Stronger-than-expected profitability – risControl !ONLine! Premium

Mag. Kurt Svoboda ©UNIQA

Synergies in the CEE region and manageable costs made it possible to drive earnings in 2021.
The corona crisis and climate change are also major challenges for the insurance industry. Despite high payouts for storm-related damage, UNIQA Insurance Group AG managed to improve profitability with a double-digit increase in revenue. Supported by the full integration of the former AXA companies in Poland, the Czech Republic and Slovakia, the volume of written premiums, including the savings portion of unit-linked and indexed life insurance, increased by 14.2% to the 6,358 million euros.
UNIQA Internacional’s premium volume expanded notably from 1,705 to 2,423 million euros, while in reinsurance it grew from 1,163 to 1,470 million euros. On the other hand, UNIQA Austria remained the source of income, where 62% of premiums are generated. Here the operating result of -89 million euros in 2021 was again positive with 379 million euros. Background: The investment result improved here from 161 to 567 million euros.

synergies

In Central and Eastern Europe (CEE), UNIQA has risen to fifth place among the main insurers thanks to the growth of 5 million clients with a premium of around 800 million euros. The first synergies from the regional merger with the AXA Group (Poland, Czech Republic and Slovakia) have already materialized. The standardization of the product range, customer-oriented processes and the IT landscape are now the order of the day. Annual savings of €45 million will be achieved by 2024, of which €20 million have already been secured. Most of the measures related to the business model, digitization and automation, as well as the corporate culture, should be completed by the end of 2023.

profitability improvement

Although storm damage payouts reached a record €267 million gross and the large loss load is also above the long-term average, management managed to reduce the combined ratio (after reinsurance) to 97.8% at 93.7%. The expense ratio (after reinsurance) fell from 29.4% to 27.4%. Excellent underwriting profitability in the private client business and contributions from international reinsurance partners brought relief. Profit before tax improved from €57 million to €382 million and is therefore even above the profit forecast of €330 million to €350 million already raised in the summer, giving room for a dividend distribution of 55 cents per share. Based on a price of EUR 7.03, this means a dividend yield of 7.8%.

risk factor’s

With a Solvency II regulatory capital ratio of 196%, UNIQA is in a strong position and the outlook would also be fundamentally positive. Kurt Svoboda, CFO/CRO of UNIQA Insurance Group AG in the course of a current press release: “Due to the course of business in the last year, the positive development of the technical result and the additional steps of implementation of the growth program ‘ UNIQA 3.0 – Sowing the Future’, we as UNIQA have an optimistic fundamental vision about the year 2022”.

The big “BUT” is the war in Ukraine, which represents a factor of macroeconomic risk and uncertainty. It is rumored in circles close to the institute that about 3% of the premiums written in the UNIQA Group and a total of 6.8% of the group’s profit before taxes come from Russia and Ukraine, a manageable magnitude. Other questions are the evolution of inflation and the future monetary policy of the ECB. (M.K.)

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