Compared with the first quarter of the previous year, which saw VIG Group start the year with considerable premium increases before the first wave of COVID-19 infections began from mid-March 2020, the Group is reporting very solid performance for the first quarter of 2021, despite the pandemic still being a factor.
Premiums and the combined ratio are at the same level as in the previous year, and a clear increase in profit before and after taxes was achieved. "With this positive development, we are firmly delivering on our promise to be a stable and reliable partner. We were very successful before the start of the pandemic, have so far made it through this unique global situation very solidly and are already seeing a return to the levels achieved in the first quarter of 2019. We owe this resilience primarily to our employees, our customers and our partners, who have shown enormous commitment, understanding and, above all, trust in the companies of our Group during this universally challenging period. We were able to continue and implement all the projects that had been planned or were in progress before the crisis hit. Our customers have been extremely loyal and we have received fantastic support from our partners, and none of these things should be taken for granted under the current circumstances", said Elisabeth Stadler, CEO of VIG, thanking the stakeholders for their support. This makes her optimistic for the further development in the remainder of the financial year:
She added: "Although economic recovery in most countries within the CEE region will be delayed due to the rising rates of infection we have seen since autumn 2020, we are confident that we will achieve our targets for 2021. Vaccination rates will be pivotal to securing tangible economic improvements, and we are currently seeing significant progress in this area in many of our markets."
Non-life and health insurance report premium increases
The total premium volume reached EUR 3.11 billion in the first three months of 2021. Despite the pandemic, in the first quarter of 2021 the motor, other property and casualty, and health insurance sectors improved on the very strong results achieved in the same quarter of the previous year. Only in life insurance, and single premium life insurance in particular, were there strategic premium decreases. In some segments, premium development was also influenced by currency effects. Adjusted for exchange rate effects, the premium would have increased by 1.6% overall. The Romania, Czech Republic and Poland segments recorded the highest absolute premium increases.
Clear increase in results
At EUR 128 million, profit before taxes was up by around 5% compared to the same period of the previous year. This result puts VIG Group firmly on track to achieve the targeted profit range between EUR 450 million and EUR 500 million for 2021. Net result improved by around 15% to EUR 99 million. The segments with the highest profit contribution are Austria, the Czech Republic and Slovakia. Earnings per share (annualised) amounted to EUR 3.09, which is an increase of 15.3% on the previous year.
Combined ratio remains stable
The combined ratio remains strong at 95.2% and is almost unchanged compared to the same quarter of the previous year (Q1 2020: 95.1%). The biggest improvements in the combined ratio were achieved in the Slovakia, Remaining CEE and Austria segments. The financial result (excl. the result from at-equity consolidated companies) amounted to EUR 175.8 million in the first quarter of 2021, which is 29% more than in the same period in the previous year. This is primarily due to lower depreciation and impairments of investments as well as increased realised gains. Group investments including cash and cash equivalents were EUR 37.1 billion as of 31 March 2021.
The quarterly figures for net assets, financial position and results of operations for the 1st and 3rd quarters were prepared in accordance with the International Financial Reporting Standards (IFRS). However, reporting for the 1st and 3rd quarters does not constitute interim reporting within the meaning of international accounting standard IAS 34.
News and a results presentation are available at www.vig.com/events.