- Recurring premiums written rise 3.1 per cent to €2,738.6 million
- Total group premiums written stable at €2,798.4 million
- Combined ratio climbs slightly to 97.1 per cent due to reserves increased as a matter of precaution
- Strong investment income influenced by one-time gains on disposal from sale of indirect interest in Casinos Austria in first quarter of 2018
- Earnings before taxes up 47.5 per cent to €140.8 million
- Earnings outlook for 2018 unchanged: further improvement in earnings before taxes compared with previous year
- Plans to continue progressive dividend policy confirmed
In the first half of 2018, UNIQA Insurance Group AG (UNIQA) increased its recurring premiums written including savings portions by 3.1 per cent while its earnings before taxes were up 47.5 per cent to €140.8 million compared with the previous year’s figure. This includes one-time gains on disposal of €47.4 million in the first quarter of 2018 from the sale of the indirect interest in Casinos Austria Aktiengesellschaft.
UNIQA CEO Andreas Brandstetter commented: “We made good use of positive economic development in our core markets of Austria and CEE. Growth in recurring premiums in the first half year is even somewhat above our expectations. The solid earning situation allows us, like it did last year, to make better provisions for upcoming storm damage. Although losses due to extreme weather events were below the long-term average in the first half, we do not assume that it will stay that way. On the earnings side, we continue to assume an increase for 2018 compared with the previous year.”
In line with the UNIQA Group’s strategic requirements, premiums written, especially in property and casualty insurance, increased by more than 4.5 per cent in the first half of 2018, even more strongly than expected. It is also pleasing that this significant growth was driven by both core markets alike: Austria (+4.5 per cent) and CEE (+7.8 per cent). The main drivers in both regions were vehicle insurance and property insurance. By contrast, premiums written in life insurance fell by 11.0 per cent due to the planned decrease in business with single premiums. The health insurance business was very stable, developing as expected with growth of 5.1 per cent.
The ongoing high level of cost discipline has helped in turn to reduce total operating expenses slightly - by 0.5 per cent or more than €3 million. Despite this improved cost situation, the combined ratio increased over this half-year due to an increased negative impact from major claims and additional provisions for future loss events - especially due to storms - from 96.8 per cent to 97.1 per cent.
For 2018 as a whole, UNIQA anticipates unchanged growth in property insurance, casualty insurance and health insurance. Despite high expenses for the innovation and investment programme launched in 2016, UNIQA is pursuing further improvement in its earnings before taxes. It is likewise keeping to its plan to continuously increase the annual distribution per share in the years to come as part of a progressive dividend policy.
Key Group figures 1-6/2018 in detail
Total premiums written by the UNIQA Group – including the savings portion of unit- and index-linked life insurance – remained stable in the first half of 2018 at €2,798.4 million (1–6/2017: €2,798.6 million). Solid growth rates in property and casualty insurance and those in health insurance compensated for the decrease in life insurance premiums due to the planned reduction of single premiums in international business. Recurring premiums included in total premiums written climbed by 3.1 per cent to €2,738.6 million (1 - 6/2017: €2,656.0 million). Retained premiums including the net savings portion of the premiums from unit- and index-linked life insurance fell by 1.7 per cent to €2,540.1 million (1 - 6/2017: €2,583.7 million). Retained premiums earned (in accordance with IFRS) increased by 3.1 per cent to €2,385.5 million (1 - 6/2017: €2,314.9 million).
Premiums written in property and casualty insurance rose in Austria and CEE by 4.5 per cent in the first six months of 2018 to €1,506.2 million (1-6/2017: €1,441.6 million) due to strong growth in vehicle and property insurance. Premiums written in health insurance rose by 5.1 per cent to €549.4 million (1-6/2017: €522.5 million). In life insurance, total premiums written including the savings portion of unit- and index-linked life insurance – driven by the strategic reduction of single premiums in international business – declined by 11.0 per cent to €742.9 million (1-6/2017: €834.4 million). While the volume of single premium business in life insurance fell by 58.1 per cent to €59.8 million (1-6/2017: €142.6 million) in line with planning, recurring premiums in life insurance fell only slightly to €683.1 million (1-6/2017: €691.8 million).
In international business, premiums written in property and casualty insurance climbed by an impressive 7.8 per cent (1-6/2018: €563.8 million / 1-6/2017: €523.0 million) due to strong growth in vehicle and property insurance and those in health insurance by 44.6 per cent (1-6/2018: €42.7 million / 1-6/2017: €29.5 million), while life insurance premiums written fell by 27.1 per cent (1-6/2018: €207.7 million / 1-6/2017: €284.7 million) due to the planned decrease in single premiums, especially in Poland. In summary, UNIQA generated written premiums in international business including savings portions of €814.2 million (-2.7 per cent / 1-6/2017: €837.1 million), recurring premiums included in this rose by 8.5 per cent to €770.1 million (1-6/2017: €709.9 million).
In Austria as well, UNIQA recorded a significant increase in property and casualty premiums of 4.5 per cent (1-6/2018: €931.7 million / 1-6/2017: €891.9 million), while health insurance premiums moved up by 2.7 per cent (1-6/2018 €506.7 million / 1-6/2017: €493.2 million). Premiums written in life insurance fell by 2.6 per cent to €531.7 million (1-6/2017: €545.7 million). In total, UNIQA generated pleasing growth in premiums written in Austria including savings portions of 2.0 per cent to €1,970.1 million (1-6/2017: €1,930.7 million). Recurring premiums included in that also expanded by a pleasing 2.0 per cent to €1,954.4 million (1-6/2017: €1,915.4 million).
The total amount of retained insurance benefits of the UNIQA Group rose by 5.0 per cent to €1,836.7 million in the half of 2018 (1-6/2017: €1,749.0 million).
Total operating expenses less reinsurance commissions received were reduced by 0.5 per cent to €642.6 million in the first six months of 2018 (1-6/2017: €645.7 million). Despite premium growth, expenses for acquisition fell by 4.7 per cent to € 422.2 million (1-6/2017: €443.0 million). Other operating expenses (administrative expenses) increased by 8.7 per cent to €220.4 million in the first half of 2018 (1-6/2017: €202.7 million). This includes costs as a result of expenses relating to the innovation and investment programme in the amount of €12 million.
The total cost ratio – the ratio of total operating expenses to premiums earned including the net savings portion of the premiums from unit- and index-linked life insurance – less reinsurance commissions received improved slightly by one percentage point to 25.3 per cent (1-6/2017: 25.0 per cent).
The combined ratio after reinsurance improved to 97.1 per cent (1-6/2017: 96.8 per cent) despite the improved cost situation. This increase reflects higher major claims compared with the previous year and increased provisions for expected loss events (especially storms) over the course of the rest of the year.
Investment income rose by 23.7 per cent to €288.9 million in the first half of 2018 (1-6/2017: €233.5 million). The main reason for this strong increase was the sale of the indirect interest in Casinos Austria Aktiengesellschaft, which generated gains on disposal of €47.4 million for the UNIQA Group in the first quarter of 2018.
The investment portfolio of the UNIQA Group (including investment property, financial assets accounted for using the equity method and other investments) decreased slightly as at 30 June 2018 compared with the end of the previous year to €19,789.2 million (31 December 2017: €19,877.7 million).
The technical result of the UNIQA Group fell by 28.2 per cent to €51.5 million in the first half of 2018 (1-6/2017: €71.7 million) despite an improved cost situation due to an increase in retained insurance benefits. In contrast, operating earnings increased by 33.7 per cent to €167.5 million (1-6/2017: €125.3 million) due to the good investment result. Earnings before taxes of the UNIQA Group rose accordingly just as significantly by 47.5 per cent to €140.8 million (1-6/2017: €95.5 million).
Consolidated net profit (net profit for the period attributable to the shareholders of UNIQA Insurance Group AG) increased by 166.2 per cent to €109.9 million (1 - 6/2017: €41.3 million). Earnings per share amounted to €0.36 (1 - 6/2017: €0.13).
As at 30 June 2018, the UNIQA Group’s equity amounted to €2,989.0 million (31 December 2017: €3,177.6 million).
The average number of employees at the UNIQA Group increased slightly in the first six months of the year to 12,876 (1 - 6/2017: 12,806).
For the entire 2018 financial year, UNIQA is expecting growth in property and casualty premiums of at least 2 per cent and a rise in premiums in health insurance of more than 3 per cent. In view of the conscious reduction of life insurance single premiums in CEE in particular and continuing customer restraint regarding traditional life insurance in Austria, lower premiums in life insurance are expected. In 2018 as a whole, UNIQA is expecting a moderate decline in total premium volume of about 1 per cent.
For investment income, UNIQA is expecting no further decline in 2018 in comparison to 2017, as the impact of low interest rates has already been largely reflected in the lower investment income of previous years.
In the area of property and casualty insurance, UNIQA is continuing to strive for increased profitability in its actuarial core business in 2018 as well and on this basis a further increase in the combined ratio compared with 2017.
Overall UNIQA is again anticipating an improvement in earnings before taxes. UNIQA retains its intention of steadily increasing the annual distribution per share in the years to come as part of a progressive dividend policy.
This press release contains statements referring to the future development of the UNIQA Group. These statements present estimates 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 deviate from the results currently expected. As a result, no liability is accepted for this information.
The UNIQA Group is one of the leading insurance groups in its core markets of Austria and Central and Eastern Europe (CEE). Around 20,000 employees and exclusive sales partners serve over 9.5 million customers in 18 countries. UNIQA is the second-largest insurance group in Austria with a market share of more than 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.