On the occasion of the annual results communication, the Group representatives have provided details on the Group's exposure to the Russian and Ukrainian markets. All together investment exposure in Ukraine and Russia accounts for some EUR 270 million, or approx. 0.7% of VIG's total assets. In Russia, VIG's exposure totals about EUR 210 million, of which approx. EUR 44 million are government bonds and EUR 113 million are corporate bonds. In Ukraine, the total figure is of approx. EUR 60 million, of which EUR 41 million are government bonds. VIG investments include no Ukrainian corporate bonds. Valuation losses of bonds affect equity via OCI, the Group said, while long-term changes (impairments) may impact on the P&L business.
In Ukraine, VIG owns three insurance companies: the non-life companies Kniazha and UIG, and the life insurance company Kniazha Life. In total, they employ 1,400 people. Last year, the Ukrainian subsidiaries wrote all together premiums worth approx. EUR 100 million, while their average profit figure in last 4 years was of about EUR 10 million. Net Asset Value is of approx. EUR 55 million. While the figures demonstrate a rather modest impact on the VIG's overall business performance, the human drama is at the center of the Group's concern.
"We are deeply saddened by the war in Ukraine in the middle of one of our VIG markets. We are observing with great concern that people in a European country and within our Group are currently exposed to serious physical danger. The safety of our employees at our Ukrainian companies and helping them as much as possible are now the top priorities in this terrible situation. Our VIG companies started many assistance programs immediately after the war broke out and are showing the terrific team spirit within our Group. We have set up the "VIG Family Fund", which is a fund with a base endowment of EUR 5 million, that all of our VIG companies and staff can pay into. The purpose of the fund is to provide direct financial support to our colleagues at the Ukrainian companies for emergencies and rebuilding caused by the war," CEO Elisabeth STADLER said.
While VIG companies across the region are all helping the Ukrainian colleagues and their families to settle in the countries where they seek refuge, Hartwig Loeger, Deputy CEO of the Group had emphasized that it is quite impressive their determination to continue a professional active life and work at least in a remote way.
As pointed out during the press conference, the further development of the financial year 2022 will remain influenced by uncertainty factors especially associated with the war situation in Ukraine and its unforeseeable consequences, the highest risks in this context being related to the capital markets' evolution. However, the ongoing pandemic, inflation, high commodity prices, supply chain problems and resource scarcity are included among the factors that lead to increased risks and may affect VIG markets accordingly. As such, the Group representatives abstained from making any predictions for the 2022 year-end results.
"The current war situation in Ukraine is not only associated first and foremost with human suffering but also economic uncertainty and possible volatility on the capital markets. This has currently made it difficult to estimate business development for 2022. The VIG Group, however, sees itself as able to continue to manage its operational insurance business well because of its broad diversity and its conservative investment and reinsurance policies. We have repeatedly proven this in recent years in challenging situations. This is why we are confident that we will also be able to continue our positive performance in 2022", STADLER stated.
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