VIG's underwritings up by 2.9% in Q3; year end targets confirmed
Premium volumes up
Group premiums written increased by +2.9% to around EUR 7.4 billion in the first three quarters of 2018. When adjusted for single premium products premiums were up by +5.4%. With the exception of single premium life insurance products, significant gains were once again recorded in all lines of business. The Czech Republic, Baltic states and Hungary were the main sources of the increase in premiums. VIG recorded double-digit growth in all lines of business in the Baltic states, where total premium volume grew by +16.5%. Hungary also recorded double-digit growth (+11.2%).
Increase in result (before taxes)
The Group result (before taxes) increased by +6.4% to EUR 352.3 million in the first to third quarter of 2018. Significant y-o-y increases in profits were recorded in Austria, the Czech Republic and the Remaining CEE segment, which includes, among others, Croatia, Serbia, Macedonia and Ukraine. Hungary's increase of +34.9% made a large contribution to the Group result (before taxes) and was primarily due to the absence of the write-down of Vienna Life insurance portfolios in the previous year. The increase of +21.7% by the Bulgarian VIG Group companies also made an important contribution to the increase in the Group result. The Czech Republic and Baltic states also recorded a positive development in results. Romania is the only market where performance in the motor business was less favorable, and we are carefully monitoring the market situation there. A loss of EUR 72.2 million was reported in the first three quarters of 2018. This was primarily due to a goodwill impairment of EUR 50.1 million carried out in the second quarter of 2018, building a provision for an ongoing market-wide anti-trust procedure and a reserve strengthening in the motor lines of business in the third quarter of 2018.
Combined ratio and other key figures clearly
VIG's combined ratio was at an excellent 96.3% in 3Q2018, one percentage point lower than last year (Q1-3 2017: 97.3 percent). This was due to a decrease in losses from natural catastrophes, which resulted in a lower claims ratio compared to the same period last year. The significant decrease in the combined ratio was primarily due to Austria, the Czech Republic, the Baltic states, Remaining CEE and Poland.
Group investments including cash and cash equivalents were EUR 37.5 billion as of 30 September 2018, at a slightly higher level than at the end of last year (31 December 2017: EUR 37.4 billion).
The financial result was EUR 795.9 million for 3Q2018. The +8.7% y-o-y increase was primarily due to investment gains, both from the sale of interest in S IMMO AG and from real estate.
VIG further expands its Global Assistance
As part of "Agenda 2020", VIG continues to expand assistance services provided by its own service companies. After successfully setting up the most modern motor assistance center in the Polish market, a separate Global Assistance company was set-up in Poland in August 2018. Established in 2017, the company "Global Assistance Romania", has been operating in the motor area since 1 October 2018. In future, "Global Assistance" will provide support for all assistance services in the motor, travel, household and health lines of business in each country. VIG is operating its own assistance companies in five countries. Following success of the "one-stop shop" model in the Czech Republic, Slovakia, Bulgaria, Romania and Poland, VIG plans to expand assistance services to other CEE countries.
Market position strengthened
Vienna Insurance Group strengthened its market position in the third quarter of 2018. The acquisition of SEESAM Insurance, which is domiciled in Estonia but operates across the Baltics, was completed at the beginning of September 2018. The company has been operating in this region since the end of October 2018 after a new redesign. VIG's market share of 20.4% makes it number 1 in the Baltic states. MERKUR Osiguranje was acquired in Bosnia-Herzegovina at the beginning of 2018 and has been operating under a new VIENNA Osiguranje brand since the end of October 2018. VIG's acquisition of this company almost doubled its market share to 8.5% in Bosnia-Herzegovina. The bank insurance company s Versicherung and Wiener Stadtische Versicherung were successfully merged in Austria in the third quarter, making VIG the largest life insurer in Austria with a market share of around 24%. The remaining merger of the Czech bank insurance company PES and Kooperativa is planned for the end of the year.