UNIQA Insurance Group AG ($UQA)

Ladies and gentlemen, we warmly welcome you to the conference call of the first quarter results for 2026 of the UNIQA Insurance Group AG. I'm pleased to welcome CEO, Andreas Brandstetter; and CFO/CRO, Kurt Svoboda, who will guide us through the presentation shortly. [Operator Instructions] And having said that, I'm handing over to you, Mr. Brandstetter.

Hello from Vienna, and thank you very much for your time and interest in the Q1 figures of UNIQA Insurance Group, which show resilient numbers and which show again a full match with our 2028 targets, and which also are a very constant proof of our diversified business model. Just reminding you of our targets for the year 2028: first, a 6% premium CAGR; second, a 7% EPS CAGR, a combined ratio, which is below 93% net; and last but not least, admin cost ratio, which is constantly below 15%. This is what we communicated to you. And if we start on Slide 4, on the left part of the slide, we see that all our figures of our KPIs in the first 3 months 2026 prove that we are everywhere on track. Let me briefly start with the growth, which shows on Slide 5, an increase of 14.4%. As you might have seen, the growth in our home market, Austria, direct insure business is north of 4%, 4.2%. The growth in our international markets, which means in CEE is 6.2%. So basically, we are pretty much in line even if as we already felt a couple of months before, we see a little bit of headwind in the Eastern European markets as far as the market growth itself is concerned. But we are quite optimistic that within the next 3 quarters of this year, we will also be able to catch up and to reach our 8% growth in CEE, which, as you know, is our target line for the next years. What is special to mention here is that we have a kind of seasonal contribution of growth from our reinsurance company in Zurich. This is our external business, which will be elaborated by Kurt a little bit later where we see a very strong increase, as I said, due to seasonality in Q1. But please don't expect us that in the next 3 quarters, we see a similar growth coming from the external reinsurance business. Most of the business, more than 90% is booked in Q1. So this will slow down and which basically normalize until the year-end. But as I mentioned again, Kurt will elaborate on this a little bit later. So we are fine with the growth on the top line. If we then move to the technical result here on the Slide 5, we see an increase of 5%, up to EUR 210 million. What we see is a kind of a small decrease in the P&C profitability, even with a combined ratio of 91% and that still is very fine. It's good. Frankly spoken, we didn't have any kind of major loss coming from natural catastrophes in this Q1. And as far as the large claims is concerned, we see a sideward development if you compare Q1 2025 to 2026. What we see is a small, but moderate increase in the so-called basic claim in the basic portfolio. But again, no reason to worry. Still, we think 91% is a very good figure. And this, as I stated a couple of minutes before, also in line with our overall target because we said combined ratio net always should be below 93%. On the other hand, staying with the technical result, we see an excellent performance in Life and in the Health performance. Kurt will show in a couple of minutes that the strong CSM release is coming from Austria Health and Life. On the other hand, the Austrian health continues to be a main CSM new business driver with a sustainability ratio, which is clear north of 100%, even north of 120%. So a very good development as far as the Austrian Health insurance business, the new business, the incoming business is concerned. I talked already about the large claims. I talked about the combined ratio. I think this is relevant because it's referring to more than 60% of our old business. This then leads us to the profitability, the earnings before tax is an increase of almost 6% up to EUR 160 million. And as I stated before, following an effective tax rate of 21%, we had a little bit higher tax rate in the first 3 months of 2025, we have a consolidated profit, which has been rising by 8% up to EUR 128 million. So overall, having said this, I think we are completely super in line with our promise, and this is also the reason why we may confirm our target for the full year 2026, showing a profit before tax somewhere in the range between EUR 540 million and EUR 570 million, Kurt, and you are also kind to guide us through the details.

Thank you very much, Andreas, and welcome also from my side. I'm starting on Page #6, talking about key financial indicators. I would like to highlight 2 of them. The first one is, again, the dividend per share. So in the upcoming general assembly on the 9th of June, we will propose a dividend of EUR 0.72, which is quite a great increase in comparison to the full year '24. Still, we stick to our payout ratio between 50% and 60% also in the upcoming years. Second key financial indicator I would like to highlight is the regulatory capital position, 272%, so nothing new on that. But on the one hand, I would like to stress that -- and you will see it in the details that we have managed to bring down the ALM gap, especially on the health side close to zero. So that means the sensitivity of UNIQA, especially to up and downward shocks on interest rates is at the moment more or less neglectable. So in other words, the 272% are for us a very constant level, of course, depending on the economic development, but this was also a discussion point even in the future. And yes, we placed a bond that you have maybe noticed in the last couple of weeks around EUR 500 million, including refinancing of an existing bond. So that means we will have a little bit of a deterioration between Q2 and Q3 because of the buyback, but this is in a way of around 5% to 7%, nothing to worry about. And with this, we are also ready for further M&As and increasing the business models and strengthening our business model in the future. The Group Life & Health CSM on the next page, on Page 7, I think what is for us very important that we are on track to the target of 90% CSM sustainability ratio 2028 with around 78.2% in the first quarter. I think nothing new on that. Health, outstanding, Life, in that case, stable. So in that case, we are confident to achieve the target. The target of top line on the Page 8 was already mentioned. So on the one hand, you see the quarterly development. What jumps into the eyes, especially P&C business quarter-to-quarter, already mentioned by Andreas about the external reinsurance business. So just to add in that case, around 90% of the external reinsurance business has the renewal in Q1. We could manage that with new prices, and a little bit of expanding the business, we come to the gross written premium of around EUR 214 million, including a small portion of new business in that amount. What to expect for the rest of the year, certainly not again on a quarterly basis, this EUR 400 million, but we are confident that the level of trend between EUR 440 million and EUR 450 million, EUR 470 million is something that is achievable in this year with the net margin of around 8%. And this has a very good diversification in our P&C business in the future. When we talk about growth, we have also to take into consideration the Health business, the Health segment, and here, especially the split between volume and pricing components. So volume components in the first quarter have been around 2.5% and pricing components have been around 5.5%. So in total, 8% growth on the Health business. Admin cost ratio, Page #9, we are on track. So nothing more to report on that. Cost management is an issue, and therefore, to have the target in line from Q1 onwards is, for us, very important. P&C, strong fundamentals, on Page #10. I think what jumps into the eye is that the earnings before tax are lower than in 3 months '25 in comparison, the combined ratio is a little bit higher. So what's behind is, on the one hand, that we have a little bit more on major claims in 2026. This is the Polish portfolio. But in this case, we are in line with the plan. So no worries that we are overshooting our internal forecast. The second thing is that we used the first quarter like many other insurance companies to strengthen for the rest of the year because cat season is ahead of us. We have a very, very dry situation here in Austria and also in parts of the CE region. So we expect not only a hot summer, but also the one or other cat event. And with this, we have prepared, in the first quarter, a little bit of reserves for the rest of the year. In total, we can talk about 2% impact on the combined ratio on that level. So that is then comparable to the year 2025. I talk about Life on Page #11. CSM really is stable. We have here a new business margin between 3%, especially in the unit-linked business and around 20% in the biometric business, so a wide range. classical business around 4%. Still, we are losing more volume that the new business is in, but this is not only the UNIQA trend, this is generally visible in the Austrian, but also in the other markets so far. Health, I talked about very strong net result driven by the inpatient tariffs and group tariffs, which are very profitable and also the volumes in line with what we expect. Talking about the core markets on Page 14. Very important for us is the well-balanced contribution of Austria and international business. So EUR 71 million in that case from both core markets, plus UNIQA reinsurance with EUR 36 million. There are a contribution from the external business of EUR 9 million. So we are very well balanced, good diversified and for that, for us, a clear achievement of the target. OCI and ECL is, for us, very stable. So what is important to note that, of course, yield on a 10-year Austrian government bond raised between '25 and '26, therefore, we have also an impact on our OCI, especially on the fair valuation on OCI. And on the other hand, we can also say that the expected credit loss development was also quite neutral in respect to the last year. And investment activities, nothing new to report on that. STRABAG that maybe have noted or seen that we sold down a portion of the non-syndicated shares, but be aware that this has an impact only from Q2 onwards and not in Q1. And with this, I would then go directly to the outlook and to our guidance for the year of 2026. As Andreas mentioned, targeted EBT in the range of EUR 540 million to EUR 570 million despite the very well-driven Q1. Dividend in the policy management between 50% and 60% and the targets here shown unchanged to that what we have reported since the last Capital Market Update. That's the keyword. Save the date for the Capital Markets Update 2026 on the 25th in November in London. Invitation and more details then to come. But for all of you who are interested, please take -- save the date in your calendar. With this, I end my presentation here. And now Andreas and I are happy to take your questions.

[Operator Instructions] And with that, we will start with Antoine.

I have 3. First one is on P&C and more specifically on the reinsurance business that you're expanding quite quickly. I was wondering if you could provide a little bit more details on the type of business that you're writing. You mentioned a net margin, I think, of 8%, but also if you could maybe expand a little bit on the profitability you expect from that business and maybe the risk that is associated with it. Then I have a second question on your STRABAG stake. So you mentioned the sale in April. I was wondering if you could help us understand whether you still have the possibility to sell more shares in the future? Could you clarify how many shares, if any, you still hold outside the syndicate agreement? And maybe whether there is a possibility that the syndicate agreement could be amended? And then finally, a question about tax, which is not specifically related to Q1. But you have a large stock of tax loss carryforwards. Only a fraction of those are recognized as DTAs. And so since they have no expiry date, I was wondering whether there is any reason why recognition would not be possible? And maybe could you help us understand -- better understand the expected time line of the recognition?

Thank you, Antoine. So first of all, question on reinsurance. Thank you for that. So I give you a snapshot of that what we are doing here. So we are doing here a niche business in the reinsurance side. So that's not comparable to that what the most known reinsurers like Munich Re, Swiss Re or others are doing in that case. So we are closely working here on MGA basis and on a business which is based on property and the whole account quota share. We have no intermediaries between, so that means we have direct access to the network and to the partners out of our expertise that we have built up in Zurich. The portfolio is spread between North America, which is the major part, more than 30%, Europe, those markets where UNIQA is not doing primary insurance and a little bit of Latin America and Asia. And as I said to you, we are in the third year. We have contracts which have duration between 2 and 3 years, so no long-term business. And correctly, our target is that we have a net margin between 8% and 10%, well diversified and also creating a dividend stream in the future from UNIQA Zurich to the UNIQA Insurance Group. I think more to come then in later stage of the year, but that's for you a summary of that what we are doing here. STRABAG, yes, we have still a little bit more than 1% on the non-syndicated shares. And the question is for us, not a urgent one, but of course, we have an eye on that. But for the time being, we are happy with the situation. The syndicate contract is something that is theoretically sellable, but for us, at the time being, not a topic because the company is operative-wise great performing, full books for the next, I would say, 8 to 10 years. And with the position that we are able to sell down a little bit more, for us, a very good participation, especially the return on the risk and the return on the investment is key. We get more than EUR 40 million on equity contribution in the P&L and between EUR 50 million and EUR 70 million as a cash dividend per year. So in that case, we're happy with the participation. Tax, very good questions, calculation. So we have tax carried forward in total of around EUR 0.5 billion in the group, especially more than 95% coming from the Austrian business originated in the years '21 to '24, especially coming from shareholding in investment funds and other provisions. Now one can say, why don't you make this available for last year, this year or the next year? This has to do because we can always then -- we can only then take these loss carried forwards into action if we have enough deferred taxes that we can cover with this. So in that case, the good thing is that we have, for the next 5 years, those loss carried forwards for us to deduct from the real tax rate. So therefore, we are confident to achieve the 20%, 21% on a sustainable basis. The bad message is we are going do it at once.

And then we will move on with the person from the telephone, so Rok Stibric will be the next one.

Hope you can hear me. I would actually have 3 questions. First one is related to the Health segment. Could you provide more insights on the growth and what's the split there between volume and pricing components? Second question is related to Poland, where you mentioned some one-off event. And I was just wondering if this is related to harsher winter conditions? Or is there something else in the equation? And last question is related to your recent refinancing. Given your very strong solvency position, it's not exactly clear if you really needed this issue, but still, I was doing now some back-of-the-envelope calculations, and I see that you must be sitting on a cash pile of over EUR 1 billion. Can we interpret this as a signal that UNIQA is now ready for some large M&A project?

Yes. So I tried to answer especially the first question in my speech, but happy to do it again. So the volume-driven effect was 2.5% and the pricing-driven effect was 5.5%. The claim, correct, that was mentioned somewhere that we have in Poland. No, that has nothing to do with harsh winters and condition. Here, we have a situation which is quite uncommon on the insurance market, especially to me. So we have 1 claim in 2 countries, which has the same basics. So the thing is that we have, on the one hand, a property claim in Poland between UNIQA Poland and an insurance customer on the corporate side, which was a property claim. And on the other hand, the other party who is embedded in that case made with us a liability against us in Czech Republic. So in that case, we have, in Poland, an impact that you are here assuming that has to do with harsh winters, that is not the case. And we have, for the same event, a liability claim, which is visible in Czech Republic. And therefore, you can now say it's a double counting. It's not a double counting in the way of accounting, but it will sort out. Either the one or the other pols are at court, and we talk about a number -- low-digit million number in that case. Third question, Rok, I think, yes, you're right, and you know our answers. We are always preparing for to be ready for M&A activities. I think all of you -- most of you know not only in the insurance business, also in the health business, but in the vertical business and to prepare for that, the Tier 2 notes and this transaction was done. That's correct. EUR 1 billion cash, Rok, is a little too much, but I can, in other way state, we would be ready also to finance the transaction in that way.

So ladies and gentlemen, before we move on with the last person in the queue, so it's Michael Huttner, [Operator Instructions].

I had 4 questions, only one because I couldn't understand, and I'm really sorry, my hearing is going, so it's not good. But you mentioned a figure for the benefit of unwinding the double counting as it were this Poland/Czech claim. And I didn't hear the figure, the benefit if it settled one way or the other. My second question is, you mentioned at the beginning, Mr. Brandstetter, the benefit -- the optimism on the 8% growth. I just wondered if you could give us a little bit more granularity on that. Then I saw yesterday that Vienna had made lots of little acquisitions, I think Moldova, Bulgaria, Romania, and I think you've recovered some write-downs on some Russian bonds. So clearly, there seems to be a wind of optimism regarding Russia and Ukraine. I just wondered if or when the war does stop, what's the potential upside for you? And then the final question is on the external reinsurance profit. So EUR 9 million is a figure I heard. For the full year, do we multiply by 4 or is it higher?

All right. And I can start it. Michael, thank you for your questions, Andreas here. Maybe about the Ukraine and Russian question, so we have a strategic position there as we entered the Ukrainian market something like 20 years ago. As far as market ranking is concerned, somewhere between #2 and #4 with a very composite book in the retail business, having more than 1 million clients in Ukraine, predominantly also before the war in the western part of the country. I think we constantly report out that we show a constant growth as far as GWP is concerned. We are able to keep the number of risks, meaning we keep our clients there. So the renewal rate is quite high. The customer satisfaction is quite high. And even if all of us in this call, frankly spoken, will not be able now to give a clear message and estimation when and how this incredible [ IT ] war will be stopped, but one thing is clear that for all of us who kept on staying in Ukraine, this will be really a relevant catch-up potential and potential general providing us relevant growth, I would say, both on the retail segment and on the corporate segment because we expect, of course, as all of us, a lot of investments coming from various parts of this world flowing into Ukraine. And this is why we are so strongly committed there, and this is why we are standing really close to Ukraine. And frankly spoken, we are also very happy that within a quite short period of time, we managed to distress and to sell our Russian assets. I think this also gave us some kind of relief and additional potential to focus really on the most relevant topics, and this is the growth and the increase of our profitability in the group. This is the one topic. And also on your second question, Michael, as far as the growth, the 8%, which I stressed out at the beginning is concerned, so yes, you could look at our figures, you can say now, okay, 6.2% growth in the first 3 months. And now we always proposed and said that 8% CAGR international-wise is our target. It's true. But what we see then, and we can state this, we see a clear speed up of the growth in April. We see it further in the first 2 months (sic) [ weeks ] of May, and that's coming from our 2 largest market in CEE that's coming from Poland. Michael, we have more than 7 million clients in Poland, and it's coming also from Czech and Slovakia. And this gives us confidence that by the year-end, it's absolutely realistic to be at the 8% GWP growth in the international business. I hope that's fine for you, Michael.

Good. Then remaining 2 questions, Michael, was about the value of the Poland/Czech Republic claim. I always said, for the compliance reasons, I cannot tell you the exact number, but I can tell you it's between EUR 10 million and EUR 20 million, which is impacting us in that respect. And your last question was about the margin on the reinsurance business, if you can take this multiply by 4. I think, no, that's not the case. So what you can do is to say, okay, I said 8% net margin on the volume by the end of the year, which I expect around EUR 420 million to EUR 450 million, yes, correct.

8%, so that would be about EUR 40 million. Is that right?

8% from EUR 450 million is a little bit around EUR 32 million to EUR 35 million.

And the Poland claim, just to check claims, just to understand, you booked it twice and it might be resolved to become just one. Is that right?

That's right.

Okay. Brilliant. Sorry, sorry. And the figure you gave is the current amount of the claim?

Correct, 2x between EUR 10 million and EUR 20 million and...

And in the meantime, we have received no further questions or virtual hands. But I can see, Michael, you want to have a follow-up, so you can go on.

Can you hear me?

Yes.

Fantastic. Sorry about that. Yes, so really, really silly questions. I think you gave a number. But on the deal front, is it -- the feeling I have is you're closer to identifying some kind of potential deal. Is that fair? The figures sounded more precise than before. That's why I ask. And then the second question is on the Health profit, so you explained that they jumped. I didn't quite understand. This is -- it's a special kind of contract where you suddenly -- is it a volume effect and so the bigger contribution than your normal contract where the profit is kind of spread over 20 years or something?

Thank you, Michael. About the M&A, so I think what we -- what's not the case that we have identified some concrete targets in our region, which are basically up to sale. So we don't see this. Of course, as you know, we keep to have our eyes open and try to be actively monitoring what's going on. But for the moment, we can exclude -- following up our discussion which we had last year on Capital Markets Day, what we exclude is that we're entering new markets, other markets outside of Eastern Europe and Austria. We think that's here our USP. And we think that still those markets are providing enough growth for the next years. What we are evaluating all the time are, as we call them, not only horizontal acquisitions, meaning that we aim to buy other insurance companies in the region, but what we do also, as you know, is that we're also looking for so-called vertical acquisitions, meaning looking for broker, looking for comparison platforms, so extending our value chain. This is what we are monitoring, evaluating all the time. But to be very open, there is nothing which is relevant [indiscernible] on the table that we could give you further information on this. But as also the excess capital was mentioned a couple of times in this call directly or indirectly and following Kurt's explanation, we are ready to invest because we understand that not only organic growth, but also unorganic growth, and this means acquisition, will be relevant and important for us in the upcoming years. If there is any news up on the horizon, we will give you further information on this.

The second question, Michael, was about the strengthening or the increase on the technical result in the Health business. So there are 3 elements. The first one is we have to take into consideration the development of the interest rates and the impact on the CSM. You know about that. And the second thing is, the good thing is that we have less benefits in Q1 2026 in comparison to '25. So that is another driver. And the last thing is that we have done in 2025 some reserve strengthening, especially on the outpatient tariff. So in that case, this is also done and we are now improving the business in that case. I just mentioned in my speech that the most profit comes from the inpatient tariff and also from group tariffs because we are dividing retail tariffs in retail contracts and group contracts and the group contracts have a very high profitability, also speaking, the highest profitability within the Health business.

So by now, there are no further questions, and we, therefore, come to the end of today's conference call. Thank you, everyone, for your shown interest. And also a big thank you to you, Mr. Brandstetter and Mr. Svoboda, for your presentation and your time. But before we close the call, I hand back to you, Mr. Brandstetter, once again for your closing remarks.

Which are very short. May thank to all of you on this call. Thank you for your further interest in UNIQA, for your time. Wish you a great weekend. All the best. Bye-bye.