4. Capitalisation

On the basis of the current supervisory requirements, the available equity and risk capital requirements are calculated according to Solvency I.

As soon as Solvency II takes effect, the definition and calculation of available equity, capital requirements and management will be replaced by the standards of Solvency II.

The solvency ratio based on supervisory provisions was 287.1 per cent as at 31 December 2013. Eligible equity amounted to € 3,290.2 million, which includes eligible subordinated liabilities of € 250.0 million up to half of the equity requirement and eligible subordinated liabilities of € 286.5 million up to a quarter of the equity requirement. The solvency requirement was € 1,145.9 million. The supervisory and internal minimum capitalisation of 135.0 per cent has therefore been surpassed considerably.

4.1. Statutory requirements

Risk capital requirements and available equity are currently calculated according to Solvency I regulations. These will be replaced when the Solvency II provisions become effective. In order to guarantee a smooth transition between these two different calculation methods, the UNIQA Group has performed parallel calculations since 2008. A consequence of these efforts is an early Group-wide introduction of the new methods and processes. Gaps and shortcomings will thus be identified early and promptly rectified.

4.2. Internal capital base

The UNIQA Group defines its risk appetite on the basis of an “economic capital model” (ECM). The excessive coverage of quantifiable risks with eligible equity should soon amount to at least 150 per cent. In the long term, excess coverage of up to 170 per cent can be achieved.

On 30 June 2013, and therefore before the placement of the supplementary capital bond in July 2013 and the capital increase in October 2013, the solvency ratio according to the ECM was 118.7 per cent. Taking into account the capital increase and the supplementary capital of € 150.0 million, the “pro forma solvency ratio” is 149.9 per cent. Further details can be found in the ECM report (from May 2014).

4.3. Standard & Poor’s model

In addition to regulatory and internal provisions, capital requirements of an external rating agency are also considered in order to present creditworthiness objectively/make it comparable. Therefore, the UNIQA Group is regularly rated by the rating agency Standard & Poor’s. In October 2013, the latter upgraded the UNIQA Group’s rating to “A-” and those of UNIQA Österreich Versicherungen AG and UNIQA Re AG to “A”, each with a stable outlook. At the same time, the rating of the hybrid capital bond issued by UNIQA in July this year was raised a notch to “BBB”. The UNIQA Group considers the effects on its rating in its capital planning process with the aim of improving it in future.

UNIQA operates the purely quantitative rating model of Standard & Poor’s independently. The firm goal is to hold a minimum rating of “AA” mathematically.

© UNIQA Group 2014