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W&W off to a strong start in the year

Profits higher than the previous year – digitalisation proceeding apace

The Wüstenrot & Württembergische Group (W&W) has started the new financial year in spirited fashion. The Stuttgart-based financial planning specialist posted solid figures for new business and positive profit development for the first three months of 2016. At EUR 62.6 million (previous year: EUR 54.7 million), consolidated net profit is about 15% higher than the value for the first quarter of 2015. The results for the first quarter of 2016 give the W&W Group grounds for optimism, and consolidated net income for 2016 is now expected to top EUR 220 million, depending on how interest rates and the capital markets develop.

Home loan savings developed in a particularly gratifying manner. In terms of total home loan savings, gross new business came in at EUR 4.8 billion (previous year: 3.6 billion), or more than 34 % above the previous year. The Wüstenrot Bausparkasse AG thus posted its best sales results for a first quarter and, counter to market trends, was able to achieve growth.

Net new business likewise posted significant growth of nearly 20 % to EUR 3.1 billion (previous year: 2.6 billion). In all, new business in the first quarter was mainly boosted by the introduction of the new home loan savings plan called “Wohnsparen”. With a nominal loan interest rate starting at just 1 %, Wüstenrot customers have been benefiting since February 2016 from the lowest interest rate ever offered by Wüstenrot in order to make their home dreams a reality.

Construction financing in the first quarter normalised as compared to the level of the exceedingly strong previous year. Group-wide, including brokerage through the construction financing portal, W&W generated new business of nearly EUR 1.2 billion (previous year: EUR 1.3 billion), one of the highest figures ever posted. In construction financing, W&W continues to pursue the objective “revenues over volumes”. With the focus on more profitable offers being maintained, it was thus possible to continue to exploit the generally positive trend in construction financing business in Germany.

Insurance business up – very good claims development

In the insurance division, gross premiums written for life and health insurance from Württembergische during the first three months of 2016 came in at EUR 612 million, a considerable increase over the previous year’s figure of nearly EUR 577 million. Gross premiums written for property/casualty insurance rose more than 2 % to EUR 792 million (previous year: EUR 774 million). In all, gross written premiums in the insurance division totalled EUR 1.4 billion (previous year: EUR 1.35 billion), or a rise of 3.4 % quarter on quarter. Once again, good claims development in property/casualty insurance boosted the W&W Group’s net income. The combined ratio amounted to about 81 %.

Numerous product introductions

Dr Alexander Erdland, Chairman of the Executive Board of W&W AG: “The business figures for the first quarter show just how strongly we’re continuing along our road to success. The persistent alignment to customer needs remains decisive for our ability to reach our growth targets.”

In the area of products, W&W is therefore continuing to rely on the rapid introduction on the market of innovative plans tailored to target groups, and these products are occupying a leading competitive position. In addition to the new Wüstenrot “Wohnsparen” plan, which is being offered by the Home Loan and Savings Bank division, the topic of “risk protection” was at the very top of the agenda in the insurance area at the start of the year.

Persistent continuation of the digitalisation strategy

In addition, W&W is pushing ahead with its digitalisation offensive. Both divisions are equipped with modern online service portals. These improve the interaction between customers, brokers, and the W&W Group companies in a variety of ways. In the area of W&W health insurance, the first quarter saw the introduction of a travel emergency app with numerous service functions, such as worldwide physician search, vaccination recommendations, and 24-hour emergency call service. Also being tested in a new application for digital invoice submission by health insurance customers.

Successful debut on the SDAX

In recent months, W&W stock has garnered significantly greater attention as a result of W&W’s solid, future-oriented business model and a roughly 20 % increase in free float in 2015. Over the course of one year, monthly trading volume jumped from about EUR 2 million to some EUR 12 million. In addition, on 1 December 2015, W&W stock was admitted to the Prime Standard by the Frankfurt Stock Exchange. This created the conditions for inclusion in the SDAX index, which was accomplished on 21 March 2016. With a free-float market capitalisation of roughly EUR 370 million and monthly order book turnover of about EUR 12 million, W&W AG has joined the largest stocks listed on the SDAX. Analysts at Bankhaus Lampe, LBBW, Montega, Berenberg, and DZ Bank have in recent weeks given W&W shares a “buy” recommendation and consider a price above EUR 20 to be appropriate.

Stuttgart, 13 May 2016