Surprisingly weak Q3 results

 CIG Pannonia Life Insurance (Pannonia) reported an unexpectedly low profit after tax of HUF 9mn for Q3/20 compared to HUF 489mn in the same period a year earlier and HUF 520mn in Q2/20. The precipitous fall in after-tax profit on a QoQ basis was primarily due to significantly lower GWP and higher OpEx. The increase in OpEx was driven by the expected loss on policies sold by CIG Pannónia Pénzügyi Közvetítő Zrt, a wholly-owned agent subsidiary.
 In Q1-3/20, the insurer’s consolidated profit before tax amounted to HUF 1bn (in 2019 the profit before taxation was HUF 282mn), that was reduced by HUF 162mn tax liability. EMABIT as discontinued non-life operation generated HUF 100mn loss. The overall profit after tax was HUF 746mn, which is HUF 1.06bn higher than the profit after tax of first three quarter in 2019. The other comprehensive income contains the decrease in the fair value of available-for-sale financial assets amounting to HUF 958mn, of which HUF 667mn is the unrealized loss on OPUS shares owned by the Group, while the remaining loss (HUF 291mn) arose from the unrealized loss on government bonds. The total comprehensive income represents a gain of HUF 212mn in 2020.
 CIG Pannónia Life Insurer is financially stable, its fundamentals are certain, the Solvency II capital adequacy is outstandingly high 348%. The consolidated capital adequacy is 326%.