EANS-News: UNIQA Insurance Group AG / UNIQA on target in first quarter 2016

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quarterly report

UNIQA on target in first quarter 2016: technical result rises,
combined ratio improved, premiums in life insurance decreased, lower
investment result, decreased earnings in line with planning

- Group premiums written fall by 15.7 per cent to EUR 1,718.7 million
due to proactive reduction in single premiums in life insurance /
Significant rise in premiums in health insurance (+3.1 per cent) and
property and casualty insurance (+1.8 per cent)

- Net insurance benefits down 25.3 per cent at EUR 1,109.7 million

- Above-average improvement in combined ratio from 98.8 per cent to
95.8 per cent

- Technical result rises by 58.0 per cent to EUR 40.1 million

- Net investment income decreases by EUR 111.7 million to EUR 125.5
million (-47.1 per cent) due to one-off effects and further
intensification of the low-interest environment

- Earnings before taxes down by EUR 52.4 million at EUR 41.6 million
(-55.7 per cent) as a result of decreased investment income

- Outlook for 2016 confirmed: earnings before taxes up to 50 per cent
lower than record result for 2015 due to high future investments

- Progressive dividend policy confirmed

UNIQA CEO Andreas Brandstetter comments: "The earnings in the first
quarter are largely in line with our planning and confirm that we are
still continuously improving in our core business, even under
challenging conditions. The increase in the technical result and the
marked improvement in the combined ratio reflect this development.
Although our active decision to reduce single premiums, which are not
very profitable but tie up a lot of capital, is currently resulting
in a decline in premiums, it will also strengthen our earnings base
for the future. Furthermore, the year-on-year decline in premiums
will slow down over the coming quarters because we already wrote
considerably lower single premiums in the second quarter of 2015 and
we expect life insurance business in Italy to pick up again in the
quarters ahead. Following the simultaneous occurrence of several
negative effects in the first quarter, we also expect investment
income to increase again as the year progresses, even if the unstable
situation on the capital markets and the historically low interest
rates continue to have a negative impact. For 2016 as a whole, we
still expect earnings before taxes to be up to 50 per cent lower than
the very good earnings for 2015 as a result of the high future
investments we have resolved and due to the generally strained
economic conditions. We are likewise keeping to our plan to
continuously increase the annual distribution per share in the years
to come as part of a progressive dividend policy."

In the first quarter, UNIQA Insurance Group AG (UNIQA Group)
continued the ongoing improvement in its core business as a result of
the systematic implementation of the UNIQA 2.0 strategy programme.
The technical result consequently increased significantly by 58.0 per
cent to EUR 40.1 million. At the same time, the combined ratio
improved by three percentage points to 95.8 per cent because of the
very positive business development in Austria and in the
international markets. There was a negative impact on earnings from
the extremely sharp decline in investment income of 47.1 per cent or
EUR 111.7 million to EUR 125.5 million, which was mainly caused by
non-recurring effects. The decline in this amount was primarily
attributable to negative exchange rate effects from the weaker dollar
in the first quarter of 2016, whereas the comparative period of the
previous year had been boosted by high positive exchange rate effects
and income from the reorganisation of the strategic investment policy
that was completed in 2015. In addition, the further intensification
of the low-interest environment obviously also had a negative impact
on ongoing investment income. As a result of these two contrary
developments - a clear improvement in technical results and the
non-recurring substantial decline in investment income - earnings
before taxes declined by EUR 52.4 million or 55.7 per cent to EUR
41.6 million.

Premiums written fell by 15.7 per cent to EUR 1,718.7 million in the
first three months of 2016 as a result of the reduction in single
premiums in life insurance that was resolved in 2015 for
profitability reasons and in spite of the encouraging growth in
health insurance (+3.1 per cent) and in property and casualty
insurance (+1.8 per cent). At the same time, UNIQA's profitability
was sustainably strengthened for the future by this focus on business
segments that generate more income in the continuing low interest
rate environment and tie up less capital.

Key Group figures for Q1 2016 in detail The premiums written by the
UNIQA Group including the savings portion of unit- and index-linked
life insurance fell by 15.7 per cent to EUR 1,718.7 million in the
first quarter of 2016 (1 - 3/2015: EUR 2,039.5 million) due to the
reduction in single premium business in the life insurance segment in
line with planning. By contrast, recurring premiums increased by 1.3
per cent to EUR 1,481.2 million (1 - 3/2015: EUR 1,462.6 million).

Premiums written in health insurance climbed by 3.1 per cent to EUR
268.9 million in the period under review (1 - 3/2015: EUR 260.9
million), while in property and casualty insurance they grew by 1.8
per cent to EUR 821.2 million in the first three months of 2016 (1 -
3/2015: EUR 806.5 million). In life insurance, total premiums written
including the savings portion of unit- and index-linked life
insurance fell by 35.3 per cent to EUR 628.5 million (1 - 3/2015: EUR
972.1 million), with single premium business declining by 58.8 per
cent and recurring premiums by 1.1 per cent.

Premiums earned (net) in accordance with IFRS (i.e. not including the
savings portion of unit- and index-linked life insurance) decreased
by 18.0 per cent to EUR 1,400.0 million (1 - 3/2015: EUR 1,707.7
million).

Net insurance benefits fell by 25.3 per cent to EUR 1,109.7 million
in the first quarter of 2016 (1 - 3/2015: EUR 1,485.9 million) as a
result of the sharp decline in premiums in life insurance.

Total operating expenses less reinsurance commissions received rose
by 1.8 per cent to EUR 341.7 million in the first three months of
2016 (1 - 3/2015: EUR 335.7 million). Acquisition expenses less
reinsurance commissions received posted a slight decrease of 0.6 per
cent to EUR 244.1 million (1 - 3/2015: EUR 245.5 million). Other
operating expenses (administration costs) climbed by 8.3 per cent in
the first quarter of 2016 to EUR 97.6 million (1 - 3/2015: EUR 90.1
million) due to initial expenses in connection with the innovation
and investment programme and a correction in social capital.

As expected, the Group cost ratio rose to 22.9 per cent (1 - 3/2015:
18.4 per cent) as a result of the decrease in premiums. Conversely,
the combined ratio after reinsurance increased to 95.8 per cent (1 -
3/2015: 98.8 per cent), primarily due to an improved loss ratio.

Net investment income declined by 47.1 per cent to EUR 125.5 million
in the first three months of 2016 (1 - 3/2015: EUR 237.2 million).
The comparative figure for the previous year was positively
influenced by net measurement gains and the reorganisation of the
strategic investment policy in 2015, whereas in the first quarter of
2016 it was curbed by negative exchange rate effects and further
intensification of the low-interest environment.

Investments of the UNIQA Group (including unit- and index-linked life
insurance investments) increased as against the end of the previous
year to EUR 29,802.1 million as at 31 March 2016 (31 December 2015:
EUR 29,416.1 million).

The technical result of the UNIQA Group rose by 58.0 per cent to EUR
40.1 million in the first quarter of 2016 (1 - 3/2015: EUR 25.4
million). However, operating earnings declined by 42.3 per cent to
EUR 60.5 million (1 - 3/2015: EUR 104.8 million) as a result of the
decline in the investment result. The UNIQA Group's earnings before
taxes amounted to EUR 41.6 million (1 - 3/2015: EUR 94.0 million).

Consolidated profit (net profit for the period attributable to the
shareholders of UNIQA Insurance Group AG) decreased by 56.9 per cent
to EUR 33.2 million (1 - 3/2015: EUR 76.9 million). Earnings per
share amounted to EUR 0.11 (1 - 3/2015: EUR 0.25).

As at 31 March 2016, the UNIQA Group's equity amounted to EUR 3,293.6
million (31 December 2015: EUR 3,152.7 million).

The average number of employees at the UNIQA Group decreased to
13,791 in the first three months of 2016 (1 - 3/2015: 13,966).

Outlook for 2016 At the beginning of 2016, UNIQA launched the biggest
innovation programme in the company's history and will invest around
EUR 500 million in the redesign of the business model, the necessary
build-up of staff expertise and the required IT systems over the next
few years. A good portion of these considerable future investments
will take effect in 2016. In combination with the persistently
difficult conditions - such as ongoing low interest rates, sinking
investment income and political uncertainty in individual markets -
UNIQA expects earnings before taxes in the 2016 financial year to be
up to 50 per cent lower than the very good earnings for 2015. Despite
the investments and the challenging economic environment, UNIQA
intends to continuously increase the annual distribution per share in
the years to come as part of a progressive dividend policy.

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 per cent. 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