Annual Report (ESEF) • Apr 8, 2021
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ANNUAL FINANCIAL REPORT 2020 ACCORDING TO SECTION 124(1) OF THE AUSTRIAN STOCK EXCHANGE ACT / UNIQA INSURANCE GROUP AG Seeding the FUTURE CONTENTS Consolidated Corporate Governance Report 4 Report of the Supervisory Board 16 Group Management Report 20 Consolidated Financial Statements 42 Notes to the Consolidated Financial Statements 51 Risk Report 120 Approval for publication 135 Declaration of the legal representatives 136 Audit Opinion 137 3 4 CORPORATE GOVERNANCE / Corporate Governance Report Consolidated CORPORATE GOVERNANCE Report CORPORATE GOVERNANCE 5 UNIQA has been committed to compliance with the Austrian Code of Corporate Governance since 2004 and publishes the declaration of conformity both in the Group report and on www.uniqagroup.com in the Investor Relations section. The Austrian Code of Corporate Governance is also publicly available at www.uniqagroup.com and www. corporate-governance.at. The Corporate Governance Report and the Consolidated Corporate Governance Report of UNIQA Insurance Group AG are summarised in this report in accordance with Section 267b in conjunction with Section 251(3) of the Austrian Commercial Code. Implementation and compliance with the individual rules in the Austrian Code of Corporate Governance, with the exception of Rules 77 to 83, are evaluated annually by PwC Wirtschaftsprüfung GmbH. Rules 77 to 83 of the Austrian Code of Corporate Governance are evaluated by the law firm Schönherr Rechtsanwälte GmbH. The evaluation is carried out based mainly on the questionnaire, published by the Austrian Working Group for Corporate Governance, for the evaluation of compliance with the Code. The reports on the external evaluation in accordance with Rule 62 of the Austrian Code of Corporate Governance can also be found at www.uniqagroup.com. The Supervisory Board is supported by Vienna Strategy HUB GmbH with self-assessments of the Supervisory Board regarding the efficiency of its activities (Rule 36 of the Austrian Code of Corporate Governance). UNIQA also declares its continued willingness to comply with the Austrian Code of Corporate Governance as currently amended. However, UNIQA deviates from the provisions of the Code as amended with regard to the following C rules (comply or explain rules), and the explanations are set out below. Rule 49 of the Austrian Code of Corporate Governance Due to the growth of UNIQA’s shareholder structure and the special nature of the insurance business with regard to the investment of assets, there are a number of con- tracts with companies related to individual members of the Supervisory Board in which these Supervisory Board members discharge duties as members of governing bod- ies. If such contracts require approval by the Supervisory Board in accordance with Section 95(5)(12) of the Austrian Stock Corporation Act (Rule 48 of the Austrian Code of Corporate Governance), the details of these contracts cannot be made public for reasons of company policy and competition law. All transactions are in any case entered into and processed on an arm’s length basis. Consolidated CORPORATE GOVERNANCE Report 6 Name Responsible for Supervisory Board appointments or compa- rable functions in other domestic and foreign companies not included in the consolidated financial statements Management and monitoring functions in significant subsidiaries Number of UNIQA shares held Andreas Brandstetter, Chief Executive Officer (CEO) * 1969, appointed 1 January 2002 until 30 June 2024 Strategy & Transformation, UNIQA Ventures, New Business Areas (Health), Group General Secretary, Auditing, Art Insurance (until 31 July 2020) Member of the Supervisory Board of STRABAG SE, Villach Member of the Advisory Board of the KHM Association of Museums, Vienna Chairman of the Management Board of UNIQA Österreich Versicherungen AG, Vienna (since 1 July 2020) Chairman of the Supervisory Board of SIGAL UNIQA Group AUSTRIA sh.a., Tirana Chairman of the Supervisory Board of SIGAL LIFE UNIQA Group AUSTRIA sh.a., Tirana Chairman of the Board of Directors of UNIQA Re AG, Zurich as at 31 December 2020: 124,479 shares Peter Eichler, Personal Insurance * 1961, appointed 1 July 2020 until 30 June 2024 Product Development – Health, Life & Casualty, Health Inpatient Benefits, Asset Management (UCM/UREM) Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna Member of the Management Board of UNIQA International AG, Vienna (until 8 December 2020) Chairman of the Supervisory Board of PremiQaMed Holding GmbH, Vienna Member of the Supervisory Board of Valida Holding AG, Vienna Member of the Supervisory Board of UNIQA Biztosító Zrt., Budapest Member of the Board of Directors of UNIQA Versicherung AG, Vaduz Member of the Supervisory Board of UNIQA Towarzystwo Ubezpieczen´ na Z ˙ ycie S.A., Warsaw Member of the Supervisory Board of UNIQA LIFE Private Joint Stock Company, Kiev (until 31 December 2020) Member of the Supervisory Board of UNIQA p o i s t ´ o v nˇ a a.s., Bratislava (since 15 January 2021) Member of the Supervisory Board of AXA Z ˙ ycie Towarzystwo Ubezpieczen´ S.A., Warsaw (since 15 October 2020) Chairman of the Board of Directors of UNIQA GlobalCare SA, Geneva (Member of the Board of Directors until 19 March 2021) as at 31 December 2020: 9,669 shares Wolf-Christoph Gerlach, Operations * 1979, appointed 1 July 2020 until 30 June 2023 Applications, Contracts & Customer Service, Property–Motor Vehicle/Property/Casualty Insur- ance, Life & Health Outpatient Benefits, Business Organisation (incl. OPEX & GPO), Purchasing & Administration, Group Service Centre (Nitra) Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna (since 1 January 2020) Member of the Supervisory Board of UNIQA Asigurari de Viata SA, Bucharest (since 3 March 2021) Member of the Supervisory Board of CherryHUB BSC Korlátolt Felelo˝sségu˝ Társaság, Budapest Member of the Supervisory Board of UNIQA pojišt´ovna, a.s., Prague (since 15 March 2021) Member of the Supervisory Board of AXA životní pojišt´ovna a.s., Prague (since 15 March 2021) Member of the Supervisory Board of AXA pojišt´ovna a.s., Prague (since 15 March 2021) as at 31 December 2020: 6,570 shares Peter Humer, Customers & Markets Austria * 1971, appointed 1 July 2020 until 30 June 2024 Regional offices, Retail ( Product Development & Pricing for Motor Vehicle and Standard Property Business, Sales Service, Sales Management), Corporate (Product Development & Risk Engineering for Corporate Property Insurance, Affinity Business, Art Insurance (since 1 August 2020)), Digitalisation Member of the Supervisory Board of Salzburg Wohnbau GmbH, Salzburg Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna Vice Chairman of the Supervisory Board of UNIQA International AG, Vienna (until 8 December 2020) as at 31 December 2020: 7,937 shares Wolfgang Kindl, Customers & Markets International * 1966, appointed 1 July 2020 until 30 June 2024 Retail (Product Development & Pricing for Motor Vehicles and Standard Property Business, Sales Service, Sales Management), Corporate (Product Development & Risk Engineering for Corporate Property Insurance, Major/International Brokers, Affinity Business), Bank International (Product Service, Sales Service, Sales Management), New Insurance Solutions, Mergers & Acquisitions, Per- formance & Change Management International, General Secretariat International Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna (since 1 July 2020) Chairman of the Management Board of UNIQA International AG, Vienna (until 8 December 2020) Vice Chairman of the Board of Directors of UNIQA Versicherung AG, Vaduz (until 22 January 2021) Chairman of the Supervisory Board of UNIQA Asigurari SA, Bucharest Chairman of the Supervisory Board of UNIQA Asigurari de Viata SA, Bucharest Chairman of the Supervisory Board of UNIQA Insurance plc, Sofia Member of the Supervisory Board of SIGAL UNIQA Group AUSTRIA sh.a., Tirana Member of the Supervisory Board of SIGAL LIFE UNIQA Group AUSTRIA sh.a., Tirana Chairman of the Supervisory Board of UNIQA Biztosító Zrt., Budapest (until 31 December 2020) Chairman of the Supervisory Board of UNIQA poist´ovnˇa a.s., Bratislava (until 15 January 2021) Chairman of the Supervisory Board of UNIQA pojišt´ovna, a.s., Prague (until 15 March 2021) Chairman of the Supervisory Board of UNIQA Towarzystwo Ubezpieczen´ na Z ˙ ycie S.A., Warsaw Chairman of the Supervisory Board of UNIQA Towarzystwo Ubezpieczen´ S.A., Warsaw Member of the Board of Directors of UNIQA GlobalCare SA, Geneva (Chairman of the Board of Directors until 19 March 2021) Chairman of the Supervisory Board of UNIQA Insurance Company Private Joint Stock Company, Kiev (until 31 December 2020) Chairman of the Supervisory Board of UNIQA LIFE Private Joint Stock Company, Kiev (until 31 December 2020) as at 31 December 2020: 17,848 shares René Knapp, HR & Brand * 1983, appointed 1 July 2020 until 30 June 2023 Strategic Personnel Management, Operating Personnel Management, Brand & Communi- cation, Ethics, Sustainability & Public Affairs, Works Council Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna (since 1 January 2020) Member of the Supervisory Board of UNIQA pojišt´ovna, a.s., Prague (until 15 March 2021) Member of the Supervisory Board of UNIQA osiguranje d.d., Zagreb (until 4 March 2021) Member of the Supervisory Board of UNIQA poist´ovnˇa a.s., Bratislava (until 15 January 2021) as at 31 December 2020: 5,000 shares Erik Leyers, Data & IT * 1969, appointed 1 June 2016 until 30 June 2024 Data Management, UITS, UIP Project Member of the Supervisory Board of Raiffeisen Informatik Geschäftsführungs GmbH, Vienna Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna Member of the Management Board of UNIQA International AG, Vienna (until 8 December 2020) Member of the Supervisory Board of UNIQA Asigurari S.A., Bucharest (until 14 October 2020) Member of the Supervisory Board of UNIQA Asigurari de Viata S.A., Bucharest (until 12 October 2020) Member of the Supervisory Board of UNIQA Towarzystwo Ubezpieczen´ S.A., Warsaw Member of the Supervisory Board of AXA Ubezpieczenia Towarzystwo Ubezpieczen´ i Reasekuracji S.A., Warsaw (since 15 October 2020) Member of the Supervisory Board of UNIQA Biztosító Zrt., Budapest Member of the Supervisory Board of UNIQA pojišt´ovna, a.s., Prague Member of the Supervisory Board of AXA životní pojišt´ovna a.s., Prague (since 15 March 2021) Member of the Supervisory Board of AXA pojišt´ovna a.s., Prague (since 15 March 2021) Chairman of the Supervisory Board of UNIQA Group Service Center Slovakia, spol. s r.o., Nitra Chairman of the Supervisory Board of sTech d.o.o., Belgrade as at 31 December 2020: 9,371 shares Members of the Management Board CORPORATE GOVERNANCE / Corporate Governance Report CORPORATE GOVERNANCE 7 Name Responsible for Supervisory Board appointments or compa- rable functions in other domestic and foreign companies not included in the consolidated financial statements Management and monitoring functions in significant subsidiaries Number of UNIQA shares held Andreas Brandstetter, Chief Executive Officer (CEO) * 1969, appointed 1 January 2002 until 30 June 2024 Strategy & Transformation, UNIQA Ventures, New Business Areas (Health), Group General Secretary, Auditing, Art Insurance (until 31 July 2020) Member of the Supervisory Board of STRABAG SE, Villach Member of the Advisory Board of the KHM Association of Museums, Vienna Chairman of the Management Board of UNIQA Österreich Versicherungen AG, Vienna (since 1 July 2020) Chairman of the Supervisory Board of SIGAL UNIQA Group AUSTRIA sh.a., Tirana Chairman of the Supervisory Board of SIGAL LIFE UNIQA Group AUSTRIA sh.a., Tirana Chairman of the Board of Directors of UNIQA Re AG, Zurich as at 31 December 2020: 124,479 shares Peter Eichler, Personal Insurance * 1961, appointed 1 July 2020 until 30 June 2024 Product Development – Health, Life & Casualty, Health Inpatient Benefits, Asset Management (UCM/UREM) Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna Member of the Management Board of UNIQA International AG, Vienna (until 8 December 2020) Chairman of the Supervisory Board of PremiQaMed Holding GmbH, Vienna Member of the Supervisory Board of Valida Holding AG, Vienna Member of the Supervisory Board of UNIQA Biztosító Zrt., Budapest Member of the Board of Directors of UNIQA Versicherung AG, Vaduz Member of the Supervisory Board of UNIQA Towarzystwo Ubezpieczen´ na Z ˙ ycie S.A., Warsaw Member of the Supervisory Board of UNIQA LIFE Private Joint Stock Company, Kiev (until 31 December 2020) Member of the Supervisory Board of UNIQA p o i s t ´ o v nˇ a a.s., Bratislava (since 15 January 2021) Member of the Supervisory Board of AXA Z ˙ ycie Towarzystwo Ubezpieczen´ S.A., Warsaw (since 15 October 2020) Chairman of the Board of Directors of UNIQA GlobalCare SA, Geneva (Member of the Board of Directors until 19 March 2021) as at 31 December 2020: 9,669 shares Wolf-Christoph Gerlach, Operations * 1979, appointed 1 July 2020 until 30 June 2023 Applications, Contracts & Customer Service, Property–Motor Vehicle/Property/Casualty Insur- ance, Life & Health Outpatient Benefits, Business Organisation (incl. OPEX & GPO), Purchasing & Administration, Group Service Centre (Nitra) Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna (since 1 January 2020) Member of the Supervisory Board of UNIQA Asigurari de Viata SA, Bucharest (since 3 March 2021) Member of the Supervisory Board of CherryHUB BSC Korlátolt Felelo˝sségu˝ Társaság, Budapest Member of the Supervisory Board of UNIQA pojišt´ovna, a.s., Prague (since 15 March 2021) Member of the Supervisory Board of AXA životní pojišt´ovna a.s., Prague (since 15 March 2021) Member of the Supervisory Board of AXA pojišt´ovna a.s., Prague (since 15 March 2021) as at 31 December 2020: 6,570 shares Peter Humer, Customers & Markets Austria * 1971, appointed 1 July 2020 until 30 June 2024 Regional offices, Retail ( Product Development & Pricing for Motor Vehicle and Standard Property Business, Sales Service, Sales Management), Corporate (Product Development & Risk Engineering for Corporate Property Insurance, Affinity Business, Art Insurance (since 1 August 2020)), Digitalisation Member of the Supervisory Board of Salzburg Wohnbau GmbH, Salzburg Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna Vice Chairman of the Supervisory Board of UNIQA International AG, Vienna (until 8 December 2020) as at 31 December 2020: 7,937 shares Wolfgang Kindl, Customers & Markets International * 1966, appointed 1 July 2020 until 30 June 2024 Retail (Product Development & Pricing for Motor Vehicles and Standard Property Business, Sales Service, Sales Management), Corporate (Product Development & Risk Engineering for Corporate Property Insurance, Major/International Brokers, Affinity Business), Bank International (Product Service, Sales Service, Sales Management), New Insurance Solutions, Mergers & Acquisitions, Per- formance & Change Management International, General Secretariat International Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna (since 1 July 2020) Chairman of the Management Board of UNIQA International AG, Vienna (until 8 December 2020) Vice Chairman of the Board of Directors of UNIQA Versicherung AG, Vaduz (until 22 January 2021) Chairman of the Supervisory Board of UNIQA Asigurari SA, Bucharest Chairman of the Supervisory Board of UNIQA Asigurari de Viata SA, Bucharest Chairman of the Supervisory Board of UNIQA Insurance plc, Sofia Member of the Supervisory Board of SIGAL UNIQA Group AUSTRIA sh.a., Tirana Member of the Supervisory Board of SIGAL LIFE UNIQA Group AUSTRIA sh.a., Tirana Chairman of the Supervisory Board of UNIQA Biztosító Zrt., Budapest (until 31 December 2020) Chairman of the Supervisory Board of UNIQA poist´ovnˇa a.s., Bratislava (until 15 January 2021) Chairman of the Supervisory Board of UNIQA pojišt´ovna, a.s., Prague (until 15 March 2021) Chairman of the Supervisory Board of UNIQA Towarzystwo Ubezpieczen´ na Z ˙ ycie S.A., Warsaw Chairman of the Supervisory Board of UNIQA Towarzystwo Ubezpieczen´ S.A., Warsaw Member of the Board of Directors of UNIQA GlobalCare SA, Geneva (Chairman of the Board of Directors until 19 March 2021) Chairman of the Supervisory Board of UNIQA Insurance Company Private Joint Stock Company, Kiev (until 31 December 2020) Chairman of the Supervisory Board of UNIQA LIFE Private Joint Stock Company, Kiev (until 31 December 2020) as at 31 December 2020: 17,848 shares René Knapp, HR & Brand * 1983, appointed 1 July 2020 until 30 June 2023 Strategic Personnel Management, Operating Personnel Management, Brand & Communi- cation, Ethics, Sustainability & Public Affairs, Works Council Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna (since 1 January 2020) Member of the Supervisory Board of UNIQA pojišt´ovna, a.s., Prague (until 15 March 2021) Member of the Supervisory Board of UNIQA osiguranje d.d., Zagreb (until 4 March 2021) Member of the Supervisory Board of UNIQA poist´ovnˇa a.s., Bratislava (until 15 January 2021) as at 31 December 2020: 5,000 shares Erik Leyers, Data & IT * 1969, appointed 1 June 2016 until 30 June 2024 Data Management, UITS, UIP Project Member of the Supervisory Board of Raiffeisen Informatik Geschäftsführungs GmbH, Vienna Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna Member of the Management Board of UNIQA International AG, Vienna (until 8 December 2020) Member of the Supervisory Board of UNIQA Asigurari S.A., Bucharest (until 14 October 2020) Member of the Supervisory Board of UNIQA Asigurari de Viata S.A., Bucharest (until 12 October 2020) Member of the Supervisory Board of UNIQA Towarzystwo Ubezpieczen´ S.A., Warsaw Member of the Supervisory Board of AXA Ubezpieczenia Towarzystwo Ubezpieczen´ i Reasekuracji S.A., Warsaw (since 15 October 2020) Member of the Supervisory Board of UNIQA Biztosító Zrt., Budapest Member of the Supervisory Board of UNIQA pojišt´ovna, a.s., Prague Member of the Supervisory Board of AXA životní pojišt´ovna a.s., Prague (since 15 March 2021) Member of the Supervisory Board of AXA pojišt´ovna a.s., Prague (since 15 March 2021) Chairman of the Supervisory Board of UNIQA Group Service Center Slovakia, spol. s r.o., Nitra Chairman of the Supervisory Board of sTech d.o.o., Belgrade as at 31 December 2020: 9,371 shares 8 Name Responsible for Supervisory Board appointments or compa- rable functions in other domestic and foreign companies not included in the consolidated financial statements Management and monitoring functions in significant subsidiaries Number of UNIQA shares held Klaus Pekarek, Customers & Markets Bancassurance Austria * 1956, appointed 1 July 2020 until 30 June 2022 Product Service, Sales Service, Sales Management Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna Chairman of the Supervisory Board of UNIQA International AG, Vienna (until 8 December 2020) Vice Chairman of the Supervisory Board of Valida Holding AG, Vienna as at 31 December 2020: 13,178 shares Kurt Svoboda, Finance & Risk Management * 1967, appointed 1 July 2011 until 30 June 2024 Legal & Compliance, Investor Relations, Controlling, Finance & Accounting, Actuarial Services, Risk Management, Regulatory Affairs, Reinsurance, Auditing Member of the Supervisory Board of Wiener Börse AG, Vienna Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna (Chairman of the Management Board until 30 June 2020) Member of the Management Board of UNIQA International AG, Vienna (until 8 December 2020) Chairman of the Board of Directors of UNIQA Versicherung AG, Vaduz (until 22 January 2021) Vice Chairman of the Board of Directors of UNIQA Re AG, Zurich Member of the Supervisory Board of UNIQA pojišt´ovna, a.s., Prague (since 15 March 2021) Member of the Supervisory Board of AXA životní pojišt´ovna a.s., Prague (since 15 March 2021) Member of the Supervisory Board of AXA pojišt´ovna a.s., Prague (since 15 March 2021) as at 31 December 2020: 17,797 shares Members of the Management Board The work of the Management Board The work of the members of the Management Board of UNIQA Insurance Group AG is regulated by the rules of procedure. The allocation of the business responsibilities as decided by the Group Management Board is approved by the Supervisory Board. The rules of procedure govern the obligations of the members of the Management Board to provide the Supervisory Board and each other with information and approve each other’s activities. The rules of procedure also specify a list of activities that require consent from the Supervisory Board. The Management Board generally holds weekly meetings in which the members of the Management Board report on the current course of business, determine what steps should be taken and make strategic corporate decisions. In addition, there is a continuous exchange of information between the members of the Management Board regarding relevant activities and events. From 1 January 2020, all members of the Management Boards of UNIQA Österreich Versicherungen AG and UNIQA International AG participated in the meetings of UNIQA Insurance Group AG with an advisory vote (Group Executive Board). Since 1 July 2020, the meetings of the Management Boards of UNIQA Insurance Group AG and UNIQA Österreich Versicherungen AG, which are composed of the same people, have been held as joint sessions. The Management Board informs the Supervisory Board at regular intervals, in a timely and comprehensive manner, about all relevant questions of business development, in- cluding the risk situation and the risk management of the Group. In addition, the Chairman of the Supervisory Board is in regular contact with the CEO to discuss the company’s strategy, business performance and risk management. CORPORATE GOVERNANCE / Corporate Governance Report CORPORATE GOVERNANCE 9 Name Responsible for Supervisory Board appointments or compa- rable functions in other domestic and foreign companies not included in the consolidated financial statements Management and monitoring functions in significant subsidiaries Number of UNIQA shares held Klaus Pekarek, Customers & Markets Bancassurance Austria * 1956, appointed 1 July 2020 until 30 June 2022 Product Service, Sales Service, Sales Management Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna Chairman of the Supervisory Board of UNIQA International AG, Vienna (until 8 December 2020) Vice Chairman of the Supervisory Board of Valida Holding AG, Vienna as at 31 December 2020: 13,178 shares Kurt Svoboda, Finance & Risk Management * 1967, appointed 1 July 2011 until 30 June 2024 Legal & Compliance, Investor Relations, Controlling, Finance & Accounting, Actuarial Services, Risk Management, Regulatory Affairs, Reinsurance, Auditing Member of the Supervisory Board of Wiener Börse AG, Vienna Member of the Management Board of UNIQA Österreich Versicherungen AG, Vienna (Chairman of the Management Board until 30 June 2020) Member of the Management Board of UNIQA International AG, Vienna (until 8 December 2020) Chairman of the Board of Directors of UNIQA Versicherung AG, Vaduz (until 22 January 2021) Vice Chairman of the Board of Directors of UNIQA Re AG, Zurich Member of the Supervisory Board of UNIQA pojišt´ovna, a.s., Prague (since 15 March 2021) Member of the Supervisory Board of AXA životní pojišt´ovna a.s., Prague (since 15 March 2021) Member of the Supervisory Board of AXA pojišt´ovna a.s., Prague (since 15 March 2021) as at 31 December 2020: 17,797 shares 10 Name Supervisory Board appointments in domestic and foreign listed companies Management and monitoring tasks in significant subsidiaries Number of UNIQA shares held Walter Rothensteiner, Chairman * 1953, appointed 3 July 1995 until the 24th AGM (2023) Chairman of the Supervisory Board of UNIQA Österreich Versicherungen AG, Vienna (since 14 April 2020) Christian Kuhn, 1st Vice Chairman * 1954, appointed 15 May 2006 until the 24th AGM (2023) Vice Chairman of the Supervi- sory Board of UNIQA Österre- ich Versicherungen AG, Vienna (since 14 April 2020) Johann Strobl, 2nd Vice Chairman * 1959, appointed 25 May 2020 until the 24th AGM (2023) Member of the Supervisory Board of Tatra banka, a. s., Bratislava Member of the Supervisory Board of UNIQA Österreich Versicherungen AG, Vienna (since 25 May 2020) Erwin Hameseder, 2nd Vice Chairman * 1956, appointed 21 May 2007 until 25 May 2020 (resigned) Chairman of the Supervisory Board of Raiffeisen Bank International AG, Vienna Chairman of the Supervisory Board of AGRANA Beteiligungs-Aktiengesellschaft, Vienna Vice Chairman of the Supervisory Board of STRABAG SE, Villach 2nd Vice Chairman of the Supervisory Board of Südzucker AG, Mannheim Member of the Supervisory Board of UNIQA Österreich Versicherungen AG, Vienna (from 14 April 2020 until 25 May 2020) Burkhard Gantenbein, 3rd Vice Chairman * 1963, appointed 29 May 2017 until the 24th AGM (2023) Member of the Supervisory Board of UNIQA Österreich Versicherungen AG, Vienna (Chairman of the Supervisory Board until 14 April 2020) Member of the Supervisory Board of UNIQA International AG, Vienna (until 8 December 2020) as at 31 December 2020: 25,250 shares Markus Andréewitch, Member * 1955, appointed 26 May 2014 until the 24th AGM (2023) Member of the Supervisory Board of UNIQA Österreich Versicherungen AG, Vienna (since 25 May 2020) Marie-Valerie Brunner, Member * 1967, appointed 28 May 2018 until the 24th AGM (2023) Member of the Supervisory Board of UNIQA Österreich Versicherungen AG, Vienna (since 25 May 2020) as at 31 December 2019: 1,750 shares Anna Maria D´Hulster, Member * 1964, appointed 20 May 2019 until the 24th AGM (2023) Member of the Supervisory Board of UNIQA Österreich Versicherungen AG, Vienna (since 25 May 2020) Elgar Fleisch, Member * 1968, appointed 28 May 2018 until the 24th AGM (2023) Member of the Supervisory Board of UNIQA Österreich Versicherungen AG, Vienna (since 25 May 2020) Martin Grüll, Member * 1959, appointed 20 May 2019 until the 24th AGM (2023) Member of the Supervisory Board of UNIQA Österreich Versicherungen AG, Vienna (since 25 May 2020) Jutta Kath, Member * 1960, appointed 30 May 2016 until the 24th AGM (2023) Member of the Supervisory Board of UNIQA Österreich Versicherungen AG, Vienna (since 25 May 2020) Member of the Board of Directors of UNIQA Re AG, Zurich Members of the Supervisory Board CORPORATE GOVERNANCE / Corporate Governance Report CORPORATE GOVERNANCE 11 Delegated by the Central Works Council Sabine Andre * 1966, since 20 May 2019 Peter Gattinger * 1976, from 10 April 2013 until 26 May 2015 and since 30 May 2016 Heinrich Kames * 1962, since 10 April 2013 as at 31 December 2020: 56 shares Harald Kindermann * 1969, since 26 May 2015 as at 31 December 2020: 750 shares Franz-Michael Koller (until 20 May 2020) * 1956, from 17 September 1999 until 20 May 2020 as at 20 May 2020: 912 shares Irene Scheiber * 1965, since 20 May 2020 Committees of the Supervisory Board Committee Chairpeople Vice Chairman Members Delegated by the Central Works Council Committee for Board Affairs Walter Rothensteiner Christian Kuhn Burkhard Gantenbein, Erwin Hameseder (until 25 May 2020), Johann Strobl (since 25 May 2020) Working Committee Walter Rothensteiner Christian Kuhn Elgar Fleisch, Burkhard Gantenbein, Martin Grüll, Erwin Hameseder (until 25 May 2020), Johann Strobl (since 25 May 2020) Sabine Andre (since 20 May 2020), Peter Gattinger, Heinrich Kames, Franz-Michael Koller (until 20 May 2020) Audit Committee Walter Rothensteiner Christian Kuhn Anna Maria D’Hulster, Burkhard Gantenbein, Erwin Hameseder (until 25 May 2020), Jutta Kath, Johann Strobl (since 25 May 2020) Sabine Andre (since 20 May 2020), Peter Gattinger, Heinrich Kames, Franz-Michael Koller (until 20 May 2020) Investment Committee Martin Grüll Christian Kuhn Marie-Valerie Brunner, Anna Maria D´Hulster, Burkhard Gantenbein, Jutta Kath Sabine Andre (since 19 May 2020), Peter Gattinger, Heinrich Kames, Franz-Michael Koller (until 19 May 2020) IT Committee Markus Andréewitch Jutta Kath Marie-Valerie Brunner, Elgar Fleisch Peter Gattinger (since 19 May 2020), Heinrich Kames, Franz-Michael Koller (until 19 May 2020) Digital Transformation Committee (since 23 June 2020) Elgar Fleisch (since 23 June 2020) Burkhard Gantenbein (since 23 June 2020) Markus Andréewitch (since 23 June 2020), Marie-Valerie Brunner (since 23 June 2020), Anna Maria D’Hulster (since 23 June 2020), Walter Rothensteiner (since 23 June 2020) Sabine Andre (since 23 June 2020), Peter Gattinger (since 23 June 2020), Heinrich Kames (since 23 June 2020) 12 The work of the Supervisory Board and its committees The Supervisory Board advises the Management Board in its strategic planning and projects. It decides on the matters assigned to it by law, the Articles of Association and its rules of procedure. The Supervisory Board is re- sponsible for supervising the management of the com- pany by the Management Board. It is comprised of ten shareholder representatives and five employee repre- sentatives, and it convened for seven meetings in 2020. Five decisions were made by way of circular resolution. All members of the Supervisory Board attended more than half of the meetings of the Supervisory Board in the 2020 financial year either in person, or virtually via telephone or video conference. A Committee for Board Affairs has been appointed to handle the relationship between the company and the members of its Management Board relating to em- ployment and salary; this committee also acts as the Nominating and Remuneration Committee and is com- posed of the members of the Executive Committee of the Supervisory Board. The Committee dealt with the remuneration strategy and succession planning in three meetings in 2020. The Working Committee of the Supervisory Board is only called upon to make decisions if the urgency of the matter means that the decision cannot wait until the next meeting of the Supervisory Board. It is the Chairman’s responsibility to assess the urgency of the matter. The resolutions passed must be reported in the next meeting of the Supervisory Board. Generally, the Working Committee can make decisions on any issue that is the responsibility of the Supervisory Board, but this does not include issues of particular importance or matters that must be decided upon by the full Super- visory Board by law. The Working Committee did not convene for any meetings in 2020. One decision was made by way of circular resolution. The Audit Committee of the Supervisory Board per- forms the duties assigned to it by law. The Audit Com- mittee convened for three meetings, which were also attended by the statutory auditor of the (consolidat- ed) financial statements. The meetings dealt with all the documents relating to the financial statements, the Corporate Governance Report and the appropriation of profit proposed by the Management Board (each for the 2019 financial year). Furthermore, the audit of the 2020 financial statements of the companies of the con- solidated group was planned, and the statutory auditor reported on the results of preliminary audits. In par- ticular, the Audit Committee received quarterly reports from Internal Audit concerning audit areas and material findings based on the audits conducted. The Investment Committee advises the Management Board with regard to its investment policy; it has no decision-making authority. The Investment Commit- tee held four meetings during which the members discussed the capital investment strategy, questions concerning capital structure and the focus of risk management and asset liability management. The IT Committee dealt with the ongoing monitoring of the progress of the project implementing the UNIQA Insurance Platform (new core IT system) over the course of four meetings. The newly established Digital Transformation Commit- tee held two meetings in 2020 in which it dealt with the digitalisation of core processes, the reduction in complexities in the product portfolio and the consol- idation of digital work processes related to customers and employees. The chairmen of the respective committees informed the full Supervisory Board about the meetings and their committees’ work. For information concerning the activities of the Super- visory Board and its committees, please also refer to the details in the Report of the Supervisory Board. As the shareholder representatives are composed of the same individuals, the Supervisory Board of UNIQA In- surance Group AG meets in a joint session with the Su- pervisory Board of UNIQA Österreich Versicherungen AG. Independence of the Supervisory Board All members of the Supervisory Board elected during the Annual General Meeting have declared their independence under Rule 53 of the Austrian Code of Corporate Govern - ance. Both Anna Maria D’Hulster and Jutta Kath also fulfil the criteria of Rule 54 of the Austrian Code of Corporate Governance, as they are not shareholders with a stake of more than 10 per cent and they equally do not represent the interests of this group. A Supervisory Board member is considered independent if he or she is not in any business or personal relationship CORPORATE GOVERNANCE / Corporate Governance Report CORPORATE GOVERNANCE 13 with the company or its Management Board that repre- sents a material conflict of interest and is therefore capable of influencing the behaviour of the member concerned. UNIQA has established the following additional criteria for determining the independence of a Supervisory Board member: The Supervisory Board member should not have been a member of the Management Board or a senior executive of the company or a subsidiary of the company in the past five years. The Supervisory Board member should not maintain or have maintained within the last year any business rela - tionship with the company or a subsidiary of the com- pany that is material for the Supervisory Board member concerned. This also applies to business relationships with companies in which the Supervisory Board member has a significant economic interest, but does not apply to func - tions performed on decision-making bodies in the Group. The Supervisory Board member should not have been an auditor of the company or a shareholder or salaried employee of the auditing company within the last three years. The Supervisory Board member should not be a member of the Management Board of another company in which a Management Board member of the company is a mem - ber of the other company’s Supervisory Board unless one of the companies is a member of the other company’s group or holds an investment in the other company. The Supervisory Board member should not be a member of the Supervisory Board for longer than 15 years. This does not apply to Supervisory Board members who are shareholders with a business investment or who are rep - resenting the interests of such a shareholder. The Supervisory Board member should not be a close family relative (direct descendant, spouse, life partner, parent, uncle, aunt, sibling, niece or nephew) of a Man - agement Board member or of persons who are in one of the positions described in the above points. Measures to promote women on the Management Board, the Supervisory Board and in executive positions UNIQA is convinced that a high degree of diversity can enhance its success on a sustainable basis. Diversity makes employees successful together and has a positive influ- ence on corporate culture. In this context, diversity means different nationalities, cultures and a collective of men and women, especially in executive positions. Together, they contribute to the diversity of thought. With Marie-Valerie Brunner, Anna Maria D’Hulster and Jutta Kath, three women have been elected to join the Su- pervisory Board of UNIQA Insurance Group AG. The pro- portion of female Supervisory Board members among the elected members (shareholder representatives) therefore amounts to the legally required 30 per cent. Sabine Andre was appointed to the group of employee representatives on the Supervisory Board on 20 May 2019, with Irene Scheiber appointed on 20 May 2020. At 40 per cent, the proportion of female Supervisory Board members among employee representatives therefore exceeds the 30 per cent required by law. A total of nine Management Board members were ap- pointed to the Management Boards of UNIQA Insurance Group AG and UNIQA Österreich Versicherungen AG in Austria in 2020, none of whom were women. However, because UNIQA is convinced that a high level of diversity at all levels can sustainably increase the company’s suc- cess, the Management Board made a clear commitment in October 2020 to the objective of including more women in management positions. A multitude of different per- spectives means that the relevant risks can be identified in good time, with better decisions made and the full poten- tial for innovation exploited. Following the UNIQA trans- formation in the international companies, the board and executive levels show a share of women at 31 per cent (19 women and 43 men). Of a total of 509 managers at the Austrian location, 158 are women, which corresponds to a share of 31 per cent. In the UNIQA Group’s international companies outside Aus- tria, 329 of a total of 678 managers are currently wom- en, which equates to 48.5 per cent. In the entire UNIQA Group, the average number of female managers is 39.4 per cent (487 of a total of 1,187 persons). 14 Diversity concept The development of a comprehensive diversity concept was continued consistently in 2020 and has now also been reflected within the organisation with the appointment of Ulrike Kienast-Salmhofer as Diversity & Inclusion Officer as at 1 August 2020. Three aspects were added to the priori- ties selected in 2019 and defined as specific objectives for upcoming years: 1. Women in management – more women in management positions 2. Compensation fairness – equal pay for work of equal value 3. Generation management – old and young together contribute to the success of the company 4. People with disabilities – integrate, promote and offer positions where they can use their strengths 5. Achieving a work/life balance 6. Internationality and background – using internationality and cultural diversity as a strength 7. Sexual orientation – all sexual orientations and identities are respected Another workshop was held with Board members in Sep- tember 2020 on the topic of unconscious bias. A manda- tory module “Unconscious Bias. Inclusive Leadership” was introduced in the newly launched #leader_ship programme for all managers as a logical next step. UNIQA recognises that self-reflective confrontation with an individual’s own unconscious prejudices is the most important prerequisite for practising diversity in everyday life. Women in management UNIQA has acknowledged that equal participation of women in all processes and at all levels in the company is a crucial competitive factor. The Women’s Career Index was launched in the fourth quarter of 2020 as a well-found- ed assessment of the current situation aimed at pursuing the objective of more women in management positions in an even more structured and effective manner going forward. This has provided UNIQA with a tool to deter- mine its standpoint regarding the topic as well as a way to measure and manage the company’s equality objectives. The women’s network “Women with Power – Network Now” established in November 2020 involved the intro- duction of an initiative to exchange experiences, at the same time supporting the professional development of women and identifying any obstacles for that. More than 70 women from all areas of UNIQA provided strong mo- mentum at the launch event. UNIQA also constantly provides opportunities for personal development. The successful cooperation initiatives contin- ued for instance with Female Founders and Business Riots. Even though the measures imposed as a result of the coro- navirus required some changes to be made from March 2020, three female managers were able to take part in the three-month digital leadership programme Lead F, as well as to gain valuable insights from various events. Improving work/life balance plays a clear role in equal op- portunities. Important experiences from expanding work- ing from home options in the context of the coronavirus crisis have given this topic particular momentum. In the sense of “smart working”, a significant expansion of flexible working options is being evaluated for when the pandemic is over. UNIQA was awarded the equalitA seal of approval for the internal promotion of women in November 2020 as a re- sult of these initiatives, which were able to build on exist- ing foundations. UNIQA sees this seal of approval, which is awarded by the Federal Ministry for Digital and Economic Affairs, primarily as a mandate to promote gender equality more forcefully and sustainably going forward. Generation management The UNIQA Group has continued to deal with the issue of how it can make even more targeted use of the age diversi- ty in the company in future, optimise the transfer of knowl- edge and further promote intergenerational cooperation. The “Get ready” format launched in the previous year was used in this context, and the topic of generations in 2020 was covered as part of an event. Transfer of knowledge was defined as a priority within the scope of the demography consultation. Its objective is to provide UNIQA managers with tools that enable a struc- tured, appreciative and comprehensive handover when people with knowledge and experience leave the organi- sation. CORPORATE GOVERNANCE / Corporate Governance Report CORPORATE GOVERNANCE 15 Andreas Brandstetter Chairman of the Management Board Peter Eichler Member of the Management Board Wolf-Christoph Gerlach Member of the Management Board Peter Humer Member of the Management Board Wolfgang Kindl Member of the Management Board René Knapp Member of the Management Board Erik Leyers Member of the Management Board Klaus Pekarek Member of the Management Board Kurt Svoboda Member of the Management Board evaluated by PwC Wirtschaftsprüfung GmbH for the 2020 financial year – with the exception of Rules 77 to 83. Rules 77 to 83 of the Austrian Code of Corporate Governance are evaluated by the law firm Schönherr Rechtsanwälte GmbH. The evaluation is carried out based mainly on the question- naire, published by the Austrian Working Group for Cor- porate Governance, for the evaluation of compliance with the Code. The evaluation by PwC Wirtschaftsprüfung GmbH and Schönherr Rechtsanwälte GmbH confirming that UNIQA complied with the rules of the Austrian Code of Corporate Governance in 2020 – to the extent that these rules were covered by UNIQA’s declaration of conformity – will be published simultaneously with the annual financial report for the 2020 financial year. Some of the rules were not ap- plicable to UNIQA in the evaluation period. Vienna, 22 March 2021 People with disabilities Following the preliminary work completed in previous years, UNIQA began an intensive collaboration with myAbility in 2020. In addition to participating in and sup- porting events, such as the myAbility Lounge in February and the Disability Comfort Day in November, UNIQA also became a member of the myAbility Business Forum. The myAbility Business Forum is the largest B2B network on the topic of business and disability in the German-speak- ing world. Its objective is to achieve an economy accessi- ble to all. The fourth quarter of 2020 also saw the launch of the Dis- Ability Performance Check at UNIQA. This initiative aims to provide a well-founded assessment of the current situation as well as starting points for effective measures aimed to enhance inclusion of people with disabilities at UNIQA. UNIQA’s fundamental stance against any form of exclusion or discrimination was underlined by numerous points. For example, the UNIQA Tower was illuminated with orange lights to commemorate the International Day for the Elim- ination of Violence against Women as part of the “Orange the World” campaign, and it glowed in purple on the In- ternational Day of People with Disabilities (“Purple Light Up” campaign). UNIQA was also one of the first compa- nies in Austria to sign the #positiv arbeiten (“working positively”) declaration, an initiative by the Austrian AIDS charity, “AIDS-Hilfen Österreich”, to promote a working environment free from discrimination for people who are HIV-positive. Remuneration Report The Remuneration Report is prepared by the Supervisory Board of UNIQA Insurance Group AG in accordance with Section 78c of the Austrian Stock Corporation Act and will be submitted to a vote at the Annual General Meeting on 31 May 2021. Risk report, directors’ dealings A comprehensive risk report (Rules 69 and 70 of the Aus- trian Code of Corporate Governance) is included in the notes to the consolidated financial statements. The noti- fications concerning directors’ dealings in the year under review (Rule 73 of the Austrian Code of Corporate Gov- ernance) can be found in the Investor Relations section of the Group website at www.uniqagroup.com. External evaluation Implementation of, and compliance with, the individual rules in the Austrian Code of Corporate Governance were Report of the SUPERVISORY BOARD 16 Dear Shareholders, We had barely set the structural and staff-related course for the future of the UNIQA Group at the end of 2019 when 2020 began with two major upheavals: the strategically important acquisition in Eastern Europe in February and the emergence of Covid-19 in March. I am dividing my report into three parts in order to give you a good over- view of the work of the Supervisory Board in this special transformation year. 1. The most important features of 2020 The first meetings of the year were dedicated to the largest acquisition in UNIQA’s corporate history: the Su- pervisory Board dealt intensively with the financial situation of the AXA companies in Poland, the Czech Republic and Slovakia at the time along with their development potential. We paid special attention to various options for financing the purchase price of approximately €1 billion as well as to possible effects on the leverage ratio, risk capital, solvency ratio and the applicable balance sheet items of our Group. The Management Board and Supervisory Board were involved intensively with the possible consequences of Covid-19 from the second half of the first quarter. The focus was on the potential impact on our clients, employees, business performance, risk modelling and profit forecasts, as well as the possible consequences for our dividends. The Supervisory Board held weekly discussions with the Man- agement Board in the second quarter regarding the most significant decisions of the internal Covid-19 crisis team. The operating principles for our Supervisory Board and all its committees also changed abruptly in the second quarter: All meetings of the Supervisory Board were held virtually from April onwards, with one exception in the summer. First of all, we had to learn how to handle this technically and in terms of Group dynamics. We soon realised that even better preparation of the written documents, strict meeting discipline and good time management would make a particularly effective contribution towards significantly increasing the quality and therefore the ef- ficiency of our digital meetings. The decision to hold the Annual General Meeting virtually was not an easy one for us either – following the capital increase in October 2013, the “Re-IPO”, active and modern capital market cultivation and therefore personal discussions with you as our shareholders are a key concern of the Management Board and Supervisory Board. From the middle of the year, our work was focused on the details of our new “UNIQA 3.0 – Seeding the Future” strategic programme. Aligning the findings from the Covid-19 pandemic with the essential cornerstones of UNIQA 3.0 was of particular concern to the Supervisory Board here: are our assumptions still correct regarding how society and customer needs will evolve by 2030? Are there any new trends that we had not considered adequately prior to this? Do certain initiatives need to be prioritised differently by the Management Board? Can the promises made by the Management Board with UNIQA 3.0 be kept to you as shareholders, including the impact of Covid-19? We deliberately took a few months longer than originally planned for this discussion process and only took the relevant decisions at our last meeting of the year in November. Due to the concentration of topics with major strategic importance, we had little time to reflect on the quality of our cooperation within the Supervisory Board over the course of the past year. At the same time, a significant need for constant further development of our activities and our capabilities has become apparent in an environment subject to dynamic and even disruptive change, particu- larly as a result of Covid-19. Towards the end of the year, we therefore decided to appoint Werner H. Hoffmann, Head of the Institute for Strategic Management at the Vienna University of Economics and Business, to support us in a structured process to optimise cooperation within the Supervisory Board. The results are expected in the course of 2021. CORPORATE GOVERNANCE / Report of the Supervisory Board 16 CORPORATE GOVERNANCE / Report of the Supervisory Board 17 CORPORATE GOVERNANCE 17 2. Timeline and details of our main areas of focus In the course of 2020, the Supervisory Board was regularly informed by the Management Board about the business performance and position of UNIQA Insurance Group AG and the Group as a whole. It also supervised the Manage- ment Board’s management of the business and fulfilled all the tasks assigned to the Supervisory Board by law and the Articles of Association. At the Supervisory Board meetings, the Management Board presented detailed quarterly reports and provided additional oral as well as written reports. The Supervisory Board was given timely and comprehensive information about measures requiring our approval. No informational events or special seminars were held for the Supervisory Board in 2020 due to the restrictions imposed through the Covid-19 pandemic. Focus of our deliberations The Supervisory Board met on seven occasions in 2020. Our meetings focused on the respective earnings situation within our Group and its further strategic development. We also made five decisions by way of circular resolution. We discussed the results of the due diligence of the AXA Group companies for sale in Poland, the Czech Republic and Slovakia at an extraordinary meeting on 14 January and approved the submission of a binding offer by UNIQA. At our meeting held on 19 February, we mainly dealt with the preliminary results of the Group in the 2019 financial year and the status of talks with AXA on the takeover of the AXA Group companies in Poland, the Czech Republic and Slovakia. We also received reports on the status of the UNIQA 3.0 strategic programme and examined the options for restructuring the Austrian Group structure. On 10 April the shareholder representatives on the Su- pervisory Board passed a resolution in writing to meet the minimum proportion of women and men on the Supervisory Board required by law separately from the employee representatives on the Supervisory Board. The Supervisory Board’s (virtual) meeting on 15 April focused on the audit of the annual financial statements and consolidated financial statements for the year ended 31 December 2019 and on the reports from the Man- agement Board regarding the latest developments in the Group in the first quarter of 2020. We also discussed the agenda for the 21st Annual General Meeting held on 25 May 2020, in particular the proposed appropriation of profits and the proposal to the Annual General Meeting to elect PwC Wirtschaftsprüfung GmbH as statutory au- ditors for the 2021 financial year. The report by auditors PwC Wirtschaftsprüfung GmbH and lawyers Schönherr Rechtsanwälte GmbH regarding compliance with the provisions of the Austrian Code of Corporate Governance (ÖCGK) in the 2019 financial year was also acknowledged. We passed a resolution on 27 April by way of circular resolution to propose Johann Strobl for election to the Supervisory Board at the 21st Annual General Meeting on 25 May 2020. A subsequent special election was required following the resignation of Erwin Hameseder. At the (virtual) meeting on 20 May, we looked in detail at the Group’s results in the first quarter of 2020. The Supervisory Board was constituted by way of circular resolution on 25 May and, following Erwin Hameseder’s resignation from the Supervisory Board, Johann Strobl was elected to the Executive Committee, the Committee for Board Affairs, the Working Committee and the Audit Committee of the Supervisory Board. We also passed a resolution in writing on 25 May to appoint the (additional) Management Board members of UNIQA Österreich Versicherungen AG and UNIQA International AG (the company ceased to exist as a result of the merger on 8 December 2020) to the Management Board, which will now consist of nine members going forward, in accordance with the modified organisational structure of the Austrian insurance Group with effect from 1 July 2020. The Management Board of UNIQA Österreich Versicherungen AG was set up with the same individuals as were on the company’s Management Board as at 1 July 2020. Similarly, the Supervisory Board of UNIQA Österreich Versicherungen AG also consisted of the same individuals as the company’s Supervisory Board on 25 May 2020. The same individuals appointed to all committees of the Supervisory Board at the level of UNIQA Insurance Group AG were appointed at the level of UNIQA Österreich Versicherungen AG, including with identical responsibilities. Meetings of the compa- ny’s Supervisory Board and its committees will be held to coincide with the corresponding meetings of UNIQA Österreich Versicherungen AG from 25 May 2020. At our (virtual) extraordinary meeting on 23 June we discussed the operational development of the AXA compa- nies in Poland, the Czech Republic and Slovakia acquired through the purchase agreement of 7 February 2020 as far as possible before closing, and the status of the competition law proceedings before the EU Commission, as well as the status of the proceedings before the local supervisory authorities required for the completion of the transaction. We also discussed the possible options available for financing the acquisition price. On 29 June, we finally approved by way of circular res- olution the issue of a senior bond with a value of up to €600 million and a hybrid capital bond (“Green Bond”) with a value of up to €200 million. On 19 August, we discussed the Group’s earnings in the first half of 2020 and developments in the third quarter of 2020. We also focused intensively on the development of the future UNIQA 3.0 strategic programme (including the “Cherrisk” and “Emerging Business Opportunities” business areas). In addition to reporting on the Group’s profits in the first three quarters of 2020 and ongoing developments in the fourth quarter of 2020, our (virtual) meeting on 18 November also covered the updated forecast for the 2020 financial year and the report on the Own Risk and Solvency Assessment (ORSA) 2020. One-off measures affecting the 2020 financial statements (headcount reductions, impairments) were acknowledged. We also approved the UNIQA 3.0 strategic programme (in par- ticular the investments in the “Cherrisk” and “Emerging Business Opportunities” business areas) and adopted the budget for 2021 as well as the medium-term planning up to 2025. A new process was introduced for evaluating the activities of the Supervisory Board in accordance with the Austrian Code of Corporate Governance. Committees of the Supervisory Board In addition to the Audit Committee required by law, we have set up a further five committees in order to ensure that the work of our Supervisory Board is structured effectively. The work of the Executive Committee of the Supervi- sory Board, which consists of the same members as the Committee for Board Affairs and the Nominating and Remuneration Committee for the Management Board, was also of particular significance in 2020. The Commit- tee dealt intensively with the final developments to the UNIQA 3.0 strategic programme and the remuneration strategy of the extended Management Board over the course of multiple meetings. The Audit Committee held three meetings in 2020 and these meetings were also attended by the auditors of the (consolidated) financial statements. All documents relating to the financial statements were discussed at the (virtual) meeting on 15 April, with the proposal for the appropriation of profits adjusted with the agreement of the Management Board. The annual activity report 2019 from the Compliance Officer was also submitted and acknowledged. At the (virtual) meeting held on 20 May, the auditor presented the plans for the audit of the 2020 financial statements prepared by the companies in the UNIQA Group and coordinated this planning and strat- egy with the Committee. At the (virtual) meeting held on 18 November, the auditor informed the Committee about the findings from its preliminary audits. In addition, the Committee received quarterly reports from Internal Audit on the areas audited by this department and any material findings that arose from these audits. The Investment Committee held four meetings at which the members discussed the capital investment strategy, questions concerning capital structure and the focus of risk and asset liability management. The IT Committee dealt with the ongoing monitoring of the progress of the project implementing the UNIQA Insurance Platform over the course of four meetings. The new Digital Transformation Committee established on 23 June 2020 held two meetings dedicated to the dig- italisation of core processes, the reduction of complexities in the product portfolio and the consolidation of digital working processes related to customers and employees. 18 CORPORATE GOVERNANCE / Report of the Supervisory Board 18 19 The Working Committee did not hold any meetings in the past financial year. A decision was taken by way of circular resolution to sell a property. The various chairs of the committees then informed the members of the Supervisory Board in detail about the meetings and their committee’s work. 3. Separate and consolidated financial statements The separate financial statements prepared by the Manage- ment Board, the Management Report of UNIQA Insurance Group AG, the consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRSs) and the Group Management Report for 2020 were audited by PwC Wirtschaftsprüfung GmbH; the statutory auditor also verified that a separate consolidated non- financial report and a consolidated corporate governance report had been prepared for the 2020 financial year. The audit raised no objections. The separate and consolidated financial statements were each awarded an unqualified audit opinion for 2020. The Supervisory Board acknowledged and approved the findings of the audit. The evaluation of UNIQA’s compliance with the rules of the Austrian Code of Corporate Governance in the 2020 financial year was carried out by PwC Wirtschaftsprüfung GmbH, whereas compliance with Rules 77 to 83 of the Austrian Code of Corporate Governance was assessed by Schönherr Rechtsanwälte GmbH. The audits found that UNIQA had complied with the rules of the Austrian Code of Corporate Governance in the 2020 financial year – to the extent that they were included in UNIQA’s declaration of conformity. The Supervisory Board acknowledged the consolidated financial statements for 2020 and approved the 2020 annual financial statements of UNIQA Insurance Group AG. It also endorsed both the Management Report and the Group Management Report. The 2020 annual financial statements were thereby adopted in accordance with Section 96(4) of the Austrian Stock Corporation Act. The Supervisory Board reviewed and approved the pro- posal for the appropriation of profit submitted by the Management Board. Accordingly, a dividend distribution of €0.18 per share will be proposed to the Annual General Meeting on 31 May 2021. Once again this year on behalf of the entire Supervisory Board, I would like to thank all employees of UNIQA Insur- ance Group AG and all Group companies for their major personal commitment in the 2020 financial year and wish them every continued success for their future. Vienna, April 2021 On behalf of the Supervisory Board Walter Rothensteiner Chairman of the Supervisory Board CORPORATE GOVERNANCE 19 20 Group MANAGEMENT REPORT and Consolidated FINANCIAL STATEMENTS 21 GROUP MANAGEMENT REPORT GROUP MANAGEMENT REPORT 22 CONSOLIDATED FINANCIAL STATEMENTS 42 General information 42 Consolidated Statement of Financial Position 44 Consolidated Income Statement 45 Consolidated Statement of Comprehensive Income 46 Consolidated Statement of Cash Flows 47 Consolidated Statement of Changes in Equity 48 Notes to the Consolidated Financial Statements 51 Segment Reporting 51 Investments 64 Technical items 76 Other non-current assets 88 Other current assets 95 Taxes 96 Social capital 98 Equity 102 Subordinated liabilities 103 Other current and non-current liabilities 104 Other non-technical income and expenses 106 Other disclosures 106 Significant events after the reporting date 120 Risk report 120 Approval for publication 135 Declaration of the legal representatives 136 Audit opinion 137 22 Economic environment Economic development was shaped above all by the coronavirus pandemic and the associated restrictions in 2020. At the beginning of the spring, the rapidly rising Covid-19 figures in the eurozone led to some harsh re- strictions on business activities. This was accompanied by an unprecedented recession affecting almost all sectors of the economy. As a result, GDP in the eurozone fell by approximately 15 per cent cumulatively in the first half of 2020, and industrial production in April 2020 was almost 30percent below the level at the beginning of the year. Unlike in previous crises, sharp fluctuations were ob- served not only in cyclical sectors, but also in the service sector and private consumption. Starting in May 2020, economic activity in the eurozone rose again once the restrictions were relaxed, and some areas were even able to catch up with pre-coronavirus lev- els again. However, this should not hide the fact that pro- duction output and consumer demand lost in the spring were not compensated by a long shot, and that overall economic output in the third quarter was still around 4percent below the levels at the end of 2019. To control the rapidly increasing spread of Covid-19, some severe restrictions were reintroduced in Europe from Septem- ber 2020 onwards, particularly in November 2020. The service sector in particular and therefore private con- sumption were also severely affected by this. In the winter of 2020/2021, we therefore expect a further decline in macroeconomic activity, but it is likely to be significantly less extreme than in the first half of 2020. The slump in consumer demand caused by the business environment also put a dampener on inflation. While inflation was still at 1.4 per cent p.a. at the beginning of 2020, and the rate of inflation slipped in to a negative range from August onwards. The ECB responded to the coronavirus crisis and its accompanying effects with a comprehensive easing of monetary policy. It offered additional refinancing possibilities for banks, while making the conditions for targeted long-term refinancing transactions much more attractive. The existing bond acquisition programme, worth €20 billion per month, was supplemented by an envelope of €120 billion by the end of the year and a pandemic emergency purchase programme (PEPP) at an initial total of €1,350 billion. Overall, this succeeded in preventing distortions in the financial sys- tem and ensuring favourable credit supplies to the public and private sectors. Following the strong increase due to the coronavirus crisis, risk premiums in the eurozone fell sharply over the course of the year and are currently at approximately the same level as at the beginning of 2020. Returns have also declined generally and in some cases are at new all- time lows. One of the main reasons for the decline in the spreads for euro government bonds since the pandemic broke out was the ECB’s significant monetary easing pol- icy, in particular the bond purchase programmes, which reduced the net liquidity available on the market. In addition, the reconstruction assistance planned by the EU strengthened investor confidence in the creditworthiness of the eurozone countries: direct borrowing by the EU, which ensures low-cost financing, is intended to provide grants and loans to the member states. The expectations with regard to the immunisation programmes that have now begun and the anticipated economic recovery were and remain an additional factor in the decline in risk premiums. Property and casualty insurance and health insurance continue to grow in Austria Premium revenues in Austrian property and casualty insurance were strong in 2020 with 2.6 per cent growth to €10.2 billion. Health insurance performed even more strongly in 2020 than in the previous year with growth in premiums of 3.9 per cent to €2.4 billion. However, the trend towards premium attrition continued in life insurance, with premiums shrinking by around 1.4percent year-on-year to just under €5.4 billion. The Group Management Report GROUP MANAGEMENT REPORT 23 GROUP MANAGEMENT REPORT main reason for this was a decline in life insurance with recurring premiums. These fell by 2.0 per cent to €4.7bil- lion. Single-premium insurance on the other hand rose by 2.7 per cent to €0.7 billion in 2020. Pandemic interrupts the catch-up process in Eastern Europe, return to growth expected in 2021 and 2022 Covid-19 resulted in a noticeable decline in economic out- put of over 4 per cent in the markets of Central and East- ern Europe last year, but experts expect the CEE markets to return to significant economic growth of around 3 to 4percent for 2021 and 2022. Based on the positive eco- nomic forecasts, the growth advantage currently enjoyed by the CEE markets compared with western European markets should also be established again following the coronavirus pandemic. The consequences of the pandemic also had an impact on the insurance markets in CEE, with strong premium growth in recent years no longer achieved in the previous year. However, the extent to which the pandemic is affect- ing the individual countries in the region varies. There are also significant differences in the restrictive measures imposed by local governments to prevent the spread of the virus. However, according to the data currently available, most insurance markets in Central and Eastern Europe show generally stable revenue performance overall, de- spite the difficult economic conditions in 2020. Demand for insurance products was higher in the pre- vious year in particular in some segments of property insurance, such as fire insurance, general liability insur- ance and motor insurance. In contrast, the segment of life insurance saw a marked fall in premiums, following a slight increase here in 2019. In addition to the persistently low interest rate environment, the main reason for this was the decline in new business via bank branches. Many of the financial institutions’ offices were closed during the lockdowns and various other restrictions, meaning that the consultation-intensive pensions business could not take place as usual. However, demand for life insurance is generally expected to recover in CEE over the next few years, as there is still a need for private pension provision outside of the state pension systems. Many insurers have also responded to the persistently low interest rates by launching new provision solutions. CEE remains a region with high growth potential for UNIQA even though the growth of the insurance markets was interrupted over the past year due to the coronavirus. UNIQA has been active in Central and Eastern Europe for more than 20 years. UNIQA significantly strengthened its market position in this growth region once again with the purchase of the AXA companies in Poland, the Czech Republic and Slovakia at the beginning of 2020. The positive economic performance expected in CEE after the end of the pandemic is expected to contribute towards higher income levels and household consumer spending in the coming years. Increasing prosperity and growing purchasing power go hand in hand with higher demand for insurance solutions. Premiums per capita (insurance density) as well as the share of the insurance industry in gross domestic prod- uct (insurance penetration) in CEE remain well below the average for western European markets, thus clearly demonstrating the very high potential for these insurance markets to catch up. UNIQA Group With premiums written including savings portions from unit-linked and index-linked life insurance of €5,565.3million, the UNIQA Group is among the leading insurance groups in Central and Eastern Europe. The savings portions from unit-linked and index-linked life insurance in the amount of €304.1 million were netted out against the change in insurance provision pursuant to FAS 97 (US GAAP). Without taking the savings portions from unit-linked and index-linked life insurance into consideration, the volume of premiums written amounted to €5,261.2million. 24 UNIQA in Europe UNIQA offers its products and services via all distri- bution channels (hired sales force, general agencies, brokers, banks and direct sales) and covers virtually the entire range of insurance lines. UNIQA is the second- largest insurance group in Austria, with a presence in 15countries of the CEE growth region: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Hungary, Kosovo, Montenegro, North Macedonia, Poland, Romania, Russia, Serbia, Slovakia and Ukraine. In addition, insurance companies in Switzerland and Liechtenstein are also part of the UNIQA Group. The listed holding company UNIQA Insurance Group AG manages the Group and also operates the indirect insurance business concluded as active reinsurance with another insurance company. Moreover, UNIQA Insurance Group AG carries out numerous service functions for UNIQA Österreich Versicherungen AG and its interna- tional Group companies, in order to take best advantage of synergy effects and to implement the Group’s long-term corporate strategy consistently. Property and casualty insurance The property and casualty insurance line includes prop- erty insurance for private individuals and companies, as well as private casualty insurance. The UNIQA Group received premiums written in property and casualty insurance in the amount of €3,010.3 million in 2020 (2019: €2,846.8 million) – which is 54.1 per cent (2019: 53.0 per cent) of total premium volume. The largest share by far in the volume of property and casualty insurance comes from private consumer business. Most property and casualty insurance policies are taken out for a limited term of up to three years. A broad spread across the dif- ferent risks of a great many customers and the relatively short terms of these contracts lead to only moderate capital requirements and also make this business segment attractive as a result. Health insurance Health insurance in Austria includes voluntary health insurance for private customers, commercial preventive healthcare and opt-out offers for certain independent professions such as lawyers, architects and chemists. Although health insurance is still at the early stages in CEE, increased levels of prosperity in the region make the long-term growth potential even greater. Across the en- tire Group, premiums written amounted to €1,167.6mil- lion in 2020 (2019: €1,130.8 million) – or 21.0 per cent (2019: 21.0per cent) of total premium volume. UNIQA is the undisputed market leader in this strategically impor- tant business line in Austria, with around 46 per cent of market share. The overwhelming majority comes from Austria with around 93 per cent of premiums, with the remaining 7 per cent from international business. Life insurance Life insurance covers economic risks that stem from the uncertainty as to how long a customer will live. It includes savings products such as classic and unit-linked life insurance. There are also biometric products which hedge against risks such as occupational disability, long-term care needs or death. The life insurance business model is structured towards the long term with terms that are around 25 years on average. Life insurance is still facing major challenges, as the low interest rate environment is particularly disadvantageous to all long-term forms of saving and investment, including for life insurance. In life insurance, UNIQA achieved a Group-wide premium volume (including savings portions from unit-linked and index-linked life insurance) of €1,387.5 million (2019: €1,394.9 million) – i.e. 24.9 per cent (2019: 26.0 per cent) of total premium volume in 2020. Companies included in the IFRS consolidated financial statements In addition to the annual financial statements of UNIQA Insurance Group AG, the consolidated financial state- ments include the financial statements of all subsidiaries in Austria and abroad as well as those of the investment funds under the Group’s control. The basis of consolida- tion – including UNIQA Insurance Group AG – consisted of 33 Austrian (2019: 33) and 66 international subsidi- aries (2019: 57) as well as five Austrian (2019: 6) and six international pension and investment funds (2019: 1). The associates are four Austrian companies (2019: 5) and one international company (2019: 1) that were accounted for using the equity method for the Group accounting. Details on the consolidated companies and associates are contained in the corresponding overview in the consol- idated financial statements. The accounting and meas- urement methods are also described in the consolidated financial statements. Error correction in accordance with IAS 8 As a result of a model change in the impairment test, the goodwill allocated to the CGUs Bulgaria and Romania in the 2019 financial year amounts to €54.6 million. The determination of the cash flow in perpetuity and the dis- count rate is adjusted in the revised impairment test. GROUP MANAGEMENT REPORT 25 GROUP MANAGEMENT REPORT Furthermore, in preparation for the initial application of IFRS 17 (Insurance Contracts) which is to be applied from 1 January 2023, it was discovered that deferred profit participation was not accounted for in health insurance. This is being corrected and the same content is also being changed retroactively in the accounting method for life insurance, in order to achieve a uniform presentation. The adjustments are retroactive to 1 January 2019 and have an impact of €9.0 million on the earnings before taxes for the 2019 financial year. Risk reporting UNIQA’s comprehensive risk report is included in the notes to the 2020 consolidated financial statements. Corporate Governance Report Since 2004, UNIQA has pledged to comply with the Austrian Code of Corporate Governance. UNIQA pub- lishes its consolidated Corporate Governance Report at www. uniqagroup.com in the Investor Relations section. Consolidated non-financial statement, consolidated non-financial report In accordance with Section 267a (6) of the Austrian Commercial Code, UNIQA Insurance Group AG prepares its consolidated non-financial statement as a separate combined non-financial report. The separate condensed non-financial report is prepared and signed by all legal representatives. It is submitted to the Supervisory Board for review and published together with the Group Man- agement Report pursuant to Section 280 of the Austrian Commercial Code. UNIQA 3.0 At the end of 2020, the UNIQA Group decided on a far-reaching strategic programme named UNIQA 3.0 for the years 2021 to 2025. Part of this transforma- tion programme involves UNIQA becoming even more customer- focused and making internal processes simpler, more efficient and more cost-effective. This will also be accompanied by the reduction of around 600 employees in Austria by the end of 2022. These measures will therefore result in restructuring expenses in the amount of approx- imately €99 million in the 2020 consolidated financial statements. In addition, impairments to the goodwill in Serbia, Bulgaria and Romania result in a one-off charge of €106 million. 26 Group business development Premiums written (including savings portions from unit-linked and index-linked life insurance) rose by 3.6 per cent to€5,565.3 million The combined ratio deteriorated from 96.4 per cent to 97.8 per cent Non-recurring expenses of €205 million for the restructuring provision and impairment losses on goodwill in the fourth quarter of 2020 Consolidated profit/(loss) due to non-recurring effects of €19.4 million Proposed dividend of €0.18 per share for 2020 Pre-tax profit at 2018 levels expected for 2021 Changes in premiums UNIQA’s total premium volume, including savings por- tions from unit-linked and index-linked life insurance in the amount of €304.1 million (2019: €309.8 million), increased by 3.6 per cent to €5,565.3 million in 2020 (2019: €5,372.6million). The main driver of this was the initial consolidation of AXA CEE companies in the fourth quarter of 2020. Details on the acquisition of the AXA companies can be found in note 1 to the consolidated financial state- ments. Premiums written including savings portions from unit-linked and index- linked life insurance In € million 2016 20182017 2019 2020 5,565 5,293 5,048 5,309 5,373 The premium volume fell slightly overall compared with the previous year due to the coronavirus pan- demic after adjusting the premiums from the AXA companies acquired. Slight declines in premiums in property and casualty insurance were recorded in the maritime, aeronautical and transportation insurance business lines as well as other insurance policies due to the coronavirus. No Covid-19-related effects were observed in the health and life insurance business areas. In the area of insurance policies against recurring pre- mium payments, there was a pleasant increase of 3.9per cent to €5,472.2 million (2019: €5,267.9 million). In the area of the single premium business, however, the premium volume fell by 10.9 per cent to €93.2million (2019:€104.6 million) in line with the strategy. Premiums written in property and casualty insurance grew by 5.7 per cent to €3,010.3 million in 2020 (2019: €2,846.8 million). In health insurance, premiums writ- ten in the reporting period increased by 3.2 per cent to €1,167.6million (2019: €1,130.8 million). In life insur- ance, premiums written including savings portions from unit-linked and index-linked life insurance fell overall by 0.5percent to €1,387.5 million (2019: €1,394.9 million). One of the reasons for this was the subdued demand due to low interest rates and the temporary closure of our partner banking branches during the lockdown phases in 2020, especially in CEE. The Group premiums earned, including savings por- tions from unit-linked and index-linked life insurance (after reinsurance) in the amount of €304.1 million UNIQA Group In € million 2020 2019 2018 Premiums written including savings portions from unit-linked and index-linked life insurance 5,565.3 5,372.6 5,309.5 Cost ratio (after reinsurance) 29.4% 27.2% 25.9% Combined ratio (after reinsurance) 97. 8% 96.4% 96.8% Earnings before taxes 57.1 232.0 294.6 Consolidated profit/(loss) (proportion of the net profit for the period attributable to the shareholders of UNIQA Insurance Group AG) 19.4 171.0 243.3 GROUP MANAGEMENT REPORT 27 GROUP MANAGEMENT REPORT Property and casualty insurance In € million 2020 2019 2018 Premiums written 3,010.3 2,846.8 2,774.4 Insurance benefits (net) –1,775.1 –1,719.5 –1,690.1 Loss ratio (after reinsurance) 63.2% 64.2% 65.4% Operating expenses (net) –970.7 –861.2 –811.0 Cost ratio (after reinsurance) 34.6% 32.2% 31.4% Combined ratio (after reinsurance) 97. 8% 96.4% 96.8% Net investment income 29.5 122.1 128.1 Earnings before taxes – 67.9 61.4 120.3 Technical provisions (net) 3,732.1 3,061.3 2,970.6 (2019:€309.8million), rose by 3.1 per cent to €5,333.7million (2019: €5,170.8 million). The volume of premiums earned (net, in accordance with IFRSs) even grew by 3.5percent to €5,029.5 million (2019: €4,861.1million). Change in insurance benefits Insurance benefits before reinsurance (see note 9 in the consolidated financial statements) increased in the 2020 financial year by 1.4 per cent to €3,819.8 million (2019: €3,765.3million). Consolidated insurance benefits (net) rose less strongly than the volume of premiums earned in the past year by 0.8per cent to €3,694.6 million (2019: €3,666.1 million). Insurance benefits (net) In € million 3,386 3,634 3,547 3,666 3,695 2016 20182017 2019 2020 In 2020 despite the extraordinary charges associated with the Covid-19 pandemic, the loss ratio after reinsurance in property and casualty insurance fell to 63.2 per cent (2019:64.2 per cent) due to a favourable trend in basic loss- es. An additional loss was incurred of around €70 million mainly from the area of business interruption insurance in direct connection with Covid-19. This was counteracted by lower expenses for motor vehicle insurance due to lower mobility in 2020. However, the combined ratio after rein- surance deteriorated to 97.8 per cent (2019: 96.4 per cent) due to thehigher cost ratio at Group level. Combined ratio after reinsurance In per cent 2016 20182017 2019 2020 Loss ratio Cost ratio 97.9 96.8 97. 5 96.4 97. 8 63.2 64.2 65.4 65.9 65.7 32.4 31.4 31.6 32.2 34.6 Operating expenses Total consolidated operating expenses (see note 10 in the consolidated financial statements) less reinsurance com- mission and share of profit from reinsurance ceded rose by 11.3 per cent to €1,566.4 million in the 2020 financial year (2019: €1,407.1 million). Expenses for the acquisition of insurance less reinsurance commission received and the share of profit from reinsurance ceded in the amount of €18.5 million (2019: €17.9 million) increased slightly less than the volume of premiums earned, by 3.0 per cent to €934.9 million (2019: €907.4 million). Other operating expenses rose by 26.4 per cent to €631.5 million (2019: €499.7million) due to higher personnel and IT costs in connection with the integration of the AXA companies in CEE in the amount of €39 million and one-off restruc- turing expenses of €99 million. This includes expenses amounting to around €62 million (2019: around €51million) as part of the innovation and investment programme. The cost ratio after reinsurance, i.e. the ratio of total operating expenses less the amounts received from re- insurance commission and share of profit from reinsurance ceded to the Group premiums earned, including savings portions from unit-linked and index-linked life insurance, increased to 29.4 per cent during the 28 past year (2019: 27.2 per cent) as a result of the develop- ments mentioned above. The cost ratio before reinsurance rose to 28.6percent (2019: 26.7percent). Investments The UNIQA Group’s investment portfolio (including investment property, financial assets accounted for using the equity method and other investments) rose by €1,694.4million to €22,319.2 million in the 2020 financial year (31 December 2019: €20,624.8 million). The main reason for this was the first-time inclusion of the capital investment portfolio of the AXA-CEE companies. Net investment income fell to €505.4 million (2019: €585.2million). The reasons for this were losses in the value of shares, fixed-income securities and equity in- vestments. In addition, gains realised from the sale of properties of around €46 million had a positive impact in 2019. Nosignificant gains from the sale of properties were recorded in 2020. Currency effects amounting to around €15.7 million also had a negative effect on net investment income. In addition, the equity method accounting of the 14.3percent holding in STRABAG SE in 2020 resulted in a positive contribution to earnings of €56.0 million (2019: €57.4 million). A detailed description of net investment in- come can be found in the consolidated financial statements (see note 5 in the consolidated financial statements). Net investment income declined compared with the previ- ous year due to negative capital market developments as a result of the coronavirus pandemic. However, an upward trend was observed in the capital markets from the second quarter of 2020. Any reversals of impairment losses were recognised in other comprehensive income in the item “Profits recognised in equity from the measurement of financial instruments available for sale”. Other income and other expenses Other income rose by 12.6 per cent in 2020 to €216.5 million (2019: €192.4million). Other expenses rose by 20.7 per cent to €230.5 million in the reporting period (2019: €191.0million). Results The UNIQA Group’s technical result fell in 2020 by 13.5 per cent to €78.3million (2019: €90.5 million) as a result of the increased cost burden from one-off expenses. Operat- ing profit fell by 28.4 per cent to €247.6 million (2019: €345.9million). UNIQA’s earnings before taxes fell by 75.4 per cent to €57.1million (2019: €232.0 million), primarily due to the one-off restructuring provision and impairment of good- will. Profit/(loss) for the year also fell by 86.1 per cent to €24.3 million (2019: €175.1 million). Income tax expense fell to €32.8 million in 2020 (2019: €57.0 million). Earnings before taxes In € million 2016 20182017 2019 2020 226 295 265 232 57 The consolidated profit/(loss) (i.e. proportion of the net profit for the period attributable to the shareholders of UNIQA Insurance Group AG) amounted to €19.4 million (2019: €171.0 million). Earnings per share fell as a result to €0.06 (2019: €0.56). Health insurance In € million 2020 2019 2018 Premiums written 1,167.6 1,130.8 1,086.4 Insurance benefits (net) –963.1 –969.3 –908.0 Operating expenses (net) –225.0 –187.8 –183.9 Cost ratio (after reinsurance) 19.3% 16.7% 17.0% Net investment income 104.5 109.0 103.4 Earnings before taxes 79.5 85.8 96.2 Technical provisions (net) 3,622.8 3,433.9 3,190.9 GROUP MANAGEMENT REPORT 29 GROUP MANAGEMENT REPORT Earnings per share In € 0.48 0.79 0.56 0.56 0.06 2016 20182017 2019 2020 The return on equity (after taxes and non-controlling interests) fell to 0.6 per cent in the reporting period (2019:5.4per cent). Return on equity In per cent 2016 20182017 2019 2020 4.7 7.9 5.4 0.6 5.4 On this basis, the Management Board will propose a divi- dend of €0.18 per share to the Supervisory Board and the Annual General Meeting (2019: €0.18 per share). 1) Proposal to the Annual General Meeting Dividend per share In € 0.18 1) 2016 20182017 2019 2020 0.51 0.49 0.53 0.18 Own funds and total assets Total equity attributable to the shareholders of UNIQA Insurance Group AG increased by €82.4 million to €3,450.1million in the past financial year (31 December 2019: €3,367.7 million). This was due to the increased measurement of financial instruments available for sale caused by the general fall in interest rates. Non- controlling interests came to €24.8 million (31 Decem- ber2019: €19.4million). The Group’s total assets came to €31,908.0million as at 31 December 2020 (31 Decem- ber2019: €28,673.8 million). 30 Cash flow UNIQA’s net cash flow from operating activities amounted to €167.9 million in 2020 (2019: €519.9 million). Cash flow from investment activities amounted to €–714.7 million (2019: €–526.9 million). Net cash flows from financing activities amounted to €712.8 million as a result of the issuance of two bonds (2019: €–958.9 million). Over- all, cash and cash equivalents increased by €161.1 mil- lion to €640.7million in the 2020 financial year (2019: €479.6 million). Employees UNIQA’s average number of employees (full-time equiv- alents, FTEs) rose in 2020 to 13,408 (2019: 13,038) due to the inclusion of the AXA-CEE companies. These included 4,138 (2019: 4,202) field sales employees. The number of employees in administration amounted to 9,271 (2019: 8,836). In 2020, the Group had an average of 3,231 FTEs (2019: 2,766) in the Central Europe (CE) region – Poland, Slovakia, the Czech Republic and Hungary – as well as 2,285 FTEs (2019: 2,278) in the Southeastern Europe (SEE) region – Albania, Bosnia and Herzegovina, Bul- garia, Croatia, Kosovo, Montenegro, North Macedonia and Serbia – and 1,622 FTEs (2019: 1,647) in the Eastern Europe (EE) region– Romania and Ukraine. There were 103 FTEs (2019: 112) working in Russia (RU). The average number of FTEs in the Western European markets in 2020 was 42 (2019: 42). A total of 6,125 FTEs were em- ployed in Austria (2019: 6,193). Including the employees of the general agencies working exclusively for UNIQA, the total number of people working for the Group amounts to around 23,500. In 2020, 60 per cent of the staff working in administra- tive positions at UNIQA in Austria were women (2019: 55percent). In sales the ratio was 80 per cent men to 20percent women (2019: 82 per cent men to 18 per cent women). 24.6percent (2019: 15.4 per cent) of employees were working part time. The average age in the past year was 44.5years (2019: 44 years). There was no bonus for managers or selected key employees nor was there any employee participation in the 2020 financial year due to the coronavirus pandemic. In addition, UNIQA offers young people in training the opportunity to get to know foreign cultures and make international contacts. Currently 93 apprentices are being trained. Life insurance In € million 2020 2019 2018 Premiums written including savings portions from unit-linked and index-linked life insurance 1,387. 5 1,394.9 1,448.6 Insurance benefits (net) –956.4 –977.3 –1,035.7 Operating expenses (net) –370.7 –358.1 –319.8 Cost ratio (after reinsurance) 27.2% 26.1% 22.6% Net investment income 371.3 354.1 353.5 Earnings before taxes 45.5 84.8 78.2 Technical provisions (net) 16,442.0 15,588.7 15,483.4 of which technical provisions from unit-linked and index-linked life insurance (net) 5,115.4 4,646.0 4,721.8 GROUP MANAGEMENT REPORT 31 GROUP MANAGEMENT REPORT Operating segments UNIQA Austria Premiums written (including savings portions from unit-linked and index-linked life insurance) rose to €3,837.5 million The cost ratio increased to 23.4 per cent due to restructuring measures Combined ratio increased from 93.9 per cent to 98.7 per cent Earnings before taxes amounting to €–119.1 million Changes in premiums At UNIQA Austria, premiums written including savings portions from unit-linked and index-linked life insurance increased by 1.0 per cent to €3,837.5 million in 2020 (2019: €3,800.8 million). Recurring premiums rose by 0.8 per cent to €3,807.7 million (2019: €3,775.7 million). The single pre- mium business increased by 18.6 per cent to €29.8 million (2019: €25.1 million). Including savings portions from unit-linked and index- linked life insurance, the volume of premiums earned at UNIQA Austria amounted to €3,076.7 million (2019:€3,057.0 million). The volume of premiums earned (net, in accordance with IFRSs) rose by 0.9 per cent to €2,869.7 million in 2020 (2019: €2,845.4 million). While premiums written in property and casualty in- surance rose by 2.0 per cent to €1,796.1 million (2019: €1,760.7 million), they increased by as much as 3.2 per cent in health insurance to €1,089.6 million (2019: €1,056.3 million). In life insurance (including savings por- tions from unit-linked and index-linked life insurance), they fell by 3.3percent to €951.8 million (2019: €983.9 million). UNIQA Austria In € million 2020 2019 2018 Premiums written including savings portions from unit-linked and index-linked life insurance 3,837. 5 3,800.8 3,734.4 Cost ratio (after reinsurance) 23.4% 20.8% 18.6% Combined ratio (after reinsurance) 98.7% 93.9% 91.6% Earnings before taxes –119.1 159.6 231.7 Property and casualty insurance In € million 2020 2019 2018 Premiums written 1,796.1 1,760.7 1,703.5 Insurance benefits (net) –698.6 –688.3 –691.2 Loss ratio (after reinsurance) 65.5% 65.6% 66.9% Operating expenses (net) –353.7 –297.4 –255.4 Cost ratio (after reinsurance) 33.2% 28.3% 24.7% Combined ratio (after reinsurance) 98.7% 93.9% 91.6% Net investment income –196.1 33.7 39.0 Earnings before taxes –197.3 83.1 112.8 Technical provisions (net) 1,171.6 1,099.3 1,090.3 32 Premiums written including savings portions from unit-linked and index- linked life insurance UNIQA Austria In € million 3,631 3,734 3,657 3,801 3,838 2016 20182017 2019 2020 Premiums earned (net, according to IFRSs) rose by 1.5percent to €1,066.1 million in property and casualty insurance (2019: €1,049.8 million) and by 3.1per cent to €1,082.7 million in health insurance (2019: €1,050.6 million). However, in life insurance they fell by 3.2per cent to €720.9 million (2019: €744.9 million). In- cluding savings portions from unit-linked and index-linked life insurance, the volume of premiums earned in life in- surance amounted to €927.9 million (2019: €956.6 million). Changes in insurance benefits Net insurance benefits at UNIQA Austria fell by 1.8percent in 2020 to €2,383.7 million (2019: €2,426.3 million). In property and casualty insurance, they rose by 1.5percent to €698.6 million (2019: €688.3 million) in line with premiums earned. As a result, the loss ratio in property and casualty insurance fell slightly in 2020 to 65.5 per cent (2019: 65.6 per cent). Nevertheless, the combined ratio in the UNIQA Austria segment increased after reinsurance to 98.7 per cent (2019: 93.9 per cent) due to the higher cost ratio. In health insurance, net insur- ance benefits fell by 1.2 per cent to €916.9 million (2019: €927.8 million). In life insurance, they fell by 5.2per cent to €768.2million (2019: €810.3 million). Operating expenses Operating expenses less reinsurance commissions received and the share of profit from reinsurance ceded in the amount of €194.3 million (2019: €190.5 million) increased by 13.2 per cent to €719.3 million (2019: €635.7 million) in the 2020 financial year due to the one-off expenses related to the restructuring. They rose by 18.9 per cent in property and casualty insurance to €353.7 million (2019: €297.4 million). In health insurance, they also grew 15.3percent to reach €176.9 million (2019: €153.3 million). They also increased in life insurance by 2.0 per cent to €188.8 million (2019: €185.1 million). The cost ratio of UNIQA Austria after reinsurance, i.e. the ratio of total operating expenses, less reinsurance commis- sion and share of profit from reinsurance ceded, to premi- ums earned, including savings portions from unit-linked and index-linked life insurance, thus rose to 23.4 per cent during the past year (2019: 20.8 per cent). Net investment income In the UNIQA Austria segment, net investment income fell by 62.1 per cent in 2020 to €160.8 million (2019: €424.1 million). The main reason for this development was the merger of UNIQA International AG with UNIQA Österreich Versicherungen AG. Through the merger, measurements of international insurance companies, that have been performed internally until now, are represent- ed across the UNIQA Austria and UNIQA International segments. However, this negative measurement result is balanced out by the consolidation and therefore had no effect on profit or loss for the UNIQA Group. Health insurance In € million 2020 2019 2018 Premiums written 1,089.6 1,056.3 1,008.9 Insurance benefits (net) –916.9 – 927.8 –864.4 Operating expenses (net) –176.9 –153.3 –140.9 Cost ratio (after reinsurance) 16.3% 14.6% 14.0% Net investment income 95.1 101.2 103.0 Earnings before taxes 84.6 70.9 107.0 Technical provisions (net) 3,573.2 3,386.2 3,151.4 GROUP MANAGEMENT REPORT 33 GROUP MANAGEMENT REPORT Earnings before taxes Earnings before taxes at UNIQA Austria fell to €–119.1million (2019: €159.6 million) in the reporting period, primarily due to the increase in costs and the fall in net investment income. They fell to €–197.3 million in property and casualty insurance (2019: €83.1 mil- lion). In health insurance, they increased by 19.2 per cent to €84.6million (2019: €70.9 million). In life insur- ance, earnings before taxes fell to €–6.3 million (2019: €55 million). 232 232 263 160 –119 Earnings before taxes UNIQA Austria In € million 2016 20182017 2019 2020 Life insurance In € million 2020 2019 2018 Premiums written including savings portions from unit-linked and index-linked life insurance 951.8 983.9 1,022.0 Insurance benefits (net) –768.2 –810.3 –834.7 Operating expenses (net) –188.8 –185.1 –168.6 Cost ratio (after reinsurance) 20.3% 19.3% 17.0% Net investment income 261.9 289.1 276.3 Earnings before taxes –6.3 5.5 12.0 Technical provisions (net) 13,817.0 13,940.2 13,910.8 34 UNIQA International Premiums written (including savings portions from unit-linked and index-linked life insurance) rose to €1,705.4 million Combined ratio improved to 93.3 per cent The technical result rose to €40.9 million Earnings before taxes at €–27.0 million due to impairment of goodwill UNIQA International In € million 2020 2019 2018 Premiums written including savings portions from unit-linked and index-linked life insurance 1,705.4 1,561.2 1,564.6 Cost ratio (after reinsurance) 38.8% 38.3% 35.6% Combined ratio (after reinsurance) 93.3% 95.0% 95.5% Earnings before taxes –27.0 16.0 55.1 Changes in premiums Premiums written including savings portions from unit- linked and index-linked life insurance increased in the UNIQA International segment in 2020 by 9.2percent to €1,705.4 million (2019: €1,561.2 million) as a result of the acquisition of AXA companies in Poland, the Czech Republic and Slovakia. While recurring premi- ums increased by 10.8 per cent to €1,642.1million (2019: €1,481.8 million), single premiums fell as planned by 20.3 per cent to €63.4million (2019: €79.5 million). That means that in 2020 the international companies contrib- uted a total of 30.6 per cent (2019: 29.1 per cent) to total Group premiums. Including savings portions from unit-linked and in- dex-linked life insurance, the segment’s volume of premiums earned amounted to €1,200.5 million (2019: €1,082.6 million). The volume of premiums earned (net, in accordance with IFRSs) increased in 2020 by 12.1percent to €1,103.4 million (2019: €984.5 million). While premiums written grew in property and casualty insurance by 10.7 per cent to €1,192.6 million (2019: €1,076.9 million), they rose by 4.5 per cent to €77.9 million in health insurance (2019: €74.6 million). In life insurance, premiums written (including sav- ings portions from unit-linked and index-linked life insurance) rose by 6.1 per cent to €434.9 million (2019: €409.8million). Premiums written including savings portions from unit-linked and index-linked life insurance UNIQA International In € million 1,400 1,565 1,609 1,561 1,705 2016 2018 2017 2019 2020 In property and casualty insurance, premiums earned (net, in accordance with IFRSs) rose by 14.4 per cent to €702.5million (2019: €614.1 million), while in health insurance they grew by 11.1 per cent to €74.4 million (2019: €67.0million). In life insurance, they increased by 7.5percent to €326.4 million (2019: €303.5 million). In- cluding savings portions from unit-linked and index-linked life insurance, the volume of premiums earned in life in- surance amounted to €423.5 million (2019: €401.6 million). In Central Europe (CE) – which includes Poland, Slovakia, the Czech Republic and Hungary – premiums written in- cluding savings portions from unit-linked and index-linked life insurance increased in the 2020 financial year by 21.2per cent to €1,143.5 million due to the inclusion of the GROUP MANAGEMENT REPORT 35 GROUP MANAGEMENT REPORT AXA-CEE companies (2019: €943.7 million). In Eastern Europe (EE), comprising Romania and Ukraine, they fell by 4.1 per cent to €193.1 million (2019: €201.5 million). In Southeastern Europe (SEE), comprising Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Montenegro, North Macedonia and Serbia, the premiums written including savings portions from unit-linked and index-linked life insurance fell in 2020 by 9.4 per cent to €289.5 million (2019: €319.4 million). In Russia (RU), they fell by19.3percent to €71.4 million (2019: €88.5 million). They remained stable in Western Europe (WE) – Liechten- stein and Switzerland – at €8.0 million (2019: €8.1 million). Changes in insurance benefits Net insurance benefits at UNIQA International in- creased in 2020 by 12.3 per cent to €608.1 million (2019: €541.6 million). They rose by 11.1 per cent in property and casualty insurance to €386.2 million (2019: €347.6 million). In health insurance, they grew 8.6 per cent to reach €42.2million (2019: €38.8 million). In life insurance, they also increased by 15.9 per cent to €179.8 million (2019: €155.1million). This pushed the loss ratio in property and casualty insurance down to 55.0 per cent in 2020 (2019: 56.6per cent), while the combined ratio after reinsurance in the UNIQA International segment improved to 93.3percent (2019: 95.0 per cent). In the Central Europe region, insur- ance benefits rose by 33.8 percent in 2020 to €372.5 million (2019: €278.4million), while in the East- ern Europe region, they increased by 14.5percent to €63.7 million (2019: €55.6 million). In South- eastern Europe, they decreased by 15.9per cent to €115.6 million (2019: €137.5million). At €54.9 million, benefits in Russia were 20.6percent below the previous year’s level (2019: €69.2million). In Western Europe, they rose to €1.3 million (2019: €0.8million). Operating expenses Operating expenses less reinsurance commissions received and the share of profit from reinsurance ceded in the amount of €129.2 million (2019: €133.0 million) increased in the 2020financial year by 12.4 per cent to €466.4 million (2019: €414.9 million). They rose 14.3 per cent in property and casualty insurance to €269.4 million (2019: €235.7 million), while in health insurance they rose by 28.4 per cent to €27.4 million (2019: €21.3 million). In life insurance, they increased by 7.4percent to €169.6 million (2019: €157.9 million). The cost ratio of UNIQA International after reinsurance, i.e. the ratio of total operating expenses, less reinsurance com- mission and share of profit from reinsurance ceded, to pre- miums earned, including savings portions from unit-linked and index-linked life insurance, amounted to 38.8percent during the past year (2019: 38.3 per cent). In Central Europe, operating expenses less reinsurance commissions received and the share of profit from re- insurance ceded rose by 34.6 per cent to €256.9 million (2019: €190.9 million) in the reporting period. In Eastern Europe, they fell by 17.0 per cent to €69.3 million (2019: €83.5 million). They remained stable in Southeastern Europe at €101.5 million (2019: €101.3 million). In Rus- sia, costs fell by 18.4 per cent to €13.4 million (2019: €16.4 million), while in Western Europe they also dropped by 32.4 per cent to €1.4million (2019: €2.1 million). In administration (UNIQA International AG), costs rose by 15.4per cent to €23.8 million (2019: €20.7 million). Property and casualty insurance In € million 2020 2019 2018 Premiums written 1,192.6 1,076.9 1,067.4 Insurance benefits (net) –386.2 –3 47.6 –339.2 Loss ratio (after reinsurance) 55.0% 56.6% 58.0% Operating expenses (net) –269.4 –235.7 –219.6 Cost ratio (after reinsurance) 38.3% 38.4% 37.5% Combined ratio (after reinsurance) 93.3% 95.0% 95.5% Net investment income 34.2 25.3 23.8 Earnings before taxes –37. 2 –30.5 17.5 Technical provisions (net) 1,275.9 678.6 653.7 Health insurance In € million 2020 2019 2018 Premiums written 77.9 74.6 77.6 Insurance benefits (net) –42.2 –38.8 – 41.3 Operating expenses (net) –27.4 –21.3 –24.7 Cost ratio (after reinsurance) 36.8% 31.8% 37.5% Net investment income 0.0 0.4 0.5 Earnings before taxes 4.5 7.1 0.2 Technical provisions (net) 46.0 44.8 37.2 36 Net investment income The segment’s net investment income increased in 2020 by 72.3 per cent to €106.1 million (2019: €61.6 million). Earnings before taxes Despite the improvement in the technical result, earn- ings before taxes in the UNIQA International segment fell to €–27.0 million due to the impairment of goodwill (2019: €16.0 million). Earnings before taxes in property and casualty insurance therefore fell to €–37.2 million (2019: €–30.5 million), in health insurance they fell to €4.5 million (2019: €7.1 million). Lastly, in life insur- ance, earnings before taxes fell to €5.7 million (2019: €39.4 million). Earnings before taxes UNIQA International In € million 12 55 43 16 –27 2016 20182017 2019 2020 Life insurance In € million 2020 2019 2018 Premiums written including savings portions from unit-linked and index-linked life insurance 434.9 409.8 419.7 Insurance benefits (net) –179.8 –155.1 –181.4 Operating expenses (net) –169.6 –157.9 –132.4 Cost ratio (after reinsurance) 40.0% 39.3% 32.4% Net investment income 71.8 35.9 57.5 Earnings before taxes 5.7 39.4 37.5 Technical provisions (net) 2,651.6 1,654.4 1, 577.7 GROUP MANAGEMENT REPORT 37 GROUP MANAGEMENT REPORT Group functions Group functions In € million 2020 2019 2018 Operating expenses (net) –80.0 –48.5 –68.4 Net investment income 96.2 356.3 309.8 Earnings before taxes –48.5 255.0 185.6 In the Group functions segment, operating expenses rose by 65.0 per cent to €80.0 million (2019: €48.5 million). Net investment income amounted to €96.2 million (2019:€356.3 million). Reinsurance Reinsurance In € million 2020 2019 2018 Premiums written 1,162.7 1,129.2 1,098.3 Insurance benefits (net) –700.6 –700.4 –682.4 Operating expenses (net) –311.0 –303.7 –299.6 Cost ratio (after reinsurance) 29.4% 29.5% 30.4% Earnings before taxes 58.3 33.5 20.9 Technical provisions (net) 1,373.6 1,406.4 1,352.1 In the reinsurance segment, the volume of premiums written rose in 2020 by 3.0 per cent to €1,162.7 million (2019: €1,129.2 million). Premiums written including savings portions from unit-linked and index- linked life insurance Reinsurance In € million 1,131 1,098 1,092 1,129 1,163 2016 20182017 2019 2020 The volume of premiums earned (net, in accordance with IFRSs) increased by 2.6 per cent to €1,056.1 million (2019:€1,029.3 million). Net insurance benefits in 2020 remained stable at €700.6million (2019: €700.4 million). Operating expenses less reinsurance commissions re- ceived and the share of profit from reinsurance ceded in the amount of €12.2 million (2019: €10.1 million) rose by 2.4 per cent to €311.0 million (2019: €303.7 million). Net investment income decreased to €6.9 million (2019:€29.5 million) in 2020. Earnings before taxes in the reinsurance segment increased by 73.9 per cent to €58.3 million (2019: €33.5 million). Earnings before taxes fell to €–48.5 million in the 2020 financial year (2019: €255.0 million). 38 In the Consolidation segment, net investment income amounted to €135.4 million in 2020 (2019: €–286.2 mil- lion). Earnings before taxes amounted to €193.4 million (2019: €–232.1 million). Significant events after the reporting date In early March 2021, the Austrian Supreme Court ruled in favour of the insurance industry in connection with busi- ness interruptions arising from Covid-19. In this decision, the Court clarified that a coverage obligation on the part of the insurer from the business interruption caused by the epidemic only applies in the case of a business closed due to the Austrian Epidemic Act, but not based on a ban on entry and access ordered under the Austrian Covid-19 Measures Act. This is expected to have a positive impact on claim payments in the 2021 financial year. Outlook The ongoing Covid-19 pandemic considerably increases the uncertainty of all statements on future business develop- ment, as not only all forecasts regarding the further course of the pandemic and the associated effects on overall economic development, but also the assessment of future central bank policy, government measures, and reactions on the capital market are currently subject to major uncer- tainty. On the other hand, we regard the situation in our technical core business as relatively strong. Despite our initial fears at the start of the pandemic, our insurance business has proven to be highly resilient. Despite significant restric- tions, which affected sales in particular, we were able to keep our premium volume relatively stable on a comparable basis, i.e. before factoring in the AXA acquisition in CEE. Our customers did not waive their insurance coverage despite the economic challenges, meaning that the rate of cancellations remained very moderate for the given condi- tions. This makes us optimistic about the premium volume for 2021. The loss directly related to Covid-19 was already entered in the books in full in 2020 and will certainly not be repeated to the same extent in 2021. Conversely, people’s mobility in our core markets is no longer as reduced as the levels we saw in the first half of 2020, despite recent repeated lock- downs. Thus, we cannot expect fewer claims in our motor vehicle insurance over the long term. We began the largest restructuring in our corporate history in the past financial year. The first partial successes of this restructuring should be seen in the form of a decrease in administrative costs as early as 2021. In summary, we do not see any significant distortions in our core insurance business despite the ongoing pandemic. This expectation is, however, linked to the hope of im- provements in the pandemic situation thanks to the broad availability of effective vaccines in the second half of 2020. The outlook for the UNIQA Group for 2021 is subject to the following assumptions: A global economic recovery is occurring that balances out at least some of the economic output lost in 2020. The ECB’s monetary policy will also remain extreme- ly loose in 2021. UNIQA does not therefore expect any noticeable rise in the general interest rate level in the eurozone. Fluctuations on the capital markets remain high, but there is no lasting significant decline in securities prices. There are no drastic fiscal, regulatory or legal interven- tions on the horizon. Damages from natural catastrophes remain within the average of previous years. Overall, UNIQA is expecting earnings before taxes for the 2021 financial year at approximately the 2018 level. Consolidation Consolidation In € million 2020 2019 2018 Net investment income 135.4 –286.2 –248.3 Earnings before taxes 193.4 –232.1 –198.7 GROUP MANAGEMENT REPORT 39 GROUP MANAGEMENT REPORT The dividend distribution is based on the company’s prof- its. UNIQA plans to distribute 50 to 60 per cent of consoli- dated profit to shareholders in the form of a dividend. Information pursuant to Section 243a(1) of the Austrian Commercial Code 1. The share capital of UNIQA Insurance Group AG amounts to €309,000,000 and is comprised of 309,000,000 individual no-par-value bearer shares. €285,356,365 of the share capital was fully paid in cash and €23,643,635 was paid in non-cash contributions. All shares confer the same rights and obligations. 2. A voting trust exists for shareholdings of UNIQA Versicherungsverein Privatstiftung, Austria Ver- sicherungsverein Beteiligungs-Verwaltungs GmbH, Collegialität Versicherungsverein Privatstiftung and RZB Versicherungsbeteiligung GmbH. Reciprocal pur- chase option rights have been agreed upon. 3. Raiffeisen Bank International AG holds indirectly, via RZB – BLS Holding GmbH and RZB Versicherungs- beteiligung GmbH, a total of 10.87 per cent (allocated in accordance with the Austrian Stock Exchange Act) of the company’s share capital; UNIQA Versicherungsverein Privatstiftung holds directly and indirectly through Austria Versicherungsverein Beteiligungs-Verwaltungs GmbH a total of 49.00 per cent (allocated in accordance with the Austrian Stock Exchange Act) of the company’s share capital. 4. No shares with special control rights have been issued. 5. The employees who have share capital exercise their voting rights directly. 6. There are no provisions of the Articles of Association or other provisions that go beyond the statutory provisions for appointing Management Board and Supervisory Board members or for modifying the Articles of Associ- ation, with the exception of the rule that, when a Super- visory Board member turns 70 years of age, they retire from the Supervisory Board at the end of the next Annual General Meeting. 7. The Management Board is authorised to increase the company’s equity capital up to and including 30June2024 with the approval of the Supervisory Board by a total of no more than €80,000,000 by issuing up to 80,000,000 no-par-value bearer or registered shares conferring voting rights in exchange for payment in cash or in kind, one time or several times. The Management Board is further authorised until 30 May 2023 to buy back up to 30,900,000 treasury shares (together with other treasury shares that the company has already acquired and still possesses) through the company and/ or through subsidiaries of the company (Section 66 of the Stock Corporation Act). The company held 2,034,739 treasury shares as at 31 December 2020. 1,215,089 treasury shares are held through UNIQA Österreich Ver- sicherungen AG. This share portfolio resulted from the merger in 2016 of BL Syndikat Beteiligungs Gesellschaft m.b.H. as the transferring company, with UNIQA Insur- ance Group AG as acquiring company (payment of port- folio in UNIQA shares to shareholders of BL Syndikat Beteiligungs Gesellschaft m.b.H.). This share portfolio is not to be included in the highest number of treasury shares. 8. Corresponding agreements with other shareholders of STRABAG SE are in place concerning the holding in this company. 9. No reimbursement agreements exist for the event of a public takeover offer. Information pursuant to Section 243a(2) of the Austrian Commercial Code The internal control and risk management system at UNIQA Insurance Group AG is comprised of transparent systems that encompass all company activities and include a systematic and permanent approach, based on a defined risk strategy, with the following elements: identification, analysis, measurement, management, documentation and communication of risks, as well as the monitoring of these activities. Identification, analysis, measurement, man- agement, documentation and communication of risks and monitoring of these activities. The scope and orientation of these systems were designed on the basis of company- specific requirements. Despite creating appropriate frameworks, there is always a certain residual risk because even appropriate and functional systems cannot guaran- tee absolute security with regard to the identification and management of risks. Objectives: a) Identification and measurement of risks that could obstruct the goal of producing (consolidated) financial statements that comply with regulations 40 b) Limiting recognised risks, for example by consulting with external specialists c) Review of external risks with regard to their influence on the consolidated financial statements and the corre- sponding reporting of these risks The aim of the internal control system in the accounting process is to guarantee sufficient security by means of im- plementing controls so that, despite identified risks, proper financial statements are prepared. Along with the risks described in the Risk Report, the risk management system also analyses additional risks within internal business processes, compliance, internal reporting, etc. Organisational structure and control environment The company’s accounting process is incorporated into the UNIQA Group accounting process. In addition to the SAP S/4HANA accounting system, a harmonised insurance- specific IT system is also used for the company’s purposes. Compliance guidelines and manuals for company organisa- tion, accounting and consolidation exist for the purpose of guaranteeing secure processes. Identification and control of risks An inventory and appropriate control measures were con- ducted to identify existing risks. The type of controls was defined in the guidelines and instructions and coordinated with the existing authorisation concept. The controls include both manual coordination and comparison routines, as well as the acceptance of system configurations for connected IT systems. New risks and control weaknesses in the accounting process are quickly reported to management so that it can undertake correc- tive measures. The procedure for the identification and control of risks is evaluated on a regular basis by an exter- nal independent auditor. Information and communication Deviations from expected results and evaluations are monitored by means of monthly reports and key figures, and they form the foundation of information provided to management on an ongoing basis. The management review that is based on this information, and the approval of the processed data, form the foundation of further treatment in the company’s financial statements. Measures to ensure effectiveness Rather than being made up of static systems, the internal control and risk management system is adjusted on an ongoing basis to changing requirements and the business environment. The identification of the necessity of chang- es requires constant monitoring of the effectiveness of all systems. The foundations for this are: a) Regular self-evaluations by the persons tasked with controls b) Evaluations of key data to validate transaction results in relation to indications that suggest control deficiencies c) Random tests of effectiveness by the Internal Audit department and comprehensive efficacy tests by the Internal Audit department and/or special teams Reporting to the Supervisory Board/ Audit Committee In the context of compliance and internal control and risk management systems, the Management Board reports regularly to the Supervisory Board and the Audit Commit- tee by means of Internal Audit department reports and the separate engagement of external auditors. GROUP MANAGEMENT REPORT 41 GROUP MANAGEMENT REPORT Proposed appropriation of profit The separate financial statements of UNIQA Insurance Group AG prepared in accordance with the Austrian Com- mercial Code and the Insurance Supervision Act show a net profit of €€55,722,592.34 (2019: €168,233,424.34) for the 2020 financial year. The Management Board will propose to the Annual General Meeting on 31 May 2021 that this profit be used for the distribution of a dividend of €0.18 for each of the 309,000,000 entitled no-par-value bear- er shares issued as of the reporting date and to carry the remaining amount forward to new account. Vienna, 22 March 2021 Andreas Brandstetter Chairman of the Management Board Peter Eichler Member of the Management Board Wolf-Christoph Gerlach Member of the Management Board Peter Humer Member of the Management Board Wolfgang Kindl Member of the Management Board René Knapp Member of the Management Board Erik Leyers Member of the Management Board Klaus Pekarek Member of the Management Board Kurt Svoboda Member of the Management Board 42 General information UNIQA Insurance Group AG (UNIQA) is a company domi- ciled in Austria. The address of the company’s registered office is Untere Donaustrasse 21, 1029 Vienna, Austria. The Group primarily conducts business with property and casualty, as well as health and life insurance. UNIQA Insurance Group AG is registered in the company registry of the Commercial Court of Vienna under FN 92933t. The shares of UNIQA Insurance Group AG are listed on the prime market segment of the Vienna Stock Exchange. UNIQA Insurance Group AG is subject to the regulatory requirements of European and Austrian supervisory au- thorities (Financial Market Authority, European Insur- ance and Occupational Pensions Authority). The require- ments include in particular the quantitative and qualita- tive solvency requirements. Unless otherwise stated, these consolidated financial statements are prepared in thousand euros; rounding dif- ferences may occur through the use of automated calcula- tion tools when totalling rounded amounts and percent- ages. The functional currency at UNIQA is the euro. UNIQA’s reporting date is 31 December. Accounting principles The consolidated financial statements were prepared in line with the International Financial Reporting Standards (IFRSs) as well as the provisions of the International Financial Reporting Interpretations Committee (IFRIC) as adopted by the European Union (EU) as at the reporting date. The additional requirements of Section 245a(1) of the Austrian Commercial Code and Section 138(8) of the Austrian Insurance Supervision Act were met. Use of discretionary decisions and estimates The consolidated financial statements require the Group Management Board to make discretionary deci- sions, estimates and assumptions that relate to the appli- cation of accounting policies and the amounts stated for the assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and their un- derlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recorded prospectively. Discretionary judgements and assumptions regarding the future which could have a significant impact on these consolidated financial statements are described in the fol- lowing notes: Note 2: Investment property (assumptions used in deter- mining fair values) Note 3: Financial assets accounted for using the equity method (assumptions and models used in STRABAG SE’s earnings estimates) Note 4: Other investments and unit-linked and index- linked life insurance investments (determination of fair values) Note 6: Technical provisions (assumptions and models used in calculating actuarial provisions) Consolidated Financial Statem ents 43CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Note 12: Intangible assets (assumptions used in determin- ing goodwill) Note 16: Deferred taxes (assessment of the ability to real- ise deferred tax assets) Note 17: Defined benefit plans (calculation of the present value of the defined benefit obligations) The following table provides a summary of the measurement standards for the individual balance sheet items in the as- sets and liabilities: Balance sheet item Standard of measurement Assets Property, plant and equipment At lower of amortised cost or recoverable amount Intangible assets - with determinable useful life At lower of amortised cost or recoverable amount - with indeterminable useful life At lower of acquisition cost or recoverable amount Investments Investment property At lower of amortised cost or recoverable amount Financial assets accounted for using the equity method At lower of amortised pro-rata value of the equity or recoverable amount Other investments - Financial assets at fair value through profit or loss Fair value - Financial assets held for sale Fair value - Loans and receivables Amortised cost Unit-linked and index-linked life insurance investments Fair value Reinsurers’ share of technical provisions As per the measurement of technical provisions Reinsurers’ share of technical provisions for unit-linked and index-linked life insurance As per the measurement of technical provisions Receivables, including insurance receivables Amortised cost Income tax receivables At the amount of any expected claims to the tax authorities, based on the tax rates applicable on the reporting date or in the near future Deferred tax assets Undiscounted measurement applying the tax rates that are expected for the period in which an asset is realised or a liability met Cash and cash equivalents Amortised cost Assets in disposal groups held for sale Lower of carrying amount and fair value less cost to sale Liabilities Subordinated liabilities Amortised cost Technical provisions Property insurance: provisions for losses and unsettled claims (undiscounted value of expected future payment obligations) Life and health insurance: insurance provision in accordance with actuarial calculation principles (discounted value of expected future benefits less premiums) Technical provisions for unit-linked and index-linked life insurance Insurance provision based on the change in value of the contributions assessed Financial liabilities - Liabilities from loans Amortised cost - Derivative financial instruments Fair value Other provisions - from defined benefit obligations Actuarial measurement applying the projected benefit obligation method - other Present value of future settlement value Liabilities and other items classified as liabilities Amortised cost Income tax liabilities At the amount of any obligations to the tax authorities, based on the tax rates applicable on the reporting date or in the near future Deferred tax liabilities Undiscounted measurement applying the tax rates that are expected for the period in which an asset is realised or a liability met 44 Consolidated Statement of Financial Position at 31 December 2020 Assets In thousand Notes 31/12/2020 31/12/2019 adjusted Property, plant and equipment 11 364,739 351,780 Intangible assets 12 2,098,769 1,586,516 Investments Investment property 2 1,219,213 1,137,444 Financial assets accounted for using the equity method 3 677,921 642,414 Other investments 4 20,422,107 18,844,939 Unit-linked and index-linked life insurance investments 4 5,218,124 4,680,403 Reinsurers’ share of technical provisions 6 514,268 350,022 Reinsurers’ share of technical provisions for unit-linked and index-linked life insurance 7 131 113 Receivables, including insurance receivables 13 684,249 546,659 Income tax receivables 15 59,130 48,660 Deferred tax assets 16 8,594 5,237 Cash and cash equivalents 14 640,713 479,621 Total assets 31,907,957 28,673,809 Equity and liabilities In thousand Notes 31/12/2020 31/12/2019 adjusted 1/1/2019 adjusted Equity Portion attributable to shareholders of UNIQA Insurance Group AG Subscribed capital and capital reserves 21 1,789,923 1,789,923 1,789,923 Treasury shares 22 ‒16,614‒16,614 ‒16,614‒16,614 ‒16,614‒16,614 Accumulated results 1,676,762 1,594,411 1,223,699 3,450,072 3,367,720 2,997,008 Non-controlling interests 24 24,760 19,399 14,438 3,474,832 3,387,119 3,011,446 Liabilities Subordinated liabilities 1,069,920 870,110 869,832 Technical provisions 6 19,195,742 17,787,900 17,324,215 Technical provisions for unit-linked and index-linked life insurance 7 5,115,506 4,646,152 4,721,904 Financial liabilities 25 693,566 75,516 798,484 Other provisions 17, 19 847,235 685,709 662,998 Liabilities and other items classified as liabilities 26 994,221 803,095 807,210 Income tax liabilities 15 93,051 60,669 64,378 Deferred tax liabilities 16 423,884 357,539 242,246 28,433,125 25,286,690 25,492,355 Total equity and liabilities 31,907,957 28,673,809 28,503,801 45CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Consolidated Income Statement from 1 January until 31 December 2020 In thousand Notes 1‒12/2020 1‒ 12/2019 adjusted Premiums earned (net) 8 Gross 5,231,531 5,034,721 Reinsurers’ share ‒201,992‒201,992 ‒173,651‒173,651 5,029,539 4,861,071 Technical interest income 322,125 331,238 Other insurance income Gross 41,302 21,438 Reinsurers’ share 368 75 41,669 21,514 Insurance benefits 9 Gross ‒3,819,752‒3,819,752 ‒ 3,765,286‒3,765,286 Reinsurers’ share 125,174 99,186 ‒3,694,579‒3,694,579 ‒3,666,100‒3,666,100 Operating expenses 10 Expenses for the acquisition of insurance ‒953,377‒953,377 ‒925,258‒925,258 Other operating expenses ‒631,546‒631,546 ‒499,741‒499,741 Reinsurance commission and share of profit from reinsurance ceded 18,524 17,883 ‒1,566,399‒1,566,399 ‒1,407,116‒1,407,116 Other technical expenses Gross ‒49,830‒49,830 ‒ 46,360‒46,360 Reinsurers’ share ‒4,232‒4,232 ‒3,742‒3,742 ‒54,061‒54,061 ‒ 50,102‒50,102 Technical result 78,295 90,504 Net investment income 5 Income from investments 773,686 768,959 Expenses from investments ‒333,965‒333,965 ‒248,143‒248,143 Financial assets accounted for using the equity method 65,689 64,428 505,409 585,244 Other income 27 216,548 192,359 Reclassification of technical interest income ‒322,125‒322,125 ‒331,238‒331,238 Other expenses 28 ‒230,497‒230,497 ‒ 191,019‒191,019 Non-technical result 169,335 255,346 Operating profit/(loss) 247,631 345,850 Amortisation of VBI and impairment of goodwill ‒125,817‒125,817 ‒ 59,162‒59,162 Finance cost ‒64,758‒64,758 ‒ 54,643‒54,643 Earnings before taxes 57,056 232,045 Income taxes 15 ‒ 32,775‒32,775 ‒56,953‒56,953 Profit/(loss) for the period 24,281 175,092 of which attributable to shareholders of UNIQA Insurance Group AG 19,405 170,957 of which attributable to non-controlling interests 4,876 4,135 Earnings per share (in ) 1) 0.06 0.56 Average number of shares in circulation 306,965,261 306,965,261 1) Diluted earnings per share equate to undiluted earnings per share. This is calculated on the basis of the consolidated profit/(loss). 46 Consolidated Statement of Comprehensive Income from 1 January until 31 December 2020 In thousand 1‒12/2020 1‒ 12/2019 adjusted Profit/(loss) for the period 24,281 175,092 Items not reclassified to profit or loss in subsequent periods Remeasurement of defined benefit obligations Gains (losses) recognised in equity ‒35,708‒35,708 ‒ 66,648‒66,648 Gains (losses) recognised in equity ‒ deferred tax 8,913 16,651 Other income from financial assets accounted for using the equity method Gains (losses) recognised in equity ‒5,188‒5,188 459 ‒31,983‒31,983 ‒ 49,538‒49,538 Items reclassified to profit or loss in subsequent periods Currency translation Gains (losses) recognised in equity ‒48,135‒48,135 10,294 Recognised in the consolidated income statement 0 10 Measurement of financial instruments available for sale Gains (losses) recognised in equity 632,111 1,003,627 Gains (losses) recognised in equity ‒ deferred tax ‒68,467‒68,467 ‒133,326‒133,326 Gains (losses) recognised in equity ‒ deferred profit participation ‒339,329‒339,329 ‒447,842‒447,842 Recognised in the consolidated income statement ‒68,659‒68,659 ‒ 46,216‒46,216 Recognised in the consolidated income statement ‒ deferred tax 9,498 13,724 Recognised in the consolidated income statement ‒ deferred profit participation 36,260 16,336 Other income from financial assets accounted for using the equity method Gains (losses) recognised in equity ‒10,004‒10,004 1,550 143,275 418,157 Other comprehensive income 111,292 368,618 Total comprehensive income 135,573 543,710 of which attributable to shareholders of UNIQA Insurance Group AG 134,805 533,690 of which attributable to non-controlling interests 768 10,020 47CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Consolidated Statement of Cash Flows from 1 January until 31 December 2020 In thousand Notes 1‒12/2020 1‒ 12/2019 adjusted Profit/(loss) for the period 24,281 175,092 Amortisation of VBI, impairment of goodwill and other intangible assets, and depreciation of property, plant and equipment 191,812 114,273 Impairment losses/reversal of impairment losses on other investments 132,409 70,616 Gain/loss on the disposal of investments ‒40,089‒40,089 ‒ 74,458‒74,458 Change in deferred acquisition costs 7,592 28,299 Change in securities at fair value through profit or loss 45,408 110,137 Change in direct insurance receivables 8,542 ‒ 44,131‒44,131 Change in other receivables ‒ 6,437‒6,437 51,724 Change in direct insurance liabilities ‒56,653‒56,653 ‒2,603‒2,603 Change in other liabilities 22,250 ‒ 11,103‒11,103 Change in technical provisions ‒208,442‒208,442 19,754 Change in defined benefit obligations 208 ‒ 27,965‒27,965 Change in deferred tax assets and deferred tax liabilities ‒5,936‒5,936 11,702 Change in other statement of financial position items 52,963 98,525 Net cash flow from operating activities 167,908 519,864 Proceeds from disposal of intangible assets and property, plant and equipment 13,712 4,615 Payments for acquisition of intangible assets and property, plant and equipment ‒122,625‒122,625 ‒ 165,074‒165,074 Proceeds from disposal of consolidated companies 587 0 Net payments for acquisition of consolidated companies ‒967,128‒967,128 ‒4,523‒4,523 Proceeds from disposal and maturity of other investments 3,466,661 3,810,353 Payments for acquisition of other investments ‒3,447,712‒3,447,712 ‒ 4,243,088‒4,243,088 Change in unit-linked and index-linked life insurance investments 341,815 70,779 Net cash flow from investing activities ‒714,690‒714,690 ‒526,938‒526,938 Dividend payments 21 ‒ 56,658‒56,658 ‒ 164,809‒164,809 Transactions between owners ‒577‒577 ‒54‒54 Proceeds from other financing activities 792,871 0 Payments from other financing activities 25 ‒ 22,815‒22,815 ‒ 794,017‒794,017 Net cash flow from financing activities 712,821 ‒958,880‒958,880 Change in cash and cash equivalents 166,039 ‒965,954‒965,954 of which due to acquisitions of consolidated subsidiaries 31,202 58 Change in cash and cash equivalents due to movements in exchange rates ‒4,948‒4,948 1,185 Cash and cash equivalents at beginning of year 14 479,621 1,444,391 Cash and cash equivalents at end of period 14 640,713 479,621 Income taxes paid (Net cash flow from operating activities) ‒33,371‒33,371 ‒ 45,053‒45,053 Interest paid (Net cash flow from operating activities) ‒65,202‒65,202 ‒ 60,945‒60,945 Interest received (Net cash flow from operating activities) 386,059 401,064 Dividends received (Net cash flow from operating activities) 43,544 52,218 48 Consolidated Statement of Changes in Equity Accumulated In thousand Notes Subscribed capital and capital reserves Treasury shares Measurement of financial instruments available for sale Remeasurement of defined benefit obligations At 31 December 2018 1,789,923 ‒16,614‒16,614 169,907 ‒264,893‒264,893 IAS 8 restatement 38 62,209 At 1 January 2019 (adjusted) 1,789,923 ‒16,614‒16,614 232,116 ‒ 264,893‒264,893 Change in basis of consolidation Dividends to shareholders Total comprehensive income (adjusted) 401,255 ‒49,967‒49,967 Profit/(loss) for the period (adjusted) 38 Other comprehensive income (adjusted) 401,255 ‒49,967‒49,967 At 31 December 2019 (adjusted) 1,789,923 ‒16,614‒16,614 633,372 ‒314,860‒314,860 At 1 January 2020 1,789,923 ‒16,614‒16,614 633,372 ‒314,860‒314,860 Change in basis of consolidation Dividends to shareholders 21 Total comprehensive income 200,033 ‒26,847‒26,847 Profit/(loss) for the period Other comprehensive income 200,033 ‒26,847‒26,847 At 31 December 2020 1,789,923 ‒16,614‒16,614 833,405 ‒341,707‒341,707 49CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S results Differences from currency translation Other accumulated results Portion attributable to shareholders of UNIQA Insurance Group AG Non- controlling interests Total equity ‒179,722‒179,722 1,473,511 2,972,112 14,438 2,986,550 ‒37,314‒37,314 24,896 24,896 ‒179,722‒179,722 1,436,197 2,997,008 14,438 3,011,446 ‒287‒287 ‒287‒287 ‒2,942‒2,942 ‒ 3,228‒3,228 ‒162,692‒162,692 ‒162,692‒162,692 ‒2,117‒2,117 ‒164,809‒164,809 9,436 172,966 533,690 10,020 543,710 170,957 170,957 4,135 175,092 9,436 2,009 362,733 5,885 368,618 ‒170,286‒170,286 1,446,185 3,367,720 19,399 3,387,119 ‒170,286‒170,286 1,446,185 3,367,720 19,399 3,387,119 2,801 2,801 5,998 8,799 ‒55,254‒55,254 ‒55,254‒55,254 ‒1,405‒1,405 ‒56,658‒56,658 ‒42,596‒42,596 4,214 134,805 768 135,573 19,405 19,405 4,875 24,281 ‒42,596‒42,596 ‒15,192‒15,192 115,399 ‒ 4,107‒4,107 111,292 ‒212,882‒212,882 1,397,946 3,450,072 24,760 3,474,832 50 51CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Notes to the Consolidated Financial Statements Segment reporting The accounting and measurement methods of the seg- ments that are subject to mandatory reporting correspond with the consolidated accounting and measurement meth- ods. The earnings before taxes for the segments were de- termined taking the following components into considera- tion: summation of the IFRS profits in the individual com- panies, taking the elimination of net investment income in the various segments and impairment of goodwill into consideration. All other consolidation effects (profit/(loss) for the period at associates, elimination of interim results, and other overall effects) are included in “Consolidation”. The segment profit/(loss) obtained in this manner is reported to the Management Board of UNIQA Insurance Group AG to manage the Group in the following operating segments: UNIQA Austria – includes the Austrian insurance busi- ness. UNIQA International – includes all international primary insurance companies and an international service com- pany as well as investment management companies and pension funds. This segment is divided on a regional basis into the following main areas: Central Europe (CE – Poland, Slovakia, the Czech Repub- lic and Hungary) Eastern Europe (EE – Romania and Ukraine) Russia (RU) Southeastern Europe (SEE – Albania, Bosnia and Herze- govina, Bulgaria, Croatia, Kosovo, Montenegro, North Macedonia and Serbia) Western Europe (WE – Liechtenstein and Switzerland) Administration Reinsurance – includes UNIQA Re AG (Zurich, Switzer- land) and the reinsurance business of UNIQA Insurance Group AG. Group functions – includes the remaining items for UNIQA Insurance Group AG (net investment income and administrative costs) as well as all other remaining Aus- trian and international service companies. 52 Operating segments UNIQA Austria UNIQA International Reinsurance In thousand 1‒12/2020 1‒ 12/2019 adjusted 1‒12/2020 1‒ 12/2019 adjusted 1‒12/2020 1‒12/2019 Premiums written (gross), including savings portions from unit-linked and index-linked life insurance 3,837,500 3,800,819 1,705,441 1,561,242 1,162,667 1,129,178 Premiums earned (net), including savings portions from unit-linked and index-linked life insurance 3,076,677 3,057,035 1,200,485 1,082,632 1,056,076 1,029,297 Savings portions from unit-linked and index-linked life insurance (gross) 207,018 211,683 97,104 98,083 0 0 Savings portions from unit-linked and index-linked life insurance (net) 207,018 211,683 97,104 98,083 0 0 Premiums written (gross) 3,630,482 3,589,137 1,608,337 1,463,159 1,162,667 1,129,178 Premiums earned (net) 2,869,659 2,845,352 1,103,382 984,549 1,056,076 1,029,297 Premiums earned (net) ‒ intragroup ‒727,578 ‒704,769 ‒ 369,557 ‒ 381,412 1,096,712 1,084,309 Premiums earned (net) ‒ external 3,597,237 3,550,121 1,472,938 1,365,961 ‒ 40,636 ‒55,012 Technical interest income 294,250 300,108 27,875 31,130 0 0 Other insurance income 4,977 3,842 26,636 20,576 7,606 216 Insurance benefits ‒2,383,735 ‒2,426,336 ‒ 608,096 ‒541,556 ‒700,605 ‒ 700,442 Operating expenses ‒719,347 ‒635,734 ‒ 466,354 ‒ 414,880 ‒310,966 ‒ 303,674 Other technical expenses ‒ 13,405 ‒14,873 ‒ 42,579 ‒ 40,075 ‒ 14,801 ‒15,430 Technical result 52,399 72,360 40,864 39,745 37,311 9,966 Net investment income 160,801 424,126 106,084 61,587 6,899 29,450 Income from investments 486,190 539,199 132,427 89,737 37,579 43,163 Expenses from investments ‒338,250 ‒133,651 ‒ 26,599 ‒28,319 ‒ 30,680 ‒13,713 Financial assets accounted for using the equity method 12,861 18,578 256 169 0 0 Other income 1,592 1,565 46,161 23,334 18,013 2,540 Reclassification of technical interest income ‒294,250 ‒300,108 ‒ 27,875 ‒31,130 0 0 Other expenses ‒9,527 ‒11,470 ‒ 63,793 ‒ 15,400 ‒1,031 ‒ 5,544 Non-technical result ‒141,384 114,113 60,577 38,392 23,881 26,446 Operating profit/(loss) ‒88,985 186,473 101,441 78,136 61,192 36,412 Amortisation of VBI and impairment of goodwill ‒1,786 ‒1,786 ‒ 123,947 ‒57,377 0 0 Finance cost ‒28,287 ‒25,102 ‒ 4,530 ‒ 4,743 ‒ 2,901 ‒2,901 Earnings before taxes ‒119,058 159,585 ‒27,036 16,017 58,291 33,511 Combined ratio (property and casualty insurance, after reinsurance) 98.7% 93.9% 93.3% 95.0% 95.8% 97.4% Cost ratio (after reinsurance) 23.4% 20.8% 38.8% 38.3% 29.4% 29.5% Impairment by segment UNIQA Austria UNIQA International Reinsurance In thousand 1‒12/2020 1‒12/2019 1‒12/2020 1‒ 12/2019 adjusted 1‒12/2020 1‒12/2019 Goodwill Impairments 0 0 ‒105,752 ‒56,653 0 0 Investments Impairments ‒19,627 ‒6,631 ‒1,200 0 0 0 Reversal of impairment losses 51 54 0 1 0 0 53CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Group functions Consolidation Group 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 adjusted 0 0 ‒1,140,262 ‒ 1,118,689 5,565,346 5,372,550 0 0 423 1,872 5,333,662 5,170,836 0 0 0 0 304,122 309,766 0 0 0 0 304,122 309,766 0 0 ‒1,140,262 ‒ 1,118,689 5,261,224 5,062,785 0 0 423 1,872 5,029,539 4,861,071 0 0 423 1,872 0 0 0 0 0 0 5,029,539 4,861,071 0 0 0 0 322,125 331,238 13,288 349 ‒10,839 ‒3,469 41,669 21,514 2,318 3,354 ‒4,461 ‒1,120 ‒3,694,579 ‒3,666,100 ‒80,049 ‒48,513 10,316 ‒4,315 ‒1,566,399 ‒1,407,116 ‒163 2,345 16,887 17,931 ‒54,061 ‒50,102 ‒64,606 ‒42,466 12,327 10,898 78,295 90,504 96,202 356,284 135,424 ‒ 286,202 505,409 585,244 321,071 482,698 ‒203,581 ‒ 385,839 773,686 768,959 ‒225,227 ‒130,954 286,791 58,495 ‒333,965 ‒ 248,143 358 4,540 52,213 41,141 65,689 64,428 180,237 194,271 ‒ 29,455 ‒ 29,351 216,548 192,359 0 0 0 0 ‒322,125 ‒ 331,238 ‒184,942 ‒186,557 28,796 27,952 ‒230,497 ‒ 191,019 91,498 363,997 134,764 ‒287,601 169,335 255,346 26,892 321,532 147,091 ‒276,703 247,631 345,850 0 0 ‒ 84 0 ‒125,817 ‒ 59,162 ‒75,428 ‒66,511 46,389 44,614 ‒64,758 ‒ 54,643 ‒48,537 255,021 193,396 ‒232,089 57,056 232,045 n/a n/a n/a n/a 97.8% 96.4% n/a n/a n/a n/a 29.4% 27.2% Group functions Consolidation Group 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 adjusted 0 0 0 0 ‒ 105,752 ‒56,653 ‒49,943 ‒15,507 0 0 ‒70,770 ‒22,138 0 7 0 0 51 62 54 Classified by business line Property and casualty insurance In thousand UNIQA Austria UNIQA International Reinsurance 1‒12/2020 1‒12/2019 1‒12/2020 1‒ 12/2019 adjusted 1‒12/2020 1‒12/2019 Premiums written (gross) 1,796,102 1,760,672 1,192,585 1,076,924 1,125,744 1,089,855 Premiums earned (net) 1,066,070 1,049,839 702,548 614,061 1,039,922 1,012,808 Technical interest income 0 0 789 1,590 0 0 Other insurance income 2,923 2,459 7,529 16,889 7,581 199 Insurance benefits ‒ 698,649 ‒688,258 ‒386,161 ‒ 347,571 ‒687,026 ‒ 684,346 Operating expenses ‒353,673 ‒ 297,358 ‒ 269,392 ‒ 235,704 ‒309,509 ‒ 302,111 Other technical expenses ‒ 7,612 ‒ 8,297 ‒36,442 ‒ 36,631 ‒ 11,748 ‒12,197 Technical result 9,059 58,384 18,871 12,634 39,220 14,353 Net investment income ‒196,135 33,744 34,234 25,306 1,651 23,203 Income from investments 84,348 73,677 48,615 33,641 32,331 36,916 Expenses from investments ‒280,686 ‒ 40,226 ‒14,637 ‒ 8,504 ‒30,680 ‒ 13,713 Financial assets accounted for using the equity method 203 293 256 169 0 0 Other income 1,355 679 18,302 5,209 18,011 2,521 Reclassification of technical interest income 0 0 ‒789 ‒ 1,590 0 0 Other expenses ‒8,344 ‒ 9,678 ‒ 15,503 ‒10,681 ‒ 929 ‒5,452 Non-technical result ‒203,124 24,745 36,245 18,244 18,733 20,272 Operating profit/(loss) ‒194,065 83,129 55,116 30,878 57,953 34,624 Amortisation of VBI and impairment of goodwill 0 0 ‒87,947 ‒57,001 0 0 Finance cost ‒3,220 0 ‒ 4,374 ‒ 4,352 ‒ 2,901 ‒2,901 Earnings before taxes ‒197,285 83,129 ‒37,205 ‒30,475 55,052 31,724 Health insurance In thousand UNIQA Austria UNIQA International Reinsurance 1‒12/2020 1‒ 12/2019 adjusted 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 Premiums written (gross) 1,089,620 1,056,263 77,936 74,558 6,795 5,747 Premiums earned (net) 1,082,685 1,050,575 74,409 66,972 6,420 5,407 Technical interest income 88,746 86,386 2 2 0 0 Other insurance income 1,455 1,212 143 118 0 0 Insurance benefits ‒ 916,935 ‒927,766 ‒ 42,177 ‒38,842 ‒ 6,056 ‒ 5,962 Operating expenses ‒176,857 ‒ 153,324 ‒ 27,362 ‒21,314 ‒ 249 ‒387 Other technical expenses ‒227 ‒ 429 ‒ 433 ‒515 0 0 Technical result 78,867 56,654 4,581 6,421 115 ‒942 Net investment income 95,073 101,237 30 352 0 0 Income from investments 120,805 124,051 254 663 0 0 Expenses from investments ‒ 31,097 ‒ 30,564 ‒ 224 ‒ 310 0 0 Financial assets accounted for using the equity method 5,365 7,750 0 0 0 0 Other income 127 555 3,278 3,146 0 0 Reclassification of technical interest income ‒ 88,746 ‒ 86,386 ‒ 2 ‒ 2 0 0 Other expenses ‒749 ‒ 1,122 ‒ 3,415 ‒ 2,821 ‒14 ‒68 Non-technical result 5,705 14,284 ‒110 675 ‒14 ‒68 Operating profit/(loss) 84,573 70,938 4,471 7,096 102 ‒1,011 Amortisation of VBI and impairment of goodwill 0 0 0 0 0 0 Finance cost 0 ‒1 0 0 0 0 Earnings before taxes 84,573 70,938 4,471 7,096 102 ‒1,011 55CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Group functions Consolidation Group 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 adjusted 0 0 ‒1,104,104 ‒ 1,080,668 3,010,327 2,846,783 0 0 414 1,729 2,808,954 2,678,436 0 0 0 0 789 1,590 13,253 299 ‒2,450 ‒ 3,403 28,836 16,443 153 99 ‒ 3,436 609 ‒1,775,119 ‒ 1,719,467 ‒42,022 ‒25,539 3,872 ‒530 ‒970,724 ‒ 861,241 ‒868 920 11,618 12,317 ‒45,053 ‒43,889 ‒29,485 ‒24,220 10,017 10,722 47,683 71,872 40,683 321,995 149,113 ‒ 282,171 29,547 122,077 182,732 388,007 ‒ 127,167 ‒ 298,470 220,859 233,770 ‒141,175 ‒68,438 265,340 11,587 ‒201,837 ‒ 119,295 ‒874 2,426 10,940 4,712 10,525 7,601 8,537 12,093 481 ‒1,894 46,685 18,607 0 0 0 0 ‒789 ‒ 1,590 ‒11,066 ‒13,616 ‒2,676 1,208 ‒ 38,518 ‒38,219 38,153 320,471 146,918 ‒282,857 36,925 100,875 8,669 296,251 156,935 ‒272,136 84,607 172,747 0 0 ‒ 82 0 ‒88,029 ‒ 57,001 ‒67,437 ‒59,239 13,414 12,142 ‒64,519 ‒ 54,349 ‒58,769 237,012 170,266 ‒ 259,994 ‒ 67,941 61,397 Group functions Consolidation Group 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 adjusted 0 0 ‒ 6,796 ‒ 5,747 1,167,554 1,130,821 0 0 99 73 1,163,614 1,123,027 0 0 0 0 88,747 86,388 0 0 ‒1 0 1,597 1,331 2,165 3,255 ‒ 53 17 ‒ 963,056 ‒969,298 ‒20,486 ‒12,773 ‒ 12 ‒ 14 ‒224,966 ‒ 187,813 390 750 0 52 ‒270 ‒ 143 ‒17,931 ‒8,769 33 129 65,666 53,493 28,468 20,029 ‒ 19,029 ‒ 12,584 104,542 109,034 83,032 46,352 ‒ 42,871 ‒ 41,109 161,220 129,957 ‒54,564 ‒26,656 7,901 14,454 ‒77,985 ‒ 43,075 0 333 15,941 14,070 21,307 22,153 168,409 180,931 ‒ 27,121 ‒ 27,398 144,693 157,234 0 0 0 0 ‒88,747 ‒86,388 ‒169,985 ‒170,992 27,606 27,509 ‒146,556 ‒ 147,494 26,893 29,969 ‒18,543 ‒ 12,473 13,931 32,387 8,962 21,200 ‒18,510 ‒ 12,344 79,597 85,879 0 0 0 0 0 0 ‒65 ‒44 0 0 ‒ 66 ‒ 44 8,896 21,157 ‒18,510 ‒ 12,344 79,531 85,835 56 Life insurance In thousand UNIQA Austria UNIQA International Reinsurance 1‒12/2020 1‒ 12/2019 adjusted 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 Premiums written (gross), including savings portions from unit-linked and index-linked life insurance 951,778 983,884 434,921 409,760 30,128 33,576 Premiums earned (net), including savings portions from unit-linked and index-linked life insurance 927,921 956,620 423,528 401,599 9,734 11,083 Savings portions from unit-linked and index-linked life insurance (gross) 207,018 211,683 97,104 98,083 0 0 Savings portions from unit-linked and index-linked life insurance (net) 207,018 211,683 97,104 98,083 0 0 Premiums written (gross) 744,760 772,201 337,817 311,677 30,128 33,576 Premiums earned (net) 720,903 744,938 326,424 303,516 9,734 11,083 Technical interest income 205,504 213,722 27,084 29,538 0 0 Other insurance income 599 171 18,964 3,569 25 17 Insurance benefits ‒768,151 ‒810,312 ‒179,758 ‒ 155,143 ‒ 7,523 ‒ 10,134 Operating expenses ‒188,817 ‒185,051 ‒169,599 ‒ 157,862 ‒ 1,208 ‒ 1,176 Other technical expenses ‒5,566 ‒6,146 ‒5,704 ‒2,928 ‒ 3,053 ‒ 3,233 Technical result ‒35,527 ‒ 42,678 17,412 20,690 ‒2,025 ‒3,444 Net investment income 261,862 289,144 71,820 35,929 5,248 6,248 Income from investments 281,036 341,472 83,558 55,433 5,248 6,248 Expenses from investments ‒26,467 ‒ 62,861 ‒11,738 ‒19,504 0 0 Financial assets accounted for using the equity method 7,293 10,534 0 0 0 0 Other income 111 331 24,581 14,980 2 19 Reclassification of technical interest income ‒205,504 ‒213,722 ‒ 27,084 ‒29,538 0 0 Other expenses ‒435 ‒ 670 ‒44,875 ‒1,898 ‒ 88 ‒24 Non-technical result 56,034 75,083 24,442 19,472 5,162 6,242 Operating profit/(loss) 20,507 32,405 41,854 40,162 3,137 2,798 Amortisation of VBI and impairment of goodwill ‒ 1,786 ‒1,786 ‒ 36,000 ‒375 0 0 Finance cost ‒25,067 ‒ 25,101 ‒155 ‒ 391 0 0 Earnings before taxes ‒6,346 5,518 5,698 39,396 3,137 2,798 57CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Group functions Consolidation Group 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 adjusted 0 0 ‒29,363 ‒32,273 1,387,465 1,394,946 0 0 ‒ 89 70 1,361,094 1,369,372 0 0 0 0 304,122 309,766 0 0 0 0 304,122 309,766 0 0 ‒29,363 ‒32,273 1,083,343 1,085,180 0 0 ‒ 89 70 1,056,972 1,059,607 0 0 0 0 232,589 243,260 35 50 ‒ 8,387 ‒67 11,237 3,740 0 0 ‒972 ‒ 1,746 ‒956,404 ‒977,335 ‒17,541 ‒10,202 6,457 ‒ 3,771 ‒370,708 ‒358,062 315 675 5,269 5,562 ‒8,739 ‒6,071 ‒17,190 ‒9,476 2,277 48 ‒35,053 ‒34,861 27,050 14,260 5,340 8,553 371,321 354,133 55,306 48,339 ‒ 33,542 ‒ 46,260 391,606 405,232 ‒29,489 ‒35,861 13,550 32,454 ‒54,143 ‒85,773 1,233 1,781 25,332 22,359 33,858 34,674 3,292 1,247 ‒ 2,816 ‒59 25,171 16,517 0 0 0 0 ‒232,589 ‒ 243,260 ‒3,891 ‒ 1,950 3,866 ‒ 765 ‒ 45,423 ‒5,307 26,452 13,557 6,390 7,729 118,479 122,084 9,261 4,080 8,667 7,777 83,426 87,223 0 0 ‒1 0 ‒ 37,787 ‒ 2,161 ‒7,926 ‒ 7,229 32,975 32,472 ‒ 173 ‒ 249 1,336 ‒3,148 41,640 40,249 45,466 84,813 58 UNIQA International ‒ classified by region Premiums earned (net) Net investment income In thousand 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 Poland 264,324 167,831 15,551 9,543 Slovakia 89,735 89,432 3,197 3,311 Czech Republic 246,685 183,097 7,754 7,372 Hungary 73,985 75,540 6,023 4,790 Central Europe (CE) 674,728 515,901 32,525 25,015 Romania 53,743 55,246 4,901 4,308 Ukraine 84,936 90,442 10,598 1,144 Eastern Europe (EE) 138,679 145,688 15,499 5,452 Russia 70,253 87,098 37,525 6,557 Russia (RU) 70,253 87,098 37,525 6,557 Albania 31,367 34,400 661 432 Bosnia and Herzegovina 27,670 28,895 2,481 4,848 Bulgaria 37,058 46,499 1,065 1,534 Kosovo 11,541 11,693 271 203 Croatia 49,241 49,240 11,696 13,967 Montenegro 10,241 10,830 684 787 North Macedonia 14,360 13,647 342 356 Serbia 37,036 39,470 3,958 3,592 Southeastern Europe (SEE) 218,515 234,673 21,158 25,718 Liechtenstein 1,206 1,189 64 16 Switzerland 0 0 ‒ 31 ‒ 21 Western Europe (WE) 1,206 1,189 33 ‒6 Austria 0 0 ‒655 ‒1,150 Administration 0 0 ‒ 655 ‒1,150 UNIQA International 1,103,382 984,549 106,084 61,587 Of which: Earnings before taxes insurance companies Impairment of goodwill 59CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Insurance benefits Operating expenses Earnings before taxes 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 adjusted ‒162,139 ‒99,535 ‒112,662 ‒60,215 4,184 15,010 ‒45,321 ‒47,675 ‒41,405 ‒37,874 5,364 5,247 ‒144,319 ‒ 107,601 ‒ 72,298 ‒ 59,459 33,325 22,499 ‒20,733 ‒23,609 ‒30,571 ‒33,371 8,632 6,263 ‒372,512 ‒ 278,420 ‒256,935 ‒ 190,919 51,506 49,019 ‒29,598 ‒18,212 ‒24,954 ‒35,897 ‒ 58,218 ‒ 31,900 ‒34,116 ‒37,423 ‒44,386 ‒47,646 14,166 6,687 ‒63,714 ‒ 55,636 ‒69,339 ‒83,543 ‒44,052 ‒25,213 ‒54,919 ‒69,211 ‒13,394 ‒16,413 20,178 19,480 ‒54,919 ‒ 69,211 ‒13,394 ‒16,413 20,178 19,480 ‒10,971 ‒14,959 ‒14,640 ‒16,356 244 1,227 ‒16,834 ‒19,109 ‒11,345 ‒11,431 1,683 1,394 ‒12,387 ‒24,052 ‒20,960 ‒19,973 ‒ 14,855 ‒ 15,724 ‒7,152 ‒ 6,387 ‒4,712 ‒ 5,270 100 255 ‒34,289 ‒34,989 ‒21,007 ‒20,939 1,813 8,079 ‒5,060 ‒ 5,686 ‒4,657 ‒ 5,139 965 501 ‒6,721 ‒ 7,187 ‒7,304 ‒ 6,896 581 ‒498 ‒22,222 ‒25,096 ‒16,841 ‒15,292 ‒ 20,232 2,007 ‒115,638 ‒ 137,465 ‒101,467 ‒ 101,296 ‒29,701 ‒ 2,761 ‒1,313 ‒ 824 ‒ 1,385 ‒2,050 ‒789 ‒ 1,585 0 0 0 0 310 169 ‒1,313 ‒824 ‒1,385 ‒ 2,050 ‒ 479 ‒ 1,417 0 0 ‒ 23,832 ‒ 20,659 ‒ 24,488 ‒ 23,092 0 0 ‒23,832 ‒20,659 ‒24,488 ‒23,092 ‒608,096 ‒ 541,556 ‒466,354 ‒ 414,880 ‒27,036 16,017 ‒2,859 38,940 ‒105,752 ‒56,653 60 Consolidated Statement of Financial Position ‒ classified by business line Property and casualty insurance Health insurance In thousand 31/12/2020 31/12/2019 adjusted 31/12/2020 31/12/2019 adjusted Assets Property, plant and equipment 192,969 192,493 36,906 37,855 Intangible assets 683,508 627,415 294,903 281,368 Investments Investment property 196,515 214,693 235,293 242,077 Financial assets accounted for using the equity method 81,270 72,436 230,391 220,089 Other investments 5,682,319 4,864,151 3,874,305 3,554,843 Unit-linked and index-linked life insurance investments 0 0 0 0 Reinsurers’ share of technical provisions 389,131 219,739 1,141 1,591 Reinsurers’ share of technical provisions for unit-linked and index-linked life insurance 0 0 0 0 Receivables, including insurance receivables 483,558 238,194 311,762 357,724 Income tax receivables 46,406 42,759 1,821 1,596 Deferred tax assets 3,693 1,803 0 0 Cash and cash equivalents 266,613 280,748 164,526 71,129 Total assets by business line 8,025,983 6,754,431 5,151,047 4,768,272 Liabilities Subordinated liabilities 1,069,920 870,110 0 0 Technical provisions 4,122,722 3,295,437 3,623,875 3,435,554 Technical provisions for unit-linked and index-linked life insurance 0 0 0 0 Financial liabilities 715,976 94,009 29,461 31,674 Other provisions 395,230 356,183 408,517 313,899 Liabilities and other items classified as liabilities 694,209 655,029 241,173 101,640 Income tax liabilities 63,214 55,336 6,598 3,612 Deferred tax liabilities 61,344 74,547 156,837 130,314 Total liabilities by business line 7,122,614 5,400,650 4,466,461 4,016,693 61CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Life insurance Consolidation Group 31/12/2020 31/12/2019 adjusted 31/12/2020 31/12/2019 31/12/2020 31/12/2019 adjusted 134,863 121,432 0 0 364,739 351,780 1,120,382 722,793 ‒25 ‒45,060 2,098,769 1,586,516 787,405 680,674 0 0 1,219,213 1,137,444 366,260 349,889 0 0 677,921 642,414 11,493,995 10,976,431 ‒ 628,512 ‒550,486 20,422,107 18,844,939 5,218,124 4,680,403 0 0 5,218,124 4,680,403 124,028 128,644 ‒31 49 514,268 350,022 131 113 0 0 131 113 208,767 160,986 ‒ 319,837 ‒ 210,244 684,249 546,659 10,903 4,305 0 0 59,130 48,660 4,901 3,434 0 0 8,594 5,237 209,574 127,745 0 0 640,713 479,621 19,679,332 17,956,847 ‒948,405 ‒ 805,742 31,907,957 28,673,809 419,258 410,741 ‒ 419,258 ‒ 410,741 1,069,920 870,110 11,450,699 11,071,340 ‒1,554 ‒14,431 19,195,742 17,787,900 5,115,506 4,646,152 0 0 5,115,506 4,646,152 91,574 49,363 ‒ 143,444 ‒ 99,530 693,566 75,516 45,468 17,133 ‒1,980 ‒ 1,505 847,235 685,709 441,129 325,767 ‒ 382,290 ‒ 279,341 994,221 803,095 23,239 1,722 0 0 93,051 60,669 205,703 152,678 0 0 423,884 357,539 17,792,575 16,674,896 ‒948,525 ‒ 805,549 28,433,125 25,286,690 Consolidated equity and non-controlling interests 3,474,832 3,387,119 Total equity and liabilities 31,907,957 28,673,809 The amounts indicated for each business line have been adjusted to eliminate amounts resulting from internal transactions. Therefore, the balance of business line assets and business line liabilities does not allow conclusions to be drawn with regard to the equity allocated to the respec- tive segment. 62 Business combinations If the Group has obtained control, it accounts for business combinations in line with the acquisition method. The consideration transferred for the acquisition and the iden- tifiable net assets acquired are measured at fair value. Transaction costs are recognised as expenses immediately. 1. Acquisition of AXA companies On 7 February 2020, UNIQA Österreich Versicher- ungen AG agreed with AXA S.A. and its subsidiary Société Beaujon on the acquisition of shares in the AXA subsidiaries and branches in Poland, the Czech Republic and Slovakia. The closing took place on 15 October 2020 through the transfer of the shares, by which control over the acquired companies was obtained. Prior to this, approval was ob- tained from the EU Commission and the supervisory au- thorities in the countries concerned. Both life and non-life insurance companies were acquired, as well as investment management companies, pension funds and service companies, each constituting a business operation within the meaning of IFRS 3. The acquisition of the companies implements UNIQA’s strategy of further growth in countries where UNIQA is already represented. Acquired company Company’s registered office Business purpose Acquired share CGU AXA ¯ycie Towarzystwo Ubezpieczeñ S.A. Warsaw, Poland Life insurance company 100% Poland AXA Ubezpieczenia Towarzystwo Ubezpieczeñ i Reasekuracji S.A. Warsaw, Poland Property/casualty insurance company 100% Poland AXA Polska S.A. Warsaw, Poland Service company 100% Poland AXA Towarzystwo Funduszy Inwestycyjnych S.A. Warsaw, Poland Investment fund 100% Poland AXA Powszechne Towarzystwo Emerytalne S.A. Warsaw, Poland Pension fund 100% Poland AXA pojišovna a.s. Prague, Czech Republic Property/casualty insurance company 100% Czech Republic AXA ivotní pojišovna a.s. Prague, Czech Republic Life insurance company 100% Czech Republic AXA penzijní spoleènost a.s. Brno, Czech Republic Pension fund 99.98% Czech Republic AXA investièní spoleènost a.s. Prague, Czech Republic Investment management company 100% Czech Republic AXA Management Services s.r.o. Prague, Czech Republic Service company 100% Czech Republic AXA d.d.s., a.s. Bratislava, Slovakia Pension fund 100% Czech Republic AXA d.s.s., a.s. Bratislava, Slovakia Pension fund 100% Czech Republic AXA companies in Poland UNIQA acquired 93.42 per cent of the issued share capital of the life insurance company AXA Życie Towarzystwo Ub- ezpieczeń S.A. from Société Beaujon and 6.58 per cent from AXA S.A. AXA Życie Towarzystwo Ubezpieczeń S.A. holds all shares in the service company AXA Polska S.A. and in the investment fund AXA Towarzystwo Funduszy Inwestycyjnych S.A. AXA Ubezpieczenia Towarzystwo Ubezpieczeń i Reaseku- racji S.A. is a non-life insurance company with its regis- tered office in Warsaw, in which UNIQA acquired 100 per cent of the issued share capital from Société Beaujon. AXA Powszechne Towarzystwo Emerytalne S.A. is a pen- sion fund in which UNIQA acquired 100 per cent of the is- sued share capital from Société Beaujon. AXA companies in the Czech Republic AXA pojišťovna a.s. is a non-life insurance company in which UNIQA acquired 100 per cent of the issued share capital from Société Beaujon. AXA životní pojišťovna a.s. is a life insurance company in which UNIQA also acquired 100 per cent of the issued share capital from Société Beaujon. 63CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S In turn, this company holds all shares in the investment management company AXA investiční společnost a.s., in the service company AXA Management Services s.r.o. and in the two Slovakian pension funds AXA d.d.s., a.s. and AXA d.s.s., a.s. Finally, 99.98 per cent of the issued share capital in AXA penzijní společnost a.s., a Czech pension fund, was ac- quired from Société Beaujon. AXA companies in Slovakia The two companies AXA d.d.s., a.s. and AXA d.s.s., a.s., held by the Czech AXA životní pojišťovna a.s. are pension funds with their registered offices in Slovakia. The amounts recognised at fair value for the identifiable assets acquired and the liabilities assumed are shown in the table below. Assets and liabilities from business com- binations at acquisition date In thousand Property, plant and equipment 32,742 Intangible assets 353,176 Investments 1,309,405 Unit-linked and index-linked life insurance investments 879,536 Reinsurers’ share of technical provisions 180,086 Deferred tax assets 17,250 Receivables, including insurance receivables 117,148 Income tax receivables 2,112 Cash and cash equivalents 31,202 Total assets 2,922,657 Technical provisions 981,152 Technical provisions for unit-linked and index-linked life insurance 817,239 Other provisions 26,856 Deferred tax liabilities 36,118 Financial liabilities 30,739 Liabilities and other items classified as liabilities 232,147 Income tax liabilities 19,753 Total liabilities 2,144,004 Net identifiable assets acquired 778,653 Consideration transferred In thousand Contractually agreed purchase price 1,002,000 Adjustments to the sale price ‒ 3,670 Price paid 1) 998,330 Acquired bank balances ‒31,202 Consideration transferred less acquired bank balances 967,128 1 ) The purchase price was paid in full by cash transfer. Preliminary differential amount In thousand Consideration transferred 998,330 Net identifiable assets acquired at fair value 778,653 Preliminary differential amount 219,677 The calculations include the knowledge gained in the pe- riod between obtaining control on 15 October 2020 until the preparation of these consolidated financial state- ments. In particular in the area of technical provisions it is possible that subsequent adjustments may be made once a full insight into the parameters of the portfolios relevant to the calculation is available. The goodwill resulting from the acquisition in the amount of €219,767 thousand reflects the value of synergies antici- pated in connection with the acquisition (market position- ing, potential addition of new customers, savings in ad- ministrative processes and infrastructures). The alloca- tion of the difference is based on the acquired identifiable net asset values attributable to the respective CGUs and taking into account future synergies. Accordingly, €15.8 million of the difference is allocated to the CGU Po- land and €203.9 million to the CGU Czech Republic. Goodwill is deductible for income tax purposes. The fair value of the receivables acquired amounts to €117,148 thousand. At the time of acquisition, the gross contract value amounts to €182,182 thousand. The balance of value adjustments at the acquisition date thus amounts to €65,034 thousand. 64 To finance the acquisition, a senior bond in the amount of €600 million was issued at an issue price of 99.436 per cent of the nominal amount (see Chapter “Financial liabil- ities”) in July 2020. The acquisition-related costs (mainly reported under op- erating expenses) amount to €12,083 thousand. For the period between the date of acquisition and the re- porting date, the acquisition contributed €211,881 thou- sand to the premiums written and €1,654 thousand to UNIQA’s profit/(loss) for the period. Had the aforementioned acquisition already taken place on 1 January 2020, UNIQA would have reported premiums written in the amount of €6,170,312 thousand. The profit/(loss) for the period would have amounted to €81,040 thousand and earnings per share €0.21. Investments 2. Investment property Land and buildings, including buildings on third-party land, held as long-term investments to generate rent reve- nue and/or for the purpose of capital appreciation are measured in accordance with the cost model. The invest- ment property is subject to straight line depreciation over the useful life of 5 to 80 years and is recognised under the item “Net investment income”. The fair value is determined using reports prepared by in- dependent experts. These expert reports are prepared based on the income approach. It requires making as- sumptions about the future, principally concerning the discount rate, the exit yield, the expected utilisation (va- cancy rate), the development of future rental charges, and the condition of the land and buildings. Property value, lo- cation, usable area and usage category for the property are also taken into account. For this reason, all measurements of the fair value for the land and buildings come under Level 3 of the hierarchy in accordance with IFRS 13. The measurement techniques respond to the underlying assumptions and parameters. For instance, any reduction in the discount rate applied would result in an increase in the values ascertained for the land and buildings if the other assumptions and pa- rameters remained unchanged. Conversely, any reduction in the expected utilisation or the expected rental charges would, for instance, result in a decrease in the values ascertained for the land and build- ings if the other assumptions and parameters remained unchanged. The measurement-related assumptions and parameters are ascertained at each key date based on the best estimate by management with due respect to the cur- rent prevailing market conditions. The effects of Covid-19 UNIQA’s real estate portfolio is oriented mainly towards office space. In addition, UNIQA holds properties in retail, residential and hotel sectors. An analysis performed showed no material impact related to Covid-19 on carrying amounts and current income and expenses. Impairment tests led to minor impairments in the hotel sector. Current income was affected by minor rent reduc- tions, which were offset by lower maintenance expenses. Acquisition costs In thousand At 1 January 2019 1,697,905 Currency translation 3,242 Additions 61,997 Disposals ‒41,908 Reclassifications 10,596 Reclassifications held for sale 78,049 At 31 December 2019 1,809,883 At 1 January 2020 1,809,883 Currency translation ‒ 20,596 Change in basis of consolidation 97,606 Additions 52,232 Disposals ‒5,201 Reclassifications ‒14,408 At 31 December 2020 1,919,516 65CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Accumulated depreciation and impairment losses In thousand At 1 January 2019 ‒593,759 Currency translation ‒1,569 Additions from depreciation ‒40,013 Additions from impairment ‒1,848 Disposals 20,129 Reversal of impairment 3,981 Reclassifications held for sale ‒59,360 At 31 December 2019 ‒ 672,439 At 1 January 2020 ‒672,439 Currency translation 6,118 Additions from depreciation ‒38,344 Additions from impairment ‒9,459 Disposals 2,214 Reclassifications 5,986 Reversal of impairment 5,621 At 31 December 2020 ‒700,303 Carrying amounts In thousand Property and casualty insurance Health insurance Life insurance Total At 1 January 2019 227,191 235,225 641,731 1,104,146 At 31 December 2019 214,693 242,077 680,674 1,137,444 At 31 December 2020 196,515 235,293 787,405 1,219,213 Fair values In thousand Property and casualty insurance Health insurance Life insurance Total At 31 December 2019 434,938 576,950 1,246,974 2,258,862 At 31 December 2020 439,767 624,609 1,456,785 2,521,161 3. Financial assets accounted for using the equity method Investments in associates are accounted for using the eq- uity method. They are initially recognised at acquisition cost, which also includes transaction costs. After initial recognition, the consolidated financial statements include the Group’s share in profit/(loss) for the period and in changes in other comprehensive income until the date the applicable influence ends. At each reporting date, UNIQA reviews whether there are any indications that the investments in associates are im- paired. If this is the case, then the impairment loss is rec- orded as the difference between the participation carrying amount of the associate and the corresponding recovera- ble amount and recognised separately in profit/(loss) for the period. An impairment loss is reversed in the event of an advantageous change in the estimates used to deter- mine the recoverable amount. 66 Reconciliation of summarised financial information In thousand STRABAG SE Associated companies not material on a stand-alone basis 2020 1) 2) 2019 2) 2020 2019 Net assets at 1 January 3,789,440 3,542,415 162,884 151,166 Dividends ‒ 92,340 ‒133,380 ‒ 495 ‒9,633 Profit/(loss) after taxes 366,695 375,535 27,562 17,731 Other comprehensive income ‒97,046 4,870 ‒892 3,620 Net assets at 31 December 3,966,748 3,789,440 189,059 162,884 Shares in associated companies 14.26% 14.26% Various investment amounts Carrying amount 606,320 579,218 71,601 63,196 1) Estimate for 31 Dec. 2020 based on financial information as at 30 July 2020 on STRABAG SE available as at the reporting date 2) The carrying amounts are calculated based on the shares in circulation. 2020: 15.29%, 2019: 15.29% As at 31 December 2020, UNIQA held a 14.3 per cent stake in STRABAG SE (31 December 2019: 14.3 per cent). UNIQA treats STRABAG SE as an associate due to con- tractual arrangements. As part of the accounting using the equity method, an assessment of the share in STRABAG SE was made, based on the financial information pub- lished at 30 June 2020, for the period up until 31 Decem- ber 2020. The fair value of the shares is based on the stock market price at 31 December 2020 and amounts to €446,950 thousand (2019: €486,156 thousand). Although the exter- nal impairment indicator was available, no impairment was required. Summarised statement of comprehensive income STRABAG SE 1) In thousand 1‒6/2020 1‒6/2019 Revenue 6,321,813 6,979,073 Depreciation ‒255,012 ‒233,738 Interest income 20,572 15,403 Interest expenses ‒34,058 ‒ 34,898 Income taxes ‒30,984 ‒ 27,563 Profit/(loss) for the period 630 13,942 Other comprehensive income ‒58,194 2,167 Total comprehensive income ‒57,564 16,109 1) STRABAG SE Semi-Annual Report 2020 as published in August 2020 Summarised statement of fi- nancial position STRABAG SE 1) In thousand 30/6/2020 31/12/2019 Cash and cash equivalents 2,019,596 2,460,814 Other current assets 4,782,118 4,540,145 Current assets 6,801,714 7,000,959 Non-current assets 5,147,915 5,249,852 Total assets 11,949,629 12,250,811 Current financial liabilities 155,965 355,509 Other current liabilities 5,700,032 5,694,876 Current liabilities 5,855,997 6,050,385 Non-current financial liabilities 1,004,711 1,066,698 Other non-current liabilities 1,294,970 1,277,829 Non-current liabilities 2,299,681 2,344,527 Total liabilities 8,155,678 8,394,912 Net assets 3,793,951 3,855,899 1) STRABAG SE Semi-Annual Report 2020 as published in August 2020 All other financial assets accounted for using the equity method are negligible from the perspective of the Group when considered individually and are stated in aggregate form. The financial statements of the associates most recently published have been used for the purpose of the account- ing using the equity method, and have been adjusted based on any essential transactions between the relevant report- ing date and 31 December 2020. 67CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Summary of information on associated companies not material on a stand-alone basis In thousand 1‒12/2020 1‒12/2019 Group’s share of profit from continuing operations 10,827 6,693 Group’s share of loss from continuing operations ‒36 0 Group’s share of other comprehensive income ‒357 1,453 Group’s share of total comprehensive income 10,434 8,145 4. Other investments and unit-linked and index-linked life insurance investments UNIQA has applied the deferral approach for IFRS 9 since 1 January 2018. This enables UNIQA to postpone the date of first-time application of IFRS 9 until IFRS 17 comes into force. Financial assets are recognised for the first time on the settlement date. They are derecognised when the contrac- tual rights to cash flows from an asset expire or the rights to receive the cash flows in a transaction in which all ma- jor risks and opportunities connected with the ownership of the financial asset are transferred. Financial assets at fair value through profit or loss Financial assets are recognised at fair value through profit or loss if the asset is either held for trading or is designated at fair value and recognised in profit and loss (fair value option). These include structured bonds, hedge funds and investment certificates whose original classification fell within this category. The fair value option is applied to structured products that are not split between the underlying transaction and the derivative but are instead accounted for as a unit. Unreal- ised gains and losses are recognised in profit/(loss) for the period. Derivatives are used within the limits permitted under the Austrian Insurance Supervisory Act for hedging invest- ments and for increasing earnings. All fluctuations in value are recognised in profit/(loss) for the period. Financial assets from derivative financial instruments are recognised under other investments. Financial liabilities from derivative financial instruments are recognised un- der financial liabilities. Available-for-sale financial assets Available-for-sale financial assets are initially measured at fair value plus directly attributable transaction costs. Sub- sequently, available-for-sale financial assets are measured at fair value. Corresponding value changes are, with the exception of impairment and foreign exchange differences in the case of available-for-sale debt securities, recognised in the accumulated profits in equity. When an asset is de- recognised, the accumulated other comprehensive income is reclassified to profit/(loss) for the period. Impairment of available-for-sale financial assets is recog- nised in profit/(loss) for the period by reclassifying the losses accumulated in equity. The accumulated loss that is reclassified from equity to profit/(loss) for the period is the difference between the acquisition cost, net of any re- demptions, amortisations and less any impairment loss previously recognised in profit or loss – and current fair value. If the fair value of an impaired, available-for-sale debt instrument increases in a subsequent period and the increase can be objectively related to an event occurring after the impairment was recognised, the impairment is reversed, with the amount of the reversal recognised in profit/(loss) for the period. Reversals of impairment losses of equity instruments held at fair value cannot be recog- nised in profit/(loss) for the period. Loans and receivables When first recognised, loans and receivables are measured at their fair value plus directly attributable transaction costs. Subsequently, they are measured at amortised cost using the effective interest method. 68 For debt instruments and assets in the category “Loans and receivables”, this test is executed within the frame- work of an internal impairment process. If there are objec- tive indications that the value currently attributed is not tenable, an impairment is recognised. Objective indications that financial assets are impaired are: the default or delay of a debtor, the opening of bankruptcy proceedings for a debtor, or signs indicating that such proceedings are imminent, adverse changes in the rating of borrowers or issuers, changes in the market activity of a security, or other observable data that indicate a significant decrease in the expected payments from a group of financial as- sets. In the case of an investment in an equity instrument, a sig- nificant or prolonged decline in the fair value below its cost is also objective evidence of impairment. A significant decrease is a decrease of 20 per cent, and a prolonged de- cline is one that lasts for at least nine months. Impairment is calculated as the difference between the carrying amount and the present value of the estimated fu- ture cash flows, discounted at the original effective inter- est rate of the asset. Losses are recognised in profit/(loss) for the period. If there are no realistic chances of recover- ing the asset, an impairment has to be recognised. In case of an event that causes a reversal of impairment losses, this is recognised in profit/(loss) for the period. In the event of a definitive non-performance, the asset is derec- ognised. Other investments are broken down into the following classes and categories of financial instruments: Other investments At 31 December 2020 In thousand Variable- income securities Fixed- income securities Loans and other investments Derivative financial instruments Investments under investment contracts Total Carrying amounts Financial assets at fair value through profit or loss 6,442 162,844 0 17,823 53,920 241,029 Available-for-sale financial assets 978,834 18,700,091 0 0 0 19,678,925 Loans and receivables 0 88,269 413,883 0 0 502,152 Total 985,276 18,951,204 413,883 17,823 53,920 20,422,107 of which fair value option 6,442 162,844 0 0 0 169,286 Other investments At 31 December 2019 In thousand Variable- income securities Fixed- income securities Loans and other investments Derivative financial instruments Investments under investment contracts Total Financial assets at fair value through profit or loss 7,345 201,234 0 21,981 58,547 289,106 Available-for-sale financial assets 909,764 16,992,181 0 0 0 17,901,946 Loans and receivables 0 114,050 539,837 0 0 653,887 Total 917,109 17,307,466 539,837 21,981 58,547 18,844,939 of which fair value option 7,345 201,234 0 0 0 208,579 Carrying amounts of other investments, with the excep- tion of reclassified bonds, represent fair values. Reclassi- fied bonds are subsumed in the item “Fixed-income secu- rities” under “Loans and receivables”, the fair value of which amounts to €122,614 thousand at 31 December 2020 (31 December 2019: €129,233 thousand). Unit-linked and index-linked life insurance investments are broken down into the following classes and categories of financial instruments: 69CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Unit-linked and index-linked life insurance investments At 31 December 2020 In thousand Variable- income securities Fixed- income securities Loans and other investments Total Financial assets at fair value through profit or loss 2,076,362 3,024,384 117,378 5,218,124 Total 2,076,362 3,024,384 117,378 5,218,124 Unit-linked and index-linked life insurance investments At 31 December 2019 In thousand Variable- income securities Fixed- income securities Loans and other investments Total Financial assets at fair value through profit or loss 1,452,371 2,966,084 261,949 4,680,403 Total 1,452,371 2,966,084 261,949 4,680,403 Determination of fair value A range of accounting policies and disclosures requires the determination of the fair value of financial and non-finan- cial assets and liabilities. UNIQA has defined a control framework with regard to the determination of fair value. This includes a measurement team, which bears general responsibility for monitoring all major measurements of fair value, including Level 3 fair values, and reports di- rectly to the respective Member of the Management Board. A review of the major unobservable inputs and the meas- urement adjustments is carried out regularly. If infor- mation from third parties (e.g. price quotations from bro- kers or price information services) is used to determine fair values, the evidence obtained from third parties is ex- amined in order to see whether such measurements meet the requirements of IFRSs. The level in the fair value hier- archy to which these measurements are attributable is also tested. Major items in the measurement are reported to the Audit Committee. As far as possible, UNIQA uses data that are observable on the market when determining the fair value of an asset or a liability. Based on the inputs used in the measurement techniques, the fair values are assigned to different levels in the fair value hierarchy. Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities. At UNIQA, these primarily involve quoted shares, quoted bonds and quoted invest- ment funds. Level 2: Measurement parameters that are not quoted prices included in Level 1 but which can be observed for the asset or liability either directly (i.e. as a price) or indi- rectly (i.e. derived from prices), or are based on prices from markets that have been classified as inactive. The parameters that can be observed here include, for exam- ple, exchange rates, yield curves and volatilities. At UNIQA, these include in particular quoted bonds that do not fulfil the conditions under Level 1, along with struc- tured products. Level 3: measurement parameters for assets or liabilities that are not based or are only partly based on observable market data. The measurement here primarily involves application of the discounted cash flow method, compar- ative procedures with instruments for which there are observable prices and other procedures. As there are no observable parameters here in many cases, the estimates used can have a significant impact on the result of the measurement. At UNIQA, it is primarily other equity in- vestments, private equity and hedge funds as well as structured products that do not fulfil the conditions un- der Level 2 that are assigned to Level 3. If the inputs used to determine the fair value of an asset or a liability can be assigned to different levels of the fair value hierarchy, the entire fair value measurement is as- signed to the respective level of the fair value hierarchy that corresponds to the lowest input significant for the measurement overall. 70 UNIQA recognises reclassifications between different lev- els of the fair value hierarchy at the end of the reporting period in which the change occurred. The measurement processes and methods are as follows: Financial instruments measured at fair value For the measurement of capital investments, techniques best suited for the establishment of corresponding value are applied. The following standard measurement tech- niques are applied for financial instruments which come under Levels 2 and 3: Market approach The measurement method in the market approach is based on prices or other applicable information from market transactions which involve identical or compara- ble assets and liabilities. Income approach The income approach corresponds to the method whereby the future (expected) payment flows or earnings are inferred on a current amount. Cost approach The cost approach generally corresponds to the value which would have to be applied in order to procure the asset once again. 71CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Measurement techniques and inputs in the determination of fair values Assets Price method Input factors Price model Fixed-income securities Listed bonds Listed price - - Unlisted bonds Theoretical price CDS spread, yield curves Discounted cash flow Unquoted asset-backed securities Theoretical price - Discounted cash flow, single deal review, peer Infrastructure financing Theoretical price - Discounted cash flow Variable-income securities Listed shares/investment funds Listed price - - Private equities Theoretical price Certified net asset values Net asset value method Hedge funds Theoretical price Certified net asset values Net asset value method Other shares Theoretical value WACC, (long-term) revenue growth rate, (long-term) profit margins, control premium Expert opinion Derivative financial instruments Equity basket certificate Theoretical price CDS spread, yield curves, volatilities (FX, cap/floor, swaption, constant maturity swap, shares) Black-Scholes Monte Carlo N-DIM CMS floating rate note Theoretical price CDS spread, yield curves, volatilities (FX, cap/floor, swaption, constant maturity swap, shares) LIBOR market model, Hull-White- Garman-Kohlhagen Monte Carlo CMS spread certificate Theoretical price CDS spread, yield curves, volatilities (FX, cap/floor, swaption, constant maturity swap, shares) Contract specific model FX (binary) option Theoretical price CDS spread, yield curves, volatilities (FX, cap/floor, swaption, constant maturity swap, shares) Black-Scholes-Garman-Kohlhagen Monte Carlo N-DIM Option (inflation, OTC, OTC FX options) Theoretical price CDS spread, yield curves, volatilities (FX, cap/floor, swaption, constant maturity swap, shares) Black-Scholes Monte Carlo N-DIM, contract specific model, inflation market model NKIS Structured bonds Theoretical price CDS spread, yield curves, volatilities (FX, cap/floor, swaption, constant maturity swap, shares) Black-Scholes-Garman-Kohlhagen Monte Carlo N-DIM, LMM Swap, cross currency swap Theoretical price CDS spread, yield curves, volatilities (FX, cap/floor, swaption, constant maturity swap, shares) Black-Scholes-Garman-Kohlhagen Monte Carlo N-DIM, Black-76-model, LIBOR market model, contract specific model Swaption, total return swaption Theoretical price CDS spread, yield curves, volatilities (FX, cap/floor, swaption, constant maturity swap, shares) Black - basis point volatility, contract specific model Investments under investment contracts Listed shares/investment funds Listed price - - Unlisted investment funds Theoretical price Certified net asset values Net asset value method 72 Valuation hierarchy of other investments Assets and liabilities measured at fair value Level 1 Level 2 Level 3 Total In thousand 31/12/2020 31/12/2019 31/12/2020 31/12/2019 31/12/2020 31/12/2019 31/12/2020 31/12/2019 Available-for-sale financial assets Variable-income securities 770,685 729,829 2,866 20,298 205,283 159,637 978,834 909,764 Fixed-income securities 14,048,895 13,170,835 3,535,446 2,941,560 1,115,750 879,787 18,700,091 16,992,181 Total 14,819,580 13,900,664 3,538,312 2,961,858 1,321,033 1,039,424 19,678,925 17,901,946 Financial assets at fair value through profit or loss Variable-income securities 912 0 1,966 2,077 3,564 5,267 6,442 7,345 Fixed-income securities 115,158 108,261 28,239 51,098 19,447 41,876 162,844 201,234 Derivative financial instruments 65 261 9,336 3,695 8,422 18,025 17,823 21,981 Investments under investment contracts 45,534 49,977 3,543 3,727 4,843 4,843 53,920 58,547 Total 161,669 158,498 43,084 60,597 36,277 70,011 241,029 289,106 Level 1 Level 2 Level 3 Total In thousand 31/12/2020 31/12/2019 31/12/2020 31/12/2019 31/12/2020 31/12/2019 31/12/2020 31/12/2019 Financial liabilities Derivative financial instruments 0 0 1,908 669 0 1 1,908 670 Total 0 0 1,908 669 0 1 1,908 670 Fair values of assets and liabilities measured at amortised cost Level 1 Level 2 Level 3 Total In thousand 31/12/2020 31/12/2019 31/12/2020 31/12/2019 31/12/2020 31/12/2019 31/12/2020 31/12/2019 Investment property 0 0 0 0 2,521,161 2,258,862 2,521,161 2,258,862 Loans and receivables Loans and other investments 0 0 278,384 384,350 135,499 155,488 413,883 539,837 Fixed-income securities 16,051 16,276 85,746 112,957 0 0 101,797 129,233 Total 16,051 16,276 364,130 497,307 135,499 155,488 515,680 669,070 Level 1 Level 2 Level 3 Total In thousand 31/12/2020 31/12/2019 31/12/2020 31/12/2019 31/12/2020 31/12/2019 31/12/2020 31/12/2019 Financial liabilities Liabilities from loans and leases 0 0 0 0 691,657 74,846 691,657 74,846 Total 0 0 0 0 691,657 74,846 691,657 74,846 Subordinated liabilities 1,231,774 1,051,425 0 0 0 0 1,231,774 1,051,425 Transfers between levels 1 and 2 In the reporting period transfers from Level 1 to Level 2 were made in the amount of €255,520 thousand (2019: €492,529 thousand) and from Level 2 to Level 1 in the amount of €493,055 thousand (2019: €144,533 thousand). These are attributable primarily to changes in trading fre- quency and trading activity. 73CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Valuation hierarchy in unit-linked and index-linked life insurance investments Assets and liabilities measured at fair value Level 1 Level 2 Level 3 Total In thousand 31/12/2020 31/12/2019 31/12/2020 31/12/2019 31/12/2020 31/12/2019 31/12/2020 31/12/2019 Financial assets at fair value through profit or loss 2,908,360 3,220,431 1,116,739 1,339,171 1,193,026 120,801 5,218,124 4,680,403 Total 2,908,360 3,220,431 1,116,739 1,339,171 1,193,026 120,801 5,218,124 4,680,403 The increase in financial instruments of unit- and index- linked life insurance under Level 3 relates to changes in the basis of consolidation. Level 3 financial instruments The following table shows the changes to the fair values of financial instruments whose measurement techniques are not based on observable inputs. Fixed-income securities Other Other investments Total In thousand 2020 2019 2020 2019 2020 2019 At 1 January 879,787 501,453 229,648 239,356 1,109,434 740,809 Transfers from Level 3 to Level 2 ‒39,342 0 0 ‒ 4,218 ‒ 39,342 ‒ 4,218 Transfers to Level 3 2,610 0 1 0 2,611 0 Gains and losses recognised in profit or loss ‒1,854 ‒2,432 ‒24,777 ‒1,539 ‒26,631 ‒3,971 Gains and losses recognised in other comprehensive income 14,275 46,002 1,874 ‒1,500 16,149 44,502 Additions 258,597 343,940 108,603 32,645 367,201 376,585 Disposals ‒11,267 ‒9,206 ‒88,333 ‒ 35,078 ‒ 99,600 ‒44,284 Changes from currency translation ‒189 30 ‒ 550 ‒ 19 ‒ 739 11 Change in basis of consolidation 13,133 0 15,094 0 28,227 0 At 31 December 1,115,750 879,787 241,560 229,648 1,357,310 1,109,434 Sensitivities Fixed-income securities The main unobservable input in the measurement of fixed-income securities is the specific credit spread. In or- der to be able to measure these securities in a discounted cash flow model, the spreads are derived from a selection of reference securities with comparable characteristics. For the fixed-income securities in Level 3, an increase in the discount rate by 100 basis points results in a 7.0 per cent reduction in value (2019: 6.2 per cent). A reduction in the discount rate by 100 basis points results in an 8.3 per cent increase in value (2019: 7. 5 per cent). Other Other securities under Level 3 mainly comprise private equity funds and other participations. Private equity funds are measured based on the net asset values which are de- termined by the fund manager using specific unobservable inputs for all underlying portfolio positions. This is done in accordance with the International Private Equity and Venture Capital Valuation (IPEV) Guideline. For other eq- uity investments under Level 3, invested capital is consid- ered to be an appropriate measure of fair value. In these cases, a sensitivity analysis is not applicable. 74 Carrying amounts for loans and other investments In thousand 31/12/2020 31/12/2019 Loans Loans to affiliated unconsolidated companies 0 4,400 Mortgage loans 7,925 9,931 Loans and advance payments on policies 12,343 12,827 Other loans 110,000 103,094 Total 130,269 130,251 Other investments Bank deposits 278,384 384,350 Deposits retained on assumed reinsurance 5,230 25,236 Total 283,614 409,586 Total sum 413,883 539,837 The carrying amounts of the loans and other investments correspond to their fair values. The measurement is based on collateral and the creditworthiness of the debtor; for deposits with banks it is based on quoted prices. Impairment of loans In thousand 31/12/2020 31/12/2019 At 1 January ‒2,713 ‒3,657 Use 83 502 Reversal 16 439 Currency translation 13 3 At 31 December ‒ 2,602 ‒ 2,713 Contractual maturities for fair values of loans In thousand 31/12/2020 31/12/2019 Up to 1 year 7,141 3,096 More than 1 year and up to 5 years 22,759 16,059 More than 5 years up to 10 years 95,368 103,478 More than 10 years 5,001 7,619 Total 130,269 130,251 5. Net investment income Classified by business line In thousand Property and casualty insurance Health insurance Life insurance Total 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 Investment property ‒4,806 15,278 7,762 12,983 37,306 54,047 40,263 82,308 Financial assets accounted for using the equity method 10,525 7,601 21,307 22,153 33,858 34,674 65,689 64,428 Variable-income securities ‒17,782 4,422 10,067 9,576 5,781 1,487 ‒1,934 15,484 Available for sale ‒17,757 6,333 9,565 8,861 5,897 1,185 ‒ 2,295 16,379 At fair value through profit or loss ‒25 ‒ 1,912 502 715 ‒116 302 361 ‒ 894 Fixed-income securities 53,207 119,094 70,586 69,321 281,809 247,904 405,602 436,319 Available for sale 48,751 112,090 65,790 60,868 281,747 247,768 396,288 420,726 At fair value through profit or loss 4,456 7,004 4,796 8,454 62 136 9,314 15,593 Loans and other investments 2,283 6,033 1,133 3,932 23,940 26,879 27,356 36,843 Loans 816 967 1,327 1,637 4,808 6,394 6,951 8,999 Other investments 1,467 5,066 ‒194 2,294 19,132 20,485 20,405 27,845 Derivative financial instruments 8,910 ‒10,416 1,851 311 ‒ 169 422 10,591 ‒9,682 Investment administration expenses, interest paid and other investment expenses ‒22,790 ‒ 19,935 ‒8,163 ‒9,241 ‒11,204 ‒11,280 ‒ 42,158 ‒40,456 Total 29,547 122,077 104,542 109,034 371,321 354,133 505,409 585,244 Of which: Current income/expenses 108,512 107,685 93,794 86,621 316,712 336,775 519,018 531,081 Gains/losses from disposals and changes in value ‒ 78,965 14,391 10,748 22,414 54,609 17,358 ‒ 13,609 54,163 Impairments ‒ 35,121 ‒11,992 ‒29,698 ‒ 6,941 ‒ 5,951 ‒ 3,204 ‒70,770 ‒22,138 75CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Classified by type of income In thousand Current income/expenses Gains/losses from disposals and changes in value Total of which impairment 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 1‒12/2020 1‒12/2019 Financial assets at fair value through profit or loss 14,378 1,414 5,889 3,603 20,266 5,017 0 0 Variable-income securities (within the framework of fair value option) 760 595 ‒399 ‒1,490 361 ‒894 0 0 Fixed-income securities (within the framework of fair value option) 1,095 2,572 8,219 13,022 9,314 15,593 0 0 Derivative financial instruments 12,523 ‒1,752 ‒ 1,931 ‒ 7,930 10,591 ‒ 9,682 0 0 Investments under investment contracts 1) 0 0 0 0 0 0 0 0 Available-for-sale financial assets 375,078 390,453 18,915 46,651 393,993 437,104 ‒61,311 ‒20,258 Variable-income securities 29,053 29,015 ‒ 31,348 ‒ 12,636 ‒2,295 16,379 ‒ 44,439 ‒ 12,385 Fixed-income securities 346,025 361,438 50,263 59,287 396,288 420,726 ‒ 16,872 ‒7,873 Loans and receivables 30,157 37,234 ‒2,801 ‒391 27,356 36,843 0 ‒32 Fixed-income securities 3,724 5,959 ‒26 ‒349 3,698 5,610 0 0 Loans and other investments 26,432 31,275 ‒ 2,775 ‒ 42 23,658 31,233 0 ‒32 Investment property 74,723 78,007 ‒34,460 4,300 40,263 82,308 ‒ 9,459 ‒1,848 Financial assets accounted for using the equity method 66,840 64,428 ‒1,151 0 65,689 64,428 0 0 Investment administration expenses, interest paid and other investment expenses ‒42,158 ‒ 40,456 0 0 ‒42,158 ‒ 40,456 0 0 Total 519,018 531,081 ‒13,609 54,163 505,409 585,244 ‒ 70,770 ‒22,138 1) Income from investments under investment contracts is not stated due to its transitory character. Details of net investment income In thousand 1‒12/2020 1‒12/2019 Current income/expenses from investment property Rent revenue 99,575 108,418 Operational expenses ‒24,851 ‒30,411 Currency gains/losses currency gains 90,345 42,610 currency losses ‒106,091 ‒60,311 Proft from currency gains/losses ‒ 15,746 ‒ 17,701 of which gains/losses from derivative financial instruments as part of US dollar underlying ‒ 17,103 3,547 of which gains/losses from derivative financial instruments as part of hedge transactions in US dollar 13,878 ‒ 7,755 Negative currency effects from investments amounting to €8,547 thousand (2019: positive currency effects amount- ing to €1,304 thousand) were recognised directly in equity. The effects of Covid-19 Net investment income fell overall compared with the pre- vious year due to negative capital market developments caused by Covid-19 in the 2020 financial year. However, an upward trend was recorded in developments on the capital markets from the second quarter of 2020 onwards. Expenses from investments increased on the previous year primarily as a result of impairments. Any reversals of impairment losses were recognised in other comprehen- sive income under the item “Profits recognised in equity from the measurement of financial instruments available for sale”. Net profit/(loss) by measurement category In thousand 1‒12/2020 1‒12/2019 Financial assets at fair value through profit or loss Recognised in profit/(loss) for the period 20,266 5,017 Available-for-sale financial assets Recognised in profit/(loss) for the period 393,993 437,104 of which reclassified from equity to consolidated income statement ‒ 68,659 ‒ 46,216 Recognised in other comprehensive income 563,452 957,411 Net income 957,445 1,394,515 Loans and receivables Recognised in profit/(loss) for the period 27,356 36,843 Financial liabilities measured at amortised cost Recognised in profit/(loss) for the period ‒ 64,758 ‒ 54,643 76 Technical items Insurance and reinsurance contracts along with investment contracts with a discretionary participation feature fall within the scope of IFRS 4 (Insurance Con- tracts). In accordance with IAS 8, the provisions of US Generally Accepted Accounting Principles (US GAAP) in the version applicable on 1 January 2005 were applied to all cases for which IFRS 4 contains no specific regulations on recognition and measurement. For accounting and measurement of the insurance-specific items of life insur- ance with profit participation, FAS 120 was observed; FAS 60 was applied for specific items in health, property and casualty insurance and FAS 113 for reinsurance. Unit- linked life insurance, where the policyholder bears the en- tire investment risk, was accounted for in accordance with FAS 97. Based on the regulations, technical items must be covered by suitable assets (cover funds). As is standard in the in- surance industry, amounts dedicated to the cover funds are subject to a limitation as regards availability in the Group. Insurance and investment contracts Insurance contracts are contracts through which a signifi- cant insurance risk is assumed. Investment contracts, i.e. contracts that do not transfer a significant insurance risk and that do not include a discretionary profit participation feature. They fall under the scope of IAS 39 (Financial Instruments). Reinsurance contracts Ceded reinsurance is stated in a separate item under as- sets. The profit and loss items (premiums and payments) are deducted openly from the corresponding items in the gross account, while commission income is reported sepa- rately as its own item. Reinsurance acquired (indirect business) is recognised as an insurance contract. 6. Technical provisions Unearned premiums For short-term insurance contracts, such as most property and casualty insurance policies, premiums relating to fu- ture years are reported as unearned premiums in line with the applicable regulations of US GAAP. The amount of these unearned premiums corresponds to the insurance cover granted proportionally in future periods. Premiums levied upon entering into certain long-term contracts (e.g. upfront fees) are recognised as unearned premiums. In line with the applicable regulations of US GAAP, these fees are recorded in the same manner as the redemption of de- ferred acquisition costs. These unearned premiums are in principle calculated for each individual policy and exactly to the day. If they are attributable to life insurance, they are included in insurance provision. Insurance provision Insurance provisions are essentially established in the life and health insurance lines. Their carrying amount is de- termined based on actuarial principles on the basis of the present value determined prospectively of future benefits to be paid by the insurer less the present value of future net premiums the insurer expects to receive on an individ- ual contract basis. Insurance provisions are also estab- lished in the property and casualty lines that cover life- long obligations (accident pensions as well as pensions in motor vehicle liability insurance). The insurance provi- sion of the life insurer is calculated by taking into account contractually agreed calculation principles, which are ex- plained in more detail under the actuarial risks in Chapter 44, “Risk profile”. These calculation principles take into account assumptions related to costs, mortality, invalidity and interest rate changes. Reasonable safety margins are included here in order to account for the risk of adjustments, errors and contingencies over the term of the contract. For policies that are mainly of investment character (e.g. unit-linked life insurance), the provisions of FAS 97 are used to measure insurance provision. Insurance provision is arrived at by combining the invested amounts, the change in value of the underlying investments and the withdrawals under the policy. Insurance provisions for health insurance are determined based on calculation principles that correspond to the “best estimate”, taking into account safety margins. Once calculation principles have been determined, they have to be applied to the corresponding partial portfolio for the whole duration (locked-in principle). 77CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Provision for unsettled claims The provision for unsettled claims includes both the pro- vision for claims already reported by the reporting date as well as the provision for damage that has not yet been re- ported but which has already occurred. The provision in property and casualty insurance is deter- mined based on a best estimate. Standard actuarial models are used to calculate the claim reserves with the parame- ters for these based on historical data. The assumptions made are reviewed continuously and adjusted if necessary. Examples of material assumptions include growth in claims frequency and in average claims expenses. Another material assumption is the settlement patterns for the in- dividual lines of business which can be impacted by vari- ous factors. Assumptions regarding the future progress of claims inflation are only made to the extent that the future development is extrapolated based on historical observa- tions. In insurance lines in which past experience does not allow the application of statistical methods, calculations are made on the basis of market data or expert assess- ments. Discounting of claims reserves only takes place with re- spect to a small section of the annuity reserves for which an insurance provision is also formed. Recourse payments expected in future are deducted from the provision for un- settled claims. Costs of settling the claim that are directly attributable to the claim event such as costs of an expert report are already included in the calculation for the pro- vision. Provisions for internal settlement expense are de- termined in a separate calculation procedure. The calcula- tion of the provision for unsettled claims involves uncer- tainty on account of the contingency risk in the underlying assumptions. Further information on this can be found in Chapter 44, “Risk profile”. For health insurance, provisions for unsettled claims are estimated on the basis of past experience, taking into con- sideration the known arrears in claim payments. Life insurance is calculated on an individual loss basis with the exception of the provision for unreported claims. Provision for the assumed reinsurance business generally complies with the figures of the cedents. Provisions for premium refunds and profit participation The provision for premium refunds includes the amounts for profit-related and non-profit related profit participa- tion to which the policyholders are entitled on the basis of statutory or contractual provisions. In life insurance, policies with a discretionary participa- tion feature, differences between local measurement and measurement in accordance with IFRSs are presented with deferred profit participation taken into account, whereby this is also reported in profit/(loss) for the period or in other comprehensive income depending on the recognition of the change in the underlying measurement differences. The amount of the provision for deferred profit participation generally comes to 85 per cent of the measurement differentials after tax. Other technical provisions This item contains provisions for contingent losses for ac- quired reinsurance portfolios as well as provisions for ex- pected cancellations and premium defaults. Liability Adequacy Test The Liability Adequacy Test evaluates whether the estab- lished IFRS reserves are sufficient. For life insurance port- folios, a best estimate reserve is compared with the IFRS reserve less deferred acquisition costs plus unearned reve- nue liability (URL). This calculation is done separately each quarter for mixed insurance policies, pension poli- cies, risk insurance policies, and unit-linked and index- linked policies. Because UNIQA already uses the best estimate approach for calculating loss reserves in non-life insurance, only the premiums to be expected in the future will be tested. Busi- ness lines that feature a surplus in the annual calculation of less than 5 per cent from future premiums less claims and costs expected in future are reviewed each quarter. In non-life insurance, the business lines tested are motor ve- hicle liability insurance, general liability insurance and other. 78 Gross In thousand Unearned premiums Insurance provision Provision for unsettled claims Provision for non-profit- related premium refunds Provision for profit- related premium refunds and/or policyholder profit participation Other technical provisions Total Property and casualty insurance At 1 January 2020 618,125 12,380 2,607,932 30,572 1,049 10,975 3,281,033 Foreign exchange differences ‒22,320 ‒1,075 ‒36,545 ‒ 139 ‒ 30 ‒312 ‒60,422 Change in basis of consolidation 290,145 475,485 2,167 767,797 Portfolio changes ‒ 105 ‒ 31,846 156 ‒ 205 1,671 ‒30,328 Additions 1,783 39,036 16 13,197 54,032 Disposals ‒ 1,559 ‒28,012 ‒ 89 ‒ 6,468 ‒ 36,129 Premiums written 3,010,327 3,010,327 Premiums earned ‒ 2,984,051 ‒2,984,051 Claims reporting year 1,753,449 1,753,449 Claims payments reporting year ‒ 908,651 ‒ 908,651 Change in claims previous years 26,839 26,839 Claims payments previous years ‒752,651 ‒752,651 At 31 December 2020 912,122 11,528 3,134,012 41,612 741 21,231 4,121,245 Health insurance At 1 January 2020 20,857 3,075,435 198,338 14,630 125,574 693 3,435,527 Foreign exchange differences ‒ 2,083 ‒ 498 ‒ 811 ‒53 0 ‒ 8 ‒ 3,453 Portfolio changes ‒ 35 0 ‒ 68 32 ‒32 0 ‒ 103 Additions 200,896 11,459 28,000 1,192 241,548 Disposals ‒31,160 ‒9,262 ‒18,693 ‒ 664 ‒ 59,780 Premiums written 1,167,554 1,167,554 Premiums earned ‒ 1,167,195 ‒1,167,195 Claims reporting year 688,708 688,708 Claims payments reporting year ‒ 556,435 ‒ 556,435 Change in claims previous years 38,597 38,597 Claims payments previous years ‒161,093 ‒161,093 At 31 December 2020 19,098 3,244,673 207,236 16,807 134,848 1,213 3,623,875 Life insurance At 1 January 2020 9,807,418 183,565 7,181 1,068,226 4,950 11,071,340 Foreign exchange differences ‒ 67,719 ‒ 2,740 ‒ 216 ‒ 2,585 ‒ 352 ‒ 73,611 Change in basis of consolidation 156,291 53,136 7,726 764 1,264 219,182 Portfolio changes 329 ‒ 583 ‒ 1,508 ‒ 1,762 Additions 465,383 1,742 389,295 1,320 857,739 Disposals ‒548,846 ‒1,451 ‒81,434 ‒ 685 ‒ 632,415 Claims reporting year 1,049,951 1,049,951 Claims payments reporting year ‒ 893,296 ‒ 893,296 Change in claims previous years ‒13,540 ‒13,540 Claims payments previous years ‒132,965 ‒132,965 At 31 December 2020 9,812,856 243,527 14,982 1,372,760 6,497 11,450,622 Total At 1 January 2020 638,981 12,895,233 2,989,835 52,383 1,194,849 16,618 17,787,899 Foreign exchange differences ‒24,403 ‒69,292 ‒ 40,096 ‒ 408 ‒ 2,615 ‒ 672 ‒ 137,485 Change in basis of consolidation 290,145 156,291 528,622 7,726 764 3,431 986,979 Portfolio changes ‒ 139 329 ‒32,498 188 ‒1,745 1,671 ‒32,192 Additions 668,062 52,237 417,311 15,709 1,153,318 Disposals ‒581,565 ‒ 38,726 ‒ 100,216 ‒ 7,817 ‒ 728,324 Premiums written 4,177,881 4,177,881 Premiums earned ‒ 4,151,245 ‒4,151,245 Claims reporting year 3,492,107 3,492,107 Claims payments reporting year ‒2,358,382 ‒2,358,382 Change in claims previous years 51,896 51,896 Claims payments previous years ‒1,046,710 ‒ 1,046,710 At 31 December 2020 931,220 13,069,057 3,584,775 73,401 1,508,349 28,940 19,195,742 79CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Reinsurers’ share In thousand Unearned premiums Insurance provision Provision for unsettled claims Provision for non-profit- related premium refunds Provision for profit- related premium refunds and/or policyholder profit participation Other technical provisions Total Property and casualty insurance At 1 January 2020 29,467 12 187,799 2,462 219,739 Foreign exchange differences ‒ 1,335 ‒ 1 ‒ 2,632 ‒78 ‒ 4,047 Change in basis of consolidation 67,314 110,667 177,981 Portfolio changes ‒ 94 ‒ 91 ‒ 184 Additions 1,368 20 1,786 3,175 Disposals ‒1 ‒1,609 ‒1,610 Premiums written 161,744 161,744 Premiums earned ‒174,836 ‒174,836 Claims reporting year 55,995 55,995 Claims payments reporting year ‒22,813 ‒22,813 Change in claims previous years 51,222 51,222 Claims payments previous years ‒ 77,234 ‒77,234 At 31 December 2020 82,259 1,378 302,912 20 2,561 389,131 Health insurance At 1 January 2020 207 520 862 1 1,591 Foreign exchange differences ‒21 ‒115 0 ‒136 Portfolio changes 20 ‒461 ‒ 440 Disposals ‒54 0 ‒ 54 Premiums written 2,596 2,596 Premiums earned ‒ 2,433 ‒2,433 Claims reporting year 637 637 Claims payments reporting year ‒424 ‒424 Change in claims previous years 44 44 Claims payments previous years ‒271 ‒271 At 31 December 2020 370 467 273 1 1,110 Life insurance At 1 January 2020 124,186 4,451 55 128,692 Foreign exchange differences ‒226 ‒ 61 0 ‒ 287 Change in basis of consolidation 219 1,402 1,621 Portfolio changes ‒784 20 ‒ 764 Additions 68,875 6 68,881 Disposals ‒75,249 ‒3 ‒ 75,252 Claims reporting year 21,801 21,801 Claims payments reporting year ‒19,838 ‒19,838 Change in claims previous years 1,592 1,592 Claims payments previous years ‒ 2,418 ‒ 2,418 At 31 December 2020 117,021 6,950 57 124,028 Total At 1 January 2020 29,674 124,717 193,113 2,518 350,022 Foreign exchange differences ‒ 1,357 ‒ 227 ‒ 2,808 ‒79 ‒4,470 Change in basis of consolidation 67,314 219 112,069 179,602 Portfolio changes ‒ 73 ‒784 ‒532 ‒1,389 Additions 70,243 20 1,792 72,055 Disposals ‒75,304 ‒1,612 ‒76,916 Premiums written 164,340 164,340 Premiums earned ‒177,269 ‒177,269 Claims reporting year 78,433 78,433 Claims payments reporting year ‒43,075 ‒43,075 Change in claims previous years 52,858 52,858 Claims payments previous years ‒ 79,923 ‒79,923 At 31 December 2020 82,629 118,865 310,135 20 2,619 514,268 80 Net In thousand Unearned premiums Insurance provision Provision for unsettled claims Provision for non-profit- related premium refunds Provision for profit- related premium refunds and/or policyholder profit participation Other technical provisions Total Property and casualty insurance At 1 January 2020 588,658 12,369 2,420,132 30,572 1,049 8,514 3,061,293 Foreign exchange differences ‒20,984 ‒1,074 ‒33,913 ‒ 139 ‒ 30 ‒234 ‒56,375 Change in basis of consolidation 222,831 364,819 2,167 589,816 Portfolio changes ‒ 11 ‒31,755 156 ‒205 1,671 ‒30,143 Additions 414 39,016 16 11,411 50,857 Disposals ‒ 1,558 ‒28,012 ‒ 89 ‒ 4,860 ‒ 34,519 Premiums written 2,848,583 2,848,583 Premiums earned ‒ 2,809,215 ‒2,809,215 Claims reporting year 1,697,454 1,697,454 Claims payments reporting year ‒ 885,837 ‒ 885,837 Change in claims previous years ‒ 24,383 ‒ 24,383 Claims payments previous years ‒675,417 ‒675,417 At 31 December 2020 829,862 10,151 2,831,100 41,592 741 18,670 3,732,115 Health insurance At 1 January 2020 20,649 3,074,915 197,475 14,630 125,574 692 3,433,936 Foreign exchange differences ‒ 2,062 ‒ 498 ‒ 696 ‒53 0 ‒ 8 ‒ 3,317 Portfolio changes ‒ 55 0 393 32 ‒32 0 337 Additions 200,896 11,459 28,000 1,192 241,548 Disposals ‒31,107 ‒9,262 ‒18,693 ‒ 664 ‒ 59,726 Premiums written 1,164,958 1,164,958 Premiums earned ‒ 1,164,762 ‒1,164,762 Claims reporting year 688,071 688,071 Claims payments reporting year ‒ 556,012 ‒ 556,012 Change in claims previous years 38,553 38,553 Claims payments previous years ‒160,822 ‒160,822 At 31 December 2020 18,729 3,244,206 206,963 16,807 134,848 1,212 3,622,765 Life insurance At 1 January 2020 9,683,232 179,114 7,181 1,068,226 4,894 10,942,648 Foreign exchange differences ‒ 67,493 ‒ 2,679 ‒ 216 ‒ 2,585 ‒ 351 ‒ 73,324 Change in basis of consolidation 156,072 51,734 7,726 764 1,264 217,561 Portfolio changes 1,113 ‒ 603 ‒1,508 ‒998 Additions 396,508 1,742 389,295 1,314 788,858 Disposals ‒473,597 ‒1,451 ‒81,434 ‒ 682 ‒ 557,163 Claims reporting year 1,028,150 1,028,150 Claims payments reporting year ‒ 873,458 ‒ 873,458 Change in claims previous years ‒15,133 ‒15,133 Claims payments previous years ‒130,548 ‒130,548 At 31 December 2020 9,695,835 236,578 14,982 1,372,760 6,439 11,326,594 Total At 1 January 2020 609,307 12,770,516 2,796,722 52,383 1,194,849 14,100 17,437,877 Foreign exchange differences ‒23,046 ‒69,066 ‒ 37,288 ‒ 408 ‒ 2,615 ‒ 593 ‒ 133,015 Change in basis of consolidation 222,831 156,072 416,553 7,726 764 3,431 807,377 Portfolio changes ‒ 66 1,113 ‒31,966 188 ‒1,745 1,671 ‒30,804 Additions 597,818 52,217 417,311 13,917 1,081,263 Disposals ‒506,262 ‒ 38,726 ‒ 100,216 ‒ 6,205 ‒ 651,408 Premiums written 4,013,541 4,013,541 Premiums earned ‒ 3,973,976 ‒3,973,976 Claims reporting year 3,413,675 3,413,675 Claims payments reporting year ‒2,315,307 ‒2,315,307 Change in claims previous years ‒962 ‒962 Claims payments previous years ‒966,787 ‒966,787 At 31 December 2020 848,591 12,950,192 3,274,640 73,381 1,508,349 26,321 18,681,474 81CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Gross In thousand Unearned premiums Insurance provision Provision for unsettled claims Provision for non-profit- related premium refunds Provision for profit- related premium refunds and/or policyholder profit participation Other technical provisions Total Property and casualty insurance At 1 January 2019 592,185 12,301 2,599,264 29,251 1,319 11,843 3,246,163 Foreign exchange differences 4,188 ‒ 323 6,492 ‒ 46 10 3 10,325 Portfolio changes 999 ‒4,331 ‒1 16 ‒ 3,318 Additions 606 1,499 284 3,714 6,103 Disposals ‒204 ‒133 ‒564 ‒4,600 ‒5,501 Premiums written 2,846,783 2,846,783 Premiums earned ‒ 2,826,030 ‒2,826,030 Claims reporting year 1,815,775 1,815,775 Claims payments reporting year ‒ 957,048 ‒957,048 Change in claims previous years ‒ 57,330 ‒57,330 Claims payments previous years ‒794,890 ‒794,890 At 31 December 2019 618,125 12,380 2,607,932 30,572 1,049 10,975 3,281,033 Health insurance At 1 January 2019 adjusted 12,894 2,932,119 183,216 13,082 106,529 715 3,248,556 Foreign exchange differences 700 47 386 ‒ 12 0 ‒ 3 1,117 Portfolio changes 0 99 ‒ 11 88 Additions 144,544 10,764 40,251 22 195,581 Disposals ‒ 1,276 ‒9,203 ‒ 21,206 ‒ 30 ‒31,715 Premiums written 1,130,821 1,130,821 Premiums earned ‒ 1,123,558 ‒1,123,558 Claims reporting year 741,288 741,288 Claims payments reporting year ‒556,796 ‒556,796 Change in claims previous years ‒ 12,149 ‒12,149 Claims payments previous years ‒157,705 ‒157,705 At 31 December 2019 adjusted 20,857 3,075,435 198,338 14,630 125,574 693 3,435,527 Life insurance At 1 January 2019 adjusted 9,979,484 199,684 4,931 640,041 5,357 10,829,497 Foreign exchange differences 22,185 1,221 ‒15 774 ‒ 85 24,080 Change in basis of consolidation 95 0 95 Portfolio changes 1,642 ‒ 282 ‒582 779 Additions 239,543 2,496 443,064 1,161 686,264 Disposals ‒435,531 ‒231 ‒15,071 ‒ 1,483 ‒ 452,316 Claims reporting year 1,168,680 1,168,680 Claims payments reporting year ‒1,018,554 ‒1,018,554 Change in claims previous years ‒ 14,337 ‒14,337 Claims payments previous years ‒152,847 ‒152,847 At 31 December 2019 adjusted 9,807,418 183,565 7,181 1,068,226 4,950 11,071,340 Total At 1 January 2019 adjusted 605,079 12,923,904 2,982,164 47,264 747,889 17,915 17,324,215 Foreign exchange differences 4,888 21,909 8,098 ‒ 73 784 ‒ 86 35,521 Change in basis of consolidation 95 0 95 Portfolio changes 999 1,642 ‒4,515 ‒583 5 ‒2,451 Additions 384,694 14,758 483,599 4,898 887,948 Disposals ‒437,011 ‒9,566 ‒36,841 ‒ 6,114 ‒ 489,532 Premiums written 3,977,604 3,977,604 Premiums earned ‒ 3,949,588 ‒3,949,588 Claims reporting year 3,725,742 3,725,742 Claims payments reporting year ‒2,532,397 ‒2,532,397 Change in claims previous years ‒ 83,816 ‒83,816 Claims payments previous years ‒1,105,442 ‒ 1,105,442 At 31 December 2019 adjusted 638,982 12,895,233 2,989,835 52,383 1,194,849 16,618 17,787,900 82 Reinsurers’ share In thousand Unearned premiums Insurance provision Provision for unsettled claims Provision for non-profit- related premium refunds Provision for profit- related premium refunds and/or policyholder profit participation Other technical provisions Total Property and casualty insurance At 1 January 2019 27,557 22 245,429 2,600 275,608 Foreign exchange differences 614 ‒ 1 1,723 ‒10 2,327 Change in basis of consolidation ‒ 1 ‒1 Portfolio changes 732 3,834 4,566 Additions 1,489 1,489 Disposals ‒10 ‒1,618 ‒1,627 Premiums written 146,668 146,668 Premiums earned ‒146,105 ‒146,105 Claims reporting year 168,497 168,497 Claims payments reporting year ‒ 105,582 ‒ 105,582 Change in claims previous years ‒ 18,558 ‒ 18,558 Claims payments previous years ‒107,544 ‒107,544 At 31 December 2019 29,467 12 187,799 2,462 219,739 Health insurance At 1 January 2019 624 566 863 4 2,057 Foreign exchange differences 56 111 0 167 Portfolio changes 1 1 Additions Disposals ‒46 ‒3 ‒48 Premiums written 2,557 2,557 Premiums earned ‒ 3,029 ‒ 3,029 Claims reporting year 1,289 1,289 Claims payments reporting year ‒1,045 ‒1,045 Change in claims previous years ‒ 65 ‒65 Claims payments previous years ‒ 293 ‒ 293 At 31 December 2019 207 520 862 1 1,591 Life insurance At 1 January 2019 130,590 5,089 17 135,696 Foreign exchange differences 122 21 0 143 Portfolio changes ‒42 ‒ 721 34 ‒729 Additions 6,877 4 6,880 Disposals ‒13,361 0 ‒13,361 Claims reporting year 25,348 25,348 Claims payments reporting year ‒22,101 ‒22,101 Change in claims previous years 1,312 1,312 Claims payments previous years ‒ 4,497 ‒ 4,497 At 31 December 2019 124,186 4,451 55 128,692 Total At 1 January 2019 28,181 131,178 251,381 2,621 413,361 Foreign exchange differences 670 121 1,856 ‒10 2,637 Change in basis of consolidation ‒1 ‒1 Portfolio changes 732 ‒42 3,115 34 3,839 Additions 6,877 1,493 8,370 Disposals ‒13,416 ‒1,620 ‒15,036 Premiums written 149,225 149,225 Premiums earned ‒149,134 ‒149,134 Claims reporting year 195,134 195,134 Claims payments reporting year ‒ 128,727 ‒ 128,727 Change in claims previous years ‒ 17,311 ‒ 17,311 Claims payments previous years ‒112,334 ‒112,334 At 31 December 2019 29,674 124,717 193,113 2,518 350,022 83CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Net In thousand Unearned premiums Insurance provision Provision for unsettled claims Provision for non-profit- related premium refunds Provision for profit- related premium refunds and/or policyholder profit participation Other technical provisions Total Property and casualty insurance At 1 January 2019 564,628 12,279 2,353,835 29,251 1,319 9,243 2,970,555 Foreign exchange differences 3,574 ‒322 4,768 ‒46 10 13 7,998 Change in basis of consolidation 1 1 Portfolio changes 267 ‒8,166 ‒1 16 ‒ 7,884 Additions 606 1,499 284 2,225 4,614 Disposals ‒194 ‒133 ‒564 ‒2,983 ‒3,873 Premiums written 2,700,115 2,700,115 Premiums earned ‒ 2,679,925 ‒2,679,925 Claims reporting year 1,647,278 1,647,278 Claims payments reporting year ‒ 851,466 ‒851,466 Change in claims previous years ‒ 38,771 ‒38,771 Claims payments previous years ‒687,346 ‒687,346 At 31 December 2019 588,659 12,369 2,420,132 30,572 1,049 8,514 3,061,294 Health insurance At 1 January 2019 adjusted 12,270 2,931,554 182,353 13,082 106,529 711 3,246,498 Foreign exchange differences 644 47 274 ‒ 12 0 ‒ 3 950 Portfolio changes 0 97 ‒ 11 87 Additions 144,544 10,764 40,251 22 195,581 Disposals ‒ 1,230 ‒9,203 ‒ 21,206 ‒ 27 ‒31,667 Premiums written 1,128,264 1,128,264 Premiums earned ‒ 1,120,529 ‒1,120,529 Claims reporting year 739,999 739,999 Claims payments reporting year ‒ 555,751 ‒555,751 Change in claims previous years ‒ 12,084 ‒12,084 Claims payments previous years ‒157,412 ‒157,412 At 31 December 2019 adjusted 20,649 3,074,915 197,475 14,630 125,574 692 3,433,936 Life insurance At 1 January 2019 adjusted 9,848,894 194,595 4,931 640,041 5,340 10,693,800 Foreign exchange differences 22,063 1,200 ‒15 774 ‒ 85 23,937 Change in basis of consolidation 95 0 95 Portfolio changes 1,685 439 ‒582 ‒ 34 1,507 Additions 232,667 2,496 443,064 1,158 679,384 Disposals ‒422,170 ‒231 ‒15,071 ‒ 1,483 ‒ 438,955 Claims reporting year 1,143,333 1,143,333 Claims payments reporting year ‒ 996,453 ‒996,453 Change in claims previous years ‒ 15,650 ‒15,650 Claims payments previous years ‒148,350 ‒148,350 At 31 December 2019 adjusted 9,683,232 179,114 7,181 1,068,226 4,894 10,942,648 Total At 1 January 2019 adjusted 576,898 12,792,727 2,730,783 47,264 747,889 15,294 16,910,854 Foreign exchange differences 4,218 21,788 6,242 ‒ 73 784 ‒ 75 32,884 Change in basis of consolidation 95 1 0 96 Portfolio changes 267 1,685 ‒7,629 ‒583 ‒ 29 ‒ 6,290 Additions 377,817 14,758 483,599 3,405 879,579 Disposals ‒423,595 ‒9,566 ‒36,841 ‒ 4,493 ‒ 474,496 Premiums written 3,828,380 3,828,380 Premiums earned ‒ 3,800,454 ‒3,800,454 Claims reporting year 3,530,609 3,530,609 Claims payments reporting year ‒2,403,670 ‒2,403,670 Change in claims previous years ‒ 66,505 ‒66,505 Claims payments previous years ‒993,108 ‒993,108 At 31 December 2019 adjusted 609,308 12,770,516 2,796,722 52,383 1,194,849 14,100 17,437,878 84 The interest rates used as an accounting basis for the in- surance provision were as follows: In per cent Health insurance Life insurance 2020 For insurance provision 1.30 ‒ 5.50 0.00 ‒ 4.00 For deferred acquisition costs 1.30 ‒ 5.50 2.31 ‒ 2.51 2019 For insurance provision 1.50 ‒ 5.50 0.00 ‒ 4.00 For deferred acquisition costs 1.50 ‒ 5.50 2.41 ‒ 2.59 Development of the provision for deferred profit participation In thousand 31/12/2020 31/12/2019 adjusted At 1 January 1,074,803 633,794 Fluctuation in value, available-for-sale securities 303,069 431,506 Remeasurement through profit or loss 4,538 9,504 At 31 December 1,382,410 1,074,803 Claims payments In thousand 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Financial year 773,996 714,267 778,329 798,573 729,222 734,691 746,846 814,664 844,675 1,033,986 957,846 1 year later 1,138,253 1,068,406 1,142,524 1,174,639 1,106,066 1,106,222 1,118,644 1,233,210 1,481,070 1,491,304 2 years later 1,229,475 1,177,160 1,255,972 1,285,030 1,204,327 1,202,760 1,231,387 1,569,429 1,618,802 3 years later 1,276,504 1,225,202 1,308,792 1,334,305 1,251,179 1,251,488 1,464,279 1,636,436 4 years later 1,300,643 1,251,970 1,339,606 1,362,980 1,278,898 1,435,597 1,493,126 5 years later 1,318,705 1,266,660 1,358,361 1,380,369 1,438,378 1,466,811 6 years later 1,329,655 1,278,874 1,372,186 1,523,376 1,453,604 7 years later 1,338,526 1,289,116 1,494,991 1,530,573 8 years later 1,346,403 1,381,323 1,503,368 9 years later 1,437,635 1,387,501 10 years later 1,441,591 Cumulated payments and provision for un- settled claims In thousand 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Financial year 1,401,783 1,337,566 1,444,917 1,489,270 1,475,068 1,476,130 1,515,928 1,615,166 1,719,067 1,933,668 1,881,282 1 year later 1,395,983 1,348,006 1,436,610 1,472,322 1,457,929 1,449,504 1,495,915 1,606,939 1,972,501 1,959,874 2 years later 1,404,598 1,350,674 1,449,431 1,495,723 1,437,879 1,429,766 1,479,026 1,871,458 1,933,021 3 years later 1,392,071 1,353,309 1,454,301 1,489,480 1,413,637 1,417,989 1,699,464 1,883,684 4 years later 1,394,923 1,353,437 1,447,394 1,474,842 1,399,226 1,612,176 1,699,511 5 years later 1,401,018 1,351,386 1,447,991 1,470,199 1,563,394 1,627,982 6 years later 1,399,677 1,349,836 1,449,843 1,620,378 1,553,798 7 years later 1,397,935 1,346,159 1,578,290 1,614,232 8 years later 1,395,533 1,445,372 1,581,023 9 years later 1,491,767 1,445,308 10 years later 1,484,753 Settlement gains/losses 7,014 64 ‒2,733 6,146 9,596 ‒15,805 ‒47 ‒12,227 39,480 ‒26,206 5,282 Settlement gains/losses before 2010 279 Total settlement gains/losses 5,561 Provision for unsettled claims 43,162 57,807 77,654 83,659 100,193 161,170 206,385 247,249 314,220 468,570 923,436 2,683,505 Provision for unsettled claims for accident years before 2010 327,813 Plus other reserve components (components not in triangle, internal claims regulation costs, etc.) 122,694 Provisions for unsettled claims (gross at 31 December 2020) 3,134,012 85CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S 7. Technical provisions for unit-linked and index-linked life insurance This item relates to insurance provisions and remaining technical provisions for obligations from life insurance policies where the value or income is determined by in- vestments for which the policyholder bears the risk or for which the benefit is index-linked. The investments in question are collected in asset pools, recognised at their fair value and kept separately from the other investments. As a general rule, the measurement of the provisions cor- responds with the item “Unit-linked and index-linked life insurance investments”. The policyholders are entitled to all income from these investments. The unrealised gains and losses from fluctuations in the fair values of the in- vestment pools are thus offset by the appropriate changes in these provisions. The reinsurers’ share corresponds to a liability for deposits in the same amount. An unearned revenue liability allocated to future year pre- mium shares (such as preliminary fees) is calculated for unit-linked and index-linked life insurance contracts in accordance with FAS 97 and amortised correspondingly to deferred acquisition costs over the contract period. Technical provisions for unit-linked and index-linked life insurance In thousand 31/12/2020 31/12/2019 Gross 5,115,506 4,646,152 Reinsurers’ share ‒ 131 ‒113 Total 5,115,375 4,646,039 8. Premiums The item “Premiums written – gross” includes those amounts that have been called due either once or on an ongoing basis in the financial year for the purposes of providing the insurance coverage. In the event of payment in instalments, premiums written are increased by the charges added during the year and the ancillary charges in line with the tariffs. In the case of unit-linked and index- linked life insurance, only the premiums decreased by the savings portion are stated in the item “Premiums written”. Premiums In thousand 1‒12/2020 1‒12/2019 Premiums written ‒ gross 5,261,224 5,062,785 Premiums written ‒ reinsurer’s share ‒ 190,549 ‒175,330 Premiums written ‒ net 5,070,675 4,887,455 Change in premiums earned ‒ gross ‒ 29,693 ‒ 28,063 Change in premiums earned ‒ reinsurers’ share ‒11,443 1,679 Premiums earned 5,029,539 4,861,071 Direct insurance In thousand 1‒12/2020 1‒12/2019 Property and casualty insurance 2,952,952 2,806,564 Health insurance 1,164,558 1,127,991 Life insurance 1,079,697 1,081,627 Total 5,197,208 5,016,182 Of which: Austria 3,613,820 3,573,023 remaining EU member states and other states which are party to the Agreement on the European Economic Area 1,254,479 1,081,618 other countries 328,909 361,541 Total 5,197,208 5,016,182 Indirect insurance In thousand 1‒12/2020 1‒12/2019 Property and casualty insurance 57,375 40,219 Health insurance 2,996 2,830 Life insurance 3,646 3,553 Total 64,016 46,602 86 Property and casualty insurance pre- miums written In thousand 1‒12/2020 1‒12/2019 Direct insurance Fire and business interruption insurance 273,683 252,819 Liability insurance 275,426 260,012 Household insurance 209,275 195,086 Motor TPL insurance 671,080 604,372 Legal expense insurance 99,178 96,687 Marine, aviation and transport insurance 62,908 67,244 Other motor insurance 587,090 573,887 Other property insurance 299,740 288,910 Other forms of insurance 73,040 79,056 Casualty insurance 401,532 388,491 Total 2,952,952 2,806,564 Indirect insurance Fire and business interruption insurance 27,268 19,566 Motor TPL insurance 7,123 5,580 Other forms of insurance 22,983 15,072 Total 57,375 40,219 Total direct and indirect insurance (amount consolidated) 3,010,327 2,846,783 Reinsurance premiums ceded In thousand 1‒12/2020 1‒12/2019 Property and casualty insurance 161,744 146,668 Health insurance 2,596 2,557 Life insurance 26,209 26,106 Total 190,549 175,330 Premiums earned In thousand 1‒12/2020 1‒12/2019 Property and casualty insurance 2,808,954 2,678,436 Gross 2,982,095 2,822,991 Reinsurers’ share ‒173,141 ‒144,555 Health insurance 1,163,614 1,123,027 Gross 1,166,261 1,126,022 Reinsurers’ share ‒2,648 ‒ 2,994 Life insurance 1,056,972 1,059,607 Gross 1,083,175 1,085,708 Reinsurers’ share ‒26,203 ‒ 26,102 Total 5,029,539 4,861,071 Premiums earned ‒ indirect insurance In thousand 1‒12/2020 1‒12/2019 Recognised simultaneously 51,926 36,379 Recognised with a delay of up to 1 year 2,976 3,059 Posted after more than 1 year 108 140 Property and casualty insurance 55,009 39,579 Recognised simultaneously 2,990 2,807 Recognised with a delay of up to 1 year 6 23 Health insurance 2,996 2,830 Recognised simultaneously 3,405 3,178 Recognised with a delay of up to 1 year 240 375 Life insurance 3,646 3,553 Total 61,651 45,962 Earnings ‒ indirect insurance In thousand 1‒12/2020 1‒12/2019 Property and casualty insurance 8,533 3,721 Health insurance ‒111 ‒ 126 Life insurance ‒1,900 ‒3,218 Total 6,522 378 The effects of Covid-19 After adjustment for the premiums of the acquired AXA companies, premium volumes fell slightly overall com- pared with the previous year due to Covid-19. While pre- mium volumes decreased slightly in the UNIQA Interna- tional segment, a slight increase was recorded in the UNIQA Austria segment despite Covid-19. In property and casualty insurance, the marine, aviation and transport insurance business lines as well as other in- surance lines recorded a slight decline in premiums as a result of Covid-19. No impact was observed in the health and life insurance business lines that could be clearly attributed to Covid-19. 87CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S 9. Insurance benefits Gross Reinsurers’ share Net In thousand 1‒12/2020 1‒ 12/2019 adjusted 1‒12/2020 1‒12/2019 1‒12/2020 1‒ 12/2019 adjusted Property and casualty insurance Claims expenses Claims paid 1,711,589 1,751,937 ‒ 100,048 ‒ 142,187 1,611,541 1,609,750 Change in provision for unsettled claims 117,850 6,508 ‒ 7,169 59,797 110,681 66,305 Total 1,829,439 1,758,445 ‒107,217 ‒82,390 1,722,222 1,676,055 Change in insurance provision 212 410 1 10 213 420 Change in other technical provisions ‒95 ‒ 3,993 ‒2 0 ‒97 ‒ 3,993 Non-profit-related and profit-related premium refund expenses 52,781 46,985 0 0 52,781 46,985 Total benefits 1,882,337 1,801,848 ‒107,218 ‒82,380 1,775,119 1,719,467 Health insurance Claims expenses Claims paid 745,499 771,718 ‒694 ‒750 744,804 770,969 Change in provision for unsettled claims 9,783 13,989 14 114 9,797 14,102 Total 755,282 785,707 ‒ 680 ‒ 636 754,602 785,071 Change in insurance provision 169,727 143,265 ‒46 46 169,682 143,310 Change in other technical provisions 0 19 0 0 0 19 Non-profit-related and profit-related premium refund expenses 38,772 40,898 0 0 38,772 40,898 Total benefits 963,782 969,888 ‒726 ‒590 963,056 969,298 Life insurance Claims expenses Claims paid 1,073,882 1,182,199 ‒ 22,256 ‒ 22,543 1,051,626 1,159,656 Change in provision for unsettled claims 11,204 ‒17,270 ‒ 1,137 656 10,067 ‒ 16,615 Total 1,085,086 1,164,928 ‒23,393 ‒ 21,887 1,061,693 1,143,041 Change in insurance provision ‒145,657 ‒208,217 6,163 5,672 ‒139,493 ‒202,545 Change in other technical provisions ‒ 161 232 0 0 ‒ 161 232 Non-profit-related and profit-related premium refund expenses and/or (deferred) benefit participation expenses 34,365 36,607 0 0 34,365 36,607 Total benefits 973,634 993,550 ‒17,230 ‒ 16,215 956,404 977,335 Total 3,819,752 3,765,286 ‒125,174 ‒ 99,186 3,694,579 3,666,100 The effects of Covid-19 Covid-19 had differing effects on insurance benefits – after adjustment of the insurance benefits of the acquired AXA companies. In property and casualty insurance, due to limited mobil- ity, there was a significant decline in payments for insur- ance claims in motor vehicle liability insurance, other mo- tor vehicle insurance and private casualty insurance. Conversely, there was a slight increase in insurance bene- fits due to business interruptions and event cancellations. Overall, insurance benefits in property and casualty insur- ance declined. In absolute terms, there was an increase in benefits in health insurance, although it was small in relation to the rise in premiums. This is primarily due to the lower utilisation of medical services. No significant impact was identified on insurance benefits in life insurance as a result of Covid-19. 88 10. Operating expenses In thousand 1‒12/2020 1‒12/2019 Property and casualty insurance Acquisition costs Payments 671,155 614,472 Change in deferred acquisition costs ‒ 26,506 ‒ 10,117 Other operating expenses 340,144 269,600 Reinsurance commission and share of profit from reinsurance ceded ‒ 14,068 ‒12,713 970,724 861,241 Health insurance Acquisition costs Payments 115,654 107,054 Change in deferred acquisition costs ‒ 14,930 ‒ 14,504 Other operating expenses 124,594 95,733 Reinsurance commission and share of profit from reinsurance ceded ‒352 ‒ 470 224,966 187,813 Life insurance Acquisition costs Payments 175,891 172,103 Change in deferred acquisition costs 32,114 56,252 Other operating expenses 166,808 134,408 Reinsurance commission and share of profit from reinsurance ceded ‒ 4,104 ‒4,700 370,708 358,062 Total 1,566,399 1,407,116 Other non-current assets 11. Property, plant and equipment Property, plant and equipment are accounted for using the cost model. Gains on the disposal of property, plant and equipment are recorded under the item “Other insurance income”, while losses are recorded under “Other technical expenses”. If the use of a property changes and an owner-occupied property becomes an investment property, the property is reclassified as investment land and buildings with the car- rying amount at the date of the change. Property, plant and equipment are depreciated on a straight line basis over a useful life for buildings of 5 to 80 years and for technical systems and operating and office equipment of 2 to 20 years. Depreciation methods, useful lives and residual values are reviewed on every reporting date and adjusted if necessary. The depreciation charges for property, plant and equipment are recognised in profit/(loss) for the period on the basis of allocated oper- ating expenses under the items “Insurance benefits”, “Op- erating expenses” and “Net investment income” so that the expenses and earnings are distributed on the basis of their causation. Leases There are around 1,500 contracts throughout the entire Group which fall within the scope of the standard and for which UNIQA is lessee. Nearly all contracts are simple standard contracts. They mainly relate to real estate and in part to operating and office equipment. A significant portion of the capitalised rights of use consists of a small number of contracts concluded for an indefinite period. for which estimates had to be made regarding their dura- tion and the exercise of termination options. The terms used to calculate these contracts are up to 40 years. The average contract term of the remaining contracts is be- tween three and five years. The discount rate used to determine the liability consists of the risk-free interest rate adjusted for country risk, cre- ditworthiness, the quality of collateral and a repayment factor. 89CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Non-lease components included in the leases will not be allocated. Leases with a contractual term of less than twelve months and low value assets were not recognised. UNIQA has not made use of the relief option for Covid-19- related payment benefits (see also Chapter “Changes in major accounting policies as well as new and amended standards”). Acquisition costs In thousand Land and buildings for own use Usage rights from land and buildings for own use Other property, plant and equipment Usage rights from other pr operty, plant and equipment Total At 1 January 2019 411,374 0 249,709 0 661,083 Currency translation ‒ 364 25 269 9 ‒61 Change in basis of consolidation 0 ‒25 275 ‒ 9 240 Additions 6,141 70,977 20,696 1,773 99,588 Disposals ‒2,511 ‒394 ‒ 21,964 ‒ 16 ‒ 24,884 Reclassifications ‒56 0 ‒10,556 0 ‒10,612 At 31 December 2019 414,585 70,584 238,429 1,757 725,355 At 1 January 2020 414,585 70,584 238,429 1,757 725,355 Currency translation ‒ 5,268 ‒ 409 ‒2,776 ‒62 ‒8,514 Change in basis of consolidation 0 27,332 3,128 2,584 33,044 Additions 1,907 31,106 21,331 119 54,463 Disposals ‒ 33,048 ‒29,498 ‒ 8,831 ‒ 249 ‒71,626 Reclassifications 14,355 0 73 0 14,428 At 31 December 2020 392,532 99,115 251,354 4,148 747,149 Accumulated depreciation and impairment losses In thousand Land and buildings for own use Usage rights from land and buildings for own use Other property, plant and equipment Usage rights from other property, plant and equipment Total At 1 January 2019 ‒175,801 0 ‒ 174,219 0 ‒ 350,021 Currency translation 170 0 ‒ 102 0 68 Change in basis of consolidation 0 0 11 0 11 Additions from depreciation ‒ 10,874 ‒10,254 ‒ 15,004 ‒ 659 ‒ 36,791 Additions from impairment ‒13 0 0 0 ‒13 Disposals 471 317 12,364 16 13,167 Reclassifications 0 0 4 0 4 Reversal of impairment 0 0 1 0 1 At 31 December 2019 ‒186,048 ‒ 9,937 ‒ 176,947 ‒643 ‒ 373,575 At 1 January 2020 ‒ 186,048 ‒9,937 ‒176,947 ‒ 643 ‒ 373,575 Currency translation 1,910 112 1,694 27 3,745 Change in basis of consolidation 0 0 0 0 0 Additions from depreciation ‒ 11,142 ‒13,066 ‒ 16,673 ‒ 736 ‒ 41,617 Additions from impairment ‒23 0 0 0 ‒23 Disposals 27,660 599 6,561 235 35,054 Reclassifications ‒ 5,986 0 ‒9 0 ‒5,994 At 31 December 2020 ‒173,628 ‒ 22,292 ‒ 185,373 ‒1,117 ‒382,410 90 Carrying amounts In thousand Land and buildings for own use Usage rights from land and buildings for own use Other property, plant and equipment Usage rights from other property, plant and equipment Total At 1 January 2019 235,573 0 75,489 0 311,062 At 31 December 2019 228,537 60,647 61,482 1,114 351,780 At 31 December 2020 218,904 76,823 65,981 3,031 364,739 The fair values of the land and buildings for own use are derived from expert reports and are comprised as follows: Fair values In thousand Property and casualty insurance Health insurance Life insurance Total At 31 December 2019 208,991 31,076 185,784 425,851 At 31 December 2020 189,887 38,566 205,250 433,703 Other property, plant and equipment refers mainly to technical systems and operating and office equipment. Amounts recognised in consolidated financial statements In thousand 2020 2019 Amounts recognised in the consolidated income statement Interest on lease liabilities 759 1,074 Expenses relating to short-term leases 1,405 1,717 Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets 4,838 5,200 Amounts recognised in the consolidated statement of cash flows Cash outflows for leases ‒13,768 ‒ 10,628 12. Intangible assets Deferred acquisition costs Based on US GAAP, deferred acquisition costs are ac- counted for in accordance with IFRS 4. In the case of prop- erty and casualty insurance contracts, costs directly at- tributable to the acquisition are deferred and distributed over the expected contract term or according to the un- earned premiums. In life insurance, the deferred acquisi- tion costs are amortised in line with the pattern of ex- pected gross profits or margins. Deferred acquisition costs for insurance activities that are directly related to new business and/or to extensions of existing policies and that vary in line with that business are capitalised. They are amortised over the term of the respective insurance con- tract. If they are attributable to property and casualty in- surance, they are amortised over the probable contractual term. For long-term health insurance contracts, the amor- tisation of acquisition costs is measured in line with the proportionate share of earned premiums in the present value of expected future premium income. In life insur- ance, the acquisition costs are amortised over the duration of the contract in the same proportion as the actuarial profit margin of each individual year is realised in compar- ison to the total margin to be expected from the contracts. The changes in deferred acquisition costs are recognised as part of profit/(loss) for the period under the item “Op- erating expenses”. Value of business in force (VBI) Values of life, property and casualty insurance policies as well as pension fund contracts relate to expected future margins from purchased operations. They are recognised at the fair value at the acquisition date. The amortisation of the current value of business in force follows the progression of the estimated gross margins. The amortisation of the value of business in force is recog- nised in the profit/(loss) for the period under “Amortisa- tion of VBI and impairment of goodwill”. 91CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Goodwill Ascertainment and allocation of goodwill For the purpose of the impairment test, UNIQA has allo- cated the goodwill to cash-generating units (CGUs) below, which coincide with the countries in which UNIQA oper- ates. An exception to this was the SIGAL Group, in which the three countries of Albania, Kosovo and North Macedo- nia were combined as one CGU due to their similar devel- opment and organisational connection: UNIQA Austria Albania/Kosovo/North Macedonia as subgroup of the SIGAL Group (SEE) Bulgaria (SEE) Poland (CE) Romania (EE) Russia (RU) Serbia (SEE) Czech Republic (CE) Hungary (CE) Goodwill by CGU In thousand 31/12/2020 31/12/2019 adjusted Albania/Kosovo/North Macedonia as subgroup of the SIGAL Group 17,689 23,299 Bulgaria 17,512 36,612 Poland 41,873 27,927 Romania 0 63,060 Serbia 0 19,998 Czech Republic 219,871 8,347 Hungary 14,696 16,179 UNIQA Austria 37,737 37,737 Other 3,544 3,567 Total 352,922 236,727 Impairment test for goodwill The impairment test was performed during the preparation of the financial statements. In order to test the impairment for goodwill, the recoverable amount of the CGUs is determined. Impairment is recognised when the recoverable amount of a CGU is less than its value to be covered, consisting of goodwill, the proportional net as- sets and any capital increases. The impairment of goodwill is recognised in profit/(loss) for the period under the item “Amortisation of VBI and impairment of goodwill”. Determination of the recoverable amount The recoverable amount of the CGUs with goodwill allo- cated is calculated on the basis of value in use by applying generally accepted measurement principles by means of the discounted dividend method (DDM). The budget pro- jections (detailed planning phase) of the CGUs, the esti- mate of the long-term net profits achievable by the CGUs and long-term growth rates (perpetuity) are used as the starting point for determination of the capitalised value. The capitalised value is determined by discounting the fu- ture profits with a suitable capitalisation rate after as- sumed retention to strengthen the capital base. In the pro- cess, the capitalised values are separated by the three busi- ness lines, which are then totalled to yield the value for the entire company. Cash flow forecast (multi-phase model) Phase 1: five-year company planning The detailed company planning generally encompasses a period of five years. The company plans used for the calcu- lation are the result of a structured and standardised man- agement dialoge. This includes an integrated reporting and documentation process integrated into this dialogue and takes into account empirical values from previous planning periods. The plans are formally approved by the Group Management Board and also include material as- sumptions regarding the combined ratio, capital earnings, market shares and the like. Phase 2: perpetuity growth rate The last year of the detailed planning phase is used as the basis for determining cash flows in phase 2. From the 2020 financial year, the perpetuity growth rate is based on me- dium-term growth forecasts of the respective national economy and is not derived based on the insurance density as before. The underlying growth assumptions depend on the geographical location and range from 1 to 4 per cent. Various studies and statistical analyses were used as sources to provide a basis for determining the growth rates in order to consistently and realistically reflect the market situation and macroeconomic development. The reference sources include our own research, as well as country risks, growth rate estimations and multiples published by Dam- odaran (NYU Stern). 92 Determining the capitalisation rate The assumptions with regard to risk-free interest rate, market risk premium and business line betas made for de- termining the capitalisation rate are consistent with the parameters used in the UNIQA planning and controlling process. They are based on the capital asset pricing model. In order to depict the economic situation of income values as accurately as possible, considering the volatility on the markets, the capitalisation rate was calculated as follows: a uniform, risk-free interest rate according to the Svensson method (a 30-year spot rate for German federal bonds) was used as a base interest rate. The beta factor was determined on the basis of the monthly betas over the last ten years for a defined peer group. The betas for the non-life, life and health insurance business lines were determined using the revenues in the relevant business lines of the individual peer group com- panies. The health insurance business line, which is strongly focused on the Austrian market, is operated in a manner similar to life insurance. A uniform beta factor for personal insurance is therefore used in relation to the health and life insurance lines. In Austrian measurement practice, the market risk pre- mium is derived at the reporting date from the implied market return based on capital market data. The growth factor is derived in the same manner as the growth in the profit from ordinary activities in the impairment test. An additional country risk premium was defined in ac- cordance with Professor Damodaran’s models. The basic principles for calculation of the country risk premium in accordance with the Damodaran method are as follows: the spread of credit default swap spreads in a rating class of “risk-free” US government bonds is determined starting from the rating of the country concerned (Moody’s). Then the spread is adjusted by the amount of the volatility dif- ference between equity and bond markets. The calculation also factored in the inflation differential for countries outside the eurozone. In general, the infla- tion differential represents inflation trends in different countries and is used as a key indicator in assessing com- petitiveness. In order to calculate the inflation differen- tial, the deviation of the inflation forecast for the country of the CGU in question in relation to the inflation forecast for a risk-free environment (Germany, in this case) was used. This is adjusted annually in the detailed planning by the expected inflation, and is subsequently applied for per- petuity with the value of the last year of the detailed plan- ning phase. Capitalisation rate 2020 Discount factor Discount factor perpetuity In per cent Property/ casualty Life & health Property/ casualty Life & health Albania/Kosovo/North Macedonia as subgroup of the SIGAL Group 1) 12.1‒13.2 12.9‒14.0 11.7‒13.4 12.5‒14.1 Bulgaria 10.3 11.1 9.7 10.5 Austria 8.6 9.4 8.6 9.4 Poland 10.0 10.8 9.7 10.4 Romania 11.8 12.5 10.7 11.5 Russia 12.8 13.5 12.1 12.9 Serbia 12.6 13.4 12.5 13.3 Czech Republic 9.2 10.0 8.6 9.4 Hungary 12.1 12.8 11.1 11.9 1) The discount rate ranges listed for the SIGAL Group and the regions relate to the spread over the respective countries grouped under these headings. 93CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Capitalisation rate 2019 Discount factor Discount factor perpetuity In per cent Property/ casualty Life & health Property/ casualty Life & health Albania/Kosovo/North Macedonia as subgroup of the SIGAL Group 1) 12.7‒15.0 13.1‒15.4 12.9‒15.0 13.3‒15.4 Bosnia and Herzegovina 16.3 16.7 16.8 17.2 Bulgaria 11.9 12.3 10.7 11.1 Austria 8.5 8.9 8.5 8.9 Poland 9.9 10.3 9.2 9.6 Romania 13.7 14.1 11.3 11.7 Russia 14.7 15.1 13.2 13.6 Serbia 13.7 14.1 13.7 14.1 Slovakia 9.1 9.5 9.1 9.5 Czech Republic 10.3 10.7 8.7 9.1 Hungary 12.8 13.2 11.7 12.2 1) The discount rate ranges listed for the SIGAL Group and the regions relate to the spread over the respective countries grouped under these headings. Impairments for the financial year The UNIQA 3.0 strategic programme also requires a re- view of medium-term planning. The changes to the plan- ning assumptions result in impairment losses on goodwill for the CGU Bulgaria in the amount of €19.1 million, the CGU Romania in the amount of €61.3 million, the CGU Serbia in the amount of €20.0 million and the CGU SIGAL Group in the amount of €5.3 million. Sensitivity analyses In order to substantiate the results of the calculation and estimation of the value in use, sensitivity analyses with re- gard to the capitalisation rate and the main value drivers are performed. These analyses show that sustained surpluses on the part of the individual CGUs are highly dependent on the actual development of these assumptions within the individual national or regional economies (GDP, insurance density, purchasing power parities particularly in the CEE mar- kets) as well as the associated implementation of the indi- vidual profit goals. These forecasts and the related assess- ment of how the situation in the markets will develop in the future, under the influence of the continuing financial crisis in individual markets, are the largest uncertainties in connection with measurement results. In the event that the insurance markets develop entirely differently from the assumptions made in those business plans and forecasts, the individual goodwill amounts may incur impairment losses. A sensitivity analysis shows that if there was a rise in in- terest rates of 50 basis points or a change in the underlying cash flow by –5 per cent for CGU Bulgaria and SIGAL, the value in use could fall below the carrying amount. Other intangible assets Other intangible assets include both purchased and inter- nally developed software, which is depreciated on a straight-line basis over its useful economic life of 2 to 20 years. Costs that are incurred at the research stage for internally generated software are recognised through profit or loss for the period in which they were incurred. Costs that are incurred in the development phase are deferred provided that it is foreseeable that the software will be completed, there is the intention and ability for future internal use, and this will result in a future economic benefit. Rights of use for leased intangible assets are not recog- nised. The amortisation of the other intangible assets is recog- nised in profit/(loss) for the period on the basis of allo- cated operating expenses under the items “Insurance ben- efits”, “Operating expenses” and “Net investment in- come”. Measurement of non-financial assets The carrying amounts of UNIQA’s non-financial assets – excluding deferred tax assets – are reviewed at every re- porting date to determine whether there is an indication of impairment. If this is the case, the recoverable amount of the asset is estimated. The goodwill and intangible as- sets under construction are tested for impairment annu- ally, unless a triggering event occurs. 94 An impairment loss on goodwill is not reversed. In the case of other assets, an impairment loss is reversed only to the extent that it does not increase the carrying amount of the asset above the carrying amount that would have been determined net of depreciation or amortisation had no im- pairment loss been recognised. Acquisition costs In thousand Deferred acquisition costs Value of business in force Goodwill (adjusted) Other intangible assets Total At 1 January 2019 1,152,095 112,896 363,272 332,076 1,960,338 Currency translation 2,738 ‒701 ‒ 2,068 ‒90 ‒121 Change in basis of consolidation 0 0 ‒109 0 ‒ 109 Additions 0 0 0 77,886 77,886 Disposals 0 0 ‒ 2,648 ‒2,917 ‒ 5,566 Reclassifications 0 0 0 15 15 Interest capitalised ‒8,399 0 0 0 ‒ 8,399 Capitalisation 238,513 0 0 0 238,513 Portfolio additions and disposals 145 0 0 0 145 Amortisation ‒261,297 0 0 0 ‒ 261,297 At 31 December 2019 1,123,795 112,195 358,446 406,970 2,001,406 At 1 January 2020 1,123,795 112,195 358,446 406,970 2,001,406 Currency translation ‒17,174 ‒ 579 2,181 ‒4,717 ‒ 20,290 Change in basis of consolidation 0 349,389 219,767 8,907 578,063 Additions 203 0 0 96,148 96,351 Disposals ‒156,674 ‒ 2,634 ‒171,752 ‒3,385 ‒ 334,447 Reclassifications 0 0 0 ‒20 ‒ 20 Interest capitalised ‒366 0 0 0 ‒366 Capitalisation 367,072 0 0 0 367,072 Portfolio additions and disposals ‒199 0 0 0 ‒199 Amortisation ‒200,454 0 0 0 ‒ 200,454 At 31 December 2020 1,116,203 458,371 408,641 503,902 2,487,116 Accumulated amortisation and impairment losses In thousand Deferred acquisition costs Value of business in force Goodwill Other intangible assets Total At 1 January 2019 ‒102,206 ‒ 67,758 ‒ 171,490 ‒341,454 Currency translation 687 0 285 973 Change in basis of consolidation 0 44 0 44 Additions from amortisation ‒ 2,509 0 ‒18,862 ‒ 21,371 Additions from impairment 0 ‒ 56,653 0 ‒ 56,653 Disposals 0 2,648 927 3,575 Reversal of impairment 0 0 ‒1 ‒ 1 Reclassifications 0 0 ‒4 ‒ 4 At 31 December 2019 ‒104,028 ‒121,719 ‒189,144 ‒ 414,890 At 1 January 2020 ‒ 104,028 ‒ 121,719 ‒ 189,144 ‒414,890 Currency translation 534 0 3,538 4,071 Additions from amortisation ‒20,064 0 ‒ 24,355 ‒44,419 Additions from impairment 0 ‒ 105,752 0 ‒105,752 Disposals 134 171,752 748 172,635 Reclassifications 0 0 9 9 At 31 December 2020 ‒123,424 ‒ 55,719 ‒ 209,205 ‒388,348 95CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Carrying amounts In thousand Deferred acquisition costs Value of business in force Goodwill (adjusted) Other intangible assets Total At 1 January 2019 1,152,095 10,690 295,513 160,586 1,618,885 At 31 December 2019 1,123,795 8,168 236,727 217,826 1,586,516 At 31 December 2020 1,116,203 334,947 352,922 294,697 2,098,769 Other intangible assets mainly comprise software. Other current assets 13. Receivables, including insurance receivables In thousand 31/12/2020 31/12/2019 Reinsurance receivables Receivables from reinsurance business 76,757 50,912 76,757 50,912 Insurance receivables from policyholders 324,837 250,196 from insurance intermediaries 29,547 22,941 from insurance companies 13,741 12,419 368,124 285,557 Other receivables Receivables from services 81,788 69,070 Other tax refund claims 14,150 14,654 Remaining receivables 143,431 126,467 239,368 210,191 Subtotal 684,249 546,659 of which receivables with a remaining maturity of up to 1 year 680,264 544,081 more than 1 year 3,985 2,578 684,249 546,659 of which receivables with values not yet impaired up to 3 months overdue 6,939 8,177 more than 3 months overdue 4,880 8,034 Total receivables including insurance receivables 684,249 546,659 The fair values are essentially equal to the carrying amounts. 96 Impairments Reinsurance receivables Insurance receivables 1) Other receivables In thousand 2020 2019 2020 2019 2020 2019 At 1 January 0 ‒ 2,329 ‒12,076 ‒ 17,187 ‒6,971 ‒ 6,694 Change in basis of consolidation ‒380 0 ‒64,028 0 ‒ 625 0 Allocation 0 0 ‒ 2,684 ‒1,957 ‒ 1,587 ‒1,312 Use 38 2,304 2,481 779 2,149 609 Reversal 0 25 2,861 6,380 207 1,009 Currency translation 0 0 763 ‒91 743 ‒582 At 31 December ‒342 0 ‒72,684 ‒12,076 ‒ 6,084 ‒ 6,971 1) Impairment losses related to policyholders are shown under the cancellation provision. There are no material overdue receivables that have not been impaired. 14. Cash and cash equivalents Cash and cash equivalents in foreign currencies are meas- ured at the exchange rate in effect on the reporting date. The item “Cash and cash equivalents” in the consolidated statement of cash flows corresponds to the item with the same name in the consolidated statement of financial po- sition. Taxes 15. Income tax Income tax In thousand 1‒12/2020 1‒ 12/2019 adjusted Actual tax ‒ reporting year 46,378 33,647 Actual tax ‒ previous year ‒8,736 11,345 Deferred tax ‒ 4,867 11,961 Total 32,775 56,953 The basic corporate income tax rate applied for all seg- ments was 25 per cent. National tax regulations in con- junction with life insurance profit participation may lead to a different calculated income tax rate. Reconciliation statement In thousand 1‒12/2020 1‒ 12/2019 adjusted Earnings before taxes 57,056 295,667 Expected tax expenses 1) 14,264 73,917 Adjusted by tax effects from Tax-free investment income ‒ 17,873 ‒ 17,250 Amortisation of value of business in force 26,438 513 Tax-neutral consolidation effect ‒79 27 Other non-deductible expenses/other tax-exempt income 16,001 994 Changes in tax rates 2,024 ‒ 20 Deviations in tax rates ‒26,063 ‒18,069 Tax deducted at source 1,562 1,356 Taxes for previous years 8,206 8,532 Lapse of loss carried forward and other 8,293 6,952 Income tax expenses 32,775 56,953 Average effective tax burden (in per cent) 57.4 19.3 1) Earnings before taxes multiplied by the corporate income tax rate Excluding impairments of goodwill in the amount of €105,752 thousand, the average effective tax burden would come to 20.1 per cent. Group taxation In Austria, UNIQA exercises the option of forming a group of companies for tax purposes. There are three taxable groups of companies with the parent groups UNIQA In- surance Group AG, PremiQaMed Holding GmbH and R-FMZ Immobilienholding GmbH. The group members are generally charged, or relieved by, the corporation tax amounts attributable to them by the parent group through the distribution of their tax burden in the tax group. Losses from foreign group members are also included within the scope of taxable profits. The tax realisation for these losses is accompanied by a future tax obligation to pay income taxes at an unspecified point in time. A corresponding provision is therefore formed for future subsequent taxation of foreign losses. 97CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S 16. Deferred taxes The calculation of deferred taxes is based on the specific tax rates of each country, which were between 9 and 25 per cent in the financial year (2019: between 9 and 25 per cent). Changes in tax rates in effect at 31 December 2020 are taken into account. The deferred tax assets and deferred tax liabilities stated in the consolidated statement of financial position per- formed as follows: Net deferred tax In thousand At 1 January 2019 adjusted ‒236,488 Changes recognised in profit/(loss) ‒11,961 Changes recognised in other comprehensive income ‒ 102,951 Reclassifications held for sale ‒ 1,088 Foreign exchange differences 186 At 31 December 2019 adjusted ‒352,302 At 1 January 2020 ‒352,302 Changes recognised in profit/(loss) 4,867 Changes recognised in other comprehensive income ‒50,057 Changes due to changes in basis of consolidation ‒18,964 Foreign exchange differences 1,166 At 31 December 2020 ‒415,291 Changes recorded in other comprehensive income essen- tially relate to measurements of financial instruments available for sale and remeasurements of defined benefit obligations. The differences between the tax carrying amounts and the carrying amounts in the IFRS consolidated statement of financial position have the following effect: In thousand 31/12/2020 31/12/2019 adjusted Deferred tax assets Technical items 54,528 57,568 Investments 54,482 22,349 Actuarial gains and losses on defined benefit obligations 73,309 61,891 Loss carried forward 17,046 12,471 Other items 89,675 22,212 Total 289,040 176,490 Netting effect ‒280,447 ‒ 171,253 Total after netting 8,594 5,237 Deferred tax liabilities Technical items 358,749 293,287 Investments 316,586 211,903 Actuarial gains and losses on defined benefit obligations 1 1 Other items 28,994 23,600 Total 704,331 528,792 Netting effect ‒280,447 ‒ 171,253 Total after netting 423,884 357,539 Net deferred tax ‒415,291 ‒352,302 The temporary differences in connection with shares in subsidiaries and associates for which no deferred tax lia- bilities were recognised amounted to €1,778,691 thousand (2019: €1,657,532 thousand). An assessment of the ability to realise deferred tax assets for tax losses not yet used, tax credits not yet used and de- ductible temporary differences requires an estimate of the amount of future taxable profits. The resulting forecasts are based on business plans that are prepared, reviewed and approved using a uniform procedure throughout the company. Especially convincing evidence regarding the value and future chance of realisation of deferred tax as- sets is required under internal Group policies if the rele- vant Group company has suffered a loss in the current or a prior period. The deferred tax assets stated include €17,046 thousand (2019: €12,471 thousand) attributable to tax loss carryfor- wards. Deferred tax assets from loss carryforwards in the amount of €11,023 thousand (2019: €10,577 thousand) were not recognised, as a realisation of these in the near future cannot be assumed, taking maturities into account. 98 The tax loss carryforwards of €139,365 thousand (2019: €132,128thousand) are forfeited as follows, with “more than 5 years” also including tax loss carryforwards with no forfeit date of €112,986 thousand (2019: €87,247 thousand). In thousand 31/12/2020 31/12/2019 Up to 1 year 1) 8,358 11,187 2 to 5 years 2) 12,336 19,604 More than 5 years 3) 118,671 101,338 Total 139,365 132,128 1) Loss carryforwards for which no deferred tax assets have been recognised amount to 1,081 thousand at 31 December 2020 (31 December 2019: 4,560 thousand) 2) Loss carryforwards for which no deferred tax assets have been recognised amount to 5,455 thousand at 31 December 2020 (31 December 2019: 3,664 thousand) 3) Loss carryforwards for which no deferred tax assets have been recognised amount to 53,409 thousand at 31 December 2020 (31 December 2019: 54,048 thousand) The tax loss carryforwards include both loss carryforwards on which deferred tax assets have been recognised and loss carryforwards on which no deferred tax assets have been recognised. Social capital 17. Defined benefit plans There are individual contractual pension obligations, indi- vidual contractual bridge payments, and pension allow- ances in accordance with association recommendations. The calculation of defined benefit obligations is carried out annually using the projected unit credit (PUC) method. If the calculation results in a potential asset, the asset recognised is limited to the present value of any eco- nomic benefit available in the form of future refunds from the plan or reductions in future contributions to the plan. Any valid minimum funding requirements are included in the calculation of the present value of the economic bene- fit. Remeasurement of net liabilities from defined benefit plans are recognised directly in other comprehensive in- come. The remeasurement includes the actuarial gains and losses, the income from plan assets (not including pro- jected interest income) and the effect of any asset ceiling. Net interest expenses (income) on net liabilities (assets) from defined benefit plans re calculated for the reporting period by applying the discount rate. The discount rate was used to measure the defined benefit obligation at the start of the annual reporting period. This discount rate is applied to net liabilities (assets) from defined benefit plans on this date. Any changes in net liabilities (assets) from defined benefit plans resulting from contribution and benefit payments over the course of the reporting pe- riod are taken into account. Net interest expenses and other expenses for defined benefit plans are recognised through profit or loss in profit/(loss) for the period. If a plan’s defined benefits are changed or a plan is cur- tailed, the resulting change in the benefit relating to past service costs or the gain or loss on the curtailment is rec- ognised directly in profit/(loss) for the period. Gains and losses from the settlement of a defined benefit plan are recognised at the date of the settlement. The defined bene- fit obligations are stated under the balance sheet item “Other provisions”. Pension entitlements Individuals who hold an individual contractual agreement can generally claim a pension when they reach the age of 60 or 65, subject to certain conditions. The amount of the pension generally depends on the number of their years of service and their last salary before leaving their active em- ployment. In the event of death, the spouse of the individ- ual entitled to the claim receives a pension at 60, 50 or 40 per cent depending on the policy. The pensions are sus- pended for any period in which a termination benefit is paid, and their value is generally guaranteed. The pensions that are based on individual policies or on association rec- ommendations are financed through provisions. The final pension contribution which guarantees a fixed cash value for when the beneficiary begins their retirement is set aside during the contribution phase and transferred to the pension fund at the time of retirement. The financing is specified in the pension fund’s business plan, in the works council agreement and in the pension fund contract. Termination benefit entitlements In the case of employees of Austrian companies whose em- ployment began prior to 31 December 2002 and lasted three years without interruption, the employee is entitled to termination benefits when the employment is termi- nated, unless the employee resigns, leaves without an im- portant reason or is dismissed. 99CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Defined benefit obligations In thousand Defined benefit obligations for pensions Plan assets at fair value Net defined benefit obligations for pensions Termination benefits Total defined benefit obligations At 1 January 2020 498,469 ‒ 100,536 397,933 134,318 532,251 Current service costs 20,936 0 20,936 10,524 31,460 Interest expense/income 3,901 ‒ 713 3,188 378 3,567 Past service costs and gains or losses from settlements ‒2,156 0 ‒2,156 0 ‒ 2,156 Components of defined benefit obligations recognised in the income statement 22,682 ‒713 21,969 10,902 32,871 Return on plan assets recognised in other comprehensive income 0 10 10 ‒ 47 ‒ 37 Actuarial gains and losses that arise from changes in demographic assumptions 57 0 57 ‒ 62 ‒5 Actuarial gains and losses that arise from changes in financial assumptions 32,306 0 32,306 3,870 36,176 Actuarial gains and losses that arise from experience adjustments 941 0 941 ‒694 248 Other comprehensive income 33,305 10 33,315 3,066 36,381 Changes from currency translation ‒ 43 0 ‒ 43 27 ‒16 Payments ‒17,171 624 ‒16,547 ‒ 7,537 ‒24,085 Contribution to plan assets 91 ‒ 9,831 ‒ 9,741 0 ‒9,741 Transfer in 75 0 75 ‒ 217 ‒ 142 Transfer out ‒9,846 9,816 ‒31 0 ‒ 31 At 31 December 2020 527,562 ‒100,632 426,930 140,560 567,490 Defined benefit obligations In thousand Defined benefit obligations for pensions Plan assets at fair value Net defined benefit obligations for pensions Termination benefits Total defined benefit obligations At 1 January 2019 439,983 ‒ 90,102 349,881 143,687 493,568 Current service costs 16,203 0 16,203 3,180 19,383 Interest expense/income 7,158 ‒ 1,376 5,782 1,387 7,169 Past service costs and gains or losses from settlements ‒1,378 0 ‒1,378 0 ‒ 1,378 Components of defined benefit obligations recognised in the income statement 21,983 ‒1,376 20,608 4,567 25,175 Return on plan assets recognised in other comprehensive income 0 ‒ 5,971 ‒ 5,971 288 ‒5,683 Actuarial gains and losses that arise from changes in demographic assumptions 51 0 51 690 741 Actuarial gains and losses that arise from changes in financial assumptions 55,527 0 55,527 7,738 63,266 Actuarial gains and losses that arise from experience adjustments 7,367 0 7,367 3,679 11,046 Other comprehensive income 62,946 ‒5,971 56,974 12,395 69,369 Changes from currency translation 6 0 6 1 7 Payments ‒19,433 0 ‒19,433 ‒ 26,078 ‒45,511 Contribution to plan assets 0 ‒ 8,116 ‒ 8,116 0 ‒8,116 Transfer in 7 0 7 ‒ 254 ‒ 247 Transfer out ‒7,022 5,029 ‒ 1,993 0 ‒ 1,993 At 31 December 2019 498,469 ‒100,536 397,933 134,318 532,251 100 The plan assets for the defined benefit obligations are comprised as follows: In per cent 31/12/2020 31/12/2019 Listed Unlisted Listed Unlisted Bonds ‒ euro 22.4 1.3 29.4 0.1 Bonds ‒ euro high yield 0.0 0.0 0.3 0.0 Corporate bonds ‒ euro 30.4 1.0 20.1 0.0 Equities ‒ euro 9.5 0.0 6.8 0.0 Equities ‒ non-euro 7.2 0.0 6.1 0.0 Equities ‒ emerging markets 4.1 0.0 3.0 0.0 Alternative investment instruments 4.2 10.1 0.5 3.7 Land and buildings 0.0 4.9 0.0 5.0 Cash 0.0 4.7 0.0 24.0 HTM bonds/term deposits 0.0 0.0 1.2 0.0 Total 78.0 22.0 67.2 32.8 Contributions to plan assets are expected for the coming year in the amount of €6,271 thousand. The measurement of the defined benefit obligations is based on the following actuarial calculation parameters: Calculation factors applied In per cent 2020 2019 Discount rate in termination benefits ‒0.1 0.3 Discount rate in pensions 0.4 0.8 Valorisation of remuneration 3.0 3.0 Valorisation of pensions 2.0 2.0 Employee turnover rate depe ndent on years of service dependent on years of service Calculation principles AVÖ 2018 P ‒ salaried employees AVÖ 2018 P ‒ salaried employees Weighted average duration in years Pensions Termination benefits 31 December 2020 13.4 7.1 31 December 2019 14.6 7.7 The essential risks from the benefit plan are limited to the investment risk, the interest rate risk, life expectancy as well as salary risk. The sensitivity of the defined benefit obligations on changes in the weighted actuarial calculation parameters is: Sensitivity analysis In thousand Pensions Termination benefits 2020 2019 2020 2019 Remaining life expectancy Change in DBO (+ 1 year) 3.1 3.8 Change in DBO (‒ 1 year) ‒3.3 ‒ 4.0 Discount rate Change in DBO (+1 percentage point) ‒ 12.5 ‒ 12.1 ‒ 6.6 ‒ 7.1 Change in DBO (‒1 percentage point) 15.7 15.1 7.5 8.1 Future salary increase rate Change in DBO (+ 0.75%) 4.6 4.3 5.3 5.8 Change in DBO (‒ 0.75%) ‒3.9 ‒3.8 ‒4.9 ‒ 5.3 Future pension increase rate Change in DBO (+ 0.25%) 3.7 3.6 Change in DBO (‒ 0.25%) ‒3.5 ‒3.4 101CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S 18. Defined contribution plans Obligations for contributions to defined contribution plans are recognised as expenses through profit or loss as soon as the associated work is performed. Prepaid contri- butions are recognised as assets if an entitlement to re- fund or reduction of future payments arises. The defined contribution plan is financed largely by UNIQA. Pension entitlements Board members, special policyholders and active employ- ees in Austria are subject to a basic defined contribution pension fund scheme. The beneficiaries are also entitled to a final pension fund contribution which guarantees them a fixed cash value when they begin their retirement. Since the first pension to be paid out to the beneficiaries has a fixed benefit amount, this commitment is to be clas- sified as a defined benefit in the contribution phase. The works council agreement states the extent to which a final pension fund contribution is provided to the beneficiary’s individual assurance cover account in the event of a trans- fer to the old-age pension or of an incapacity to work or the death of a participant. UNIQA has no obligations dur- ing the benefit phase. Contributions to company pension funds Under the defined contribution company pension scheme, the employer pays the fixed amounts into company pen- sion funds. The insurance contributions to company pen- sion funds amounted to €4,537 thousand (2019: €4,231 thousand). The employer has satisfied their obliga- tion by making these contributions. 19. Restructuring measures The Supervisory Board approved the UNIQA 3.0 strategic programme in November 2020. This programme aims to make UNIQA even more focused on the customer and makes internal processes simpler, more efficient and more cost-effective. This will be accompanied by cutbacks in the UNIQA Group’s workforce. Staff reductions will be achieved wherever possible through natural attrition and contract terminations agreed through mutual consent. The severance scheme that has been agreed includes spe- cial severance, partial retirement and other compensation models. A provision for restructuring measures was recog- nised in the amount of €98,587 thousand on account of these measures, which mainly involve a reduction in the number of employees in Austria. The provision for restructuring measures is stated under the balance sheet item “Other provisions”. It is mainly dis- closed in the consolidated income statement under the items “Insurance benefits” and “Operating expenses”. Disclosure in the consolidated income statement In thousand Property and casualty insurance Health insurance Life insurance Total Insurance benefits 6,801 4,117 2,819 13,738 Expenses for the acquisition of insurance 14,123 7,475 5,118 26,716 Other operating expenses 27,773 16,787 11,477 56,037 Expenses from investments 1,333 456 308 2,096 Total 50,030 28,835 19,721 98,587 102 20. Employees Personnel expenses In thousand 1‒12/2020 1‒12/2019 Salaries 444,997 454,780 Expenses for termination benefits 10,902 4,567 Pension expenses 21,969 20,608 Expenditure on mandatory social security contributions as well as income-based charges and compulsory contributions 127,861 128,921 Other social expenditures 5,631 7,040 Personnel-related restructuring expenses 96,319 0 Total 707,679 615,916 of which sales 133,748 120,436 of which administration 574,322 493,351 of which retirees ‒ 391 2,129 Average number of employees 31/12/2020 31/12/2019 Total 13,408 13,038 of which sales 4,138 4,202 of which administration 9,271 8,836 At 31 December 2020 the number of employees of the ac- quired AXA companies is 1,986. These were reported in the average number of salaried employees in relation to the time period from the acquisition date. Equity 21. Subscribed capital and capital reserves The share capital is comprised of 309,000,000 no-par- value bearer shares. Capital reserves include unallocated capital reserves, which primarily result from share premi- ums. A dividend of €0.18 per share was paid on 8 June 2020. This corresponds with a distribution amounting to €55,254 thousand. Subject to the approval of the Annual General Meeting, a dividend payment in the amount of €0.18 per share is planned for the financial year, which equates to a distribution in the amount of €55,254 thou- sand. 22. Treasury shares Treasury shares 31/12/2020 31/12/2019 UNIQA Insurance Group AG Number of shares 819,650 819,650 Cost in thousand 10,857 10,857 Share of subscribed capital in % 0.27 0.27 UNIQA Österreich Versicherungen AG Number of shares 1,215,089 1,215,089 Cost in thousand 5,774 5,774 Share of subscribed capital in % 0.39 0.39 Total 2,034,739 2,034,739 Authorisations of the Management Board In accordance with the resolution of the Annual General Meeting dated 20 May 2019, the Management Board is au- thorised to increase the company’s share capital up to and including 30 June 2024 with the approval of the Supervi- sory Board by a total of up to €80,000,000 by issuing up to 80,000,000 no-par-value bearer or registered shares in ex- change for payment in cash or in kind, one time or several times. In accordance with the resolution of the Annual General Meeting dated 25 May 2020, the Group Management Board was again authorised to acquire, with the approval of the Supervisory Board, treasury shares for a period of 30 months from 30 November 2020 (the authorisation granted in accordance with the resolution of the Annual General Meeting on 28 May 2018 expired at 29 November 2020). The proportion of the share capital represented by newly acquired shares, together with the proportion of other treasury shares that the company has already ac- quired and still holds, may not exceed 10 per cent of the share capital. The authorisation to acquire treasury shares also includes the acquisition of shares in the company by subsidiaries of the company. The treasury shares held via UNIQA Österreich Versicher- ungen AG stem from the merger of BL Syndikat Be- teiligungs Gesellschaft m.b.H., the assigning company, with UNIQA Insurance Group AG, the acquiring company. These shares held are not to be counted towards the 10 per cent limit. 23. Capital management Capital management takes place with due regard to the regulatory and statutory requirements. After Solvency II came into force on 1 January 2016, the definitions and methods used to calculate available own funds, as well as 103CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S risk capital requirements and management standards, were replaced by Solvency II standards. In the context of Group management, the appropriate cov- erage of the solvency capital requirement in accordance with Solvency II on a consolidated basis is constantly monitored. Active capital management is implemented in order to ensure that the individual Group companies and the Group as a whole have a reasonable capital base at all times. Aside from the five-year planning, another objective of active capital management is also to actively guarantee UNIQA’s financial capacity, including under difficult eco- nomic conditions, in order to safeguard the continued ex- istence of the insurance business. In addition to the solvency capital/minimum capital re- quirements, UNIQA has set itself a target capitalisation for the Group of at least 170 per cent. The solvency ratio is managed using strategic measures which result in a reduc- tion in the capital requirements and/or increase the amount of existing capital. UNIQA also takes the potential impact on the rating by recognised rating agencies into account in the capital management process. Standard & Poor’s (S&P) currently applies a credit rating of “A–” to UNIQA Insurance Group AG. In the S&P capital model UNIQA achieves sig- nificant surplus coverage for the current level. UNIQA assumes that it will secure its surplus coverage of the AA level at a minimum in the long term and will also improve the rating in line with the corporate strategy as a result. UNIQA Österreich Versicherungen AG and UNIQA Re AG each have a rating of “A”. The supplementary capital bond issued in 2013 (€350.0 million Tier 2, first call date: 31 July 2023), the subordinated capital bond issued in 2015 (€500.0 million Tier 2, first call date: 27 July 2026) and the subordinated capital bond issued in 2020 (€200.0 million Tier 2, first call date: 9 July 2025) are rated “BBB” by S&P. The agency rates the outlook for all companies as “stable”. Further quantitative and qualitative information related to capital management according to Solvency II is in- cluded in the “Solvency and Financial Condition Report” (SFCR). 24. Non-controlling interests Non-controlling interests are measured at the acquisition date with their proportionate share in the identifiable net assets of the acquired entity. Changes in the share in a subsidiary that do not result in a loss of control are recognised directly as equity transac- tions with non-controlling interests. Non - controlling interests In thousand 31/12/2020 31/12/2019 In measurement of financial instruments available for sale 5,636 4,255 In actuarial gains and losses on defined benefit plans ‒155 ‒ 207 In retained profit 11,297 5,129 In other equity 7,982 10,221 Total 24,760 19,399 Subordinated liabilities In July 2013, UNIQA Insurance Group AG successfully placed a supplementary capital bond to the value of €350 million with institutional investors in Europe. The bond has a maturity period of 30 years and cannot be ter- minated until after 10 years. The coupon equals 6.875 per cent per annum during the first ten years, after which a variable interest rate applies. The supplementary capital bond satisfies the requirements for equity netting as Tier 2 capital under the Solvency II regime. The issue was also aimed at replacing older supplementary capital bonds from Austrian insurance groups and at bolstering UNIQA’s capital resources and capital structure in prepa- ration for Solvency II and optimising these over the long term. The supplementary capital bond has been listed on the Luxembourg Stock Exchange since the end of July 2013. The issue price was set at 100 per cent. In July 2015, UNIQA Insurance Group AG successfully placed a subordinated capital bond (Tier 2) to the value of €500 million with institutional investors in Europe. The bond is eligible for netting as Tier 2 capital under Sol- vency II. The bond is scheduled for repayment after a pe- riod of 31 years and subject to certain conditions, and can only be cancelled by UNIQA after eleven years have elapsed and under certain conditions. The coupon equals 6.00 per cent per annum during the first eleven years, after which a variable interest rate applies. The bond has been listed on the Vienna Stock Exchange since July 2015. The issue price was set at 100 per cent. In July 2020 a subordinated bond was also issued in the amount of €200 million at an issue price of 99.507 per cent of the nominal amount. With a term of 15.25 years, it may be terminated for the first time after 5.25 years subject to certain conditions. The annual interest rate is fixed at 3.25 per cent for the first 5.25 years, after which a variable 104 interest rate applies. The bond is eligible for netting as Tier 2 capital under Solvency II. By issuing a green bond, UNIQA has committed to finance or refinance suitable as- sets in accordance with the Green Bond Framework at the same level as the issue proceeds. The bond issue has been listed on the Vienna Stock Exchange since July 2020. Carrying amounts In thousand At 1 January 2019 869,832 Amortisation of transaction costs 355 Additions from accrued interests 23,061 Disposals from accrued interests ‒ 23,139 At 31 December 2019 870,110 At 1 January 2020 870,110 Additions 197,826 Amortisation of transaction costs 576 Additions from accrued interests 24,483 Disposals from accrued interests ‒ 23,075 At 31 December 2020 1,069,920 Maturity In thousand 2020 long term 2020 short term 2019 long term 2019 short term Subordinated liabilities 1,045,451 24,469 847,034 23,075 Other current and non-current liabilities 25. Financial liabilities Carrying amounts In thousand Liabilities from collateral received for securities lending Liabilities from loans Derivative financial instruments Lease liabilities Total At 1 January 2019 772,196 12,943 13,345 0 798,484 Additions 0 3 37 75,179 75,219 Disposals ‒ 772,196 0 ‒11,015 ‒3,404 ‒ 786,614 Changes from currency translation 0 0 7 0 7 Profit or loss from changes of exchange rates 0 0 ‒ 1,413 0 ‒1,413 Additions from accrued interests 0 0 30 859 890 Disposals from accrued interests 0 0 ‒ 322 0 ‒ 322 Ordinary amortisation 0 ‒ 942 0 ‒ 9,793 ‒10,735 At 31 December 2019 0 12,004 670 62,842 75,516 At 1 January 2020 0 12,004 670 62,842 75,516 Additions 0 594,803 70 28,214 623,088 Disposals 0 0 ‒ 437 ‒25,086 ‒ 25,523 Change in basis of consolidation 0 0 1,540 29,916 31,456 Changes from currency translation 0 0 ‒ 7 ‒ 343 ‒350 Profit or loss from changes of exchange rates 0 0 72 ‒ 14 59 Additions from accrued interests 0 3,955 0 955 4,910 Disposals from accrued interests 0 0 0 ‒ 8 ‒ 8 Extraordinary amortisation 0 0 0 ‒ 584 ‒584 Ordinary amortisation 0 ‒ 907 0 ‒ 14,331 ‒15,238 Amortisation of transaction costs 0 241 0 0 241 At 31 December 2020 0 610,098 1,908 81,560 693,566 105CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Maturity In thousand 2020 long term 2020 short term 2019 long term 2019 short term Liabilities from loans 606,142 3,955 11,104 900 Derivative financial instruments 292 1,617 1 669 Lease liabilities 73,609 7,951 57,861 4,980 Total 680,043 13,523 68,966 6,550 In July 2020 UNIQA Insurance Group AG issued a senior bond in the amount of €600 million at an issue price of 99.436 per cent of the nominal amount. The senior bond has a term of ten years at a nominal interest rate of 1.375 per cent. The proceeds are used to finance the pur- chase of former AXA companies of AXA companies in Po- land, the Czech Republic and Slovakia. Changes in financial liabilities In thousand Subordinated liabilities Financial liabilities Changes in fina ncial liabilities At 1 January 2019 869,832 798,484 1,668,316 Payments from other financing activities 0 ‒ 794,017 ‒ 794,017 Currency translation 0 7 7 Change in basis of consolidation 0 10,255 10,255 Other changes 278 60,787 61,065 At 31 December 2019 870,110 75,516 945,625 At 1 January 2020 870,110 75,516 945,625 Proceeds from other financing activities 197,826 595,045 792,871 Payments from other financing activities 0 ‒ 22,815 ‒ 22,815 Currency translation 0 ‒350 ‒350 Change in basis of consolidation 0 37,883 37,883 Other changes 1,984 8,287 10,271 At 31 December 2020 1,069,920 693,566 1,763,485 106 26. Liabilities and other items classified as liabilities In thousand 31/12/2020 31/12/2019 Reinsurance liabilities Deposits retained on assumed reinsurance 116,113 123,578 Reinsurance settlement liabilities 46,555 37,321 162,668 160,899 Insurance liabilities to policyholders 183,672 161,586 to insurance brokers 83,254 57,225 to insurance companies 17,411 16,279 284,337 235,091 Liabilities to credit institutions 4,217 3,501 Other liabilities Personnel-related obligations 86,839 87,763 Liabilities from services 122,152 86,813 Liabilities from investment contracts 122,807 59,368 Other tax liabilities (without income tax) 55,964 79,858 Other liabilities 155,236 89,802 542,999 403,604 Subtotal 994,221 803,095 of which liabilities with a maturity of up to 1 year 889,166 729,845 more than 1 year and up to 5 years 30,600 16,233 more than 5 years 74,454 57,017 994,221 803,095 Total liabilities and other items classified as liabilities 994,221 803,095 Other non-technical income and expenses 27. Other income In thousand 1‒12/2020 1‒12/2019 Property and casualty insurance 46,685 18,607 Health insurance 144,693 157,234 Life insurance 25,171 16,517 Of which: Medical services 142,676 154,877 Other services 24,588 9,837 Changes in exchange rates 30,471 16,208 Other 18,814 11,437 Total 216,548 192,359 Revenues from medical services are almost always realised at the time of purchase. 28. Other expenses In thousand 1‒12/2020 1‒12/2019 Property and casualty insurance 38,518 38,219 Health insurance 146,556 147,494 Life insurance 45,423 5,307 Of which: Medical services 142,455 142,959 Other services 25,706 19,925 Exchange rate losses 35,437 9,449 Other 26,900 18,686 Total 230,497 191,019 Other disclosures 29. Group holding company UNIQA’s Group holding company is UNIQA Insurance Group AG. In addition to its duties as Group holding com- pany, this company also performs the duties of a group re- insurer. 30. Remuneration for the Management Board and Supervisory Board The members of the Management Board of UNIQA Insur- ance Group AG assume a dual operational role in their function, as they also hold the Management Board func- tion at UNIQA Österreich Versicherungen AG. This identi- cal composition of the Management Board in both compa- nies enables efficient control of the UNIQA Group. From 1 July 2020 all employment contracts of the members of the Management Board will be with UNIQA Insurance Group AG, which will pay out all remuneration from this date. The remuneration components for the first half of the year for those members of the Management Board who will also be members of the Management Board of the company from 1 July 2020 relate to their Management Board func- tions at UNIQA Österreich Versicherungen AG and the former UNIQA International AG, which has been merged with UNIQA Österreich Versicherungen AG. Remuneration of the Management Board In thousand 1‒12/2020 1‒12/2019 Fixed remuneration 1) 4,377 1,574 Variable remuneration 2) 2,217 1,141 Multi-year share-based remuneration 3) 2,137 468 Current remuneration 8,731 3,183 1) The fixed salary components include remuneration in kind equivalent to 110 thousand (2019: 35 thousand). 2) The Short-Term Incentive (STI) comprises a variable remuneration component which is paid beginning with the 2017 financial year, partly in the following year and partly after three years (the “deferred com- ponent”). 3) The Long-Term Incentive (LTI) corresponds to a share-based remuneration agreement first introduced in 2013, with the beneficiary entitled to receive a cash settlement following a four-year term. 107CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S For the 2017 financial year, expected payments of €806 thousand will be made for variable remuneration (STI) in subsequent years. For the 2018 financial year, pay- ments of €909 thousand are expected to be made in the year 2022. For the 2019 financial year, payments of €795 thousand are expected to be made in the year 2023. For the 2020 financial year, no short-term incentive due to Covid-19 was made. As part of the multi-year long-term incentive plan (LTI), payments of €2,137 thousand were made to the members of the Management Board of UNIQA Insurance Group AG in 2020. For the subsequent years 2021 to 2024, a payment of €2,894 thousand is expected for the virtual shares allo- cated up to 31 December 2020. For pension commitments and reinsurance to cover these commitments for the members of the Management Board €1,024 thousand were paid in the reporting year (2019: €359 thousand). Of the pension reinsurance amounting to €244 thousand, €184 thousand will be paid in 2021. No compensation payments were made in the current finan- cial year. The amount expended on pensions in the report- ing year for former members of the Management Board and their survivors was €2,084 thousand (2019: €2,766 thousand). The remuneration of the members of the Supervisory Board for their work in the 2019 financial year was €745 thousand. Provisions of €790 thousand have been recognised for the remuneration to be paid for work com- pleted in 2020. The amount paid out in attendance fees and cash expenditures in the financial year was €75 thousand (2019: €72 thousand). From 14 April 2020, the members of the Supervisory Board of UNIQA Insurance Group AG who are also members of the Supervisory Board of UNIQA Österreich Versicherungen AG will receive their daily allowances and remuneration exclusively from UNIQA Insurance Group AG despite their dual function. These daily allowances and remunerations therefore also cover the Supervisory Board activities at UNIQA Öster- reich Versicherungen AG. 31. Share-based payment agreement with cash settlement A share-based remuneration programme has been in place for the members of the Management Board of UNIQA In- surance Group AG, UNIQA Österreich Versicherungen AG and UNIQA International AG (merged with UNIQA Öster- reich Versicherungen AG in the 2020 financial year) since the 2013 financial year. Virtual UNIQA shares are granted conditionally for each financial year as part of this pro- gramme. Cash payments subject to agreed limits are pro- vided for at the end of a performance period of four years for the individual annual tranches or depending on certain key performance targets. The selected key performance targets are aimed at ensur- ing a relative market-based performance measurement and absolute performance measurement in accordance with the individual corporate objectives of the UNIQA Group. These defined equally-weighted key performance targets include the total shareholder return (TSR) of the UNIQA ordinary share compared with the TSR of the shares in the companies on the DJ EURO STOXX TMI In- surance, the P&C Net Combined Ratio in UNIQA’s prop- erty and casualty business and the return on risk capital (the return on equity required). The programme stipulates annual investments in UNIQA shares with a holding period also of four years in each case. The cash settlement is calculated as follows for each tranche of shares: payment = A × B × C A = number of virtual shares awarded for the performance period. B = average price of the UNIQA ordinary share in the pe- riod of six months before the end of the performance pe- riod. C = degree of target achievement at the end of the perfor- mance period. The maximum target achievement is 200 per cent. The fair value on the date that share-based payment awards are granted is recognised as expense over the pe- riod in which the unconditional entitlement to the award is obtained. The fair value is based on expectations with respect to achievement of the defined key performance targets. Changes in measurement assumptions result in an adjustment of the recognised provision amounts affecting income. Obligations from share-based remuneration are stated under “Other provisions”. As at 31 December 2020 a total of 1,139,469 virtual shares (2019: 1,066,194 shares) were relevant for the measure- ment. The fair value of share-based remuneration (exclud- ing non-wage labour costs) at the reporting date amounts to €3,993 thousand (2019: €7,169 thousand). 108 32. Relationships with related companies and persons Companies in the UNIQA Group maintain various rela- tionships with related companies and persons. Related companies refer to companies which exercise ei- ther a controlling or a significant influence on UNIQA. The group of related companies also includes the non-con- solidated subsidiaries, associates and joint ventures of UNIQA. Related persons include the members of management holding key positions along with their close family mem- bers. This covers in particular the members of manage- ment in key positions at those companies which exercise either a controlling or a significant influence on the UNIQA Group, along with their close family members. Transactions and balances with related companies In thousand Companies with significant influence on UNIQA Group Affiliated but not consolidated companies Associated companies of UNIQA Group Other related parties Total Transactions in 2020 Premiums written (gross) 966 34 1,238 21,151 23,389 Income from investments 1,695 566 14,116 4,299 20,677 Expenses from investments ‒ 1,647 0 0 ‒ 2,491 ‒4,138 Other income 157 7,384 1,922 385 9,847 Other expenses ‒2,574 ‒8,886 ‒ 2,092 ‒25,576 ‒39,128 At 31 December 2020 Investments 182,630 16,270 689,036 47,409 935,345 Cash and cash equivalents 293,184 0 0 45,422 338,606 Receivables, including insurance receivables 112 10,161 1 3,687 13,961 Liabilities and other items classified as liabilities 0 4,222 135 5,133 9,489 In thousand Companies with significant influence on UNIQA Group Affiliated but not consolidated companies Associated companies of UNIQA Group Other related parties Total Transactions in 2019 Premiums written (gross) 897 52 1,232 49,371 51,551 Income from investments 8,583 526 22,785 5,313 37,207 Expenses from investments ‒929 0 0 ‒ 2,078 ‒3,007 Other income 164 7,487 1,953 555 10,159 Other expenses ‒3,265 ‒8,841 ‒ 2,674 ‒38,896 ‒53,675 At 31 December 2019 Investments 211,065 29,901 644,941 45,172 931,078 Cash and cash equivalents 301,093 0 0 235,372 536,465 Receivables, including insurance receivables 27 2,727 39 3,752 6,545 Liabilities and other items classified as liabilities 0 906 245 4,399 5,550 109CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Transactions with related persons In thousand 1‒12/2020 1‒12/2019 Premiums written (gross) 898 529 Salaries and short-term benefits 1) ‒4,915 ‒5,382 Pension expenses ‒ 2,015 ‒ 1,420 Compensation on termination of employment contract ‒174 ‒158 Expenditures for share-based payments 0 ‒1,255 Other income 275 213 Other expenses ‒144 0 1) This item includes fixed and variable Management Board remuneration paid in the financial year and remuneration of the Supervisory Board. 33. Other financial obligations and contingent liabilities Options to purchase granted There were bilateral option agreements in place between UNIQA and the two remaining non-controlling sharehold- ers in UNIQA Insurance Company, Private Joint Stock Company (Kiev, Ukraine) to acquire (call option for UNIQA) or to sell (put option for the non-controlling shareholders) the non-controlling shares based on pre- agreed purchase price formulas by 30 June 2020 at the lat- est. UNIQA exercised the call option in June 2020 and as a result it will owe 100 per cent of the shares in both UNIQA companies in Ukraine following a successful share trans- fer (expected in the first quarter of 2021). There is also the possibility to acquire the company shares held by the minority shareholders through exercising a mutual option between UNIQA and the minority share- holders in the SIGAL Group based on previously agreed purchase price formulas. A new option period was agreed by extending the previous shareholders’ agreement, with the exercise period agreed to be from 1 July 2023 to 30 June 2024. 34. Expenses for the auditor of the financial statements The auditor fees in the financial year were €2.340 thou- sand (2019: €2,439 thousand); of which €386 thousand (2019: €369 thousand) is attributable to the annual audit, €1.660 thousand (2019: €1,146 thousand) to other auditing services and €294 thousand (2019: €924 thousand) to other general services. 35. Basis of consolidation Subsidiaries Subsidiaries are entities controlled by UNIQA. UNIQA is regarded as controlling an entity if: UNIQA is able to exercise power over the relevant entity, UNIQA is exposed to fluctuating returns from its partici- pation, and UNIQA is able to influence the amount of the returns as a result of the power it exercises. The financial statements of subsidiaries are included in the consolidated financial statements from the date con- trol begins until the date control ends. Loss of control If UNIQA loses control over a subsidiary, the subsidiary’s assets and liabilities and all associated non-controlling in- terests and other equity components are deleted from the accounts. Any resulting profit or loss is recognised in profit/(loss) for the period. Any retained shares in the for- mer subsidiary is measured at fair value at the date of the loss of control. Investment in associates Associates are all the entities over which UNIQA has sig- nificant influence but does not exercise control or joint control over their financial and operating policies. This is generally the case as soon as there is a voting share of be- tween 20 and 50 per cent or a comparable significant in- fluence is guaranteed legally or in practice via other con- tractual regulations. Inclusion in the basis of consolida- tion is based on the proportionate equity (equity method). Pension and investment funds Controlled pension and investment funds are included in the consolidation unless the relevant fund volumes were considered to be immaterial when viewed separately and as a whole. A fund is regarded as controlled if: UNIQA determines the relevant activities of the fund, such as the definition of the investment strategy and short and medium-term investment decisions, UNIQA has the risk of and the rights to variable suc- cesses of the fund in the form of distributions and partic- ipates in the performance of the fund assets, and the determining power over the relevant activities is ex- ercised in the interest of UNIQA by determining the in- vestment objectives and the individual investment deci- sions. 110 Basis of consolidation 31/12/2020 31/12/2019 Consolidated companies Austria 33 33 Other countries 66 57 Associates Austria 4 5 Other countries 1 1 Consolidated pension and investment funds Austria 5 6 Other countries 6 1 Shares in subsidiaries that are not consolidated, associates as well as joint ventures that are not accounted for using the equity method are classified as financial assets availa- ble for sale and stated under the item “Other invest- ments”. 36. Consolidation principles Transactions eliminated on consolidation Intragroup balances and transactions and all income and expenses from intragroup transactions are eliminated when consolidated financial statements are prepared. Initial consolidation UNIQA Ventures GmbH (Vienna) and City One Park Sp. z o.o. (Warsaw, Poland) were consolidated for the first time in the first quarter of 2020. Poland, Warsaw. Acquisitions In addition to the acquired AXA companies in Poland, the Czech Republic and Slovakia described in the Chapter “Business combinations”, 85 per cent of the shares in Treimorfa Project Sp. z o.o. (Krakow, Poland) were acquired in the second quarter of 2020. UNIQA 5 Star GmbH (Vienna) (previously: SASR Alpha Sieben- undfünfzigste Beteiligungsverwaltung GmbH) was acquired in the third quarter of 2020. The acquisitions of Treimorfa Project Sp. z o.o. and UNIQA 5 Star GmbH do not represent a business combination within the meaning of IFRS 3. Restructuring processes UNIQA International AG (Vienna) as assigning company was merged in the fourth quarter with UNIQA Österreich Versicherungen AG (Vienna) as acquiring company with retroactive effect from 1 January 2020. PremiQaMed Management Services GmbH (Vienna) was merged in the third quarter of 2020 with PremiQaMed Holding GmbH (Vienna) as acquiring company. In the fourth quarter of 2020, UNIQA Real Estate d.o.o. (Belgrade, Serbia) was merged with Renaissance Plaza d.o.o. (Belgrade, Serbia) as the acquiring company. Sales The 25 per cent shareholding in SK Versicherung Aktien- gesellschaft (Vienna) was sold in September 2020. Deconsolidation The fully consolidated investment fund UNIQA Diversi- fied Bond Fund was deconsolidated on 19 October 2020. 111CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Company Type of consolidation Location Equity int erest at 31/12/2020 In per cent Equity interest at 31/12/2019 In per cent Domestic insurance companies UNIQA Insurance Group AG (Group Holding Company) Vienna UNIQA Österreich Versicherungen AG Fully consolidated Vienna 100.0 100.0 SK Versicherung Aktiengesellschaft (Deconsolidation: 3/9/2020) Equity method Vienna 0.0 25.0 Foreign insurance companies AXA ¯ycie Towarzystwo Ubezpieczeñ S.A. (Initial consolidation: 15 October 2020) Fully consolidated Poland, Warsaw 100.0 0.0 AXA Ubezpieczenia Towarzystwo Ubezpieczeñ i Reasekuracji S.A. (Initial consolidation: 15 October 2020) Fully consolidated Poland, Warsaw 100.0 0.0 AXA pojišovna a.s. (Initial consolidation: 15/10/2020) Fully consolidated Czech Republic, Prague 100.0 0.0 AXA ivotní pojišovna a.s. (Initial consolidation: 15/10/2020) Fully consolidated Czech Republic, Prague 100.0 0.0 Raiffeisen Life Insurance Company LLC Fully consolidated Russia, Moscow 75.0 75.0 SIGAL LIFE UNIQA Group AUSTRIA sh.a Fully consolidated Kosovo, Pristina 86.9 86.9 SIGAL LIFE UNIQA Group AUSTRIA sh.a. Fully consolidated Albania, Tirana 86.9 86.9 SIGAL UNIQA Group AUSTRIA sh.a. Fully consolidated Albania, Tirana 86.9 86.9 SIGAL UNIQA Group AUSTRIA sh.a. Fully consolidated Kosovo, Pristina 86.9 86.9 UNIQA AD Skopje Fully consolidated North Macedonia, Skopje 86.9 86.9 UNIQA Asigurari de Viata S.A. Fully consolidated Romania, Bucharest 100.0 100.0 UNIQA Asigurari S.A. Fully consolidated Romania, Bucharest 100.0 100.0 UNIQA Biztosító Zrt. Fully consolidated Hungary, Budapest 100.0 100.0 UNIQA Insurance Company, Private Joint Stock Company Fully consolidated Ukraine, Kiev 100.0 100.0 UNIQA Insurance plc Fully consolidated Bulgaria, Sofia 99.9 99.9 UNIQA Life AD Skopje Fully consolidated North Macedonia, Skopje 86.9 86.9 UNIQA Life Insurance plc Fully consolidated Bulgaria, Sofia 99.8 99.8 UNIQA LIFE Private Joint Stock Company Fully consolidated Ukraine, Kiev 100.0 100.0 UNIQA neivotno osiguranje a.d. Fully consolidated Serbia, Belgrade 100.0 100.0 UNIQA neivotno osiguranje a.d. Fully consolidated Montenegro, Podgorica 100.0 100.0 UNIQA osiguranje d.d. Fully consolidated Croatia, Zagreb 100.0 100.0 UNIQA osiguranje d.d. Fully consolidated Bosnia and Herzegovina, Sarajevo 100.0 100.0 UNIQA poisovòa a.s. Fully consolidated Slovakia, Bratislava 100.0 99.9 UNIQA pojišovna, a.s. Fully consolidated Czech Republic, Prague 100.0 100.0 UNIQA Re AG Fully consolidated Switzerland, Zurich 100.0 100.0 UNIQA Towarzystwo Ubezpieczeñ na ¯ycie S.A. Fully consolidated Poland, Lodz 99.8 99.8 UNIQA Towarzystwo Ubezpieczeñ S.A. Fully consolidated Poland, Lodz 98.6 98.6 UNIQA Versicherung AG Fully consolidated Liechtenstein, Vaduz 100.0 100.0 UNIQA ivotno osiguranje a.d. Fully consolidated Serbia, Belgrade 100.0 100.0 UNIQA ivotno osiguranje a.d. Fully consolidated Montenegro, Podgorica 100.0 100.0 Group domestic service companies Agenta Risiko- und Finanzierungsberatung Gesellschaft m.b.H. Fully consolidated Vienna 100.0 100.0 Assistance Beteiligungs-GesmbH Fully consolidated Vienna 64.0 64.0 call us Assistance International GmbH Fully consolidated Vienna 50.2 50.2 UNIQA 5 Star GmbH (Initial consolidation: 1/10/2020) Fully consolidated Vienna 100.0 0.0 UNIQA Capital Markets GmbH Fully consolidated Vienna 100.0 100.0 UNIQA International AG (Merger: 1/1/2020) Fully consolidated Vienna 0.0 100.0 UNIQA IT Services GmbH Fully consolidated Vienna 100.0 100.0 UNIQA Real Estate Finanzierungs GmbH Fully consolidated Vienna 100.0 100.0 UNIQA Real Estate Management GmbH Fully consolidated Vienna 100.0 100.0 112 Company Type of consolidation Location Equity int erest at 31/12/2020 In per cent Equity interest at 31/12/2019 In per cent Valida Holding AG Equity method Vienna 40.1 40.1 Versicherungsmarkt-Servicegesellschaft m.b.H. Fully consolidated Vienna 100.0 100.0 Group foreign service companies UNIQA investièní spoleènost, a.s. (Initial consolidation: 15/10/2020; formerly: AXA investièní spoleènost a.s.) Fully consolidated Czech Republic, Prague 100.0 0.0 UNIQA Management Services, s.r.o. (Initial consolidation: 15/10/2020; formerly: AXA Management Services s.r.o.) Fully consolidated Czech Republic, Prague 100.0 0.0 AXA Polska S.A. (Initial consolidation: 15/10/2020) Fully consolidated Poland, Warsaw 100.0 0.0 DEKRA-Expert Mûszaki Szakértõi Kft. Equity method Hungary, Budapest 50.0 50.0 sTech d.o.o. Fully consolidated Serbia, Belgrade 100.0 100.0 UNIQA GlobalCare SA Fully consolidated Switzerland, Geneva 100.0 100.0 UNIQA Group Service Center Slovakia, spol. s r.o. Fully consolidated Slovakia, Nitra 100.0 100.0 UNIQA Ingatlanhasznosító Kft. Fully consolidated Hungary, Budapest 100.0 100.0 UNIQA InsService spol. s r.o. Fully consolidated Slovakia, Bratislava 100.0 99.9 UNIQA Raiffeisen Software Service Kft. Fully consolidated Hungary, Budapest 60.0 60.0 UNIQA Raiffeisen Software Service S.R.L. Fully consolidated Romania, Cluj-Napoca 100.0 60.0 UNIQA Számítástechnikai Szolgáltató Kft. Fully consolidated Hungary, Budapest 100.0 100.0 Vitosha Auto OOD Fully consolidated Bulgaria, Sofia 99.9 99.9 Financial and strategic domestic shareholdings Diakonissen & Wehrle Privatklinik GmbH Fully consolidated Gallneukirchen 92.6 90.0 Goldenes Kreuz Privatklinik BetriebsGmbH Fully consolidated Vienna 100.0 100.0 PremiQaMed Ambulatorien GmbH Fully consolidated Vienna 100.0 100.0 PremiQaMed Beteiligungs GmbH Fully consolidated Vienna 100.0 100.0 PremiQaMed Holding GmbH Fully consolidated Vienna 100.0 100.0 PremiQaMed Management Services GmbH (Merger: 1/7/2020) Fully consolidated Vienna 0.0 100.0 PremiQaMed Privatkliniken GmbH Fully consolidated Vienna 100.0 100.0 STRABAG SE Equity method Villach 14.3 14.3 UNIQA Beteiligungs-Holding GmbH Fully consolidated Vienna 100.0 100.0 UNIQA Erwerb von Beteiligungen Gesellschaft m.b.H. Fully consolidated Vienna 100.0 100.0 UNIQA Leasing GmbH Equity method Vienna 25.0 25.0 UNIQA Ventures GmbH (Initial consolidation: 1/1/2020) Fully consolidated Vienna 100.0 0.0 Real estate companies “Hotel am Bahnhof” Errichtungs GmbH & Co KG Fully consolidated Vienna 100.0 100.0 Asena LLC Fully consolidated Ukraine, Kiev 100.0 100.0 AVE-PLAZA LLC Fully consolidated Ukraine, Kharkiv 100.0 100.0 Black Sea Investment Capital LLC Fully consolidated Ukraine, Kiev 100.0 100.0 Design Tower GmbH Fully consolidated Vienna 100.0 100.0 DIANA-BAD Errichtungs- und Betriebs GmbH Equity method Vienna 33.0 33.0 EZL Entwicklung Zone Lassallestraße GmbH & Co. KG Fully consolidated Vienna 100.0 100.0 Floreasca Tower SRL Fully consolidated Romania, Bucharest 100.0 100.0 Hotel Burgenland Betriebs GmbH Fully consolidated Vienna 100.0 100.0 IPM International Property Management Kft. Fully consolidated Hungary, Budapest 100.0 100.0 Knesebeckstraße 8-9 Grundstücksgesellschaft mbH Fully consolidated Germany, Berlin 100.0 100.0 Praterstraße Eins Hotelbetriebs GmbH Fully consolidated Vienna 100.0 100.0 PremiQaMed Immobilien GmbH Fully consolidated Vienna 100.0 100.0 Pretium Ingatlan Kft. Fully consolidated Hungary, Budapest 100.0 100.0 Renaissance Plaza d.o.o. Fully consolidated Serbia, Belgrade 100.0 100.0 Reytarske LLC Fully consolidated Ukraine, Kiev 100.0 100.0 113CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Company Type of consolidation Location Equity int erest at 31/12/2020 In per cent Equity interest at 31/12/2019 In per cent R-FMZ Immobilienholding GmbH Fully consolidated Vienna 100.0 100.0 Software Park Kraków Sp. z o.o. Fully consolidated Poland, Warsaw 100.0 100.0 UNIQA Immobilien-Projekterrichtungs GmbH Fully consolidated Vienna 100.0 100.0 UNIQA Linzer Straße 104 GmbH & Co KG Fully consolidated Vienna 100.0 100.0 UNIQA Plaza Irodaház és Ingatlankezelõ Kft. Fully consolidated Hungary, Budapest 100.0 100.0 UNIQA poslovni centar korzo d.o.o. Fully consolidated Croatia, Rijeka 100.0 100.0 UNIQA Real Estate Bulgaria EOOD Fully consolidated Bulgaria, Sofia 100.0 100.0 UNIQA Real Estate BV Fully consolidated Netherlands, Hoofddorp 100.0 100.0 UNIQA Real Estate CZ, s.r.o. Fully consolidated Czech Republic, Prague 100.0 100.0 UNIQA Real Estate d.o.o. (Merger: 22/12/2020) Fully consolidated Serbia, Belgrade 0.0 100.0 UNIQA Real Estate GmbH Fully consolidated Vienna 100.0 100.0 UNIQA Real Estate Inlandsholding GmbH Fully consolidated Vienna 100.0 100.0 UNIQA Real Estate Polska Sp. z o.o. Fully consolidated Poland, Warsaw 100.0 100.0 UNIQA Real Estate Property Holding GmbH Fully consolidated Vienna 100.0 100.0 UNIQA Real III, spol. s r.o. Fully consolidated Slovakia, Bratislava 100.0 100.0 UNIQA Real s.r.o. Fully consolidated Slovakia, Bratislava 100.0 100.0 UNIQA Retail Property GmbH Fully consolidated Vienna 100.0 100.0 UNIQA Szolgáltató Kft. Fully consolidated Hungary, Budapest 100.0 100.0 UNIQA-Invest Kft. Fully consolidated Hungary, Budapest 100.0 100.0 Zablocie Park Sp. z o.o. Fully consolidated Poland, Warsaw 100.0 100.0 City One Park Sp. z o.o. (Formerly: Dabrine Investments Sp. z o.o.) Fully consolidated Poland, Warsaw 100.0 0.0 Treimorfa Project Sp. z o.o. (Initial consolidation: 1.4.2020) Fully consolidated Poland, Krakow 85.0 0.0 Treimorfa Hotel Sp. z o.o. Fully consolidated Poland, Krakow 85.0 0.0 Pension and investment funds UNIQA d.d.s., a.s. (Initial consolidation: 15/10/2020; formerly: AXA d.d.s., a.s.) Fully consolidated Slovakia, Bratislava 100.0 0.0 UNIQA d.s.s., a.s. (Initial consolidation: 15/10/2020; formerly: AXA d.s.s., a.s.) Fully consolidated Slovakia, Bratislava 100.0 0.0 UNIQA penzijní spoleènost, a.s. (Initial consolidation: 15/10/2020; formerly: AXA penzijní spoleènost a.s.) Fully consolidated Slovakia, Brno 100.0 0.0 AXA Powszechne Towarzystwo Emerytalne S.A. (Initial consolidation: 15 October 2020) Fully consolidated Poland, Warsaw 100.0 0.0 AXA Towarzystwo Funduszy Inwestycyjnych S.A. (Initial consolidation: 15 October 2020) Fully consolidated Poland, Warsaw 100.0 0.0 SSG Valluga Fund Fully consolidated Ireland, Dublin 100.0 100.0 UNIQA Corporate Bond Fully consolidated Vienna 100.0 100.0 UNIQA Diversified Bond Fund (Deconsolidation: 19/10/2020) Fully consolidated Vienna 0.0 100.0 UNIQA Eastern European Debt Fund Fully consolidated Vienna 100.0 100.0 UNIQA Emerging Markets Debt Fund Fully consolidated Vienna 100.0 100.0 UNIQA Euro Government Bond Fund Fully consolidated Vienna 99.7 99.7 UNIQA World Selection Fully consolidated Vienna 100.0 100.0 37. Changes in major accounting policies as well as new and amended standards With the exception of the following changes, the outlined accounting policies were consistently applied to all peri- ods presented in these consolidated financial statements. Amendments and standards to be applied for the first time The Group applied the following amendments to stand- ards with the initial application date of 1 January 2020. None of the new regulations arising from this have any essential impact on UNIQA’s assets, liabilities, financial position and profit or loss. 114 Standard Content First- time application by UNIQA Impact on UNIQA Miscellaneous Updated Framework 1 January 2020 Yes IFRS 3 Definition of a Business ‒ Amendments to IFRS 3 1 January 2020 Yes IAS 1, IAS 8 Definition of Material ‒ Amendments to IAS 1 and IAS 8 1 January 2020 Yes IFRS 9, IAS 39, IFRS 7 Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform 1 January 2020 Yes New and amended standards to be applied in the future The IASB has also published a range of new standards that will be applicable in the future. UNIQA does not intend to adopt these standards early. Standard Content First- time application by UNIQA Endorsement by the EU at 31 December 2020 Likely to be relevant for UNIQA New standards IFRS 9 Financial Instruments 1 January 2023 1) Yes Yes IFRS 9 Amendments to IFRS 9 ‒ Prepayment Features with Negative Compensation 1 January 2023 1) Yes Yes IFRS 17 Insurance Contracts 1 January 2023 1) No Yes Amended standards IAS 1 Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-Current 1 January 2022 No Yes IFRS 16 Amendments to IFRS 16 Leases: Covid-19-Related Rent Concessions 1 June 2020 Yes Yes IFRS 4, IFRS 9 Amendments to IFRS 4 Insurance Contracts: Extension of the Temporary Exemption from Applying IFRS 9 1 January 2021 No Yes 1) Preliminary decision of the IASB to defer the date of IFRS 17 coming into force and to extend the temporary exemption of IFRS 9 by one year The following standards to be applied in future are ex- pected to have a significant impact on reporting at UNIQA: IFRS 9 – Financial Instruments Since UNIQA’s business is predominantly insurance-re- lated and UNIQA has not yet adopted IFRS 9 in any other version, a deferral to apply IFRS 9 for the first time is per- mitted until 1 January 2023 (see Footnote 1 to the table above). The use of UNIQA’s deferral approach requires the publication of additional information in the notes for the period up to the first-time application of IFRS 9. Classification and measurement The future classification and measurement of financial as- sets under IFRS 9 is derived from the business model crite- rion and the SPPI criterion (solely payments of principal and interest). Depending on the principle-based classifica- tion rules, IFRS 9 requires that subsequent measurement be carried out at amortised cost or at fair value. UNIQA has already completed the technical development and implementation of an IT-system-based assessment of the SPPI criterion for the entire portfolio of relevant as- sets. Fixed-income securities make up a large portion of the in- vestment portfolio. Given that these securities tend to fol- low the principal/interest payment structure in most cases, they largely fulfil the criteria of the SPPI test. If an instrument meets the requirements of the SPPI test, there are two options: it can then be measured at amortised cost, or it can be measured at fair value through other compre- hensive income. The portion of the UNIQA portfolio that does not fulfil the SPPI criteria will in future be measured at fair value through profit or loss. 115CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Requirements for SPPI fulfilled based on carry- ing amounts in per cent 1) Variable- income securities Fixed-income securities Loans and other investments Derivative financ ial instruments Investments under investment contracts Financial assets at fair value through profit or loss 0.0 0.1 - 0.0 0.0 Available-for-sale financial assets 0.0 90.7 - - - Loans and receivables - 0.4 99.5 - - Total 0.0 91.2 99.5 0.0 0.0 1) Classification according to IAS 39 Asset allocation of other investments In thousand At amortised cost or at fair value through other comprehensive income At fair value through profit or loss Carrying amount Fair value Change in fair value over the period Carrying amount Fair value Change in fair value over the period Government bonds 11,639,942 11,541,953 1,559,196 6,780 6,693 ‒ 477 Corporate bonds 3,486,221 3,471,831 92,482 130,817 131,564 ‒ 81,708 Covered bonds 2,141,159 2,120,240 ‒ 550,742 0 0 0 Loans 128,335 127,663 0 1,934 1,850 0 Other 0 0 0 1,546,285 1,545,774 645,790 Total 17,395,657 17,261,688 1,100,936 1,685,817 1,685,881 563,605 In addition, the logic of the business models was created in accordance with IFRS 9. Based on current indications, a large part of UNIQA’s business is classified under the hold- and-sell business model. This may result in changes due to the interactions with IFRS 17 that cannot yet be fully as- sessed at the time the financial statements are being pre- pared. Impairment The new provisions of IFRS 9 concerning impairment must be applied in future to financial assets measured at amortised cost or at fair value through other comprehen- sive income. Under IFRS 9, the impairment calculation to be applied is based on a forward-looking model for the recognition of expected credit losses. The model logic used to determine expected credit losses has been implemented in the IT systems and will be tested until initial application of IFRS 9. For the purpose of as- sessing the default risk, recourse was made to the defini- tion in IFRS 9 of financial instruments with a low default risk at the reporting date. An external investment grade rating can therefore be used to assess whether a financial instrument has a low default risk. Financial instruments by rating In thousand Government bonds Corporate bonds Covered bonds Loans Other Total AAA 2,246,890 72,462 1,369,367 0 0 3,688,718 AA 3,499,527 260,996 577,221 0 0 4,337,744 A 3,460,494 1,387,524 87,343 10,110 0 4,945,472 BBB 1,813,096 1,213,171 0 0 0 3,026,267 BB 248,791 98,985 25,129 0 0 372,904 B 303,048 9,067 0 0 0 312,115 Not rated 68,097 444,016 82,099 118,224 0 712,437 Total 11,639,942 3,486,221 2,141,159 128,335 0 17,395,657 The fair value of the instruments which do not feature a low default risk (non-investment grade) amounts to €685 million. UNIQA expects effects from the conversion to IFRS 9 both as a result of the new classification and measurement 116 rules and due to the new impairment model. In this re- gard, possible initial application and subsequent measure- ment effects are to be expected in the category “Variable- income securities” in particular, as these financial assets will have to be measured at fair value through profit or loss in future. In a holistic view, interactions with IFRS 17 must also be taken into account in this context. For the further course of the project, the focus is on the parallel phase in order to analyse the financial effects of the differ- ences between IAS 39 and IFRS 9 even further. IFRS 17 – Insurance Contracts The IASB (International Accounting Standards Board) decided on 17 March 2020 to postpone the date of initial application of IFRS 17 by two years from 1 January 2021 to 1 January 2023. The IASB also decided to align the effective date for IFRS 9 for insurance companies with IFRS 17 to 1 January 2023. At the next stage, the EFRAG (European Financial Reporting Advisory Group) will work on the recommendation to the European Commission regarding the adoption of IFRS 17 into EU law. IFRS 17 establishes principles relating to recognition, measurement, presentation and disclosures of insurance contracts. An essential element of the standard is a general measurement model, according to which all insurance contracts are to be valued on the basis of a prospective model. This involves combining current values (best estimate cash flows) plus a risk margin with a mode for distributing the future profit from the contracts (contractual service margin). The contractual service margin is the equivalent of the expected future profit from contracts held in the respective portfolio and thus creates a high degree of transparency with regard to UNIQA’s future profitability. This margin is a residual figure and its amount depends significantly on the best estimate of future cash flows, the discount rate and the method used to determine the risk margin. For short-term insurance contracts, there is an option to use a simplified measurement model. UNIQA will primarily value and account for insurance contracts from the property and casualty insurance area based on the premium allocation approach. There is a mandatory special model (variable fee approach) for participating contracts and contracts of unit-linked and index-linked life insurance. The variable fee approach is expected to be applied at UNIQA in health insurance and in life insurance. For both, the general measurement model and the variable fee approach, UNIQA assumes at the time of publication of the Group report that the so-called OCI option will be applied where the respective allocated financial instruments on the asset side are also measured through other comprehensive income. The objective of applying this option is to reduce volatility in the financial position and income statement. Since IFRS 17 is expected to lead to significant changes in the accounting and measurement of UNIQA’s core business, a separate project team consisting of actuaries, accountants, controllers and IT experts has been appointed, and it reports to a central programme management. This organisation was set up concurrently in all affected UNIQA subsidiaries in order to provide support in defining the requirements of the respective local characteristics and the product features for the entire UNIQA Group. In order to adequately reflect the complexity of the standard, UNIQA decided to implement an insurance subledger. In the course of its implementation, characteristic sample business transactions, so-called use cases, were developed for all existing product groups in the entire UNIQA portfolio. These sample business transactions reflect the technical interpretation of IFRS 17 from UNIQA’s point of view and illustrate the configuration plan for the insurance subledger. They are the core of the new software solution. The sample business transactions were created in close cooperation with the actuaries, accountants and the technical implementation team and shared with the UNIQA Group subsidiaries in a two-stage feedback process. In the course of numerous workshops and feedback rounds, specific features of the product landscapes of the individual subsidiaries were updated and integrated in the pool of use cases. The functional and technical design of the core of the reporting and process environment required under IFRS 17 was continued in the 2020 financial year. In addition to the use cases, various IFRS 17 technical concepts in the actuarial and accounting areas were shared with the subsidiaries in 2020 and expanded to include their features and specifics. The integration and preparation of the data required for the measurement of 117CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S and accounting for insurance contracts represents a key challenge in implementing IFRS 17. Significant progress was achieved here in the 2020 financial year. The effects and interaction of IFRS 9 and IFRS 17 on the financial position and income statement of selected UNIQA companies were analysed in the past financial year. This analysis was based on several simplifications and assumptions. For example, in health and life insurance business lines, the future expected cash flows were based on the results of the market consistent embedded value (MCEV). In addition, an approximate cost allocation according to IFRS 17 was applied in the analysis. A simplified approach was also used to derive the risk adjustment. Despite simplifications and estimates, important lessons have been learned: The comparability of IFRS 4 and IFRS 17 is limited due to the fundamental differences between the two accounting standards. Despite certain similarities with the solvency regulations under Solvency II, the interpretation of the results according to IFRS 17 is a great challenge due to the significantly increased complexity. In addition, the parameters for measuring the success of the company will change and new indicators such as the contractual service margin or loss component will be added. In order to ensure that the measurement of insurance contracts is in accordance with the provisions of IFRS 17, much larger volumes of data need be processed and validated compared to IFRS 4. In the course of the impact analysis, all three measurement models described above (general measurement model, variable fee approach and premium allocation approach) were applied specifically to the portfolio of selected UNIQA companies. Due to the continued limited scope of this impact analysis, no conclusions can be drawn regarding the impact of IFRS 17 on the Group as a whole. 38. Error correction and change in accounting policies pursuant to IAS 8 A change in the impairment test model A change in the impairment test model results in an im- pairment of goodwill allocated to CGU Bulgaria and Ro- mania in the amount of €54,600 thousand for the 2019 fi- nancial year. In the revised impairment test the determi- nation of the cash flow in the perpetuity and the discount rate has been adjusted. The adjustment is implemented based on an audit by the Austrian Audit Agency for Financial Reporting (OePR). This showed that the growth assumptions used in the model and the discount rates also need to be changed. Following review and evaluation of these findings by UNIQA Insurance Group AG, there is an impairment of goodwill of CGU Bulgaria in the amount of €19,200 thou- sand and of CGU Romania in the amount of €35,400 thousand. Adjustments of deferred profit participation In preparation for the initial application of IFRS 17 (Insur- ance Contracts) which is to be applied from 1 January 2023, it was discovered that deferred profit participation was not accounted for in health insurance. Due to this er- ror correction, a provision for deferred profit participation is being recognised – with retroactive effect from 1 Janu- ary 2019 – for contracts in health insurance that involve profit participation. The amount of the provision for the deferred profit participation is determined by taking into account the amounts from endowed profit participations deducted in previous years. In the course of this correction the same content is also being changed retroactively in the accounting method for life insurance, in order to achieve a uniform presentation. For this purpose – as in health in- surance – a deduction of the endowed profit participations of the previous years is made. The corrections and changes in accounting policies relate exclusively to the UNIQA Austria segment. 118 Equity and liabilities In thousand 1/1/2019 published Change in the impairment test model Deferred profit participation 1/1/2019 adjusted Equity Portion attributable to shareholders of UNIQA Insurance Group AG Subscribed capital and capital reserves 1,789,923 1,789,923 Treasury shares ‒16,614 ‒ 16,614 Accumulated results 1,198,803 24,896 1,223,699 2,972,112 24,896 2,997,008 Non-controlling interests 14,438 14,438 2,986,550 24,896 3,011,446 Liabilities Technical provisions 17,336,358 ‒12,143 17,324,215 Deferred tax liabilities 254,999 ‒ 12,752 242,246 25,517,251 ‒24,896 25,492,355 Total equity and liabilities 28,503,801 0 0 28,503,801 Assets In thousand 31/12/2019 published Change in the impairment test model Deferred profit participation 31/12/2019 adjusted Intangible assets 1,641,116 ‒ 54,600 1,586,516 Total assets 28,728,409 ‒54,600 28,673,809 Equity and liabilities In thousand 31/12/2019 published Change in the impairment test model Deferred profit participation 31/12/2019 adjusted Equity Portion attributable to shareholders of UNIQA Insurance Group AG Subscribed capital and capital reserves 1,789,923 1,789,923 Treasury shares ‒16,614 ‒ 16,614 Accumulated results 1,627,714 ‒ 54,600 21,296 1,594,410 3,401,023 ‒ 54,600 21,296 3,367,719 Non-controlling interests 19,399 19,399 3,420,422 ‒ 54,600 21,296 3,387,118 Liabilities Technical provisions 17,791,006 ‒ 3,106 17,787,900 Deferred tax liabilities 375,729 ‒ 18,190 357,539 25,307,986 ‒21,296 25,286,690 Total equity and liabilities 28,728,409 ‒54,600 0 28,673,809 119CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Consolidated income statement In thousand 1‒ 12/2019 published Change in the impairment test model Deferred profit participation 1‒ 12/2019 adjusted Insurance benefits Gross ‒ 3,756,264 ‒ 9,023 ‒3,765,286 ‒3,657,078 ‒ 9,023 ‒ 3,666,100 Technical result 99,526 ‒ 9,023 90,504 Operating profit/(loss) 354,872 ‒9,023 345,850 Amortisation of VBI and impairment of goodwill ‒ 4,562 ‒54,600 ‒59,162 Earnings before taxes 295,667 ‒54,600 ‒9,023 232,045 Income taxes ‒59,172 2,219 ‒ 56,953 Profit/(loss) for the period 236,496 ‒ 54,600 ‒ 6,804 175,092 of which attributable to shareholders of UNIQA Insurance Group AG 232,360 ‒54,600 ‒ 6,804 170,956 of which attributable to non-controlling interests 4,135 4,135 Earnings per share (in ) 0.76 0.56 39.Currency translation Functional currency and reporting currency The items included in the financial statements for each operating subsidiary are measured based on the currency that corresponds with the currency of the primary eco- nomic environment in which the subsidiary operates (functional currency). The consolidated financial state- ments are prepared in euros which is UNIQA’s reporting currency. Transactions in foreign currencies Transactions in foreign currencies are translated into the functional currency of the Group entity at the exchange rate on the date of the transaction or, in the case of re- measurement, at the time of measurement. Monetary assets and liabilities denominated in a foreign currency on the reporting date are translated into the functional currency at the closing rate. Non-monetary as- sets and liabilities measured at fair value in a foreign cur- rency are translated at the rate valid on the date the fair value is calculated. Currency translation differences are generally recognised in profit/(loss) for the period. Non- monetary items recognised in a foreign currency at histor- ical cost are stated with the historical exchange rate. This results in no currency translation difference. Currency translation differences from equity instruments available for sale are recognised in other comprehensive income by way of derogation from the general principle. An exception to this are impairments for which currency translation differences are reclassified from other com- prehensive income to profit/(loss) for the period. Foreign operations Assets and liabilities from foreign operations, including the goodwill and fair value adjustments that result from the acquisition, are translated into euros at the closing rate on the reporting date. Income and expenses from for- eign operations are translated at the monthly closing rates. Currency translation differences are reported in other comprehensive income and recognised in equity as a part of the accumulated profits in the item “Differences from currency translation” if the foreign exchange difference is not attributable to non-controlling interests. Currency translation differences from the share of the carrying amount in the consolidated income statement and at- tributable to the amortised cost are recognised in the item “Available-for-sale financial assets”. 120 Major exchange rates EUR closing rates EUR average rates 31/12/2020 31/12/2019 1‒12/2020 1‒12/2019 Czech koruna (CZK) 26.2420 25.4080 26.4138 25.6638 Hungarian forint (HUF) 363.8900 330.5300 352.2423 325.3846 Croatian kuna (HRK) 7.5519 7.4395 7.5355 7.4198 Polish z³oty (PLN) 4.5597 4.2568 4.4518 4.2992 Romanian leu (RON) 4.8683 4.7830 4.8379 4.7434 Ukrainian hryvnia (UAH) 34.6022 26.6796 30.9282 28.9962 Russian rouble (RUB) 91.4671 69.9563 83.1271 72.7949 US dollar (USD) 1.2271 1.1234 1.1452 1.1214 Significant events after the reporting date In early March 2021, the Austrian Supreme Court ruled in favour of the insurance industry in connection with busi- ness interruptions arising from Covid-19. In this decision, the Court clarified that a coverage obligation on the part of the insurer from the business interruption caused by the epidemic only applies in the case of a business closed due to the Austrian Epidemic Act, but not based on a ban on entry and access ordered under the Austrian Covid-19 Measures Act. This is expected to have a positive impact on claim payments in the 2021 financial year. Risk Report 40. Risk strategy Principles UNIQA’s strategic objectives are directly linked to the company’s risk strategy. The cornerstones of the risk strat- egy are based on the business strategy and the risks it en- tails. A clear definition of the risk preference creates the foundation for all business policy decisions. Organisation UNIQA’s core business is to relieve customers of risk, pool the risk to reduce it and thereby generate profit for the company. The focus is on understanding risks and their particular features. To ensure a strong focus on risk, UNIQA has created a separate risk function on the Group’s Management Board with a Group Chief Risk Officer (CRO) who is also acting concurrently as Group Chief Financial Officer (CFO). In the Group companies, the Chief Risk Of- ficer is also a part of the Management Board. This ensures that decision-making is risk-based in all relevant bodies. UNIQA has established processes that make it possible to identify, analyse and manage risks. The risk profile is regularly validated at all levels of the hi- erarchy and discussions are held in specially instituted committees with the members of the Management Board. Internal and external sources are consulted to obtain a complete picture of the risk situation. UNIQA regularly checks for new threats both in the Group and in the sub- sidiaries. Risk-bearing capacity and risk appetite UNIQA assumes risk in full awareness of its risk-bearing capacity. This is defined as the capacity to absorb potential losses from extreme events so that medium- and long- term objectives are not put in danger. The Solvency Capital Requirement (SCR) is at the centre of risk-related decisions. The SCR corresponds with a company-specific risk assessment based on a partial inter- nal model for market risks and non-life risks, as well as on the standard model according to Solvency II for the other risk categories. As such, it corresponds with the regulatory risk calculations under the Solvency II framework. We are aiming for risk capital cover (capital requirement ratio) of more than 170 per cent based on this approach. Immediate steps will be taken to improve the capital position if the marginal value falls below 135 per cent. Details for the re- porting date as at 31 December 2020, including a detailed analysis of changes, can be found in the “Group Capital” presentation. Non-quantifiable risks, in particular operational risk, liti- gation risk and strategic risk are identified and assessed as part of the risk assessment process. This assessment is then used as the basis for implementing any necessary risk mitigation measures. UNIQA’s risk strategy specifies the risks the company in- tends to assume and those it plans to avoid. Within the scope of the strategy process, risk appetite is defined based on UNIQA’s risk-bearing capacity. This risk appetite is then used to determine tolerances and limits, which pro- vide a sufficient early warning system for the company to initiate prompt corrective action in the event of any devia- tion from targets. UNIQA counters risks that fall outside the defined risk appetite, such as reputational risk, with proactive measures, transparency and careful assessment. 121CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Opportunities Risk also means opportunity. UNIQA analyses trends and risks that influence the society and thus customers and the company itself. Employees throughout the company are involved in order to recognise and analyse trends at an early stage, produce suitable action plans and develop in- novative approaches. 41. Risk management system The focus of risk management with management struc- tures and defined processes is the attainment of UNIQA’s and its Group companies’ strategic goals. UNIQA’s Risk Management Guidelines form the basis for a uniform standard at various company levels. The guide- lines are approved by the CFO/CRO and the Group Execu- tive Board and describe the minimum requirements in terms of organisational structure and process structure. In addition to the Group Risk Management Guidelines, similar guidelines have also been prepared and approved for the Group companies. The Risk Management Guide- lines at company level were approved by the Management Board of the UNIQA Group companies and are consistent with UNIQA’s Risk Management Guidelines. Organisational structure (governance) The detailed setup of the process and organisational struc- ture of risk management is set out in UNIQA’s Risk Man- agement Guidelines. They reflect the principles embodied in the concept of “three lines of defence” and the clear dif- ferences between the individual lines of defence. First line of defence: risk management within the busi- ness activity Those responsible for business activities must develop and put into practice an appropriate risk control environment to identify and monitor the risks that arise in connection with the business and processes. Second line of defence: supervisory functions including risk management functions The risk management function and the supervisory func- tions, such as controlling, must monitor business activities without encroaching on operational activities. Third line of defence: internal audit This enables an independent review of the formation and effectiveness of the entire internal control system, which comprises risk management and compliance (e.g. internal auditing). 122 The relevant responsibilities are shown accordingly in the overview above. In addition, the Supervisory Board at UNIQA Insurance Group AG receives comprehensive risk reports at Supervisory Board meetings. Risk management process UNIQA’s risk management process delivers periodic infor- mation about the risk profile and enables the top manage- ment to make the decisions for the long-term achievement of objectives. The process concentrates on risks relevant to the company and is defined for the following classes of risk: Market risk/Asset-Liability Management risk (ALM risk) Credit risk/default risk Liquidity risk Concentration risk Underwriting risk (property and casualty insurance, health and life insurance) Operational risk Emerging risk Reputational risk Contagion risk Strategic risk 123CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S A Group-wide, standardised risk management process reg- ularly identifies, evaluates and reports on risks to UNIQA and its Group companies within these categories of risk. Risk identification is the starting point for the risk man- agement process, systematically recording all major risks and describing them in as much detail as possible. In order to conduct as complete a risk identification as possible, different approaches are used in parallel, and all catego- ries of risk, subsidiaries, processes and systems are included. The risk categories of market risk, underwriting risk and default risk are evaluated at UNIQA by means of quantita- tive methods either based on the Solvency II standard ap- proach or the partial internal model (for non-life or mar- ket risks). Furthermore, risk drivers are identified for the results from the standard approach, and analysed to assess whether the risk situation is adequately represented (in accordance with the Company’s Own Risk and Solvency Assessment (ORSA)). All other categories of risk are evaluated quantitatively or qualitatively with their own risk scenarios. 42. Activities and objectives in 2020 Based on external and internal developments, activities in 2020 focused on the following: Covid-19 AXA integration Review of Solvency II (holistic impact assessment) GRC tool implementation The world was affected by the global Covid-19 pandemic earlier this year, and this has had a significant impact on many nations around the world, on the global economic system and, as a result, on the solvency position of insur- ance companies. UNIQA therefore set up a crisis manage- ment team in which a group of experts from different ar- eas regularly monitors developments associated with the spread of the coronavirus as well as the effects on UNIQA in order to be able to make decisions and implement the corresponding measures. The challenge of having all em- ployees work remotely was mastered within a very short time, meaning that business was able to continue with al- most no problems. The crisis management team continues to monitor further developments with the pandemic in or- der to be able to implement measures at short notice if necessary. Due to strong capitalisation in recent years, UNIQA al- ready actively expressed its interest and willingness some time ago to make an acquisition in its core markets in Cen- tral and Eastern Europe. On 7 February 2020 UNIQA offi- cially announced the acquisition of AXA’s subsidiaries in Poland, the Czech Republic and Slovakia, which was com- pleted on 15 October 2020. This transaction involving the AXA subsidiaries significantly increased UNIQA’s market share and led UNIQA to become the fifth largest player in the CEE market. The preparations and activities for inte- grating the processes and employees from the new compa- nies into the UNIQA Group began in 2020. This topic con- tinues to affect UNIQA in the fourth quarter of 2020 and beyond, with a merger of the AXA companies with the UNIQA companies being the next step planned. As stated above, the greatest challenge will be the integration of all the processes, employees and IT systems. As in the previous year, the topic of the Solvency II Review continued to occupy UNIQA in 2020. The European Insur- ance and Occupational Pensions Authority (EIOPA) al- ready published extensive consultation papers in 2019, containing a total of 19 topics divided into two consulta- tion waves. These waves dealt with both qualitative (e.g. Group supervision, macro-prudential issues, reporting and disclosure) and quantitative topics (e.g. risk-free rate, risk margin, SCR, own funds). Although the review of Sol- vency II is not binding in nature, the initial proposals already determine the direction in which the entire Sol- vency II framework may change. EIOPA carried out two holistic impact assessments in 2020 on this topic in order to gain an overview of the quantitative impact of the pro- posals. UNIQA took part in these assessments. There is therefore a project in place with a group of experts analys- ing the impact of this review on the company. This will enable UNIQA to prepare for upcoming changes in good time and mitigate the risk of being unable to meet future regulatory requirements. UNIQA has been working intensively on expanding the concept of its internal control system (ICS) in recent years. The primary focus in 2020 was on creating an IT so- lution for this. A Governance, Risk & Compliance (GRC) tool was introduced in order to support implementation of the ICS through the systems. The challenge here in partic- ular was in the conceptual coordination of four areas (compliance, security management, data protection and risk management) and then reflecting this in the tool. 124 43. Challenges and priorities in risk management for 2021 Capital market environment The current capital market environment is a topic that will continue to occupy UNIQA in 2021. Last year was also characterised by a low interest rate environment. In addi- tion, the Covid-19 pandemic caused interest rates to drop sharply in early 2020 along with a strong increase in spreads and losses on the equity markets. The stock mar- kets saw some of the most dramatic daily losses in history. The risk premiums (spreads) – in particular but not only for corporate bonds – rose sharply and recorded move- ments in some cases similar to those during the financial crisis of 2008–2009. Interest rates reached almost historic lows. Even though the situation has stabilised at present and the worst seems to be over for the moment, the overall situation and further developments still entail a good deal of uncertainty. This topic therefore represents a major challenge for UNIQA. UNIQA will continue to monitor the capital market environment closely in 2021 in order to be able to respond quickly to potential movements (triggered e.g. by another wave of Covid-19). Sustainability Sustainability is one of the topics that has become increas- ingly important in recent years, both in the applicable reg- ulations as well as in terms of public perception. UNIQA established a separate group for this topic in the “HR & Brand” Management Board department at the beginning of 2020 in order to account for this trend. The focus for risk management is particularly on managing and han- dling sustainability risks. A working group was set up for this reason with the objective of monitoring the various developments in the area of sustainability regulation and analysing the impact on the risk management system. The output of this working group and main focus in 2021 will be on incorporating the new aspects of the requirements into the internal processes, internal regulations and re- porting. Further development of the internal model In October 2020, the decision was taken to develop UNIQA’s partial internal model into a full internal model over the next few years. With the approval of the market risk PIM approximately 80 per cent of the risk profile is al- ready covered by the partial internal model. The plan is to replace the remaining 20 per cent currently still modelled using the standard formula with an internal model. This would make UNIQA the first Austrian insurance group to have a full internal model. This project is designed to be a multi-year project that will continue beyond 2021. GRC tool rollout As mentioned in the section on activities, a GRC tool has been set up as a central instrument for managing opera- tional risk. Rolling it out across the entire Group will be one of the focal points and challenges in 2021. The focus on the one hand will be on the fact that the relevant em- ployees must be trained to work with the tool, and on the other hand that the data must be migrated into this new system. 44. Risk profile UNIQA’s risk profile is very heavily influenced by the life and health insurance portfolios of UNIQA Öster- reich Versicherungen AG. This situation means that mar- ket risk plays a central role in UNIQA’s risk profile. The Group companies in Central Europe operate in the property and casualty business linesas well as in the life and health insurance business lines. In the CEE region, the property and casualty sectors are the most dominant. This structure is important to UNIQA, because it offers a high level of diversification from the life and health insur- ance lines that dominate in the Austrian companies. The distinctive risk features of the regions are also reflected in the risk profiles determined by using the inter- nal measurement approach. Market and credit risk The strength of the market and credit risks depends on the structure of the capital investment and its allocation to the different asset categories. The table below shows invest- ments classified by asset category. Asset allocation In thousand 31/12/2020 31/12/2019 Fixed-income securities 17,577,469 16,473,243 Real estate assets 1,219,213 1,137,444 Pension fund 1,373,557 834,227 Equity investments and other stocks 822,476 794,450 Shares and equity funds 840,135 765,038 Time deposits 279,315 384,762 Other investments 207,077 235,631 Total 22,319,241 20,624,797 125CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S However, the market and credit risks not only have an im- pact on the value of investments, but also influence the level of technical liabilities. Thus, there is – particularly in life insurance – a dependence between the (price) growth of assets and liabilities from insurance contracts. UNIQA manages the income expectations and risks of assets and liabilities arising from insurance contracts as part of the asset liability management (ALM) process. The objective is to ensure sufficient liquidity while retaining the greatest possible security and balanced risk in order to achieve a return on capital that is sustainably higher than the guar- anteed performance of the technical liabilities. To do this, assets and liabilities are allocated to different accounting groups. The following two tables show the main accounting groups generated by the various product categories. Assets In thousand 31/12/2020 31/12/2019 Long-term life insurance contracts with guaranteed interest and profit participation 12,565,453 12,251,003 Long-term unit-linked and index-linked life insurance contracts 4,238,569 4,680,403 Long-term health insurance contracts 4,434,179 4,068,651 Short-term property and casualty insurance contracts 5,577,045 5,073,948 Total 26,815,246 26,074,005 These values refer to the following items: Land and buildings for own use Investment property Financial assets accounted for using the equity method Other investments Unit-linked and index-linked life insurance investments Cash and cash equivalents Technical provisions and liabilities (net) In thousand 31/12/2020 31/12/2019 Long-term life insurance contracts with guaranteed interest and profit participation 11,243,000 11,143,552 Long-term unit-linked and index-linked life insurance contracts 4,208,512 4,646,152 Long-term health insurance contracts 3,519,993 3,359,589 Short-term property and casualty insurance contracts 3,147,659 3,061,309 Total 22,119,164 22,210,602 These values refer to the following items: Technical provisions Technical provisions for unit-linked and index-linked life insurance Reinsurance liabilities (only securities account liabilities from reinsurance ceded) Reinsurers’ share of technical provisions Reinsurers’ share of technical provisions for unit-linked and index-linked life insurance The market and credit risk is broken down into interest rate, credit spread, equity, currency and market concen- tration risk. The interest rate risk arises on all asset and liability items of the statement of financial position whose value fluctu- ates as a result of changes in risk-free yield curves or asso- ciated volatility. Given the high proportion of interest- bearing securities in the assets, interest rate risk forms an important part of market risk. The interest rate risk is ac- tively managed as part of the ALM-based investment strat- egy. 126 The following table shows the maturity structure of fixed- income securities. Exposure by term In thousand 31/12/2020 31/12/2019 Up to 1 year 975,698 673,476 More than 1 year up to 3 years 1,668,822 1,888,393 More than 3 years up to 5 years 2,307,840 2,468,311 More than 5 years up to 7 years 2,579,998 2,323,011 More than 7 years up to 10 years 2,863,478 3,067,014 More than 10 years up to 15 years 2,635,322 2,503,197 More than 15 years 4,546,309 3,549,841 Total 17,577,469 16,473,243 In comparison with this, the next table shows the insur- ance provision before reinsurance in health and life insur- ance and the gross provision for unsettled claims in non- life insurance, broken down into annual brackets. In health and life insurance the breakdown takes place using expected cash flows from the ALM process. IFRS reserve by expected maturity date In thousand 31/12/2020 31/12/2019 Up to 1 year 1,015,663 1,133,007 More than 1 year up to 3 years 1,122,053 1,085,507 More than 3 years up to 5 years 1,290,754 994,309 More than 5 years up to 7 years 1,074,151 1,127,128 More than 7 years up to 10 years 1,453,751 1,490,459 More than 10 years up to 15 years 2,233,169 2,433,869 More than 15 years 8,002,000 7,226,506 Total 16,191,540 15,490,785 Since the interest rate risk is particularly relevant in life insurance as a result of the long-term liabilities, the focus below is placed on this segment. Using UNIQA Österreich Versicherungen AG as an example, the average interest rate sensitivity of life insurance in the event of a change in interest rates of +/–50 basis points for the assets is €524.0 million, and that of liabilities €655.0 million. The difference between these two values is used as the control basis for the interest rate risk or the duration gap. During the annual ALM process, it is determined from a strategic point of view which budgets for interest rate risk can be accepted at the operating company level. The discount rate that may be used in the costing when new business is written in most UNIQA companies takes into account a maximum discount rate imposed by the rel- evant local supervisory authority. In all those countries in which the maximum permissible discount rate is not imposed in this way, appropriate prudent, market-based assumptions are made by the actuaries responsible for the calculation. In our core market of Austria, the maximum interest rate beginning 1 January 2017 is 0.5 per cent per year. However, the portfolio also includes older contracts with different discount rates. In the relevant markets of the UNIQA Group, these rates amount to as much as 4.0 per cent per year. The following table provides an over- view of the average technical discount rates by region and currency. Average technical discount rates, core business by region and currency In per cent EUR USD Local currency Austria (AT) 2.2 Central Europe (CE) 3.3 3.0 Eastern Europe (EE) 3.4 3.5 3.2 Southeastern Europe (SEE) 2.2 1.7 0.6 Russia (RU) 2.5 2.5 4.0 As these interest rates are guaranteed by the insurance company, the financial risk lies in not being able to gener- ate these returns. Since classic life insurance business pre- dominantly invests in interest-bearing securities, the un- predictability of long-term interest rate trends is the most significant financial risk for a life insurance company. In- vestment and reinvestment risk arises from the fact that premiums received in the future must be invested to achieve the rate of return guaranteed when a policy is written. However, it is entirely possible that no appropri- ate securities will be available at the time the premium is received. Likewise, future income must be reinvested to achieve a return equivalent to at least the original discount rate. For this reason, UNIQA has already decided to only offer products in its key markets that are based on a low or zero discount rate. One example of this in Austria is the sale of deferred pension products with a discount rate of 0.0 per cent. The credit spread risk refers to the risk of changes in the price of asset or liability items in the financial statement, as a consequence of changes in credit risk premiums or as- sociated volatility, and is ascertained for individual securi- ties in accordance with their rating and duration. When investing in securities, UNIQA chooses securities with a wide variety of ratings, taking into consideration the po- tential risks and returns. 127CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S The following table shows the credit quality of those fixed- income securities that are neither overdue nor written down, based on their ratings. Exposure by rating In thousand 31/12/2020 31/12/2019 AAA 3,704,679 3,770,117 AA 4,337,744 4,063,442 A 4,957,442 4,135,223 BBB 3,051,150 3,191,344 BB 397,365 421,238 B 317,206 271,218 ≤ CCC 1 2,837 Not rated 811,881 617,825 Total 17,577,469 16,473,243 Equity risk arises from movements in the value of equities and similar investments as a result of fluctuations in inter- national stock markets, and therefore, stems in particular from the asset categories “Equity investments and other stocks” and “Equities”. The effective equity weighting is controlled by hedging with the selective use of derivative financial instruments. Foreign currency risk is caused by fluctuations in ex- change rates and associated volatility. Given the interna- tional nature of the insurance business, UNIQA invests in securities denominated in different currencies, thus fol- lowing the principle of ensuring matching liabilities with assets in the same currency to cover liabilities at the cov- erage fund or company level. Despite the selective use of derivative financial instruments for hedging purposes, it is not always possible on cost grounds or from an investment point of view to achieve complete and targeted currency matching between the assets and liabilities. The following tables show a breakdown of assets and liabilities by cur- rency. Currency risk 31/12/2020 In thousand Assets Provisions and liabilities EUR 25,405,823 23,317,599 USD 307,258 130,128 CZK 1,372,728 1,009,002 HUF 461,516 573,488 PLN 3,017,455 2,343,060 RON 289,071 203,474 Other 1,046,284 877,670 Total 31,900,133 28,454,421 Currency risk 31/12/2019 adjusted In thousand Assets Provisions and liabilities EUR 24,859,575 22,255,561 USD 315,363 92,359 CZK 651,244 530,656 HUF 492,803 576,893 PLN 993,648 804,969 RON 379,563 203,371 Other 981,612 844,177 Total 28,673,809 25,307,986 In addition to figures from the established market and credit risk models (MCEV, SCR, etc.), stress tests and sen- sitivity analyses are used to measure and manage market and credit risk and their components. The following tables show the most important market risks in the form of key sensitivity figures, along with their impact on equity and profit/(loss) for the period. Depend- ing on the measurement principle to be applied, any future losses from the measurement at fair value may result in different fluctuations in profit/(loss) for the period or in other comprehensive income. The key figures are calcu- lated theoretically on the basis of actuarial principles and do not take into consideration any diversification effects between the individual market risks or countermeasures taken in the various market scenarios. 128 Sensitivities for other investments are determined by simulating each scenario for each individual item, keeping all other parameters constant in each case. Market value changes that have no effect on the balance sheet include reclassified bonds and loans in the case of interest rate and credit spread risk. Interest rate risk 31/12/2020 31/12/2019 1) In thousand +50 basis points ‒ 50 basis points +50 basis points ‒50 basis points Government bonds ‒564,293 633,667 ‒ 432,715 478,340 Corporate bonds (incl. covered) ‒198,932 207,914 ‒ 193,807 205,992 Other ‒ 32,159 38,838 ‒8,366 15,098 Total ‒795,383 880,419 ‒634,888 699,430 Of which income statement 3,179 194 1,725 3,746 Of which equity ‒798,563 880,225 ‒ 636,613 695,684 Credit spread risk 31/12/2020 31/12/2019 1) In thousand +50 basis points +50 basis points Income statement 503 ‒930 Equity ‒ 877,721 ‒ 672,726 Total ‒ 877,218 ‒ 673,656 Equity risk 31/12/2020 31/12/2019 1) In thousand ‒25% ‒ 25% Income statement ‒33,160 ‒74,691 Equity ‒ 166,949 ‒ 120,425 Total ‒ 200,110 ‒ 195,117 1 ) The adjustment to the sensitivity calculation was made as a result of the changed market environment and in line with current market practice. Currency risk 31/12/2020 31/12/2019 In thousand 10% ‒10% 10% ‒10% PLN 146,247 ‒ 146,247 51,970 ‒ 51,970 USD 14,494 ‒ 40,788 24,921 ‒50,962 CZK 65,034 ‒ 65,098 40,396 ‒30,432 RUB 22,491 ‒ 22,491 26,206 ‒26,206 HUF 16,112 ‒16,112 17,283 ‒ 17,283 Other 43,532 ‒ 46,942 53,026 ‒57,559 Total 307,910 ‒ 337,678 213,802 ‒234,412 Of which income statement 183,189 ‒217,999 203,222 ‒223,833 Of which equity 124,721 ‒119,679 10,580 ‒ 10,580 In life insurance the interest rate assumptions are the crucial influencing factor on the liability adequacy test and deferred acquisition costs. The impact of the implied new funds assumption (including reinvestment) is there- fore stated below. If new funds are assumed with a +100 bp increase, then the resulting net effect (after accounting for the deferred profit participation) amounts to €8.5 million. A –100 bp reduction in this assumption results in a net effect of €–9.0 million. The effects described relate to the changes in deferred acquisition costs along with the impact on the liability adequacy test. The results were determined using the traditional business in Austria which makes up the majority of insurance provision in the Group. In non-life insurance, the provision for unsettled claims is formed based on reported claims and applying accepted statistical methods. One crucial assumption here is that the pattern of claims observed from the past can be sensi- bly extrapolated for the future. Additional adjustments need to be made in cases where this assumption is not pos- sible. The calculation of claim provisions is associated with un- certainty based on the time required to process claims. In 129CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S addition to the normal chance risk, there are also other factors that may influence the future processing of the claims that have already occurred. In particular, the re- serving process for court damages in property and casualty insurance should be mentioned here. A reserve estimate is prepared here for these damages based on expert assess- ment, although this estimate can be exposed to high levels of volatility specifically with major damage at the start of the process for collecting court costs. The partial internal model in property and casualty insur- ance is a suitable instrument for quantifying the volatility involved in processing. Pursuant to analysis of these model results, it was determined that a deviation of 5 per cent from the basic provision calculated may repre- sent a realistic scenario. Based on the current provision for unsettled claims of €3,068.0 million (excluding additional provisions such as provisions for claim settlement) in the Group on a gross basis, this would mean an increase in claims incurred by €153.0 million. Health insurance similar to life technique is now also af- fected by the period of low interest rates. Since 1 January 2018 only tariffs with the 1.0 per cent discount rate are be- ing sold. That fact, together with the tariffs sold in 2017 at the discount rate of 1.75 per cent, further reduces the aver- age discount rate. A reduction in the capital earnings by 100 bp (based on investment results 2019) would reduce the earnings before taxes by €38.2 million. Liquidity risk Ongoing liquidity planning takes place in order to ensure that UNIQA is able to meet its payment obligations over the next twelve months. Obligations with a term of more than twelve months are covered by investments with matching maturities as far as possible within the framework of the ALM process and the strategic guidelines. In addition, a majority of the securi- ties portfolio is listed in liquid markets and can be sold quickly and without significant markdowns if cash is re- quired. There are underwriting obligations mainly in the form of funds from holdings in healthcare and investments in pri- vate debt, as well as in the infrastructure sector, amount- ing to €574,187 thousand (2019: €565,916 thousand). Contractual maturities at 31 December 2020 In thousand Liabilities from loans Derivative financial instruments Lease liabilities Total 2021 19,348 1,617 14,210 35,174 2022 8,250 13 11,051 19,314 2023 8,250 278 9,601 18,129 2024 8,250 0 7,393 15,643 2025 8,250 0 6,936 15,186 > 2026 641,250 0 34,891 676,141 Contractual maturities at 31 December 2019 In thousand Liabilities from loans Derivative financial instruments Lease liabilities Total 2020 900 436 8,888 10,224 2021 11,104 233 7,757 19,094 2022 0 0 7,334 7,334 2023 0 0 5,801 5,801 2024 0 0 4,452 4,452 > 2025 0 1 33,514 33,515 130 Contractual maturities at 31 December 2020 In thousand Notional amount 1) Coupon payments Total 2021 0 60,563 60,563 2022 0 60,563 60,563 2023 350,000 60,563 410,563 2024 0 36,500 36,500 2025 200,000 36,500 236,500 > 2026 500,000 30,000 530,000 Contractual maturities at 31 December 2019 In thousand Notional amount 1) Coupon payments Total 2020 0 54,063 54,063 2021 0 54,063 54,063 2022 0 54,063 54,063 2023 350,000 54,063 404,063 2024 0 30,000 30,000 > 2025 500,000 60,000 560,000 1) Contractual maturities based on the first possible termination date Concentration risks UNIQA strives to keep concentration risks as low as pos- sible. These could arise, for example, from the transfer of insur- ance business to individual reinsurance companies to an inappropriate extent. This can have a material influence on UNIQA’s result in case of late payment (or non-pay- ment) by an individual reinsurer. UNIQA controls such risks with an internal reinsurance company that is respon- sible for selecting external reinsurance parties, taking into account strict guidelines for avoiding material concentra- tion risks. However, concentration risk can also arise among other things from the composition of balance sheet items re- ported in the assets. Throughout the investment period, the company continuously checks to ensure that the in- vestment volumes in securities of individual issuers do not exceed certain limits in relation to the total investment volume, defined according to the respective credit rating. Underwriting risks The underwriting risks are divided into non-life, life and health insurance. The underwriting risk in non-life is broken down into the three risk categories of premium, reserve and catastrophe risk. Premium risk is defined as the risk that future benefits and expenses in connection with insurance operations will exceed the premiums collected for the insurance con- cerned. Such a loss may also be caused in insurance opera- tions by exceptionally significant, but rare loss events, known as major claims or shock losses. Natural catastro- phes represent a further threat from events that are infre- quent but that nevertheless cause substantial losses. This risk includes financial losses caused by natural hazards, such as floods, storms, hail or earthquakes. In contrast to major individual claims, insurance companies in this case refer to cumulative losses. 131CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Reserve risk refers to the risk that technical provisions recognised for claims that have already occurred will turn out to be inadequate. The loss in this case is referred to as settlement loss. The claim reserve is calculated using actu- arial methods. External factors, such as changes in the amount or frequency of claims, legal decisions, repair and/or handling costs, can lead to differences compared with the estimate. To counter and actively manage these risks, UNIQA runs a number of processes integrated into its insurance opera- tions. For example, a Group Policy specifies that new prod- ucts may only be launched if they satisfy certain profitabil- ity criteria. Major claims and losses from natural catastro- phes are appropriately managed by means of special risk management in the underwriting process (primarily in corporate activities) and by the provision of suitable rein- surance capacity. In connection with claim reserves, guidelines also specify the procedures to be followed by local units when recog- nising such reserves in accordance with IFRSs. A quarterly monitoring system and an internal review process safeguard the qual- ity of the reserves recognised in the whole of the Group. An essential element in risk assessment and further risk management is the use of the non-life partial model. This risk model uses stochastic simulations to quantify the risk capital requirement for each risk category at both com- pany and Group levels. The entities acquired by AXA in Poland, the Czech Repub- lic and Slovakia are still measured according to the EIOPA standard model as at 31 December 2020. They will be inte- grated into the Group model in 2021. In life insurance, the underwriting risk is generally de- fined as the risk of loss or adverse developments affecting the value of insurance liabilities. It is divided into the cate- gories mortality, longevity, disability-morbidity, lapse, ex- pense, revision and catastrophe risk. The mortality risk depends on possible fluctuations in mortality rates due to an increase in deaths which would have an adverse effect on the expected benefits to pay on risk insurance policies. Longevity risk refers to the adverse effects of random fluc- tuations in mortality rates due to a decline in the mortality rate. The insurer is thereby exposed to the risk that the an- ticipated life expectancy in the calculation of the premium will be exceeded in reality and that the expenditure for pension payments will be higher than planned. The disability-morbidity risk is caused by possible adverse fluctuations in disability, sickness and morbidity rates compared to what they were at the time the premium was calculated. The lapse risk arises from the fluctuations in policy can- cellation, termination, renewal, capital selection and sur- render rates of insurance policies. Overall, it represents the uncertainty regarding customer behaviour. The expense risk refers to adverse effects due to fluctua- tions in the administrative costs of insurance and reinsur- ance contracts. The revision risk results from fluctuations in the revision rates for annuities due to changes in the legal environ- ment. The catastrophe risk results from significant uncertainty in relation to pricing and the assumptions made in the cre- ation of provisions for extreme/exceptional events. The most relevant risk in this context is an immediate dramatic increase in mortality rates: in this case, death benefits in the risk portfolio could not be fully financed by the risk premium collected. In the context of life insurance, the main techniques for risk mitigation are the adjustment of future profit partici- pations or a corresponding premium adjustment as well as additional reinsurance policies, which are carried out in compliance with legal and contractual framework condi- tions. These measures are crucial for the underlying risk models and contain detailed information and regulations, particularly with regard to profit participation. In prac- tice, profitable new business supports the risk-bearing ca- pacity of the existing portfolio, whereby careful risk selec- tion (e.g. health checks) and cautiously chosen calculation principles for premiums are essential cornerstones when designing products. By including premium adjustment clauses, the potential to reduce risk can be improved, espe- cially in the risk and occupational disability portfolio. 132 The health insurance business is operated primarily in Austria. As a result, risk management in this line focuses mainly on Austria. Health insurance is a loss insurance which is calculated under consideration of biometric risks and is operated in Austria according to the similar to life technique. The risk categories of the underwriting risk in health in- surance with the similar to life technique are based on the subdivisions of life insurance already described above, with minor deviations. Analogous to life insurance, the main techniques for risk mitigation are the adjustment of future profit participa- tions or a corresponding premium adjustment which is carried out in compliance with legal and contractual framework conditions. These measures are crucial for the underlying risk models and contain detailed information and regulations, particularly with regard to profit partici- pation. In practice, classic risk-mitigation techniques are also relevant here. For health insurance they include: Prudent setting of the discount rate at a level that can be earned in the long term; Risk selection, i.e. a targeted pre-selection of prospective customers for insurance products, for example through health checks; Careful selection of the withdrawal probabilities (death and policy cancellation) in order to obtain sufficient pre- miums for the expected benefits; The consideration of premium adjustment clauses in various health insurance products in order to be able to adjust premiums in line with changes in the calculation principles in case of changes in the expected values. In addition to these classic risk mitigation techniques, an ongoing process for managing portfolios has been estab- lished. This process is carried out annually by determining and evaluating the need for rate adjustments. The effec- tiveness of the risk mitigation techniques described for the health business is assessed by comparing invoiced and actual benefits as well as by calculating contribution mar- gin calculations. Operational risk Operational risk includes losses that are caused by insufficient or failed internal processes, as well as losses caused by systems, human resources or external events. The operational risk includes legal risk, but not reputation or strategic risk. Legal risk is the risk of uncertainty due to lawsuits or uncertainty in the applicability or interpreta- tion of contracts, laws or other legal requirements. At UNIQA, legal risks are monitored on an on-going basis, and reports made to the Group Management Board. UNIQA’s risk management process also defined the risk process for operational risks in terms of methodology, workflow and responsibilities. The risk manager is respon- sible for compliance throughout all Group companies. A distinctive feature of operational risk is that it can sur- face in all processes and departments. This is why opera- tional risk is identified and evaluated in every operational company at a very broad level within UNIQA. Risks are identified with the help of a standardised risk catalogue that is regularly checked for completeness. According to international standards, UNIQA – as a finan- cial service provider – forms part of the critical infrastruc- ture of key importance to the national community. If this infrastructure were to fail or become impaired, it would cause considerable disruption to public safety and security or lead to other drastic consequences. As a rule, emergencies, crises and disasters are unexpected events for which it is impossible to plan, although systems and processes can be put in place to deal with such events. The systems and processes must then be treated as a spe- cial responsibility of management and must be dealt with professionally, efficiently and as quickly as possible. UNIQA has implemented a business continuity manage- ment system covering the issues of crisis prevention, crisis management and business recovery (including business emergency plans). The UNIQA BCM model is based on in- ternational rules and standards and is developed on a con- tinuous basis. 133CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Emerging risk Emerging risk refers to newly arising or changing risks that are difficult to quantify and can have a significant im- pact on an organisation. Among the main drivers of the changing risk landscape are new economic, technological, socio-political and ecological developments and the in- creasing interdependencies between them, which may lead to a growing concentration of risk. In addition, a changing business environment – the further develop- ment of regulatory rules, the increased expectations of stakeholders and the shift in risk perception – must be taken into account. Reputational risk The reputational risk describes the risk of loss that arises due to possible damage to the company’s reputation, a deterioration in prestige, or a negative overall impression due to negative perception by customers, business part- ners, shareholders or supervisory agencies. Reputational risks that occur in the course of core pro- cesses such as claim processing or advising and service quality are identified, evaluated and managed as opera- tional risks in the Group companies. Contagion risk Group risk management analyses whether the reputation risk observed in the Group or in another unit may occur, and whether the danger of “contagion” within the Group is possible. The analyses performed guard against contagion risk. Strategic risk The strategic risk refers to the risk that results from man- agement decisions or insufficient implementation of management decisions that may influence current or fu- ture income or solvency. This includes the risk that arises from management decisions that are inadequate because they ignore a changed business environment. Like opera- tional and reputational risks, strategic risks are evaluated on an ongoing basis. Sustainability risk Sustainability risks are not currently classified as a sepa- rate risk category but are allocated among the existing cat- egories. Up until now, UNIQA has identified potential sus- tainability risks with the following topics from the materi- ality analysis: clear evaluation of damage and rapid assis- tance, process for handling data and new technologies, customer information and financing, complaints manage- ment, avoidance of critical investment, employee satisfaction as well as ethics and compliance. UNIQA’s risk identification process is subject to continuous develop- ment and will also ascertain in the future whether an iden- tified risk is relevant from a sustainability point of view. According to the definition used by UNIQA this is the case if a risk exists in relation to ecological and/or social as- pects of the sustainability topics. 45. Reinsurance The Group Management Board determines, directly and indirectly, the strategic contents of reinsurance policy with its decisions regarding risk and capital policy. The structure of the purchasing of external reinsurance is linked to the risk management process, thus enabling the risk capital to be relieved. Reinsurance structures support the continuous optimisa- tion of the required risk capital and the management of the use of this risk capital. Great importance is attached to the maximum use of diversification effects. Continuous analysis of reinsurance purchasing for efficiency charac- teristics is an essential component of internal risk management processes. UNIQA Re AG in Zurich, Switzerland, is responsible for the operational implementation of these tasks. It is re- sponsible for and guarantees the implementation of rein- surance policies issued by the Group Management Board. UNIQA Re AG is available to all Group companies as the risk carrier for their reinsurance needs. 134 The assessment of the exposure of the portfolios assumed by the group companies is of central importance. Periodic risk assessments have been performed for years in the in- terest of a value-based management of the capital commit- ment. Extensive data are used to assess risk capital re- quirements for the units in question and their reinsurance programmes are structured in a targeted manner. For the property and casualty insurer, promises of perfor- mance for protection against losses resulting from natural hazards frequently represent the greatest stress on risk capital by far due to the volatile nature of such claims and the conceivable amount of catastrophic damages. UNIQA has set up a specialised unit in order to deal with this prob- lem. Exposure is constantly monitored and evaluated at the country and Group levels in cooperation with internal and external authorities. UNIQA substantially eases the pressure on its risk capital through the targeted utilisation of all applicable diversification effects and the launching of an efficient retrocession programme. UNIQA Re AG has assumed almost all of the UNIQA Group’s required reinsurance business ceded in the re- porting period. Only in the life insurance line was a por- tion of the necessary cessions given directly to external re- insurance partners. The Group assumes reasonable de- ductibles in the retrocession programmes based on risk- and value-based approaches. 135CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Approval for publication These consolidated financial statements were prepared by the Management Board as at the date of signing and ap- proved for publication. Vienna, 22 March 2021 Andreas Brandstetter Chairman of the Management Board Peter Eichler Member of the Management Board Wolf-Christoph Gerlach Member of the Management Board Peter Humer Member of the Management Board Wolfgang Kindl Member of the Management Board René Knapp Member of the Management Board Erik Leyers Member of the Management Board Klaus Pekarek Member of the Management Board Kurt Svoboda Member of the Management Board 136 Declaration of the legal representatives Pursuant to Section 82(4) of the Austrian Stock Exchange Act, the Management Board of UNIQA Insurance Group AG hereby confirms, that, to the best of our knowledge, the consolidated financial statements, which were prepared in accordance with the relevant accounting standards, give a true and fair view of the financial posi- tion, financial performance and cash flows of the Group, and that the Group management report describes the rele- vant risks and uncertainties which the Group faces. Vienna, 22 March 2021 Andreas Brandstetter Chairman of the Management Board Peter Eichler Member of the Management Board Wolf-Christoph Gerlach Member of the Management Board Peter Humer Member of the Management Board Wolfgang Kindl Member of the Management Board René Knapp Member of the Management Board Erik Leyers Member of the Management Board Klaus Pekarek Member of the Management Board Kurt Svoboda Member of the Management Board 137CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S Auditor’s Report Report on the Consolidated Financial Statements Audit Opinion We have audited the consolidated financial statements of UNIQA Insurance Group AG, Vienna, and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2020, the consoli- dated income statement, the consolidated statement of comprehensive income, the consolidated statement of cash flows and the consolidated statement of changes in equity for the financial year then ended, and the notes. In our opinion, the accompanying consolidated financial statements comply with legal requirements and give a true and fair view of the financial position of the Group as at 31 December 2020, and of its financial performance and cash flows for the financial year then ended in accordance with International Financial Reporting Standards as adopted by the EU (IFRSs) and the additional regulations of section 245a Austrian Company Code and the supple- mentary provisions of section 138 para. 8 Austrian Insur- ance Supervision Act. Basis for Opinion We conducted our audit in accordance with Regulation (EU) No. 537/2014 (hereinafter EU Regulation) and Aus- trian Generally Accepted Standards on Auditing. Those standards require the application of the International Standards on Auditing (ISAs). Our responsibilities under those provisions and standards are further described in the “Auditor’s Responsibilities for the Audit of the Consol- idated Financial Statements” section of our report. We are independent of the Group in accordance with Austrian Generally Accepted Accounting Principles and profes- sional requirements, and we have fulfilled our other ethi- cal responsibilities in accordance with these require- ments. We believe that the audit evidence we have ob- tained until the date of the auditor’s report is sufficient and appropriate to provide a basis for our opinion by this date. Key Audit Matters Key audit matters are those matters that, in our profes- sional judgment, were of most significance in our audit of the consolidated financial statements of the financial year. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a sep- arate opinion on these matters. We have structured key audit matters as follows: Description Audit approach and key observations Reference to related disclosures 1. Recognition and measurement of the restructuring provision in the course of the strategy programme UNIQA 3.0 Description In the financial year 2020, an extensive strategy pro- gramme for the upcoming years called UNIQA 3.0 was agreed and approved. An essential element of the pro- gramme is the downsizing of the workforce intended to be achieved by terminating contracts by way of mutual con- sent and agreeing on a social plan. Taking into account the planned measures, a provision in the amount of EUR 98,587k was set up. The measurement of this restructuring provision is based on discretionary decisions, estimates and assumptions, in particular with regard to the likeli- hood of whether the affected employees will accept the termination offers presented to them. Due to the matter described, we considered the recogni- tion and measurement of the restructuring provision as a key audit matter in our audit. 138 Audit approach and key observations We: examined the criteria and prerequisites for recognizing the provision, tested the systematics in deriving the assumptions and parameters for calculating the provision, checked whether these assumptions and parameters match the agreed social plan, reconciled, based on samples, the inputs taken into con- sideration in the calculation of the provision and took into consideration, in our assessment of the meas- urement of the provision at the reporting date, the find- ings established in the course of employee interviews and the actual contract terminations occurred within the ad- justment period until the date of this report. The accounting and measurement methods applied are in accordance with IFRSs. We consider the recognition and measurement of the restructuring provision to be plausi- ble and reasonable. Reference to related disclosures Refer to chapter “Use of discretionary decisions and esti- mates” under General information in the notes as well as “19. Restructuring measures” in the notes to the consoli- dated financial statements 2. Measurement of goodwill as well as of other intangible assets Description Goodwill in the amount of EUR 352,922k as well as intan- gible assets still under development in the amount of EUR 64,544k, which mainly relate to software development in the course of the renewal of the Group-wide IT systems, are tested for impairment at least once a year and addi- tionally whenever there is an indication for impairment. The impairment tests carried out for this purpose require the Management Board to make discretionary decisions, estimates and assumptions, which particularly includes budgeted cash flows in the individual cash-generating units, future market conditions, growth rates and capital costs. Changes in these assumptions as well as in the methods used may have a material impact on measure- ment. Due to the matter described, we considered the measure- ment of goodwill as well as of other intangible assets as a key audit matter in our audit. Audit approach and key observations We: evaluated work flows and the measurement approach as well as tested selected key controls, compared the accounting and measurement methods with the accounting provisions of IAS 38 and IAS 36, examined whether the calculation method of the impair- ment test is appropriate and assessed the significant dis- cretionary decisions and assumptions, verified the derivation of the capital costs and juxtaposed it to a calculation we made ourselves and compared the company planning approved by the Man- agement Board and Supervisory Board with the cash flows included in the impairment test. The accounting and measurement methods applied arein accordance with IFRSs. We consider the underlying as- sumptions and measurement parameters to be plausible and reasonable. Reference to related disclosures Refer to chapter “Use of discretionary decisions and esti- mates” under General information in the notes as well as “12. Intangible assets” in the notes to the consolidated fi- nancial statements 3. Acquisition of AXA subsidiaries in Poland, the Czech Republic and Slovakia Description On 7 February 2020, a purchase agreement was concluded with AXA and its subsidiary Sociéte Beaujon covering the acquisition of AXA subsidiaries and branches in Poland, the Czech Republic and Slovakia. The acquisition was completed after all necessary regulatory approvals were obtained as per 15 October 2020. The purchase price amounted to EUR 998,330k. 139CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S The business combination is accounted for according to IFRS 3. The assets, liabilities and contingent liabilities acquired were stated at their fair values which were determined in the course of the purchase price allocation performed. This results in preliminary net assets measured at fair value in the amount of EUR 778,653k and goodwill in the amount of EUR 219,677k. The purchase price allocation performed requires the Management Board to make discretionary decisions, esti- mates and assumptions. Changes in these assumptions may have a material impact on the fair values. Due to the matter described, we considered the business combination and in particular the purchase price alloca- tion as a key audit matter in our audit. Audit approach and key observations We: verified, based on the purchase agreements and the agreements under company law as well as the criteria de- fined in IFRS 10, the assessment made by the Manage- ment Board with regard to the control over the shares taken over and the consolidation in the consolidated fi- nancial statements, assessed the methodical approach in identifying the as- sets acquired and liabilities assumed at the acquisition date, verified the measurement methods applied and exam- ined, consulting component auditors in Poland and the Czech Republic, the determination of the identifiable as- sets acquired as well as of the liabilities and contingent liabilities assumed and examined the disclosures on the acquisition made in the notes in accordance with the requirements of IFRS 3. The accounting and measurement methods applied are in accordance with IFRSs. We consider the underlying as- sumptions and measurement parameters to be plausible and reasonable. Reference to related disclosures Refer to chapter “1. Acquisition of AXA companies” under General information in the notes Other Information Management is responsible for the other information. The other information comprises the information included in the annual report, but does not include the consolidated financial statements, the management report for the Group and our auditor’s report thereon. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other infor- mation identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge ob- tained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other in- formation that we obtained prior to the date of this audi- tor’s report, we conclude that there is a material misstate- ment of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management and the Audit Commit- tee for the Consolidated Financial Statements Management is responsible for the preparation of the con- solidated financial statements that give a true and fair view in accordance with International Financial Report- ing Standards as adopted by the EU (IFRSs) and the addi- tional regulations of section 245a Austrian Company Code and the supplementary provisions of section 138 para. 8 Austrian Insurance Supervision Act, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. 140 In preparing the consolidated financial statements, man- agement is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, mat- ters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no real- istic alternative but to do so. The Audit Committee is responsible for overseeing the Group’s financial reporting process. Auditor’s Responsibilities for the Audit of the Consoli- dated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accord- ance with the EU Regulation and with Austrian Generally Accepted Standards on Auditing, which require the appli- cation of ISAs, will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggre- gate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with the EU Regulation and with Austrian Generally Accepted Standards on Audit- ing, which require the application of ISAs, we exercise pro- fessional judgment and maintain professional skepticism throughout the audit. We also: identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures re- sponsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opin- ion. The risks of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of inter- nal control. obtain an understanding of internal control relevant to the audit in order to design audit procedures that are ap- propriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and re- lated disclosures made by management. conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast sig- nificant doubt on the Group’s ability to continue as a go- ing concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated fi- nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. obtain sufficient appropriate audit evidence regarding the financial information of the entities or business ac- tivities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opin- ion. 141CONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any signifi- cant deficiencies in internal control that we identify dur- ing our audit. We also provide the Audit Committee with a statement that we have complied with all relevant ethical require- ments regarding independence, and to communicate with them all relationships and other matters that may reason- ably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Audit Commit- tee, we determine those matters that were of most signifi- cance in the audit of the consolidated financial statements of the current period and are therefore the key audit mat- ters. We describe these matters in our auditor’s report un- less law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public in- terest benefits of such communication. Report on Other Legal and Regulatory Requirements Comments on the Management Report for the Group Pursuant to Austrian Generally Accepted Accounting Principles, the management report for the Group is to be audited as to whether it is consistent with the consolidated financial statements and as to whether the management report for the Group was prepared in accordance with the applicable legal regulations. Management is responsible for the preparation of the management report for the Group in accordance with Aus- trian Generally Accepted Accounting Principles and the provisions of the Austrian Insurance Supervision Act. We conducted our audit in accordance with Austrian standards on auditing for the audit of the management re- port for the Group. Opinion In our opinion, the management report for the Group was prepared in accordance with the applicable legal regula- tions, comprising the details in accordance with section 243a UGB, and is consistent with the consolidated finan- cial statements. Statement Based on the findings during the audit of the consolidated financial statements and due to the obtained understand- ing concerning the Group and its circumstances no mate- rial misstatements in the management report for the Group came to our attention. 142 Additional Information in Accordance with Article 10 of the EU Regulation We were elected as statutory auditor at the ordinary gen- eral meeting dated 20 May 2019. We were appointed by the Supervisory Board on 16 December 2019. Besides that, we were elected as auditor for the following financial year by the ordinary general meeting on 25 May 2020 and ap- pointed by the Supervisory Board on 30 November 2020. We have audited the Company for an uninterrupted period since 31 December 2013. We confirm that the audit opinion in the “Report on the Consolidated Financial Statements” section is consistent with the additional report to the Audit Committee re- ferred to in Article 11 of the EU Regulation. We declare that no prohibited non-audit services (Article 5 para. 1 of the EU Regulation) were provided by us and that we remained independent of the audited company in conducting the audit. Responsible Engagement Partner Responsible for the proper performance of the engage- ment is Werner Stockreiter, Austrian Certified Public Ac- countant. Vienna 22 March 2021 PwC Wirtschaftsprüfung GmbH signed: Werner Stockreiter Austrian Certified Public Accountant This report is a translation of the original report in German, which is solely valid. Publication and sharing with third par- ties of the financial statements together with our auditor’s report is only allowed if the financial statements and the man- agement report are identical with the German audited version. This auditor’s report is only applicable to the German and complete financial statements with the management report. For deviating versions, the provisions of section 281 para. 2 UGB apply. 143 141 KONZERNABSCHLUSS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any signifi- cant deficiencies in internal control that we identify dur- ing our audit. We also provide the Audit Committee with a statement that we have complied with all relevant ethical require- ments regarding independence, and to communicate with them all relationships and other matters that may reason- ably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Audit Commit- tee, we determine those matters that were of most signifi- cance in the audit of the consolidated financial statements of the current period and are therefore the key audit mat- ters. We describe these matters in our auditor’s report un- less law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public in- terest benefits of such communication. Report on Other Legal and Regulatory Requirements Comments on the Management Report for the Group Pursuant to Austrian Generally Accepted Accounting Principles, the management report for the Group is to be audited as to whether it is consistent with the consolidated financial statements and as to whether the management report for the Group was prepared in accordance with the applicable legal regulations. Management is responsible for the preparation of the management report for the Group in accordance with Aus- trian Generally Accepted Accounting Principles and the provisions of the Austrian Insurance Supervision Act. We conducted our audit in accordance with Austrian standards on auditing for the audit of the management re- port for the Group. Opinion In our opinion, the management report for the Group was prepared in accordance with the applicable legal regula- tions, comprising the details in accordance with section 243a UGB, and is consistent with the consolidated finan- cial statements. Statement Based on the findings during the audit of the consolidated financial statements and due to the obtained understand- ing concerning the Group and its circumstances no mate- rial misstatements in the management report for the Group came to our attention. 141KONZERNABSCHLUSS C O N S O L I D AT E D F IN A N C I AL S TAT EM E N T S We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any signifi- cant deficiencies in internal control that we identify dur- ing our audit. We also provide the Audit Committee with a statement that we have complied with all relevant ethical require- ments regarding independence, and to communicate with them all relationships and other matters that may reason- ably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Audit Commit- tee, we determine those matters that were of most signifi- cance in the audit of the consolidated financial statements of the current period and are therefore the key audit mat- ters. We describe these matters in our auditor’s report un- less law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public in- terest benefits of such communication. Report on Other Legal and Regulatory Requirements Comments on the Management Report for the Group Pursuant to Austrian Generally Accepted Accounting Principles, the management report for the Group is to be audited as to whether it is consistent with the consolidated financial statements and as to whether the management report for the Group was prepared in accordance with the applicable legal regulations. Management is responsible for the preparation of the management report for the Group in accordance with Aus- trian Generally Accepted Accounting Principles and the provisions of the Austrian Insurance Supervision Act. We conducted our audit in accordance with Austrian standards on auditing for the audit of the management re- port for the Group. Opinion In our opinion, the management report for the Group was prepared in accordance with the applicable legal regula- tions, comprising the details in accordance with section 243a UGB, and is consistent with the consolidated finan- cial statements. Statement Based on the findings during the audit of the consolidated financial statements and due to the obtained understand- ing concerning the Group and its circumstances no mate- rial misstatements in the management report for the Group came to our attention. 144 Imprint Owner and publisher UNIQA Insurance Group AG Commercial registry no.: 92933t Concept, advice, editorial work and design be.public Corporate & Financial Communications GmbH / www.bepublic.at Springer & Jacoby Österreich GmbH / sjaustria.com Translation and linguistic consulting ASI GmbH / www.asint.at Editorial deadline 22 March 2021 Contact UNIQA Insurance Group AG Investor Relations Untere Donaustrasse 21, 1029 Vienna, Austria Phone: (+43) 01 21175-3773 E-mail: [email protected] www.uniqagroup.com Information This is a translation of the German Group Report of UNIQA Group. In case of any divergences, the German original is legally binding. Clause regarding predictions about the future This report contains statements which refer to the future development of the UNIQA Group. These statements present estimations which were reached on the basis of all of the information available to us at the present time. If the assumptions on which they are based do not occur, the actual events may vary from the results currently expected. As a result, no guarantee can be provided for the information given. www. UNIQAgroup.com
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