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Vienna Insurance said its preliminary pretax profit rose to 540 million euros from 437 million euros the previous year. The multiline group also said total premiums written rose 16.1% to 8.32 billion euros. In the Central and Eastern European markets, premiums rose 35%, and for the first time, premiums in that region exceeded 50% of the group's total.
Final 2008 results are expected to be released April 1.
"Despite the difficult situation in the capital markets in 2008, we carried out a very successful capital increase and we have risen, with the acquisition of all the insurance activities of the Erste Group, to number one in our core markets in CEE," said Chief Executive Gunter Geyer in a statement.
Group life insurance premiums rose 12.2% to 3.46 billion euros. Nonlife premiums rose 19% to 4.87 billion euros.
At the same time, the group said its VIG Re zajistovna unit, a new Central and Eastern European reinsurer, has "made a flying start in its very first year of business," with half its premium targets for the year 2011 already met. Contracts worth more than 280 million euros have been written.
?Such a successful start for VIG Re confirms the decision of our group to also use a new business model in the area of reinsurance,? Geyer. ?Particularly pleasing and noteworthy is the great interest aroused in VIG Re?s reinsurance coverage among companies that are not part of the group."
"Given this excellent business performance ? already half of the external business planned for 2011 has been attained ? it can be expected that it will be possible to revise the premium target for 2011 upwards," the group said. "The company?s expectations of a 20% return on equity can also be confirmed."
Vienna Insurance closed on the insurance operations of Erste Group Bank A.G. in Austria and in Central and Eastern Europe last year (BestWire, Sept. 23, 2008). At that time the insurer said it received approval from the relevant competition and local regulatory authorities in Austria, Croatia, the Czech Republic, Slovakia and Hungary. The total value of the transaction comes to 1.45 billion euros.
According to Vienna, a crucial part of the deal is a long-term distribution agreement, which provides it with access to the nationwide sales network of Erste Group, consisting of more than 16 million customers and 2,900 branches. In return, Erste Group will obtain access to the 10 million customers of Vienna in those countries in which both partners are currently active.
(By David Pilla, international editor, BestWeek: David.Pilla@ambest.com)
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