Group business development

• Premiums written (including savings portions from unit-linked and index-linked life insurance) rose by 0.3 per cent to €5,309.5 million
• Combined ratio improved from 97.5 per cent to 96.8 per cent
• Earnings before taxes increased to €294.6 million
• Consolidated profit of €243.3 million
• Proposed dividend increased by 2 cents to €0.53 per share for 2018
• An increase in pre-tax profit is expected for 2019 following adjustment for the one-time effect from the sale of Casinos Austria Aktiengesellschaft

Changes in premiums

UNIQA’s total premium volume, including savings portions from unit-linked and index-linked life insurance, increased in 2018 in the amount of €320.5 million (2017: €481.6 million), by 0.3 per cent to €5,309.5 million (2017: €5,293.3 million).

Premiums written including savings portions from unit-linked and index-linked life insurance

In € million

In the area of insurance policies with recurring premium payments, there was an encouraging rise of 3.1 per cent to €5,196.7 million (2017: €5,039.3 million). In the single premium business, however, the premium volume decreased by 55.6 per cent to €112.7 million (2017: €254.0 million) in line with the strategy.

Premiums written in property and casualty insurance increased in 2018 by 5.1 per cent to €2,774.4 million (2017: €2,639.7 million). In health insurance, premiums written in the reporting period rose by 4.3 per cent to €1,086.4 million (2017: €1,042.0 million). In life insurance, premiums written including savings portions from unit-linked and index-linked life insurance fell by 10.1 per cent overall to €1,448.6 million (2017: €1,611.6 million). The strategic withdrawal from the single premium business was the reason for this.

The Group premiums earned, including savings portions from unit-linked and index-linked life insurance (after reinsurance) in the amount of €320.9 million (2017: €476.2 million), fell by 0.4 per cent to €5,081.7 million (2017: €5,104.1 million). The volume of premiums earned (net, in accordance with IFRSs) increased on the other hand by 2.9 per cent to €4,760.7 million (2017: €4,627.9 million).

Changes in insurance benefits

In the 2018 financial year, insurance benefits before reinsurance (see note 8 in the consolidated financial statements) rose by 5.0 per cent to €3,793.1 million (2017: €3,611.7 million). Consolidated net insurance benefits rose by 2.2 per cent to €3,626.6 million in the past year (2017: €3,547.4 million).

Insurance benefits (net)

In € million

The claims rate after reinsurance in property and casualty insurance fell slightly in 2018 to 65.4 per cent (2017: 65.9 per cent) as a result of less damage from natural disasters. The combined ratio after reinsurance improved to 96.8 per cent (2017: 97.5 per cent) for this reason as well as due to the improved cost situation at Group level.

Combined ratio after reinsurance

In per cent

Operating expenses

Total consolidated operating expenses (see note 9 in the consolidated financial statements) less reinsurance commission and share of profit from reinsurance ceded rose by 3.0 per cent to €1,314.7 million in the 2018 financial year (2017: €1,276.0 million). Expenses for the acquisition of insurance less reinsurance commission and share of profit from reinsurance ceded in the amount of €13.6 million (2017: €23.0 million) fell on the other hand by 0.4 per cent to €851.9 million (2017: €855.7 million) as a result of the fall in commissions in the life insurance sector. Other operating expenses increased by 10.1 per cent to €462.7 million (2017: €420.3 million) as a result of higher staff and IT costs. This line item includes expenses amounting to around €43 million (2017: approx. €41 million) within the scope of the innovation and investment programme.

The cost ratio after reinsurance, i.e. the ratio of total operating expenses less the amounts received from reinsurance commission and share of profit from reinsurance ceded to the Group premiums earned, including savings portions from unit-linked and index-linked life insurance, increased to 25.9 per cent during the past year (2017: 25.0 per cent) as a result of the developments mentioned above. The cost ratio before reinsurance rose to 25.2 per cent (2017: 24.6 per cent).

Investments

The UNIQA Group’s investment portfolio (including investment property, financial assets accounted for using the equity method and other investments) fell by €722.1 million to €19,337.1 million in the 2018 financial year (31 December 2017: €20,059.2 million).

Despite the persistent low interest rate environment and negative currency effects of around €17 million, net investment income increased by 1.6 per cent to €581.2 million (2017: €572.1 million). The main reason for this increase was the completion of the sale of the indirect holding in Casinos Austria Aktiengesellschaft in the first quarter of 2018. The UNIQA Group generated a capital gain of €47.4 million from selling this holding. Due to the recognition of the 14.3 per cent equity-accounted holding in STRABAG SE, there was a positive contribution in the amount of €51.4 million in 2018 (2017: €42.4 million). A detailed description of net investment income can be found in the consolidated financial statements (see note 4 in the consolidated financial statements).

Other income and other expenses

Other income remained stable in 2018 at €36.8 million (2017: €36.6 million). Other expenses for the period increased by 28.5 per cent to €72.5 million (2017: €56.5 million) as a result of currency losses in Russia.

Results

The technical result of the UNIQA Group rose significantly by 26.7 per cent to €140.2 million in 2018 (2017: €110.6 million). Operating profit also increased by 8.5 per cent to €350.1 million (2017: €322.7 million).

Earnings before taxes at UNIQA likewise increased by 11.3 per cent to €294.6 million (2017: €264.6 million), primarily as a result of the improvement in the technical result. The profit/(loss) for the period rose by 27.5 per cent to €235.1 million (2017: €184.4 million). However, the 2017 comparative value included the profit/(loss) from discontinued operations (after tax) of €33.1 million on account of the sale of the Italian Group companies. Income tax expense increased in 2018 to €59.5 million (2017: €47.2 million), while the tax burden was 20.2 per cent (2017: 17.8 per cent).

Earnings before taxes

In € million

The consolidated profit/(loss), i.e. the proportion of the net profit for the period attributable to the shareholders of UNIQA Insurance Group AG, amounted to €243.3 million (2017: €171.8 million). The earnings per share rose as a result to €0.79 (2017: €0.56).

Earnings per share

In €

Operating return on equity (earnings before taxes and amortisation of goodwill and impairment losses in relation to average equity, including non-controlling interests and excluding the accumulated profits of the valuation of financial instruments available for sale) came to 10.5 per cent in 2018 (2017: 10.2 per cent). The return on equity (after tax and non-controlling interests) rose to 7.9 per cent in the reporting year (2017: 5.4 per cent).

Operating return on equity

In per cent

On this basis, the Management Board will propose a dividend of €0.53 per share to the Supervisory Board and the Annual General Meeting (2017: €0.51 per share).

Dividend per share

In €

Own funds and total assets

Total equity attributable to the shareholders of UNIQA Insurance Group AG fell by €185.9 million to €2,972.1 million in the past financial year (31 December 2017: €3,158.0 million). The reason for this was the drop in the measurement of financial instruments available for sale due to an increase in volatility on the international financial markets. Non-controlling interests came to €14.4 million (31 December 2017: €91.4 million). The total assets of the Group amounted to €28,616.2 million at 31 December 2018 (31 December 2017: €28,743.9 million).

Cash flow

UNIQA’s net cash flow from operating activities amounted to €4.8 million in 2018 (2017: €473.4 million, of which €258.2 million was from discontinued operations). Net cash flow from investing activities amounted to €210.0 million (2017: €–217.6 million, of which €35.3 million resulted from discontinued operations). Net cash flows from financing activities amounted to €588.9 million (2017: €–154.2 million). Overall, cash and cash equivalents increased by €794.1 million to €1,444.4 million in the 2018 financial year (2017: €650.3 million).

Employees

In 2018, the average number of employees (full-time equivalents, or FTEs) at UNIQA again fell slightly to 12,818 (2017: 12,839). These included 4,271 (2017: 4,456) field sales employees. The number of employees in administration amounted to 8,547 (2017: 8,383).

In the 2018 financial year, the Group had 2,708 FTEs in the Central Europe (CE) region of Poland, Slovakia, the Czech Republic and Hungary (2017: 2,626), with 2,242 FTEs (2017: 2,293) in the Southeastern Europe (SEE) region consisting of Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Montenegro, North Macedonia and Serbia, and 1,654 FTEs (2017: 1,779) in the Eastern Europe (EE) region of Romania and Ukraine. There were 108 FTEs (2017: 108) working in Russia (RU). The average number of FTEs in the Western European markets in 2018 was 48 (2017: 46). A total of 6,058 FTEs were employed in Austria (2017: 5,987). Including the employees of the general agencies working exclusively for UNIQA, the total number of people working for the Group amounts to about 19,000.

In 2018, 55 per cent of the staff working in administrative positions at UNIQA in Austria were women. In sales, the ratio was 83 per cent men to 17 per cent women. 14.6 per cent (2017: 15.5 per cent) of employees were working part time. The average age in the past year was 44 years (2017: 44 years).

In Austria, almost all employees have a share in the company’s success through some form of variable participation programme. It consists of either a bonus for managers and selected key employees, or an employee participation programme. In 2018, 14 per cent (2017: 15 per cent) of employees participated in the bonus system for managers and selected key employees – a variable remuneration system that is tied both to the success of the company and to personal performance. In 2018, a total of 76 per cent took part in the employee participation programme (2017: 77 per cent) in the form of a bonus. Everyone who has an employment relationship for the entire financial year is entitled to participate. The payment of the employee participation bonus depends on the one hand on achieving the profit target and on the other hand on the degree to which other important corporate goals have been reached.

In addition, UNIQA offers young people in training the opportunity to get to know foreign cultures and make international contacts. Currently, 55 apprentices are being trained.