May 20, 2020 / 7:45 AM / 14 days ago

UPDATE 1-Vienna Insurance sees lower premium volume from second quarter

(Adds outlook, detail, CEO)

VIENNA, May 20 (Reuters) - Vienna Insurance Group (VIG) expects premium volumes to fall for the rest of this year, it said on Wednesday, after its business was barely affected by the coronavirus pandemic in the first three months of 2020.

Premium volumes rose 7.2% to 3.1 billion euros ($3.4 billion) in January-March, thanks to strong demand in Austria and Poland during the first two months, VIG said.

“Premium losses due to a decrease in new business will primarily be noticeable starting in the second quarter of 2020 and are expected to continue for the remainder of the financial year,” said Chief Executive Elisabeth Stadler.

Some decline in new business had already been seen that could not be offset by an increase in online business.

The insurer, which operates in more than 10 eastern European countries, reported a 4.4% fall in first-quarter profit before tax to 121.9 million euros.

That included a hit of 46 million euros as VIG changed its accounting method for Austrian housing societies, as well as a negative impact from declines in capital markets, it said.

The combined ratio - a measure of profitability in the property and accident business - improved to 95.1% from 96.8% a year earlier. A reading below 100% denotes an improvement.

$1 = 0.9138 euros Reporting by Kirsti Knolle; Editing by Riham Alkousaa and Mark Potter

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