Elisabeth STADLER: 2019 was a very successful year for Vienna Insurance Group. We achieved top results for the financial year 2019 and we significantly improved our key financial figures for the fourth year in a row. For the first time in our history, we exceeded the 10 billion EUR premium limit and gained 10.4 billion EUR. We generated more than a half billion profit before taxes (522 million EUR), our net profit jumped by 23% to 331 million EUR and we improved our combined ratio strongly to 95.4 %. Without exception, all sectors recorded growth and contributed to the year-on-year increase in premiums of around 742 million EUR. These results confirm our position as market leader in Austria and the CEE region. They also underpin the growth potential in our markets that we have successfully made use of for exactly 30 years.
E.S.: Without any doubt, we now find ourselves in an exceptional global economic situation, which of course will not leave anyone unaffected, including insurance industry and Vienna Insurance Group. You have to imagine that we sent from one day to the next thousands of employees to the home office, the operative insurance companies closed their client offices, no consultant was able to make personal contact with clients. But it worked very well, we were all not in physical but digital contact with each other and were able to maintain business operations without any problems. As expected, we recorded a decline in new business in the first few weeks, but on the other hand more and more insurance policies were taken out online. This shows that our extensive digitalization activities are paying off.
It must also be taken into account that this situation is not a financial crisis, but a crisis of the real economy, which has consequences for the financial economy and thus also for insurance companies. The economic uncertainties affect the capital markets and thus our investments. We have begun to categorize our investments in such a way that we can estimate the real economic impact on our portfolio in sub-portfolios.
To recap, the Corona situation will have an impact on the business development of the insurance industry. Currently it is not possible to predict how the remainder of this year will look like. We are consciously taking our time to build up a clearer picture of the impact of the Covid-19 crisis on the Group's insurance business. We cannot quantify the effects on this year's results at the moment.
E.S.: I believe that three factors give us reason to be confident that we will deal with these unique circumstances as effectively as possible. Firstly, we have enjoyed great success in recent years and our 2019 balance sheet was strong. Second, our capital base is solid. The Group's solvency ratio remained very high at the end of 2019, standing at 210%. And thirdly, we started the Agenda 2020 management programme in 2017 to enhance profitability and our ability to meet future challenges, and this year we will continue to implement the measures we have introduced. As I mentioned before, we see now that the extensive digitalisation measures implemented in the course of Agenda 2020 are paying off. I think that this field will take on even greater significance due to the coronavirus crisis within the insurance industry.
E.S.: We have taken all appropriate measures within the Group to protect our employees and customers and ensured the continuous business operations in all our countries. We are constantly in contact with our insurance companies to encourage the containment of the virus. We continuously adjust these measures as the situation changes. In addition, capital market developments are being continuously monitored. Since May, we have been gradually reopened the clients' offices and moving from the home office mode back to normal office life. All this in line with appropriate security measures.
The last weeks were characterized by countless telephone and video conferences. Whatever I save in travel time or travel expenses is invested in digital conversations. I am in constant contact with authorities, ministries, capital market representatives and, above all, with our companies in our countries. At the same time, it is important to realize the plans we have set ourselves, which we try to fulfill also during the Corona crisis. And of course in such a situation it is important that the management remains in contact with the employees via e-mail, intranet, video or telephone.
E.S.: As I have already mentioned, online transactions have increased during the last weeks in some of our countries, many have now taken advantage of online and digital services. They existed already before Corona, but many people are now more aware that these simple options are available. We expect that digital services will get a new push. That is why digitisation is a main topic for us within Agenda 2020. Currently more than 180 digitisation projects are running within our Group and we are investing about 50 million EUR in digitisation every year.
We may also see a change in the investment behaviour of the industry. Social investments have increased as a result of the crisis. In my view, these will become more important and, in general, the topic of sustainable investments will continue to grow. Before Corona, the environmental criteria have clearly been in the foreground of sustainable investments in the industry and I think that the Green Deal will not lose importance as a result of the Corona crisis. I think that there may be delays in implementation, but not in the importance. We must bear in mind that insurance companies are important providers of capital for national economies, thereby ensuring that economy and, as a result, society, flourishes. They therefore make an important contribution to modern society. Our business, and the insurance business in general, is aimed at preserving value, primarily financial value, which creates security from one generation to the next. However, acting sustainably and investing in ESG-criteria means for us more than just generate financial security. Our priorities in that case also take into account future social and environmental trends. This means that we are actively working to create a future worth living.
E.S.: The impacts of the COVID 19 pandemic will affect all markets, whether Western Europe, CEE or the rest of the world. We currently see a decline in economic growth everywhere. Therefore, we do not see any minor or major risks doing business in the CEE region. However, we are convinced that after the crisis, economic growth in the CEE region will again be stronger than in Western Europe. What we see as another opportunity is the already mentioned topic of digitization. Our experience shows that people in the Eastern countries are more open to the topic of digitization and have a much higher affinity for online services than for example in Austria. We have now seen this even during the crisis. That is why we are deliberately initiating some projects in this region.
E.S.: It is difficult to say. I do not believe that the corona crisis will have any noticeable effect on the mentality towards insurance. It is generally a matter of creating a better understanding of the importance of covering risks in many markets. We have already noticed that many people would like to be covered, but there is still a lack of understanding that this coverage also has a value which must be priced. This puts a great responsibility on all the players on the insurance market to educate people and raise the awareness of the importance of insurance.
E.S.: No, we are continuing to implement our measures of Agenda 2020 this year and are already working on the follow-up programme until 2025. Maybe we will see a little delay in a few measures due to the Corona crisis, but we stay to implement them. We still follow our strategy to be focused on Central and Eastern Europe. We still want to grow profitably in our markets by following a sustainable, long-term strategy in our markets, in line with our commitment to stay for the long haul, and we intend to stick to it. That makes us a reliable and stable partner for our Group companies, our customers and our shareholders.