Profit (before taxes) was EUR 101.5 million. VIG generated a financial result of EUR 236.0 million in the 1Q 2016. This represented a 13.7% year-on-year decrease that was mainly due to lower realised gains on the disposal of investments in bonds, loans and investment funds.
"As expected, the low interest rate environment burdened our financial result. We expect this negative effect to continue during the remainder of the financial year. As shown by our profit (before taxes) in the 1st quarter, however, we are on schedule to achieve our target of doubling 2015 profit (before taxes) to up to EUR 400 million in 2016," said Elisabeth STADLER, CEO of Vienna Insurance Group. Group investments including cash and cash equivalents were EUR 32.7 billion (+2.6%) as of 31 March of the current year.
Premiums from regular-premium life products continue to grow
Life insurance holds a 38.5% share in the Group's consolidated portfolio, a decreasing percent as compared with the similar period of the last year (42%). The difference is entirely attributable to the lowering share of the single-premium insurance products which saw a significant reduction in sales due to the low interest rate environment. However, regular premium life insurance business continued to grow, increasing their share in the VIG portfolio by about 1pp, to 24.4%. Growth achieved in the Czech Republic and Hungary was particularly noteworthy.
Growth achieved in difficult environment for motor insurance
The second business line in the Group's portfolio, in GWP terms, is the motor insurance one, acconting in total for 23.2% of the consolidated GWP. MTPL holds a 13.7% share of the consolidated GWP (11.6% in 1Q 2015), while Motor Hull insurance accounts for 9.5% of the portfolio, increasing from 8.7% in 2015. VIG is still confronted by a very competitive situation for motor insurance in some markets. Romania and Turkey nevertheless recorded strong growth in the motor insurance business. In spite of the challenging market situation the combined ratio in Poland was below the 100% mark.
New structure in the Baltic States
The Baltic consist of the countries of Estonia, Latvia and Lithuania. The Baltic Group companies achieved significant premium growth up to EUR 34.3 million. Reasons for this growth included the first-time consolidation of the newly founded insurance company Compensa Non-Life and the acquisition of the non-life insurance company Baltikums.
Double-digit growth in premiums in Remaining CEE
The "Remaining CEE" segment defined by VIG, which contains the countries of Albania, Bosnia-Herzegovina, Croatia, Macedonia, Moldova, Serbia and Ukraine, once again recorded double-digit premium growth (+13.5%) in 1Q 2016. Croatia and Serbia, which VIG considers to be high growth markets, made particularly large contributions to this growth.
The full VIG press release is available here.