- Recurring premiums written rise by 3.1 per cent to €5,197 million
- Total group premiums written rise slightly to €5,309 million
- Combined ratio improves further to 96.8 per cent
- Consolidated net profit rises by more than €70 million to €243 million
- SCR capital requirement of around 250 per cent at high level in international comparison
- Dividend to be increased for the seventh time in a row – from 51 cents to 53 cents
- Slight growth is expected again in 2019
- Dividends also expected to increase in 2019
UNIQA CEO Andreas Brandstetter on the preliminary annual results: “2018 was a solid year for us in several respects. We expanded and obtained new customers in the 18 countries in which we operate. We further improved our combined ratio to 96.8 per cent, due to comparatively low expenses for weather damage among other reasons and increased consolidated net profit by more than €70 million to €243 million. Based on this expected result and our capital requirement that is at a strong international level of more than 250 per cent, we are able to propose the seventh dividend increase in a row of 53 cents.”
Preliminary Key Group figures for 2018 in detail
Total premiums written by the UNIQA Group (including the savings portion of unit- and index-linked life insurance) rose slightly in 2018 by 0.3 per cent to €5,309.5 million (2017: €5,293.3 million). The solid growth in property and casualty insurance and health insurance compensated for the decline in life insurance premiums caused by the planned decrease in single premiums in international business. Recurring premiums included in total premiums written increased by 3.1 per cent to €5,196.7 million (2017: €5,039.3 million). Retained premiums earned (in accordance with IFRS) increased by 2.9 per cent to €4,760.7 million (2017: €4,627.9 million).
Premiums written in property and casualty insurance climbed significantly by 5.1 per cent in Austria and in CEE to €2,774.4 million (2017: €2,639.7 million). Premiums written in health insurance rose by 4.3 per cent to €1,086.4 million (2017: €1,042.0 million). In life insurance, total premiums written including the savings portion of unit- and index-linked life insurance – driven by the strategic reduction of less-profitable single premiums in international business – declined by 10.1 per cent to €1,448.6 million (2017: €1,611.6 million).
In international business, premiums written in property and casualty insurance climbed by 7.0 per cent (2018: €1,067.4 million / 2017: €997.3 million) and those in health insurance by 23.5 per cent (2018: €77.6 million / 2017: €62.8 million), while life insurance premiums written fell by 23.5 per cent (2018: €419.7 million / 2017: €548.4 million) due to the planned decrease in single premiums, especially in Poland. In summary, UNIQA generated written premiums in international business including savings portions of €1,564.6 million (-2.7 per cent / 2017: €1,608.5 million), recurring premiums included in this rose by 7.0 per cent to €1,479.0 million (2017: €1,382.1 million).
In Austria as well, UNIQA recorded a significant increase in property and casualty premiums of 5.0 per cent to €1,703.5 million in 2018 (2017: €1,621.8 million), while health insurance premiums moved up by 3.0 per cent to €1,008.9 million in 2018 (2017: €979.7 million). Premiums written in life insurance fell by 3.1 per cent to €1,022.0 million (2017: €1,055.2 million). In total, UNIQA generated growth in premiums written in Austria including savings portions of 2.1 per cent to €3,734.4 million (2017: €3,656.6 million). Recurring premiums included in that expanded by a pleasing 2.2 per cent to €3,707.4 million (2017: €3,629.0 million).
The total amount of retained insurance benefits of the UNIQA Group rose by 2.2 per cent to €3,626.6 million in 2018 (2017: €3,547.4 million). Benefits therefore grew slower than the corresponding retained premiums earned (+2.9 per cent).
Total consolidated operating expenses less reinsurance commissions received rose by 3.0 per cent to €1,314.7 million in 2018 (2017: €1,276.0 million). Despite the higher premiums earned, expenses for acquisitions fell by 0.4 per cent to €851.9 million (2017: €855.7 million). Due to higher costs for personnel and IT, other operating expenses (administration costs) increased by 10.1 per cent to €462.7 million in 2018 (2017: €420.3 million). This includes costs in connection with the innovation and investment programme amounting to €43 million.
The total cost ratio – the ratio of total operating expenses to premiums earned including the net savings portion of the premiums from unit- and index-linked life insurance – increased to 25.9 per cent (2017: 25.0 per cent).
The combined ratio after reinsurance decreased to 96.8 per cent (2017: 97.5 per cent) due to the relatively low expenses for weather damage and the improved cost situation in property and casualty insurance.
Investment income rose by 1.6 per cent in 2018 to €581.2 million (2017: €572.1 million). The main reason for this increase was the sale of the indirect interest in Casinos Austria Aktiengesellschaft, which generated gains on disposal of €47.4 million for the UNIQA Group in 2018.
The investment portfolio of the UNIQA Group (including investment property, financial assets accounted for using the equity method and other investments) decreased as at 31 December 2018 compared with the end of the previous year to €19,337.1 million (31 December 2017: €25,059.2 million).
The technical result of the UNIQA Group increased significantly by 26.7 per cent in 2018 to €140.2 million in 2018 (2017: €110.6 million). Operating result increased by 8.5 per cent to €350.1 million (2017: €322.7 million). Earnings before taxes of the UNIQA Group rose by 11.3 per cent to €294.6 million (2017: €264.6 million). Net profit for the period increased by 27.5 per cent to €235.1 million (2017: €184.4 million). Income tax expenses increased to €59.5 million (2017: €47.2 million). The tax rate was therefore 20.2 per cent (2017: 17.8 per cent).
Consolidated net profit (net profit for the period attributable to the shareholders of UNIQA Insurance Group AG) increased by more than €70 million or 41.6 per cent to €243.3 million (2017: €171.8 million). As a result earnings per share increased to €0.79 (2017: €0.56).
As at 31 December 2018, equity attributable to the shareholders of UNIQA Insurance Group AG decreased to €2,972.1 million (31 December 2017: €3,158.0 million). The return on equity in the year under review increased to 7.9% (2017: 5.4%)
In 2018, the average number of employees (full-time equivalents) at the UNIQA Group fell slightly to 12,818 (2017: 12,839) with the number of employees in Austria increasing from 5,987 to 6,058.
Note
All the figures for the 2018 financial year are based on unaudited preliminary data. The final consolidated annual report for 2018 will be published at the same time as the Sustainability Report and the Economic Capital Report on the Group website www.uniqagroup.comon 10 April 2019.
The figures for 2017 are subject to IAS 8 adjustments and therefore differ from the published figures.
Outlook
For the 2019 financial year, UNIQA is expecting growth in property and casualty premiums of approximately 2 per cent and a rise in premiums in health insurance of around 3 per cent. In contrast, a continuation of declining premiums in life insurance is expected. In 2019 as a whole, UNIQA is expecting a slight increase in total premium volume.
UNIQA is also targeting a further improvement in its combined ratio in 2019.
Earnings before taxes for 2019 are expected to be above 2018 figure after the adjustment for the non-recurring effect from the sale of the interest in Casinos Austria.
In line with the progressive dividend policy, UNIQA intends to further increase the distribution per share for 2019 as well.
Forward-looking statements
This press release contains statements concerning UNIQA’s future development. These statements present estimates that 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.
UNIQA
The UNIQA Group is one of the leading insurance groups in its core markets of Austria and Central and Eastern Europe (CEE). Around 20,000 employees and exclusive sales partners serve over 10.1 million customers in 18 countries. UNIQA is the second-largest insurance group in Austria with a market share of more than 21 per cent. 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 Switzerland and Liechtenstein.