Domestic insurance undertakings have recorded a sound start to the 2011 financial year. Austrian firms experienced an increase in premiums written during Q1 2011, up by 0.3% on the same period in the previous year to €4.98 billion. The technical account balance for the quarter improved by 12.28% year-on-year to €192 million. The result from ordinary activities of €372 million remained at around the same level as in Q1 2010 (€374 million) due to weaker financial results (€832 million, -5.67%). The news was disclosed in the report on Q1 2011 performance of Austrian insurance undertakings published today by the Financial Market Authority FMA.
The slight rise in premiums written for direct business, i.e. not including reinsurance business, masks varied performance by individual balance sheet groups: While health insurance (+3.48%) and non-life and accident insurance (+2.76%) experienced strong growth, a significant downturn was recorded by life assurance (-3.61%). The main reason for the negative performance of life assurance was a massive decrease in premium incomes for unit and index-linked life insurance of 7.12%. This was caused by a change in the tax treatment for the single premium business. This change means that, in the case of insurance policies with a term of fewer than 15 years for which regular, generally equal premium payments are agreed, the income resulting from the difference between the insurance premiums paid in and the insurance pay-out is fully liable to income tax. While unit-linked life assurance, including both policies featuring regular premium payments and those with single premium payments, rose by 3.51% altogether, the index-linked life assurance policies with single premium payments almost halved – and even including those with regular premiums this segment fell by 31.25%
The total value of assets managed by Austrian insurance undertakings (in Austria at carrying amounts) amounted to almost €93 billion as at the end of March. This represents quarter-on-quarter growth of 0.97%. Hidden net reserves fell once again as a result of the interest rate hike, most recently recording €6.54 billion following a value of €6.94 billion as at the end of December 2010.
The core share ratio (i.e. listed shares, share-based investment funds, share risk in mixed funds) barely changed in Q1 2011 and registered around 3.91%. During the same period, the extended share ratio rose slightly from 15.98% to 16.21%. In addition to the core share ratio, the extended ratio also includes non-listed shares, structured debt securities without capital guarantee and structured loans without capital guarantee.
This year, the figures for Central and Eastern Europe were gathered for the first time. Outside Austria (CESEE plus Germany, Italy, Switzerland, Luxembourg and Liechtenstein) foreign subsidiaries of Austrian insurance groups recorded premium incomes amounting to €2.62 billion. Of this total, €1.64 billion related to non-life and accident insurance (including health insurance) and €981 million was attributable to life assurance. Premiums written for unit and index-linked life assurance amounted to €204 million.
The financial result of foreign subsidiaries as at the end of March was composed as follows: income from capital investments and interest income €197 million, and expenses from capital investments and interest paid €44 million. This produced a consolidated financial result of €153 million for Q1 2011.
You can find the full Quarterly Report (in German) on the FMA website at: https://www.fma.gv.at/versicherungen/offenlegung/quartalsberichte/
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-5106
+43/(0)676/882 49 516