Phase 3: the strategic initiatives in detail

Capital – the foundation for our activities

Underpinned by a strong capital base, we want to make our UNIQA House as stable as possible. We have worked rigorously on improving this base since 2011 in order to grow our existing business and, whenever the opportunity has presented itself, to invest our capital in growth as well.

We have set ourselves the objective of a regulatory capital requirement () ratio with a fluctuation margin (target range) of 155 to 190 per cent to give us a financial position that is strong and balanced. This allows us to ensure that UNIQA always remains solvent, including under structural conditions that have deteriorated significantly, and is also able to make the most of any opportunities in the insurance business at all times. Our solid capital position makes it easy for us to strengthen the organic growth we are anticipating, particularly in CEE.

Change in SCR

In per cent

Change in SCR (graphic)

216%
SCR

2019 in general, and the first three quarters in particular, were marked by a sharp fall in interest rates. Although this pushed the ratio down from 248 per cent as at 31 December 2018 to 216 per cent as at 31 December 2019, UNIQA’s capital base remains strong.

Icon – 2019 (graphic)

Update 2019

Capital – the foundation for our activities

2019 in general, and the first three quarters in particular, were marked by a sharp fall in interest rates. Although this pushed the ratio down from 248 per cent as at 31 December 2018 to 216 per cent as at 31 December 2019, UNIQA’s capital base remains healthy.

This is due to the continuous further development of our risk model, with which we have now achieved yet another milestone: our for market risks was approved in November 2019.

In February 2020, we signed a purchase contract to acquire AXA Group companies in Poland, the Czech Republic and Slovakia. The purchase price is around €1.0 billion. Including the AXA acquisition, therefore, our pro-forma capital requirement ratio as at 31 December 20191) is estimated at around 190 per cent. Armed with this level of capitalisation – well above our target mark of 170 per cent – we believe we are well positioned.

1) In other words, calculated as if the transaction had actually been completed on 31 December 2019.

The “UNIQA House” (icon)

SCR
Solvency Capital Requirement. The eligible own funds that insurers or reinsurers must hold to enable them to absorb significant losses and give reasonable assurance to policyholders and beneficiaries that payments will be made as they fall due. It is calculated to ensure that all quantifiable risks (such as market risk, credit risk, life underwriting risk) are reliably taken into account. It covers both current operating activities and the new business expected in the subsequent twelve months.
Solvency
An insurance company’s equity base.
SCR
Solvency Capital Requirement. The eligible own funds that insurers or reinsurers must hold to enable them to absorb significant losses and give reasonable assurance to policyholders and beneficiaries that payments will be made as they fall due. It is calculated to ensure that all quantifiable risks (such as market risk, credit risk, life underwriting risk) are reliably taken into account. It covers both current operating activities and the new business expected in the subsequent twelve months.
(Partial) internal model
Internally generated model developed by the insurance or reinsurance entity concerned and at the instruction of the FMA to calculate the solvency capital requirement or relevant risk modules (on a partial basis).