With premiums written including savings portions from unit-linked and index-linked life insurance of €5,565.3 million, the UNIQA Group is among the leading insurance groups in Central and Eastern Europe. The savings portions from unit-linked and index-linked life insurance in the amount of €304.1 million were netted out against the change in insurance provision pursuant to FAS 97 (US GAAP). Without taking the savings portions from unit-linked and index-linked life insurance into consideration, the volume of premiums written amounted to €5,261.2 million.
UNIQA in Europe
UNIQA offers its products and services via all distribution channels (hired sales force, general agencies, brokers, banks and direct sales) and covers virtually the entire range of insurance lines. UNIQA is the second-largest insurance group in Austria, with a presence in 15 countries of the CEE growth region: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Hungary, Kosovo, Montenegro, North Macedonia, Poland, Romania, Russia, Serbia, Slovakia and Ukraine. In addition, insurance companies in Switzerland and Liechtenstein are also part of the UNIQA Group.
The listed holding company UNIQA Insurance Group AG manages the Group and also operates the indirect insurance business concluded as active reinsurance with another insurance company. Moreover, UNIQA Insurance Group AG carries out numerous service functions for UNIQA Österreich Versicherungen AG and its international Group companies, in order to take best advantage of synergy effects and to implement the Group’s long-term corporate strategy consistently.
Property and casualty insurance
The property and casualty insurance line includes property insurance for private individuals and companies, as well as private casualty insurance. The UNIQA Group received premiums written in property and casualty insurance in the amount of €3,010.3 million in 2020 (2019: €2,846.8 million) – which is 54.1 per cent (2019: 53.0 per cent) of total premium volume. The largest share by far in the volume of property and casualty insurance comes from private consumer business. Most property and casualty insurance policies are taken out for a limited term of up to three years. A broad spread across the different risks of a great many customers and the relatively short terms of these contracts lead to only moderate capital requirements and also make this business segment attractive as a result.
Health insurance in Austria includes voluntary health insurance for private customers, commercial preventive healthcare and opt-out offers for certain independent professions such as lawyers, architects and chemists. Although health insurance is still at the early stages in CEE, increased levels of prosperity in the region make the long-term growth potential even greater. Across the entire Group, premiums written amounted to €1,167.6 million in 2020 (2019: €1,130.8 million) – or 21.0 per cent (2019: 21.0 per cent) of total premium volume. UNIQA is the undisputed market leader in this strategically important business line in Austria, with around 46 per cent of market share. The overwhelming majority comes from Austria with around 93 per cent of premiums, with the remaining 7 per cent from international business.
Life insurance covers economic risks that stem from the uncertainty as to how long a customer will live. It includes savings products such as classic and unit-linked life insurance. There are also biometric products which hedge against risks such as occupational disability, long-term care needs or death. The life insurance business model is structured towards the long term with terms that are around 25 years on average. Life insurance is still facing major challenges, as the low interest rate environment is particularly disadvantageous to all long-term forms of saving and investment, including for life insurance. In life insurance, UNIQA achieved a Group-wide premium volume (including savings portions from unit-linked and index-linked life insurance) of €1,387.5 million (2019: €1,394.9 million) – i.e. 24.9 per cent (2019: 26.0 per cent) of total premium volume in 2020.
Companies included in the IFRS consolidated financial statements
In addition to the annual financial statements of UNIQA Insurance Group AG, the consolidated financial statements include the financial statements of all subsidiaries in Austria and abroad as well as those of the investment funds under the Group’s control. The basis of consolidation – including UNIQA Insurance Group AG – consisted of 33 Austrian (2019: 33) and 66 international subsidiaries (2019: 57) as well as five Austrian (2019: 6) and six international pension and investment funds (2019: 1). The associates are four Austrian companies (2019: 5) and one international company (2019: 1) that were accounted for using the equity method for the Group accounting.
Details on the consolidated companies and associates are contained in the corresponding overview in the consolidated financial statements. The accounting and measurement methods are also described in the consolidated financial statements.
Error correction in accordance with IAS 8
As a result of a model change in the impairment test, the goodwill allocated to the CGUs Bulgaria and Romania in the 2019 financial year amounts to €54.6 million. The determination of the cash flow in perpetuity and the discount rate is adjusted in the revised impairment test.
Furthermore, in preparation for the initial application of IFRS 17 (Insurance Contracts) which is to be applied from 1 January 2023, it was discovered that deferred profit participation was not accounted for in health insurance. This is being corrected and the same content is also being changed retroactively in the accounting method for life insurance, in order to achieve a uniform presentation. The adjustments are retroactive to 1 January 2019 and have an impact of €9.0 million on the earnings before taxes for the 2019 financial year.
UNIQA’s comprehensive risk report is included in the notes to the 2020 consolidated financial statements.
Corporate Governance Report
Since 2004, UNIQA has pledged to comply with the Austrian Code of Corporate Governance. UNIQA publishes its consolidated Corporate Governance Report at www.uniqagroup.com in the Investor Relations section.
Consolidated non-financial statement, consolidated non-financial report
In accordance with Section 267a (6) of the Austrian Commercial Code, UNIQA Insurance Group AG prepares its consolidated non-financial statement as a separate combined non-financial report. The separate condensed non-financial report is prepared and signed by all legal representatives. It is submitted to the Supervisory Board for review and published together with the Group Management Report pursuant to Section 280 of the Austrian Commercial Code.
At the end of 2020, the UNIQA Group decided on a far-reaching strategic programme named UNIQA 3.0 for the years 2021 to 2025. Part of this transformation programme involves UNIQA becoming even more customer-focused and making internal processes simpler, more efficient and more cost-effective. This will also be accompanied by the reduction of around 600 employees in Austria by the end of 2022. These measures will therefore result in restructuring expenses in the amount of approximately €99 million in the 2020 consolidated financial statements. In addition, impairments to the goodwill in Serbia, Bulgaria and Romania result in a one-off charge of €106 million.