VIG still growing (Buy confirmed)

- Vienna Insurance Group with 5.5% top line growth in 1Q. VIG presented a strong set of figures, including premium growth of 5.5%, pre-tax profit up 6% and net profit up 7.9%.

- Strong balance sheet. VIG’s equity increased 4.4% to EUR 5.3bn. In addition, the group’s current hidden reserves amount to EUR 1.5bn (corresponding to 40% of the actual market cap). The solvency ratio exceeded the 200% mark after the first quarter.

- Target price reduced to EUR 38, Buy confirmed. To reflect the difficult market situation, we decided to slightly cut our earnings estimates for the coming years by 3-5%. Consequently, we also slightly reduced our target price to EUR 38 (from EUR 40). We confirm our Buy recommendation.

- Peer group comparison confirms positive view. A peer group comparison shows that VIG is currently traded at discounts with regards to its P/EmbV multiple. Slightly higher P/Es compared to its Western European competitors are justified by higher growth rates.