UNIQA 3.0 – Growing Impact:
UNIQA’s new strategy

We initiated the next phase in our long-term strategic development shortly before the turn of the year 2024/25 when we presented “UNIQA 3.0 – Growing Impact”. The focus of the new strategy to be implemented between 2025 and 2028 is on profitable growth, further efficiency improvements and the expansion of our strong market position in Austria and Central and Eastern Europe (CEE). The overriding goal is to position UNIQA as a diversified and attractive dividend share with sustainable premium, earnings and distribution growth.

With this new strategy, we are continuing a successful course that has already led to significant customer and premium growth as well as an increase in profitability in the insurance business in recent years.

Ambitious objectives

Our objectives for the future are also ambitious: Our premium volume is expected to grow by an average of 5 per cent per year until 2028, while we are even aiming for annual growth of over 6 per cent in earnings per share (EPS) thanks to consistent cost management. International business in the CEE region is expected to make a disproportionately large contribution to this: We are aiming for annual premium growth of around 8 per cent here, while the increase in premiums in Austria is expected to be around 3 per cent per year. This means more than double the GDP growth in our most important markets. We also want to improve our earning power even further: The plan is for combined ratio (net) to be permanently reduced to below 94 per cent, while we aim to reduce the administrative cost ratio to below 15 per cent. The return on equity should remain stable at over 12 per cent.

We also want our shareholders to participate in our success through a progressive dividend policy. Our plan is for dividends also to increase annually in line with the targeted growth in earnings. The basis for this is a distribution ratio of 50 – 60 per cent of profits.

Our growth strategy is underpinned by strong capitalisation. The solvency ratio, which was a solid 264 per cent at the end of 2024, should be at least between 180 and 230 per cent in future. This gives us sufficient room for organic growth and potential acquisitions.

Strong starting position in Austria and CEE

These targets are ambitious but they appear achievable in view of our strong market position and the measures already introduced in previous years. The successful implementation of our “UNIQA 3.0 – Seeding the Future” strategy over the past four years has created a good starting position for this in particular.

With over 17 million customers and more than 15,000 employees in 17 countries, UNIQA is one of the leading insurance groups in Austria and CEE today. A very high level of brand awareness makes us the second largest insurer in Austria and one of the top five insurers in many CEE countries. Our position is particularly strong in the healthcare business, where UNIQA is the clear market leader in Austria.

Continuation of a successful path

UNIQA owes this strong position to a consistent long-term focus on growth and profitability, which the company has been working on consistently since 2011. In addition to expanding the customer base, the focus initially was also on strengthening the balance sheet structure, with the re-IPO in 2013 playing a decisive role in this. The focus since 2021 has been on expanding and consolidating the country portfolio – particularly through the integration of the former AXA companies in Poland, Czechia and Slovakia, the withdrawal from Russia and, most recently, the sale of the companies in Albania, North Macedonia and Kosovo – as well as consistent digitalisation. We also managed to improve both our current business and our capital base alongside these efforts. The number of customers has more than doubled from 7.5 million since 2011.

Profitable growth and operational transformation

Challenging environment

The new strategic programme means that we are specifically responding to the diverse challenges facing our industry, as well as society and the economy as a whole. In addition to different paces for economic growth, which we want to exceed with our changes in premiums both in Austria and in the CEE region, we are confronted with a volatile macroeconomic environment with inflation and interest rate uncertainty as well as a rise in losses due to natural catastrophes. We are countering this with active financial and risk management to absorb the impact of interest rate trends, inflation and natural catastrophes on our business as far as possible.

However, climate change and the increased ESG requirements also require new answers in our product and investment policy. This is compounded by an ageing society and a healthcare system that is often at its limits. As an insurance company, we can offer a wide range of products and services that play a part in solving social problems and at the same time expand our business radius.

Digitalisation as a driver for growth

Consistent digitalisation is an important lever for achieving our goals. We have therefore been investing heavily in our IT systems and digital processes for years. We want to reduce our administrative costs significantly through this, while also improving customer service at the same time. For instance, UNIQA already processes around 86 per cent of claims notifications digitally in the health business. We are also increasingly focusing on digital channels in sales, without neglecting physical sales in the process.

Expansion of the healthcare business

One particular focus is on further expansion of the profitable healthcare business. UNIQA wants to operate here both as an insurer as well as increasingly as a healthcare provider. We already offer various healthcare services through our subsidiary Mavie – from telemedicine to health centres and private clinics through to preventive services (see Healthcare).

The healthcare market offers some major opportunities: There is an annual market potential of over €11 billion in the private healthcare sector in Austria alone. The premium volume in the healthcare business is expected to grow by around 5 per cent per year by 2028.

Stabilisation and growth in life insurance

In life insurance, we are working not only to offset but also to surpass the expiring business, and we are therefore aiming for average annual premium growth of 3 per cent by 2028. An important driver for this is an ageing society, which is leading to rising demand for pension and life insurance policies. The contractual service margin in the Life segment should improve to more than 70 per cent through additional support from growth in the area of term life insurance and unit-linked products as well as an improvement in the portfolio mix. The completion of our IT transformation initiative will also contribute to this.

As already mentioned earlier, UNIQA now intends to continue down this route with newly adjusted objectives. The overriding objectives are economic success and positioning ourselves as the best service provider and best employer. While there are concrete KPI targets for economic development, UNIQA measures its performance as a service provider and employer with specific indices, aiming to achieve 4.5 out of 5 stars in each of these.

Our goals by 2028

Increased efficiency in Austria, accelerated growth in CEE

From a regional perspective, our focus in Austria lies on increasing profitability, with improvements in pricing as well as an increased focus on SMEs and a reduction in the loss ratio through strategic claims management contributing towards this. Supported by a growing exclusive distribution network, we are the number one in most federal provinces and are aiming for premium growth of 3 per cent per year based on this. This growth will be driven primarily by property and casualty insurance and health insurance. This will be accompanied by the aforementioned IT transformation and digitalisation, which is expected to reduce the administrative cost ratio to 13 per cent by 2028.

We are aiming for rising earnings contributions and dividends in our international business, where we are able to build on a well-diversified product and country portfolio. Our starting point for this is very good with top five positions in most of our CEE markets and the growth differential to western Europe, coupled with insurance density that is still low. We plan to increase our premium volume in this region by 8 per cent annually supported by a strong customer base, while also increasing our profitability through portfolio optimisation and operational improvements. At the same time, the administrative cost ratio is set to decrease to 14 per cent by 2028 thanks to digitalisation and economies of scale.

Sustainability as an integral component

We have also set ourselves ambitious targets when it comes to sustainability. The Group aims to become climate-neutral in Austria by 2040 and then across the entire Group by 2050. The plan is for coal, oil and gas businesses to be completely eliminated from the investment and insurance portfolio by 2030/35. The fact that sustainability is not just lip service for us, but is consistently implemented in all business lines, is also reflected in the ESG ratings, where UNIQA is well above the industry average.

We have achieved almost all of the objectives from our “UNIQA 3.0 – Seeding the Future” strategic programme, which runs until the end of 2024, and in some cases have even exceeded these: The premium volume increased for instance by 9 per cent to €7.8 billion in 2024, with earnings before taxes up by 4 per cent to €442 million and consolidated profit/(loss) by 15 per cent to €348 million. The cost ratio (31.2 per cent) and combined ratio (91.1 per cent) were also better than the target values. The solvency ratio was an impressive 264 per cent at the end of 2024. Only the return on equity remained slightly below the target value of 14 per cent at 12.4 per cent.

UNIQA 3.0