CIG Pannonia shows resilience in Q3/23 despite one-offs

CIG Pannonia (Pannonia or the insurer) reported HUF 772mn after tax profit for Q3/23 compared to HUF 938mn in Q3/22. Other comprehensive income including the changes in the fair value of other financial assets (OPUS shares and government securities) valued at fair value was HUF -191mn compared to a loss of HUF 1.33bn in Q3/22. Total comprehensive income came in at HUF 2.34bn in Q3/23 as against a slight loss of HUF 44mn in Q3/22. Pannonia’s capital position has constantly been stable, with a capital adequacy ratio of 215% at the end of 30 September, 2023.

• It is worth stressing that Pannonia reportsits results in accordance with IFRS 17 standards, which significantly differ from the results reported according to IFRS 4 standards used previously. Accordingly, the insurance portfolios are evaluated using the so-called General Measurement Model (GMM), the Premium Allocation Approach (PAA) and the Variable Fee Approach (VFA).
• As mentioned earlier, the use of the IFRS 17 accounting transition methodology for 31 December 2021 increased Pannonia’s consolidated equity by HUF 7.3bn (+56%), however, due to the transition, a one-time tax effect of HUF 475 million had to be considered and to be charged to profit. Also importantly, according to Pannonia’s best estimate, the extra profit tax was HUF 502mn in Q1-3/23 (HUF 181mn in Q3/23), as a result of which, the insurer’s consolidated after-tax profit came in at HUF 1.36bn in Q1-3/23, up from HUF 585mn in Q1-3/22. Adjusting for the mentioned tax charges of HUF 977mn in total, consolidated after tax profit was HUF 2.34bn in Q1-3/23.