The significant increase in earnings was positively influenced by the one-time gains on disposal from the sale of indirect interest in Casinos Austria Aktiengesellschaft from the first quarter of 2018 of EUR 47.4 million, the Group's press release stated..
For 2018 as a whole, UNIQA still anticipates growth in property and casualty insurance and health insurance. Despite high expenses for the innovation and investment program launched in 2016, UNIQA is pursuing further improvement in its earnings before taxes. The Group is likewise keeping to its plan to continuously increase the annual distribution per share in the years to come as part of a progressive dividend policy.
In the first nine months of 2018, the UNIQA Group's premiums written, especially in property and casualty insurance, increased by more than 4.7%, even more strongly than expected. This significant growth was borne by both core markets alike: Austria (+4.9%) and CEE (+7.0%). In particular, vehicle insurance and property insurance were growth drivers in both regions. By contrast, premiums written in life insurance fell by 11.0% as a result of the planned decrease in low-margin single premiums, primarily in Poland. The very stable health insurance business developed as expected and climbed by 4.4%.
Consistently high cost discipline helped that the increase in total operating expenses was low at 1.0%, despite a significant increase in recurring premiums. The combined ratio dropped from 97.1% to 96.6% due to the improved cost situation, despite a further expansion of the provision for future loss events, especially storms.
Key Group figures 1-9/2018 in detail
In the first nine months of 2018, the UNIQA Group's total premiums written, including the savings portion of unit-and index-linked life insurance remained stable at EUR 4,042.3 million (1 - 9/2017: EUR 4,043.9 million). The solid growth in property and casualty insurance and health insurance compensated for the decline in life insurance premiums caused by the planned decrease in single premiums in international business. Recurring premiums included in total premiums written increased by 3.1% to EUR 3,957.7 million (1 - 9/2017: EUR 3,837.2 million). Premiums earned including the net savings portion of the premiums from unit- and index-linked life insurance fell by 1.2% to EUR 3,797.5 million (1 - 9/2017: EUR 3,844.4 million). Retained premiums earned (in accordance with IFRS) increased by 2.8% to EUR 3,571.4 million (1 - 9/2017: EUR 3,473.0 million).
Premiums written in property and casualty insurance climbed by 4.7% to EUR 2,145.7 million (1 - 9/2017: EUR 2,048.4 million) in both Austria and in CEE due to strong growth in vehicle insurance and property insurance. Premiums written in health insurance rose by 4.4% to EUR 817.8 million (1 - 9/2017: EUR 783.5 million). In life insurance, total premiums written including the savings portion of unit- and index-linked life insurance - driven by the strategic reduction of single premiums in international business (Poland) - declined by 11.0% to EUR 1,078.9 million (1 - 9/2017: EUR 1,211.9 million). While single premiums in life insurance reduced by 59.1% to EUR 84.6 million (1 - 9/2017: EUR 206.6 million) in line with planning, recurring premiums in life insurance only decreased slightly to EUR 994.3 million (1 - 9/2017: EUR 1,005.3 million).
In international business, premiums written in property and casualty insurance increased by 7% (1 - 9/2018: EUR 806.3 million / 1 - 9/2017: EUR 753.5 million) due to strong growth in vehicle and property insurance and those in health insurance by 29.7% (1 - 9/2018: EUR 59.6 million / 1 - 9/2017: EUR 46.0 million), while life insurance premiums fell by 26.2% (1 - 9/2018: EUR 308.9 million / 1 - 9/2017: EUR 418.2 million). In summary, UNIQA generated written premiums in international business including savings portions of EUR 1,174.8 million (-3.5% / 1 - 9/2017: EUR 1,217.7 million), recurring premiums included in this rose by 7.6% to EUR 1,111.1 million (1 - 9/2017: EUR 1032.4 million).
In Austria as well, UNIQA recorded a significant increase in property and casualty premiums of 4.9% in the first nine months of 2018 (1 - 9/2018: EUR 1,330.3 million / 1 - 9/2017: EUR 1,268.5 million), while health insurance premiums moved up by 2.8% (1 - 9/2018: EUR 758.2 million / 1 - 9/2017: EUR 737.8 million). Premiums written in life insurance fell by 2.9% to EUR 764.9 million (1 - 9/2017: EUR 787.7 million). In total, UNIQA generated pleasing growth in premiums written in Austria including savings portions of 2.1% to EUR 2,853.4 million (1 - 9/2017: EUR 2,793.9 million). Recurring premiums included in that expanded by a pleasing 2.2% to EUR 2,838.6 million (1 - 9/2017: EUR 2,772.6 million).
The total amount of retained insurance benefits of the UNIQA Group rose by 4.0% to EUR 2,764.7 million in the first nine months of 2018 (1 - 9/2017: EUR 2,659.0 million).
Total operating expenses less reinsurance commissions received rose by only 1.0% to EUR 951.6 million in the first nine months of 2018 (1 - 9/2017: EUR 942.7 million). Despite the higher premiums earned, expenses for acquisitions fell by 2.7% to EUR 627.8 million (1 - 9/2017: EUR 645.5 million). Due to higher personnel costs and pension provisions, other operating expenses (administration costs) increased by 9.0% to EUR 323.9 million (1 - 9/2017: EUR 297.2 million) in the first nine months of 2018. This includes costs in connection with the innovation and investment programme amounting to EUR 23 million.
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 slightly by one percentage point to 25.1% (1 - 9/2017: 24.5%).
The combined ratio after reinsurance decreased to 96.6% (1 - 9/2017: 97.1%) due to the improved cost situation despite the higher provision for loss events that are to be expected, especially storms.
In the first nine months of 2018, investment income rose by 13.6% to EUR 447.2 million (1 - 9/2017: EUR 393.6 million). The main reason for this strong increase was the sale of the indirect interest in Casinos Austria Aktiengesellschaft, which generated gains on disposal of EUR 47.4 million for the UNIQA Group in the first quarter of 2018.
The investment portfolio of the UNIQA Group (including investment property, financial assets accounted for using the equity method and other investments) decreased slightly as at 30 September 2018 compared with the end of the previous year to EUR 19,422.1 million (31 December 2017: EUR 19,877.7 million).
Owing to higher insurance benefits in life insurance and health insurance and higher expenses, the UNIQA Group's technical result decreased by 24.0% to EUR 74.4 million in the first nine months of 2018 (1 - 9/2017: EUR 97.9 million). In contrast, operating earnings increased by 12.1% to EUR 253.6 million (1 - 9/2017: EUR 226.3 million) due to the good investment result. Earnings before taxes of the UNIQA Group rose accordingly just as significantly by 17.1% to EUR 212.4 million (1 - 9/2017: EUR 181.4 million).
Consolidated net profit (net profit for the period attributable to the shareholders of UNIQA Insurance Group AG) increased by 45.3% to EUR 166.2 million (1 - 9/2017: EUR 114.4 million). Despite higher income tax expenses, earnings per share up at EUR 0.54 (1 - 9/2017: EUR 0.37).
Outlook
For the entire 2018 financial year, UNIQA is expecting growth in property and casualty premiums of approximately 4% and a rise in premiums in health insurance of more than 3%. In view of the conscious reduction of life insurance single premiums in CEE in particular, lower premiums in life insurance are expected. In 2018 as a whole, UNIQA is expecting a close to stable total premium volume.
For investment income, UNIQA is expecting no further decline in 2018 compared to 2017, as the impact of low interest rates has already been largely reflected in the lower investment income of previous years.
In the area of property and casualty insurance, UNIQA is continuing to strive for increased profitability in its actuarial core business in 2018 as well and on this basis a further increase in the combined ratio compared with 2017.
Overall UNIQA is again anticipating an improvement in earnings before taxes. UNIQA retains its intention of steadily increasing the annual distribution per share in the years to come as part of a progressive dividend policy.
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