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VIG reports solvency ratio of 250% in 2021 results

19th April 2022 - Author: Jack Willard

Vienna Insurance Group (VIG) has reported a solvency ratio of 250% at the end of the 2021 financial year, highlighting the company’s strong capitalisation.

As of December 31 2021, VIG had own funds of roughly EUR 10.3 billion, approx. 85% of which was in the highest quality category.

VIG also achieved a very good overall business result in 2021, with a premium volume of EUR 11 billion (+5.5%), a profit before taxes of EUR 511 million (+47.8%), and a combined ratio of 94.2% (-0.8 percentage points).

VIG Chief Executive Officer, Elisabeth Stadler, commented: “A look at our key figures shows the high resilience of our Group and that we have dealt with the major challenges facing the industry in good time, especially with digitalisation. This has proved to be a key instrument for maintaining business operations and, above all, customer service during the pandemic.”

Furthermore, due to the positive interest rate development, VIG reported an improved embedded value (after taxes), which rose to EUR 3.85 billion, as of 31 December 2021.

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In Austria, the embedded value increased by EUR 817 million, due to the interest-sensitive portfolio, with Central & Eastern Europe (CEE) contributing EUR 118 million.

Value creation was supported by the conclusion of profitable new business with a margin of 2.5%, VIG achieved a very good margin of 3.8% in CEE.

Meanwhile, the group objectives set out in the current “VIG 25” strategic programme, include for the first time – ESG-related projects to benefit society, customers and employees.

Stadler added, “We are not talking here about introducing sustainability for the first time, but about continuing consistently down the path that has already been taken. Since its origins in the 19th century, our Group has pursued social causes and sustainable business practices as well as profitable growth.”

The VIG Group’s sustainability strategy aims to promote investments in renewable energy and green bonds, as well as to phase out its involvement in the coal sector.

At the end of 2021, The Sustainability Report shows a total green bond volume of EUR 436 million, which represents an increase of more than 83% compared to the previous year.

As part of its climate change strategy, VIG decided to withdraw from the coal sector as early as 2019, the company’s climate change strategy commits it not to take on new insurance for companies in the coal sector.

Since May 2019, no new insurance has been issued for either coal-mining or coal-fired power plant projects. Existing policies in this sector will be phased out.

However, in 2021, coal risk among corporate customers were reduced by 74% compared to 2019.

Meanwhile, VIG recently acquired the business of the Dutch insurer Aegon in Hungary for EUR 620 million.

 

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