W&W off to a good start in 2023

• First quarter of 2023 sees consolidated net profit of €64.1 million.
• Best quarterly gross new business at Wüstenrot – total home loan savings increased by around 75 per cent.
• Growing demand, positive income from insurance, successful advice, customer acquisition and store stable situation of the financial markets have a very positive effect on results.
• W&W CEO Jürgen A. Junker: “After the successful start to the year, the W&W Group is firmly on the right track. With numerous new digital offerings, we have also invested heavily in even greater customer proximity.”

The Wüstenrot & Württembergische Group (W&W) boasted a good operating performance and rigorously continued its growth course in the first three months of the current 2023 financial year. The financial services provider’s consolidated net profit came to €64.1 million in the first quarter, up slightly on the previous year’s adjusted figure of €62.1 million. The new financial reporting standard IFRS 17 was applied for the first time. For 2023 as a whole, the Executive Board confirms that it still expects to achieve consolidated net profit in the target range of €220 million to €250 million.

Jürgen A. Junker, CEO of W&W AG: “The start of the year was successful for the W&W-Group. After the first quarter, we are firmly on the right track for the year as a whole. We are acquiring new customers and market shares and occasionally outperforming the market in new business. This is thanks not least to our continuous advancement of our Group’s digital transformation with innovative products and initiatives in response to rapidly changing customer needs. We are thus steadily enhancing the customer experience in terms of user-friendliness and speed. Recent examples are the now fully digital conclusion of home loan and savings contracts in all sales channels, the steady customer growth for our very successful digital brand Adam Riese and the relocation of customer communication in the health insurance business to our online portal at the start of the year. The W&W Group is therefore increasingly digital, fast and close to customers. At the same time, we are successful in providing sophisticated advice. However, for the rest of the year we would do well to remain vigilant in view of the economic and political risks in Germany. In this environment, we continue to rely on our operating performance, our agility and, last but not least, our resilient balance sheet.”

New business performance in the first three months of 2023

In the Insurance division, property/casualty insurance saw very good new business with growth of 31.5 per cent to €167.7 million (first quarter of 2022: €127.5 million) – in terms of the annual contribution to the portfolio (replacement and new business). The growth was driven by the motor and corporate customer businesses. The normalisation of claims and the strong new business contributed to a better technical result, which in the same quarter of the previous year was influenced by greater natural disasters as a result of winter storms. The net combined ratio in property/casualty insurance, calculated for the first time according to IFRS 17, improved by almost 5 percentage points to a good 92.1 per cent (first quarter of 2022: 96.9 per cent).

In life insurance, new business declined – in line with the industry trend. Total premiums in the first three months amounted to €821.2 million, down 16.6 per cent on the previous year’s figure (€985.0 million). In contrast, company pension schemes continued to perform above average, with total premiums in new business remaining almost stable at €319.3 million.

In the Housing division, Wüstenrot achieved the best new business in a single quarter in its history and significantly outperformed the market. Gross new business in terms of total home loan savings contracts increased by 74.6 per cent to €6.08 billion compared with €3.48 billion in the same quarter of the previous year. Given the significantly increased construction interest rates, home loan and savings remains an attractive tool for risk hedging and planning security for many customers. Faced with the current uncertainties on the real estate markets, new lending business declined as expected in the first quarter both in Wüstenrot and the industry and reached €838 million (first quarter of 2022: €1.90 billion, -55.8 per cent).

Outlook for 2023 as a whole

The W&W Group still expects to achieve consolidated net profit of between €220 million and €250 million in 2023 as a whole. This is assuming that there will be no distortions on the capital and financial markets or other unforeseeable events of material consequence for the W&W Group. The risks, for example as a result of inflation or consumer’s political uncertainty, remain unchanged.