"Our Group's underwriting result developed positively in the first half of 2021. Despite significant strains caused by hailstorms, storm damage and flooding - particularly in Austria and the Czech Republic - we improved the combined ratio to an encouraging figure of 92.6%. 2021 marks the first year of implementing our 'UNIQA 3.0 - Seeding the Future' growth programme, and we are seeing pleasing development in our profitability, particularly in property and casualty insurance and in health insurance. The first six months of 2021 have been a successful milestone along the road as we work towards substantially improving the health and prosperity of our customers," said Andreas Brandstetter, CEO of UNIQA Insurance Group AG.
There was a significant improvement in the investment result year-on-year as it rose from EUR 215 million to EUR 307 million. While write-downs on shares and fixed-income securities caused some heavy losses in the first half of 2020, in the first six months of 2021 UNIQA made gains from investments in shares and bonds in a strong capital market environment. "Our cost program in Austria is on target and the integration of the former AXA companies in CEE is showing great promise as well. This, together with the excellent results for the first half-year, prompted us to raise our outlook for the year as a whole as early as July. We are anticipating earnings before taxes of EUR 330 million to EUR 350 million for the 2021 financial year," Brandstetter continued.
Under the 'UNIQA 3.0 - Seeding the Future' strategy program, UNIQA has set itself ambitious growth targets for 2021 through to 2025. Average annual premium growth of 3%, a reduction in the cost ratio to 25%, a combined ratio of around 93% on a sustained basis by 2025 and a return on equity that is consistently above 9% form the basis of progressive dividend growth. The program is underpinned by an explicit customer focus and by maintaining high investments in digitalization, IT and data. The first milestones have already been achieved with the successful integration of the AXA companies in CEE, a reduction in the cost ratio, the transformation of the corporate culture and the focus on innovations in disruptive business models.
Key Group figures - January to June 2021 in detail
Premiums written by the UNIQA Group - including the savings portion of unit- and index-linked life insurance - rose by 17.1% to EUR 3,310.0 million in the first half of 2021 due primarily to the first-time consolidation of the AXA CEE companies. While recurring premiums grew by 16.3% to EUR 3,239.2 million, single premiums in life insurance climbed by 64.7% to EUR 70.8 million. Premiums earned - including the net savings portion of premiums from unit- and index-linked life insurance totaling EUR 160.1 million - rose by 15.1% to EUR 2,983.2 million in the first half of 2021. Retained premiums earned (in accordance with IFRS) increased by 15.7% to EUR 2,823.1 million.
In the first six months of 2021, premiums written in property and casualty insurance grew by 19.9% to EUR 1,877.4 million.
Premiums written in health insurance rose by 5.0% to EUR 615.2 million in the reporting period Premiums written in life insurance - including the savings portion of unit- and index-linked life insurance - increased by 20.8% in total to EUR 817.5 million in the first six months of 2021. The key driver behind this performance was the first-time consolidation of the AXA companies in CEE. Single premiums went up by 64.7% to EUR 70.8 million in the first half of 2021.
The total amount of retained insurance benefits of the UNIQA Group increased at a slower rate than growth in premiums earned in the first half of 2021, growing by 11.4% to EUR 2,050.3 million. This meant that, despite heavy losses due to the weather, the loss ratio after reinsurance fell by around EUR 45 million to 62.2% in the first six months of 2021. The combined ratio after reinsurance improved to 92.6% (January to June 2020: 96.7%).
Total operating expenses less reinsurance commission received rose by 12.3% to EUR 802.5 million in the first six months of 2021. Acquisition expenses increased by 10.5% to EUR 495.8 million. Reinsurance commission received of EUR 11.0 million was already deducted from acquisition expenses. Other operating expenses (administration costs) rose by 15.4% to EUR 306.7 million in the first half of 2021 as a result of the first-time consolidation of the AXA companies in CEE. This includes costs in connection with the innovation and investment program amounting to roughly EUR 24 million.
The total cost ratio - the ratio of total operating expenses to premiums earned including the net savings portion of premiums from unit- and index-linked life insurance - less reinsurance commission received decreased to 26.9% (January to June 2020: 27.6%).
The investment portfolio of the UNIQA Group (including investment property, financial assets accounted for using the equity method and other investments) shrank as at 30 June 2021 compared with the end of the previous year to EUR 21,903.8 million (31 December 2020: EUR 22,319.2 million).
Investment income increased by 42.8% to EUR 307.2 million in the first half of 2021 (January to June 2020: EUR 215.1 million). While write-downs on shares and fixed-income securities pulled down investment income in the first half of 2020, in the first six months of 2021 UNIQA made gains from selling shares and fixed-income securities worth around EUR 69 million in a strong capital market environment. Investment income was impacted by currency effects of approximately EUR 5 million.
The UNIQA Group's underwriting result jumped by 194.1% to EUR 111.1 million in the first half of 2021 predominantly on account of the improved loss ratio in property and casualty insurance Operating earnings grew by 224.3% to EUR 277.0 million. The UNIQA Group's earnings before taxes went up accordingly by 289.1% to EUR 215.7 million.
Consolidated net profit (net profit for the period attributable to the shareholders of UNIQA Insurance Group AG) rose by 321.6% to EUR 170.7 million. Earnings per share were EUR 0.56.
The equity attributable to the shareholders of UNIQA Insurance Group AG declined to EUR 3,340.9 million as at 30 June 2021 (31 December 2020: EUR 3,450.1 million). The main factors behind this development were the lower valuation of financial instruments held for sale on account of higher returns and the distribution of the dividend for the 2020 financial year. The solvency II ratio was 198% as at 30 June 2021 (31 December 2020: 170%).
The average number of employees at the UNIQA Group increased to 14,748 in the first six months of 2021 as a result of the first-time consolidation of the AXA CEE companies (January to June 2020: 12,777).