Vienna Insurance Group – outlook

With more than 24,000 employees, VIG is the clear market leader in its Austrian and CEE markets. It is therefore excellently positioned to take advantage of the long-term growth opportunities in a region with 180 million potential customers. In order to further exploit this potential, VIG will rely on its proven business strategy and four management principles. It will continue to follow its Group-wide principles of maintaining a diversified, decentralised market presence in Austria and Central and Eastern Europe, and focusing on the insurance business as its core competence.

The Group aims to further increase its market share using its proven multi-brand strategy and multiple distribution channels developed to best suit the region. These gains will be achieved through organic growth by expanding existing business and through acquisitions that are economically attractive for VIG or can strategically supplement its existing portfolio. Vienna Insurance Group wants to increase its market share to a minimum of 10% in Poland, Hungary, Croatia and Serbia over the medium term. VIG already achieved this goal of a 10% market share in Serbia in 2016 due to its acquisition of the AXA insurance companies. Market share was also further increased in Croatia and Hungary. Cost-efficiency will remain a priority in spite of this goal. Consolidation and pooling of processes and services is being examined to determine whether the potential synergies would outweigh the benefits of a diversified market presence in the long-term.

VIG has set itself a goal of continuously optimising profitability. The Group aims to generate healthy, properly considered growth and, based on this principle, will continue in the future to follow a growth policy focusing on earnings. We plan to steadily increase our Group premium volume to EUR 9.5 billion by 2019 and expect our profit before taxes to also grow steadily to between EUR 450 million and EUR 470 million.

The Group will focus more strongly on its underwriting result in future years and endeavour to make improvements in both the claims and expenses areas that will improve the combined ratio in the direction of 95% over the medium term. Life insurance with biometric components and regular premiums will also be further promoted. These measures are aimed at compensating for the decrease in the ordinary financial result due to the current low interest rate environment.

Vienna Insurance Group will also continue to pursue its strategic initiatives for optimising its business model, ensuring future viability and organisation and cooperation. For example, Vienna Insurance Group will focus on exploiting insurance potential in the health insurance segment and optimising the profitability of motor insurance. A new focus will also be placed on digitisation of products and services.

Vienna Insurance Group would also like to further expand its bank insurance business in the future, as bank distribution has become more important in many markets in the last few years. Vienna Insurance Group recognised this trend early on and now benefits from a partnership with Erste Group, a leading banking group in Austria and the CEE region. Personal insurance typically dominates the range of insurance products sold through banks. VIG also sees a great deal of potential in sales of health and property and casualty insurance. A project group was formed with our bank insurance partner Erste Group for this purpose. The aim of the project is to optimise products, distribution and profits for the banks and insurance companies in all countries where Erste Group and Vienna Insurance Group cooperate. The focus is on customer needs and requirements, easily understandable products and integration into the bank’s digitisation initiative. This also includes organisational and structural considerations on the insurance side that will improve communications and service for customers and banking partners.