Group business development

  • written (including savings portions from unit-and index-linked life insurance) rose by 4.9 per cent to €5,293.3 million due to the positive performance in all business lines
  • improved from 98.1 per cent to 97.5 per cent
  • Earnings before taxes increased to €242.2 million
  • Consolidated profit/(loss) of €161.4 million
  • Proposed dividend increased by 2 cents to €0.51 per share for 2017
  • A further increase in pre-tax earnings is expected for 2018.

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UNIQA Group

In € million

2017

2016

2015

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

5,293.3

5,048.2

5,211.0

Cost ratio (after reinsurance)

25.0%

26.6%

23.7%

Combined ratio (after reinsurance)

97.5%

98.1%

97.9%

Earnings before taxes

242.2

225.5

397.8

Consolidated profit/(loss) (proportion of the net profit for the period attributable to the shareholders of UNIQA Insurance Group AG)

161.4

148.1

337.2

Changes in premiums

UNIQA’s total premium volume, including savings portions of unit-linked and index-linked life insurance, increased in 2017, in the amount of €481.6 million (2016: €405.1 million), by 4.9 per cent to €5,293.3 million (2016: €5,048.2 million).

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

In € million

Premiums written including savings portions from unit-linked and indexlinked life insurance (bar chart)

In the area of insurance policies with recurring premium payments, there was a rise of 3.3 per cent to €5,039.3 million (2016: €4,879.0 million). In the single premium business, the premium volume increased by 50.1 per cent to €254.0 million (2016: €169.2 million) due to strong growth in the single premium business in Poland.

in property and casualty insurance increased in 2017 by 4.8 per cent to €2,639.7 million (2016: €2,518.4 million). In health insurance, written in the reporting period rose by 3.8 per cent to €1,042.0 million (2016: €1,003.7 million). In life insurance, premiums written including savings portions from unit-linked and index-linked life insurance increased by 5.6 per cent to €1,611.6 million (2016: €1,526.1 million). The reason for this was the strong rise in single premiums in Poland.

The Group , including savings portions from unit-linked and index-linked life insurance (after ) in the amount of €476.2 million (2016: €384.7 million), rose by 5.7 per cent to €5,104.1 million (2016: €4,827.7 million). The volume of premiums earned (net, in accordance with ) increased by 4.2 per cent to €4,627.9 million (2016: €4,443.0 million).

Changes in insurance benefits

In the 2017 financial year, before reinsurance (see note 8 in the consolidated financial statements) rose by 4.2 per cent to €3,623.0 million (2016: €3,478.2 million). Consolidated net insurance benefits rose by 5.1 per cent to €3,558.6 million in the past year (2016: €3,385.6 million).

Insurance benefits (net)

In € million

Insurance benefits (net) (bar chart)

In 2017, the loss ratio after in property and casualty insurance increased just slightly to 65.9 per cent (2016: 65.7 per cent) on account of positive settlement results and a heavy decline in the volume of major damage, despite above-average claims incurred as a result of natural disasters. In contrast, the combined ratio after reinsurance fell at the Group level to 97.5 per cent (2016: 98.1 per cent) as a result of an improved .

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Property and casualty insurance

In € million

2017

2016

2015

Premiums written

2,639.7

2,518.4

2,439.2

Insurance benefits (net)

–1,644.8

–1,550.6

–1,553.7

Claims rate (after reinsurance)

65.9%

65.7%

67.5%

Operating expenses (net)

–788.5

–763.2

–699.6

Cost ratio (after reinsurance)

31.6%

32.4%

30.4%

Combined ratio (after reinsurance)

97.5%

98.1%

97.9%

Net investment income

108.6

132.6

117.2

Earnings before taxes

83.9

57.9

71.4

Technical provisions (net)

2,939.7

2,708.4

2,869.6
Combined ratio after reinsurance

In per cent

Combined ratio after reinsurance (bar chart)

Operating expenses

Total consolidated (see note 9 in the consolidated financial statements) less reinsurance commission and share of profit from reinsurance ceded fell by 0.8 per cent to €1,276.0 million in the 2017 financial year (2016: €1,286.4 million). Expenses for the acquisition of insurance less reinsurance commission and share of profit from reinsurance ceded in the amount of €23.0 million (2016: €21.3 million) fell by 1.6 per cent to €855.7 million (2016: €869.4 million), despite the increase in in property and casualty insurance caused by the focus on higher and more profitable commissions in the property business in UNIQA International as a result of the fall in commissions in the health insurance and life insurance areas. Other increased just minimally by 0.8 per cent to €420.3 million (2016: €417.0 million), despite expenses in the amount of around €41 million in connection with 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 including savings portions from unit-linked and index-linked life insurance, increased to 25.0 per cent during the past year (2016: 26.6 per cent) as a result of the developments mentioned above. The before reinsurance fell to 24.6 per cent (2016: 26.1 per cent).

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Health insurance

In € million

2017

2016

2015

Premiums written

1,042.0

1,003.7

964.4

Insurance benefits (net)

–877.6

–843.6

–781.7

Operating expenses (net)

–168.0

–175.5

–153.7

Cost ratio (after reinsurance)

16.2%

17.5%

15.9%

Net investment income

116.4

114.9

140.1

Earnings before taxes

109.7

96.1

171.3

Technical provisions (net)

3,037.7

2,880.1

2,779.0

Investments

The UNIQA Group’s investment portfolio (including investment property, financial assets accounted for using the and other investments) fell by €147.1 million to €19,877.7 million in the 2017 financial year (31 December 2016: €20,024.8 million).

Net investment income fell by 4.7 per cent to €560.9 million (2016: €588.9 million) due to the persistent low interest rate environment and negative currency effects of around €60 million, despite liquidation proceeds and gains from the sale of property in the amount of around €45 million. In the 2016 financial year, one of the positive factors was the sale of the stake in Niederösterreichische Versicherung AG, which resulted in net investment income amounting to €37.2 million. 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 €42.4 million in 2017 (2016: €30.9 million). A detailed description of net investment income can be found in the consolidated financial statements (see note 4).

Other income and other expenses

Other income fell in 2017 by 13.9 per cent to €36.6 million (2016: €42.6 million) mainly due to significantly lower exchange rate gains in the Russian rouble. Other for the period increased by 6.2 per cent to €56.5 million (2016: €53.1 million).

Results

The technical result of the UNIQA Group rose significantly by 43.8 per cent to €106.2 million in 2017 (2016: €73.9 million). Operating profit fell slightly by 5.8 per cent to €300.2 million (2016: €318.8 million).

Earnings before taxes at UNIQA increased by 7.4 per cent to €242.2 million (2016: €225.5 million), mainly because of an improvement in the technical result and lower amortisation of goodwill and impairment losses, along with lower finance costs. Profit/(loss) for the period rose by 8.8 per cent to €162.8 million (2016: €149.6 million). This includes losses from discontinued operations (after tax) amounting to €–33.1 million (2016: €–53.1 million) due to the sale of Group companies in Italy. Income tax expense increased in 2017 to €46.3 million (2016: €22.8 million). Tax expense was reduced in 2016 by higher tax-free investment income, tax revenues from previous years, as well as a reduction in tax rates. The tax burden for 2017 was still 19.1 per cent (2016: 10.1 per cent).

Earnings before taxes

In € million

The consolidated profit/(loss), i.e. the proportion of the profit/(loss) for the period attributable to the shareholders of UNIQA Insurance Group AG, amounted to €161.4 million (2016: €148.1 million). The earnings per share rose as a result to €0.53 (2016: €0.48).

Earnings per share

In €

Earnings per share (bar chart)

Operating (earnings before taxes and amortisation of goodwill and impairment losses in relation to average equity, including and excluding the accumulated profits of the valuation of financial instruments available for sale) came to 9.3 per cent in 2017 (2016: 10.0 per cent). The return on equity (after tax and non-controlling interests) rose to 5.1 per cent (2016: 4.7 per cent).

Operating Return on Equity

In per cent

Operating Return on Equity (line chart)

On this basis therefore the Group Management Board will propose a dividend of 51 cents per share to the Supervisory Board and the Annual General Meeting (2016: 49 cents per share).

Dividend per share

In €

Dividend per share (bar chart)

Own funds and total assets

Total equity attributable to the shareholders of UNIQA Insurance Group AG fell slightly by €8.7 million to €3,177.6 million in the past financial year (31 December 2016: €3,186.3 million). The reason for this development was the fall in the valuation of financial instruments available for sale through the increase in the general interest rate level. came to €15.8 million (31 December 2016: €26.5 million). The total assets of the Group fell in the reporting period as a result of the sale of the Italian group companies and amounted to €28,743.9 million as at 31 December 2017 (31 December 2016: €33,639.2 million).

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Life insurance

In € million

2017

2016

2015

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

1,611.6

1,526.1

1,807.5

Insurance benefits (net)

–1,036.2

–991.4

–1,335.9

Operating expenses (net)

–319.5

–347.7

–337.1

Cost ratio (after reinsurance)

20.3%

23.7%

19.2%

Net investment income

336.0

341.4

474.7

Earnings before taxes

48.7

71.6

155.2

Technical provisions (net)

15,780.2

16,224.3

19,990.3

Cash flow

UNIQA’s net cash flow from operating activities amounted to €484.4 million in 2017 (2016: €976.9 million). Of this, €258.2 million came from discontinued operations (2016: €586.5 million). The cash flow from investing activities amounted to €–228.6 million (2016: €–919.5 million), of which €35.3 million (2016: €–593.3 million) resulted from discontinued operations. Net cash flow from financing activities amounted to €–154.2 million (2016: €–398.5 million). Overall, cash and cash equivalents increased by €100.4 million to €650.3 million in the 2017 financial year (2016: €549.9 million).

Employees

In 2017, the average number of employees (full-time equivalents, or FTEs) at UNIQA fell slightly to 12,839 (2016: 12,855). These included 4,456 (2016: 4,630) field sales employees. The number of employees in administration amounted to 8,383 (2016: 8,225).

In the 2017 financial year, the Group had 2,626 FTEs in the Central Europe region (CE) – Poland, Slovakia, the Czech Republic and Hungary) (2016: 2,533), with 2,293 FTEs (2016: 2,359) in the Southeastern Europe region (SEE) – Albania, Bosnia and Herzegovina, Bulgaria, Kosovo, Croatia, Macedonia, Montenegro and Serbia – and 1,779 FTEs (2016: 1,834) in the Eastern Europe region (EE) – Romania and Ukraine. There were 108 FTEs (2016: 102) working in Russia (RU). The average number of FTEs in the Western European markets in 2017 was 46 (2016: 41). A total of 5,987 FTEs were employed in Austria (2016: 5,986). Including the employees of the general agencies working exclusively for UNIQA, the total number of people (FTEs) working for the Group amounts to 19,456 (2016: 19,578).

In 2017, 59 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. 15.5 per cent (2016: 14 per cent) of employees were working part time. The average age in the past year was 44 years (2016: 44 years).

In Austria in 2017, a total of 15 per cent (2016: 15 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 performance. In addition, UNIQA offers young people in training the opportunity to get to know foreign cultures and make international contacts. Currently, 35 apprentices are being trained.

Premiums
Total premiums written. All premiums from contracts written in the financial year from business acquired by the company directly and as inward reinsurance.
Combined ratio
Total sum of operating expenses and insurance benefits in relation to the (net) premiums earned in property and casualty insurance.
Premiums written
All premiums due during the financial year arising from insurance contracts under direct insurance business, regardless of whether these premiums relate (either wholly or partially) to a later financial year. This involves (net) premiums written when reduced by the amount ceded to reinsurance companies.
Premiums
Total premiums written. All premiums from contracts written in the financial year from business acquired by the company directly and as inward reinsurance.
Premiums earned
The actuarial premiums earned that determine the income for the year. In order to determine these, the changes to the unearned premiums, the cancellation provisions and the premium volume not yet written are taken into account, along with the gross premium volume written attributable to the financial year.
Reinsurance
An insurance company insures part of its risk via another insurance company.
IFRSs
International Financial Reporting Standards. Since 2002 the term IFRSs has applied to the overall concept of standards adopted by the International Accounting Standards Board. Standards already adopted beforehand continue to be referred to as International Accounting Standards (IASs).
Insurance benefits
Total of insurance benefit payments and changes in the claims provision during the financial year in connection with direct insurance and reinsurance contracts (gross). This involves net insurance benefits when reduced by the amount ceded to reinsurance companies. This does not include claims settlement expenses and changes in the provisions for claims settlement expenses.
Reinsurance
An insurance company insures part of its risk via another insurance company.
Cost ratio
Ratio of total insurance operations expenses (net of reinsurance commissions received and share of profit from reinsurance ceded) to consolidated premiums earned (including savings portions of unit-linked and index-linked life insurance).
Operating expenses
This item includes acquisition expenses, portfolio management expenses and the expenses for implementing reinsurance. The operating expenses remain for the company’s own account following deduction of the commissions and profit participation received from the reinsurance business ceded.
Acquisition costs
The amount paid to acquire an asset in cash or cash equivalents or the fair value of another form of compensation at the time of acquisition.
Operating expenses
This item includes acquisition expenses, portfolio management expenses and the expenses for implementing reinsurance. The operating expenses remain for the company’s own account following deduction of the commissions and profit participation received from the reinsurance business ceded.
Premiums earned
The actuarial premiums earned that determine the income for the year. In order to determine these, the changes to the unearned premiums, the cancellation provisions and the premium volume not yet written are taken into account, along with the gross premium volume written attributable to the financial year.
Cost ratio
Ratio of total insurance operations expenses (net of reinsurance commissions received and share of profit from reinsurance ceded) to consolidated premiums earned (including savings portions of unit-linked and index-linked life insurance).
Equity method
Investment in associates is accounted for using this method. The value assessed corresponds with the Group’s proportional equity in these companies. In the case of shares in companies that prepare their own consolidated financial statements, their Group equity is assessed accordingly in each case. Within the scope of ongoing valuations, this value must be updated to incorporate proportional changes in equity; the pro rate profit on ordinary activities is imputed to the Group results with this.
Operating expenses
This item includes acquisition expenses, portfolio management expenses and the expenses for implementing reinsurance. The operating expenses remain for the company’s own account following deduction of the commissions and profit participation received from the reinsurance business ceded.
Return on equity (ROE)
The return on equity is the ratio of the profit/(loss) to the average equity, after deducting non-controlling interests in each case.
Non-controlling interests
Shares in the profit/(loss) that are not attributable to the Group but rather to companies outside the Group that hold shares in affiliated companies.
Non-controlling interests
Shares in the profit/(loss) that are not attributable to the Group but rather to companies outside the Group that hold shares in affiliated companies.