“A+” rating with stable outlook confirmed again
• Premiums rise to EUR 4.9 billion
• Profit (before taxes) of EUR 201.3 million
• Combined ratio of 97.9 percent clearly below the 100 percent mark
Vienna Insurance Group’s half year results for 2016 are right on target, a press release issued on Tuesday informs. VIG generated EUR 4.9 billion in Group premiums, representing a slight increase of 0.4 percent compared to the previous year. The restrictive underwriting policy used for single-premium life insurance in many markets continued to have an effect on total premium income. When adjusted for single premium business, total premiums even grew by 4.5 percent in the first six months of the current year.
Profit (before taxes) was EUR 201.3 million. “We announced a target of doubling the profit achieved last year to up to EUR 400 million and our half-year results show we are on course to achieve this goal, even though the low interest rate environment has not changed and continues to have a negative effect on our financial result,” said Elisabeth Stadler, CEO of Vienna Insurance Group. The financial result was EUR 449.5 million (-13.2 percent).
The Group’s combined ratio of 97.9 percent after reinsurance (not including investment income) remained clearly below the 100 percent mark during the reporting period.
Group investments including cash and cash equivalents were EUR 32.3 billion (+3.2 percent) as of the 1 st half of 2016.
The international rating agency Standard & Poor’s once again confirmed Vienna Insurance Group’s “A+” rating with a stable outlook in July 2016. VIG therefore continues to have the best rating of any company listed in the ATX Index. “Standard & Poor’s based its “A+” rating primarily on our leading market position and high level of financial flexibility, which also gives us security during periods of unexpected market turbulence. Standard & Poor’s believes we will be able to maintain our market leadership in Austria and Central and Eastern Europe. We are pleased that the stable outlook was also confirmed,” concluded Elisabeth Stadler.
VIG current market news
VIG’s goal of achieving a market share of at least 10 percent in four markets over the medium term is also proceeding according to plan. Except for Poland where, among other things, the ongoing reduction in single-premium life insurance put downward pressure on premium volume, Hungary (premium increase of 15.4 percent), Croatia (+6.2 percent) and Serbia (+12.1 percent) showed clear gains. “In Croatia, significant gains were achieved, particularly from growth in the life insurance, bringing us close to our minimum target of a 10 percent market share. We recently signed a purchase agreement for the AXA companies in Serbia and will soon pass our target by reaching a market share
of around 12 percent, once the acquisition has been approved by the authorities,” said Elisabeth Stadler, confirming the strategy followed for these markets.
Vienna Insurance Group also recorded good results in the Romanian insurance market, which has been difficult for a number of years. The Group companies in Romania increased premiums by a remarkable 37.3 percent in the first half of 2016. This was primarily due to the motor insurance business, which is currently moving in a positive direction. In life insurance, VIG signed an agreement
at the beginning of August to acquire the Romanian AXA Life company (subject to approval by the authorities), a further step that will expand its market leadership.