Despite the difficult market conditions Hungary’s Generali-Providencia insurer boosted its after-tax profit by 42% year on year to HUF 4.9 billion (EUR 16.76 m) in 2011, the company announced on Monday. The Generali Group booked a similar improvement.
Generali insurance company increased its after-tax profit considerably to HUF 4.9 billion in 2011 from nearly HUF 3.5 bn (42% yr/yr).
Generali Group in Hungary boosted its after-tax profit to HUF 4.8 bn from HFU 3.6 bn.
The major improvement is the result of enhanced operational efficiency, cost-cutting measures and a smaller loss ratio (i.e. the ratio of total losses incurred (paid and reserved) in claims plus adjustment expenses divided by the total earned premiums) thanks to more favourable weather conditions. Meanwhile, the relative market position of both Generali-Providencia and Generali Group has strengthened, although their market share was down in annual terms it was close to that of the market leader.
2011 was a year of extremities in the insurance sector: the crisis and the early repayment scheme reduced households’ saving capacity but as weather was “merciful" the loss ratio dropped.
Generali Group said it achieved its targets last year despite difficult market conditions. Generai’s primary goal - in line with its strategy - was not to boost premium income at all costs, but to improve profitability and it achieved this objective while it maintained is market position, commented Chairman-CEO Mihály Erdős.
Generali-Providencia’s adjusted premium income totalled HUF 114.9 bn in 2011, which translated into a 16.9% market share, slightly smaller than in 2010.
Premium income in life amounted to HUF 35.8 bn, which meant a 12% market share for the company. In non-life, Generali posted HUF 79.1 bn premium income, which was enough only for a 20.8% market share, down 4.8 ppt yr/yr. The latter was attributable primarily to the erosion of premium income from the compulsory vehicle liability insurance (kgfb); in other areas Generali managed to increase its market share.
Generali Group (including Genertel and travel insurer Európai Utazási Biztosító) reached HUF 120.6 bn adjusted premium income last year, which carved the group out a 17.7% slice of the market. Now Generali is only 0.2% behind the market leader. In non-life other than the “kgfb" the group had a 25.2% market share that made it market leader.
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