Hello and welcome to UNIQA results for the first half year 2025. My name is Laura and I will be your coordinator for today's event. Please note this call is being recorded, and for the duration of the call your lines will be on listen only mode. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing Star. one on the telephone keypad to register a question. If you require assistance at any point, please press Star, zero and you will be connected to an operator. I will now hand you over to your host, Kurt Svoboda, to begin today's conference. Thank you.
Thank you and welcome to UNIQA's crypto thoughts. After six months in the year 2025 and hopefully everybody has a good vacation in this summer week. After six months in the week 95 I'm now on page number four of our presentation. We are delivering a result which is quite impressive even after six months and the first part of the cup season with a €296 million earnings before tax which is plus 7% the year 2024 for us. Importantly, this is a good service situation of the portfolio which is 50%-10% coming from the Austrian business in terms of revenues, around 40% coming from international business and 5% even now from UNIQA re external business. In Switzerland we grew with this 10% versus 2024. I come back later in which lines of businesses this is.
We are quite satisfied with a 90.5% net combined ratio which is another improvement in relation to the previous years and a high quality ratio which has several aspects I will explain later on with 2.84 percentage points in the year 2024. First on page number five we are seeing the PNM on a short convers. I would like to stress that the 10% growth I was referring before is coming with a very high part from the international business. Here in international business Poland is the driver of the business. Poland here with high growth in the multi business proposal. Otherwise, it is a high point followed also by Hungary and then the SCE region. Austria stable with roughly 5% and in the two markets. We are satisfied if this goes over in PNC life and health cases is good.
In Austria we had a technical result which is 23% better than 2024. We have less last rains and the cut season is a door now. For the time being we have minor that we had to take into consideration in our books. Here we are far away from that what we had in the previous years, especially stories in 2004, adding cost ratio on the one hand and under budget in terms of administration cost, but also driven by the high growth. This is a good path in the direction of achieving a target of omega 3.0 and 28. Quite okay, we are within new investment yields 4.8% and the average investment yield in total 3.1 percentage point. This means also under life book the average guaranteed interest rate. We are now below 2 percentage points, on which we are very good covering these interest guarantees in the especially Austrian's life book.
When we move on on the next page, we have a return on equity which is also here in line with the target that we searched for 2028 and the other KPIs are also in line with this what we expected. The CSM on page number seven has several impacts that we have talked about. First of all, interest rate movements, especially on the longer end, have a huge impact on our liability slide. Also, especially in life, Austria and South Austria, an impact on the interest rates and on the assumption changes. Around here, with more than €500 million, 450 million, out of these, €570 million is coming from interest movements in the first half year. Another part that is worth mentioning here is that Sravak, and I will explain Sravak l ater on when we talk about investing results.
Starbuck is here accounted by €50 million, and this week high something changes or economic range of €520 million. With this, also then in the future, higher releases out of the system for UNIQA. Page eight talks about the top line. I mentioned Poland. I mentioned UNIQA really with the external business. With this, we are quite in line with the achievement of the CAGR international also at 8.3% for 2028 . For the time being, we are growing in all lines of business in all segments that are profitable. This is one of the key drivers of the profitability. In the first half, we talked about the cost tag here at the slit on page number nine on Austria and on international. We have improved below target. While Austria is below target, we are international-wise in line with the targeted.
We have to take into consideration that in contestment business, we have €10 million as an extraordinary impact this year for the setting up of the SCE six regions. This is the country Romania, Bosnia, Croatia. Here there were more countries that we are putting together in one group. These non-recurring tensions are one part in 2025 which are impacting the opening cost ratio. Page number 10, I talked about a very favorable situation on the claim side. You see here the different levers of reinsurance, discounting effects and nuts. We have also quite good runaway cloud which is driving this net loss ratio in 2025. Here we are below that what we expected. Driving driver is on the one hand lope major claims, especially in Austria. The cut result €70 million is far away from that's what we had in average in the previous previous years.
Here then, I talked about on page 11, we just see here a very good life result with €104 million on a topical basis. That means the business margin with 9% are contributing to these good stock results. You can also say that the international business, especially biometric products, PPR products, is a good contributor to this good technical result of €104 million. Same in the health business. On page number 12, here we have the Austrian business of course dominating the profit activity. Good new business, especially on the young population and on the young clients, leading to an improvement of 30% from technical results comparing to 2024, the new business values. On page number 13, I mentioned this 9% on the health business have around 30. 11.8% on the trading projection. You see here that also this profitability is quite detail. Of course, volume-wise there's always room for improvement.
We see here also the comeback of the last business in the fiscal. Let's now move to the investment portfolio and explain a little bit the Starbuck situation and Unifesto. I'm now on page number 16. We're €400 million on net invest income which was driven by, on the one hand, good ordinary income from the development of the bonds in the portfolio. Then we have an impact of around €170 million from the contribution in the first half year. This €117 million can be divided into two items, into two operations. The one is the sale of 1.5% Sravak shares have been not indicated. Hence, the rest 49 is coming from an operative adjustment on fabrics in the second quarter. Let's start with the same. We sold 1.5 out of the non-celebrated force which have been in either belonging to the self segment.
As you know, that of course means we are using the barrel. The various steel growth had also the so-called underlying item effects. We have to, in that case, neutralize these efforts that we see on the net investing. Example, €6 million- €7 million was the impact on the net investment income. This has been neutralized under fair value terms of underlying outcome which is in the pot for €279 million according to the standard and therefore the impact on the EPT side and our first business was zero . On the other hand, why did it do it? Because it was on the one hand for us testicutter, it was also for the local gap and impact and this was the reason of the sale of those properties.
We do not see them on first again because one of the projects does not reflect anything in the film or a little bit differently is the operating adjustment. It was €49 million. The €49 million are belonging to that the Sravak delivered a much more better EBIT than the original response. This was then shown because here hold a different balance year and a successful year. With this adjustment for our part and for our share , €5 million out of these €49 million are then reflected in EBT, the part in the P&C business and the part is also here in the five and in the first places. Therefore, and this is what I explained to you a couple of minutes ago, we had also a contribution to the CSM.
This means that with the release of the CSM slowly over the time of the contracts, these positive impacts of Sravaks are also then visible in the EBT but not at once, as was history on the ISS 4. These are for your information and updates to Sravak. This leads you now to the outlook and our announcement for the fates of taste. We see quite good development in the first half year with good growth, with high profitability in P&C, with a good situation on the life business, and an excellent development in the international business. We see a positive situation to increase our output to €490 million- €510 million. Again, I have to say, despite some major tax events, still very focused on September to go.
This is for the feasible situation, the 50%-60& payout ratios so we do not claim any bonus dividends even because this had all the impact on the 17% ratio. On the other hand, we have to take into consideration that the solvency ratio decreased now in the first quarter starting because we prepaid Tier 2 instrument of €200 million and this does not anymore count for positive situation. This 10% for US okays and stab A is volatile, we know this. We see an ordinary and normalized situation on the solvency issuing ratio on 260% until the capital market and therefore no need for extraordinary events in that respect. Last but not least, again set the date for 24th of November investment in Vienna and most things to come. Also on the 26th November investor event in London. Both are related to 35 year split
That's the Vienna Stock Exchange. With this, thank you for listening and now I'm open for your questions and for your responses. Thank you.
Thank you, ladies and gentlemen. As a reminder, if you would like to ask a question, please press Star, one on your telephone keypad. We'll pause for a brief moment. Thank you. We will now take our first question from Michael Hudner of Danske Bank. Please go ahead.
Thank you so much, and thanks, Kurt, for lovely results. I've got three questions. Dividend, cash and I was curious about your life comment. The margin, I can't quite hear that. On the dividend, if I apply 50- 60% and fewer earnings growth, I get somewhere around 64% to 78% DPF, assuming tax is normal and everything. It's just a range. Last year or 2024, the dividend was 6%. If I stick on midpoint 72, I would get a 20% dividend increase. I just wondered if that's the kind of, if I would be very out of the line. Think of that third question. The second is you mentioned Schabag and the accounting is different local GAAPs, this gain of $65 million, whether it increased your chance at the hoeing. The last question is on the Austrian Life. You highlighted the very nice new business margin. It's not Austrian Life, it's life.
I just wanted these extraordinary numbers. I'm not used to them. I'm used to, you know being around 4%, 5% or something. I just wondered what drives it.
Thanks. Okay, Michael, thank you. I start with the dividend. Look Michael, I think your calculation is quite valid, but I think it's too early to talk about this because we have to see what comes out and we have to range 50 %- 60% to the income with all them to decide finally in which point we will decide to go forward. Of course, we are looking that the growth of the dividend is in line with the growth of the Profit . I think this is what we see as a sustainable growth also on the dividend side. This is what we see now. It should be running around end of the year where we know more about this to say in that respect. Robert? Yes, you're right.
We have this different region between our variable free brochure and workout which is according to, you know, acquisition costs and valuation and that's correct. We copy quite nice cash in page to the holding out of these 1.5% on the shares which helps us on the one hand for the payback of the C2 instrument funding several investment. This is one of the reasons why we took this decision. The third question is about the ocean lifetime, where does it come from? The nucleus values of around 9% in total of the livestock is coming from three elements. A with a very favorable situation on the left side. B also the long width situation is quite the truth for the offset book. The interest rate environment helps us also in that respect.
These are the three levers that help us for the last book, but also international wide you have this good profitability.
Lovely. Thank you.
Thank you. We will now take our next question from August Marčan of UBS. Please, over. Hi.
Hi. Thanks for taking my question. First one is a very quick one on solvency. Can you give the breakdown of the number between own funds and FCR? The second one on targets, Y ou upgraded the full year 2025 targets, but you left kind of the medium t erm T&D targets unchanged. Do you expect some worsening of conditions in the market for UNIQA in the upcoming year? Is there any other reason not to update the medium term targets as well? Finally, on the CSM, I was just wondering why the sustainability ratio, so the new business CSM versus the release, is down year over year. It seems to be now in the low 70s and the target is around 90s. How do you see what are some actions that you need to take to g et to that 90% target?
Okay, so I start with he first one, Q2 The own funds are €7.366 trillion and the FCR is €3.595 billion These are the two numbers leading to the 284% points. I give you also the number for 2023 for this, for first quarter for 2023 issue €6.937 billion were the own funds and €2.5130 million was the FCR leading to 274% points. The increase was coming from additionally 6% and interest rates resulted 10%. The second question on the medium term, a very valid question. We are planning to deliver a new outlook on that on the two capital markets in Austria and in Vienna. This has to do on the one hand with our strategic planning, which is now in the next guarding and going over the weeks in September. This has to do also with the scenarios that we are wanting to see.
At the moment I can tell you that I see positively also the medium outlooks to be increased for the years 2026 to 2028. We have to be careful. We know we have the U.S.A effect. We have a topic of Austria and the politics and this is what we have to discuss how far can we increase the medium outlook. Of course we are dealing with these and so far I can tell you it's just a tendency that this will be increased over. Your last question was about how to achieve a 90% target of your. Yes, you're right. For the time being what we see was as ourselves we are completely in ground, we've had what we expected. So B D ratio is okay, the portfolio is okay and also dependency of the health book etc in last we are struggling with two things.
The first one was the interest rates. That's one thing because these two increases in CSM and then the relief is lower over the years but we also a little bit lacking of volume and that's the operative topic volume in Austria, especially on the biometric products and internationally we have a situation that markets are showing a tendency and we are floating in the market that we are moving to source from business. Short term business is not bad but broad term business means that communication is far jumped and with this the release of the CSM is different to the catalogue plan. We are working also here on actions especially with our bank partner internally review products so that we are coming back.
We still see the 90% as achievable and these actions are planned for the second half of the year but till that we also see the target of 2025 to 72% roughly to feel perfect.
Perfect. Thank you.
Thank you. You'll now take our next question from Antoine Bouchetoux of AlphaValue. Please go ahead.
Yes, good afternoon. Three questions for me too. The first one would be on your full year 2025 guidance, the €419 million- €510 million pre-tax profit guidance. You did €277.5 million in the first half and obviously as you mentioned there was the very significant impact of Storm Boris. I was trying to look at t he numbers for H2 and thinking that, despite the fact that you upgraded your guidance, it maybe still looks a bit conservative. That would be my expectations.
On live business the full term release has been growing at a faster pace than the overall CSM for the quarters now. I was wondering if it could help me better maybe model the life CSM, meaning could we consider maybe the current levels in absolute millions of euros going forward, or should we still consider the percentage of the closing CSM? It was to help me with that. Still on new business margins, they have declined in recent quarters in addition to stabilizing at the current levels for Q1 and Q2. I was wondering if we should expect this trend to continue going forward. Thank you.
Okay, so to the first question. On first plans, your ice term the change debate was around roughly rounded up €300 million. We're just doing €200 million in the second half year. I think that a couple of things we have to take into consideration. First of all as it's only always the the situation that the second half year is operational wise automatically a little bit slower than the first one, with aim that we have especially in the international business. The big new, the new business volume is coming in the first quarter. In that respect we are seeing that growing. The second thing is that the very good cost administration cost development which under fulfillment of the plans in the first half year of around €30 million is something that we are not catching up automatically.
We do not expect that this high under fulfillment is stable because many projects make their invoicing by the fourth quarter. This is always the highest margin at omega on the cost side in the last quarter. Third is that you have also some investment results. We did some validation of the real estate portfolio, made here some gains of around €15 million, which we do a good in the second half of the year. We have to take into consideration what the interest movement is about. We see that in the last two months, especially the interest rates on the short term, meaning up to the five weeks, was in disadvantage of us. Especially for discounting assets, we are lacking of 0.5% in the first half year. If this stays like that, we are also another 0.5%- 1%.
That means the positive discounting effect cannot be calculated in that security level as it was in the last years. With this we have to take care especially claims and maybe the one of our Nascraft. We are very cautious in that respect. If we can happens if you guys, we are expecting 520- 530. Then we have exact two things. The counter balance and then the counter balance is rather limited. Therefore we say, okay, this is what we can be, this is what we can deliver. The rest is something which is a little bit of the best. There are some things that we have to take into consideration. A very long answer to a simple question. You see we have here some effects which are not recurring in the second half of the year.
The second question was about the life business, the release which you can take use as a modeling effect. A very short answer, and I think the colleagues from the IR team can give you more on that for your modeling. You can say the release is rather stable. We do not see a big movement on each issue. This is something that we can count on. On average, we have a duration of around 11 years. This is something that is very stable. Where we have the situation, which is a little bit of unsecurity, is economic reliance. We are very interest sensitive because of the loss of the portfolio. It can happen that we have a high economic reliance, and this is increasing the sustainability, the CSM, and then the impact also on the release.
This is something that is for us the biggest topic to handle, to work with. On the new business margin, I think at the moment with twith the like, latest order in the questions we're calling from UBS, which is we are fine. As long as we see this situation on the left side, as we see this on the situation on the portfolio, this is for us rather stable. When there's a movement of interest side, okay, this can this can change, but the 9% for us are fine. And at the moment, also our internal hurdles.
Thank you.
Thank you. Next, passing from Thomas Unger of Arista Group. Please go ahead.
Yes, thank you very much. Thank you for the presentation and for taking m y question. I have two left . First, I'd like to ask you to t alk about Poland a bit. Really a growth driver, as you can see in the first half, 2025. You can also talk about what you expect for the coming months of coming quarters and also next year. Do you have a new contract with bancassurance channels? What do you expect of that? The second question would be on the new investment yield, which was quite a bit higher in the first half of 2025 than previously in Austria and internationally. If you could tell us what this was driven by. Thanks.
Okay, Thomas. Thank you. I start this fall and should have some short topics out of foreign for profitability device. Our company delivered a combined ratio on the gross side, by the way, 91%. We have a GPD of €60 million coming from the company. In the market you have in share of more than 7% at the moment. We have ranked number five. The market grows by 2% growth and Omega grows by around 15%. You see we are outperforming the market in all areas. What is the reason? The reason is we have three levels here. The first one is retail, the second one is corporate and affinity, and the third one is the pantry stores. In all three lines or in all three focus areas as we call them, we have also got USP.
Retail, we have the MTPL portfolio and our pricing, which gives us the situation that we have a growth of around 40% in the resource side. In the corporate and in the affiliated guide, we are growing by 11%. In bank, we have over 8% and the mBank 2% dynamic of additional itself default. This is for your first answer in terms of what do we expect from the market itself and what to expect from mBank. Bank, by the way, we have an agreement with them and we are not only selling the life policies, going on into the selling of non-life portfolio, and with this prolongation of improvement, we are starting a full marketing campaign in 2035. We also are having an optimization in the multi business in township, which is now striking. This is also that gives us a boost in the future.
So far it's a very stable situation. On Poland and on mBank in that respect. Talking about the new money yield, it was about on the one hand of the portfolio transfer. We sold some portfolios and ranged into a longer duration side and with this came up, this is with these favorable 4 point then as a new money yield in this year. Give you some numbers. We have Austria 3.6, we have Switzerland 4.3. Don't forget that we have also growing portfolio around €220 million on premiums, which is also to be invested. We have, of course, Ukraine, of course different cost of capital, different pricing. We have 6% Romania, and this keeps them in both the 4.8%.
Super, thank you very much.
Thank you. Once again, as a reminder, if you would like to ask a question, please press Star, one on your telephone keypad. Thank you. We'll now move on to our next question, a follow-up from Michael Hutner of Berenberg. Please go ahead.
Thank you so much. The first one is on the numbers. You very kindly gave us the own funds and the SCR for a half year, but I'm really sorry, I didn't catch the numbers. The second one is on the i nsurance. I think you alluded to it just now relating to Switzerland. I think that is the insurance. If you could give us a feel for where we are now in terms of the growth and the profitability that you're getting there. The reason I ask is here in London we always worry about pricing coming down, so it's just a general session, and then the last one is on CSM. So Y ou kindly explained that the CSM release rate is quite stable, but you have a function change in strike, etc . The CSM itself jumped a lot.
How volatile is this? In other words, could this go into r everse if interest rates drop for some reason. Thank you.
Okay, so Michael, I'll try again. The own fund is €7.366 billion and the solvency capital requirement is €2.595 billion. Okay?
Thank you.
This was by the 30th half year, 2025. Then about UNIQA Re. Yes. The profitability of our external reinsurance business is of around 8% - 9%. Michael, we have at the moment an EBITDA coming from the external reinsurance business at UNIQA Re of about roughly €10 million on the half year, and we have a volume of around roughly close to €200 million at the moment. Yes, the market is depending on who you ask. If you ask a reinsurer, the market is hard. If you ask as a buyer, I would say I expect a soft market. There was an article on Hannover East because they had something, they said that there is a soft market.
Anyhow, our export reinsurance business might be a bit different because we are not competing with reinsurers of the SCOR and Munich Re of the world. What we are doing is we are going into new business where we have no intermediary in between, and we are sitting in the process line when reinsurers are looking for their reinsurance segment. Therefore, we say the price at the moment in our portfolio is rather stable, a little bit increasing because we can also take some upsides coming from inflation in our portfolio. This is how we see at the moment and therefore also our renewal, a very small one, went very smooth and we advised increase around 4% 0 6%. On the CSM, yes, have been a lot of ups and downs with traffic with the interest rates.
The answer is yes, Michael, it is interest rates, especially on the long run. So the RT is 100 are developing on the other direction. He's single down also.
Brilliant. Thank you very much.
We'll now take our next question from August Marčan on Sardin, a follow-up from UBS. Please go ahead.
Hi, thanks for taking my follow ups. I read a press article talking about you guys opening your asset management to third party external assets. Are there anything you can comment on that? Any targets, any numbers? Is it still a bit too early for that? The second one is based on recent news around one of your close peers. Does UNIQA have any ambitions to grow beyond your current kind of geographical footprint m ore in Western Europe, let's say? Thanks.
Yes, article interesting. I didn't read it. Maybe you can send it over to us. Yes, it's correct. We are working on a third party management, which we have now opened. That means what we see is that according to the size of UNIQA and also the network that they have to seek, that there for family offices, for foundations, whatever, we are offering asset management. This is what we are doing. We have the first three or four clients open up. I think it's early to say what this means and what the targets are, but it is, I would say, it's a nice solidification in our asset management. I take into evidence, I will refer this specifically on the market, on the capital market, to guide you what we are doing in that respect. Thank you.
The second one is you always say that we are open for acquisitions and we are also looking for opportunities within our geographical footprints. Yes, why not also do it in other areas? On the other hand, it has to have a fit to our portfolio size. Got linked with the banks and corporate, and it has to be also in markets where we say, okay, where we have then a significant but a sizable market share. It is for us not a target to say, okay, we're going into market and we are then number 28. This is not what we're looking for. If it is sizable, if it is also fitting to our portfolio size in general, why not also other markets? That's correct.
There are no further questions in queue. I will now hand it back to Kurt for closing remarks.
Thank you all gracious for your questions and for participating in those information. About 6 months 2025. I wish you a nice weekend and a very stable and nice rest of the comma. Take care and hear and hear from. Thank you. Goodbye.
Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.