I'll now hand you over to your host, Kurt Svoboda, to begin today's conference. Thank you.
Thank you very much, and welcome, everybody, to UNIQA's Q1 2024 results, group level. I'm referring to the slide deck that is visible via our website, and start on page number 5 with the overview on the UNIQA Group, which delivers a earnings before tax result after 3 months of EUR 145 million. That is a plus of 70%, 17% roughly, in comparison to the year 2023. We have an outstanding growth with around slightly 11% on gross written premium basis. I come to that in a minute, what the composition on the three segments, P&C, Life, and Health is about. This is also reflected in the insurance revenue on IFRS basis.
What you can see is that PNC and Health is driving the growth of UNIQA in both segments, Austria and in the international business. We have a stable release of the CSM, which is also reflecting the good profitability and the good financial results that UNIQA has after three months, and with EUR 82 million is in line with what we expected. We have to state, but I will come to that in detail later on, that the first quarter was driven by more or less a very favorable development on the claims side. And this leads to a gross combined ratio of around 86.7 percentage points after three months, in comparison to 88.7 in the last year.
So good growth, favorable development on the claims, obviously on the claim side, and costs that are in line with that is what, what we have planned is the driver for this good result. When we move on on page number 6, we see the split of the development of the CSM, which, has slightly grown, over the first couple of months in 2024. New business CSM is around 9.69%, coming predominantly from the health business. We have assumption changes that are reflecting the interest rate environment, on the markets, and, this leads up by a stable CSM of EUR 5.3 million. And, what I can state here also is that the new business margin on CSM basis is 9.4 percentage points after 8.8 in 2023.
Key financial indicators on the next page, page 7. Two things that are jumping to the eye. The first one is a jump on the regulatory capital position from 255 up to 265. This is again a strong development on our capital position. Still, we know that we are far away from our target solvency level, but this is on the one hand, reflecting the interest rate development on the market. Secondly, the profitability of our business. And we always stated that a little bit of excess capital is for us fine, especially to be prepared for M&A activities or for sensitivities that can come up from the capital markets. Second thing is the return on equity.
On the one hand, 15.6 is a quite good number, on the other hand, in comparison to 2023, it's a drop. This is mainly driven, or this is driven from equity development, on IFRS basis. Growth, page 8. In that case, I would like to give you also a split between the, lines of business, on gross written premiums, and it's more or less reflected also in the insurance revenue. So when we say split, 14.5 is the growth, on the insurance revenue. The comparable data on gross written premium is 13.7. Health, 16% on insurance revenues, or 11.8 on gross written premium, and the life business is 5.1 on insurance revenue and 2.1 in the gross written premium, equivalent.
On life business, we have a good growth in the international business. In Austria, we have a situation like the whole market, that a huge sum of insurance and all the premiums is expiring, and the new business is okay, but cannot cover the outflows from expiring contracts. Cost situation at UNIQA on page number nine is in line with what we have planned and what we have so this year budgeted, so no extraordinary spendings, and also no extraordinary items to be reported. Everything in line. Inflation is also part of the cost driver, as well as in the international business as in Austria. Even that, the inflation goes down, but still has a huge impact on our expenditures. Page number ten.
The P&C side, I mentioned in the beginning that we had no CAT; there's no worth mentioning big claims. This is true for Austria as well as for the international business. So when we talk about big claims, we have to report around 2 or 3 big claims in the amount of EUR 2 million in the Austrian business, which is in comparison to our premiums or to our revenues negligible, and this led to this extraordinary good P&C combined ratio in Austria. Still up to today, we can also report that no major events have changed, so it seems that this year is quite okay. Anyhow, we have to state that we are in the starting season of catastrophe event, and with this, we can expect that in June or July, things will arise.
And therefore, we do not see that this favorable development on the claim side, especially on the CAT side, is sustainable for this year. We have also reported about the P&C compensation are discounted and undiscounted, so two percentage point is the effect of the discounting on our IFRS. Life and health is driven by the CSM. The assumption changes are reflecting the capital markets, meaning interest rates and the changes. New business in the health segment is good and is driving the CSM. On the life side, the CSM is driven by the releases from the portfolio in Austria, which is more or less expiring.
Investment portfolio, page 12, with a stable development on the expected great loss development, that means also the financial result, the investment result after three months are extraordinary good. We have no mention worth mentioning impairments. We have a very good yield, which is around 4.2%, the new money yield. We have around 2.8% on average, that the yield is contributing to the P&L. And with this, we can also say that the capital market is also in a very stable position and leading to a very good result at UNIQA. One major event in the capital or the financial result is described on page 13.
When you talk about the contribution from our STRABAG participation, accordingly, to the capital increase that STRABAG made and, with our shares, and the participation in this capital increase, we had a uplift of around EUR 30 million in comparison to the year 2023. This has to do with the valuation of the new shares, and this led to this, extraordinary, result in Q1. Also, positive year adjustments from STRABAG from the, last year contributed to this effect. UNIQA, at the moment, is holding 16.5% at STRABAG. Finally, I come to the outlook of, the year 2024. So on the one hand, as I stated, we do not see that, very favorable development on the claims side over Europe for the rest of the year.
We still are in the beginning of the summer season, which is always very risky about regional CAT claims and general CAT claims, and I think this will also be the case for the year 2024. Of course, we have taken care in our budget and plans, but I think we have to have an eye that the combined ratio will slightly go higher. But still, with this, we are in line with the targeted profitability of the year 2023. Update on UNIQA's new strategy from 2025 onwards will be announced in autumn. Information will follow soon, and our general assembly will take place on the third of June 2024, and we will propose EUR 0.57 to the general assembly, as already noted.
Thanks so far for your attention, and I'm now happy to take your questions and your topics, and open the line for that.
Thank you. If you'd like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. You'll be advised when to ask your question. We will take our first question from Thomas Unger, Erste Group. Your line is open. Please go ahead.
Yes, hello. Good afternoon. Thank you very much for the presentation, and thank you for taking my questions. My first one would be on the outlook. I know we've, you've spoken about that. You've talked about the combined ratio that might go up in the coming quarters. But from today's perspective and what you've delivered in Q1, EUR 145 million in pre-tax earnings, and I understand we shouldn't extrapolate this for the full year, but if you did, you'd come out slightly below EUR 600 million, which is far above last year's level.
And if you adjust for the positive effect that you had on your STRABAG stake, as well as weather-related claims, you probably still regards the outlook as conservative. Can you give us maybe a few more details on what you expect for the coming quarters? I understand that of course the non-CATs events are unpredictable, but anything that you give us some more insights in your thinking here and your projections for the full year. And then my second question would be if you could give us an update on your efforts to exit the Russian market. What is the progress there? Thank you.
Thank you, Thomas. First of all, we have several topics to consider in the remaining three quarters. First of all, as you mentioned, and as also stated, is we have a very favorable combined ratio with 86.7% at the moment. We calculate around roughly 90% is a good position for the whole year. So that means, we are 4% at the moment ahead of this. And, if you take this 4% to the whole premiums of insurance revenues, you get a number which is quite significantly reducing your six hundred something that you calculated. Secondly, we also have a very favorable development on the capital, on the financial market so far, so that means no impairments.
We have no situations or no significant variations on the FXs. And this also is something that we do not believe that this stays over the year in that context. We have to consider that we have some elections all over the world. We have to consider that stock market is in a very, very positive development at the moment. And all of this will impact here or there, the PNL of UNIQA. The third thing is that accordingly to generally many projects we are running and many, many activities we are doing on the IT side, but also on the new fields of business side that expense loading at UNIQA is always the highest in the fourth quarter.
All this around, Thomas, brings us to a situation that we are still believing that around the year end result 2023 is, at the moment, the best outlook that we, we can give. Second topic is around Russia. Russia, we can, we can report that from our side, we have done everything, and also the regulator, that means the Austrian and the Russian regulator, so far has signed all papers. We're waiting now for the final okay from the Russian regulator, which is not in our hand. We hope, in that case, that we can finalize this in the second quarter.
Very good. Thank you very much. Once again, please press star one to ask for a question. We'll take our next question from Michael Huttner, Berenberg. Your line is open. Please go ahead.
Fantastic. Thank you. I had 3. On the first one is the run-off. Could you provide? You said EUR 31 million, I think, or EUR 32 million this quarter. Could you give us a feel for the figure for the previous quarter and maybe a feel for how you see that developing? The second is the rise in solvency, so from 255 to 264. I wonder if you could break it down between the normal capital generation, market effects, and anything else. And then, the last one is on cost. So I noticed your costs are almost but at the low, you know, the lower end of what I was hoping for, so 31%, well below the 32.5%, which is the target you set yourself.
Can you talk a little bit about, more about this? I know you mentioned projects, but the premium growth is so strong, it looks as if you might be able to absorb this quite easily. Thank you.
Okay, Michael. Can you repeat the first question? I didn't get it on a technical perspective.
So it's the run-off. So you have a run-off in Q1 of EUR 31-32 million, and I just wanted to understand what the comparative figure is, and also how you see the run-off as a normal run rate for the rest of the year.
Okay. Okay, so the comparable figure of the year 2023 was around EUR 19 million.
One nine.
19? Okay.
Thank you.
So with the breakdown, there are two things. First of all, we—it's getting a little bit technical. We have, on the one hand, within our partial internal model and, with the regulator, an uplift in the years 2023, 2022, and 2021. And as we have, with the year 2024, ended with all necessary requirements that have been opened, they reduced this uplift, and this is one major impact of the increase of the Solvency II ratio. The second topic is, Michael, that, with the very positive effect of Strabag, this also impacts the Solvency II ratio because of a higher profitability by less capital risk capital, and this is the second impact on the Solvency II ratio.
So, the rest, what is remaining, is coming from economic profitability that improves solvency too. So I would say one third for each of this is the path from 255 to 264. The last question was about the costs and the comment. Look, on the cost side, I can tell you that it's a normal development on the cost side. Yes, we have projects you know about, IT topics, where we have, on the one hand, expenditures, on the other hand, we make also the creating of immaterial goods, and this is one part of the development of our cost. The second thing is, we have inflation in the country, especially in the international ones.
And the third one is that we are allocating the costs around 85%-90% to the direct attributable costs. Maybe this is different to others, but this is how we do it because this is how our business is set up. On the other hand, Michael, we have no one-offs, we have no real major topics to develop, and this development of the cost.
Thank you.
As a final reminder, if you'd like to ask a question, please press star one on your telephone keypad now. We'll take our next question from Michael Huttner, Berenberg. Your line is open, please go ahead.
Sorry about that. It's completely different questions now, and some of them are not, sadly, I'm really sorry, directly related to Q1, but they are related to profit. So it's leverage, profitability in health and how... Which figure to look at when I think of growth, is it the insurance revenue or the CSM for life and health? So on leverage, I spoke to wonderful IR Stoyan, and he explained that 40% is the ratio now, but that is on the IFRS 4 basis, so just shareholders' equity. Your peers now include economic solvency, and I was just wondering, when you think of your own leverage, do you think of the 40%, which is really high? I mean, I'm sorry, it is very high.
I've never seen a figure like that. Or do you think on the economic basis, which is what your peers do, where it's, I think, 12% or 15% or something, and where it is actually very, very low. So I'm just interested in how you judge it internally. On the health side, and this is a topic I ask, and I... It's probably not relevant, but I'm sure you have the answer. When I look at the IFRS 4 reporting, so in 2021, 2022, the run rate was about EUR 150 million, give or take. And then when I look at the IFRS 17 reporting for 2022, 2023, the run rate annually was about EUR 50 million. It's a big drop, and I can't explain it. I'd like to say, well, it's STRABAG, but STRABAG's not that big.
So I just wondered if you have any kind of insight on how I could look at that. And then the final is simply on the topic of growth. Looking at all the slides and the presentations, you know, there's a lot of mention of the replacement ratio or sustainability ratio in life and health, and life is not very high, in health it's a little bit over one. But what I noticed is that the insurance revenue growth is much, much stronger benefiting from indexation, and I'm just wondering which is the better metric to use when judging the growth? Thank you.
Okay. So second question is the easier one, Michael, because when you talk about growth, and if I get your question right, is what is the right metric to look at? Look, insurance revenue is not covering all of the growth that is visible on premium, growth with premium. You have the topic of unit link, you have the topic of index links and all the stuff that is missing here, because this is not a customer related business as it's related, staying at the insurance company. So honestly speaking, I personally look on the growth side, is more or less still on the gross written premium. The insurance revenue is then a follow-up in that respect.
With the gross written premium, I gave you a number where we have life business, for example, 2%. And here we have the situation as explained, Austria, minus developments, international, a huge plus. And this is because of unit link, index link, single premium, and all that stuff. The second topic is on your leverage and your economic topic. So far from my personal perspective, and not having now the numbers on the table and in mind that you've been talking about, IFRS 4 was reflecting in the health business, on the one hand, that what we achieved on a technical perspective, on a periodical development, plus that what we see from the capital, from the financial result allocated to the health business.
This is what the number was reflecting. IFRS 17, in that case, is reflecting still that what we are achieving on a technical perspective, on an economic perspective. This is one thing, Michael, but what is missing is, what is fully missing, because it is embedded, but it's coming over the CSM, is the impact from the financial result on a periodic basis. So that means if we have a very huge and a very good result on the financial result, including Strabag, this is okay, but you see this then just for the lifetime of the CSM, and not automatically within the period as it was in IFRS 4. So which leverage is now the right one, with 40% or 12 point?
I think you can follow that, what Stoyan told you. And I think this is like it is, it is like this in our business. As market leader, plus the portfolio, which has grown over recent decades, I would say in comparison to other ones, still we are here on a very, very high level. What I can state you also for the existing time and for the future is, will this stay so? As long as the situation around private health insurance in Austria is like it is, I think yes, it can stay so.
Of course, we see a tendency that the benefits are growing a little bit, because people are more and more taking care of their personal situation in comparison to COVID years and before COVID years. And on the other hand, we still see a high growth and high demand of this, because as I stated, 11.8% growth, predominantly coming from Austria, is a very good sign that this product or this line of business is still growing. Not only on indexation, this is a part of it, but also from new business, from new customers, and from new policies. This is my answer on the fly.
Makes perfect sense. Thank you so much. Thank you.
There are no further questions on the line, so I will now hand you back to your host for closing remarks.
Thank you very much. Ladies and gentlemen, thanks for participating on UNIQA's call for Q1 2024, and I wish you a remaining nice Friday and a great weekend. All the best. Thank you, and take care.
Thank you for joining today's call. You may now disconnect.