VIG Re, the Prague-based reinsurance arm of Vienna Insurance Group (VIG), has reported improved profitability over the first quarter of 2021, helped by strong premium growth of 13%, compared with the same period last year.
Profit for the Q1 2021 period totalled €2.79 million, compared with €2.42 million in Q1 2020.
Meanwhile, net earned premiums jumped from €93.9 million to €105.9 million as the reinsurer grew its top line to take advantage of improved pricing conditions.
Investment income similarly came to €1.84 million last quarter, compared with a loss of €966,000 in the Q1 period of the previous year, when the COVID-19 pandemic caused significant volatility in the financial markets.
Looking at 2020 overall, VIG Re’s gross written premiums grew 10% to €579 million, with premium growth driven by continued franchise development in all regions, particularly business underwritten by the branches in Frankfurt, Germany and Paris.
Over the year, the reinsurer also delivered a net combined ratio of 96.9%, including the impact of Covid-19 of €18.4 m gross and a higher than normal frequency of large fire losses reported from the VIG companies.
Investment income for 2020 was down to €4.3 m, impacted by devaluation of foreign currencies and the realisation of losses in Q1 2020, while profit before taxes was €22.6 million allowing for a RoE after tax of 9.2%. The Solvency ratio of the Company was 196.7%, well within the defined comfort zone of 170% – 220%.
“The Company demonstrated a great resilience, delivering technical and financial profits even in unprecedent times,” said Martin Hartmann, Chairman of the Board of Directors of VIG Re. “This is a great proof of our business model. It is based on a technical underwriting, prudent investment and comprehensive enterprise risk management policy. It allows us to consistently deliver superior results to our
clients and shareholders and handle challenges effectively.”
VIG Re’s parent company, Vienna Insurance Group, likewise reported a 5% increase in profit over Q1 to €128 million, while retaining a combined ratio of 95.2% for the period.
Its total premium volume was €3.11 billion as motor, other property and casualty, and health insurance sectors improved on strong results from the same quarter of the previous year, despite the impacts of the pandemic.
“With this positive development, we are firmly delivering on our promise to be a stable and reliable partner,” said Elisabeth Stadler, CEO of Vienna Insurance Group. “We were very successful before the start of the pandemic, have so far made it through this unique global situation very solidly and are already seeing a return to the levels achieved in the first quarter of 2019.”
“Although economic recovery in most countries within the CEE region will be delayed due to the rising rates of infection we have seen since autumn 2020, we are confident that we will achieve our targets for 2021,” she added. “Vaccination rates will be pivotal to securing tangible economic improvements, and we are currently seeing significant progress in this area in many of our markets.”
