Other Markets

The Other Markets segment includes Germany and Liechtenstein. The Other Markets generated 3.2% of Group premiums in 2017.

Germany

Premium income in the German insurance industry grew 2.2% in the first nine months of 2017. While property and casualty rose by 3.0% and health insurance 4.9%, premium volume in life insurance in the narrow sense fell slightly (-0.3%) due to the decrease in single premium business. The regular premium business remained almost unchanged. The increase in private health insurance was the result of premium adjustments based on a drop in the technical interest rate.

Vienna Insurance Group is represented in Germany by InterRisk Non-Life and InterRisk Life. The InterRisk companies distribute exclusively through around 10,000 independent sales partners and have positioned themselves as highly profitable niche providers. InterRisk Non-Life specialises in accident and liability insurance and selected property insurance products. InterRisk Life focuses on retirement provision and occupational disability solutions, as well as protection for surviving dependants.

Liechtenstein

The Principality of Liechtenstein has been a member of the European Economic Area since 1995. This gives Liechtenstein insurance companies free access to the markets in 31 countries and around 500 million people in Europe. The life insurance companies domiciled in Liechtenstein primarily offer unit-linked and equity-linked (anteilsgebunden) retirement and insurance solutions for high net worth individuals. The property and casualty insurers cover all of the corresponding lines of business. At the end of 2017, 21 life insurance, 17 property and casualty insurance and 5 reinsurance companies had registered offices in Liechtenstein. Premium volume in the first three quarters of 2017 was around the same level as the previous year.

VIG is represented in Liechtenstein by the life insurance company Vienna-Life. Vienna-Life mainly offers unit-linked and index-linked life insurance.

Business development in the Other Markets in 2017

Premium development

PREMIUMS by line of business

In the Remaining Markets, Vienna Insurance Group generated total premiums written of EUR 292.6 million in 2017 (2016: EUR 353.0 million), representing a decrease of 17.1% compared to the previous year. The decrease was due to a reduction in single premium business in Liechtenstein. Net earned premiums were EUR 248.8 million in 2017 (2016: EUR 311.6 million), a decrease of 20.2% compared to the previous year.

Expenses for claims and insurance benefits

The VIG companies in the Other Markets segment had EUR 251.3 million in expenses for claims and insurance benefits (less reinsurance) in 2017. This was 1.5% less than in 2016 (EUR 255.0 million) due to the decrease in single premium business.

Acquisition and administrative expenses

Acquisition and administrative expenses rose in the Other Markets segment from EUR 25.2 million in 2016 to EUR 29.8 million in 2017. This corresponds to a year-on-year increase of 18.3%, which was due to an increase in commissions resulting from a higher level of new business in Germany.

Result before taxes

The result before taxes rose significantly by 7.0% to EUR 23.7 million in 2017 due to an improvement in the combined ratio and a significant increase in premiums in Germany.

Combined Ratio

VIG had an excellent combined ratio of 81.3% in the Other Markets in 2017 (2016: 81.8%).