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UNIQA Insurance Group AG

EANS-News: UNIQA Insurance Group AG
UNIQA on track to achieve targets set

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9-month report

UNIQA on track to achieve targets set
 
 
* Planned decrease in single premiums in life insurance reduces Group premiums
  written by 2.3 per cent to EUR 4,753.3 million

* Recurring Group premiums climb by 1.9 per cent to EUR 3,949.6 million

* Retained insurance benefits down 2.3 per cent at EUR 3,431.4 million
   
* Combined ratio virtually unchanged at 98.2 per cent (+0.2 pp)
   
* Net investment income decreases to EUR 490.1 million (-20.7 per cent) due to
  further deterioration in the low-interest rate environment 
   
* Earnings before taxes down 42.9 per cent at EUR 172.2 million in line with
  expectations
   
* Earnings outlook for 2016 confirmed: up to 50 per cent lower than record
  earnings from 2015 due to high future investments and strained economic
  conditions

  
UNIQA CEO Andreas Brandstetter comments on the first three quarters of 2016 as
follows: "With earnings before taxes of EUR 172.2 million after nine months, we
are in line with our expectations overall, although an unexpectedly large number
of major claims arose in property and casualty insurance in the third quarter.
At the start of the year, we already announced that earnings for the current
year would be up to 50 per cent lower than the record earnings from 2015 due to
high future investments and the strained economic conditions. We are therefore
on track to achieve the targeted earnings for 2016 as a whole, even though the
 challenging low interest rate environment is still putting investment income
under a great deal of pressure."
 
With regard to the development of claims, Brandstetter comments: "The third
quarter of 2016 was influenced by a larger than average number of major claims
in Austria and the international markets. As a result, the combined ratio in
property and casualty insurance increased slightly to 98.2 per cent in the first
nine months of the year. We are not satisfied with this figure, which is
considerably higher than we had expected. Therefore, we will continue unabated
with our efforts to achieve further improvements in this area on a sustainable
basis. Returning to the path of recent years with a steady decrease in the
combined ratio is a top priority for us."
 
With regard to the development of premiums, Brandstetter comments: "In the first
three quarters of 2016, recurring premiums climbed by 1.9 per cent overall as a
result of moderate growth in Austria and more substantial increases
internationally. The decline in premiums written is entirely due to the fact
that we deliberately  reduced single premium business because it is not
attractive for our customers in the current interest rate environment and has a
poor return on capital for the Group. We achieved very good growth in property
and casualty insurance and also continued our solid growth in health insurance."
With regards to the anticipated development, Brandstetter says: "For the 2016
financial year, we still expect earnings before taxes to be up to 50 per cent
lower than the very good earnings for 2015. This is due firstly to the
innovation programme launched at the beginning of 2016 with significant future
investments in the redesign of the business model, the enhancement of staff
expertise and the necessary modernisation of our IT landscape. Secondly, we do
not expect the persistently difficult conditions with negative interest rates,
decreasing investment income and political uncertainty in individual markets to
improve in the medium term. We are keeping to our plan to continuously increase
the annual distribution per share in the years to come on the basis of very
sound capital resources as part of a progressive dividend policy."
 
Key Group figures for first nine months of 2016 in detail

The premiums written by the UNIQA Group including the savings portion of unit-
and index-linked life insurance fell by 2.3 per cent to EUR 4,753.3 million in
the first three quarters of 2016 (1 - 9/2015: EUR 4,866.1 million) due to the
reduction in single premium business in the life insurance segment in line with
planning. While recurring Group premiums rose by 1.9 per cent to EUR 3,949.6
million (1 - 9/2015: EUR 3,876.8 million), single premiums in life insurance
fell by 18.8 per cent to EUR 803.7 million (1 - 9/2015: EUR 989.3 million).
 
Premiums written in health insurance climbed by 4.0 per cent to EUR 778.8
million in the period under review (1 - 9/2015: EUR 749.1 million), while in
property and casualty insurance they grew by 2.4 per cent to EUR 2,079.1 million
in the first nine months of 2016 (1 - 9/2015: EUR 2,029.6 million). In life
insurance, total premiums written - including the savings portion of unit- and
index-linked life insurance - declined by 9.2 per cent to EUR 1,895.3 million (1
- 9/2015: EUR 2,087.5 million) due to the reduction of single premium business.
 
Premiums earned in accordance with IFRS (i.e. not including the savings portion
of unit- and index-linked life insurance) decreased by 2.1 per cent to
EUR 4,219.3 million (1 - 9/2015: EUR 4,307.6 million).
 
The UNIQA Group's net insurance benefitsfell by 2.3 per cent to EUR 3,431.4
million in the first nine months of 2016 (1 - 9/2015: EUR 3,512.5 million) as a
result of the decline in premiums in life insurance.
 
Total operating expensesless reinsurance commissions received rose by 1.7 per
cent to EUR 1,015.0 million in the first nine months of 2016 (1 - 9/2015:
EUR 998.5 million). Acquisition expenses posted a decrease of 0.8 per cent to
EUR 702.7 million (1 - 9/2015: EUR 708.5 million). Other operating expenses
(administration costs) climbed by 7.8 per cent in the first three quarters of
2016 to EUR 312.4 million (1 - 9/2015: EUR 289.9 million) as a result of
expenses relating to the innovation and investment programme.
 
As expected, theGroup cost ratiorose to 22.4 per cent (1 - 9/2015: 21.4 per
cent) as a result of the decrease in premiums and the increase in investments.
The combined ratioafter reinsurance increased slightly to 98.2 per cent (1 - 9/
2015: 98.0 per cent) due to higher than average expenses from major claims in
the third quarter.
 
Net investment incomefell by 20.7 per cent to EUR 490.1 million in the first
three quarters of 2016 (1 - 9/2015: EUR 618.0 million), partly due to negative
exchange rate effects. The comparative figure for the previous year was
influenced by positive  measurement results and the reorganisation of the
strategic investment policy in 2015, whereas in the first nine months of 2016,
it was curbed by further intensification of the low-interest rate environment.
 
The investmentof the UNIQA Group (including unit- and index-linked life
insurance investments) increased as against the end of the previous year to
EUR 30,584.9 million as at 30 September 2016 (31 December 2015: EUR 29,416.1
million).
 
The technical result of the UNIQA Group declined by 50.7 per cent to EUR 74.4
million in the first three quarters of 2016 (1 - 9/2015: EUR 151.0 million).
Operating earnings declined by 32.3 per cent to EUR 230.6 million (1 - 9/2015:
EUR 340.4 million), chiefly as a result of the decline in the investment result.
The UNIQA Group's earnings before taxes amounted to EUR 172.2 million (1 - 9/
2015: EUR 301.9 million). These earnings include extraordinary income before
taxes of EUR 37 million from the sale of our minority financial investment in
Niederösterreichische Versicherung AG, investments of around EUR 30 million as
part of our innovation programme, and a EUR 30 million increase in expenses from
major claims compared to the previous year.
 
Consolidated profit(net profit for the period attributable to the shareholders
of UNIQA Insurance Group AG) decreased in line with planning by 39.3 per cent to
EUR 148.8 million (1 - 9/2015: EUR 245.0 million). Earnings per shareamounted to
EUR 0.48 (1 - 9/2015: EUR 0.79).
 
The UNIQA Group's equityposted an increase of 6.8 per cent since the beginning
of the year and amounted to EUR 3,367.9 million as at 30 September 2016 (31
December 2015: EUR 3,152.7 million).
 
The average number of employeesat the UNIQA Group decreased to 13,908 in the
first nine months of 2016 (1 - 9/2015: 14,038).
 
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 ten 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 concerning UNIQA's future development.
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). 21,300 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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