Excellent premium development continues: six billion euro mark surpassed
Czech Republic after three quarters for the first time posts over one billion euros in premiums
Particularly strong growth in Poland and Romania
Good outlook for 2008 continues
Dividend for 2008 remains unchanged
"Our Group companies in CEE prove to be the driving force behind our outstanding growth in premium income", CEO Günter Geyer comments on the fact that the positive development of the Vienna Insurance Group has been showing no sign of slowing down in the first nine months of the current year. "Organic growth was particularly strong in the Czech Republic, in Romania and in Poland and so far we have not detected any decline in the demand for insurance products in the CEE region. We therefore continue to be among the most dynamically growing insurance groups in Europe. The business cycle has not resulted in any serious impairment of turnover in this region in the third quarter either.
Depending on the development of the capital markets in the fourth quarter of 2008, the Group will be able to achieve the forecast Group profit (before taxes, consolidated) in the amount of approximately EUR 540 million.
Although we had a capital increase in May 2008 and the number of shares rose by 23 million, we will suggest to our competent corporate bodies to maintain a dividend of EUR 1.10 per share.”
I. OVERVIEW OF KEY GROUP DATA FOR THE FIRST THREE QUARTERS OF 2008 (IFRS*)
In the first three quarters of the current year, the Vienna Insurance Group was able to achieve a total growth in premiums of 19.6 percent. It thus continues to be among the fastest-growing insurance groups in Europe. Consolidated premiums written (excluding other insurance participations) totalled EUR 6.02 billion.
The Vienna Insurance Group thus for the first time surpassed the six billion euro premium mark on the Group level after three quarters.
(The premium income of Bank Austria Creditanstalt Versicherung and Unita has been included only up to deconsolidation, i.e. 30 June 2008, and the premium income of Sparkassen Versicherung in Austria only as from 1 July 2008. Furthermore, the premium income of s Versicherung Group in the individual CEE countries and of the BCR insurances in Romania are not included.)
The year-on-year increase in Group profit (before taxes, consolidated) was even more pronounced, rising by a remarkable 25.5 percent to a total of EUR 406.78 million.
At 96 percent, the combined ratio of the Group after reinsurance (not considering investment income) continues to remain clearly below the 100 percent mark.
Financial results (before allocation to the mathematical reserve in life insurance) in the first three quarters of the current year amounted to EUR 806.24 million, a gain of 8.5 percent compared with the same period in 2007.
As of 30 September 2008, investment volume of the Group amounted to EUR 24.22 billion. This corresponds to a 20.1 percent increase compared to 31 December 2007.
The Group figures for the Vienna Insurance Group do not include the aquired insurance companies of the Erste Group in CEE.
II. DATA FOR THE GROUP FOR QUARTERS 1 – 3/2008, CLASSED BY SEGMENTS (consolidated)
Property/casualty insurance
In the property/casualty segment, the Group was able to generate a total of EUR 3.38 billion in premiums written in the first three quarters of 2008. This is an outstanding gain of 21.0 percent compared to the same period of the prior year.
The premium volume achieved in this segment in the CEE markets even rose by 33.5 percent, to EUR 2.04 billion. The share of total property and casualty premiums contributed by Group companies in the CEE region is approaching the two thirds mark (60.5 percent).
In the non-CEE countries, premiums in this segment totalled EUR 1.34 billion (up 5.8 percent). In Austria, Group companies generated premiums of EUR 1.28 billion, representing a 5.8 percent growth. In the Other Markets (Germany), premiums written rose 5.6 percent to EUR 52.19 million.
Life insurance
In the life insurance segment, the premium volume of the Vienna Insurance Group totalled EUR 2.40 billion, translating to a remarkable 19.6 percent increase over the prior-year period. As from 1 July 2008, this also includes the Austrian insurance company Sparkassen Versicherung.
The standout premium volume in this segment was achieved by the Group companies of the Vienna Insurance Group in the CEE region. The first three quarters of 2008 saw a 43.2 percent growth – with premiums written amounting to EUR 844.35 million. The share of premiums in this segment accounted for by the Group companies in the CEE region now equals approximately 35 percent, with the upward trend thus continuing. These figures do not yet include those of s Versicherung Group in the CEE region.
In the non-CEE countries, premiums written in the life insurance segment came in at EUR 1.56 billion. This corresponds to an increase of 9.8 percent. Austria generated EUR 1.44 billion of this amount (up 11.3 percent), with the Other Markets contributing EUR 118.80 million.
Health insurance
In the health insurance segment, the Vienna Insurance Group recorded premiums written of EUR 236.57 million, an increase of 2.4 percent. As one of the leading health insurers, Wiener Städtische Versicherung AG in Austria is the only Group company selling a sizeable volume of health insurance products.
III. DATA FOR THE GROUP FOR QUARTERS 1 – 3/2008, CLASSED BY REGIONS (consolidated)
In the first three quarters of the current year, premiums written in the CEE region amounted to EUR 2.89 billion. This corresponds to an increase of 36.2 percent over 2007.
In the non-CEE countries (Austria, Germany, Liechtenstein), the Group companies generated premiums of EUR 3.13 billion in the first nine months of 2008, which translates to a growth rate of 7.5 percent.
Austria
Premiums written by the Vienna Insurance Group in the first three quarters of 2008 amounted to EUR 2.96 billion (up 8.1 percent incl. health insurance). The Austrian insurance company Sparkassen Versicherung was first included in the consolidation in the third quarter.
Premiums written in casualty/property came in at EUR 1.28 billion. This represents a gain of 5.8 percent.
In the life segment, premiums amounted to EUR 1.44 billion (up 11.3 percent).
Profit (before taxes) increased by 16.7 percent over the first nine months of 2007, to EUR 241.41 million.
Czech Republic
In total, the Group companies in the Czech Republic again achieved double-digit premium growth of an excellent 19.5 percent in the first nine months of the current year, surpassing the one billion euro mark for the first time after three quarters (total premiums written: EUR 1.01 billion).
Premiums written in the non-life segment came in at EUR 751.96 million, which represents a year-on-year growth of 18.0 percent. In the life segment, premiums written were even increased by 24.2 percent to EUR 254.78 million.
Profit (before taxes) rose by 22.3 percent to EUR 70.49 million.
Slovakia
The Group companies in Slovakia also recorded an outstanding premium development in the first three quarters of 2008. They achieved a total of EUR 422.82 million in premiums written, growing a magnificent 16.5 percent compared to the prior-year period. In the non-life segment, the premium volume amounted to EUR 247.36 million (up 9.1 percent), while a premium volume of EUR 175.46 million, and thus a growth rate of 29,0 percent, was achieved in the life segment.
Profit (before taxes) amounted to EUR 11.27 million. This result was affected mainly by the establishment, required by law, of a special provision for old claims in connection with the former state-owned monopolist insurance provider.
Poland
In the first nine months of 2008, the Polish Group companies generated premiums written in the amount of EUR 609.14 million, gaining an excellent 55.9 percent. Both in the non-life and in the life segments, premiums grew at excellent rates. The premium volume rose by 34.9 percent to EUR 324.08 million in the non-life segment and by 89.3 percent to EUR 285.06 million in the life segment.
At EUR 17.93 million, and an increase of 35.7 percent, profit (before taxes) continues to develop very positively in the first nine months of the current year.
Romania
The Romanian Group companies of the Vienna Insurance Group (OMNIASIG S.A. Vienna Insurance Group, OMNIASIG Asigurari de Viata S.A. Vienna Insurance Group and ASIROM S.A. Vienna Insurance Group; Unita until 30 June 2008) achieved premiums written in the amount of EUR 494.80 million in the first nine months of the current year, or an increase of 64.0 percent over the prior-year period. In the non-life segment, premiums written amounted to EUR 466.23 million (up 60.2 percent), while premiums rose by 167.5 percent to EUR 28.57 million in the life segment.
Profit (before taxes) rose to EUR 51.96 million, also due to the sale of the Unita insurance company.
Other CEE markets
Group companies in the following countries are included in the results of the Vienna Insurance Group in the Other CEE markets achieved in the first nine months of 2008: Bulgaria, Croatia, Serbia, Turkey, Ukraine and Hungary.
In these countries, premiums written in the first nine months of 2008 came in at EUR 353.88 million. This corresponds to an increase of 59.2 percent over the same period of the prior year.
In the non-life segment, the Group companies in these countries generated a premium volume of EUR 253.40 million, or a remarkable 87.2 percent increase.
In the life segment, premiums written in the amount of EUR 100.47 million, or a 15.5 percent growth rate, were recorded.
Profit (before taxes) in the first nine months of the current year amounted to EUR 1.14 million.
Other Markets
Group companies in Germany and Liechtenstein generated premiums totalling EUR 170.99 million in the first three quarters of 2008.
Profit (before taxes) amounted to EUR 12.59 million (up 13.5 percent).
IV. OUTLOOK
Depending on the development of the capital markets in the fourth quarter of 2008, the Group will be able to achieve the forecast Group profit (before taxes, consolidated) in the amount of approximately EUR 540 million.
As regards the international capital markets, almost all forecasts of financial results have proved wrong so far. Therefore, the Vienna Insurance Group will fix its targets for 2009 to 2011 only after observing the further development. In any case, the managing board of the Vienna Insurance Group in 2009 will seek to at least repeat and - depending on the capital market development - outperform the expected very good result for 2008.
Based on its knowledge of its CEE markets, the Vienna Insurance Group assumes that the premium growth it will be able to achieve in this region in the next few years will again be clearly above that of Western Europe on account of insurance markets in the CEE region being not yet as saturated as those in Western Europe.
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