August 28 (SeeNews) - Vienna Insurance Group (VIG) said on Tuesday that it has posted a pre-tax loss of 43 million euro ($50 million) from its operations in Romania in the first six months of 2018, compared to a 5.8 million euro profit in the same period of last year, according to preliminary data.
This loss was primarily caused by a goodwill write-down of 50.1 million euro, the company said in a conference call presentation of its first-half preliminary unaudited results posted on the corporate website.
"Due to the increase in the yields on Romanian government bonds in the second quarter of 2018, VIG had the plans for its Romanian subsidiaries updated. They indicated a deterioration of results in one area, leading VIG to perform an impairment test for the Romanian CGU group for the first half of 2018. The resulting necessary impairment of 50.1 million euro was recognised as an expense in the 2018 half-year report," VIG said.
After adjusting for this write-down, the result increased 20.7%, the company added.
Total gross written premiums of VIG's Romanian units rose by an annual 5.5% to 272.4 million euro in the January-July period, due to strong motor third party liability premiums (MTPL) business.
The increase was primarily due to strong premium development in the motor lines of business.
VIG's premiums from MTPL insurance in Romania rose by 10% on the year to 97.3 million euro in the first half, while casco premiums rose 11% to 67.8 million euro and other property premiums grew 3% to 51.1 million euro.
Premiums from regular life insurance on the Romanian market added 12% year-on-year to 23.5 million euro, while single life insurance fell by 19% to 27.9 million euro. Health insurance premiums jumped by 38% to 5.1 million euro in the six months through July.
The group's net combined ratio in Romania improved to 98.6% in the first half of 2018 from 99.3% in the year ago period, due to a better expense ratio.
VIG's operations in Romania posted a pre-tax profit of 3.2 million euro in 2017, compared to a 1.5 million euro profit in 2016.
In Romania, VIG is represented by three insurance companies - Omniasig Non-life, Asirom, BCR Life and Axa Life.
($= 0.8609 euro)