UNIQA Group, 2020: results above expectations; 3.6% growth in GWP after consolidation of AXA-CEE in Q4

18 February 2021 — Daniela GHETU
Austrian UNIQA's 2020 results exceeded the Group's expectations as formulated in April. GWP went up 3.6% after consolidation of AXA-CEE in Q4, while preliminary earnings before taxes reached EUR 57 million, including the EUR 243 million one-time charges for restructuring, adjustment of goodwill in CEE and AXA integration.

Yet, the Group's announcement stressed out that due to the acquisition of the AXA companies in Poland, Czechia and Slovakia as well as the one-off charges from the strategy program "UNIQA 3.0 - Seeding the Future" (2021 to 2025), the figures for the past year are only partially comparable with those of the previous periods.

With EUR 5,565 million in premiums written, the growth reported for 2020 is a pleasing +3.6%. After deducting the first-time premium contribution from the AXA companies (EUR +212 million), which were first consolidated in the fourth quarter, UNIQA recorded a premium decline of -0.4%, with business in Austria growing by +1% and international UNIQA Markets (excluding AXA) - mainly due to currency effects - fell by -4.3%.

The preliminary earnings before taxes (EGT) 2020 amount to EUR 57 million, which includes one-off charges of EUR 243 million (EGT 2019: EUR 295.7 million before adjustment of the valuation of goodwill in Romania and Bulgaria in the amount of EUR 54 6 million): 137 million euros in restructuring provisions and expenses for the integration of the AXA companies, as well as EUR 106 million for the amortization of goodwill in CEE (Romania, Bulgaria, Serbia and Albania).

The preliminary result was better than expected, because despite COVID-19-related claims expenses for insurance benefits amounting to around EUR 70 million and lockdown-related restrictions in sales, the claims and benefits figures developed positively overall. Despite the special charges mentioned, the combined ratio rose by just 1.3 percentage points to 97.8%. With an expected solvency ratio of around 170%, UNIQA is within the defined value corridor.

AXA integration expands customer base to more than 15 million

Following the closing of the takeover of the AXA companies in the Czech Republic, Slovakia and Poland in October, UNIQA's customer base has expanded to a total of more than 15 million (+5 million) customers. The increase in the premiums charged through the AXA integration is over 800 million euros. Further legal integration steps will take place in the next two quarters - as will the brand migration to "UNIQA", which was completed in Slovakia in January. In future, the UNIQA Group will look after 75% of its customers in the CEE growth markets, who represent around 40% of the premium contributions and more than 50% of the group's income.

UNIQA 3.0 strategy program launched and on schedule - focus on "progressive dividend path"

With the strategy program "UNIQA 3.0 - Seeding the Future", UNIQA is setting itself ambitious growth targets for the next five years: an average annual premium growth of 3%, a significant reduction in the expense ratio to 25%, a combined ratio of consistently below 95% and a solvency ratio of constantly over 170% are the basis of a progressive dividend growth at the level of the "pre-COVID-19 years." The main pillars are the explicit customer focus and consistently high investments in the future areas of digitization, IT and data.

Outlook for 2021

In view of the current uncertainty with regard to the further course of the COVID-19 pandemic and the associated state-prescribed measures, UNIQA's outlook is fraught with great uncertainty. Nonetheless, UNIQA expects earnings before taxes roughly in the amount for 2018.

This outlook is based on the assumption that the current COVID-19 situation and the closely related macroeconomic developments will not worsen further over the course of the year, that no serious distortions will occur on capital markets and that the losses from natural disasters are on average over the past few years.

The full detailed press release is available here.

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