Austria

Austrian insurance market

The five largest insurance groups generated around 72% of the premium volume in the country in the first three quarters of 2018. The two largest insurance groups generated around 44%.

Premium volume from the Austrian insurance companies rose 1.6% in the 1^st to 3^rd quarters of 2018. Property and casualty insurance grew 3.4% and health insurance grew 4.2%. Life insurance recorded its third year of losses with a decrease of 2.6%.

The increase in property and casualty premiums was mainly driven by growth in motor own damage insurance (+6.3%) and third party liability insurance (+4.5%). The increase in motor own damage insurance was due to an increase in the number of policies. The average policy premium only rose 1%.

In life insurance, the regular premium business decreased 1.5% while the single premium business declined 9.2%. While the low interest rate environment continues to negatively affect interest in endowment insurance and annuity insurance, double-digit premium increases were recorded for occupational disability insurance (+12.8%) and term life insurance incl. residual debt insurance (+24.0%). Unit-linked life insurance – the largest life insurance line of business, generating around a third of the premiums – remained unchanged at the level of the previous year.

According to Axco Global Statistics, Austrians spent an average of EUR 1,949 per capita for insurance in 2017, which is the same as the year before. Of this, EUR 1,285 was spent in the non-life insurance area and EUR 664 in the life insurance area.

VIG companies in Austria

As planned, Vienna Insurance Group merged s Versicherung, which specialises in bank distribution, with Wiener Städtische in 2018. At the end of the year, the Group was now represented by two insurance companies in Austria, Wiener Städtische and Donau Versicherung. s Versicherung is being retained as a brand for bancassurance customers. Wiener Städtische also operates branches in Italy and Slovenia. Donau Versicherung is also represented by a branch in Italy. VIG Holding operates out of Austria as a reinsurer of the Group and as an insurer in the cross-border corporate business. It is assigned to the Central Functions segment.

VIG has a market share of 23.0% in Austria, making it the largest insurance group in the country. It holds first place in the property and casualty and life insurance markets, and second place in health insurance.

Financial performance indicators in the Austria segment

Premium development

Premiums by line of business

The Vienna Insurance Group companies in Austria wrote EUR 3,839.9 million in gross premiums in 2018 (2017: EUR 3,848.5 million). This corresponds to a slight year-on-year decrease of 0.2% due to the reduction in single premium life business. When adjusted to this, the Austrian Group companies recorded an increase of 1.6%. Net earned premiums were EUR 3,158.3 million in 2018 (2017: EUR 3,165.1 million).

Expenses for claims and insurance benefits

The Austrian Group companies had expenses for claims and insurance benefits (less reinsurance) of EUR 3,083.5 million in 2018, or EUR 38.1 million more than in 2017. This corresponds to an increase of 1.3%.

Acquisition and administrative expenses

Acquisition and administrative expenses decreased to EUR 639.0 million in 2018. The year-on-year decrease of 1.3% resulted from an increase in reinsurance commissions and profit commissions from reinsurance due to a decrease in claims under fire and natural hazards insurance.

Result before taxes

The result before taxes in the Austria segment decreased 2.8% to EUR 170.4 million in 2018 (2017: EUR 175.3 million).

Combined Ratio

Due to better loss experience for fire and natural hazards insurance and motor own damage insurance, the combined ratio (after reinsurance, not including investment income) improved again in 2018 to 94.2% (2017: 95.5%).