UNIQA Group: Preliminary results for 2014

UNIQA records significant growth in premiums and earnings despite difficult environment

  • EBT improves again by 22.9% to €377.9 million
  • Retained premiums earned increase by 7.6% to €5,312.9 million
  • Net combined ratio declines from 99.8% to 99.5%
  • Costs reduced by another €79 million
  • Dividend proposal raised again by 20% to 42 cents per share (2013: 35 cents)
  • Number of customers in the 19 UNIQA markets exceeds 10 million for first time (+700,000)

In the 2014 financial year, the UNIQA Insurance Group (UNIQA) improved its preliminary profit on ordinary activities (EBT) by 22.9% to €377.9 million (2013: €307.6 million). UNIQA achieved this result in spite of the impairment of subordinated bonds of Hypo Alpe-Adria-Bank International with state guarantees that was enforced by the Austrian Special Hypo Act in the amount of €35.4 million (as already reported in Q3 2014) and in spite of the impairment of the goodwill of the Romanian subsidiaries for risk minimisation purposes in the amount of €25 million.

The preliminary consolidated net profit (after taxes and minority interests) was virtually unchanged at €289.9 million (2013: €284.7 million), since the figure for 2013 included a result from discontinued operations (disposal of the Mannheimer Group) of €50.0 million after taxes. On a like-for-like basis (not including this non-recurring effect in 2013), consolidated net profit was up 23.5%.

Based on these figures, the Management Board will propose to the Supervisory Board and Annual General Meeting that a dividend of 42 cents per share – 20% higher than the dividend for 2013 of 35 cents – be paid for the 2014 financial year. This corresponds to a payout of around 45% of consolidated net profit.

UNIQA CEO Andreas Brandstetter: “In the third full year of our long term UNIQA 2.0 strategy programme we made a large step towards our goals and once again improved our result. This was due to the fact that we once again improved our operating profit in all segments while also managing to reduce costs again. This good result, combined with our strong capital resources, allows us to propose to the Annual General Meeting an increased dividend of 42 cents per share. Based on the year-end 2014 share price the dividend yield raises to around 5.4%.”

Key Group figures:

Premiums written – including the savings portion of unit- and index-linked life insurance – increased by 3.0% to €6,064.4 million (2013: €5,885.5 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 resolution adopted back in 2011 to completely withdraw from the German market and not to conclude any new business.

The main growth driver in 2014 was life insurance, which – partly due to strong demand in Italy in the fourth quarter – recorded a 5.3% increase in premiums to €2,482.7 million (2013: €2,357.4 million). Premiums written in health insurance rose by 2.5% to €960.8 million (2013: €937.6 million). In property and casualty insurance, premiums written increased by 1.2% to €2,620.9 million (2013: €2,590.5 million).

Looking at the development by region, premiums written in international business rose by 8.8% to €2,353.1 million (2013: €2,162.4 million), while in Austria they declined slightly by 0.2% to €3,678.8 million (2013: €3,685.2 million). As a result of this development, the share of international business in Group premiums written rose to 38.8% (2013: 36.7%).
Retained premiums earned in accordance with IFRS (i.e. not including the savings portion of unit- and index-linked life insurance) increased by 7.6% to €5,312.9 million (2013: €4,938.6 million).

Retained insurance benefits climbed by 10.7% to €4,383.7 million (2013: €3,959.4 million), as provisions for future benefits increased significantly as a result of higher premium income in life insurance.

Operating expenses less reinsurance commissions received and profit shares from reinsurance business ceded were reduced by around €79 million in 2014. This represents a significant decrease of 5.8% to €1,275.3 million (2013: €1,354.2 million). Administrative expenses were reduced by 17.5% to €362.8 million (2013: €439.9 million) by means of consistently implemented cost management as part of the UNIQA 2.0 strategy programme. Acquisition expenses fell by 0.2% to €912.5 million (2013: €914.2 million). 

The consolidated cost ratio after reinsurance was improved to 21.8% (2013: 24.0%) as a result of lower costs and increased premiums. The cost ratio is therefore already below the target level that was set for 2015 as part of UNIQA 2.0. In 2012, the first full financial year after the UNIQA 2.0 strategy programme was launched, the cost ratio was still 25.0%.

The combined ratio in property and casualty insurance after reinsurance improved to 99.5% (2013: 99.8%). This positive development was driven by the reduction of the cost ratio in property and casualty insurance to 30.0% (2013: 32.9%). There has also been a significant improvement in the combined ratio since the launch of the UNIQA 2.0 strategy programme. In 2012, the combined ratio had amounted to 101.3%.

Investments, including unit- and index-linked life insurance investments, increased by €1,829.0 million as against the end of the previous year to €29,212.7 million (31 December 2013: €27,383.6 million). Net investment income increased by 10.8% to €864.4 million (2013: €780.0 million). This increase primarily results from the long-term investment strategy, which is already geared towards the upcoming challenges of Solvency II and risk capital management.

Operating earnings (before financing costs and before goodwill impairment) climbed by 28.9% to €447.6 million (2013: €347.2 million), with particularly significant increases in earnings recorded in health insurance and property and casualty.

The Group’s profit on ordinary activities (EBT) increased by 22.9% to €377.9 million (2013: €307.6 million; 2012: €204.2 million).

At €289.9 million, consolidated net profit was up slightly on the previous year’s level (2013: €284.7 million; 2012: €127.1 million). However, consolidated net profit for 2013 included a positive non-recurring effect of €50 million from the reversal of a provision in connection with the disposal of the German Mannheimer Group. On a like-for-like basis (not including this non-recurring effect in 2013), consolidated net profit rose in step with EBT by 23.5%.

The UNIQA Group’s total equity increased by 11.4% to €3,102.4 million (31 December 2013: €2,785.1 million), primarily due to higher market valuations of fixed-income securities.

The UNIQA Group’s average equity (after minority interests) rose by 22.4% to €2,922.7 million in 2014 (2013: €2,388.3 million) as a result the successful completion of the re-IPO in October 2013. As a result of this development, the return on equity (ROE) – which is calculated in relation to average equity – fell to 9.9% (2013: 11.9%) despite a higher consolidated net profit.

The solvency ratio (Solvency I) improved to 295.4% (31 December 2013: 287.5%) as a result of the increase in equity.

The average number of employees at the UNIQA Group increased slightly to 14,316 (2013: 14,277) as a result of the integration of the Baloise Group’s insurance companies in Croatia and Serbia.

The number of customers served by the UNIQA Group companies in 19 markets rose to more than 10 million at the end of 2014 (2013: 9.3 million) and has thus reached eight figures for the first time in the country’s history.

Dividend proposal: 
The Management Board will propose to the Supervisory Board and Annual General Meeting that a 20% higher dividend of 42 cents per share (2013: 35 cents; 2012: 25 cents) be paid for the 2014 financial year. Based on a total of 308,180,530 dividend-bearing shares, this corresponds to a total distribution of €129.4 million. The distribution ratio in relation to consolidated net profit is thus around 45%, compared to around 38% in 2013.

UNIQA currently still expects double-digit percentage growth in the profit on ordinary activities to a level of €425 million to €450 million in 2015 as against 2014, based on further operative improvements in core business. This assumes that the capital market environment will be stable, that economic development will improve moderately and that losses caused by natural disasters will remain within a normal range.

All the figures for the 2014 financial year are based on unaudited preliminary data. The final annual report with audited figures will be published on the Group website on 15 April.

Forward-looking statements
This press release contains statements concerning UNIQA’s future development. 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 10 million customers in 19 countries. UNIQA is the second-largest insurance group in Austria with a market share of around 22%. 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.

 UNIQA Group Key Figures - Preliminary Results 2014

Vienna, 6. March 2015

UNIQA Group Communication

Untere Donaustraße 21
A-1029 Vienna, Austria
Phone: (+43 1) 211 75-3414
Fax: (+43 1) 211 75-3619