UNIQA, 1Q2020: The group recorded a negative net result for the first time since 2011 euro crisis

22 May 2020 — press.release
UNIQA Group ended the first three months of 2020 with a consolidated net result of EUR -13.2 million, COVID-19-related market effects forcing UNIQA to report a negative quarterly result for the first time since 2011 euro crisis. The result compares to an EUR 32.2 million net profit in the first quarter of 2019.

Considering the high levels of uncertainty regarding the macroeconomic and financial impact of COVID-19, which extends to the rest of the year, the group cannot maintain its outlook for the 2020 financial year, which anticipated profit on ordinary activities in 2020 at a similar level to that of 2019. The dividend for the 2020 financial year will not be paid, the company announced.

UNIQA 1Q2020 preliminary figures, y-o-y changes

  • Gross written premiums: EUR 1,578 million (+3.2%), of which:
    • GWP Austria: EUR 1,137.0 million (+2.6%)
    • GWP Czechia: EUR 80.6 million (+11%)
    • GWP Hungary: EUR 63.5 million (+6%)
    • GWP Poland: EUR 85.1 million (+5%)
    • GWP Slovakia: EUR 36.4 million (+8%)
    • GWP Romania: EUR 23.8 million (-5%)
    • GWP Ukraine: EUR 30.7 million (+12%)
    • GWP Albania: EUR 8.3 million (-12%)
    • GWP BiH: EUR 8.4 million (+4%)
    • GWP Bulgaria: EUR 20.9 million (-2%)
    • GWP Croatia: EUR 23.0 million (+5%)
    • GWP Montenegro: EUR 3.8 million (+5%)
    • GWP N. Macedonia: EUR 3.9 million (+13%)
    • GWP Serbia: EUR 12.6 million (-2%)
    • GWP Kosovo: EUR 2.7 million (-1%)
    • GWP Russia: EUR 18.9 million (-3%)
  • Premiums earned: EUR 1,257 million (+2.1%)
  • Net investment income: EUR 90 million (-11.7%)
  • Insurance benefits: EUR 951 million (+2.2%)
  • Operating expenses (net): EUR 379 million (+9.3%)
  • Combined ratio: 97.8% (+1.5 pp.)
  • Insurance technical result: EUR -0.9 million (1Q2019: 31.2)
  • Net result: EUR -13 million (1Q2019: 32)

Total premiums written by the UNIQA Group (including the savings portion of unit- and index-linked life insurance) rose by 3.2% to EUR 1,578.3 million in the first quarter of 2020. While recurring premiums grew by 3.1% to EUR 1,551.7 million, single premiums in life insurance rose by 5.3% to EUR 26.6 million. Retained premiums earned (in accordance with IFRS) increased by 2.1% to EUR 1,256.6 million.

Premiums written in property and casualty insurance rose by 3.7% to EUR 913.3 million in the first three months of 2020. Premiums written in health insurance rose by 5.1% to EUR 303.6 million in the reporting period. In life insurance, premiums written including the savings portion of unit- and index-linked life insurance remained virtually stable overall in the first three months of 2020 at EUR 361.4 million.

As the effects of COVID-19 on sales were still barely noticeable in the first three months, this caused premiums to rise considerably more than insurance benefits, although these already included initial provisions of EUR 37.5 million in connection with COVID-19 and other expenses for the storm front "Sabine" and an earthquake in Albania.

The total amount of retained insurance benefits of the UNIQA Group rose by 2.2% to EUR 950.6 million in the first quarter of 2020.

Total operating expenses rose by 9.3% to EUR 379.0 million in the first three months of 2020. Acquisition expenses less reinsurance commissions received posted an increase of 5.8% to EUR 239.3 million. Other operating expenses (administration costs) climbed by 16.1% in the first quarter of 2020 to EUR 139.7 million as a result of higher investments and additional resources and staff requirements for the strategic projects. This includes costs in connection with the innovation and investment programme amounting to roughly EUR 12 million (1Q2019: roughly EUR 14 million). Current operating costs rose by EUR 16 million, with most of these comprising non-recurring, advance expenses for the upcoming integration of the AXA companies in Poland, the Czech Republic and Slovakia.

The total cost ratio - the ratio of total operating expenses to premiums earned including the net savings portion of the premiums from unit- and index-linked life insurance - less reinsurance commissions received increased to 28.4% (1Q2019: 26.8%). The combined ratio after reinsurance increased to 97.8% in connection with the higher costs (1Q2019: 96.3%).

Investment income fell by 11.7% to EUR 89.7 million in the first quarter of 2020. The decline caused by COVID-19-related capital market turbulence would have been greater if it had not been cushioned by exchange rate effects through other comprehensive income of EUR 28 million in international business. Accounting for the 14.3% interest in the construction group STRABAG SE using the equity method resulted in a negative contribution to earnings of EUR - 18.7 million in the first quarter of 2020 (1Q2019: EUR - 18.7 million).

The investment portfolio of the UNIQA Group (including investment property, financial assets accounted for using the equity method and other investments) decreased as at 31 March 2020 compared with the end of the previous year to EUR 19,859.2 million (31 December 2019: EUR 20,624.8 million)

The UNIQA Group's technical result declined to EUR - 0.9 million in the first quarter of 2020, primarily due to a rise in costs (1Q2019: EUR 31.2 million). Operating earnings also fell to EUR 1.6 million (1Q2019: EUR 56.1 million). The UNIQA Group's earnings before taxes amounted to EUR - 13.9 million (1Q2019: EUR 42.3 million).

The average number of employees at the UNIQA Group rose 1.6% to 13,052 in the first three months of 2020 (1Q2019: 12,851).

More financial information about UNIQA Group can be found at www.uniqagroup.com

Source: uniqagroup.com

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