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Property and casualty insurance

Premium volume written in property and casualty insurance



Premium development
Due to the extremely positive development in the year 2007, the UNIQA Group was able to increase its premiums written by 7.9% to €2,198 million (2006: €2,037 million). Despite the sometimes intense competition situation, in the automotive segments in particular, the premium volume in Austria increased by 2.8% to €1,268 million (2006: €1,234 million). In the Central and Eastern European regions (CEE & EEM), the rapid growth continued in 2007 as well. The premiums written grew by 23.6% to €528 million (2006: €427 million), thereby contributing 24.0% (2006: 21.0%) to the Group premiums in property and casualty insurance. However, considerable growth was also achieved in the Western European markets (particularly in Italy and Germany), with premiums written in this region rising by 6.9% to €402 million (2006: €376 million). Overall, the international share of Group premiums in this segment was 42.3% (2006: 39.4%).

Details on premium volume written in the most important risk classes can be found in the Group notes (cf. Group notes no. 30).

The retained premiums earned (according to IFRS) in casualty and property insurance totalled €1,858 million at the end of the year (2006: €1,716 million) – representing an increase of 8.3%.

Property and casualty insurance segment 2007
€ million
2006
€ million
2005
€ million
2004
€ million
Premiums written 2,198 2,037 1,934 1,656
Share CEE & NEEM 24.0% 21.0% 18.7% 18.6%
Share WEM 18.3% 18.5% 19.6% 13.4%
International share 42.3% 39.4% 38.3% 32.0%
Premiums earned (net) 1,858 1,716 1,628 1,394
Net investment income 258 141 131 89
Insurance benefits -1,251 -1,130 -1,106 -908
Net loss ratio (after reinsurance) 67.3% 65.9% 68.0% 65.1%
Gross loss ratio (before reinsurance) 67.9% 64.1% 66.4% 63.6%
Operating expenses less reinsurance commissions -606 -569 -553 -479
Cost ratio (after reinsurance) 32.6% 33.2% 34.0% 34.4%
Administrative cost ratio (net after reinsurance) 8.6% 9.2% 9.4% 8.4%
Net-Combined ratio (after reinsurance) 99.9% 99.0% 101.9% 99.5%
Gross-Combined ratio (before reinsurance) 98.7% 95.4% 98.2% 95.8%
Profit on ordinary activities 238 129 81 59
Net profit 193 104 54 53

Developments in insurance benefits
Due to the storm losses over the course of the year and reserve-strengthening measures, the total retained insurance benefits increased in 2007 by 10.7% to €1,251 million (2006: €1,130 million). Insurance benefits increased in Austria by 7.0% to €765 million (2006: €715 million) and in Western European countries by 20.5% to €215 million (2006: €178 million) as a result of an accumulation of major losses. In the Central and Eastern European regions (CEE & EEM), insurance benefits were up only moderately – compared with the rise in business volume – by 14.7% to €237.2 million (2006: €272 million).

As a result of this development and despite the continued, consistent implementation of reorganisation measures and risk-oriented underwriting policies, the net loss ratio (retained insurance benefits relative to premiums earned) increased by 1.4 percentage points to 67.3% (2006: 65.9%). The gross loss ratio (before reinsurance) at the end of 2007 was 67.9% (2006: 64.1%). In Austria, the net loss ratio for the past financial year was 70.2% (2006: 67.9%) and in Western Europe 73.1% (2006: 67.2%), while in the CEE & EEM regions it amounted to 57.3% (2006: 59.7%).

The level of reserves in property and casualty insurance (retained technical provisions in relation to earned premiums) rose slightly again in 2007, reaching 112.2% at the end of the year (2006: 110.9%).

Operating expenses, combined ratio
The total operating expenses less reinsurance commissions and profit shares from reinsurance business ceded increased in the property and casualty segment by 6.5% to €606 million (2006: €569 million) representing a lower rate of increase than the premiums. In the process, acquisition costs rose in line with premium income by 8.1% to €445 million (2006: €412 million), while other operating expenses increased only moderately by 2.1% to €160 million (2006: €157 million).

The cost ratio in property and casualty insurance sank in the past financial year to 32.6% (2006: 33.2%). The administrative cost ratio also declined 8.6% (2006: 9.2%). However, the net combined ratio increased due to the rise in the loss ratio and was at 99.9% in 2007 (2006: 99.0%). The combined ratio before reinsurance was 98.7% (2006: 95.4%). Excluding the losses from the storm “Kyrill”, the net combined ratio was 99.2%, placing it only slightly above the level of the previous year. The adjusted combined ratio before reinsurance was 95.9%.

Investment results
The net income from investments less financing costs increased in the past financial year by 83.4% to €258 million (2006: €141 million), primarily due to the exceptional profits from the capital increases of STRABAG SE. The capital investments in property and casualty insurance increased by 7.4% to €3,590 million (2006: €3,343 million).

Profit on ordinary activities, net profit
Profit on ordinary activities increased in property and casualty insurance in 2007 by 85.0% to €238 million (2005: €129 million). Net profit was up by 86.2% to €193 million (2006: €104 million).

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