Vienna Insurance Misses Estimates as Growth Stalls

Vienna Insurance Group AG (VIG), the biggest insurer in eastern Europe, said it had a less-than- estimated pretax profit increase last year as growth outside Poland stalled.

Earnings rose 5 percent to about 585 million euros ($780 million) in 2012, according to preliminary results, the Vienna- based company said in a statement today. That implies fourth- quarter profit fell 2 percent to about 142 million euros, according to Bloomberg News calculations. The average estimate of 13 analysts was for pretax profit of 588.5 million euros, while 11 predicted earnings of more than 585 million euros.

“The strong demand for insurance products in the central and eastern European region has led to a substantial expansion of Vienna Insurance Group’s business also in 2012,” Chief Executive Officer Peter Hagen said in the statement.

Vienna Insurance fell 1 percent to 38.65 euros at 9:02 a.m. in Vienna trading, making it the worst performer in the 14- member EURO STOXX Insurance index.

Vienna Insurance, which makes more than half of its revenue in the former communist part of Europe, is relying on growth from that region because people are still spending a smaller share of their income on insurance than in western Europe. While it benefits from increasing savings in Poland and the Czech and Slovak republics, products like car insurance have suffered from the slowdown in countries including Romania.

Unconsolidated premiums written rose 9.5 percent to 9.87 billion euros last year, driven by life-insurance premiums that more than tripled in Poland, and by growth with corporate customers in Austria, Vienna Insurance said in slides prepared for presentation to investors today. Premiums slid in Romania and the Czech Republic, it said.

The company said it would continue to pay out about 30 percent of net income as a dividend. It didn’t say what net income was last year. Final results are due April 3.

Vienna Insurance paid 1.10 euros a share for 2011 and the Bloomberg dividend estimate is 1.20 euros for 2012.

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.