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euro adhoc: Generali Holding Vienna AG
Reorientation is Generating Remarkable Successes (E)
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Generali Vienna Group reorientated as a fully integrated financial services provider with a complete line of products and services. Insurance companies in Central and Eastern Europe also post positive net earnings for the year. Increased distribution by listed holding company.
"The reorientation of our group, which we pushed rapidly ahead with during 2003, is already yielding impressive benefits." At the presentation of the Annual Financial Statements for 2003, Dietrich Karner, CEO of Generali Holding Vienna AG, stressed that the Generali Vienna Group with its members in Austria and seven countries in Central and Eastern Europe is not merely achieving its ambitious goals. For the most part, it has also even surpassed them.
Thanks to the extremely successful launch of its state-subsidized old-age benefits plan, employee benefits fund, pension fund and the comprehensive line of services offered by Generali Bank, the Generali Vienna Group has been able to establish itself as a fully integrated financial services provider. New alliances with banks in Austria and Central and Eastern Europe are also making an important contribution to establishing that positioning.
Value orientated management: putting profits ahead of revenues In line with its commitment to value-orientated management, the group focused on profitable new insurance and financial services business during 2003. As a result, it achieved an increase of 71 per cent in new regular-premium life-insurance business in Austria. "We keep profits ahead of revenues." According to provisional calculations, the group's consolidated premium income grew by 1.5 per cent to EUR 2.7 billion, even though Generali Holding Vienna AG massively cut back its commercial reinsurance operations and despite the fact that single-premium income in the life insurance segment came to virtually zero because of the prevailing interest-rates landscape.
First positive net earnings for the year posted in Central and Eastern Europe Premium income from direct insurance business in Austria came to EUR 1.9 billion, which was 1.0 per cent up on the year; growth in the non-life insurance segment grew by 3.0 per cent. In the life insurance segment, it proved impossible to wholly offset the drop in single-premiums despite the success of our new private pensions and savings line and the rapid growth in regular-premium policies.
The Generali Vienna's Group's premium income in its seven markets in Central and Eastern Europe - Hungary, the Czech Republic, Slovakia, Poland, Romania, Slovenia and Croatia - grew by 16.2 per cent to EUR 628.9 million. Generali was particularly satisfied with rates of growth in Poland, where our premium income grew by 146 per cent, Slovakia, where it grew by 86 per cent, and the Czech Republic, where it grew by 66 per cent. Claims and benefits dropped from EUR 2.23 billion in 2002 to EUR 2.09 billion in the year under review. The group's profit orientation is paying off both in Austria and in Central and Eastern Europe. Having posted a loss of EUR 235.0 million in 2002, the group's insurance companies recorded a profit of EUR 19.6 million for 2003. For the first time, the insurance subsidiaries in Central and Eastern Europe were also profitable, accounting for EUR 7.1 million of the total.
Increased distribution to shareholders In 2002 consolidated net income from ordinary activities and net earnings for the year were dented by the sale of the group's stake in Germany's AMB Generali Lloyd GmbH. That one-off effect, accounting for over EUR 300 million, was absent in 2003. Nonetheless, the group was able to post satisfying net income from ordinary activities of EUR 32.5 million and net earnings for the year of EUR 20.5 million. Those net earnings for the year were nearly 40 per cent up on the most recent comparable year (2001). We distributed a total of EUR 16.0 million, which was 9.9 per cent more than for the previous year. The General Assembly of the shareholders of Generali Holding Vienna AG on 26 May will be asked to approve the distribution to shareholders of 25 cents per no-par share (dividend of 20 cents plus a 5 cent bonus).
Substantially improved gross underwriting result There was a considerable improvement in the group's gross underwriting result in the property/casualty segment: Following losses of EUR 165.6 million in 2001 and EUR 274.0 million in 2002, it posted a gross underwriting profit of EUR 49.1 million in 2003. There was also a marked improvement in the Generali Vienna Group's combined ratio, which came to 97.2 per cent (gross) in 2003, as against 116.4 per cent in 2002 and 112.0 per cent in 2001.
Sizeable increase in undisclosed reserves As in prior years, Generali Holding Vienna AG and its subsidiaries in Austria continued to value the listed securities in its investment portfolio on a strict lower-of-book-and-market basis under Austrian law. The Generali Vienna Group again succeeded in avoiding hidden burdens in its accounts, increasing accordingly its unrealized gains. The unrealized gains of the group's Austrian insurance companies alone increased from EUR 330 million at year-end 2002 to EUR 452 million at year-end 2003. Generali Holding Vienna AG recorded unrealized gains of EUR 1.1 billion (year-end 2002: EUR 605 million).
Karner: "Very satisfied" Group CEO Dietrich Karner expressed all his satisfaction with the Generali Vienna Group's development during 2003. Following a difficult year for the international insurance industry, Generali adapted to the enduring changes in market conditions in all its business segments and national markets. "We have made sure that our insurance business itself is profitable again, while we can also expect earnings from our investments to rise."
Market offensive and sharp rise in profits in 2004 The Generali Vienna Group intends to consolidate its successes in 2004. The key challenges of 2004 will be to continue to reduce the group's combined ratio, achieve powerful growth (especially in new business value in the life insurance segment), substantially improve performance, and implement a market offensive in every one of the groups national markets. In Austria, Generali Versicherung AG and Interunfall Versicherung AG will be merging this year to create the country's largest insurance company.
The group's Annual Report for 2003 will be published on 28 April 2004. The individual non-consolidated financial statement of Generali Holding Vienna AG will be available in the Internet at http://holding.generali.at from 26 February 2004.
end of announcement euro adhoc 26.02.2004
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