Hello, and welcome to the UNIQA Group results of the Q1 to Q3 for 2021. My name is Jess, and I'll be your coordinator for today's event. For the duration of the call, your lines will be on listen-only. However, there will be the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question at any time. If at any point you require assistance, please press star zero on your telephone keypad, and you will be connected to an operator. I will now hand over to your host, Andreas Brandstetter, Group CEO, to begin today's call. Thank you.
Thank you. Good afternoon, ladies and gentlemen, and thank you very much for your interest in our results. I think that after the first three quarters of this year, we see a very strong technical result across all major business lines. If I may invite you to follow me on page five of our presentation, then you see the first details before I hand over to Kurt Svoboda, our CFO. What we see is 18% increase on the premium side, on the top level, mainly driven by the integration of the AXA companies in Czech Republic, in Slovakia and Poland. Also accompanied by, I would say, a satisfying organic growth of around 2% in our home market, Austria.
Lower impairments and realized gains, as you know, in Q1 of this year, on the sale of equities and fixed income led to an increased net investment income of 5%. I'm very happy that we see the first result of our cost-cutting program. If you see our operating expenses, but mainly then the group cost ratio development. I see ourselves right well on track to reach our long-term goal of UNIQA 3.0. Very happy to report a further decrease of the combined ratio, despite a series of weather events in this year, especially in the months of June and July, especially in Austria and in Czech Republic.
As a result of all of this is very, very happy to report a much improved earnings before tax by 40% up to nearly EUR 300 million. Reflecting, as I just mentioned, on the one hand, lower cost ratio, but also, on the other hand, increased investment result. Having said this, and to understand a little bit more about the details, I may hand over to our CFO, Kurt, who will start, I would assume, by page eight.
Yes. Welcome from my side. Page eight, about the growth of the first nine months, were quite nice. Growth story by 18%. Of course, this is driven from the AXA integration, which was not included in the nine months 2020. Even excluding this, we have good growth of more than 3% in P&C business. Good growth also on the health side. Focus is P&C business and with this we are very satisfied and even better than expected. We have on the cost ratio on page nine, a solid development from 27% cost ratio down to 26.4%. The cost program, the actions that we took, they are on track.
We have the social plan in Austria, which is done and where we have now the situation that, with this also, the release of people is done. With this, the cost program with the EUR 100 million and reducing the cost ratio is on track in both segments, as well in Austria and also in the international segment. Leads me to page 10, the P&C combined ratio by 94.2%. Here to be a little bit more precise, we have in this nine months included nat cat events of, on a gross basis, more than EUR 190 million. We have in that result included also major claims in an amount of EUR 160 million on a gross basis.
On the other hand, we have reliefs from the COVID side and from the situation of less commuting, less mobility, which helps us especially in Austria. We took this also as a background also to strengthen our reserve in Zurich and in Austria, knowing that this situation is not sustainable and things may arise in the future. Even including this, we have a good solid development in the combined ratio with 94.2%. In the cost ratio, the cost program is reflected. Page 11, why is the P&C EBT with the -EUR 8 million then worse in comparison to the last quarters? This has to do with the nat cat and with the major claims, plus the reserve topic I explained minutes ago.
On the health side, EUR 25 million EBT in Quarter 3. Also here, COVID situation in Austria and respectively with our situation with the private hospitals. The situation is like that many surgeries and things like that are postponed. With this, we have also here created reserves for more or less IBNR topics in the future. Life, EUR 66 million, this is driven by the international business. As it is stated below, we have the pension business, we have the AXA business, and we have Russia, where we have good results that drive these EUR 66 million. With this, I came to the last page, which I would like to comment. It's about the investment activities.
On the first glance, it looks that we have in nine months topic of less investment results, where with this the situation that we have less inflows coming from life business and also some depreciations done on the participation side. With this we are quite comfortable. The average yield is of around more than 2.5%, and this is in line with what we expect and also in line with what we have as an average current interest rate for the life business. With this comments, I hand back to Andreas for the outlook of the year 2021.
Thank you, Kurt. Well, it will be no big surprise for you that we stick to our outlook and that we confirm EBT in the range of EUR 330 million-EUR 350 million. This was the amount which we already mentioned in July of this year. You might ask why we are so prudent. Look, the year is not over yet and still six quite tough weeks to come. I've got no idea what COVID will mean for us in our core market, just to give you one example. We confirm that we are aiming and that we are thinking to reach an improved profitability in our core underwriting business, continuing the very solid development of the last quarters.
As far as dividends are concerned, you know, we said that we wanna return to the pre-corona path in the next couple of years. If you have in mind that we paid for 2019 and 2020, 8% per share. If you remember that within UNIQA 3.0, our new strategy program, we addressed that our overall strategy is a payout ratio between 50%-60%. I think you will make your own calculations and conclusions out of this. Everything I said, of course, means that we assume that there will be no any kind of further extraordinary negative developments in this year. Thanks a lot for listening to Kurt and me. We may invite you to address all your questions. Thank you.
If you would like to ask a question, please press star one on your telephone keypad. Please ensure your line is unmuted locally, as you will be advised when to ask your question. Once again, that's star one if you would like to ask a question. The first question comes from the line of Thomas Unger from Erste Group. Please go ahead.
Yes, hello, good afternoon. Thank you very much for the presentation, and thank you for taking my question. Mr. Brandstetter, you just talked about the outlook and that it might be perceived as conservative for the full year. Can you just talk a little more about what you expect in Q4? You've generated a profit of nearly EUR 300 million in the first three quarters, so that gives us a range of EUR 30 million-EUR 50 million around for the Q4 . What do you expect to happen? Do you anticipate any higher expenses? Are you investing into a better profitability midterm in Q4? Some insights would be very helpful. Secondly, on the larger topic, inflation, how and where do you see the inflation impacting your business? What do you anticipate also for next year? Maybe taking this into the topic of interest rates and yields, has that changed your view on mid- to long-term yield outlook? Have you altered your expectations at all? Does that have any implications for your investment portfolio? Thank you.
Okay, Thomas. This is Kurt speaking. If I may, I take all three questions. The first one is about the outlook. When we calculated the outlook, we have been very cautious and also not knowing what the COVID situation looks like in that case. With this answer, we expect that even with the existing situation, that the Q4 will be a good one, and that we will be on the upper range of EUR 340 or even more, in that respect. Second question that you raised is about inflation. It's a good question, Thomas, because we are calculating with inflation, so we have downside scenarios calculated by 50 basis points and 100 basis points.
Downside scenarios for UNIQA and the impact so far. It takes a little bit longer to run this through the whole finance workflow chain, if we call it like that. In case of a 50 basis point inflation increase, we expect a low double-digit number of impact, negative impact on our EBT. Where does this come from? The major impact comes from Austria on the cost side and on the asset side. This is one thing. On the other thing is international-wise, we are in a mid-sized single-digit number. Here it comes from mostly from the claims side because we have contracts with Euro or US Dollar denomination. The policy is mostly in local currency and receives the impact is the greatest one. This is to the inflation question. Your last question, Thomas, was about our outlook on the yield side. We calculate our plans with a moderate increase of 15 basis points increase on the euro swap curve.
Okay. Thank you very much.
There are currently no questions in the queue. As another reminder, please press star one if you would like to ask a question. The next question comes from the line of Thomas Unger from Erste Group. Please go ahead.
Hi. Thank you again. I just had one more question and a little bit of detail on the individual business lines. In P&C, the profitability suffered a bit in Q3. So the expenses, the net OpEx, were higher in the quarter than in previous quarters. Commissions increased but also other operating expenses and the cost ratio was up. At the same time, there was improvement in the life segment. Was there a shift between those two segments or is there another reason for the worsening in the P&C segment? Thank you.
Now, the most important thing, Thomas, is the reserve topic I talked about. The reserve strengthening is of more than 2% on the premium side and therefore this impacts EBT then to that great extent. The cost side is not worth mentioning. It's a more or less seasonal development, but we have no changes in the allocation between life and P&C. The major impact comes from the reserve situation and of course also from the payments for nat cat and major claims.
Okay. Thank you very much.
There are no further questions in the queue, so I'll hand the call back to your hosts for some closing remarks.
Okay. Thank you for listening and thank you for taking your questions. Andreas and myself wish you a nice remaining day. Stay healthy and thank you.
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