Improvement in all key performance indicators for Vienna Insurance Group in the first quarter of 2017

Following the favourable results achieved in the financial year 2016, Vienna Insurance Group (VIG) can now also report very positive figures for the 1st quarter of 2017.

"All our key performance indicators are showing a clear improvement compared to the 1st quarter of the previous year and are thus fully in line with our plans. The good economic outlook for both Austria and our Central and Eastern European markets makes us highly confident that we are on course for continued success in 2017," stated Elisabeth STADLER, Chairwoman of the Managing Board of VIG, summarizing the initial positive interim results for the year.

Premiums increased

Total premium volume reached around EUR 2.72 billion in the first three months of 2017, corresponding to an increase of +0.5 percent compared to the 1st quarter of 2016. Single premium life insurance business continued to decline (-22.1 percent). Excluding single premium products, premiums increased by +4.2 percent year-on-year. Health insurance, one of the growth segments identified in the "Agenda 2020" management programme, recorded the largest increase, with premiums rising by +12.5 percent to EUR 150.7 million. In motor vehicle insurance, the own-damage line of business recorded strong premium growth of 10.7 percent (EUR 284.4 million), while premiums for third party liability insurance declined slightly by -0.6 percent (EUR 368.5 million). Other property and casualty insurance recorded a strong increase of +6.8 percent (EUR 1.3 billion), and regular premium life insurance rose by 1.5 percent (EUR 666.6 million).

"We continue to follow a restrictive underwriting policy for traditional single premium life products in most markets. We also place profitability before growth in motor third-party liability insurance, where we face massive price competition in some countries, and have tightened our underwriting policy accordingly. We achieved very satisfactory growth in all other lines of business and continue with our stable performance," explained Elisabeth STADLER.



Highly positive premium development was recorded in the neighbouring countries of Hungary (+46.5 percent), Slovakia (+10 percent) and the Czech Republic (+5.1 percent). In the Remaining CEE segment, consisting of Albania, Bosnia-Herzegovina, Croatia, Macedonia, Moldova, Serbia and Ukraine, premiums rose by +12.4 percent, with Serbia and Bosnia-Herzegovina being the fastest-growing markets. The Turkey/Georgia segment also recorded double-digit premium growth of +17.7 percent. Except for Slovakia and Serbia, where growth was driven by life insurance (unit-linked single premium life insurance), the increases were mainly due to property and casualty insurance. The large percentage premium increase of +122.8 percent in the Baltic States resulted from the first-time consolidation of BTA Baltic, which was acquired in the previous year.

The premium decreases in Austria (-4.2 percent) were due to the ongoing decline in single premium business. In Romania, the regulatory cap the government placed on motor third party liability premiums had a negative effect on overall premium development (-7.5 percent).

Combined ratio significantly improved

The combined ratio improved significantly by almost one percentage point to 96.9 percent, compared to 97.8 percent in the 1st quarter 2016. While the loss ratio remained almost the same year-on-year, the cost ratio was clearly reduced. The combined ratio consequently improved in many of our countries, particularly Austria.

Profit (before taxes) +22.4 percent higher

Profit (before taxes) was around EUR 110 million, corresponding to an increase of +22.4 percent compared to the 1st quarter of 2016. The companies in the Czech Republic made the largest contribution to Group profit, namely 38 percent, followed by Austria (35 percent) and Slovakia (10 percent).



VIG generated a financial result of EUR 247.7 million in the 1st quarter of 2017. This year-on-year increase of +10.6 percent was primarily due to higher current income resulting from full consolidation of the non-profit housing societies.

The Solvency II ratio at the level of the listed VIG Group rose to around 206 percent for the 1st quarter of 2017.

Group investments including cash and cash equivalents were EUR 36.2 billion as of 31 March of the current year.

Implementation of "Agenda 2020"

Concrete steps were taken in the 1st quarter of 2017 with respect to optimising the business model under "Agenda 2020". Introduction of the model for reducing insurance fraud was concluded for the entire motor business in the Polish non-life companies and roll-out was commenced in the property and casualty business. In Romania, the implementation of the model is under way in the motor segment, and a pilot phase is currently under way in Bulgaria. The first projects in cooperation with the Insurance Innovation Lab Leipzig began as part of VIG's digitisation initiative. These projects include the development of specific products, as well as digitisation of the operating model.

Related articles

ATRADIUS enters Romanian and Bulgarian markets

ATRADIUS - the second largest provider of credit insurance in the world, announced it expanded its international presence with two new locations in Bulgaria and Romania, as a part of the company's global expansion strategy.

2017-11-15

ON THE MOVE

TOP EVENT

photodune-3834701-laughing-girl-xs

"IIF2017 - Insurance in the DIGITAL World" Conference took place in Vienna

"IIF2017 - Insurance in the DIGITAL World" conference brought together in Vienna well-known insurance professionals from all over the world who analyzed the latest digital trends in the industry, taking into account the fast digitalization of the financial services providers' world, in particular in the insurance field, which is creating both huge opportunities and strong challenges for the players.

14.11.2017

photodune-3834701-laughing-girl-xs

Croatian Insurance Days Live

On 9 November has started in Opatija, Croatia, the 2017 edition of the Croatian Insurance Days Conference, the traditional meeting of the Croatian insurance top professionals with their European peers. XPRIMM Publications are supporting the event as Media Partners.

09.11.2017

photodune-3834701-laughing-girl-xs

The 2017 Baden Baden Meeting: Short recap

The Baden-Baden meeting, one of the key events in the reinsurance calendar, has just set the final point of this year's edition. XPRIMM Publications have reported from the meeting's premises. Let's recap!

26.10.2017

Baden Baden Headlines 3: CEE insurance markets are attractive for reinsurers

Central and Eastern Europe insurance markets are an important source of business for Lloyds, total premium income from this region increasing by EUR 64 million since 2010, pointed out the Lloyd's representative in a seminar dedicated to CEE insurance markets: "We are seeing strong growth from Czech Rep, Poland, Slovakia and Ukraine. At the same time are some contractions from Russia, Bulgaria, Romania and Hungary due to challenging trading conditions as political implications and other sanctions".

25.10.2017

Baden Baden Headlines 2: cyber insurance market set to grow under regulatory presure; nat cat events more frequent, but losses per event are decreasing

Asian insurance market, especially the Indian market - are considered to be "the new El-Dorado" of the global re/insurance market, with rapidly expanding markets and an dynamic environment: "Indian P&C re/insurance markets are expected to grow at a pace of 15% per annum", according  to Victor PEIGNET, CEO, Global P&C, SCOR SE. The French -based reinsurer setted-up its Indian branch in 2016, after the authorisation from the local market authority - IRDAI. India's re/insurance market has become more attractive for global companies following the relaxation of regulatory requirements, and lately, "big names" in the industry entered the market by opening branches: GEN Re, SCOR, Lloyd's of London, MUNICH Re, SWISS Re, Reinsurance Group of America (RGA), HANNOVER Re, XL Catlin and others.

24.10.2017

BB Headlines: Rates are settled to increase following Q3 events

The main effect after the Q3 nat cat bill of over USD 100 billion: Global reinsures said - the "discounts and reductions in tariffs era" especially in European reinsurance market for the January 2018 renewals, will come to end. At the same time, some reinsurers might disappear and there are likely to be more mergers, acquisitions and run-offs processes.

23.10.2017

photodune-3834701-laughing-girl-xs

Baden-Baden Reinsurance Symposium: the industry-wide impact of disruption

"In our business we are more than used to disruptions [...] But the pace of disruption has been amplified by new sources of data and by the increase in the power to collate this data", James NASH, the President, International of GUY Carpenter stated during his opening address at the Reinsurance Symposium in Baden-Baden on 22 October.

23.10.2017

See all