RIESTER PENSIONS
[BIZ: Aachen, August 8] In the AMB Generali Group the business with basic and Riester pensions is booming. In the first six months of the year, the Group's life insurers have already sold close to 35,000 basic pension policies (so-called "Rürup pensions"). The portfolio has thus increased to about 66,300 contracts. In Riester business, the Group again confirmed its leadership in the market and has meanwhile reached a portfolio of more than 1.3 million contracts. In the first half of 2007 alone, nearly 140,000 policies were produced. "Just like the Riester pension, the basic pension with a state incentive is a highly attractive product for old-age provision", said Dietmar Meister, Chief Executive of AMB Generali, when presenting the half-year figures. "With regard to both products we benefit from our strong advisory capacity in old-age provision." As at June 30, 2007, the Group net profit of the third-largest primary insurer in Germany increased to EUR 224m (first-half 2006: 172 m). The strong rise in profits is primarily supported by a noticeable improvement of net investment income (+14.6%) and a lower cost volume. The net profit of the second half of the year will not be influenced to the same extent by the positive extraordinary investment impact. Nevertheless AMB Generali – as already announced – raises its profit target for 2007 from an original level of EUR 380m to 400 m. This forecast does not take into account the EUR 80 m increase in profits expected already in 2007 under the corporate tax reform 2008 from the adjustment of deferred tax in the balance sheet. Two additional extraordinary items had an influence on the result development in the first half of the year: the contribution of AMB Generali's fund and asset-management unit into the international company Generali Investments S.p.A. led to a rise of earnings while, on the other hand, the result was affected by the "Kyrill" storm representing a net claims expenditure of about EUR 70 m. As at June 30, 2007 the combined ratio of the property and casualty insurers was 97.8%. In this context it should be noted that the impact from the "Kyrill" storm will level off in the further course of the year. Therefore the Group maintains its target of a combined ratio below 97% for the full year. More market-share gains in insurance business After the good start at the beginning of the year, the AMB Generali Group continues its successful course in insurance activities. Across all lines, the total premiums of direct business rose by 1.4% to EUR 6,974m in the first six months of 2007. For comparison: a 1% growth is forecast for the market for 2007. Under IFRS accounting, gross premiums written amounted to EUR 6,046m. In life insurance, the total premiums of direct business grew by 3.0%. The development of single-premium business, however, was highly volatile. As a whole, total premiums in life (direct business) increased by 0.5% to EUR 4,244m in the first six months of the year. Over the same period, the market witnessed an 0.1% decrease of premiums. The gross premiums written of the Group's life insurers under IFRS accounting amounted to EUR 3,312m. In health insurance, gross premiums grew by 4.6% to EUR 867m in the first half of the year. In the health sub-segment, the premium growth of the AMB Generali Group is thus 1.6 percentage points above the average market growth expected for 2007. Business in the highly competitive market of property and casualty insurance continued to witness a satisfactory development. The Group strategy of a prudent risk selection and an underwriting policy oriented at profitability prove to be successful. Gross premiums written rose by 1.9% to EUR 1,867m. In the market, an average decrease of 0.4% is expected for the year 2007. Motor insurance made a substantial contribution to the positive business development of the AMB Generali Group by reaching a 1.2% growth in terms of gross premiums. In this context, the Group's approach of distinguishing itself in competition with products oriented at customers and target groups is showing a positive effect. Life new business influenced by extraordinary Riester impact The business of basic pensions (so-called "Rürup pension") continued to experience a highly dynamic development. As a whole, the Group's life insurers sold close to 35,000 basic pension contracts representing a new business of EUR 56.4m. This is six times the sales level achieved in the first half of 2006. Since the launch of this product, AMB Generali has produced about 66,300 basic pension contracts representing a new business in terms of regular annual premiums of EUR 107.6m. Dietmar Meister: "With our basic pension business we follow the successful development of our Riester pensions. As happened with Riester business, we again benefit from the fact that we have offered to our customers individual product solutions with a state incentive right from the start." The development of new business in life insurance was primarily marked by the increase of the Riester incentive threshold from 2 to 3% of gross income. Adjusted for the extraordinary Riester impact, the new business of the Group's life insurers increased by 14.2% in the first six months of the year. Including the extraordinary 2006 impact of Riester pensions, regular annual premiums decreased by 12.1%. The Group as market leader will again benefit over-proportionately from the next Riester step in 2008. Currently the Group has about 1.33 million Riester contracts in its portfolio, which include close to 140,000 new policies produced in the first six months of 2007 and representing a new business of EUR 91.1 m. Deutsche Vermögensberatung, the longstanding distribution partner of the AMB Generali Group, made a vital contribution to the successful development in Riester and basic pension business. Profit target raised to at least EUR 400m for the business year 2007 The Group net profit as at June 30, 2007 was influenced by extraordinary items which will partly level off in the further course of the year. Following the favorable development of capital markets, the net investment income increased substantially in the first six months of the year. At the same time the Group's cost volume reduced. The net profit of the second half of the year will not be influenced to the same extent by the positive extraordinary investment impact. Nevertheless the AMB Generali Group raises its profit forecast for 2007 made earlier this year from EUR 380m to 400 m after tax, provided the current year is not affected by further extraordinary claims or negative capital-market developments. This profit target does not yet take into account the possible impact of the corporate tax reform passed by parliament in July 2007. Starting from 2008, the reform provides, among others, for a reduction of the corporation tax rate from 25 to 15%. The rise of the net profit, which the reform is expected to involve already for the current year due to the adjustment of deferred tax, is difficult to estimate. According to first rough calculations, the increase of the net profit of the current business year is expected to amount to about EUR 80m. Under IFRS, according to the German regulation, technical items of the Balance Sheet and Income statement are presented based on US-GAAP. The complete Group Report 1st Quarter 2007 of the AMB Generali Group can be downloaded from our website:
AMB’s H1 results showed Life, property/casualty and health insurance better than market. The Group net profit rose to EUR 224m in the first half of 2007 and the Profit target was raised to at least EUR 400m
For the business year 2007 AMB Generali expects to achieve further market-share gains in insurance business. Growth will continue to be supported by the life and health insurers. After the successful restructuring measures in property and casualty insurance, the Group remains focused on writing profitable business and on further enhancing its product range.
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