KORNWESTHEIM (dpa-AFX) - Increasingly expensive insurance claims have caused the financial group Wüstenrot & Württembergische (W&W) to suffer a drop in profits in the first quarter. At a good 51 million euros, the surplus was around a fifth lower than a year earlier, as the group comprising the building society Wüstenrot and the insurer Württembergische announced in Kornwestheim on Friday. In property insurance, net income even fell by more than half.

For the current year, CEO Jürgen Junker continues to expect a rather meagre result. Although the profit is expected to be higher than in 2023, the destruction caused by severe storms in the summer and higher motor vehicle damage caused consolidated net profit to fall by more than 40 percent to 140.5 million euros. Management estimates that the result in 2024 is also likely to remain below the medium to long-term target range of 220 to 250 million euros.

In the first quarter, the property and casualty division increased its turnover by almost 11% to around 679 million euros thanks to new contracts. This means that income was once again sufficient to cover expenses for claims, administration and sales: At 95.7 percent, the combined ratio remained below the critical 100 percent mark.

However, the management set aside more money for claims, which are becoming more expensive due to inflation, among other things. As a result, the segment's profit fell by 56% to 10.5 million euros.

Life and health insurance fared better: the segment increased its profit by almost a fifth to 14.7 million euros, although new life insurance business declined somewhat due to fewer single-premium contracts.

In the residential segment, Bausparkasse Wüstenrot felt the effects of the slump in the real estate market. New business from loans and home loan and savings contracts slumped by around 40 percent after reaching a record level a year earlier.

Group CEO Junker called the profit for the first quarter a "more than respectable result" despite the decline. The company is "fully on track" to achieve its targets for the year as a whole. New business is growing at a pleasing rate and administrative expenses have fallen overall.

The news did not trigger a clear reaction on the stock market. In the morning, the W&W share price hovered around the previous evening's closing level. Most recently, the share was one of the somewhat stronger stocks in the small-cap index SDax./stw/nas/jha/