Uniqa announces potential loss for 2020

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May 25, 2020 – Uniqa was able to increase its premium income by 3.2 percent in the first quarter, with growth in all lines. Provisions in connection with Covid-19, higher costs and a lower investment result led to the first negative quarterly result since 2011. The insurance group warns that a negative pre-tax result is also possible for the year as a whole.

In the first three months of the current year, the effects of the corona pandemic were barely noticeable in the sales result, Uniqa Insurance Group AG writes in its communication on the first quarter.

The premiums written rose by a total of 3.2 percent to 1,578.3 million euros. Current premiums rose by 3.1 percent, single premium premiums in life insurance rose by 5.3 percent to EUR 26.6 million.

The Uniqa Group recorded the relatively largest premium growth in health insurance with an increase of 5.1 percent to EUR 303.6 million. There was also growth in property and casualty insurance with +3.7 percent to € 913.3 million and life insurance (+0.3 percent to € 361.4 million).

Increased costs

Insurance benefits rose by 2.2 percent to 950.6 million euros. Among other things, this includes 37.5 million provisions in connection with Covid-19 as well as expenses for damage caused by the storm “Sabine” and an earthquake in Albania.

Expenses for insurance operations have increased significantly. They grew by 9.3 percent to EUR 379.0 million. Higher investments and additional resource and personnel requirements for the strategic projects led to an increase in administrative costs of 16.1 percent.

Together with higher expenses for taking out insurance, this led to an increase in the total expense ratio to 28.4 percent; in the first three months of 2019 it was 26.8 percent. As a result, the combined ratio deteriorated from 96.3 to 97.8 percent.

Results heavily burdened

The 11.7 percent decline in investment income to EUR 89.7 million was primarily due to the turmoil on the capital markets caused by the Corona crisis. The investment result was particularly burdened by the 14.3 percent stake in Strabag accounted for using the equity method.

Overall, the higher costs would have caused the underwriting result to turn negative: While it was still EUR 31.2 million in the first three months of 2019, it was now EUR –0.9 million.

For the first time since the euro crisis in 2011, Uniqa had to report a negative quarterly result, the statement said. The consolidated result was EUR –13.2 million, compared to EUR 32.2 million in the first quarter of the previous year.

Also negative in Austria

Uniqa also increased premiums in Austria. Gross premiums rose by 2.6 percent to EUR 1,137.0 million. There was growth in property and casualty and health insurance, and a decline in life insurance.

The underwriting result fell by 99.7 percent and remained just positive at EUR 0.1 million. Among other things, higher damage cases were responsible for this.

Lower investment income ultimately led to a negative operating result of EUR –16.1 million (2019: EUR 44.8 million). The pre-tax result also turned negative: after 38.2 million euros in the previous year, it was –23.9 million in the first quarter of this year.

Loss possible in the whole year

Uniqa expects property and casualty insurance to decline this year, while health insurance should develop very stably. In Austria, subdued demand for life insurance is expected.

According to Uniqa, the original forecast that earnings from ordinary activities would reach the previous year’s level for the year as a whole could not be maintained due to the uncertainties associated with Covid-19.

Compared to 2019, a deterioration in the combined ratio and a lower investment result are expected. Overall, a “possibly negative result before taxes” is therefore expected. A dividend for 2020 is not planned, and there will also be no bonus payments.

Uniqa in the first quarter of 2020 – selected key figures

identification number

2020

2019

Gross premiums written *

– of which Austria

– of which international

1,578.3

1,137.0

427.4

1,530.0

1,108.6

409.7

Underwriting result

-0.9

31.2

Combined ratio after reinsurance

97.8%

96.3%

Capital investments

19,859.2

20,102.7

Investment result

89.7

101.6

Earnings before taxes

-13.9

42.3

Equity

2,993.1

3,401.0

Group result

-13.2

32.2

To download

The results presentation for the first quarter of 2019 is only available in English. It can be downloaded as a PDF document (299 KB) from the Uniqa website.

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