Travel Insurer Europäische Reiseversicherung Stays on its Success Path in 2012

• Premium income sets a new record of €59 million
• Cautiously positive outlook for 2012

Vienna, on 12 April 2012:
In 2011, premium income at travel insurer Europäische Reiseversicherung AG came to a record €59 million.  This further strengthened the company’s leadership position in the travel insurance segment, giving it a market share of over 60 per cent.  Premium income was therefore 5.6 per cent up on the previous year, and this Generali Group subsidiary also recorded a record number of insured travellers, namely 2.15 million.
Although 2011 was a difficult year for the tourist industry, every business segment developed positively, including the company’s activities abroad.  Overall, its operating profit (profit from ordinary activities) was very satisfactory.

Outgoing tourism was particularly hard hit by a number of events.  Among other things, people’s desire to travel was affected by unrest in North Africa, the Tsunami and nuclear disaster in Japan and flooding in Thailand and other countries.  Bookings with tour operators through Austrian travel agencies increased by just 0.7 per cent in 2011, having still increased by 3.1 per cent in 2010 (source: Amadeus Tourix).  However, events did increase risk awareness and, as a result, the market penetration of travel insurance.  Having also acquired new sales partners, Europäische was able to grow in this business segment, which is its largest and most important source of premium .
The number of overnight stays in the incoming segment grew by 0.8 per cent in 2011, compared with 0.4 per cent in 2010.  In contrast, following a record increase of 3.3 per cent in 2010, the number of guests grew strongly again in 2011, advancing by 3.6 per cent (source: Statistik Austria).
Business travel continued to develop well.  Flight bookings through Austrian travel agencies grew by a solid 4.5 per cent, making 2011 a satisfactory year even if the record growth rate of 14.6 per cent recorded in 2010 was not repeated (source: Amadeus AATIX).

CLAIMS EXPENSE INCREASES BY 11 PER CENT

Claims expense came to €27.36 million, which was 11 per cent more than in the previous year.  Cancellations accounted for most of the increase, totalling €16.34 million.  That was 15.3 per cent more than in 2010 and made up roughly 60 per cent of aggregate claims.  Travel sickness and accident insurance claims increased by about 7 per cent to €9.07 million to account for roughly one third of total claims expense.  The company’s loss ratio — claims in relation to premium — was static at just under 47 per cent.

As premium income grew, underwriting expenses increased by 6 per cent to €23.9 million.  Over 90 per cent of the total was accounted for by acquisition costs, made up largely of commission.  At the same time, the company was able to cut its administrative expenses by 5.5 per cent.

OUTSTANDING PROFIT

The company’s investment income was dented by the difficult situation in the financial market.  Despite high impairments of equities and fixed-interest securities (among other things, Greek securities), the company’s net investment income was positive, but lower than  the previous year.
Profit from ordinary activities recahed €3.51 million, which was 76 per cent more than in 2010.  Taking into account a profit carryforward from 2010, net profit grew by 64 per cent to €1.98 million.  This permitted a sizeable increase in the company’s own funds, which came to €10.89 million.
Europäische’s two subsidiaries also developed well.  Insurance broker Care Consult was restructured and is now focusing more closely on the tourism and events segment.  TTC Travel Training Center has become a leading tourism service provider thanks to its extensive programme of seminars.

SUCCESSFUL ABROAD

Europäische Reiseversicherung AG successfully continued and stepped up its activities abroad.  In its fifth full financial year, the company’s branch in Slovakia achieved a 74.3 per cent surge in premium income to €4.53 million.  This led to a marked improvement in its expense ratio.  With its development phase completed, this company has established itself as one of the leading travel insurers in a hotly contested market, and it will be able to continue its profitable growth on solid foundations.

Insurance operations grew in Slovenia too.  Supplementing cooperation with the local Generali company, Europäische was able to acquire new sales partners within the travel industry.  There was significant growth in its long-standing operations in South Tyrol.  The company’s equity investments in the leading travel insurers in Hungary and the Czech Republic also contributed to the growth in its premium income and profit.

Europäische successfully entered the Croatian market in 2011 in cooperation with the local Generali company.  The company expects to grow when Croatia joins the EU in 2013.

CAUTIOUSLY POSITIVE OUTLOOK FOR 2012

The volatility of the market makes exceptional challenges likely in 2012.  Some market segments are unlikely to grow at all and some may even shrink.  Chairman of the Managing Board Martin Sturzlbaum underscored the company’s position as a centre of excellence for safe travel.  He sees this as the basis for moderate growth: “Product innovations will enable us to continue to develop market segments that are still underdeveloped and press ahead with rapid market penetration given that the proportion of all travellers taking out travel insurance still has the potential to increase.  This is evident from comparisons with other countries.  Not least, there is potential in the large number of trips organized by travellers themselves where no or only inadequate insurance cover is purchased.”

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