- After a robust development in the first three quarters of 2014, UNIQA generates EBT of € 275.2 million (+3.3 per cent)
- Retained premiums earned in accordance with IFRS climb by 5.3 per cent to € 3,900.7 million in the first three quarters of 2014
- Administrative expenses reduced by € 30.3 million (9.9 per cent) in the first three quarters of 2014
- UNIQA specifies outlook for 2014 as a whole (“significant increase in comparison to 2013”) with EBT forecast of € 370 – 380 million (+20 per cent) and consolidated net profit of € 275 – 285 million
- UNIQA adjusts the original EBT target for 2015 (“up to € 550 million”) in line with the economic environment and currently anticipates a double-digit percentage increase in EBT in 2015 compared to 2014 to a level of € 425 – 450 million
In the first nine months of 2014, UNIQA Insurance Group AG (UNIQA Group) generated a profit on ordinary activities (EBT) of € 275.2 million (+3.3 per cent). UNIQA achieved this result in spite of the impairment of Hypo Alpe-Adria-Bank International bonds enforced by the Austrian Special Hypo Act. Adjusted for the non-recurring effect from the sale of the Austria hotel group in the first half of 2013 in the amount of € 51.6 million, EBT was up 28.2 per cent year on year. Retained premiums earned (in accordance with IFRS, not including savings portions) grew by 5.3 per cent to € 3,900.7 million (1-9/2013: € 3,703.5 million).
UNIQA CEO Andreas Brandstetter comments: “In the first three quarters of 2014, we significantly improved EBT on a like-for-like basis in a challenging economic despite the complete write-off of the Hypo Alpe-Adria bonds. The decisive factors here were that we increased our premiums, considerably reduced our administrative expenses and achieved a good development in investment income.
We have specified our outlook for 2014 as a whole, which now forecasts a significant increase in EBT of more than 20 per cent to between € 370 million and € 380 million. We have adjusted our targets for 2015 in line with the subdued economic environment and currently expect to generate EBT of € 425 million to € 450 million. Although this is lower than our original target of ‘up to € 550 million’, it still represents a double-digit percentage increase as against 2014. We will systematically continue along the path that we started out on in 2011 with our strategic concept UNIQA 2.0 and will remain focused on managing costs, improving efficiency and increasing profitability in our core insurance business.”
Key Group figures for Q1 - Q3 2014
Premiums written by the UNIQA Group – including the savings portion of unit- and index-linked life insurance – rose by 1.0 per cent to € 4,492.6 million in the first nine months (1-9/2013: € 4,447.3 million). Premium growth was curbed primarily by a significant decrease in premiums in unit-linked life insurance. This development was caused mainly by follow-on effects from maturing life insurance policies in connection with the decesion adopted back in 2011 to completely withdraw from the German market and not to conclude any new business.
Retained premiums earned in accordance with IFRS (i.e. not including the savings portion of unit- and index-linked life insurance) increased much more significantly by 5.3 per cent to € 3,900.7 million (1-9/2013: € 3,703.5 million). The strongest growth impetus came from the life insurance segment with an increase of 12.4 per cent and from health insurance (+2.4 per cent), which has been posting stable growth for several years. The continuing strong double-digit premium growth in local currency in Ukraine (+24.2 per cent) and Russia (+22.6 per cent) is also encouraging.
The UNIQA Group’s retained insurance benefits rose by 7.3 per cent to € 3,175.3 million in the first three quarters of 2014 (1–9/2013: € 2,960.1 million). The increase in benefits, which was slightly higher than the increase in premiums earned, was chiefly attributable to a rise in benefits for major claims.
There was a significant reduction in administrative expenses, which fell by 9.9 per cent or € 30.3 million to € 274.7 million (1-9/2013: € 305.0 million). Operating expenses for acquisition increased by 2.3 per cent to € 679.2 million (1–9/2013: € 664.0 million) as a result of the growth in premiums. Overall, operating expenses less reinsurance commissions received improved by 1.6 per cent year on year, falling to € 953.9 million (1–9/2013: € 968.9 million).
The Group cost ratio improved from 23.1 per cent to 22.3 per cent, chiefly due to the reduction in administrative expenses. In 2012, the first full financial year after the UNIQA 2.0 strategy programme was launched, the cost ratio was still 25.0 per cent.
As a result of the flood damage in Southeastern Europe and an increased negative impact from major claims, the combined ratio (after reinsurance) deteriorated slightly by 0.1 percentage points to 98.9 per cent (1-9/2013: 98.8 per cent); in 2012, the combined ratio was 101.3 per cent.
Net investment income of the UNIQA Group climbed by 4.3 per cent from € 561.8 million to € 586.2 million in the first three quarters of 2014.
The investment portfolio of the UNIQA Group (including unit- and index-linked life insurance investments) increased by € 1,735.7 million as against the end of the previous year to € 29,119.3 million as at 30 September 2014 (31 December 2013: € 27,383.6 million).
The UNIQA Group’s profit on ordinary activities (EBT) amounted to € 275.2 million (+3.3 per cent) in the first nine months. On a like-for-like basis (not including the non-recurring effect from the sale of the hotel group in the first half of 2013 in the amount of € 51.6 million), this corresponds to an increase of 28.2 per cent. The net profit for the period amounted to € 193.4 million (1-9/2013: € 213.1 million), while the consolidated profit (after taxes and minority interests) fell by 9.9 per cent to € 189.1 million (1-9/2013: € 209.7 million) as a result of higher tax expenses.
In the first nine months of 2014, the UNIQA Group’s total equity increased by 14.6 per cent to € 3,197.7 million (31 De¬cember 2013: € 2,789.9 million).
The average number of employees increased from 14,287 to 14,451 (+1.1 per cent) due to the acquisition of insurance companies in Croatia and Serbia. 5,940 of these employees were employed in sales and 8,511 in administration.
Outlook for 2014
Despite the subdued economy, for 2014 as a whole UNIQA anticipates an increase in retained premiums earned in accordance with IFRS of around 4 per cent compared to 2013, a further improvement in the cost ratio to a little over 23 per cent, stable investment income and EBT of between € 370 million and € 380 million. This represents an increase of more than 20 per cent in comparison to the EBT of € 305.6 million generated in 2013. UNIQA expects to generate a consolidated profit (after taxes and minority interests) of € 275 million to € 285 million in 2014. The outlook for 2014 assumes that there will be no negative developments on the capital markets and no extraordinary losses caused by natural disasters in the remaining weeks of the year.
In line with the dividend policy, UNIQA intends to distribute between 40 and 50 per cent of the consolidated profit as a dividend again for the 2014 financial year.
Targets for 2015
In light of the fact that economic growth has slowed considerably in large parts of Europe in recent months and the economic forecasts for 2015 were recently lowered further, UNIQA now anticipates weaker growth for the coming year than originally expected. Growth is also held back by the very low interest rate level, which decreased further over the course of 2014 and is not expected to see a turnaround in the near future, either. Combined with increasing geopolitical tensions, UNIQA believes that this results in an unusually high degree of uncertainty with regard to the medium-term economic development in Europe.
This unstable environment prompted UNIQA to revise its planning in comparison to the original targets, which had specified an increase in EBT to up to € 550 million for the 2015 financial year. UNIQA currently still expects double-digit percentage growth in the profit on ordinary activities to a level of € 425 million to € 450 million, moderate growth in premiums and a further improvement in the cost ratio in 2015 as against 2014.
In the medium term, UNIQA will increasingly focus on managing costs, improving efficiency and further increasing the profitability of its core insurance business.
New allocation of responsibilities on the Management Board of UNIQA Insurance Group AG
From 1 January 2015, Kurt Svoboda, who has been on the Management Board of UNIQA Insurance Group AG since 2011, will assume the position of Chief Financial Officer (CFO) in addition to his role as Chief Risk Officer (CRO). Hannes Bogner, who previously held the position of CFO, will in future primarily be responsible for investments and for Group legal affairs and compliance as Chief Investment Officer (CIO).
Personnel changes on the Management Board of UNIQA Österreich Versicherungen AG
Erik Leyers, Head of Group Operations since March 2014, will join the Management Board of UNIQA Österreich Versicherungen AG next year and will be responsible for process management. At the end of the year, Silvia Harfmann will leave the Management Board of UNIQA Österreich Versicherungen AG for private reasons but will remain at the company in an advisory capacity. Silvia Harfmann has been a member of the Management Board of UNIQA Österreich Versicherung AG since 2011, prior to which she was Managing Director of UNIQA Software Service.
Financial report for 1st – 3rd quarter of 2014
In light of the specified outlook, UNIQA will publish its financial report for the 1st – 3rd quarter of 2014 on the Group website www.uniqagroup.com on 26 November 2014, a day earlier than originally announced in the financial calendar.
This press release contains statements referring to the future development of the UNIQA Group. These statements present estimates which 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). 22,000 employees and exclusive sales partners serve more than 9.3 million customers in 19 countries. 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 Italy, Switzerland and Liechtenstein.