprises the net assets for life, health, and property and casualty insurance plus the present value of future income from the existing life and health insurance portfolio.
The value of in-force business (VIF) in life and health insurance increased by 14.1 per cent to € 2,107 million (2015: € 1,847 million).
UNIQA Management Board member Kurt Svoboda (CFO/CRO): “The improvement of the embedded value, which reflects the value of the personal insurance business, shows that we have successfully further increased profitability. The consistently continued measures in life insurance of recent years also give reason to expect the positive develop to continue.”
The new business margin – a ratio for the profitability of new business in life and health insurance in 2016 – improved to 4.3 per cent (2015: 2.4 per cent); for CEE, it remained at a persistently high level of 5.4 per cent in 2016 (2015: 6.0 per cent). Performance in Austria is particularly gratifying, where the traditional life insurance business was again put to the test by the persistently low interest rates environment and where initial successes have now been seen thanks to the adjustments made for more capital-efficient products. The further transformation of new business to include more risk- and unit-linked insurance remains a challenge.
Capital requirement ratios sustainably high
The economic capital requirement ratio of the UNIQA Group, which gauges capitalisation, was 215 per cent on 31 December 2016 on the basis of the internal steering approach and thus at a very high level. This signifies a year-on-year improvement of 33 percentage points. “This good and very solid solvency ratio is evidence of UNIQA’s exceedingly good capitalisation. It is yet again an improvement. This has finally brought us to the front of the pack. At 215 per cent, we have massively exceeded the internally defined minimum of 135 per cent despite the use of risk capital for government bonds and the repayment of a subordinated bond of € 250 million. The ratios once again confirm the validity of the strategic decision to withdraw from the Italian business and thus create the necessary support and scope for investments in our future growth.” The provisional regulatory capital requirement ratio according to Solvency II (EIOPA standard formula) as of 31 December 2016 was 202 per cent. This also increased by 7 percentage points year on year and thus less sharply than the economic capital requirement ratio because, in accordance with the legal regulations, it does not yet take into account the sale of the Italian entities. The verified regulatory capital requirement ratio will be published at the end of May in the report on solvency and financial position.
The economic capital requirement ratio, for which UNIQA utilises no regulatory transitional provisions, is the ratio of the economic own funds of € 5,382 million (2015: € 5,205 million) to the economic own funds requirement of € 2,509 million (€ 2,857 million) according to the internal capital approach. Economic own funds consist of Tier 1 capital (core capital), Tier 2 capital (subordinated capital) and Tier 3 capital (other capital holdings).
B & W Deloitte GmbH, Cologne, fully certified the market consistent embedded value and the economic capital requirement ratio of the UNIQA Group.
UNIQA
The UNIQA Group is one of the leading insurance groups in its core markets of Austria and Central and Eastern Europe (CEE). 22,000 employees and exclusive sales partners serve around 10 million customers in 19 countries (including Italy). UNIQA is the second-largest insurance group in Austria with a market share of around 22 per cent. UNIQA operates in 15 markets in the CEE growth region: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Hungary, Kosovo, Macedonia, Montenegro, Poland, Romania, Russia, Serbia, Slovakia and Ukraine. The UNIQA Group also includes insurance companies in Switzerland and Liechtenstein. At the start of December 2016, UNIQA decided to sell the Group companies in Italy in connection with the concentration on the core business in Austria and CEE. Legal closing is expected in the first half of 2017.