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UNIQA Insurance Group AG

EANS-News: UNIQA Insurance Group AG
UNIQA on target in first quarter 2016

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  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
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quarterly report

UNIQA on target in first quarter 2016: technical result rises, combined ratio
improved, premiums in life insurance decreased, lower investment result,
decreased earnings in line with planning

- Group premiums written fall by 15.7 per cent to EUR 1,718.7 million due to
proactive reduction in single premiums in life insurance / Significant rise in
premiums in health insurance (+3.1 per cent) and property and casualty insurance
(+1.8 per cent)

- Net insurance benefits down 25.3 per cent at EUR 1,109.7 million 

- Above-average improvement in combined ratio from 98.8 per cent to 95.8 per
cent 

- Technical result rises by 58.0 per cent to EUR 40.1 million

- Net investment income decreases by EUR 111.7 million to EUR 125.5 million
(-47.1 per cent) due to one-off effects and further intensification of the
low-interest environment

- Earnings before taxes down by EUR 52.4 million at EUR 41.6 million (-55.7 per
cent) as a result of decreased investment income

- Outlook for 2016 confirmed: earnings before taxes up to 50 per cent lower than
record result for 2015 due to high future investments

- Progressive dividend policy confirmed


UNIQA CEO Andreas Brandstetter comments: "The earnings in the first quarter are
largely in line with our planning and confirm that we are still continuously
improving in our core business, even under challenging conditions. The increase
in the technical result and the marked improvement in the combined ratio reflect
this development. Although our active decision to reduce single premiums, which
are not very profitable but tie up a lot of capital, is currently resulting in a
decline in premiums, it will also strengthen our earnings base for the future.
Furthermore, the year-on-year decline in premiums will slow down over the coming
quarters because we already wrote considerably lower single premiums in the
second quarter of 2015 and we expect life insurance business in Italy to pick up
again in the quarters ahead. Following the simultaneous occurrence of several
negative effects in the first quarter, we also expect investment income to
increase again as the year progresses, even if the unstable situation on the
capital markets and the historically low interest rates continue to have a
negative impact. For 2016 as a whole, we still expect earnings before taxes to
be up to 50 per cent lower than the very good earnings for 2015 as a result of
the high future investments we have resolved and due to the generally strained
economic conditions. We are likewise keeping to our plan to continuously
increase the annual distribution per share in the years to come as part of a
progressive dividend policy."

In the first quarter, UNIQA Insurance Group AG (UNIQA Group) continued the
ongoing improvement in its core business as a result of the systematic
implementation of the UNIQA 2.0 strategy programme. The technical result
consequently increased significantly by 58.0 per cent to EUR 40.1 million. At
the same time, the combined ratio improved by three percentage points to 95.8
per cent because of the very positive business development in Austria and in the
international markets. There was a negative impact on earnings from the
extremely sharp decline in investment income of 47.1 per cent or EUR 111.7
million to EUR 125.5 million, which was mainly caused by non-recurring effects.
The decline in this amount was primarily attributable to negative exchange rate
effects from the weaker dollar in the first quarter of 2016, whereas the
comparative period of the previous year had been boosted by high positive
exchange rate effects and income from the reorganisation of the strategic
investment policy that was completed in 2015. In addition, the further
intensification of the low-interest environment obviously also had a negative
impact on ongoing investment income. As a result of these two contrary
developments - a clear improvement in technical results and the non-recurring
substantial decline in investment income - earnings before taxes declined by EUR
52.4 million or 55.7 per cent to EUR 41.6 million. 

Premiums written fell by 15.7 per cent to EUR 1,718.7 million in the first three
months of 2016 as a result of the reduction in single premiums in life insurance
that was resolved in 2015 for profitability reasons and in spite of the
encouraging growth in health insurance (+3.1 per cent) and in property and
casualty insurance (+1.8 per cent). At the same time, UNIQA's profitability was
sustainably strengthened for the future by this focus on business segments that
generate more income in the continuing low interest rate environment and tie up
less capital. 

Key Group figures for Q1 2016 in detail
The premiums written by the UNIQA Group including the savings portion of unit-
and index-linked life insurance fell by 15.7 per cent to EUR 1,718.7 million in
the first quarter of 2016 (1 - 3/2015: EUR 2,039.5 million) due to the reduction
in single premium business in the life insurance segment in line with planning.
By contrast, recurring premiums increased by 1.3 per cent to EUR 1,481.2 million
(1 - 3/2015: EUR 1,462.6 million).

Premiums written in health insurance climbed by 3.1 per cent to EUR 268.9
million in the period under review (1 - 3/2015: EUR 260.9 million), while in
property and casualty insurance they grew by 1.8 per cent to EUR 821.2 million
in the first three months of 2016 (1 - 3/2015: EUR 806.5 million). In life
insurance, total premiums written including the savings portion of unit- and
index-linked life insurance fell by 35.3 per cent to EUR 628.5 million (1 -
3/2015: EUR 972.1 million), with single premium business declining by 58.8 per
cent and recurring premiums by 1.1 per cent. 

Premiums earned (net) in accordance with IFRS (i.e. not including the savings
portion of unit- and index-linked life insurance) decreased by 18.0 per cent to
EUR 1,400.0 million (1 - 3/2015: EUR 1,707.7 million).

Net insurance benefits fell by 25.3 per cent to EUR 1,109.7 million in the first
quarter of 2016 (1 - 3/2015: EUR 1,485.9 million) as a result of the sharp
decline in premiums in life insurance.

Total operating expenses less reinsurance commissions received rose by 1.8 per
cent to EUR 341.7 million in the first three months of 2016 (1 - 3/2015: EUR
335.7 million). Acquisition expenses less reinsurance commissions received
posted a slight decrease of 0.6 per cent to EUR 244.1 million (1 - 3/2015: EUR
245.5 million). Other operating expenses (administration costs) climbed by 8.3
per cent in the first quarter of 2016 to EUR 97.6 million (1 - 3/2015: EUR 90.1
million) due to initial expenses in connection with the innovation and
investment programme and a correction in social capital.

As expected, the Group cost ratio rose to 22.9 per cent (1 - 3/2015: 18.4 per
cent) as a result of the decrease in premiums. Conversely, the combined ratio
after reinsurance increased to 95.8 per cent (1 - 3/2015: 98.8 per cent),
primarily due to an improved loss ratio. 

Net investment income declined by 47.1 per cent to EUR 125.5 million in the
first three months of 2016 (1 - 3/2015: EUR 237.2 million). The comparative
figure for the previous year was positively influenced by net measurement gains
and the reorganisation of the strategic investment policy in 2015, whereas in
the first quarter of 2016 it was curbed by negative exchange rate effects and
further intensification of the low-interest environment.

Investments of the UNIQA Group (including unit- and index-linked life insurance
investments) increased as against the end of the previous year to EUR 29,802.1
million as at 31 March 2016 (31 December 2015: EUR 29,416.1 million).

The technical result of the UNIQA Group rose by 58.0 per cent to EUR 40.1
million in the first quarter of 2016 (1 - 3/2015: EUR 25.4 million). However,
operating earnings declined by 42.3 per cent to EUR 60.5 million (1 - 3/2015:
EUR 104.8 million) as a result of the decline in the investment result. The
UNIQA Group's earnings before taxes amounted to EUR 41.6 million (1 - 3/2015:
EUR 94.0 million).

Consolidated profit (net profit for the period attributable to the shareholders
of UNIQA Insurance Group AG) decreased by 56.9 per cent to EUR 33.2 million (1 -
3/2015: EUR 76.9 million). Earnings per share amounted to EUR 0.11 (1 - 3/2015:
EUR 0.25).
 
As at 31 March 2016, the UNIQA Group's equity amounted to EUR 3,293.6 million
(31 December 2015: EUR 3,152.7 million). 

The average number of employees at the UNIQA Group decreased to 13,791 in the
first three months of 2016 (1 - 3/2015: 13,966).

Outlook for 2016
At the beginning of 2016, UNIQA launched the biggest innovation programme in the
company's history and will invest around EUR 500 million in the redesign of the
business model, the necessary build-up of staff expertise and the required IT
systems over the next few years. A good portion of these considerable future
investments will take effect in 2016. In combination with the persistently
difficult conditions - such as ongoing low interest rates, sinking investment
income and political uncertainty in individual markets - UNIQA expects earnings
before taxes in the 2016 financial year to be up to 50 per cent lower than the
very good earnings for 2015. Despite the investments and the challenging
economic environment, UNIQA intends to continuously increase the annual
distribution per share in the years to come as part of a progressive dividend
policy.

Forward-looking statements
This press release contains statements referring to the future development of
the UNIQA Group. These statements present estimates which were reached on the
basis of all of the information available to us at the present time. If the
assumptions on which they are based do not occur, the actual results may deviate
from the results currently expected. As a result, no liability is accepted for
this information.

UNIQA
The UNIQA Group is one of the leading insurance groups in its core markets of
Austria and Central and Eastern Europe (CEE). 22,000 employees and exclusive
sales partners serve more than 10 million customers in 19 countries. UNIQA is
the second-largest insurance group in Austria with a market share of around 22
per cent. UNIQA operates in 15 markets in the CEE growth region: Albania, Bosnia
and Herzegovina, Bulgaria, Croatia, the Czech Republic, Hungary, Kosovo,
Macedonia, Montenegro, Poland, Romania, Russia, Serbia, Slovakia and Ukraine.
The UNIQA Group also includes insurance companies in Italy, Switzerland and
Liechtenstein.

Further inquiry note:
UNIQA Insurance Group AG 
Norbert Heller
Tel.: +43 (01) 211 75-3414
mailto:norbert.heller@uniqa.at

end of announcement                               euro adhoc 
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company:     UNIQA Insurance Group AG
             Untere Donaustraße 21
             A-1029 Wien
phone:       01/211 75-0
mail:         investor.relations@uniqa.at
WWW:         http://www.uniqagroup.com
sector:      Insurance
ISIN:        AT0000821103
indexes:     WBI, ATX Prime, ATX
stockmarkets: official market: Wien 
language:   English

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