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Uniqa Insurance Group AG

Interim / Quarterly Report Nov 29, 2007

764_rns_2007-11-29_dd6e4549-7e54-4019-b1db-40f3b0b2b4fc.pdf

Interim / Quarterly Report

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9-Month Report 2007 UNIQA Versicherungen AG

The insurance of a new generation

Group Key Figures

1–9/2007 1–9/2006 Change
%
3,933 3,806 +3.3
3,483 3,313 +5.1
450 493 –8.8
499 356 +40.4
1,377 1,277 +7.8
981 1,140 –13.9
681 665 +2.5
923 849 +8.8
1,113 1,311 –15.1
609 593 +2.6
2,645 2,753 –3.9
446 412 +8.1
236 190 +24.1
96 98 –1.7
777 700 +11.1
747 638 +17.1
21,943 20,389 +7.6
280 191 +46.3
+6.1
€ million
59,604
€ million
56,155

1) Incl. expenditure for deferred profit participation and premium refunds.

2) Incl. reinsurance commissions and profit shares from reinsurance business ceded.

Share key figures 1–9/2007 1–9/2006 Change
%
UNIQA share price as at 30.9. 23.22 25.00 –7.1
High 28.10 29.86
Low 21.10 22.35
Market capitalisation as at 30.9. (m million) 2,781 2,994 –7.1
Earnings per share 1.63 1.04 +55.8
Information on UNIQA shares
Securities abbreviation UQA
Reuters UNIQ.VI
Bloomberg UQA.AV
ISIN AT0000821103
Market segment Prime Market, Vienna Stock Exchange
Trading segment Official trading
Indices ATXPrime, WBI, VÖNIX
No. of shares 119,777,808
Financial calendar 2008
Cheuvreux Investor Conference, Paris 10 January 2008
Preliminary Figures 2007 Week 4, 2008
Group Report 2007, Press Conference,
Conference Call
25 April 2008
Annual General Meeting 19 May 2008
1st Quarterly Report 2008, Conference Call 30 May 2008
Ex Dividend Day, Dividend Payment Day 2 June 2008
2nd Quarterly Report 2008, Conference Call 29 August 2008
3rd Quarterly Report 2008, Conference Call 27 November 2008
  • ■Profit before taxes increased by 46.3% to €280 million.
  • Earnings per share up by 55.8% to €1.63.
  • Strong growth in Eastern Europe premiums plus 24.1%.
  • ■Results forecast for 2007 increased to €340 million (pre-tax profit).

Economic environment

Economic growth in the Euro zone continued to be extremely dynamic in the 3rd quarter of 2007, despite the crisis on the international financial markets. Whilst the credit crunch caused a setback in September, domestic demand remained very robust overall. However, the export economy no longer made such a high contribution to growth, due to the strong euro. The European Central Bank left key interest rates unchanged at 4.0% in September, while the US Federal Reserve reduced its own by 50 basis points, in order to counteract any risks to growth.

In Eastern Europe, growth weakened only negligibly in Poland, the Czech Republic and Slovakia. Growth rates in all of these countries were above 5%. Growth in these countries is still driven primarily by very high domestic demand.

Financial accounting principles, scope of consolidation

The quarterly statement of the UNIQA Group was prepared in accordance with the International Accounting Standards as well as the International Financial Reporting Standards. This interim report has been prepared in accordance with IAS 34. The scope of the fully consolidated companies was not significantly expanded during the 3rd quarter of 2007.

UNIQA sets up property insurance business in Serbia

UNIQA is the first insurer on the Serbian market to have completed the separation of its activities, and set up its own company for property insurance. Due to a new legal regulation, life insurance and non-life insurance must be operated in separate companies. Following the successful founding, UNIQA has also been offering motor vehicle insurance in Serbia since the beginning of July. In addition to having its own sales team, agents and specialist agencies, UNIQA also cooperates with vehicle test centres in the sale of the new products. The sale and service network will be further expanded in the future.

EBRD supports expansion of UNIQA

The EBRD (European Bank for Reconstruction and Development) strengthened its successful cooperation with UNIQA, which has been in place since 1998, and increased the financing framework agreement with UNIQA from €70 million to €150 million. These funds will, in future, be available to minority participations in existing UNIQA subsidiaries in Central and Eastern Europe, as well as for any other acquisitions. As the first new project under this expanded framework agreement, the EBRD is taking over 20% of UNIQA Osiguranje, currently the fifth largest insurance company in Bosnia.

Premium volume written up by 3.3%

The premium volume written of the UNIQA Group (including the savings portion of the premiums from unit- and index-linked life insurance) rose in the first three quarters of 2007 by 3.3% to €3,933 million (not including significant consolidation effects). Whilst the single premiums decreased as planned by 8.8% to €450 million, premiums in the area of recurring premium products grew during the first nine months of 2007 by 5.1% to €3,483 million. The stronger weighting of the recurring premium business was in line with strategic objectives.

In Austria, premiums rose by 3.3% to €2,682 million, despite the growth-limiting effect of the life insurance business caused by expirations in the area of bank sales. The recurring premium business recorded an increase of 1.7% to €2,488 million on the Austrian market in the first three quarters of 2007. Sales of single premium products rose by 28.6% to €194 million. Of this, the single premiums in the unit-linked life insurance increased as planned by 164.7%, whilst single premiums in classic life insurance decreased according to plan.

The growth of Group companies in Eastern Europe was also very strong in the 3rd quarter of 2007 – premiums rose by 24.1% to €579 million in the first nine months, thereby contributing 14.7% to the Group premiums (1–9/2006: 12.3%). The business volume in Western Europe was down by 9.5% to €672 million, due to the exceedingly strong life insurance business in Italy in the comparison period of the previous year. However, the recurring premium business grew by 5.8% to €514 million. Overall, the international portion of the business shifted further towards Eastern Europe, and amounted to 31.8% (1–9/2006: 31.8%) at the end of the 3rd quarter of 2007.

Including the net savings portions of the premiums from the unitand index-linked life insurance to the value of €468 million, the premium volumes earned rose by 3.1% to €3,507 million. The premiums earned according to IFRS decreased in comparison with the same period in 2006 by 1.4% to €3,040 million.

Property and casualty insurance

The premium volume written in property and casualty insurance grew in the first three quarters of 2007 by 7.7% to €1,712 million. Whilst premiums in Austria grew by 2.9% to €1,012 million, they climbed in the growth regions of Eastern Europe by 22.5% to €386 million, thereby contributing 22.6% (1–9/2006: 19.8%) to the total premiums in property and casualty insurance. Very satisfactory premium growth of 8.1% to €313 million was also achieved in the Western European markets. The premium share of Western Europe at the end of the 3rd quarter amounted to 18.3% (1–9/2006: 18.2%). The foreign share after nine months of 2007 totalled 40.9% (1–9/2006: 38.1%).

Premiums earned in property and casualty insurance increased in the first three quarters of 2007 by 7.8% to €1,377 million.

Life insurance

The situation in the life insurance line developed quite positively in the 3rd quarter of 2007. Premiums in the area of recurring premium life insurance increased by 3.0% to €1,084 million in the first nine months of 2007. On the other hand, single premiums were taken back by 8.8% to €450 million. Single premiums in classic life insurance were taken back by 51.8% to €142 million, whilst single premiums in unit-linked life insurance rose by 54.6% to €308 million. Overall, the premium volume written (incl. the savings portion of premiums from unit- and index-linked life insurance) fell slightly by 0.8% to €1,534 million. The risk premium share of unit- and index-linked life insurance included in the premiums totalled €65 million (1–9/2006: €45 million).

In Austria, revenues from policies with recurring premium payments rose marginally in the first three quarters of 2007 by 0.1% to €929 million. Whilst classic single premium business fell by 34.0% to €68 million, single premium business in the area of unit-linked life insurance climbed by 164.7% to €126 million. Overall, life insurance premiums rose by 4.1% to €1,124 million. Unit-linked life insurance also grew overproportionally in the 3rd quarter of 2007, with premiums in this area rising by 49.6% to €355 million in the first nine months of 2007.

The recurring premium business in the Western European markets developed positively, with a premium increase of 6.8% to €64 million. However, the single premium business decreased in the first three quarters of 2007 by a calculated 38.5% to €157 million, and the special situation in Italy must be considered here. Thus, the overall premium volume in life insurance in Western Europe decreased by 29.9% to €222 million.

The development of life insurance business in Eastern and southeastern Europe remained very pleasing. The UNIQA Group companies in these regions were able to increase premium volume in the first nine months of 2007 by 25.8% to €188 million. The share of premiums in Eastern Europe within the total Group life insurance premiums was, therefore, increased to 12.3% (1–9/2006: 9.7%).

The premiums earned according to IFRS stood at €981 million (–13.9%) at the end of the 3rd quarter of 2007. By comparison, the net savings portion of premiums from unit- and index-linked life insurance increased by 46.5% to €468 million. Overall, the premium volume earned in life insurance fell slightly by 0.7% to €1,449 million.

Health insurance

The premium volume written in health insurance rose in the 2007 reporting period by 2.3% to €687 million. In Austria, the premium volume grew by 2.3% to €546 million. Internationally, premiums rose by 2.5% to €141 million, contributing 20.5% to the Group's health insurance premiums (1–9/2006: 20.5%).

The earned premium income after nine months of 2007 stood at €681 million (+2.5%).

Insurance benefits down by 3.9%

After three quarters of 2007, the UNIQA Group's loss expenses and benefits paid were still below the value for the same period in 2006. The total amount of retained insurance benefits fell by 3.9% to €2,645 million.

Property and casualty insurance

The loss ratio in the property and casualty segment after reinsurance was 67.1% at the end of the 3rd quarter of 2007, which was slightly higher than the value for the previous year (1–9/2006: 66.5%), due to reserve-strengthening measures. Overall, insurance benefits in the reporting period rose by 8.8% to €923 million.

The combined ratio after reinsurance improved slightly in the 3rd quarter of 2007 compared to the 1st half of 2007, to stand at 99.4% (1–6/2007: 99.6%; 1–9/2006: 98.7%) after three quarters of 2007. Before taking reinsurance into consideration, the combined ratio was 98.0% (1–9/2006: 96.1%). Adjusted for the storm damage from the 1st quarter of 2007 ("Kyrill"), the combined ratio for the 1st nine months of 2007 was 98.8% after reinsurance and 94.9% before reinsurance.

Life insurance

Consistent with the decline in the single premium business, the life insurance benefits fell during the reporting period by 15.1% to €1,113 million.

Health insurance

Insurance benefits, including the change to the actuarial provision in health insurance, rose in the first nine months of 2007 by 2.6% to €609 million.

Group cost ratio at 22.2%

Total operating expenses for the insurance business, including reinsurance commissions received, rose in the first nine months of 2007 by 11.1% to €777 million. This increase was largely influenced by the positive development of new business, in particular, by the increased business volume of the Eastern European Group companies and the strong growth of unit-linked life insurance in Austria. In addition, this also includes the costs for the ongoing dynamisation projects for enhancing organic growth in Eastern Europe, within the framework of the profit improvement programme.

Acquisition expenses rose here by 14.8% to €585 million and continue to be influenced, in line with the development of new business, by considerably lower relief, amounting to €27 million from the change of deferred acquisition costs, than in the previous year. Other operating expenses rose only marginally by 1.1%, amounting to €193 million at the end of the 3rd quarter of 2007.

The cost ratio, i.e. the relationship of total operating expenses to the Group premiums earned, including the savings portion of the premiums from unit- and index-linked life insurance – including the reinsurance commissions received – stood at 22.2% (1–9/2006: 20.6 %) after three quarters. Excluding the change in deferred acquisition costs, the cost ratio stood at 22.8% (1–9/2006: 22.0%).

Property and casualty insurance

Total operating expenses in property and casualty insurance increased in the reporting period by 8.1% to €446 million. Acquisition costs increased by 9.2% to €330 million. Other operating expenses rose marginally compared to premium growth by 5.1% to €116 million.

The cost ratio in property and casualty insurance was, therefore, 32.4% (1–9/2006: 32.3%) after the first nine months of 2007, including the reinsurance commissions received.

Life insurance

In life insurance, total operating expenses rose in the first three quarters of 2007 by 24.1% to €236 million. Acquisition costs increased by 31.6% to €192 million. This rise in acquisition expenses can be traced to ongoing satisfactory new business. The 3rd quarter of 2007 also witnessed increased expenses from the change in deferred acquisition costs to the value of €26 million, in line with the development of new business. Adjusted for the effect of the change in deferred acquisition costs, acquisition expenses increased by 11.4%. Other operating expenses fell by 0.4% to €44 million. Reinsurance commissions received decreased by €4 million to €7 million.

Including the reinsurance commissions received, the cost ratio in life insurance was 16.3% (1–9/2006: 13.0%) during the reporting period. Excluding the change in deferred acquisition costs, the cost ratio stood at 16.4% (1–9/2006: 15.0%).

Health insurance

Total operating expenses decreased in the first nine months of 2007 by 1.7% to €96 million. Acquisition costs increased by 2.7% to €63 million. Other operating expenses (including reinsurance commissions received) fell by a sharp 9.2% to €33 million.

The cost ratio of health insurance after three quarters of 2007 was 14.1% (1–9/2006: 14.7%).

Investments grew by 7.6%

As at 30 September 2007, the UNIQA Group was able to increase capital investments (incl. land and buildings used by the Group, real estate held as financial investments, shares in associated companies and the investments of unit- and index-linked life insurance) in comparison with the same point of time in 2006 by 7.6% or €1,554 million, to a total of €21,943 million.

Net investment income grew in the first nine months of 2007 by 17.1% to €747 million. The capital investment results for the reporting period included the effects of the capital increase of STRABAG SE in the 3rd quarter of 2007, and the disposal of shares in this company to the value of around €145 million.

The "sub-prime crisis" on the US mortgage market and the subsequent liquidity crisis in the market for Asset Backed Securities (ABS) led, in combination with downgradings of such structures by the ratings agencies, to falls in value in this investment category. The lack of liquidity in the ABS market partially resulted in valuations ("markto-market") that are significantly below the values based on a "markto-model" approach, which takes the actual financial fundamentals of investments into consideration. Regardless of this, UNIQA has based its valuations on the current lower market values. Substantial real

Further downgradings by ratings agencies since the end of September have led to additional strains being placed on ABS investments. On the basis of conservative valuations, UNIQA currently expects additional downside of between €20 and €30 million, assuming the capital market remains unchanged until year-end. Valuations based on a "held-to-maturity" approach would lead to a significantly lower downside. Falls in value below the redemption value at the end of the term are only considered, in this case, to the level of the actual losses.

Profit on ordinary activities at €280 million after nine months of 2007

The UNIQA Group was able to increase its profit on ordinary activities in the first nine months of 2007 compared to the same period of the previous year by a substantial 46.3% to €280 million, also due to the special influences of the participation in STRABAG SE. The operating profit of the Group after three quarters of 2007 was €308 million, corresponding to 46.7% above the previous year's value. The Group consolidated profit thus rose by 55.8% to €194 million. The earnings per share were €1.63.

Own funds and total assets

The total equity of the UNIQA Group increased in the first three quarters of 2007 by 14.2% or €189 million to €1,518 million compared to the last balance sheet date (31.12.2006: €1,330 million). This included minority interests amounting to €205 million (31.12.2006: €207 million). The total assets of the Group as at 30 September 2007, were €25,552 million (31.12.2006: €24,587 million).

Cash flow

The cash flow from operating activities fell in the first nine months of 2007, mainly due to the reduction in the single premium business, to €824 million (1–9/2006: €1,173 million). Cash flow from investing activities of the UNIQA Group, corresponding to the investment of revenue inflow during the reporting period, amounted to €–865 million (1–9/2006: €–1,064 million). The financing cash flow increased through the issuance of subordinate capital in the amount of €100 million to €52 million (1–9/2006: €–44 million). In total, the amount of liquid funds changed by €11 million (1–9/2006: €66 million).

Employees

Due to a clear increase in the number of sales staff in the Group's Eastern European companies (mainly due to the consolidation of the Serbian Group companies), the average number of employees at the UNIQA Group after the first three quarters of 2007 rose to 11,299 (1–9/2006: 9,961).

International companies

The premium volume written (incl. the savings portion of premiums from unit- and index-linked life insurance) outside Austria increased by 3.5% in the first three quarters of 2007 to €1,251 million. Whilst the business volume in Western Europe fell by 9.5% to €672 million, as a result of special effects in single premium life insurance in Italy, growth in Eastern and south-eastern Europe remained very strong in the 3rd quarter of 2007. Premium income in these regions increased by 24.1% to €579 million. The level of internationalisation after nine months of 2007 was, therefore, at 31.8% (1–9/2006: 31.8%). The share of Eastern Europe reached 14.7% (1–9/2006: 12.3%), the share of Western Europe declined to 17.1% (1–9/2006: 19.5%). The total insurance benefits in the international Group companies decreased in the first three quarters of 2007 by 8.6% to €636 million.

Capital market and UNIQA shares

The 3rd quarter of 2007 was marked by the losses in price that occurred on all major stock markets between mid-July and mid-August. These losses were primarily due to a marked fall in the risk appetite of private and institutional investors following the crisis in the US mortgage market ("sub-prime crisis"). In reaction to the turbulence on the international finance markets, the US Federal Reserve reduced its prime lending rate, whilst the European Central Bank cancelled its expected interest rate increase for September. The stock markets reacted to this with sharp price rises – despite higher oil prices and somewhat unfavourable economic data. The DOW JONES INDUSTRIAL index was thus more than able to make up the losses suffered thanks to the sharp drop in interest rates, and finished the 3rd quarter with a rise of 3.6%. In the first three quarters, the DOW JONES INDUSTRIAL posted an overall rise of 11.5%, thereby exceeding the growth of the European stock market (DJ EURO STOXX 50: +6.4%) and the Japanese stock market (NIKKEI 225: –2.6%). As at end September 2007, neither the DJ EURO STOXX 50 (–2.4%) nor the NIKKEI 225 (–7.5%) had regained the index levels reached at the end of the first half. The Emerging Markets, on the other hand, achieved powerful, double-digit price increases. The Eastern European CECE index also experienced growth of 10.8% in the first three quarters of the current year. The sharp fall in the summer months was almost completely recouped by the end of the quarter (–1.4%).

The "sub-prime crisis" did not stop at the Austrian stock market either. After the Vienna Stock Exchange index ATX closed at a new all-time high of 4,981.87 points on 9 July 2007, the index subsequently fell sharply, in step with other markets around the world. Consequently, the ATX was not able to reach its first-half level by the end of September (–7.0%), although at 4,527.30 points, it was 1.4% higher than the end of 2006 level. The UNIQA share was also unable to escape global events in the last quarter. Whilst the share price was still at €24.92 at the end of the first half, it fell back to €21.10 in July and August. The share price subsequently rose again to reach €23.22 on 30 September 2007 (–6.8%). The DJ EURO STOXX Insurance index lost 3.7% in the same period. The recovery of the UNIQA share continued in October, to reach a price of €24.40 on the last day of the month. No treasury shares were sold within the framework of the resale programme.

Development of UNIQA shares

Outlook

Preview 2007

A further positive effect on the result arising from the shareholding in STRABAG SE is expected in the 4th quarter of 2007. The additional income will be used to reinforce the reserves and expand the market position in Eastern Europe by taking investment measures in organic growth. Assuming stable capital markets and the absence of extraordinary loss events, the forecast for the profit on ordinary activities for 2007 will be raised from €320 to €340 million.

Consolidated Balance Sheet

Assets 30.9.2007 31.12.2006
€ million € million
A. Tangible assets
I.
Self-used land and buildings
230 234
II.
Other tangible assets
124 111
354 345
B. Land and buildings held as financial investments 994 927
C. Intangible assets
I.
Deferred acquisition costs
875 863
II.
Goodwill
298 253
III. Other intangible assets 39 47
1,212 1,164
D. Shares in associated companies 534 372
E. Investments
I.
Variable-yield securities
1. Available for sale 3,898 3,462
2. At fair value through profit or loss 986 1,025
4,884 4,488
II.
Fixed interest securities
1. Held to maturity 0 0
2. Available for sale 10,104 10,635
3. At fair value through profit or loss 504 509
10,608 11,143
III. Loans and other investments
1. Loans 990 1,034
2. Cash at credit institutions 1,172 802
3. Deposits with ceding companies 116 106
2,278 1,942
IV. Derivative financial instruments 90 96
17,859 17,669
F. Investments held on account and at risk of life insurance policyholders 2,326 1,953
G. Share of reinsurance in technical provisions 799 741
H. Share of reinsurance in technical provisions for life insurance policies where the investment risk is borne by policyholders 329 306
I. Receivables including receivables under insurance business 736 708
J. Receivables from income tax 46 54
K. Deferred tax assets 82 85
L. Liquid funds 281 263
Total assets 25,552 24,587
Equity and liabilities 30.9.2007
€ million
31.12.2006
€ million
A. Total equity
I.
Shareholders' equity
1. Subscribed capital and capital reserves 206 206
2. Revenue reserves 714 692
3. Revaluation reserves 216 182
4. Group total profit 176 42
1,313 1,122
II.
Minority interests in shareholders' equity
205 207
1,518 1,330
B. Subordinated liabilities 575 475
C. Technical provisions
I.
Provision for unearned premiums
497 390
II.
Actuarial provision
15,181 14,942
III. Provision for outstanding claims 2,102 2,023
IV. Provision for profit-unrelated premium refunds 42 48
V. Provision for profit-related premium refunds, i.e. policyholder profit sharing 489 753
VI. Other technical provisions 39 43
18,351 18,199
D. Technical provisions for life insurance policies held on account and at risk of policyholders 2,302 1,912
E. Financial liabilities 188 195
F. Other provisions 737 722
G. Payables and other liabilities 1,510 1,388
H. Liabilities from income tax 26 67
I. Deferred tax liabilities 346 300
Total equity and liabilities 25,552 24,587

Consolidated Income Statement

1–9/2007 1–9/2006 7–9/2007 7–9/2006
€ million
3,434 3,450 1,044 1,012
3,040 3,082 1,005 971
54 55 17 14
1
747
638 292 200
43 40 15 15
3,884 3,815 1,329 1,200
–2,645 –2,753 –873 –835
–832 –755 –263 –245
–86 –93 –28 –35
–13 –5 –10 0
–3,576 –3,605 –1,174 –1,114
308 210 154 86
–28 –19 –10 –6
280 191 144 79
–66 –44 –43 –19
214 147 101 60
194 125 89 58
20 23 12 2
1.63 1.04 0.75 0.49
119,427,808 119,427,808 119,427,808 119,427,808
Group notes
€ million
€ million € million

The diluted earnings per share are equal to the undiluted earnings per share.

Development of Group Equity

Equity Minority interests Total equity
1–9/2007
€ million
1–9/2006
€ million
1–9/2007
€ million
1–9/2006
€ million
1–9/2007
€ million
1–9/2006
€ million
Situation as at 1.1. 1,122 930 207 203 1,330 1,134
Foreign currency translation 0 –6 0 0 0 –6
Dividends –42 –31 –10 –10 –52 –41
Own shares 0 0 0 0 0 0
Net profit for the period 194 125 20 23 214 147
Unrealised capital gains and losses from invest
ments and other changes
38 –85 –11 –14 26 –99
Situation as at 30.9. 1,313 933 205 202 1,518 1,135

Consolidated Cash Flow Statement

1–9/2007
€ million
1–9/2006
€ million
Net profit including minority interests
Net profit 214 147
of which interest and dividend payments 9 39
Minority interests –20 –23
Change in technical provisions 460 939
Change in deferred acquisition costs –12 –48
Change in amounts receivable and payable from direct insurance 12 47
Change in other amounts receivable and payable 38 174
Change in securities at fair value through profit or loss 51 –155
Realised gains/losses on the disposal of investments –20 –73
Depreciation/appreciation of other investments 90 185
Change in provisions for pension and severance payments –6 18
Change in deferred tax assets/liabilities 46 –16
Change in other balance sheet items 3 10
Change in goodwill and intangible assets –36 –27
Other non-cash income and expenses, as well as accounting-period adjustments 4 –9
Net cash flow from operating activities 824 1,173
of which cash flow from income tax –57 –84
Receipts due to disposal of consolidated companies and other business units 39 0
Payments due to acquisition of consolidated companies and other business units –76 –118
Receipts due to disposal and maturity of other investments 8,809 6,832
Payments due to acquisition of other investments –9,265 –7,527
Change in investments held on account and at risk of life insurance policyholders –373 –251
Net cash flow used in investing activities –865 –1,064
Change in investments on own shares 0 0
Dividend payments –42 –31
Receipts and payments from other financing activities 93 –13
Net cash flow used in financing activities 52 –44
Change in cash and cash equivalents 11 66
Change in cash and cash equivalents due to foreign currency translation 0 0
Change in cash and cash equivalents due to acquisition/disposal of consolidated companies 6 1
Cash and cash equivalents as at 1.1. 263 192
Cash and cash equivalents as at 30.9. 281 259
of which cash flow from income tax –57 –84

The cash and cash equivalents correspond to item L. of the assets: Liquid funds.

Segment Balance Sheet

Classified by segment Property and casualty Life Health
30.9.2007
E million
31.12.2006
E million
30.9.2007
E million
31.12.2006
E million
30.9.2007
E million
31.12.2006
E million
Assets
Tangible assets 213 202 126 127 16 16
Land and buildings held as financial investments 345 334 469 412 180 181
Intangible assets 329 284 668 664 215 215
Shares in associated companies 433 271 81 81 20 20
Investments 2,911 2,708 13,163 13,295 1,963 1,878
Investments held on account and at risk of life insurance policyholders 0 0 2,326 1,953 0 0
Share of reinsurance in technical provisions 385 346 411 392 3 3
Share of reinsurance in technical provisions for life insurance policies where the
investment risk is borne by policyholders
0 0 329 306 0 0
Receivables incl. receivables under insurance business 743 681 365 403 148 210
Receivables from income tax 18 27 25 26 3 1
Deferred tax assets 74 75 3 4 5 6
Liquid funds 84 96 179 152 17 16
Total segment assets 5,535 5,024 18,147 17,814 2,569 2,546
Equity and liabilities
Subordinated liabilities 335 235 270 270 0 0
Technical provisions 2,444 2,250 13,603 13,726 2,309 2,223
Technical provisions for life insurance policies held on account and
at risk of policyholders
0 0 2,302 1,912 0 0
Financial liabilities 168 185 44 52 0 0
Other provisions 684 682 44 32 8 8
Payables and other liabilities 827 833 1,278 1,152 47 125
Liabilities from income tax 14 43 2 14 10 10
Deferred tax liabilities 243 200 47 55 56 45
Total segment liabilities 4,714 4,429 17,591 17,212 2,430 2,412

The amounts indicated for each business segment have been ad- Total equity and liabilities 25,552 24,587 justed to eliminate amounts resulting from segment-internal transactions. Therefore, the balance of segment assets and segment liabilities does not allow conclusions to be drawn with regard to the equity allocated to the respective segment.

Classified by segment
Property and casualty
Life
Health
Consolidation Group
30.9.2007
31.12.2006
30.9.2007
31.12.2006
30.9.2007
31.12.2006
30.9.2007 31.12.2006 30.9.2007 31.12.2006
E million
E million
E million
E million
E million
E million
E million E million E million E million
Tangible assets
213
202
126
127
16
16
0 0 354 345
Land and buildings held as financial investments
345
334
469
412
180
181
Intangible assets
329
284
668
664
215
215
0
0
0
0
994
1,212
927
1,164
Shares in associated companies
433
271
81
81
20
20
0 0 534 372
Investments
2,911
2,708
13,163
13,295
1,963
1,878
–178 –212 17,859 17,669
Investments held on account and at risk of life insurance policyholders
0
0
2,326
1,953
0
0
0 0 2,326 1,953
Share of reinsurance in technical provisions
385
346
411
392
3
3
0 0 799 741
Share of reinsurance in technical provisions for life insurance policies where the
investment risk is borne by policyholders
0
0
329
306
0
0
0 0 329 306
Receivables incl. receivables under insurance business
743
681
365
403
148
210
–520 –585 736 708
Receivables from income tax
18
27
25
26
3
1
0 0 46 54
Deferred tax assets
74
75
3
4
5
6
0 0 82 85
84
96
179
152
17
16
0 0 281 263
Total segment assets
5,535
5,024
18,147
17,814
2,569
2,546
–698 –797 25,552 24,587
Equity and liabilities
Subordinated liabilities
335
235
270
270
0
0
–30 –30 575 475
Technical provisions
2,444
2,250
13,603
13,726
2,309
2,223
–5 0 18,351 18,199
Technical provisions for life insurance policies held on account and
at risk of policyholders
0
0
2,302
1,912
0
0
Financial liabilities
0 0 2,302 1,912
168
185
44
52
0
0
–24 –43 188 195
Other provisions
684
682
44
32
8
8
Payables and other liabilities
827
833
1,278
1,152
47
125
0
–642
0
–723
737
1,510
722
1,388
Liabilities from income tax
14
43
2
14
10
10
0 0 26 67
243
200
47
55
56
45
0 0 346 300
Deferred tax liabilities
Total segment liabilities
4,714
4,429
17,591
17,212
2,430
2,412
–701 –796 24,034 23,257
Equity and minority interests 1,518 1,330
Total equity and liabilities 25,552 24,587

Segment Income Statement

Classified by segment Property and casualty Life Health Consolidation Group
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
Gross premiums written 1,714 1,591 1,035 1,190 687 671 –2 –2 3,434 3,450
Premiums earned (retained) 1,376 1,277 981 1,140 681 664 1 0 3,040 3,082
Income from fees and provisions 51 45 7 11 0 0 –3 –1 54 55
Net investment income 224 99 417 455 107 84 –1 0 747 638
Other income 53 38 5 4 1 1 –15 –2 43 40
Insurance benefits –926 –849 –1,113 –1,311 –609 –593 3 0 –2,645 –2,753
Operating expenses –496 –462 –243 –201 –95 –98 2 7 –832 –755
Other expenses –72 –57 –29 –28 –3 –4 17 –4 –86 –93
Amortisation of goodwill –5 0 –8 –5 0 0 0 0 –13 –5
Operating profit 205 91 17 65 82 55 4 –1 308 210
Financing costs –17 –8 –11 –10 0 0 0 0 –28 –19
Profit on ordinary activities 188 82 6 55 82 55 4 –1 280 191
Income taxes –30 –20 –13 –10 –23 –14 0 0 –66 –44
Net profit 158 62 –7 45 59 41 4 –1 214 147
of which consolidated profit 154 54 –6 39 42 32 4 –1 194 125
of which minority interests 4 8 –1 6 17 9 0 0 20 23
Classified by region Premiums earned
(retained)
Net investments income Insurance benefits Operating expenses Profit on ordinary
activities
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
Austria 2,162 2,181 659 541 –2,011 –2,060 –512 –494 267 145
Other Europe 876 901 94 102 –637 –692 –401 –326 15 50
Western Europe 575 636 62 72 –454 –529 –231 –193 –13 19
Eastern Europe 301 265 32 30 –183 –163 –170 –132 28 32
Total before consolidation 3,039 3,081 753 643 –2,648 –2,753 –913 –820 282 195
Consolidation
(based on geographic segments)
1 0 –6 –5 3 0 81 65 –2 –4
In the consolidated financial
statements
3,040 3,082 747 638 –2,645 –2,753 –832 –755 280 191

Starting in the 2006 financial year, the presentation of the investment income and the profit on ordinary activities by region has been adjusted for the effects from the capital consolidation included in the investment income. The amounts from the previous period have been adjusted to correspond. Accordingly, the consolidation based on geographic segments comprises the expenses and income consolidation from operative business between Group companies.

Group Notes

Accounting regulations

As a publicly listed company, UNIQA Versicherungen AG is obligated to prepare its consolidated financial statements according to internationally accepted accounting principles. These consolidated interim financial statements for the period ending 30 September 2007, have been prepared in accordance with the International Financial Reporting Standards (IFRS) and the International Accounting Standards (IAS), in the versions applicable to this reporting period. No early application of modified standards was performed. The accounting and valuation principles and consolidation methods are the same as those applied in the preparation of the consolidated financial statements for the 2006 business year. For creation of these consolidated interim financial statements, according to IAS 34.41, estimates are used to a greater extent than as in the annual financial statements.

Scope of consolidation

In addition to the interim financial statement of UNIQA Versicherungen AG, the Group interim financial statements include the interim financial statements of all subsidiaries at home and abroad. A total of 51 affiliated companies did not form part of the scope of consolidation. They were of only minor significance, even if taken together, for the presentation of a true and fair view of the Group's assets, financial position and income. The scope of consolidation, therefore, contains – in addition to the UNIQA Versicherungen AG – 33 domestic and 59 foreign subsidiaries in which UNIQA Versicherungen AG held the majority voting rights.

The scope of consolidation was extended in the reporting period by the following companies:

Date of initial
inclusion
Net profit
E million1)
Acquired shares
%
Acquisition costs
E million
Goodwill
E million
Zepter Osiguranje A.D., Podgorica 1.1.2007 0.0 99.4 0.0 0.0
UNIQA neživotno osiguranje a.d.o., Belgrade 1.4.2007 –0.6 100.0 5.0 0.0
UNIQA Real Estate Inlandsholding GmbH, Vienna 1.7.2007 0.0 100.0 0.0 0.0
UNIQA Real Estate Dritte Beteiligungsverwaltung GmbH, Vienna 1.7.2007 0.0 100.0 0.0 0.0
UNIQA Real Estate Vierte Beteiligungsverwaltung GmbH, Vienna 1.7.2007 0.0 100.0 0.0 0.0
UNIQA Real Estate Bulgaria EOOD, Sofia 1.7.2007 0.0 100.0 0.0 0.0
UNIQA Real Estate BH nekretnine, d.o.o., Sarajevo 1.7.2007 0.0 100.0 0.0 0.0
IPM International Property Management Kft., Budapest 1.7.2007 –0.2 100.0 13.6 0.0
UNIQA Real Estate Polska Sp.z.o.o., Warsaw 1.7.2007 0.0 100.0 0.0 0.0
UNIQA Real III, spol.s.r.o., Bratislava 1.7.2007 –0.1 100.0 0.0 0.0

1) Net profit for the period included in the consolidated statements.

Foreign currency translation

The reporting currency of UNIQA Versicherungen AG is the euro. All financial statements of foreign subsidiaries which are not reported in euros are converted, at the rate on the balance sheet closing date, according to the following guidelines:

  • Assets, liabilities and transition of the net profit/deficit for the period at the middle rate on the balance sheet closing date,
  • Income statement at the average exchange rate for the period,
  • Equity capital (except for net profit/deficit for the period) at the historic exchange rate.

Resulting exchange rate differences are set off against the shareholders' equity without affecting income.

The most important exchange rates are summarised in the following table:

€ rates on balance sheet closing date 30.9.2007 31.12.2006
Swiss franc CHF 1.6601 1.6069
Slovakian koruna SKK 33.8770 34.4350
Czech koruna CZK 27.5320 27.4850
Hungarian forint HUF 250.6900 251.7700
Croatian kuna HRK 7.2773 7.3504
Polish zloty PLN 3.7730 3.8310
Bosnia and Herzegovina convertible mark BAM 1.9620 1.9581
Romanian leu (new) RON 3.3440 3.3840
Bulgarian lev (new) BGN 1.9558 1.9558
Ukrainian hrywnja UAH 7.1691 6.6631
Serbian dinar RSD 79.3085 79.8438

Notes to the consolidated income statement

1 | Net investment income

Property and casualty
insurance
Life insurance Health insurance Group total
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
I. Properties held as financial investments 4 –4 5 5 6 5 16 6
II. Shares in associated companies 138 23 0 9 48 0 186 32
III. Variable-yield securities 45 51 141 198 15 38 201 287
1. Available for sale 41 48 107 165 13 35 161 248
2. Reported in the income statement 3 3 34 33 2 3 40 39
IV. Fixed interest securities 22 23 180 175 14 24 216 222
1. Held to maturity 0 0 0 0 0 0 0 0
2. Available for sale 22 24 174 168 14 23 209 215
3. Reported in the income statement 0 0 6 7 1 1 7 7
V. Loans and other investments 16 12 11 22 12 15 39 49
1. Loans 7 10 8 11 10 12 26 33
2. Other investments 8 2 3 11 2 3 14 16
VI. Derivative financial instruments 9 4 91 47 9 3 109 55
VII. Expenditures for asset management, interest
expenditures and other
–14 –8 –5 –2 –1 –2 –21 –13
Total (fully consolidated values) 219 102 424 454 104 83 747 638
Ordinary income Appreciation and
unrealised capital gains
Realised capital gains unrealised capital losses Depreciation and
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
1–9/2007
E million
1–9/2006
E million
I.
Properties held as financial investments
37 31 0 0 0 2 –21 –26
II.
Shares in associated companies
37 32 137 0 12 0 0 0
III.
Variable-yield securities
91 104 86 21 215 229 –131 –55
1. Available for sale 76 80 4 0 196 207 –62 –33
2. Reported in the income statement 15 24 82 21 19 22 –69 –22
IV.
Fixed interest securities
364 308 94 0 37 28 –236 –71
1. Held to maturity 0 0 0 0 0 0 0 0
2. Available for sale 356 296 87 0 34 28 –227 –67
3. Reported in the income statement 8 12 8 0 3 0 –8 –4
V.
Loans and other investments
46 52 1 0 0 0 –8 –3
1. Loans 29 36 1 0 0 0 –4 –3
2. Other investments 18 16 0 0 0 0 –4 0
VI.
Derivative financial instruments
–11 –23 106 32 93 116 –67 –21
VII. Expenditures for asset management,
interest expenditures and other
–21 –13 0 0 0 0 0 0
Total (fully consolidated values) 543 491 425 53 357 374 –463 –177

The depreciation and unrealised capital losses of €463 million include expenses from currency fluctuations to the value of €151 million. These expenses from currency fluctuations are offset by income from currency hedging amounting to €128 million, which is posted as income from derivative financial instruments.

Realised capital gains
Depreciation and
unrealised capital losses
Realised capital losses Group total Of which adjustment of
impairments
1–9/2007
1–9/2006
1–9/2007
1–9/2006
1–9/2007 1–9/2006 1–9/2007 1–9/2006 1–9/2007 1–9/2006
E million
E million
E million
E million
E million E million E million E million E million E million
0
2
–21
–26
0 –1 16 6 0 –9
12
0
0
0
0 0 186 32 0 0
215
229
–131
–55
–61 –12 201 287 –27 –10
196
207
–62
–33
–53 –6 161 248 –27 –10
19
22
–69
–22
–8 –6 40 39 0 0
37
28
–236
–71
–43 –42 216 222 –48 –27
0
0
0
0
0 0 0 0 0 0
34
28
–227
–67
–40 –42 209 215 –48 –27
3
0
–8
–4
–3 0 7 7 0 0
0
0
–8
–3
0 0 39 49 0 0
0
0
–4
–3
0 0 26 33 0 0
0
0
–4
0
0 0 14 16 0 0
93
116
–67
–21
–12 –49 109 55 0 0

Other disclosures

Employees

interest expenditures and other –21 –13 0 0 0 0 0 0 0 0 –21 –13 0 0 Total (fully consolidated values) 543 491 425 53 357 374 –463 –177 –116 –104 747 638 –75 –45

Average number of employees 1–9/2007 1–9/2006
Total 11,299 9,961
of which business development 4,442 3,482
of which administration 6,857 6,479

These consolidated quarterly financial statements were neither audited nor reviewed by an auditor.

Imprint

Owner and publisher

UNIQA Versicherungen AG Untere Donaustraße 21 (UNIQA Tower) 1029 Vienna Austria Commercial registry No.: 92933t Data-processing register: 0055506

Investor relations

UNIQA Versicherungen AG Stefan Glinz Untere Donaustraße 21 1029 Vienna Austria Tel.: (+43) 1 21175-3773 Fax: (+43) 1 21175-793773 E-mail: [email protected]

www.uniqagroup.com

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