EANS-Adhoc: Vienna Insurance Group
Vienna Insurance Group in 2008 in
accordance with IFRS:
Good results for 2008 confirmed
-------------------------------------------------------------------------------- Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement. --------------------------------------------------------------------------------
31.03.2009
Increase in profit (before taxes) of nearly 24 percent to approx. EUR 540 million
Bonus dividend for shareholders
Excellent increase in Group premiums to almost EUR 8 billion overall (up 14.3 percent)
CEE premium share in non-life at around 60 percent
I. OVERVIEW OF KEY GROUP DATA FOR 2008*
(* The BCR insurance companies in Romania are not included in the Group results of the Vienna Insurance Group.)
In 2008, the Vienna Insurance Group achieved an increase of 14.3 percent to EUR 7.90 billion with total premiums written (consolidated) (excluding other insurance participations) in comparison to the previous year.
In 2008, the Group profit (before taxes, consolidated) amounted to a total of EUR 540.80 million. The Vienna Insurance Group is therefore one of the few insurance groups, in an international comparison, which has not revised the earnings outlook downwards, but has even increased consolidated profit in comparison to the previous year by a remarkable 23.7 percent. For the first time, the share of the Czech Group companies in the consolidated profit (before taxes) was over EUR 100 million.
As previously mentioned, it will be suggested to the decision-making bodies - in spite of the fact that the number of shares increased by 23 million - that a dividend of EUR 1.10 per share be distributed again in 2008. It will also be suggested that a bonus dividend of EUR 0.90 per share be distributed to the shareholders in late autumn 2009. In this way, the loyalty of the shareholders in conjunction with the capital increase in difficult market times shall be recognized. 4 May 2009 is scheduled as the dividend payment date. The bonus dividend shall be paid out on 27 October 2009.
The combined ratio of the Group after reinsurance (not considering investment income) was once again significantly under the 100 percent mark in 2008 at 96.4 percent.
The financial results for 2008 were kept relatively stable at EUR 918.14 million despite the negative situation in the world markets.
As of 31 December 2008, the investments of the Group amounted to EUR 24.55 billion. This corresponds to a growth of 21.7 percent in comparison to the end of 2007.
II. SOLID GROUP EMBEDDED VALUE
The embedded value represents the value of in-force insurance business and in accordance with international guidelines is made up of the net asset value for life, health and property & casualty insurance as well as the present value of the combined future earnings from in-force business in the life and health lines.
The embedded value reacts sensitively to the developments of the capital markets and directly shows the effects of the increased volatility of the interest and stock markets, higher bond risk spreads and declining interest. This leads to an increased assessment of the guarantee risk in life insurance and subsequently to a reduction of the embedded value, among other things. The insurance activities of the Vienna Insurance Group in Austria were primarily affected by this, whereas in Central and Eastern Europe even an increase of the embedded value was recorded.
As a result, the Vienna Insurance Group has been successful in keeping the embedded value on a Group basis comparatively stable. The Group embedded value (after taxes) of the Vienna Insurance Group was EUR 4.16 billion as of 31 December 2008 (2007: EUR 4.55 billion).
A clear sign of the successful continuation of the course of growth in Central and Eastern Europe are the expected earnings of newly concluded life insurance business in this region. With EUR 92.2 million for the new business of 2008, this shows an increase of 34 percent vis-à-vis the comparative value in the previous year and underlines the earnings power of this segment (2007: EUR 68.8 million). This also shows that the strategic step of the Vienna Insurance Group in acquiring the s-Versicherungsgruppe as well as the BCR companies was correct.
The very gratifying development in the segment of life insurance in Central and Eastern Europe particularly shows an increase of the Group embedded value in this region by EUR 147.4 million to EUR 2.34 billion. The detailed key data for Central and Eastern Europe contained in the entire Group embedded value also shows sustained positive development of the insurance business in economically difficult times.
B & W Deloitte GmbH, Köln have reviewed and fully confirmed the Group embedded value of the Vienna Insurance Group.
III. 2009 HYBRID BONDS ISSUANCE**
The Wiener Städtische Versicherung AG Vienna Insurance Group intends to issue, within the scope of the existing hybrid bonds programme, the emission of a second tranche with a volume of up to EUR 250 million. The terms and conditions of the bonds will be determined in the final conditions of the bonds within the near future.
(** Not for distribution in the United States, Canada, Japan and Australia.)
IV. 2009 OUTLOOK
In spite of a difficult economic environment, the Vienna Insurance Group expects a growth in premiums for 2009, the concrete definition of which is not currently possible due to the very volatile exchange rate development of the CEE markets. Due to the uncertain situation on the financial markets, the financial results, which are considered to be the driver of results in insurance, cannot be reliably predicted either.
It is the goal of the Vienna Insurance Group to maintain the combined ratio at significantly below 100 percent. To guarantee this and in light of the altered general economic conditions, the management of the Vienna Insurance Group has decided to initiate a Group-wide and future-oriented action program. The focus of the measures will be centered on the material costs as well as the comprehensive improvement of processes in the individual companies as well as across the entire Group. An optimization potential of at least EUR 100 million was identified until the end of 2010.
As already announced, the Vienna Insurance Group has conducted talks with the Wüstenrot Group concerning the acquisition of the shares of the Vienna Insurance Group in Wüstenrot Versicherungs-Aktiengesellschaft (31.6 percent). These talks have now come to a positive conclusion.
end of announcement euro adhoc --------------------------------------------------------------------------------
Further inquiry note:
VIENNA INSURANCE GROUP (V.I.G.)
1010 Wien, Schottenring 30
Mag. Barbara Hagen-Grötschnig
Unternehmenskommunikation
Tel.: +43 (0)50 350-21027
Fax: +43 (0)50 350 99-21027
E-Mail: barbara.hagen@vig.com
Mag. Thomas Schmee
Investor Relations
Tel.: +43 (0)50 350-21900
Fax: +43 (0)50 350 99-21900
E-Mail: thomas.schmee@vig.com
Branche: Insurance
ISIN: AT0000908504
WKN: A0ET17
Index: WBI, ATX Prime, ATX
Börsen: Prague Stock Exchange / stock market
Wiener Börse AG / official market
Original content of: Vienna Insurance Group, transmitted by news aktuell