Press Release

Ludwigsburg, 13.11.2020

W&W Group firmly on track

- Consolidated net profit reaches EUR 170.4 million after nine months.

- Good levels of new business in construction financing and in the insurance segments, as well as rigorous cost management.

- Further expansion of new digital products.

- Executive Board Chair Jürgen A. Junker: "Our successful digitisation of products and processes guarantees close personal service and customer confidence - particularly in this age of the coronavirus."

The Wüstenrot & Württembergische Group (W&W) is firmly on track in the third quarter of 2020. Despite restrictions resulting from the coronavirus pandemic and volatility in the financial and capital markets, the Group achieved a solid consolidated net profit amounting to EUR 170.4 million (previous year: EUR 220.0 million). The third quarter alone accounted for 63.4 million, following 44.2 million in the same quarter of 2019. Continuing high levels of new business, efficiency improvements resulting from digitisation and rigorous cost management, as well as a favourable claims experience, all had a positive effect on business performance. After nine months, the Group's general administrative expenses were down by 5.2 per cent from the corresponding figure in the previous year. The financial result further includes charges from the valuation of equities and debt-financing instruments, as well as risk provision. The Executive Board sticks by its net income expectation for the whole of 2020.

Jürgen A. Junker, Chair of the Executive Board of W&W AG: "The first nine months of this year clearly demonstrated that the move by our Group into a digital future, with considerable investment in new products and more efficient processes, has significantly enhanced the resilience and competitiveness of the W&W Group. In spite of the coronavirus pandemic, zero and negative interest rates and increasingly stringent regulations, we are a company moving forward, continuously developing our range of services and gaining customers and market share. Thanks to modern digital communications, we also maintain close contact with our customers, who particularly need our full support in uncertain times such as these. The recent restrictions to public life in Germany show that we still do well to enhance our competitiveness. There is still hope that our circumstances will quickly normalise, but there is no certainty of that."

Housing division

In the Housing division, in which the W&W Group is active in financing, and in the construction and sale of real estate through Wüstenrot Haus- Städtebau and Wüstenrot Immobilien, Wüstenrot Bausparkasse recorded adjusted new business after home loan savings of EUR 7.55 billion, following EUR 7.99 billion in the same period of the previous year (down 5.4 per cent). It did however perform better than the market as a whole and consequently increased its market share. The corona-related lockdown of branches led primarily to losses among cooperation partners, while Wüstenrot's own mobile sales force performed better.

Insurance division

Gross premiums written in Life and Health Insurance in the first three quarters of 2020 were at the same level as in the previous year, at EUR 1.73 billion. In property/personal accident insurance, gross premiums written rose by 5.2 per cent to EUR 1.73 billion (previous year: EUR 1.64 billion). The segment also recorded an improved combined ratio, up to 87.8 per cent gross (nine months of 2019: 90.6 per cent).

More customer service as a result of new digital offerings

Adam Riese, the digital brand launched in 2017, has now acquired around 150,000 customers. The expansion of the product range and the service level go hand in hand in this context. For example, in the "Insurer of the Year 2020" study, which is produced by the German Institute for Service Quality (DISQ), Adam Riese took first place among the direct insurers for customer satisfaction. In October 2020 the digital brand launched its fifth product for retail customers, a personal accident insurance policy.

In the Housing segment, more and more estate agents are now also offering virtual, contactless home viewings - a service bonus for prospective house buyers, and not only in the age of the coronavirus.

FinanzGuide, the digital financial assistant for W&W Group customers, now also offers customers of Württembergische Krankenversicherung (health insurance) the opportunity to settle their bills and invoices simply and easily by digital means.

Outlook for 2020 as a whole

In light of the negative economic effects of the coronavirus pandemic and the associated trends on the capital markets, the W&W Group already adjusted its expectations for the 2020 financial year in the first half of the year. Subject to renewed escalation in trends relating to the pandemic and the capital markets, the company currently expects consolidated net income to come in above the result for the first nine months of 2020, but still below the medium-term target corridor of EUR 220 to 250 million.