- Recurring premiums written rise by 3.1 per cent to €3,957.7 million
- Total group premiums stable at €4,042.3 million
- Combined ratio decreased to 96.6 per cent
- Investment income influenced by gains on disposal from sale of indirect interest in Casinos Austria in the first quarter of 2018
- Earnings before taxes up 17.1 per cent to €212.4 million
- Earnings outlook unchanged for 2018: further improvement in earnings before taxes compared with previous year
- Plans to continue progressive dividend policy confirmed
In the first nine months of 2018, UNIQA Insurance Group AG (UNIQA) increased its recurring premiums written including the savings portion by 3.1 per cent and with earnings before taxes of €212.4 million, exceeded the previous year’s figure by 17.1 per cent. This includes one-time gains on disposal from the sale of indirect interest in Casinos Austria Aktiengesellschaft from the first quarter of 2018 of €47.4 million.
For 2018 as a whole, UNIQA still anticipates growth in property and 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. The Group 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.
In the first nine months of 2018, the UNIQA Group’s premiums written, especially in property and casualty insurance, increased by more than 4.7 per cent, even more strongly than expected. It is also pleasing that this significant growth was borne by both core markets alike: Austria (+4.9 per cent) and CEE (+7.0 per cent). In particular, vehicle insurance and property insurance were growth drivers in both regions. By contrast, premiums written in life insurance fell by 11.0 per cent as a result of the planned decrease in low-margin single premiums, primarily in Poland. The very stable health insurance business developed as expected and climbed by 4.4 per cent.
Consistently high cost discipline helped that the increase in total operating expenses was low at 1.0 per cent, despite a significant increase in recurring premiums. The combined ratio dropped from 97.1 per cent to 96.6 per cent due to the improved cost situation, despite a further expansion of the provision for future loss events, especially storms.
Key Group figures 1-9/2018 in detail
In the first nine months of 2018, the UNIQA Group’s total premiums written, including the savings portion of unit-and index-linked life insurance remained stable at €4,042.3 million (1 - 9/2017: €4,043.9 million). The solid growth in property and casualty insurance and health insurance compensated for the decline in life insurance premiums caused by the planned decrease in single premiums in international business. Recurring premiums included in total premiums written increased by 3.1 per cent to €3,957.7 million (1 - 9/2017: €3,837.2 million). Premiums earned including the net savings portion of the premiums from unit- and index-linked life insurance fell by 1.2 per cent to €3,797.5 million (1 - 9/2017: €3,844.4 million). Retained premiums earned (in accordance with IFRS) increased by 2.8 per cent to €3,571.4 million (1 - 9/2017: €3,473.0 million).
Premiums written in property and casualty insurance climbed by 4.7 per cent to €2,145.7 million (1 - 9/2017: €2,048.4 million) in both Austria and in CEE due to strong growth in vehicle insurance and property insurance. Premiums written in health insurance rose by 4.4 per cent to €817.8 million (1 - 9/2017: €783.5 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 (Poland) – declined by 11.0 per cent to €1,078.9 million (1 - 9/2017: €1,211.9 million). While single premiums in life insurance reduced by 59.1 per cent to €84.6 million (1 - 9/2017: €206.6 million) in line with planning, recurring premiums in life insurance only decreased slightly to €994.3 million (1 - 9/2017: €1,005.3 million).
In international business, premiums written in property and casualty insurance increased by 7 per cent (1 - 9/2018: €806.3 million / 1 - 9/2017: €753.5 million) due to strong growth in vehicle and property insurance and those in health insurance by 29.7 per cent (1 - 9/2018: €59.6 million / 1 - 9/2017: €46.0 million), while life insurance premiums fell by 26.2 per cent (1 - 9/2018: €308.9 million / 1 - 9/2017: €418.2 million). In summary, UNIQA generated written premiums in international business including savings portions of €1,174.8 million (-3.5 per cent / 1 - 9/2017: €1,217.7 million), recurring premiums included in this rose by 7.6 per cent to €1,111.1 million (1 - 9/2017: €1032.4 million).
In Austria as well, UNIQA recorded a significant increase in property and casualty premiums of 4.9 per cent in the first nine months of 2018 (1 - 9/2018: €1,330.3 million / 1 - 9/2017: €1,268.5 million), while health insurance premiums moved up by 2.8 per cent (1 - 9/2018: €758.2 million / 1 - 9/2017: €737.8 million). Premiums written in life insurance fell by 2.9 per cent to €764.9 million (1 - 9/2017: €787.7 million). In total, UNIQA generated pleasing growth in premiums written in Austria including savings portions of 2.1 per cent to €2,853.4 million (1 - 9/2017: €2,793.9 million). Recurring premiums included in that expanded by a pleasing 2.2 per cent to €2,838.6 million (1 - 9/2017: €2,772.6 million).
The total amount of retained insurance benefits of the UNIQA Group rose by 4.0 per cent to €2,764.7 million in the first nine months of 2018 (1 - 9/2017: €2,659.0 million).
Total operating expenses less reinsurance commissions received rose by only 1.0 per cent to €951.6 million in the first nine months of 2018 (1 - 9/2017: €942.7 million). Despite the higher premiums earned, expenses for acquisitions fell by 2.7 per cent to €627.8 million (1 - 9/2017: €645.5 million). Due to higher personnel costs and pension provisions, other operating expenses (administration costs) increased by 9.0 per cent to €323.9 million (1 - 9/2017: €297.2 million) in the first nine months of 2018. This includes costs in connection with the innovation and investment programme amounting to €23 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 increased slightly by one percentage point to 25.1 per cent (1 - 9/2017: 24.5 per cent).
The combined ratio after reinsurance decreased to 96.6 per cent (1 - 9/2017: 97.1 per cent) due to the improved cost situation despite the higher provision for loss events that are to be expected, especially storms.
In the first nine months of 2018, investment income rose by 13.6 per cent to €447.2 million (1 - 9/2017: €393.6 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 September 2018 compared with the end of the previous year to €19,422.1 million (31 December 2017: €19,877.7 million).
Owing to higher insurance benefits in life insurance and health insurance and higher expenses, the UNIQA Group’s technical result decreased by 24.0 per cent to € 74.4 million in the first nine months of 2018 (1 - 9/2017: €97.9 million). In contrast, operating earnings increased by 12.1 per cent to €253.6 million (1 - 9/2017: €226.3 million) due to the good investment result. Earnings before taxes of the UNIQA Group rose accordingly just as significantly by 17.1 per cent to €212.4 million (1 - 9/2017: €181.4 million).
Consolidated net profit (net profit for the period attributable to the shareholders of UNIQA Insurance Group AG) increased by 45.3 per cent to €166.2 million (1 - 9/2017: €114.4 million). Despite higher income tax expenses, earnings per share up at €0.54 (1 - 9/2017: €0.37).
As at 30 September 2018, the UNIQA Group’s equity decreased to €2,986.2 million (31 December 2017: €3,177.6 million).
The average number of employees at the UNIQA Group decreased to 12,775 in the first nine months of the year (1 - 9/2017: 12,797).
For the entire 2018 financial year, UNIQA is expecting growth in property and casualty premiums of approximately 4 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, lower premiums in life insurance are expected. In 2018 as a whole, UNIQA is expecting a close to stable total premium volume.
For investment income, UNIQA is expecting no further decline in 2018 compared 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.