Five insurance groups headquartered in Austria (GRAWE, Merkur, UNIQA, Vienna Insurance Group, Wüstenrot) are active on foreign insurance markets via insurance and reinsurance subsidiaries.
For a more structured overview, FMA divides the scope of international activity into five geographical segments: Austria (AT), Central Europe (CE), Southeastern Europe (SEE), Eastern Europe (EE) and Western Europe (WE). The aim of this allocation is to achieve a more homogeneous grouping of insurance markets, taking various criteria into account (e.g. EEA-membership, macroeconomic factors, insurance markets’ level of maturity).
Not all groups are represented in each geographical segment, but overall, there is a clear focus on the CE and SEE region, where most of the foreign premium volume is generated.
| Number of undertakings | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|---|
| Insurance companies | 96 | 98 | 100 | 94 | 97 | 97 |
| Austria | 9 | 9 | 8 | 8 | 9 | 9 |
| Foreign Markets | 87 | 89 | 92 | 86 | 88 | 88 |
| Reinsurance companies | 5 | 5 | 5 | 5 | 5 | 5 |
| Austria | 1 | 1 | 1 | 1 | 1 | 1 |
| Foreign Markets | 4 | 4 | 4 | 4 | 4 | 4 |
| Total | 101 | 103 | 105 | 99 | 102 | 102 |
| Source: Solvency II reporting | ||||||
At year-end 2023, the scope of Austrian insurance groups covered 102 insurance and reinsurance companies in 28 countries (including Austria).
The scope included 97 insurance companies, thereof 9 in Austria and 88 in foreign markets. Moreover, 5 reinsurance companies are part of Austrian insurance groups, thereof 1 is located in Austria and 4 abroad.
Despite a number of mergers and acquisitions, the overall number of insurance subsidiaries remained rather stable during the last five years. There has been no change in the number of insurance and reinsurance undertakings compared to the previous year.
For a proper analysis of insurance subsidiaries’ business activities, it’s important to also look at the macroeconomic environment in the relevant countries. This is evaluated by reviewing key indicators such as real GDP growth, inflation and unemployment.
The average real GDP growth rate in CE was -0.07%, in EE 4.37% and SEE 3.06%. The highest growth rates were recorded in Georgia with 7.5%, followed by Montenegro with 6.3% and Ukraine with 5.3%.
In the segment Western Europe, Switzerland and Germany showed growth rates of 0.7%, and -0.3%, respectively. In Austria, real GDP growth was -1%.
In 2023, inflation is still elevated in most of the countries, however except for Hungary and Serbia inflation rates lay lower than in 2022.
The average inflation rate in CE was 11.11%, in EE 17.54% and SEE 7.78%. The highest inflation rates were recorded in Turkiye with 54%, followed by Hungary with 17% and Moldova with 13.4%.
In the segment Western Europe, Germany and Switzerland showed inflation rates of 6%, and 2.3%, respectively. In Austria the inflation rate was at 7.7%.
Except for Georgia, the countries with the highest unemployment rates are all in the SEE-segment.
The highest unemployment rates were recorded in Montenegro with 15.3%, followed by Bosnia and Herzegovina with 13.2% and North Macedonia with 13.1%.
Insurance markets relevant for Austrian insurance groups differ significantly regarding size and level of maturity. The indicators used to assess the level of maturity are insurance penetration (i.e., premiums in % of GDP) and insurance density (i.e., premiums per capita), the insurance market size (illustrated by the size of the bubbles) is measured on the basis of gross written premiums.
Regarding market size, Poland is the flagship market of the CE-region with a size of 17,894 million EUR, followed by Czechia with 8,804 million EUR and Hungary with 3,618 million EUR. The biggest markets in the SEE-segment are Romania with a size of 3,509 million EUR and Bulgaria with 2,903 million EUR, followed by Croatia with 1,766 million EUR. The EE-segment is dominated by the insurance markets of Russian Federation with 23,037 million EUR and Turkiye with 14,891 million EUR.
A clear difference in the maturity level as measured by insurance density, can be observed between the CE and the EE segment. While the majority of CE countries show an insurance density above 200 EUR, this indicator is below 170 EUR in EE-countries and also in some of the SEE-countries. A remarkable in heterogeneity can be seen in the insurance penetration within the SEE-segment: Albania and Romania record an insurance penetration below 1.1%, while this indicator nearly reaches 3.1% in Bulgaria.
Outliers in all CESEE segments are Cyprus and Slovenia. In Cyprus the insurance density is 1,188 EUR and the insurance penetration 4.8%. In Slovenia, the insurance density is 1,613 EUR and the insurance penetration 5.4%.
The segment Western Europe (Germany, Liechtenstein and Switzerland) and Austria are not shown in the graph, as they are still significantly more mature insurance markets. Germany has an insurance penetration of 8.2% paired with an insurance density of 4,066 EUR. Switzerland has an insurance penetration of 4.9% paired with an insurance density of 4,606 EUR. Liechtenstein represents an outlier for both measures with 76.9% and 136,848 EUR. In Austria, the insurance penetration is at 4.6% and the insurance density at 2,403 EUR.
Information on market shares of Austrian insurance groups is calculated for all EEA-members, where data is based on national Solvency II-reporting and publicly available insurance statistics by EIOPA (market shares in terms of net written premiums).
As can be seen in the table, Austrian insurance groups show aggregated market shares of greater or equal to 30% in 4 countries in the EEA. The aggregate market share of Austrian groups is highest in Czechia with 44.63%, followed by Slovakia with 40.24%, Latvia with 37.12% and Romania with 31.7%.
In most countries, the high market shares are due to the strong market positions of VIG.
The country with the highest single market share of an Austrian insurance group in the EEA is Slovakia with a market share of 37.29% achieved by VIG.
Regarding market positions in non-EEA countries, no fully consistent information is available. However, considerably high aggregated market shares are achieved in almost all Balkan countries, especially in the life insurance sector.
Austrian insurance groups differ considerably regarding the size and the scale of contribution of foreign business.
| Net written premiums (in million EUR) | GRAWE | Merkur | UNIQA | VIG | Wüstenrot | Total |
|---|---|---|---|---|---|---|
| Insurance companies | 1,972 | 1,537 | 8,821 | 16,543 | 824 | 29,697 |
| Austria | 761 | 717 | 3,399 | 4,813 | 387 | 10,077 |
| Foreign markets | 1,211 | 819 | 5,422 | 11,730 | 438 | 19,621 |
| Reinsurance companies | 13 | 0 | 1,525 | 593 | 0 | 2,131 |
| Austria | 0 | 0 | 11 | 0 | 0 | 11 |
| Foreign markets | 13 | 0 | 1,514 | 593 | 0 | 2,120 |
| Total | 1,986 | 1,537 | 10,346 | 17,136 | 824 | 31,828 |
| Source: Solvency II reporting | ||||||
The largest group by far is VIG with a net written premium volume of about 17,136 million EUR. UNIQA ranks second with net written premiums of 10,346 million EUR, however, more than 1,514 million EUR originate from its group internal reinsurance company UNIQA Re (based in Switzerland). GRAWE generated net written premiums of almost 1,986 million EUR, Merkur and Wüstenrot are comparatively smaller insurance groups with a net written premium volume of 1,537 million EUR and 824 million EUR, respectively. The three larger groups generate a significant share of their net written premiums outside Austria. This is not the case for Merkur and Wüstenrot.
Data on profitability (taken out of the quantitative reporting template S.32.01.04.01), are aggregated numbers, so they have not been adjusted for dividends, intra-group transactions or other consolidation effects.
These numbers are based on local GAAP, and thus do not compare to consolidated IFRS statements.
Please note that the indicator “Profit-Premium-Margin” (PPM) approximates “Return on Premiums”, based on the relation between profit and net written premiums.
In total, Austrian insurance groups achieved an aggregated net profit of 2,172 million EUR in 2023. This means a change of 34.7 % compared to the previous year.
Significant differences in the profit-premium-margins (PPM) can be observed between the foreign and the domestic business of the insurance groups. For Merkur and UNIQA the foreign business margin exceeds the domestic business margin by 0.47 and 1.38 percentage points, respectively. The other case is true for GRAWE, VIG and Wüstenrot. In 2023, Wüstenrot had a negative PPM related to its only foreign subsidiary in Slovakia.
Except for GRAWE, all Austrian insurance groups make either use of LTG and/or transitional measures for the calculation of technical provisions in life insurance (UNIQA, VIG, Wüstenrot). For Merkur, such measures applied by a subsidiary have been taken into consideration at group level since Q2/2022. Moreover, UNIQA and VIG make use of partial internal models.
At year-end 2023, solvency ratios of all Austrian insurance groups were above 200%. Merkur, UNIQA and GRAWE showed an increase in SCR ratios compared to the previous year. The SCR ratios of VIG and Wüstenrot declined, however, from a relatively high level.
GRAWE group is focusing on Southeastern Europe but also obtains subsidiaries in Eastern Europe.
Besides Austria, the top 3 most important countries in terms of premiums are Romania, followed by Croatia and Bosnia and Herzegovina.
Total own funds eligible to cover the Solvency Capital Requirement (SCR) includes own funds of other financial sectors and can be classified in 3 Tiers.
Total own funds of GRAWE group eligible to cover the group SCR amounted to 3,587 million in 2023. About 99.4% of total eligible own funds classifies as Tier 1 capital (Tier 1-restricted and Tier 1-unrestricted). 0.6% are composed by Tier 2 and 0.0% by Tier 3 capital.
The Solvency Capital Requirement of GRAWE group was 1,319 million EUR. In relation to the eligible own funds, this results in a Group Solvency Ratio of 272.1%.
The PPM of GRAWE Group for the foreign business was 2.78% in 2023 compared to 10.99% in Austria. In comparison, the average PPM of Austrian groups was 5.32% for foreign business and 10.84% for Austria.
Please note that in terms of profit, the indicator “Profit-Premium-Margin” (PPM) approximates “Return on Premiums”, based on the relation between profit and net written premiums. Data on profitability (taken out of the quantitative reporting template S.32.01.04.01), are aggregated numbers, so they have not been adjusted for dividends, intra-group transactions or other consolidation effects.
These numbers are based on local GAAP, and thus do not compare to consolidated IFRS statements.
Merkur Group is focusing on Southeastern Europe, with subsidiaries in Croatia, Serbia and Slovenia.
Total own funds eligible to cover the Solvency Capital Requirement (SCR) includes own funds of other financial sectors and can be classified in 3 Tiers.
Total own funds of Merkur group eligible to cover the group SCR amounted to 986 million in 2023. 100.0% of total eligible own funds classifies as Tier 1 capital (Tier 1-restricted and Tier 1-unrestricted). 0.0% are composed by Tier 2 and 0.0% by Tier 3 capital.
The Solvency Capital Requirement of Merkur group was 410 million EUR. In relation to the eligible own funds, this results in a Group Solvency Ratio of 240.4%.
The PPM of Merkur Group for the foreign business was 1.17% in 2023 compared to 0.71% in Austria. In comparison, the average PPM of Austrian groups was 5.32% for foreign business and 10.84% for Austria.
Please note that in terms of profit, the indicator “Profit-Premium-Margin” (PPM) approximates “Return on Premiums”, based on the relation between profit and net written premiums. Data on profitability (taken out of the quantitative reporting template S.32.01.04.01), are aggregated numbers, so they have not been adjusted for dividends, intra-group transactions or other consolidation effects.
These numbers are based on local GAAP, and thus do not compare to consolidated IFRS statements.
UNIQA group generates business in all CESEE segments, but Central Europe is its dominant geographical focus. In Western Europe, it obtains one reinsurance company in Switzerland and one insurance company in Liechtenstein.
Besides Austria, the top 3 most important countries in terms of premiums are Switzerland, followed by Poland and Czechia.
Total own funds eligible to cover the group SCR amounted to 5,941 million in 2023. About 85.7% of total eligible own funds classifies as Tier 1 capital (Tier 1-restricted and Tier 1-unrestricted). 14.1% are composed by Tier 2 and 0.2% by Tier 3 capital.
The Solvency Capital Requirement of UNIQA group was 2,328 million EUR. In relation to the eligible own funds, this results in a Group Solvency Ratio of 255.2%.
The PPM of UNIQA Group for the foreign business was 7.65% in 2023 compared to 6.27% in Austria. In comparison, the average PPM of Austrian groups was 5.32% for foreign business and 10.84% for Austria.
Please note that in terms of profit, the indicator “Profit-Premium-Margin” (PPM) approximates “Return on Premiums”, based on the relation between profit and net written premiums. Data on profitability (taken out of the quantitative reporting template S.32.01.04.01), are aggregated numbers, so they have not been adjusted for dividends, intra-group transactions or other consolidation effects.
These numbers are based on local GAAP, and thus do not compare to consolidated IFRS statements.
VIG generates business in all geographical segments in CESEE, as well as in Germany and Liechtenstein.
Besides Austria, the top 3 most important countries in terms of premiums are Czechia, followed by Poland and Romania.
Total own funds eligible to cover the group SCR amounted to 10,345 million in 2023. About 87.9% of total eligible own funds classifies as Tier 1 capital (Tier 1-restricted and Tier 1-unrestricted). 11.0% are composed by Tier 2 and 1.0% by Tier 3 capital.
The Solvency Capital Requirement of VIG group was 3,847 million EUR. In relation to the eligible own funds, this results in a Group Solvency Ratio of 268.9%.
The PPM of VIG Group for the foreign business was 5.01% in 2023 compared to 15.33% in Austria. In comparison, the average PPM of Austrian groups was 5.32% for foreign business and 10.84% for Austria.
Please note that in terms of profit, the indicator “Profit-Premium-Margin” (PPM) approximates “Return on Premiums”, based on the relation between profit and net written premiums. Data on profitability (taken out of the quantitative reporting template S.32.01.04.01), are aggregated numbers, so they have not been adjusted for dividends, intra-group transactions or other consolidation effects.
These numbers are based on local GAAP, and thus do not compare to consolidated IFRS statements.
The foreign insurance business of Wüstenrot insurance group entirely relies on its subsidiary in Slovakia.
Total own funds of eligible to cover the Solvency Capital Requirement (SCR) includes own funds of other financial sectors and can be classified in 3 Tiers.
Total own funds of Wüstenrot group eligible to cover the group SCR amounted to 1,192 million in 2023. About 93.3% of total eligible own funds classifies as Tier 1 capital (Tier 1-restricted and Tier 1-unrestricted). 6.7% are composed by Tier 2 and 0.0% by Tier 3 capital.
The Solvency Capital Requirement of Wüstenrot group was 346 million EUR. In relation to the eligible own funds, this results in a Group Solvency Ratio of 344.6%.
The PPM of Wüstenrot Group for the foreign business was -0.66% in 2023 compared to 13.7% in Austria. In comparison, the average PPM of Austrian groups was 5.32% for foreign business and 10.84% for Austria.
Please note that in terms of profit, the indicator “Profit-Premium-Margin” (PPM) approximates “Return on Premiums”, based on the relation between profit and net written premiums. Data on profitability (taken out of the quantitative reporting template S.32.01.04.01), are aggregated numbers, so they have not been adjusted for dividends, intra-group transactions or other consolidation effects.
These numbers are based on local GAAP, and thus do not compare to consolidated IFRS statements.