VIG: Counting 25 countries in 25 years, with the aim of further growing in the CEE

28 April 2016 — Daniela GHETU
25 years since after taking the bold step of extensivelly entering Central and Eastern Europe, VIG leaders are satisfied with the Group's position in the region and the financial outcome of this strategy, as the CEE markets are providing for about half od the premium income and significantly over 50% of the Group's profit.

Elisabeth STADLER, the recently appointed VIG CEO, has stated in an interview published by the VIG newsletter, "The Safe Side": "We still have an appetite for more! We have markets with double-digit growth in the CEE region. Insurance penetration there is, in some cases, only one tenth of the Western level. This and the higher level of economic growth are what generates the great potential. For this reason, in the next few months we will be examining the markets from the Baltic area to the Black Sea for further growth potential. Our goal is to increase market share to at least 10% over the medium term in Croatia, Serbia, Hungary and Poland. If it is economically reasonable and possible, we are also open to further acquisitions, particularly if this is more cost-efficient than establishing and developing our own company."

Speaking about the CEE's markets performance, Peter HOFINGER, Member of the VIG Managing Board, said: "We are now present in 25 countries and therefore well diversified. Some markets grow quickly, some more slowly, but we can even this out within the Group. Our decentralised management approach is also important, and allows the Group companies in each country to follow an appropriate strategy that takes advantage of local market conditions."

"In Austria, which continues to be VIG's largest individual market, premium volume remained stable compared to the previous year at around EUR 4.1 billion," explained Martin SIMHANDL, Member of the VIG Managing Board. As far as the CEE markets are concerned, he added: "In the Czech Republic, single premium life insurance declined due to the low level of interest rates, which in turn led to a decrease in premiums. We saw a solid performance in Slovakia. The decrease in Polish life insurance business was due to a focus on profitable business in the area of single premium products. In addition, competition was extremely strong in Poland in the area of motor liability insurance. This had an effect on premium development. VIG continues to be on course in Romania, where all lines of business recorded double-digit growth rates. As always, our Remaining Markets achieved pleasing development with a 12.0% increase in premiums. With respect to the CEE countries, the Baltic countries, Bulgaria, Serbia, Turkey and Hungary achieved particularly significant growth."

Finally, the VIG leaders also have stressed out that, despite the still strong competition on the MTPL business line, there is enough "business potential in these countries (n. red. the CEE countries) that is not price-driven,", property and casualty insurance and health insurance being among the areas VIG will be focusing on more strongly.

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