28.03.2018
Wüstenrot & Württembergische AG DE0008051004
DGAP-News: W&W Group: Company launches its largest investment programme
DGAP-News: Wüstenrot & Württembergische AG / Key word(s): Final Results
W&W Group: Company launches its largest investment programme
28.03.2018 / 11:47
The issuer is solely responsible for the content of this announcement.
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- Consolidated earnings for 2017 increase by 9.6% to EUR 258 million.
- Between 2018 and 2020, approximately EUR 820 million will be invested in
digital transformation, new services and further development of staff
skills.
- Income from property/casualty insurance increases in 2017, with the
combined ratio remaining good.
- New business for Wüstenrot Bausparkasse AG comes in at the high level of
the previous year.
- Dividend to be increased to EUR 0.65 per share for 2017.
- Chairman of the Executive Board Jürgen A. Junker: "In 2017 the W&W Group
made a number of important strides, particularly in terms of dynamism and
speed."
The Wüstenrot & Württembergische Group (W&W) can look back on a successful
2017 financial year. With consolidated net profit after taxes coming in at
EUR 258 million, the Group surpassed the figure for the previous year by
9.6%, despite having planned for earnings at the level of the previous year.
As a result, the Executive Board and the Supervisory Board are proposing to
the Annual General Meeting that the dividend for the 2017 financial year be
increased to EUR 0.65 per share (previous year: EUR 0.60).
In terms of strategy, the financial planning specialist successfully
launched a number of measures relating to the digital transformation of the
Group. Between 2018 and 2020, the W&W Group is planning to invest
approximately EUR 820 million in digital products and processes, but also in
the further development of the skills of its employees. This is the largest
investment programme in the company's history.
"The business success that we enjoyed last year, which was by no means a
certainty in view of tough competition and the market environment, is proof
of the Group's solid foundation and at the same time the result of changes
that we've implemented," said Jürgen A. Junker, Chairman of the Executive
Board of W&W AG. "In 2017 we substantially strengthened our brick-and-mortar
presence and digital services, successfully introduced new products and
streamlined our structures and processes. With everything we do, we pursue a
single objective: keeping pace with the changing requirements of our
customers and continuously increasing the benefits for them."
Key indicators of the Group for 2017
The largest contributor to consolidated net profit, which totalled EUR 258
million, was once again the property/casualty insurance segment, which
posted very good net underwriting income of EUR 125.8 million (previous
year: EUR 108.3 million). At 90.7%, the segment's combined ratio remained at
a good level (2016: 90.1%).
Consolidated net financial income increased slightly to EUR 1.83 billion
(2016: EUR 1.82 billion). In this regard, while net income did not grow
robustly due to the environment of low interest rates, impairments of
financial instruments declined, and the performance of capital investments
for unit-linked life insurance policies improved.
Benefits paid under insurance contracts fell slightly to EUR 4.03 billion
(2016: EUR 4.08 billion).
General administrative expenses rose moderately by 2.2% to EUR 1.10 billion
(previous year: EUR 1.08 billion). In this regard, investments in
future-oriented projects, like the digital brand "Adam Riese", resulted in
only a minor increase in personnel costs. In 2017 the Group met its target
of increasing productivity by 5% annually.
Performance of the operational divisions in 2017
Home Loan and Savings Bank
At Wüstenrot Bausparkasse AG new home loan savings business (gross) came in
at EUR 13.6 billion, essentially the same level as the previous year, which
was positively influenced by the "Wüstenrot Bausparen" plan introduced that
year. Net new business stood at EUR 11.5 billion, and while this was
slightly below the previous year, the result outperformed the market. Thus,
on whole, Wüstenrot Bausparkasse AG again gained market shares and
solidified its position as the number two in the industry in Germany.
New business in construction financing increased Group-wide by 2.4% to EUR
5.5 billion, thus outperforming the market as it did the previous year.
Insurance
In property/casualty insurance, Württembergische Versicherung AG was able to
increase new business by 11.6% to EUR 232 million, with all segments -
motor, corporate customers, retail customers - posting growth. Gross
premiums written rose further by 4.3% to EUR 1.75 billion (2016: EUR 1.68
billion). The new digital brand "Adam Riese" had a successful launch.
In life insurance new business declined, primarily as a result of a
significant fall in single-premium business. Also having an effect was the
legally mandated lowering of the maximum interest rate that life insurers
may apply when calculating provisions for future policy benefits, which went
into effect on 1 January 2017. As a result, gross premiums written dropped
by 9.8% to EUR 1.9 billion (2016: EUR 2.1 billion).
By contrast, health insurance continued its growth from the previous year
and increased gross premiums written by 7.5% to EUR 232 million. This
encouraging development was again the result of the sustained good market
successes of the supplementary health and long-term care plans.
Digital transformation picks up pace
In addition to measures to strengthen the two mobile sales force
organisations and sales collaborations, the W&W Group successfully
implemented numerous initiatives in 2017 and in the first months of this
year designed to bring about the digital transformation of the Group, such
as:
- In October 2017, the new digital brand "Adam Riese" launched on the
insurance market. This platform enables customers to obtain basic products
simply and conveniently. They are sold digitally to customers directly or
through agents and comparison sites. "Adam Riese" is thus directly aimed at
an internet-savvy target group that does not necessarily require personal
assistance at a branch. The feedback from agents and aggregators concerning
the quality of the product and the website has been very positive with
respect to clarity and understandability.
- The financial assistant "FinanzGuide" launched early this year. This app
enables customers to view, manage and optimise their personal insurance,
home loan savings and banking portfolio with their smartphone, make bank
transfers and request products.
- Also in early 2018, the new Web-based residential platform "Wüstenrot
Wohnwelt" went live. It provides all important information on the topics of
"building or buying", "renting", "selling or renting out", "renovating" and
"senior-friendly living". Wohnwelt thus constitutes an additional digital
service for all questions relating to real estate, one that goes beyond the
actual financial products and services.
- W&W will soon be introducing "NIST", a digital financial assistant for
property purchases. It is designed to be the customer's digital companion,
offering assistance from the start of a property search to the conclusion of
sale. Upon request, potential buyers can also get assistance from a personal
advisor with years of industry expertise.
In 2017 the W&W Group strengthened not only its digital sales and
communication channels but also its brick-and-mortar presence. This is
because the company believes that the centrepiece of its business is and
remains high-performance customer assistance, i.e. expert service and advice
at retail locations. For instance, the sales format "Tandem" was
significantly expanded. It pools our home loan savings and insurance
expertise under one roof at a customer advisory centre. More than 500 mobile
sales force partners are now working on this basis.
Chairman of the Executive Board Jürgen A. Junker: "Financial services
providers will be forced to deal with a massive upheaval over the next
several years. Competition will intensify still further, new players will
enter the market and customer behaviour will continue to change. We have the
strategic advantage of being able to meet these challenges from a position
of strength. Our explicit goal is to have the W&W Group emerge as one of the
winners from the upheaval in the financial industry. In this regard, it is
essential that we be faster, more creative, more courageous and more focused
on our customers than our competitors are - simply, a little bit better each
day."
Outlook for the 2018 financial year
In view of the positive macroeconomic conditions and the advances made in
the W&W Group, the Executive Board is in principle confident that in 2018
the company will be able to build on the good operational performance
achieved in 2017. But because of the high additional investments, primarily
in digital transformation, the Group will not be able to attain the very
good net profit generated in 2017. W&W nevertheless expects that net profit
will come in about EUR 200 million and thus remain on a solid level. The W&W
Group continues to adhere to its long-term goal of sustainably achievable
net profit in the range of EUR 220-250 million.
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28.03.2018 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Wüstenrot & Württembergische AG
Gutenbergstrasse 30
70176 Stuttgart
Germany
Internet: www.ww-ag.com
ISIN: DE0008051004
WKN: 805100
Indices: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard), Stuttgart;
Regulated Unofficial Market in Berlin, Dusseldorf,
Tradegate Exchange
End of News DGAP News Service
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669815 28.03.2018
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