The Vienna Insurance Group (VIG) listed increased its earnings and picked up more premiums in the first three quarters. For the year as a whole, the insurance group expects to earn more than the previous year. In the first nine months of 2022, profit before tax rose nearly 10 percent to 413.4 million euros, VIG announced on Tuesday. Net income improved by 10.1% to €302.4m.
exposure in Russia
At 479.2 million euros, the financial result (excluding the result from companies calculated using the equity method) was 8.4 per cent lower than the previous year’s comparative figure. This is primarily due to the measures already taken in the first and second quarters of 2022 regarding exposure to Russian government and corporate bonds. By the end of the first half of the year, VIG had already committed more than three-quarters of that exposure, which totaled around €165 million, and the insurer also announced figures for the first six months.
“Of course, like every company, we feel the effects of the current situation, with inflation having the greatest impact here. Among other things, it drives up claims expenses and therefore affects the evolution of the combined ratio,” said VIG. President Elisabeth Stadler today according to a press release. “However, we are confident that our broad diversification will allow us to effectively manage our overall inflation risk.”
The risk assessment showed that the markets with higher volumes are in a good position due to the measures taken and the current pricing policy. VIG remains convinced of the long-term growth potential of the Central and Eastern European region, especially since the current forecasts for this region are much higher than those for the eurozone.
For the year as a whole, VIG expects – based on the current situation and assuming no externalities or unforeseen volatility by the end of the year – “a premium volume of at least €12 billion and pre-tax profit that will exceed the previous year’s figure of €511 million.” In the previous year, it achieved VIG generated premium income of €11 billion.“Despite the challenging environment, we aim to have a value of around 95 percent for the combined percentage,” said VIG CEO.
Higher premium size
In the first three quarters, the combined ratio (damage and costs measured against income) improved and at 95.1 percent was slightly lower than the previous year’s value (95.2 percent), VIG announced. The burden of the increase in average claims, due in part to inflation, is palpable compared to the first half of the year, when the combined ratio was still 94.3 percent.
Premiums increased by 13.6 percent to 9.53 billion euros. This includes the consolidation for the first time of the most recent insurers acquired in Hungary and Turkey, which amounts to about 291 million euros representing 3.0 percent of the total premium volume. Even without these companies, double-digit premium growth of 10.1 percent was recorded. There has been growth in all sectors. As of September 30, 2022, VIG Group investments including cash and cash equivalents amounted to €34.1 billion.
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