Hello, and welcome to the UNIQA Group Results for the First to the Third Quarter of 2025. My name is George, and I'll be your coordinator for today's event. Please note that this conference is being recorded, and for the duration of the call, your lines will be in the listen-only mode. However, you'll have the opportunity to ask questions towards the end of the presentation, and this can be done by pressing Star 1 on your telephone keypad to raise your question. If you require assistance at any point, please press Star 0, and you'll be connected to an operator. I hand the call over to your host today, Mr. Kurt Svoboda, CFO, to begin today's conference. Please go ahead, sir.
Thank you, and welcome to UNIQA G roup results after nine months in the year 2025. Yeah, first of all, we have a very successful nine months that we can report out. With this, I would also like to make an introduction to the first analytics for the nine months. On page number four, we talk about a growth volume of around 9%, leading to EUR 6.4 billion after nine months. You can read out later that in Austria, we grew by 5%, and in international business, we grew by 10%. When we talk about growth, and let's do this here, I would like to inform that we have outstanding growth results, especially in the non-life business in Poland, by 15%. We have Hungary by 12%. We have the region of Southeastern Europe, which is around 6%, and even Ukraine runs in the non-life business to growth of around 18%.
Quite tremendous results on the P&C side, which is, on the one hand, the one driver of the profitability after nine months. Austria with 5% is also worth mentioning because normally Austria is, on average, between 3 and 3.5 percentage points, a very mature market. Especially in the health side and also in the P&C side, we are outperforming the market, and this is also a second pillar of the growth and profitability after nine months. Generally, we are very satisfied with the diversification between Austria and international that is shown on the right-hand side of this page. Around 56% is coming from Austria, roughly 40% from the international business, and 5% from the reinsurance, which is also growing with the external reinsurance part in that respect.
Very good diversification, well-balanced, and P&C with 61% on share of our revenues leads then with the good profitability with consolidated profit that has increased by 26 percentage points up to EUR 333 million. That means an earning before tax of EUR 423 million. That is an introduction. I will come later on to the net combined ratio with a 91% and also the return on risk-adjusted capital of roughly 18% with index donations in a minute. On page number five, the growth we talked about, what I would like to draw the attention to is about the technical result, which is an increase of 47.6% coming from a very good development on the base claims. That means we have around 52% base claims defined as claims lower than EUR 500,000. We have neglectable or more or less no nat cats in the portfolio this year.
That means we talk about an impact of 0.5% in relation to 8% last year with Boris. I think everybody knows about this story. Finally, we have also a quite good development on our portfolio, and within this, we come to these technical results and to the combined ratio of 91 percentage points. Also, what I'd like to highlight or to take attention towards is the new money yield and the average investment yield, which is 4.7% and 3.1% higher than last year, and also one part of the profitability increase after nine months. When we go one slide further, it's about the return on equity, which is on a level which is much more higher than expected or the target range.
I think this will be a topic for next week's capital markets, but the 14.5% also reflecting the good profitability and also the stable development on the equity base. On page seven, we talk about the CSM, Life and Health. I think we have to mention here two things. The first is in the development of the CSM, we have operative topics and non-operative topics. Operative topics are that the portfolio is growing. Operative topics are that we have a profitability coming from good new business values in life and in health. In health, we talk about new business values, margins about 9% or more. Life is about 3-4%, depending on the markets.
Non-operative topics is, on the one hand, the movement of the interest rate is one thing, and on the other hand, also the STRABAG SE that we had has an impact on the CSM as we have this allocated to the health business, and therefore the gain goes first through the CSM and then over a release of 31 years to the P&L. This has to be taken into consideration when we talk about release and sustainability ratio. Still, yes, this is maybe a weak point. The volumes in the life business, especially in Austria, are not that big that they are compensating the high outflows from maturity levels from the last 10 to 15 years, and therefore the lower sustainability ratio on a standalone basis for the life business.
I think growth we tackled in the beginning here just gives you a flavor on how this developed over the recent years on the left-hand side, but also on a quarterly basis, and this is for us also key. We expect from a seasonal perspective and also how the portfolio of UNIQA is structured that the fourth quarter is the lowest one in the growth, and that's also the reason why the profitability is in the fourth quarter of UNIQA generally lower than the first three ones in total. Admin cost ratios on page number eight, page number nine, sorry, they are on a significant decrease level, which is in line with our target and also in line with our internal benchmarks. That means efficiency and also the first fruits from the IT transformation are visible.
P&C delivers not only a very strong technical performance, but also a record EPD on page 10 to be seen. This is coming from the growth. This is coming from the good development on the claim side and also from a favorable investment result other than that financial result seen. Same for life business on page number 11, increase up to 33.8% to 143% on a technical basis, and the same for the health business on page number 12, so 13% increase also on this level. I talked about the new business value in the group on page number 13. These are the numbers for that. On the one hand, you can see on the left-hand side the different contractual service new business margins divided into the different product lines and leading to a new business value on the right-hand side.
In comparison to the nine months in 2024, we increased also the profitability value significantly within 2025. Core markets, page number 14, a well-balanced between Austria and internationalized. Of course, one can say, "What is the balance when Austria delivers EUR 343 million and international EUR 184 million?" Please take into consideration that Austria, from a governance topic, is also financially and from the governance topic, the owner of the international business unit. That means from an accounting perspective, each dividend that is paid internationally to the holding company firstly goes through Austria. If you deduct the dividend streams from the Austrian result, then you end up on a level of around EUR 200 million. This is what I see as a well-balanced result between Austria and international. This is also for us a key topic for the future.
Investment activities on page number 16, just to give you some little bit of flavor. First of all, with the net financial result, we are in line with in plan. We achieve with the 3.1% average yield and the 4.7% new money yield a result which is above market level. We have a favorable ordinary income. We have also a development where we see no impairments in the first nine months. STRABAG contributes to the net investment income, but accordingly to the accounting scheme, is then eliminated for the net financial result. With this, I come then to the outlook for 2025 and also for the announcement for next week's capital market event in Austria and in the U.K. in London. First of all, we stick to our target range of EUR 490 million-EUR 510 million.
Yes, we see the range and the achievements for the rest of the year in the upper level of this range, and I feel quite comfortable also to keep the level of profitability, keep the level of the core business, and with this also the level of progressive dividend payment. With this, about the outlook then for the years 2026 and 2028 and what this means for UNIQA 3.0, again, the announcement for the capital market events. With this, I end my presentation, and I'm happy to take your questions. Thank you.
Thank you very much, Mr. Svoboda. Ladies and gentlemen, as a reminder, if you have any questions, please press star one on your telephone keypad and just make sure that your line is not muted to allow your signal reaches equipment. Our very first question today is coming from Michael Huttner of Berenberg. Please go ahead, sir. Your line is open.
Fantastic. Congratulations. This is lovely results. I've got lots of questions. I hope that's okay. The first one is on the P&C, so 91%. I think your target is below 94%. So well ahead. What would be a kind of normalized figure? The reason I ask is in the combined ratio, I can see two different, I can see man-made claims or large claims higher, but also, as you said, natural catastrophe or weather claims are very low. My second question is these wonderful growth figures. Poland, 15%; Southeast Europe, 6%; Austria continuing growing across the board around 5%. How sustainable is this? Presumably, if you address it next week, that's fine. On Poland, and here's the opposite. You're going to say, "This guy's completely nuts." PZU reported virtually no growth, but they reported amazing combined ratios.
This is across PZU, so not just Poland, but Poland is their main business. The combined ratio improved from 94% to 85%. I think yours kind of stayed roughly stable around 90 or 91. I just wondered what kind of different trends you're seeing or if you can talk about that. I don't know. My final question, and I'm sorry for so many. In life and health, what I can see is that the CSM release rate, so what I'm really asking is about profitability, but it's a funny way of asking about it. The CSM release rate is kind of nudging up. If I do the average, it was like 5.7 and 5.8, and now we're at 6 point something if I annualize it. I just wondered, is this structural or is there some mix shift or anyway? Thank you.
Michael, thank you for the questions. I think we can tackle the most here, the rest then final next week, and happy to have you. First of all, the normalized combined ratio is a fair point because we even internally, we see a very strong movement from Nat Cat. We see a normalized combined ratio at the moment if you add 1.5 percentage points on average. That means we end up here at 92.5%, which is still below the target that we set. This is roughly how we see at the moment the normalized combined ratio at UNIQA at the portfolio. Second question is about growth and sustainability of the growth. I would say, look, we have at the moment in we have in Europe a situation which is for the financial sector quite positive.
Despite I see personally the economic in Europe quite dangerous and the development rather skeptical, but for the financial sector, why is it that favorable? First of all, interest rates help us. Secondly, it's about that wealth and that what people are having is safeguarded, and this is what we see generally as a tendency to get no risk on this level. Thirdly, when we talk about health business, we see quite even in Austria, a quite good growth to move from the social to the private health business. In life business, it's an international game because here we have biometric products and the need and also here with our partners, brokers, the bank generally, and not to forget, gives us also a situation that is much more better than we expected last year. Therefore, I would say the growth is to a certain level highly sustainable.
When we talk about Poland and when we talk about the combined ratio, we have reported out in the slides the gross combined ratio of Poland. Not to forget about gross and net. We have here 92.7% in Poland. Taking into consideration that our Polish portfolio is quite big and with the one or other major claim, we are up to 93%. On a net basis, also including our internal and external reinsurance program, even Poland is on a quite good level, which is also sustainable in the level between 90-92 percentage points. CSM, Michael, I think we can talk next week much more in detail because we have some information about this and what we're doing in that respect.
Also, our colleague from the person's line is with me, so I would like to give the answer on that next week if this is fine for you.
Of course. Lovely. Thank you very much.
Thank you. What's your question, sir? One hour to August Marčan of UBS. Please go ahead, sir.
Hi. Thanks for taking my questions. First, I have a couple on growth and then some on the full year outlook. On growth, could you split out the 5% in Austria and 10% international? How much was volume, how much was pricing? What's the current environment? How do you see across your markets and across major divisions, motor versus general P&C? How is claims inflation versus pricing looking on your written business currently? My second question is on your full year guidance. You posted a very strong nine-month profit number, but you left the full year guidance unchanged. If I just assume that we have Q4 normalized cap level, does that imply a lower profitability for Q4 compared to what we saw, let's say, last two years, or is there something that I'm missing here?
Finally, on your solvency, again, a very healthy, strong number above 280%. Keeping in mind what one of your local peers has recently done, does this change your M&A appetite? Would you be willing to look at other geographies or maybe accelerate your inorganic growth? Alternatively, if you do not see that as an option, would you return capital to shareholders? Thanks.
Yes. Coming to the first question about growth, volume, pricing, inflation. Look, we have in our let's start with inflation. Inflation at the moment plays for us, UNIQA, not a big role because in Austria, we have the automatic indexation in 99% of our portfolio, retail and corporate. Internationally-wise, we are dealing with high-end pricing knowledge. With this, also, we saw that in the history and even on the COVID, the tendency was more or less that we did not lose that much because of higher prices out of inflation adaptation. I would say here, tick the box, inflation is under control, at least as it is in the level as it is at the moment. To not talk about an inflation increase of, I do not know, 100 basis points, I think that the game is different. This is generally a different game.
Talking about pricing and volume, you can, on a roughly basis, on a thumb rule, count that one-third is coming from indexation, one-third is coming from pricing, and one-third is coming from new volumes and new business. That's the rule of thumb overall when you talk about retail business. In corporate business, there is no rule because corporate business is different. It's about ownership, it's about pricing, and all this stuff. Keep that thing out. In retail business, I would say the thumb of rule is one-third, one-third, and one-third. Second question about the Q4 standalone basis, this means, of course, we priced in a little bit of, on the one hand, a not that favorable claims management or claims development. Secondly, as I stated this in my opening speech, Q4 is at UNIQA always the quarter where we have the less premium income because of seasonality.
The third thing is to take into consideration a little bit the financial markets, and this led us to a situation to come up with the EUR 510 on the upper level to achieve targets. This is so far my explanation to this. I understand your point and what I can state so far. All the rest, we can talk next week. We are very confident to end up on the higher level of this guidance. Solvency II, yeah, I think I state the same as I said last year in London and in Austria. I think we have no change in the M&A appetite of UNIQA. We have defined our geographical footprints. They are not considering the western part of Europe. In the eastern part of Europe, we are open for everything. M&A activities do not take place only in the traditional M&A part, meaning insurance.
We also are investing and in touch with vertical integrations. We have the healthcare ecosystem. It is around many opportunities that we see there, and a good Solvency II gives us here also a good backbone to come to the level that we expected. You're correct. The point of share buyback, I can also state, we'll also do it next week, but no change to that what we said last year. That means no plan for these times.
Perfect. Thank you so much.
Thank you, sir. When I move to Antoine Bouchetoux of AlphaValue. Please go ahead.
Yes. Hi. Good afternoon. Thank you for taking my questions as well. Got two, please. The first one is on large losses in P&C. I was wondering if you could confirm that large losses are included in the traditional that you publish and maybe give us some color on the EUR 273 million losses in large losses in nine months. I think that was EUR 130 million in the third quarter alone, and maybe provide some outlook for the fourth quarter. The second question, maybe a bit early to discuss this, maybe it's going to be a subject next week, I guess so, but you do mention that UNIQA Re, the external business is expanding.
I was wondering if you could give us a little bit more detail on that, the segments that you are targeting, and maybe whether you expect to continue growing in a softening reinsurance market at the moment. Thank you.
Okay. Talking about large losses, yes, they are part of the traditional claims. That's correct. Large losses, defined as losses at EUR 500,000, have generally an impact on our P&C loss ratio at the moment of 6%. This was last year 4%. We have higher large losses in that case. We've also taken into consideration that fronting business is something that at UNIQA is also considered, not at UNIQA generally, on the additional claims. We have here 1.7% on a gross basis, but you have to carve this out on a net basis because this is 100% reinsured. Yes, you're right, we had one big claim last year, but this year we have the large loss situation more on a frequent level. That means between EUR 10 million and EUR 15 million. Not the big losses between EUR 30 million and EUR 40 million-EUR 50 million.
The frequency is getting higher in that respect. Second question is about UNIQA Re. Yes, the external business is something that we started 2023. I will elaborate on that next week in more detail, but I can tell you that at the moment, with a level of around EUR 270 million-EUR 300 million after two years, we are quite happy. Rest, happy to inform next week.
Okay. Thank you very much.
Thank you very much, sir. Ladies and gentlemen, once again, if you have any questions or follow-up questions, please press star one at this time. We'll now move to Rok Štibrić of Erste Group. Please go ahead, sir.
Hi. Good afternoon, everyone. Hope you can hear me. Congrats on the good results. Yeah. Really, really nice to see how you're progressing on the strategy. You already talked quite a lot about some topics that I wanted to ask about, but I would still like to come back to the solvency II ratio. I mean, right now, you are quite high with the number, and I was just wondering if there is no suitable M&A opportunities, if investors could expect maybe a special dividend or something like that. I mean, I understand that buyback is out of the equation here, but still, when I compare your return on equity and cost of capital, I think there is some more potential on UNIQA's side. I just wanted to hear what's your view on that. Thank you.
Yes, Rok. Also here, give you a flavor on some guidelines, and the rest we see next week in London to talk about this. Look, the solvency ratio is 283%. First of all, where does it come from? We have, on the one hand, an impact of more than 10% coming from the STRABAG development and around 11% in total over the years coming from the interest movements. Do I see this as a sustainable development? STRABAG, I hope this because the company is great, and what they're doing is, in Europe, a great construction company. The point is, if the stock value and the market value of STRABAG is sustainable on that level as it is, I would say this is not only dependent from the operational development of the company. I see this as a little bit of a risk.
The same is for interest rates because interest rates are going up. Yes, UNIQA is very interest-sensitive. We know this. We explain this. I just wanted to point this out because personally, I always say between 15% and 20% out of these 283% is market movement, not in our hands. With this, we are down at 260% in my calculation. Maybe others see this differently, but let's discuss this next week. For the 260%, we want to be prepared for M&A activities. We have seen here a lot of opportunities, and of course, we are looking on that. The markets are defined at UNIQA. We have to take care of, we have to have a placeholder between 15% and 20% percentage points for this. We want to bring down our leverage ratio.
This is also something that has an impact in the future to us. Rok, we are down at the 230 and maybe even below. This is how I see this. Meaning a very simple question from your side with a long answer is a special dividend is for us then worth thinking when we have a special situation because what I do not want to suggest to my shareholders is to say, "Let's just pay out some dividends because to come down with the solvency ratio." This is maybe it's easy done, but it's not sustainable. If we have a special situation, measurement, activity, sale, whatever realization, then we can talk about this.
All right. Noted. Thank you very much.
Thank you, Rok. When I move to Thomas Unger of Erste Group. Please go ahead.
Yes. Good afternoon. Thank you very much also for taking my questions. I'd like to stay with the topic, capital ratios, and just wanted to know how you got to these 283 now in Q3. That's the stable development versus the first half of 2025. At the same time, you bought back these subordinated notes. I expected a weaker development actually in Q3. Maybe you could explain how the capital ratio and what developed in Q3 and what were the driving factors here. For the financial results, it's been weak throughout 2025. Are there any improvements foreseeable for 2026? Is there anything from your side, not external factors, any reasons to be optimistic about the development in the coming quarters or next year? I'd like to hear your opinion on that.
Thirdly, on the non-technical results, this has been weak, especially in Q3 and Q2 with high or higher other expenses than in prior quarters. What has led to this development, and is there any improvement in sight? Thank you.
Okay. Thomas, let's start with the first one. I explained this when Rok was asking. It's 10% STRABAG, it's 11% interest rate movement, and it's about minus 8 percentage points from the tier two call. This is what were the drivers for the solvency ratio. I think the rest is what I explained to the answer of Rok, and this is the capital base.
That was in Q3 alone?
Yeah. Yeah. That's year-to-date growth in that case. STRABAG was continuing. Yeah. That's okay. Net financial result, yes, you're right. On the first line, it looks weak because it's lower than 2024. The thing is that we did two things. The first one is we have the situation that we see that our technical performance generally is quite okay. It's not quite okay. It's quite overplanned. With this, we made economic-wise changes in the strategic asset allocation. That means we sold on purpose bonds where we made realized losses in the amount of EUR 46 million directly for the non-financial result. We did this on purpose because with this, we could, A, a little bit improve our cash position. Secondly is keyword M&A.
Secondly is with this, we improved massively our ordinary income position in the future because we changed from bonds with lower interest rates into bonds with higher interest rates at the moment. Thirdly is we could manage because of the good situation with the interest rates and also our anticipation that they keep on that level for a longer time, that we have high overvalues on the life and health business, and we could also change between life and P&C, the bonds and the net financial result. Out of these three elements, we said, "Okay, with this, it's fine for us when the net financial result is a little bit lower than last year or than expected, but we have higher economic positions for the future, plus cash liquidity buffers saved." I think this is something which is worth in days and times like this.
When we talk about non-technical items, it is on one hand, a little bit of project cost coming from that level. The other thing, Thomas, to be honest, I'm not aware of the answer. I will reach out to you next week if it's okay.
Thank you very much. For your answer on the financial results, that means that for 2026, we can expect an improvement in the financial result. Is that right?
Yeah. Yes. Out of this, we have a higher ordinary income to expect it. Yeah.
Very good. Thank you very much.
Thank you very much. Your question is, Thomas. Ladies and gentlemen, as a final reminder, if you have any questions or follow-up questions, please press star one. We have a follow-up question coming in from Michael Huttner out of Berenberg. Please go ahead, sir.
Thank you very much. Just one is on the frequency, and I just wondered if you can I think you said the base claims are better, but the large claims are worse or there are more of them. I just wondered if you can maybe talk about how you see those two different developments. The other one is on the cost of the ecosystems. I know it's part of your you look at it as part of your M&A, but I always get the figure wrong. How should I think about the I call it a drag on earnings. It's not. It's like an investment, but you book it as a negative.
In the health business, is there a figure which I should say, "Well, health normally earns this much," and then I deduct this much for the cost of the ecosystems annually, I don't know, 20 or 30 or whatever million? Thank you.
Okay, Michael. When we talk about the large claims again, yes, that's correct. The frequency is getting higher. With the frequency getting higher, also the numbers are getting higher. Let me regard we have at the moment on a level of major claims, a level of on a gross basis. Yeah. That's gross without reinsurance, EUR 210 million. The comparable basis like last year was EUR 140 million. The average I expect is normally EUR 190-200 million. We are between EUR 10 million and EUR 50 million above the average. This is what I want to say, and this is the frequency I see this year. Is it problematic? No, it's not problematic. It's a situation that happens. I said again, the highest claims are between EUR 10 million and EUR 15 million, and therefore the frequency is higher. Also our portfolio is getting higher.
I think it's a normal development. It's an outlier for your calculation between EUR 200 million and EUR 210 million. EUR 200 million is for me the average at which we are normal. The second question is about the health ecosystem, and you can take on a nine-month basis as a run rate around EUR 10 million loss.
10 million. Fantastic. Perfect. Thank you very much.
Thank you for your question, Mr. Huttner. As we have no further questions at this time, I'm going to call back over to you, Mr. Svoboda, for any additional closing remarks. Thank you.
Yes. Ladies and gentlemen, thank you for your participation in listening to UNIQA's nine-month 2025 results. Happy to see you next week and wish you a remaining successful day. Thank you and goodbye.
Thank you, sir. Ladies and gentlemen, that will conclude today's conference. Thank you for your attendance. You may now disconnect. Have a good day and goodbye.