EANS-News: UNIQA Insurance Group AG / UNIQA launches largest investment programme in the company's history

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Strategic management decisions

UNIQA launches largest investment programme in the company's history

- 2015: UNIQA on track for record result - 2016: launch of the
largest investment and innovation programme in the company's history
amounting to around EUR500 million - Digital transformation drives
innovation and new business models - Amended earnings forecast for
2016 due to investments and challenging conditions - Intention for a
sustainably progressive dividend policy with annual increases of the
dividend per share up to 2020

2015: best annual result in the company's history

UNIQA CEO Andreas Brandstetter delivers a positive summary of the
progress so far of the "UNIQA 2.0" growth strategy launched in 2011.
"In the last five years, we have rigorously pursued and largely
achieved our ambitious targets," Brandstetter says. "Since the
economic capital ratio according to Solvency II (EIOPA standard
formula) has been strengthened step by step over the last years to
over 180 per cent, UNIQA now has a healthy, strong equity base and
high operating profitability. Following the re-IPO in 2013, we have
created a corporate structure fit for the capital market and
continuously increased the number of customers from 7.5 million in
2011 to more than 10 million today," says Brandstetter on the
significant momentum of development in recent years. As a result of
this strategy programme set to run until 2020, UNIQA generated the
best nine-month result in the company's history at the end of the
third quarter with EBT of EUR301.9 million. "In the 2015 financial
year, we expect to achieve the best result in the company's history,"
says Brandstetter, giving a forecast of financial year 2015 results.

UNIQA launches EUR500 million investment and innovation programme

Brandstetter sees digitalisation as a key driver of new business
models converging from the "new and old economy" and one of the
biggest challenges UNIQA will have to face in the future. The
diversity of convergent product and service offers emerging in recent
years is leading in particular to fundamental changes in customer
expectations and behaviour. This disruptive development of a new
market environment sets UNIQA the challenge of rethinking the own
business model and the underlying products and processes from the
customers' perspective. "The digitalisation and digital networking of
existing offers, which UNIQA has successfully promoted in recent
years, are the first steps in the right direction, but they will be
far from sufficient," says Brandstetter, pointing to examples such as
the "SafeLiner" in car insurance or the VitalCoaches and medical call
centre in healthcare. "We have to bring our offering much closer to
where our customers intuitively expect security and associated
services," says the UNIQA CEO. "In order to trigger the necessary
innovation boost, we are launching the largest innovation programme
in the company's history and will invest around EUR500 million in our
future over the next few years. The investments, a good portion of
which will be made in 2016, will largely go on the redesign of the
business model, the necessary build-up of staff expertise and the
required IT systems," Brandstetter specifies. "In the core business,
we are transforming ourselves from a provider of insurance products
into an integrated service provider that meets customers in their
'needs environment'," says the UNIQA CEO. In the future, this may be
the application-controlled 'smart home', the self-driving car or any
form of free-time activity that aims at a healthy, better and longer
life. An essential requirement for this is the best possible
convergence of new technology with the already close-knit network of
local UNIQA advisors. The Supervisory Board's approval of this
innovation programme is not just based on UNIQA's comfortable
economic situation and the fact that Austria's leading insurer can
afford these considerable investments. "We actually have to make this
investment right now, because we will thus meet the necessary
requirement of being able to continue on our ambitious growth
trajectory in the future," says Brandstetter, explaining why a large
portion of the EUR500 million programme will already take effect in
2016. "The insurance industry is faced with enormous challenges and
drastic upheaval. Only those who invest now can actively shape the
future."

Low interest environment remains a challenge

The second major challenge is the persistent phase of low interest
rates, which threatens to erode key parts of the business model of
the entire insurance sector in the medium term, Brandstetter
continues. It is difficult to predict what new conditions these
developments, unheard of in the history of the industry, will create
in the medium term: "New phenomena, such as negative interest on
sovereign bonds, are already making a considerable impact on our
investment result," says the UNIQA CEO on the urgency of responding
to the current capital market environment. Operating excellence in
the core business must therefore be further optimised in parallel
with the far-reaching investments in the future. "We have implemented
a range of programmes in order to exploit new alternative
investments, manage our capital even more actively, adapt our current
product portfolio to market conditions and continue lowering the cost
ratio in the medium term through the ongoing optimisation of our
processes."

Outlook for 2016

A good portion of the considerable future investments will take
effect in 2016 and is thus reflected in the short term by an altered
earnings forecast. In combination with the persistently difficult
conditions, such as the still-moderate economic outlook, ongoing low
interest rates, sinking investment income and political uncertainty
in individual markets in particular, UNIQA expects significantly
reduced earnings in the 2016 financial year compared to 2015.
Preliminary figures for 2015 will be published at the beginning of
March 2016.

Continuation of the progressive dividend policy with annual dividend
increases

UNIQA has distributed a higher dividend per share every year since
2012. With dividend payments of 25 cents per share for the 2012
financial year, 35 cents for 2013 and 42 cents for 2014, the UNIQA
share has evolved into a progressive dividend stock. "Despite the
considerable investments in the future and the challenging economic
environment, we intent to still continuously increase the annual
distribution per share in the years to come," Brandstetter says of
his plan to continue the progressive dividend policy.

In addition, Brandstetter presents shareholders with the prospect of
the further consistent continuation of the growth trajectory started
in 2011: "Our target of increasing customer numbers to around 15
million by 2020 remains valid," says the UNIQA CEO. With a planned
average operating ROE of 13.5 per cent (2017-2020) and further
increases in the economic capital ratio according to Solvency II
(currently more than 180 per cent according to EIOPA standard
formula), UNIQA is to retain its high level of profitability at the
same time as a comfortable equity base in the years to come. "On the
basis of our strong economic position, we will finance both the
future investments of around EUR500 million and our sustainably
progressive dividend policy not by selling assets but from our
operating cash flow," says Brandstetter. "We will thus come a
significant step closer to achieving our target of becoming the best
insurance group in Central and Eastern Europe by 2020."

Forward-looking statements This press release contains statements
referring to the future development of the UNIQA Group. 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). 22,000
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%. 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