- Revenue & Profit Growth: Insurance service revenue rose 8.6% to EUR 9.7B, with profit before taxes surging 31% to EUR 872.8M.
- P&C Performance: Net combined ratio improved to 92.1%, driven by favorable climate and fewer claims.
- Strategic Acquisition: 98.38% shareholder approval for NURNBERGER acquisition, enhancing Germany presence and diversification.
- Capital Strength: Solvency ratio at 286%, with own funds up 4% to EUR 11.7B, supporting EUR 500M credit facility for NURNBERGER deal.
- Regional Growth: Central Eastern Europe drives 12% health, 8% life, and 5.6% P&C growth, targeting expanded customer base and product offerings.
Financial Highlights and Outlook
VIG's financial performance was bolstered by growth across its business lines, with health insurance growing by 12%, property and casualty by 5.6%, and life insurance by 8%. The company's solvency ratio stood at 286%, and its own funds increased by almost 4% to EUR 11.7 billion. VIG raised its target range for 2025 profit before taxes to EUR 1.1 billion to EUR 1.15 billion, reflecting its confidence in continued strong performance. As Gerhard Lahner noted, "we have shown we can turn around non-life portfolios, and we can share our know-how," highlighting the company's capabilities in managing its insurance businesses.
Strategic Expansion through NURNBERGER Acquisition
VIG announced its intention to acquire a controlling stake in NURNBERGER, with a public purchase offer accepted by 98.38% of shareholders. The acquisition will strengthen VIG's presence in Germany and enhance its diversification. The deal is expected to be financed from VIG's own liquid funds and a EUR 500 million revolving credit facility. VIG expects the acquisition to enhance its internal financing capacities and support growth in Central and Eastern Europe.
Valuation and Dividend Yield
With a Price-to-Book Ratio (P/B) of 0.97, VIG's valuation appears reasonable, considering its strong financial performance and growth prospects. The company's Dividend Yield stands at 3.16%, providing an attractive return for income-focused investors. The acquisition of NURNBERGER is not expected to impact VIG's dividend payment from 2025 earnings, as Hartwig Loger stated, "our investment in NURNBERGER won't impact the dividend payment from 2025 earnings."
Growth Prospects and ROE
VIG's Return on Equity (ROE) stands at 10.48%, indicating a decent return on shareholders' equity. Analysts estimate next year's revenue growth at 6.8%, driven by the company's strategic initiatives and expansion in Central and Eastern Europe. The Evolve '28 program aims to drive long-term profitable growth through a dynamic evolution of its current business model, focusing on key areas such as country portfolio and company strategies, group programs, CO3, and values and principles.