Press information

Kornwestheim, 15 September 2023

W&W Group maintains growth trajectory in H1 2023

• Consolidated net profit for first half of year up 24 per cent at €180.7 million after strong second quarter.
• Record new business for Wüstenrot Bausparkasse and higher market share, significant growth at Württembergische Versicherung.
• Financial performance bolstered by successful new business, new customers, cautious risk policy, increasing digitalisation of the business model, more stable financial markets and non-recurring effect.
• W&W CEO Jürgen A. Junker: “The good first six months show that the W&W Group can operate successfully even in a challenging macroeconomic environment.”

The Wüstenrot & Württembergische Group (W&W) maintained its growth trajectory in the first six months of the current 2023 financial year. The financial services provider’s consolidated net profit [1] rose by 24 per cent year on year in the first half of the year from €145.7 million to €180.7 million. Operating trends seen in the first quarter – growth in new business, new customers, risk and cost discipline – were maintained and in some cases strengthened in Q2. The more stable share and bond environment compared to the previous year, as well as a non-recurring effect in the Housing division, also shored up net income. The previous expectation of consolidated net profit in the target range of €220 million to €250 million was confirmed for 2023 as a whole.

Jürgen A. Junker, CEO of W&W AG: “The first half of the year was a clear success. Business performance shows that the W&W Group can be stable and operate very successfully in a challenging economic environment with high inflation, recession and considerable consumer uncertainty.

We are particularly pleased that we further increased our market share and that more and more customers are placing their trust in our employees, especially in these difficult times. At the same time, our path to a digital future that began several years ago is increasingly paying off. We remain fundamentally optimistic about the second half of the year, but are also realistic. The subdued German economy and additional costs faced by the general public, mostly a result of political and legislative factors, are not cause for celebration.”

New business performance in H1 2023

In the Insurance division, property/casualty insurance generated new business growth (annual contribution to the portfolio, new and replacement business) of 23.7 per cent to €260.1 million (previous year: €210.3 million), which was higher than the industry figure. The growth was driven by strong motor and corporate customer business. The combined ratio in property/casualty insurance was 92.5 per cent in the first six months under IFRS 17 (previous year: 91.2 per cent).

In life insurance, new business continued to decline. Total premiums in the first six months amounted to €1.61 billion (down 6.9 per cent on the previous year’s figure of €1.73 billion). Company pension schemes continued to enjoy growth with total premiums picking up by almost 7 per cent in the first half of the year.

In the Housing division, Wüstenrot Bausparkasse generated the highest level of new business in a first half-year in the company’s history. Gross new business in terms of total home loan savings contracts came to €10.83 billion, 27.3 per cent higher than the previous year’s €8.51 billion. Wüstenrot thus grew more strongly than the sector as a whole and further expanded its market share.

New lending business (including brokering for third parties) declined to €1.83 billion in the first six months (previous year: €3.98 billion, down 54.1 per cent). This is due to increased construction costs, high real estate prices and higher financing costs, which caused the total construction financing business in the market to halve in the first half of 2023 compared with the previous year. A non-recurring effect in the net financial result from a previous acquisition had a positive impact on the division’s financial performance.

Outlook for 2023 as a whole

The previous forecast of consolidated net profit of between €220 million and €250 million in 2023 as a whole has been confirmed. This assumes that new business trends will continue in the second half of the year. In view of macroeconomic risks, this is subject to the condition that there are no distortions on the capital and financial markets, no other unforeseeable events and no further strain on consumers.

^[1] Initial application of the new accounting standard IFRS 17 for insurance contracts since 1 January 2023; previous year figures restated accordingly.