41. Activities and objectives in 2022

Based on external and internal developments, activities in 2022 focused on the following:

  • Covid-19 and capital market environment;
  • rising inflation;
  • war in Ukraine;
  • sustainability (ESG);
  • further development of the internal model; and
  • security & resilience management.

Covid-19 and capital market environment

Since the beginning of the Covid-19 crisis, UNIQA has been monitoring the effects of the pandemic on business operations. In this context, the development of the capital market environment and its impact on fair values is also closely monitored. In 2022, the Group’s solvency position increased significantly due to a positive development in interest rates. This further strengthened resilience to unexpected shocks such as the Covid-19 crisis. UNIQA will continue to monitor the pandemic situation closely in order to be able to respond quickly to potential changes or new developments. In 2022, UNIQA’s business performance remained stable. The impact of the Covid-19 pandemic on new business volume and claims frequency in the different lines of business decreased compared to the previous year.

Rising inflation

After years of moderate inflation, in 2022 the rate increased significantly in the UNIQA countries. Inflation also had a corresponding impact on the insurance business and UNIQA’s investment strategy. Both administrative costs and the cost of settling claims rose due to inflation. This rise in costs has an influence on UNIQA’s pricing. Many policies include adjustment clauses that can mitigate the impact of this cost increase accordingly. The risk in terms of price adjustments is also defined by the pricing of competitors in the market. If inflation remains high for a longer period of time, there is also a risk that this could have a negative impact on new business and the number of cancellations.

War in Ukraine

Because the situation in the Russia-Ukraine conflict was already tense at the end of 2021, preparations of preventive measures in case of an escalation commenced as early as the beginning of 2022. When the war broke out, the initial focus in Ukraine was on helping the local workforce and their relatives flee the hostilities, but also on keeping business running. For the Russian company (Limited Liability Company Insurance Company Raiffeisen Life), in view of the far-reaching economic sanctions, the decision was already taken at the beginning of March to massively restrict new business in Russia, and active activities to extend the existing portfolio were also terminated. The conflict also had an impact on the capital investment strategy in Russia and Ukraine, as impairment losses on Russian and Ukrainian bonds were recognised in the 2022 financial year.

Sustainability (ESG)

The topic of sustainability is of very high importance for UNIQA. Risk management in 2022 focused particularly on managing and dealing with climate risks. Therefore, one of the main topics in 2022 was to assess long-term climate scenarios and how they are developing. Depending on the size and complexity of the risk profile of the Group’s subsidiaries, UNIQA distinguished between quantitative and qualitative approaches when assessing climate risks. Other focus areas were identifying sustainability risks in all departments throughout the company, integrating sustainability risks into reporting and monitoring sustainability risks in our investments. The aim of this risk management approach is to identify potential risks at an early stage in order to be able to react to them in time.

Further development of the internal model

Also of very high importance for risk management in 2022 were the next steps to further develop the partial internal model into a full internal model. UNIQA’s goal with this project is to map its own risk profile more adequately and to be able to manage risks more effectively. The project was launched in 2021, and the first pilot calculations were already carried out this year. They will be the basis for further project activities. In the next phase, the project will be coordinated and discussed with the Austrian Financial Market Authority.

Security & resilience management

Companies worldwide are exposed to an increasing number of security risks. For this reason, in 2022 UNIQA placed a strong focus on topics such as data theft, ransomware, cyber attacks, power outages and gas emergencies. Corresponding measures were implemented. The IT applications, IT infrastructures and data centres required for operational business and the key personnel needed to keep them running were identified and prepared for various scenarios. Another focus during the year was on addressing the identified vulnerabilities as part of a Group-wide, centrally coordinated IT security programme. Among other things, security requirements and controls as well as their gaps were reviewed.

(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).
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