Life

Premium development

In 2012, the premium volume written in the life insurance segment, including the savings portion of unit- and index-linked life insurance, declined by 7.0 per cent to € 2,088.1 million (2011: € 2,244.3 million) due to the downturn in the area of single-premium business in Austria and Poland. Premiums from policies with recurring premium payments fell by 5.4 per cent to € 1,554.6 million (2011: € 1,643.4 million). The aforementioned deterioration in the single-premium business saw premiums falling by 11.2 per cent to € 533.5 million (2011: € 600.9 million). Traditional single premiums declined by 41.7 per cent to € 246.3 million (2011: € 422.4 million), while single premiums in the area of unit-linked life insurance increased by 61.0 per cent to € 287.2 million (2011: € 178.4 million).

Premium volume written in life insurance

Including the savings portion of premiums from unit- and indexlinked life insurance
Figures in € million

Premium development in Austria in 2012 was largely unsatisfactory. The premium volume for products with recurring premiums fell by 9.7 per cent to € 1,199.8 million (2011: € 1,328.6 million). The single-premium business was again impacted by the extension of the minimum holding period to benefit from tax advantages from 10 to 15 years, with premiums decreasing by 34.2 per cent to € 92.1 million (2011: € 140.0 million). All in all, the life insurance premium volume in Austria decreased by 12.0 per cent to € 1,291.9 million (2011: € 1,468.6 million).

The life insurance business of the Group companies in the Central and Eastern European regions stabilised in 2012. The premium volume written, including the savings portion of unit- and index-linked life insurance, declined marginally by 0.1 per cent to € 359.4 million (2011: € 359.7 million). While single premiums fell by 22.6 per cent to € 112.1 million (2011: € 144.8 million), recurring premiums enjoyed extremely satisfactory development, rising by 15.1 per cent to € 247.3 million (2011: € 214.9 million). All in all, the share of life insurance attributable to these countries amounted to 17.2 per cent in 2012 (2011: 16.0 per cent).

In the Western European countries, the premium volume increased by 5.0 per cent to € 436.7 million (2011: € 416.0 million) due to the strong business performance in Italy. Single premiums rose by 4.2 per cent to € 329.2 million (2011: € 316.1 million), while recurring premiums increased by an impressive 7.6 per cent to € 107.5 million (2011: € 99.9 million). All in all, this meant that the Western Europe region contributed 20.9 per cent (2011: 18.5 per cent) to the Group’s total life insurance premiums.

The risk premium share of the unit- and index-linked life insurance included in the Consolidated Financial Statements amounted to € 92.7 million in 2012 (2011: € 139.1 million). The savings portion contained in the premiums of the fund- and index-linked life insurance segments amounted to € 679.0 million (2011: € 633.9 million) and was offset against the changes in actuarial provisions in accordance with FAS 97 (U.S. GAAP).

Including the savings portion of unit- and index-linked life insurance (after reinsurance) in the amount of € 649.9 million (2011: € 599.7 million), premiums earned in the life insurance segment fell by 7.5 per cent to € 1,976.4 million (2011: € 2,136.2 million). Retained premiums earned (in accordance with IFRS) decreased by 13.7 per cent to € 1,326.5 million in 2012 (2011: € 1,536.5 million).

Development of insurance benefits

Retained insurance benefits fell by 1.7 per cent to € 1,363.2 million in the year under review (2011: € 1,386.5 million), meaning that the benefit and loss ratio after reinsurance amounted to 69.0 per cent (2011: 64.9 per cent).

Insurance benefits in Austria increased by 14.7 per cent to € 976.9 million (2011: € 852.0 million). In Western Europe, insurance benefits decreased by 32.0 per cent to € 252.5 million (2011: € 371.2 million), while the figure for Central and Eastern Europe fell by 18.0 per cent to € 133.8 million (2011: € 163.3 million).

Operating expenses

Total operating expenses in the life insurance segment less reinsurance commission and profit shares from reinsurance business ceded declined by 10.1 per cent to € 393.9 million in 2012 (2011: € 438.1 million). Acquisition costs fell by 6.0 per cent to € 320.8 million (2011: € 341.4 million), while other operating expenses decreased by 24.4 per cent to € 73.1 million (2011: € 96.7 million). The cost ratio in life insurance, i.e. the ratio of all operating expenses to Group premiums earned, including the savings portion of unit- and index-linked life insurance (after reinsurance), fell to 19.9 per cent (2011: 20.5 per cent).

In Austria, operating expenses decreased by 21.2 per cent to € 241.7 million (2011: € 306.6 million). The figure for the CEE region increased by 13.5 per cent to € 112.2 million (2011: € 98.9 million). By contrast, operating expenses in the Western European countries increased by 22.9 per cent to € 40.0 million (2011: € 32.6 million).

Investment result

Net income from investments increased by 257.7 per cent to € 613.7 million in the year under review (2011: € 171.6 million). Investments, including the investments for unit- and index-linked life insurance, rose by 10.6 per cent to € 20,251.2 million (31 December 2011: € 18,305.7 million).

Profit/loss on ordinary activities, net profit/loss, consolidated net profit/loss

The profit/loss on ordinary activities in the life insurance segment amounted to € 114.4 million in the year under review (2011: minus € 171.3 million). The net profit/loss for the period increased to € 98.0 million (2011: minus € 167.3 million), while the consolidated net profit/loss after taxes and minority interests amounted to € 88.4 million (2011: consolidated net loss of € 164.2 million).