Uniqa Insurance : Group 2023 17.05.2024

Solvency and Financial Condition Report 2023

UNIQA Group

living better together

2	2023 / UNIQA GROUP

Ladies and gentlemen, dear shareholders, dear UNIQA customers,

With this Solvency and Financial Condition Report, we want to share with you a comprehensible overview of the UNIQA Group and its risk and capital position for 2023. A sound solvency position and proactive approach to risks continue to form the basis of our business actions for the benefit of our customers, employees and shareholders.

2023 was beset by a continuing uncertain economic climate influenced by fluctuating interest rates, rising inflation and persistent fears of recession. These challenges also have an impact on the insurance industry, which is in a constant process of adaptation in order to meet the needs of its customers.

On top of this, ongoing global geopolitical uncertainties, particularly the new conflict in Israel, have put further pressure on the capital markets. The UNIQA Group must therefore continue to deal not only with economic risks but also with political risks in order to guarantee long-term stability and security for its customers.

In a fast-moving regulatory environment characterised by new regulations such as DORA and CSRD, it is essential for insurance companies to remain flexible and innovative in order to meet the constantly changing requirements. We are proud that the UNIQA Group continues to operate successfully in this challenging arena and continues to offer customers first-class insurance solutions.

Huge efforts were made in 2023 to achieve the goals of the "UNIQA 3.0" corporate strategy. Following on from what has been a successful year, it is still important to continue setting ambitious goals. UNIQA not only wants to meet the expected challenges, but also use them as an opportunity for ongoing improvement. The continuous development of risk management and the models used to measure and control the solvency and financial condition form an essential basis for this.

We hope that this report on the 2023 solvency and financial condition of our company helps to further strengthen your trust in UNIQA and our products and services.

Many thanks for this trust.

Yours sincerely,

Kurt Svoboda

CFO/CRO UNIQA Insurance Group AG

2023 / UNIQA GROUP

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Contents
Executive summary	5
A Business and performance	8
A.1	Business activities	8
A.2	Technical result	11
A.3	Investment performance	15
A.4	Performance of other activities	17
A.5 Any other information	18
B System of governance	19
B.1	General information on the system of governance	19
B.1.1 Supervisory Board	19
B.1.2 Management Board and committees	21
B.1.3 Key functions	25
B.1.4 Remuneration	32
B.1.5 Significant related party transactions with companies and individuals	34
B.2	Fit and proper requirements	35
B.3	Risk management system including the company's Own Risk and Solvency Assessment	38
B.3.1 General	38
B.3.2 Risk management, governance and organisational structure	38
B.3.3 Risk strategy	39
B.3.4 Risk management process	40
B.3.5 Risk-related committees	41
B.3.6 Governance of the partial internal model	41
B.3.7 The company's Own Risk and Solvency Assessment (ORSA)	42
B.4	Internal control system	45
B.4.1 Overview of the internal control system	45
B.4.2 Compliance function	45
B.5	Internal audit function	45
B.6 Actuarial function	45
B.7	Outsourcing	46
B.8 Any other information	47
C Risk profile	48
C.1 Underwriting risk	52
C.1.1 Description of the risk	52
C.1.2 Risk exposure	53
C.1.3 Risk assessment	55
C.1.4 Risk concentration	57
C.1.5 Risk mitigation	57
C.1.6 Stress and sensitivity analyses	59
C.2 Market risk	59
C.2.1 Description of the risk	59
C.2.2 Risk exposure	60
C.2.3 Risk assessment	60
C.2.4 Risk concentration	61
C.2.5 Risk mitigation	61
C.2.6 Stress and sensitivity analyses	61
C.3 Credit risk/default risk	63
C.3.1 Description of the risk	63
C.3.2 Risk exposure	63

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C.3.3 Risk assessment	63
C.3.4 Risk concentration	64
C.3.5 Risk mitigation	64
C.3.6 Stress and sensitivity analyses	64
C.4 Liquidity risk	64
C.4.1 Description of the risk	64
C.4.2 Risk exposure	64
C.4.3 Risk assessment and risk mitigation	65
C.4.4 Stress and sensitivity analyses	65
C.5 Operational risk	66
C.5.1 Description of the risk	66
C.5.2 Risk exposure	66
C.5.3 Risk assessment	66
C.5.4 Risk concentration	66
C.5.5 Risk mitigation	66
C.5.6 Stress and sensitivity analyses	67
C.6 Other material risks	67
C.7 Any other information	67
C.7.1 Specific geographical areas or sectors	67
C.7.2 Risk mitigation from deferred tax	69
D Measurement for solvency purposes	70
D.1 Assets	71
D.2 Technical provisions	79
D.2.1 Non-life technical provisions	80
D.2.2 Life and health (similar to life) technical provisions	85
D.2.3 Use of volatility adjustments	88
D.3 Other liabilities	88
D.4 Alternative methods for measurement	93
D.5 Any other information	93
E Capital management	94
E.1 Own funds	94
E.2 Solvency capital requirement and minimum capital requirement	99
E.3 Use of the duration-based equity risk sub-module in the calculation of the solvency capital requirements	100
E.4 Differences between the standard formula and any internal models used	100
E.5 Non-compliance with the minimum capital requirement or solvency capital requirement	104
E.6 Any other information	104
Appendix I - Affiliated companies and associates as at 31 December 2023	105
Appendix II - QRTs	108
Appendix III - Regulatory requirements for the SFCR	126
List of figures	127
List of tables	128
Glossary	130

2023 / UNIQA GROUP

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Executive summary

The following executive summary is aimed at providing a compact overview of the main content in this Solvency and Financial Condition Report of the UNIQA Group.

The figures stated here, both in the executive summary and in the report itself, relate exclusively to UNIQA Group. For all other figures, please refer to the respective reports of the individual companies for 2023.

We present the company and its underlying business model together with the most important figures related to premium revenues, benefits and investment performance in Chapter A, Business and performance.

The UNIQA Group provides its customers with a comprehensive portfolio of products in property and casualty insurance, life insurance and health insurance.

The listed holding company, UNIQA Insurance Group AG, manages the Group and also operates in the indirect insurance business (i.e. inward reinsurance).

UNIQA Österreich Versicherungen AG is a wholly owned subsidiary of UNIQA Insurance Group AG and has been the Group's only direct insurer on the Austrian market since 1 October 2016. Business activities include all product lines as in the UNIQA Group.

The UNIQA Group operates in the core markets of Austria and Central and Eastern Europe as well as, on a lesser scale, in Western Europe. The Group is now made up of more than 100 companies in 17 countries.

With its comprehensive product range, UNIQA is a multiline insurance company that sells its products based on a multi- channel strategy - that means using all sales channels likely to produce successful results (exclusive sales, insurance brokers, banks and direct sales).

UNIQA's total premium volume increased in 2023 - taking into account the savings portions from unit-linked and index-linked life insurance - by 9.7 per cent to €7,185.6 million (2022: €6,548.7 million). Premiums written in property and casualty insurance increased by 14.4 per cent to €4,214.3 million in 2023 (2022: €3,683.0 million). In health insurance, premiums written rose by

8.8 per cent to €1,388.1 million in the reporting period (2022: €1,275.9 million). In life insurance, the premiums written including savings portions from unit-linked and index-linked life insurance

decreased slightly by 0.4 per cent to €1,583.2 million (2022: €1,589.8 million).

The figures are based on IFRS values.

Details on the individual business lines and explanations on their developments are provided in Chapters A.2 to A.5.

As outlined in Chapter B, System of governance, UNIQA has developed the organisational structure further within the scope of the preparations for Solvency II, resulting in a transparent system with clear assignments and an appropriate separation of responsibilities. The core of this system is the "three lines" concept, with clear distinctions between those parts of the organisation that assume the risk within the scope of business activities (first line), those that monitor the assumed risk (second line) and those that carry out the independent internal reviews (third line).

Figure 1: Distribution of premiums by UNIQA Group's lines of business

A comprehensive committee structure is available as a strategic supervisory, advisory and decision-making body to the Holding Management Board. The topics of risk management, reserving, asset liability management (ALM), remuneration, as well as issues related to security management and data protection are covered in these committees. Furthermore, a committee was set

6	2023 / UNIQA GROUP

up for ESG (environmental, social and governance) issues. Establishing key functions is also a crucial element in the system of governance. UNIQA has defined asset management and reinsurance as key functions in addition to four mandatory governance functions under statute (actuarial function, risk management, compliance and internal audit). Clear definitions of the remuneration principles and the requirements for the professional qualifications ("fit") and personal reputability ("proper") of persons who actively run the company or hold other key functions also form part of a fitting system of governance.

Particular attention is paid to the risk management system as an integral part of the system of governance. It defines responsibilities, processes and general rules that allow us to manage our risks effectively and appropriately. The clear objective is to allow the insights acquired from the risk management system - from risk identification to risk assessment - to be used in strategic and material corporate decision-making. The company's Own Risk and Solvency Assessment (ORSA) plays an important role here.

The details on the composition and calculation of the risk capital are outlined in Chapter C, Risk profile. This includes above all the material risks related to underwriting, market risks, credit risks or risks of default along with operational risks. As a multiline insurance company, UNIQA is well diversified. The following overview illustrates the capital requirements for the individual risk modules, the overall solvency capital requirement (SCR) and the accompanying own funds.

Figure 2: Risk profile of the UNIQA Group (in € million)

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As a result of the significant share of long-term liabilities from the life and health insurance business where we invest our customers' money, we set ourselves a correspondingly high risk capital requirement for market risks (59 per cent).

UNIQA has a sound capital position with a solvency ratio of 255 per cent. Even under various stress scenarios, the UNIQA Group's solvency ratio remains well above the minimum level of 135 per cent defined internally. It should be explicitly mentioned here that UNIQA does not make use of any transitional measures. If the volatility adjustment is not taken into account the solvency ratio is reduced to 212 per cent.

Figure 3: Distribution of the overall capital requirement across risk sub-modules

The methods used to measure individual balance sheet items in the solvency balance sheet are outlined in Chapter D, Measurement for solvency purposes, and a comparison with the IFRS consolidated financial statements is provided. The surplus of assets over liabilities stated in the solvency balance sheet amounts to €5,394 million (2022: €4,921 million) and is the Group's economic capital.

Finally, in Chapter E, Capital management, the net asset value is reconciled with the own funds ultimately eligible. The eligible own funds of the UNIQA Group amount to €5,941 million (2022: €5,607 million). At around €5,093 million (2022: €4,612 million), most of the own funds consist of Tier 1 capital. This results in an SCR ratio of 255 per cent. The MCR ratio amounts to 276 per cent.

The following table lists all the subsidiaries of the UNIQA Group that prepared and published a report about their solvency and financial condition at 31 December 2023 because they were requested to do so in accordance with Solvency II.

Table 1: Reports on the solvency and financial condition of the subsidiaries in the UNIQA Group

8	2023 / UNIQA GROUP

A Business and performance

A.1 BUSINESS ACTIVITIES

The insurance companies in the UNIQA Group provide their customers with comprehensive products in property and casualty insurance, life insurance and health insurance. The listed holding company, UNIQA Insurance Group AG, manages the Group and also operates in the indirect insurance business (i.e. inward reinsurance). In addition, it carries out numerous service functions for UNIQA Österreich Versicherungen AG and the international insurance companies in order to take best advantage of synergy effects and to consistently implement the Group's long-term corporate strategy.

UNIQA Österreich Versicherungen AG is a wholly owned subsidiary of UNIQA Insurance Group AG and has been the Group's only direct insurer on the Austrian market since 1 October 2016.

UNIQA Insurance Group AG Untere Donaustrasse 21 1029 Vienna, Austria www.uniqagroup.com

UNIQA Österreich Versicherungen AG Untere Donaustrasse 21

1029 Vienna, Austria www.uniqa.at

UNIQA Insurance Group AG and UNIQA Österreich Versicherungen AG are subject to supervision by the Austrian Financial Market Authority (FMA).

Financial Market Authority (FMA) Otto-Wagner-Platz 5

1090 Vienna, Austria www.fma.gv.at

PwC Wirtschaftsprüfung GmbH was appointed to conduct the audit for the current financial year.

PwC Wirtschaftsprüfung GmbH Donau-City-Strasse 7

1220 Vienna, Austria www.pwc.at

Shareholder structure

The free float was 35.9 per cent at the end of 2023. This put the capitalised free float at approximately €850 million at the end of 2023. The core shareholder UNIQA Versicherungsverein Privatstiftung (Group) holds a total of 49 per cent (Austria Versicherungsverein Beteiligungs-Verwaltungs GmbH 41.3 per cent, UNIQA Versicherungsverein Privatstiftung 7.7 per cent). The Raiffeisen Banking Group holds 10.9 per cent via RZB Versicherungsbeteiligung GmbH as core shareholder. The core shareholder Collegialität Versicherungsverein Privatstiftung holds a 3.5 per cent stake in UNIQA.

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The portfolio of treasury shares now amounts to 0.7 per cent. There is a voting trust in place applicable to the shares of UNIQA Versicherungsverein Privatstiftung, Austria Versicherungs-

verein Beteiligungs-Verwaltungs GmbH, Collegialität Versicherungsverein Privatstiftung and RZB Versicherungs- beteiligung GmbH.

The UNIQA Group operates in the core markets of Austria and Central and Eastern Europe. Currently UNIQA is active in the following 17 countries: Austria, Poland, Czechia, Slovakia, Hungary, Romania, Ukraine, Croatia, Serbia, Bosnia and Herzegovina, Kosovo, Montenegro, Albania, North Macedonia, Bulgaria, Switzerland and Liechtenstein. UNIQA Insurance Group AG prepares consolidated financial statements and a Group management report in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU.

Figure 4: Shareholder structure of UNIQA Insurance Group AG

Separate financial statements are also prepared at the UNIQA Insurance Group AG level. Likewise, UNIQA Österreich Versicherungen AG prepares separate financial statements. In addition to UNIQA Insurance Group AG, the UNIQA Group's 2023 IFRS consolidated financial statements also include 32 Austrian and 61 international subsidiaries, as well as four Austrian and nine international controlled pension and investment funds. The associates relate to four Austrian companies that were included in the consolidated financial statements using equity method accounting. Further details on the affiliated companies and associates are provided in Appendix I "Affiliated companies and associates".

There are no material differences between the scope of the Group as applied for the consolidated financial statements and the scope of the data to be consolidated for the provisions defined in Article 335 of the Delegated Regulation (EU) 2015/35.

Figure 5: Group structure of the UNIQA Group

Essential business lines

The UNIQA Group offers a comprehensive range of insurance and retirement products and covers property and casualty insurance, life insurance and health insurance with its services in virtually all markets.

The UNIQA Group covers different customer requirements with its multi-channel strategy. Any sales channel likely to produce successful results is utilised, e.g. exclusive sales, insurance brokers, banks and direct marketing. The banking sales channel supplements the UNIQA Group's extensive local presence.

Property and casualty insurance

Property insurance includes insurance such as fire, comprehensive motor vehicle insurance and third-party liability insurance. The principle of specific fulfilment of demand applies here: the insurance benefit is determined by the insured sum, the insured value and the amount of the claim. In contrast, casualty insurance is a fixed-sum insurance product: the insurance benefit is set to a precise amount in advance.

10	2023 / UNIQA GROUP

Most property and casualty insurance contracts are taken out for a short term of up to three years. Broad distribution across a great many customers and the relatively short duration of these products enables moderate capital requirements and makes this business segment attractive.

Property and casualty insurance includes non-life insurance for private individuals and companies, as well as private casualty insurance. In property and casualty insurance, the UNIQA Group achieved premiums written in the amount of €4,214.3 million in 2023, i.e. 58.6 per cent of the total premium volume.

Life insurance

Life insurance covers economic risks that stem from the uncertainty as to how long a customer will live. The insured event is the attainment of a certain point in time, or the death of the insured during the insurance period. The customer or defined authorised beneficiary then receives a capital sum or a perpetuity as a benefit. The premium is calculated on the basis of the principle of equivalence, i.e. in accordance with an applicant's individual risk; its amount is based, among other things, on the type of insurance, age at the time the contract was signed, the policy term and the duration of premium payments.

Life insurance includes savings products such as classic and unit-linked life insurance. There are also so-called biometric products to secure against such risks as occupational disability, the need for nursing, or death. In life insurance, the UNIQA Group achieved a premium volume across the Group (including savings portions from unit-linked and index-linked life insurance) of €1,583.2 million in 2023, i.e. 22.0 per cent of the total premium volume.

Health insurance

Health insurance includes voluntary health insurance for private customers, commercial preventive healthcare and opt-out offers for certain independent contractors such as lawyers, architects and chemists. In 2023 health insurance premiums written amounted to €1,388.1 million across the Group, equating to 19.3 per cent of total premium volume.

The UNIQA Group is the undisputed market leader in this strategically important line of insurance in Austria with about a 44 per cent market share. About 91 per cent of premiums come from Austria, with the remaining 9 per cent coming from international business.

About four-fifths of health insurance benefits go to inpatient care (for example, premium category), around one-fifth to outpatient care and fixed-sum insurance products such as daily benefits for hospital stays. In Austria, the UNIQA Group also operates private hospitals through the PremiQaMed Group.

Main geographical areas

The UNIQA Group is one of the leading insurance groups in its two core markets of Austria and Central and Eastern Europe (CEE) with a presence that covers the entire area. The UNIQA Group also includes insurance companies in Liechtenstein and Switzerland. A total of 16.7 million customers have already placed their trust in UNIQA - 22 per cent of them in Austria and 78 per cent in international markets. The UNIQA Group is the second-largest insurance group in Austria, with a market share of around 21 per cent based on premium volume. In 2023, our domestic market accounted for around 61 per cent of Group premiums. UNIQA is the undisputed leader in the strategically important health insurance line, with a market share of about 44 per cent.

Aside from these core markets, the UNIQA Group is also active in Western Europe - in Liechtenstein, Switzerland as well as in Germany and Italy with branches. The UNIQA Group and its subsidiaries are represented in 14 countries in Central and Eastern Europe. In 2023, the CEE markets accounted for around 39 per cent of Group premiums. We also work with the subsidiaries of Raiffeisen Bank International AG in Eastern Europe under a preferred partnership.