Impact of Russia’s attack on Ukraine
The Russian attack on Ukraine has had an impact on UNIQA at various levels.
In general, strong effects on the global financial markets and economies were observed in the form of higher inflation due to sharply increased energy prices, negative changes in share prices, a significant increase in credit spreads and an increase in credit defaults. A global increase in key interest rates was also recorded in the 2022 financial year. These developments are reflected in the decline in the net carrying amounts of the investments held by UNIQA.
In the 2022 financial year, UNIQA recognised an impairment loss on Russian bonds in the amount of € 103 million. This impairment relates to Russian government and corporate bonds with an acquisition cost of € 166 million denominated in euros, US dollars and Russian roubles and held by UNIQA in Group companies outside Russia. An impairment loss of € 39 million arose in the 2022 financial year in connection with Ukrainian government bonds. UNIQA expects that there will continue to be sufficient capitalisation and that the regulatory solvency capital requirements will be met.
With regard to the Russian market, it was necessary to evaluate UNIQA’s positioning: UNIQA currently holds 75 per cent of Raiffeisen Life Insurance Company LLC, which operates under the Raiffeisen brand (the remaining 25 per cent is held by JSC Raiffeisenbank). The company in Russia is a specialist personal insurance company that focuses on the retail business, which was launched to conduct bank insurance business in bank sales with Raiffeisen. Immediately after Russia’s attack on Ukraine in early 2022, UNIQA decided to stop all investments in the Russian insurance market and to discontinue key branches of new business. The existing business is managed within the framework of the contractual obligations. The premiums generated in Russia amount to € 55 million for the 2022 financial year, which corresponds to 0.8 per cent of UNIQA’s premiums written.