EIG Q1 GWP down to EUR 76.5 million due to the 22% Romanian business decrease

The Bulgarian financial holding EUROHOLD reported a Q1 2018 net consolidated profit of BGN 0.8 million (EUR 0.4 million), representing a 49% decline compared to a profit of BGN 1.6 million for the first quarter of 2017.

The consolidated gross profit (including insurance, automotive, leasing, investment brokerage activities and parent company activities) increased by BGN 2.6 million, reaching BGN 28.9 million (EUR 14.7 million) compared to BGN 26.3 million at the end of March 2017, while EBITDA decreased by 1% y-o-y to BGN 8.9 million (EUR 4.5 million).

On the other hand, its insurance arm - EUROINS Insurance Group (EIG) reported aggregate Q1 2018 GWP of BGN 149.6 million (EUR 76.5 million) compared to BGN 170.9 million for the same period of 2017. "Reason for the decrease is the written business by EUROINS Romania. All other subsidiaries have registered growth", as the Bulgarian holding explained in its quarterly interim report.

The revenues from insurance business decreased by 5% and as of the end of the reporting period amounted to BGN 237 million (EUR 121.2 million). Operating expenses for insurance business decreased by 6% and amounted to BGN 219.2 million (EUR 112 million) while the quarterly consolidated operating profit was BGN 17.7 million (EUR 9 million) compared to BGN 15.8 million as at 31.03.2017, 12% more y-o-y.

At the same time, EIG generated unaudited consolidated profit of BGN 5.8 million (EUR 3 million) compared to a profit of BGN 6.6 million in Q1 2017.

The Bulgarian insurer mentioned that in January 2018 the company completed the process to increase capital by BGN 195.6 million (EUR 100 million), "a decision that has been voted back in 2015. The amount of this increase has been fully paid in and registered with the Trade Registry as well. As of now the total share capital of EUROINS Insurance Group amounts to BGN 483,445,791".

Per branches, EUROINS Romania remained the largest EIG subsidiary. During the analyzed period the company has written total GWP of BGN 102.5 million (EUR 52.4 million) compared to BGN 131.7 million in 2017. "The decrease is a result of the stabilization of the Romanian MTPL market after two years of significant increase of the average premium. Unlike the Motor business the major non-Motor lines of business such as Liability (47.5%), Accident (28.4%), Cargo (7.5%), and Property (5.5%)".

"As a result, this is another quarter for EUROINS Romania where it can be witnessed the positive effect of the re-segmentation combined with the strengthening of the reserves in 2015. Subsequently the profit for group purposes rises to BGN 5.4 million before tax".

EUROINS Bulgaria - the second larges EIG subsidiary - has reported total GWP of BGN 38.3 million (EUR 19.6 million) compared to BGN 33.1 million written in 2017. "The reason for this growth of nearly 16% is the direct insurance business written through brokers both locally in Bulgaria and in Greece, Italy and Spain according to the EU directive for Freedom of services. MTPL line of business grows but so do also main non-motor lines such as Property (15.4%), Accident & Health (22%), Liability (28.9%), Travel (46.3%) and Cargo (26.6%)".

At the same time, EUROINS Bulgaria has reported a profit for group purposes of BGN 419 thousand compared to BGN 54 thousand in Q1 2017.

In Q1 2018 gross premiums written by EUROINS Macedonia have registered a growth of nearly 17% reaching BGN 4.5 million. Main business lines that grow are Liability by 63.3%, Motor Hull - 25.9%, Property - 17.5%, MTPL - 14.9% and Cargo - 2.1%. The Skopje-based subsidiary reported a quarterly profit of BGN 418 thousand compared to BGN 44 thousand in 2017.

EUROINS Ukraine (the former PJSC HDI Strakhuvannya Insurance Company) generated GWP of BGN 3.9 million, which is a growth of 30% y-o-y. According to EIG, nearly 50% of the written business has been non-Motor. As a result of the administrative and acquisition costs related to the current ongoing restructuring of the company EUROINS Ukraine has reported a loss for Group purposes of BGN 568 thousand.

EIG Re (ex. HDI Insurance) has written gross premiums of BGN 924 thousand showing growth of 21.7% (profit of BGN 78 thousand) while EIG Life generated total GWP of BGN 372 thousand, which is at the same level as in Q1 2017.

EUROINS Russia (31.195% owned by EIG) reported GWP of BGN 11 million with the non-Motor business accounting for 48.6% of them. "As continuation of the sound performance from last year (a profit of BGN 198 thousand in 2017 Full year) the company reports a profit of BGN 286 thousand in Q1 2018".

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