02.12.2016 |
- Concentration on core markets of Austria and CEE in line with strategy
- Excellent economic capital ratio rises by another roughly 20 percentage points on pro-forma basis
- Consolidated net profit around €100 million lower in 2016
Today, the Management Board of UNIQA Insurance Group AG (UNIQA) resolved to sell the majority interest of 99.7% in its subsidiary UNIQA Assicurazioni SpA to the Italian mutual insurance company Società Reale Mutua di Assicurazioni. The Supervisory Board has approved the sale.
The sale encompasses UNIQA Assicurazioni SpA and its subsidiaries operating in Italy, UNIQA Previdenza SpA and UNIQA Life SpA. The parties have agreed on the content of a purchase agreement that is to be signed shortly. The legal closing of the purchase agreement is expected to take place in the first half of 2017 after all necessary regulatory approval has been granted. The purchase price is €295 million before transaction costs.
UNIQA Group CEO Andreas Brandstetter explained the background of this step: “We are focussing on our core business in Austria and CEE and orienting our investments towards this as part of our long-term strategy, UNIQA 2.0, which was launched in 2011. “While we made acquisitions in Croatia and Serbia, for example, and expanded our involvement in the private hospital sector in Austria, we have sold investments that are not in our core markets or do not contribute to the insurance business. These include an insurance company in Germany and investments in hotels and media. In the case of UNIQA Italy, we are selling a very well-managed subsidiary that has been profitable through the years but is not in our core markets.”
The transaction will have a particularly strong effect on UNIQA’s capital ratios, which are already at excellent levels. For example, the economic capital ratio (ECR ratio) will improve significantly by another roughly 20 percentage points compared to its level of 166 per cent in the first half of 2016. In the context of a continuing low interest rate environment, the reduction in capital-intensive life insurance business in Italy in particular will have a sustained positive impact. As at 30 September 2016, UNIQA currently has goodwill of €115 million relating to the Italian companies. In connection with the impairment of this goodwill, the sale will result in a negative effect on consolidated net profit of around €100 million in 2016. The expected earnings before taxes will be reduced by the positive contribution from the Italian business, which was estimated at around €25 million for 2016.
UNIQA Italy, founded in 1965, generated premiums written of €1,114 million in 2015 and made a positive contribution of around €25 million to the Group’s earnings. The three companies currently employ 321 people. “UNIQA Italy is an excellently managed company that has consistently delivered positive earnings contributions through the years,” comments Wolfgang Kindl, CEO of UNIQA International. “I would specifically like to thank Michele Meneghetti, CEO UNIQA Italy, and his team for their many years of outstanding support. We are delighted that in Società Reale Mutua di Assicurazioni we have found a buyer that has a long historical presence in Italy, strong values and high insurance skills, all elements that will be very positive for our sales partners, employees and customers.”
With regard to the outlook, Andreas Brandstetter comments: “For the 2016 financial year, we still expect earnings before taxes to be up to 50 per cent lower than the very good earnings for 2015. This is due to the fact that the positive contribution from Italy is now no longer included in the earnings before taxes, as well as to the innovation programme launched at the beginning of 2016 with considerable future investments in the redesign of the business model, the build-up of staff expertise and the necessary modernisation of our IT landscape. Furthermore, we do not expect the persistently difficult conditions with negative interest rates, sinking investment income and political uncertainty in individual markets to improve in the medium term. Even after the sale of our operations in Italy, we are still keeping to our plan to continuously increase the dividend per share.”
UNIQA has been supported on the transaction by KPMG Corporate Finance Italy and Unicredit, as financial advisors and by Legance and Schoenherr as legal advisors.
Forward-looking statements
This press release contains statements concerning UNIQA’s future development. These statements present estimates which were reached on the basis of all of the information available to us at the present time. If the assumptions on which they are based do not occur, the actual results may deviate from the results currently expected. As a result, no liability is accepted for this information.