Press release

W&W: Growth in new business

- Insurance business up considerably, more new customers acquired.

- Quarterly net profit of EUR 25.0 million influenced by market turmoil occasioned by the coronavirus.

- Adjusted net income expectation confirmed for 2020 as a whole.

- Executive Board Chair Jürgen A. Junker: "W&W is now benefiting from comprehensive digitalisation and the new beginning that commenced several years ago."

The Wüstenrot & Württembergische Group (W&W) posted a good first quarter in operational terms. Despite substantial uncertainties on the market as a result of the global COVID-19 pandemic, the company was able to achieve encouragingly positive new business. The insurance lines in particular posted good growth. The construction financing business came in at nearly the record level of the previous year. The number of new customers rose by almost 25%. As was announced on 4 May 2020, the Group's financial performance was influenced by the effects that the volatile capital markets had on the balance sheet, with a corresponding negative impact on net financial income, as well as by one-off effects stemming from the coronavirus crisis. As a result, consolidated net profit for the first three months stood at EUR 25 million (prior-year period: EUR 78.5 million). For the year as a whole, the Executive Board - as previously reported - now expects net profit to come in below the target corridor of EUR 220 to 250 million.

Jürgen A. Junker, Chair of the Executive Board of W&W AG: "The encouraging, convincing achievements in new business this quarter, which was heavily influenced by the coronavirus, show that customers also rely on us in times of crisis and consider us to be a trusted partner for financial planning issues. Right now we are doing everything in our power to live up to that trust and to show customers that we are there for them. The W&W Group is benefiting from the fact that we made enormous investments over recent years in the digitalisation of our products and processes. And now, in times marked by the coronavirus, our new digital possibilities are keeping us closely connected with our customers. During this difficult market phase, we are thus benefiting from the operational clout that we have acquired for ourselves in recent years through the change that we successfully initiated, which led to a comprehensive new beginning. At the same time, we have made the Group resilient. And today this resilience is more necessary than ever."

Housing division

Construction financing business (including brokering for third parties) came in at EUR 1.45 billion in the first quarter, which was nearly at the record level of EUR 1.46 billion posted in the previous year. New home loan savings business (paid-in new business) for Wüstenrot Bausparkasse, Germany's second largest home loan and savings bank, rose by 1.7% to EUR 2.65 billion (prior-year period: EUR 2.61 billion). New home loan savings business (gross) stood at EUR 3.02 billion, a decline of -13.1% compared with the corresponding quarter in 2019 (EUR 3.47 billion), mainly as a result of the coronavirus. Nevertheless, Wüstenrot performed better than the market and gained market shares.

Insurance and brandpool divisions

In Life and Health Insurance, gross premiums written rose by 6.6% to EUR 629.7 million (prior-year period: EUR 590.9 million). Property/Casualty Insurance posted growth in gross premiums of 6.3% to EUR 989.2 million in the first three months (prior-year period: EUR 930.2 million). All business segments (motor, corporate customers, retail customers) contributed to growth. The digital brand Adam Riese continued its growth path and is again ahead of expectations with currently more than 110,000 contracts. Claims development was once again encouraging, despite slightly higher expenses for natural disaster claims. The combined ratio in Property/Casualty Insurance stood at 87.4%, gross (prior-year period: 86.5%).

Outlook for 2020 as a whole

W&W confirms the revised outlook announced on 4 May 2020 for the year 2020 as a whole and expects that consolidated net profit for the year will come in below the medium-term target corridor of EUR 220 to 250 million. A more specific forecast is currently not possible owing to the prevailing uncertainties with respect to the capital and financial markets, as well as to the macroeconomic situation.