UNIQA provides life and health insurance, and is active in almost all lines of property and cas-ualty insurance. It serves about 10.0 million customers, over 19.2 million insurance contracts with a premium volume written (including the savings portion from the unit-linked and index-linked life insurance) of about €6.1 billion (2013: €5.9 billion) and investments of €29.2 billion (2013: €27.4 billion). UNIQA is the second-largest insurer in Austria, has a strong network in Central and Eastern Europe with a presence in 15 countries and is additionally active in Italy, Liechtenstein and Switzerland.
Premium development
UNIQA’s total premium volume increased in 2014, taking into account the savings portions of the unit-linked and index-linked life insurance in the amount of €544.7 million (2013: €727.9 million), by 3.0 per cent to €6,064.4 million (2013: €5,885.5 million). The total consolidated premium volume written rose by 7.0 per cent to €5,519.7 million (2013: €5,157.6 million). The continuing noticeable decline in premiums in the unit-linked life insurance was a dampening factor. The main causes of this are subsequent effects of maturing life insurance policies in conjunction with the decision that was already made back in 2011 to withdraw completely from the German market and not to underwrite any more new business.
In the area of insurance policies with recurring premium payments, there was a deterior-ation of 1.9 per cent to €5,102.7 million (2013: 5,202.8 million). In the single premium business, on the other hand, the premium volume increased by 40.8 per cent to €961.6 million (2013: €682.8 million) due to very strong growth in Austria and Italy.
The Group premiums earned, including the savings portion from the unit-linked and index-linked life insurance (after reinsurance) in the amount of €526.1 million (2013: €702.3 million), rose by 3.6 per cent to €5,839.0 million (2013: €5,640.9 million). The retained premiums earned (according to IFRSs) rose by 7.6 per cent to €5,312.9 million (2013: €4,938.6 million).
In the 2014 financial year, 43.2 per cent (2013: 44.0 per cent) of the premium volume written (including the savings portion from the unit-linked and index-linked life insurance) can be attributed to property and casualty insurance, 15.8 per cent (2013: 15.9 per cent) to health insurance and 40.9 per cent (2013: 40.1 per cent) to life insurance.
Development of insurance benefits
The insurance benefits before reinsurance (see Note 36 in the consolidated financial statements) rose in the 2014 financial year by 10.8 per cent to €4,517.7 million (2013: 4,078.1 million). Consolidated insurance benefits retained also rose in the past year by 10.7 per cent to €4,383.7 million (2013: €3,959.4 million), above all due to the sharp rise in the single premium business.
Operating expenses
Total consolidated operating expenses (see Note 37 in the consolidated financial statements) less reinsurance commissions received and the share of profit from reinsurance ceded (see Note 33 in the consolidated financial statements) decreased clearly in the 2014 financial year by 5.8 per cent to €1,275.3 million (2013: €1,354.2 million). Expenses for the acquisition of insurance less reinsurance commissions received and the share of profit from reinsurance ceded in the amount of €26.0 million (2013: €28.3) fell by 0.2 per cent to €912.5 million (2013: €914.2 million). Other operating expenses decreased due to the systematic implementation of cost savings measures as part of the UNIQA 2.0 strategy programme by 17.5 per cent to €362.8 million (2013: €439.9 million). The figures from the past year include extraordinary expenses related to strategic projects in the amount of €25 million.
UNIQA’s cost ratio after reinsurance, i.e. the relation of total operating expenses less re-insurance commissions received and the share of profit from reinsurance ceded to the Group premiums earned, including the savings portion from the unit-linked and index-linked life insurance, dropped to 21.8 per cent during the past year (2013: 24.0 per cent) as a result of the developments mentioned above. The cost ratio before reinsurance was 21.4 per cent (2013: 23.5 per cent).
Investment results
Total investments including land and buildings used by the Group, investment property, shares in associates and investments of the unit-linked and index-linked life insurance and current cash held at banks and cash-in-hand rose in the 2014 financial year by €1,829.0 million to €29,212.7 million (31 December 2013: €27,383.6 million).
Net investment income rose despite the burden of the impairment of bonds of Hypo Alpe-Adria-Bank International AG in an amount of €35.4 million by 10.8 per cent to €864.4 million (2013: 780.0 million). Other drivers of this development were gains on the sale of property and fixed interest securities due to modifications of the strategic asset allocation for the economic optimisation of capital. A detailed description of the investment income can be found in the consolidated financial statements (Note 34).
Other income and Other expenses
Other income rose in 2014 mainly due to differences in the exchange rate of the US dollar by 53.8 per cent to €62.4 million (2013: €40.6 million). However, other expenses also rose in the reporting period due to exchange rate differences of the Russian rouble and Ukrainian hryvnia and amounted to €70.3 million (2013: €32.4 million).
Profit/(loss) from ordinary activities
The technical result of the UNIQA Group rose in 2014 clearly to €151.5 million (2013: €48.8 million). Operating profit increased to €447.6 million (2013: €347.2 million). Profit/(loss) from ordinary activities of UNIQA was very satisfactory, above all due to the welcome trend in the operative segments UNIQA Austria and Raiffeisen Versicherung AG, and rose by 22.9 per cent to €377.9 million (2013: €307.6 million). Net profit for the reporting period only rose by 1.7 per cent to €292.9 million (2013: €287.9 million), because the net profit for the previous year included a result from discontinued operations in the amount of €50.0 million that arose as a result of the reversal of an other provision related to the sale of the Mannheimer Group. The consolidated profit/(loss) amounted to €289.9 million (2013: €284.7 million). Earnings per share fell, however, due to the rise in the average number of shares in circulation to €0.94 (2013: €1.21). The return on equity after tax and non-controlling interests in the reporting period was 9.9 per cent (2013: 11.9 per cent).
The Management Board will therefore propose a dividend of €0.42 per share to the Supervisory Board and the Annual General Meeting.
Own funds and total assets
The Group’s total equity increased in the past financial year due to the rise in the revaluation reserve – driven by higher fair values in particular of fixed interest securities – by 11.4 per cent or €317.3 million to €3,102.4 million (31 December 2013: €2,785.1 million). This included non-controlling interests in the amount of €20.2 million (31 December 2013: €22.0 million). The solvency ratio (Solvency I) increased accordingly to 295.4 per cent (31 December 2013: 286.7 per cent). The total assets of the Group rose in the reporting period by 6.6 per cent and amounted to €33,038.2 million on 31 December 2014 (31 December 2013: €31,001.7 million).
Cash flow
UNIQA’s cash flows from operating activities amounted to €182.4 million in 2014 (2013: €628.0 million). The cash flow from investing activities amounted to €283.4 million (2013: minus €1,781.3 million). The financing cash flow dropped to minus €109.7 million (2013: €813.0 million).
In total, liquid funds changed by €356.0 million (2013: minus €340.3 million). Financial resources available at the end of 2014 amounted to €975.8 million (2013: €617.0 million).
Employees
In 2014, the average number of employees at UNIQA rose slightly as a result of the acquisition of the insurance companies in the Baloise Group in Croatia and Serbia to 14,336 (2013: 14,277). Of these, 5,821 (2013: 5,893) were employed in sales positions. The number of employees in administration amounted to 8,515 (2013: 8,384).
In the Central European region (CE) – Poland, Slovakia, Czech Republic and Hungary – the Group had 2,806 employees in the 2014 financial year (2013: 2,899), 2,412 people (2013: 2,028) were employed in the Southeastern Europe region (SEE) – Albania, Bosnia and Herzegovina, Bulgaria, Kosovo, Croatia, Macedonia, Montenegro and Serbia – and 2,328 people (2013: 2,489) in the Eastern European region (EE) – Romania and Ukraine. There were 103 employees (2013: 94) in Russia. The average number of employees in the Western European markets rose slightly to 360 (2013: 348). A total of 6,327 people were employed in Austria (2013: 6,419). Including the employees of the general agencies working exclusively for UNIQA, the total number of people working for the Group amounts to about 22,000.
In 2014, 51 per cent of the staff working in administrative positions at UNIQA Insurance Group AG in Austria were women. In sales, the ratio was 80 per cent men to 20 per cent women. Twenty-one per cent (2013: 19 per cent) of the employees in administration were working part time. The average age in the past year was 43 years (2013: 42 years). In 2014, a total of 15.3 per cent (2013: 14.4 per cent) of the employees participated in UNIQA's bonus system – a variable remuneration system that is tied both to the success of the Company and to personal perfor-mance. In addition, UNIQA offers young people in training the opportunity to get to know foreign cultures and make international contacts. Currently, 28 apprentices are being trained. Ten new apprentices were accepted in 2014.
