Vienna Insurance Group reports profit of 466 million Euro, up 24 percent in 2022
With a premium volume of EUR 12.6 billion, Vienna Insurance Group (VIG) has exceeded the previous year’s figure of EUR 11 billion by 14.1 percent. Profit before taxes amounts to EUR 562 million, which is 10 percent above the value achieved in 2021. Profit after taxes reaches EUR 466 million (+24 percent compared with the previous year).
The combined ratio of 94.9 percent is within the target range. The financial result increases by 26 percent to EUR 797 million. The operating return on equity before taxes of 11.9 percent clearly improved compared to the previous year’s figure of 10.9 percent. With a preliminary solvency ratio of 280 percent, VIG Group once again demonstrates its strong capital position.
“VIG Group’s preliminary figures for 2022 paint a highly satisfactory picture and underscore our growth strategy and our aim of being a stable and reliable partner even in challenging times. 2022 brought uncertainty in a variety of areas, and these uncertainties remain. In particular, the war in Ukraine, high inflation, which was in double digits in many of our markets last year and in some cases still is, and the pandemic, which was still making its presence felt last year. Despite this volatile environment, VIG Group demonstrates good resilience, as it did in the previous year. This is due, among other things, to our considerable diversity, our conservative investment and reinsurance policy and our very strong capital resources. Above all, however, it is due to the outstanding commitment of our employees, now numbering roughly 29,000, who serve around 28 million customers in 30 countries. Based on these good results, the VIG Managing Board is proposing an increase of the dividend to EUR 1.30 per share for the 2022 financial year”, explains Elisabeth Stadler, CEO of Vienna Insurance Group.
Strong premium increase
The total premium volume of EUR 12.6 billion exceeded the value of the previous year by EUR 1.6 billion, or 14.1 percent. This includes the newly acquired insurance companies in Hungary and Türkiye, which bring a premium volume of EUR 444.5 million. Even without taking into account this premium volume, the premium increase sits at an impressive 10.1 percent. Double-digit premium growth was achieved in all lines of business, except for single premium life insurance (-1 percent), which VIG deliberately restricts. Motor third-party liability increased by 20.1 percent (EUR 1,936 million) and motor own damage insurance by 16.1 percent (EUR 1,627 million). Other property and casualty is also up 16 percent thanks to a premium volume of EUR 6,112 million, and the premiums in health insurance of EUR 835 million grew by 12.4 percent. Regular premium life insurance has delivered very pleasing performance, increasing by 11.1 percent to EUR 2,980 million. There was particularly strong premium growth in the segments Czech Republic (+13.8 percent), Extended CEE (+24.5 percent) and Special Markets (+59.2 percent). Overall, 65.7 percent of premiums were generated outside Austria in 2022.
Profit before taxes up 10 percent
Profit before taxes is EUR 562.4 million, which is 10 percent higher than in the previous year. This significant increase in profit is due primarily to the good operating performance and the improved financial result. The figure also includes impairment of goodwill and other intangible assets totalling EUR 67.6 million. Adjusted accordingly, the operating result for 2022 is EUR 630 million, which represents a 23 percent increase on the performance achieved in 2021. The net result of roughly EUR 466 million is 24 percent higher than in the previous year.
Combined ratio of 94.9 percent
The Group’s combined ratio for 2022 is 94.9 percent, which places it in the target range of 95 percent. The slight deterioration of 0.8 percentage points compared with the previous year’s figure is due to a normalisation of claims following the COVID-19 and lockdown years.
Financial result up 26 percent
The financial result (including the result from shares in at equity consolidated companies) was EUR 797.2 million in 2022. The increase of 26.2 percent compared to the same period in the previous year is due primarily to the first-time consolidation of the companies acquired in Hungary and Türkiye in 2022, as well as higher interest rates. Both effects overcompensated the impairments in connection with exposure to Russian government bonds and corporate bonds in the amount of EUR 84.1 million.
Operating return on equity (operating RoE)
Since last year, VIG Group has been reporting operating return on equity as a new profitability key figure. This ratio is calculated by dividing the business operating result by the average shareholders’ equity. VIG Group generated an operating return on equity before taxes of 11.9 percent in 2022; clearly higher than in the previous year (10.9 percent).
Expenses for claims and insurance benefits less reinsurer’s share amounted to EUR 7,912 million in 2022, sitting 10.9 percent higher than in the previous year. The increase is due to the significantly higher business volume.
The preliminary solvency ratio of the Group as of 31 December 2022 is 280 percent (including transitional measures). This top value underscores the exceptionally strong capital position of VIG Insurance Group and therefore the strong resilience of the business model.
Total investments including cash and cash equivalents amounted to EUR 34.4 billion as of 31 December 2022. The decline of 8 percent compared to the previous year is due primarily to price drops, particularly for fixed-income securities, caused by the interest rate increase.
Proposed dividend of EUR 1.30 per share
Based on the very positive business development, the Managing Board of Vienna Insurance Group will propose a dividend increase from last year’s figure of EUR 1.25 per share to EUR 1.30 per share for the 2022 financial year. This equates to an increase of 4 percent and to a dividend payout ratio of 35.7 percent. The dividend yield is 5.8 percent. Compared to the previous year, earnings per share have improved by 22 percent to EUR 3.58.
Focus on digitalisation and sustainability
As part of the ongoing VIG 25 strategy programme, focus areas will include further expansion of digital services. The fully digital “Beesafe” sales platform was successfully launched in Poland during the pandemic. The platform allows customers to get an online motor insurance quote in only 35 seconds. In just two years, Beesafe has acquired more than 200,000 online customers. Sales via the customer platform of our partner Erste Group are also proving successful. In 2022 alone, around 175,000 insurance contracts were concluded via “George”.
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