Other Markets

The Other Markets segment includes Germany and Liechtenstein. The segment generated 3.3% of Group premiums in 2018.

Germany

The German insurance industry recorded a 2.7% year-on-year increase in premiums in the first nine months of the year. The main contribution was from property and casualty insurance, which recorded an increase of 3.4%. After decreasing in the previous year, the contribution from life insurance (not including pension funds) increased 3.8% in the 1^st to 3^rd quarters of 2018, driven by a 12.6% increase in single premium business. Regular premium life insurance also recorded a small gain of 0.4%. Private health insurance grew 1.9%.

VIG is represented in Germany by InterRisk Non-Life and InterRisk Life. The InterRisk companies distribute exclusively through around 10,000 independent sales partners. InterRisk Non-Life specialises in accident and third party liability insurance and selected property insurance products. InterRisk Life focuses on retirement provision and occupational disability solutions, as well as protection for surviving dependants. The VIG companies continue to operate successfully in the German market as highly profitable niche providers.

Liechtenstein

The Principality of Liechtenstein has been a member of the European Economic Area since 1995. This gives Liechtenstein insurance companies free access to the markets in 31 countries in Europe. The life insurance companies domiciled in Liechtenstein primarily offer unit-linked and equity-linked (anteilsgebunden) retirement and insurance solutions for high net worth individuals. The property and casualty insurers cover all of the corresponding lines of business. At the end of 2018, 21 life insurance, 17 property and casualty insurance and 5 reinsurance companies had registered offices in Liechtenstein. Premium volume in the first three quarters of 2018 was at the same level as the previous year.

VIG is represented in Lichtenstein by Group company Vienna Life, which focuses on unit-linked and index-linked life insurance.

Financial performance indicators in the Other Markets segment

Premium development

Premiums by line of business

Vienna Insurance Group recorded total premiums written of EUR 321.0 million in the Other Markets segment in 2018 (2017: EUR 292.6 million), representing an increase of 9.7% compared to the previous year. The increase was due to good performance in all lines of business in Germany and single premium life insurance in Liechtenstein. Net earned premiums were EUR 275.1 million in 2018 (2017: EUR 248.8 million), an increase of 10.6% compared to the previous year.

Expenses for claims and insurance benefits

The VIG companies in the Other Markets segment incurred EUR 188.2 million in expenses for claims and insurance benefits (less reinsurance) in 2018, 25.1% less that than in 2017 (EUR 251.3 million). This was primarily due to the effect on underwriting reserves of currency fluctuations between the Swiss franc and euro.

Acquisition and administrative expenses

Acquisition and administrative expenses in the Other Markets segment improved from EUR 29.8 million in 2017 to EUR 28.3 million in 2018. This year-on-year decrease of 5.0% was due to an increase in reinsurance commissions.

Result before taxes

The result before taxes improved 0.9% to EUR 23.9 million in 2018 (2017: EUR 23.7 million).

Combined Ratio

Vienna Insurance Group had a combined ratio of 82.9% in the Other Markets segment in 2018 (2017: 81.3%).