W&W Group continues to improve its market position in 2023

• Strong growth above the market average at Wüstenrot Bausparkasse AG and in Württembergische property and life insurance despite weak economy and high levels of uncertainty among consumers.
• HGB profit climbs by around 10 per cent to EUR 131.7 million, enabling dividend continuity.
• Consolidated net profit under IFRS in line with the updated forecast at EUR 140.5 million.
• The W&W Group has continued to make good progress on customer proximity, market relevance and cost efficiency. Successful financial year on the whole.

In the 2023 financial year, the Wüstenrot & Württembergische Group (W&W) saw good, in some cases excellent development of new business in nearly all lines. Wüstenrot Bausparkasse AG, which set another new record, and the Württembergische property and life insurance business achieved growth well above the market average. As previous announced, the financial planning group’s earnings performance was influenced by storm damage and other large losses as well as significantly higher costs in motor vehicle insurance. Consolidated net income after taxes calculated as per IFRS came to EUR 140.5 million, thus attaining the target range of EUR 130 million to EUR 160 million, which was updated in October 2023. In the individual accounts under HGB, the Group grew significantly to EUR 131.7 million (up 10.3 per cent on the previous year).

In light of these good results, the Executive Board and Supervisory Board will again be proposing the payment of a dividend of EUR 0.65 per share, thus ensuring dividend continuity. EUR 61 million would thus be distributed to shareholders. The W&W Group expects consolidated net income to increase in the current 2024 financial year, while adverse external influences persist.

Jürgen A. Junker, CEO of W&W AG: “The environment in 2023 was anything but easy. It was shaped by external factors such as steep price rises as well as people’s uncertainty as a result of the political situation. There were also losses caused by adverse weather. Despite the unprecedented concentration of negative influences, the Group continued to make significant progress. Strong new business in particular underscores the attractiveness of our products and services for customers and not least the resilience that the W&W Group has developed with its more than 6.5 million customers. It shows that our Group can also succeed under difficult conditions. This is thanks to our customer-focused and cost-efficient way of working and our successful digital transformation. Our solidity and resilience have also helped us to handle the unprecedented intensity of claims.”

Junker continues: “Particularly notable and disadvantageous to policyholders is the sharp increase in costs for reinsurance and at workshops. The price increases at workshops with hourly rates sometimes exceeding EUR 200 are clearly out of control. Reinsurers’ amended pricing and underwriting policies are ultimately also negatively affecting consumers, even though we have adjusted to these challenges in the interests of our customers.”

The W&W Group’s key figures in 2023 (IFRS)

At EUR 140.5 million, net profit was below the previous year’s figure of EUR 237.7 million (figure adjusted to IFRS 17) and thus in line with the forecast as updated in October 2023. This was chiefly influenced by the significant decline in the technical result of EUR 121.8 million (previous year: EUR 308.2 million) due to the high claims expenses.

Gross general administrative expenses increased by 5.1 per cent to EUR 1.15 billion (previous year: EUR 1.09 billion), primarily due to continued high investments in the digitalisation of processes and efficient IT infrastructure.

Housing division

In the Housing division, Wüstenrot Bausparkasse AG – the clear number two on the German market – reported growth in net new business by contract volume of 20.5 per cent to EUR 16.73 billion in 2023, the best figure in the company’s history. Wüstenrot’s market share will therefore increase by nearly 2 percentage points.

In the construction financing business, the rapid interest rate rise, steep price increases for building work and unclear requirements for financial support for home ownership and energy-efficiency upgrades to buildings led to a collapse in demand for residential construction loans last year. With a new business volume of EUR 3.91 billion including brokering for third parties, Wüstenrot slightly outperformed the sector as a whole. At Wüstenrot, the credit portfolio grew by 6 per cent year on year to EUR 25.8 billion, setting a new record.

Insurance division

In 2023, Württembergische property/casualty insurance saw growth in new business (annual contribution to the portfolio, new and replacement business) of 23.5 per cent to EUR 423.6 million. The multi-award-winning digital brand Adam Riese further increased its customer base to nearly 420,000 customers at the end of 2023 and expanded its product range. The combined ratio (net, IFRS) in property/casualty insurance was 99.3 per cent (previous year: 92.7 per cent). Especially in the third quarter of 2023, Württembergische Versicherung saw a high number of claims relating to natural disasters as a result of adverse weather. There was also an unexpected cumulation of individual large losses claimed by corporate customers and a higher number of motor vehicle claims, associated with significantly higher claims expenses, which led to corresponding premium increases throughout the sector.

Württembergische Lebensversicherung AG increased new business by total premium by 5.6 per cent year on year to EUR 3.47 billion, whereas market growth was only 2.3 per cent. As in previous years, company pension schemes grew particularly dynamically, with the total premium rising 14.6 per cent. Württembergische Krankenversicherung AG increased its annual new premiums by more than 30 per cent to EUR 10.1 million (previous year: EUR 7.7 million).

Outlook for 2024

Although the economic environment in Germany remains difficult, the W&W Group is cautiously optimistic for the current year. Assumed continued success in the acquisition of new customers, stable general administrative expenses and normalisation of claims performance, the Group expects consolidated net profit in 2024 to be higher than in the previous year, but below the medium- to long-term target range of EUR 220 million to EUR 250 million. In the individual accounts under HGB, the target is a figure at the previous year’s level.

Jürgen A. Junker: “The W&W Group is strong and has proven in recent years that it can outperform the sector as a whole. We are working to gain new customers again in 2024 and to build on existing customer relationships. To this end, we are making substantial investments in products, processes and not least in our employees.”

Kornwestheim, 27 March 2024

The W&W Group

The W&W Group came into existence in 1999 as a result of the merger of the two long-standing companies Wüstenrot and Württembergische. Today, it develops and provides the four components of modern financial planning: financial security, residential property ownership, risk protection and savings and investment. It combines the Housing, Insurance and brandpool divisions as equally strong pillars, which enables it to offer every customer the financial planning solution that suits them best. In doing so, the W&W Group focuses on omni-channel sales, ranging from its own mobile sales force to cooperation partners and sales agents, broker activities and digital initiatives. Today, approximately 13,000 people work as in-house staff or in the mobile sales force for the listed group headquartered in Kornwestheim, Germany.