Europäische Reiseversicherung continues on its growth course
Best ever figures for premium income and company results
Vienna, 20 March 2014 – Although 2013 was not an easy year for the travel sector, Europäische Reiseversicherung has been able to further extend its position as market leader in this area of insurance, achieving its best ever result: premiums received from over 2.2 million insured travellers stood at 63.81 million Euros, 2.1 per cent up on the record value in 2012, the profit from ordinary activity (POA) was up 4.2 per cent at 5.31 million Euros, the annual profits rose by 20.8 per cent to 3.99 million Euros and the balance sheet profit rose by 32.1 per cent to 3.71 million Euros.
The positive trend was evident in all business areas, with above-average growth (as in the previous year) in Corporate Travel Insurance (CTI). Europäische’s foreign undertakings, the branch in Slovakia and the activities in South Tyrol and Slovenia and in the Czech Republic and Hungary continued to be consistently successful.
According to the Chairman of the Management Board, Dr. Martin Sturzlbaum, the fact that the company has continued to grow in all areas in spite of an essentially stagnating travel market is attributable to increased market penetration: “Climatic events such as floods and heat waves, as well as political unrest in important holiday countries like Turkey and Egypt, led to a sharp decline in the second half year after a good first six months, but at the same time this led to greater risk awareness and an increased tendency to take out travel insurance in order to cover these risks.” An essential prerequisite is the ongoing adaptation of the company’s products in response to changes in risk profiles, and the nurturing of the cooperation that has been established with competent partners in the sales and tourism sectors.
OUTGOING TOURISM STAGNATING In outgoing tourism, the company’s main area of business, the indicators reveal almost zero growth: the Amadeus AATIX (Austrian Air Traffic Index), which records scheduled flight bookings made by travel agencies, shows growth of 1.5 per cent, which is probably due to positive development in the business trips included in these figures. The Amadeus TOURIX (Austrian Touristik Index), however, stands at minus five per cent, almost as great a reduction as in 2012. This index shows the number of holiday bookings made by tour operators in travel agencies, but does not record the increasing number of online bookings. For trips organised individually without any professional support, Europäische scores with its annual insurance contracts, which are becoming increasingly popular.
Incoming tourism, with the number of guests up 1.8 per cent to 36.8 million, and the number of overnight stays up 1.2 per cent to 132.6 million, showed new record values which confirm Europäische’s decision to focus on this important segment.
INCREASED CLAIMS COSTS – MOSTLY DUE TO CANCELLATION INSURANCE Total expenditure on claims, at 31.37 million Euros, was 9.8 per cent higher than in the previous year, which was mostly due to increased costs in respect of large claims. Cancellation insurance accounted for 61.1 per cent (19.18 million Euros) and sickness and accident insurance for 33.5 per cent (10.52 million Euros). The loss ratio (the proportion of expenditure to premium income) rose from 46.3 to 49.7 per cent.
STABLE COST SITUATION AND FURTHER INCREASE IN RESULT The administration and policy acquisition costs (including commission) rose by 2.1 per cent and thus remained more or less at the same level as the previous year in terms of the relationship of these costs to turnover. The situation on the financial markets improved slightly in 2013, and also, under adherence to the strict lower of cost or market principle in financial investments, the company’s financial result was markedly increased by 36.1 per cent to 1.77 million Euros.
The POA (profit from ordinary activity) increased by 4.2 per cent to 5.31 million Euros, the annual surplus rose by 20.8 per cent to 3.99 million Euros (the highest ever in the company’s history), and the balance sheet profit (including a profit carryforward from the previous year in the amount of 2.44 million Euros) increased by 32.1 per cent to 3.71 million Euros. As a result the company’s equity was increased to 17.45 million Euros.
POSITIVE RESULTS FOR SUBSIDIARIES ALSO The subsidiaries of Europäische also achieved positive results: our brokerage company Care Consult focuses on special event and tourism insurance, and TTC (Travel Trainings Center), with its broad range of seminar programmes, enjoys success as a leading professional development institution for the tourism sector.
ALL FOREIGN UNDERTAKINGS ON SUCCESSFUL COURSE In the highly competitive insurance market, the branch in Slovakia has become a leading provider of travel insurance, with income from premiums increasing last year by 5.7 per cent to 5.14 million Euros. Following its successful start up phase, the company (which was formed in 2006) is thus moving in the direction of solid and sustainable development.
In Slovenia, Europäische Reiseversicherung operates in cooperation with the local Generali company, and also (since 2010) in direct business. In spite of a decline in the travel market due to the difficult economic situation in Slovenia, as a result of the expansion of the cooperation with sales partners the figure for the percentage growth went into double figures. With the entry of Croatia into the EU in 2013, and upon registration for the provision of services, the main preconditions for the opening up of this country are fulfilled.
In Hungary and the Czech Republic also, where Europäische holds participations in the leading travel insurance specialists, the travel sector is going through a difficult period. Nevertheless clearly positive results have been achieved, indicating that stable further development is to be expected.
In South Tyrol, products which have proved successful in Austria are sold for outgoing travel via a dense network of sales partners in the travel agency and tour operator sector, in the hotel sector mainly the “incoming” policies that are offered for this purpose. Here also the course of growth was continued in spite of the difficult economic environment.
CONFIDENCE IN REGARD TO 2014 “We are expecting further dynamic growth for 2014,” says Management Board Chairman Dr. Martin Sturzlbaum, with a confidence that is also grounded in an expected “catch up” effect on the travel market following the fall in demand in the previous year, and also in the positive signals shown over the first few weeks of the year. In addition to the demand for insurance products that are adapted to the needs of the travelling public, optimised cooperation with partners should in particular open up new customer segments and sales channels, always with the focus on increasing market penetration. “We are continuing to pursue our strategy of profiling Europäische as a competence centre in regard to travel security, for the benefit of both our customers and our partners,” says Dr. Martin Sturzlbaum.
Business Report 2013
Figures, data, facts – the latest business report for you to download. (pdf in German)