"The interest rate environment is a challenge that all European insurers now have to face. Given these circumstances, we are very satisfied with our profit development, which is in line with the target we announced for 2016," said Elisabeth STADLER, CEO of Vienna Insurance Group, adding: "Overall, the results show that the decision to exercise restraint in the traditional single premium life insurance business was correct."
With regard to the sharp increase of 88.4% recorded in the profit before taxes, the impairment in the comparable period of 2015 must be taken into account, notes the VIG's press release.
The Group's combined ratio after reinsurance (not including investment income) was 97.9% in 1st to 3rd quarter of 2016.
Group investments including cash and cash equivalents were EUR 36.5 billion as of 30 September 2016. VIG earned a financial result of EUR 703.2 million (-10.0%) in the first three quarters of 2016.
Vienna Insurance Group market developments
"Based on the motto 'identify chances', we rely on local management in our markets. Our premium growth shows that we respond to the different circumstances in each individual market, based on our diversity across countries and regions. Our Group companies bring us close to our customers and make us successful as a local insurer," stated Elisabeth STADLER, explaining VIG's CEE strategy.
In light of the challenging circumstances, VIG's companies recorded good premium growth in many markets, such as in Hungary (+14.2%), Romania (+30.3%) or Turkey/Georgia (+15.6%).
Premiums by line of business
Premium growth was consistently positive in property and casualty. VIG recorded significant growth in motor third party liability, casco and the non-motor lines of business. Vienna Insurance Group recently defined health insurance as a strategic growth line of business. During the first nine months, premiums grew 6.3% in this line of business.
However, even the markets greatly affected by the low interest rate environment, such as the Czech Republic, Slovakia and Austria, when adjusted for single premium business, premiums saw a growth of +6.7%, +4.5% and +0.6%, respectively. Solid growth of 6.4% was also achieved in Poland, when adjusted for the transfer of the Baltic non-life insurance business as well as exchange rate effects.
Profitable insurance business is the top priority for Vienna Insurance Group. It must be stressed that almost all regional segments made positive contributions to profits. Profit (before taxes) rose, for example, in Hungary (+41.6%), Romania (+16.6%) and the Turkey/Georgia segment (+80.4%). The Baltic region was the sole exception, recording a minus (EUR -7.8 million) primarily due to start-up losses for the newly founded insurance company Compensa Non-Life.
The full 3Q2016 report of VIG is available here.
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