Vienna Insurance Group AG (VIG), Austria’s biggest insurer, reported second-quarter profit plunged after the worst central European floods in a decade caused damage compensation to triple. The shares fell.
Pretax profit for the period ending June 30 dropped 69 percent to 46.3 million euros ($61.4 million), missing the 67.8 million-euro average estimate by five analysts, according to data compiled by Bloomberg. Net income declined 85 percent to 16.7 million euros, while premiums contracted 8.4 percent to 2.3 billion euros, the company said in a statement today.
Weather-related “damages were three times as high as in the same period of the previous year,” Vienna Insurance said. The group’s combined ratio, which shows spending on claims and costs as a percentage of premiums, improved to 95.5 percent from 98.7 percent in the first six months.
Springtime floods triggered by heavy rain caused damages in Vienna Insurance markets including Austria, Hungary and the Czech Republic. The insurer saw flood claims of 180 million euros and total weather-related claims of 230 million euros. The net impact of the flood damages on Vienna Insurance’s business was 40 million euros after reinsurance, the company said.
Vienna Insurance shares dropped 1.7 euros, or 4.1 percent, to 39.20 euros at 9:55 a.m. in the Austrian capital, the biggest intraday decline in two months. The stock is down 3 percent this year, giving the insurer a 5 billion-euro market value.
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