We are very satisfied with our results in a very challenging time, which is primarily characterised by the war in Ukraine, high inflation and the pandemic that is still present. Although these influences, which also apply to the insurance industry, are dampening the economic outlook, VIG Group continues to demonstrate very strong resilience, which is once again manifested in improved key figures. Improving premiums and profits, as well as the combined ratio, cannot be taken for granted. The success of our group is built on a long-term oriented and broadly diversified business model, which shows its strengths especially in particularly challenging phases. Also, digitalisation plays a very important role. We have the great advantage that in many of our markets digital literacy is considerably higher than in Austria for example, and we have launched most innovative projects in CEE.
Based on strategic starting points and last year’s macroeconomic forecasts for 2022, the Triglav Group plans a profit before tax of 120–130 million euro and an increase in total written premium to more than 1.4 billion euro; however, due to the growth of the insurance portfolio and other factors, we also expect an increased volume of claims paid. The combined ratio is expected to remain favourable below 93%. Due to the low interest rates at which our investments were reinvested in the previous financial year, we anticipated a further decline in rates of return on investment, excluding unit-linked assets. We estimate that the planned annual profit will be achieved; however, it should be stressed that the risks related to the realisation of target profit increased significantly due to negative influences from the business environment.
In less than a year, the company has seen massive improvements from digitalisation of processes to diversification of insurance products, as well as a major decrease in complaints and faster payments combined with an important increase in the non-MTPL segment.In less than a year, the company has seen massive improvements from digitalisation of processes to diversification of insurance products, as well as a major decrease in complaints and faster payments combined with an important increase in the non-MTPL segment. Other important achievements of our team are of course the new branding, the focus on improving the customer experience and the change in the company culture.
COVID-19 has jumpstarted the digital transformation in the insurance sector. Insurance customers are embracing digital touchpoints across the entire customer lifecycle: 71% of US life insurance buyers researched their insurance products online, 74% of UK insurance buyers bought insurance online, 13% of Italian insurance buyers have interacted with their insurer via online chat, and the list goes on (Forrester, The State of Digital Insurance, 2021). Where insurance companies haven’t responded with better digital experiences, a number of insurtechs are prepared to take over. But digital technologies are changing more than just sales and service, and this is starting to affect the entire insurance value chain. Insurers are now facing three key challenges: how to increase customer satisfaction and retention, reduce operational cost and utilise legacy core insurance technology.
It has been shown that people particularly appreciate protection and security in crisis situations. Our business model therefore proves its worth especially in such situations. People appreciate being well protected at such times, which is why we were confronted with almost no cancellations of insurance policies and we registered an increased interest in health insurance. What has also proven successful is that we have been pushing the digital transformation within our group for years. The already extensive range of digital services and products has been a great benefit for us during the pandemic. We have also consciously continued to strengthen digital offerings and will continue to do so. Another factor is our strategic orientation with a high level of diversity. It has been confirmed that our business model, with its broad diversity across countries, brands, distribution channels and products, is proving successful even in difficult times. We therefore did not have to, and do not have to, rethink our strategic goals.
The net profit of Triglav Group, active on seven markets across Southeast Europe as well as in the Czech Republic, rose 78% to 47.5 million euro in 2011. Return on equity at both Triglav Group and its parent company, Zavarovalnica Triglav, improved dramatically, moving closer to 12% − the target value for 2015. The combined ratio in 2011 was 90.1% at the group level. Last year saw the beginning of talks on the entry of a strategic partner, the International Finance Corporation, into the Triglav Group through the company Triglav INT, a process that was formally finalised this year.