Risk Management

A strong capital base is all-important for any insurance company. Ensuring that this is preserved over the long term means only entering into risks if they are calculable. That is why UNIQA relies on strict rules for detailed analysis and active management of risk. 

With a strong risk and sustainability culture, UNIQA has set the stage to ensure our business remains successful and profitable for the long term. The key element here is our Group-wide standardised risk management process aimed at identifying, measuring, aggregating and managing all risks that are relevant to the company. The roadmap for this is UNIQA’s Risk Management Guidelines, which not only set out the minimum requirements for the organizational structure and workflows of the company’s risk management process, but also define the framework for the specific processes for each risk category. The Guidelines also define measures for each risk aimed at preventing or reducing any potential damage. Since sustainability risks are interdisciplinary, they are not currently classified as a separate risk category at UNIQA, but rather they are allocated to the existing categories. 

UNIQA follows the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) for companies. For this reason, we analyse climate-related risks and opportunities as part of our risk management efforts and include these analyses in our external reporting. In the context of climate risks, the risks particularly relevant to UNIQA are those resulting from increasing weather extremes, which raise the claims rate and also amplify default risks. UNIQA actively deals with this issue and takes regulatory developments especially into account.  

Our business relationships and services can give rise to risks that could negatively affect non-financial matters governed by the Austrian Sustainability and Diversity Improvement Act. These risks can affect the following areas:

  • investments,
  • writing business in the industrial and commercial
  • segments,
  • writing business in the private customer segment and
  • procurement processes. 

In terms of investments, risks can arise from the financing of undesirable business practices of other companies, which could have an adverse effect with regard to the issues mentioned under certain circumstances. In order to avoid this risk, we focus on assessing and monitoring the most important parts of the portfolio for purposes of sustainability ratings. 

In our industrial and commercial business, we evaluate and assume industry risks in compliance with the UNIQA Corporate Business Standards. Risk assessments are used to analyse customers in a structured risk evaluation process. Along with our customers, we determine potential for improvement and risk minimisation. Subsequently, customers are given sufficient time to implement measures to counteract these risks. These measures are also the basis for the future transfer of risks to an insurance solution. In addition to complying with applicable law, we focus on avoiding money laundering and corruption as well as on environmental protection, social issues, working conditions and human rights.  

We also address sustainability risks in our private customer business. Various options (e.g. premium discounts for electric cars) are offered to increasingly create incentives relating to non-financial issues. In addition, in the first half of 2020 we expanded our fund choices in unit-linked life insurance to include sustainable investment funds. Furthermore, we address any possible risks by applying guidelines for product approval and strictly following our internal compliance guidelines.  

Risks relating to the relevant issues can arise in procurement processes in the course of doing business with other companies and suppliers. Our Purchasing department conducts screenings and sustainability assessments to avoid these risks if at all possible.