With diversity into the future

Dear Shareholders, Ladies and Gentlemen!

It is with great pleasure that I present to you the current VIG Group Annual Report. Together with our Group companies we have succeeded in continuing the very positive dynamic and conclude the financial year with outstanding results. In the first full year after the adaption of the accounting standards our Group showed an insurance service revenue of EUR 10.9 billion and a pre-tax result of EUR 772.7 million. This corresponds to an increase in turnover of 12.2% and an increase in results of 31.9%. The insurance service revenue is one of several new key figures under IFRS 9 and IFRS 17 that you will come across in the report. They include the consideration that an insurance company receives or expects to take over insurance risks.

Interest rate turnaround and inflation significantly shaped 2023. The ­increased interest rates had a positive effect on our earnings and solvency position. On the other hand, rising prices increased claims handling costs. This effect, however, could be kept within limits – on the one hand by measures to increase efficiency, and on the other hand by inflation-related premium adjustments that are included in many insurance contracts via ­indexation.

The 2023 results show: You can rely on VIG at all times. For me personally, it is extremely important that this continues to be the case in the future. Therefore the question: What makes us resilient? I am convinced: It is our diversity and our strong ­capitalisation. The diversification across markets and the overall decentralised orientation of the Group. The fact that VIG’s independent companies operate close to the market and the needs of the customers. This makes us flexible and enables individual action. Thus, we create added value by diversity for all our stakeholders.

A dividend at last year’s level or higher

The strength and stability of VIG also benefits you, our shareholders. Since our initial listing on the Vienna Stock Exchange in 1994 we have continuously paid a dividend every year. The previous dividend policy foresaw a distribution of 30% to 50% of the Group net profit. From 2024 onwards, our focus will be even more on the resilience and predictability of VIG. We now strive for a dividend per share that at least corresponds to the previous year and increases continuously depending on the operative performance. On the basis of the dividend adopted in 2023 and the excellent business performance we will propose to the Annual General Meeting a dividend of EUR 1.40.

A Group is more than the sum of its parts.

New ways to collaborate

In order to continue the positiv dynamic of the Group it is important to keep alive VIG’s recipe for success and develop it further in line with the requirements of an increasingly complex world. Therefore, we took a few significant steps in the second half of the year in order to expand collaboration within the Group.

It was always clear for VIG: Diversity and solidarity go hand in hand for us. That is what connects us and makes us a Group. Thus, a Group is more than the sum of its parts. Diversity means working independently and at the same time supporting each other in the best possible way. The newly created division CO³ takes up this approach with the goal of strengthening the collaboration within our Group.

CO³ stands for “collaboration, ­cooperation and communication”. The range of activities in collaboration is wide: they include better exchanges between the departments within a company as well as the networking of peers over different companies and national borders. There are already numerous very well established formats for this – others are currently in the making. In contrast to this, cooperation describes the collaboration of two or more companies in the same country. Communication, in addition to the familar tasks of corporate communication and marketing, forms the bracket over all collaboration and cooperation focal points and makes these visible via different channels.

With all this, VIG remains true to its values and management principles. We continue to live local entrepreneurship. Because the solutions to identify and leverage synergy potentials are developed locally, with consideration of the market conditions. Our multi-brand ­policy, the differentiated approach to the customers, remains the same. Hence, we also see added value through ­diversity here.

Future topics in view

In addition to CO³, the digital, social and ecological (climate) transition will keep us very busy with the further ­development of our business model. Parallel to diverse technical innovations, such as the use of AI models for automatic claims handling, IT security and the protection of infrastructure and corporate data are increasingly important. Also in this area we are strengthening the organisation of the Group with corresponding structures and support measures for all our companies. We want to include new possibilities in ­approaching our customers via systematic cooperation with digital platforms, as well as to expand assistance not only to new products but also to new markets.

Sustainability has always characterised the group. In recent years we have started to anchor this subject explicitly and systematically in all our businesses. The sustainability program that was formulated in 2023 – jointly with the CEOs of the Group companies – defined specific goals in six spheres of impact. This strengthened sustainability as an integral part of the business model. This will also be reflected in the future in a corresponding specific reporting based on new statutory regulations, such as EU’s Corporate Sustainability Reporting Directive (CSDR).

Outlook

What can you expect from VIG in the future? We have no control over how our environment will develop but we do have control over how to deal with it. This makes it all the more important that we are in a position to continue to be proactive to trends and react quickly to changes. The initiatives of our programme as well as new ways of collaboration support us in this. The three strategic focus areas of the VIG 25 strategic programme target more efficiency, greater customer proximity and expansion of the business model beyond the classical insurance business and ensure that we reach our goals by 2025.

With the outlined CO³ measures we improve our internal collaboration, maximise our strengths and ensure the continued positive performance of our companies and the entire Group. By systematic embedding of our ­sustainability goals we are taking a ­significant step towards preserving a future worth living.

Hartwig Löger
Chairman of the Managing Board