W&W Group makes very solid start to 2024 financial year

Press information

Kornwestheim, 17 May 2024

W&W Group makes very solid start to 2024 financial year
 

• Consolidated net profit reaches EUR 51.1 million in first three months.
• New lending business in Housing segment rises by more than 24 per cent despite weak property markets.
• Good growth in new business with motor vehicles and retail customers.
• Strict cost management: general administrative expenses down 4 per cent.
• W&W Executive Board Chairman Jürgen A. Junker: “The W&W Group is operating successfully even in the current weak economic environment and despite some significant cost increases for claims adjustment.”

The Wüstenrot & Württembergische Group (W&W) posted further growth in new business in a weak economic environment in the first quarter of 2024. For example, new lending business for residential property financing increased by 24.4 per cent to EUR 1.04 billion despite the strained situation on the German property market. After the first three months of the year, the consolidated net profit under IFRS accounting was on target with EUR 51.1 million and was thus only EUR 13 million lower than in the same period of the previous year. This is a remarkable result, not least in view of the situation that can now be observed throughout the sector in property/casualty insurance, with significant cost increases for claims adjustment. At EUR 298.9 million, general administrative expenses in the Group were down almost 4 per cent on the previous year’s figure of EUR 310.5 million, reflecting the financial planning group’s strict cost management. The Executive Board has confirmed its current earnings guidance for 2024 as a whole.

Jürgen A. Junker, Chairman of the Executive Board of W&W AG: “In view of the weak macroeconomic environment in Germany and rising costs for claims, the W&W Group has achieved a more than respectable result. We are completely on track after the first quarter of 2024 to achieve our targets for the year as a whole. Particularly in times of great uncertainty like these, our customers value having a reliable financial partner at their side. The clout and resilience that we have developed over the past years is reflected in some encouraging increases in new business, as well as in decreasing general administrative expenses and a sound financial performance. Those things that we are able to influence ourselves remain on the right track.”

Development of new business in the first three months of 2024

Housing division

In the Housing division, gross new business at Wüstenrot Bausparkasse AG – the number two on the German market – was down year-on-year as expected, amounting to EUR 3.12 billion after EUR 6.08 billion in the year before. The record figure from the comparative quarter had been influenced by the sharp rise in interest rates at that time.

New lending business (including brokering for third parties) developed positively with an increase of 24.4 per cent to EUR 1.04 billion (prior-year quarter: EUR 838 million). After the general slump in demand for residential construction loans last year, Wüstenrot is currently seeing stronger demand for existing properties in particular.

Insurance division

At Württembergische Lebensversicherung, new business by total premiums amounted to EUR 804 million in the first quarter of 2024 and was thus down 2.1 per cent on the previous year’s figure of EUR 821 million due to lower single premiums. By contrast, Württembergische Krankenversicherung posted a significant increase.

Property/casualty insurance generated encouraging growth in new business (annual contribution to the portfolio, new and replacement business) of 5.1 per cent to EUR 176.2 million (prior-year quarter: EUR 167.7 million). Gross premiums written raised above the market level by more than 10 per cent to EUR 1,37 billion (previous-year period: EUR 1,25 billion). The combined ratio improved from 99.3 per cent (net) at year end 2023 to 95.7 per cent (net) at the end of the first quarter 2024; a very good level in view of the cost developments in the sector as a whole.

Outlook for 2024 as a whole

After the development of the financial year to date, the existing earnings guidance for 2024 as a whole has been confirmed. The W&W Group anticipates consolidated net profit above the previous year’s figure of EUR 140.5 million but still below the long-term target range of EUR 220 million to EUR 250 million. In the individual accounts under HGB, the target is a figure at the previous year’s high level.

This is subject to the proviso that there are no distortions on the capital and financial markets, no economic slumps and no unforeseen major loss events.