1H results according to plan
– 1H figures in line with our estimates: As expected,
Vienna Insurance Group was able to present a strong set of
figures, including top line growth of 7.9% (supported by an
outstanding development of the life insurance business)
and pre-tax profit growth of 11%. The net result increased
by 9.2% to EUR 196.4mn.
– Combined ratio up to 98.3%: A number of natural
catastrophes (especially in Austria, Poland, the Czech
Republic and Romania) caused losses of more than EUR
100mn. After reinsurance, VIG’s P/L was burdened by
some EUR 50mn, leading to a combined ratio increase to
98.3%, from 95.5% in the corresponding period of last year.
– Guidance confirmed: The company said that business in
the current financial year is developing according to plan.
The original aim of Vienna Insurance Group was to achieve
single-digit growth in premiums and an increase in the pretax
profit of more than 10%.
– Buy recommendation and target price confirmed: We
stick to our EPS estimates of EUR 3.03 and EUR 3.48 for
2010e and 2011e, respectively. For 2012e, we calculate
EUR 3.68. We leave our target price unchanged at EUR
44.5 and confirm our Buy recommendation. A comparison
with the Polish PZU underlines the attractiveness of the
VIG share.
