W&W Group: Respectable first half-year in 2020

• Consolidated net profit after six months stands at EUR 107 million.
• Second quarter considerably stronger than the first quarter.
• New business continues to grow.
• Net income expectation for 2020 as a whole unchanged.
• Executive Board Chair Jürgen A. Junker: "Innovation, digitalisation and close personal service ensure that W&W will continue to prosper."

In the first half of 2020, despite the considerable restrictions imposed as a consequence of the coronavirus pandemic, the Wüstenrot & Württembergische Group (W&W) grew its operational business further and generated a respectable consolidated net profit of EUR 107.0 million (prior-year period: EUR 175.8 million). Of this amount, EUR 82.0 million was generated in the second quarter alone. While insurance business suffered, such as in the form of expenses for business closures by customers, this was compensated for by positive effects, such as lower motor claims. As a result of the investments in digital solutions and processes that were made in recent

years, the W&W Group is capable not only of staying in close contact with customers and tapping into new customer groups despite the pandemic-related restrictions but also of further expanding its room for manoeuvre and its perspectives. The Executive Board's expectation for net income for 2020 as a whole is unchanged.

Jürgen A. Junker, Chair of the Executive Board of W&W AG: "Despite the severe impact of the coronavirus pandemic, the W&W Group posted a respectable net income for the first half of the year. More than three years ago, our Group embarked on its venture into the digital future, and that is ultimately why our work for customers, who particularly in recent months needed our assistance, is proceeding smoothly. Today the W&W Group is positioned to meet the times probably better than ever before. That has not gone unnoticed by our customers. We are gaining market shares and further expanding our business. For the second half of the year, we continue to expect a gradual improvement in the basic conditions for our businesses. However, in view of the uncertainties and risks, a great deal of caution is still warranted. But we are now benefiting from the fact that the W&W Group was made resilient at an early stage. Innovation, digitalisation and close personal service ensure that our company will continue to prosper."

Housing division

In the first half of 2020, the W&W Group posted growth in the Housing division, where it is active in both the financing and the sale of properties. For instance, construction financing business (including brokering for third parties) rose by 3.3% to EUR 3.17 billion (first half-year of 2019: EUR 3.07 billion). In the home loan savings business of Wüstenrot Bausparkasse, paid-in new business in terms of total home loan savings contracts stood at EUR 5.08 billion, or 2.9% below the corresponding figure for the previous year (EUR 5.24 billion). In this regard, the performance by our mobile sales force improved, whereas in partnership business, the branch lockdowns occasioned by the coronavirus had an adverse impact on partners.

With respect to the other activities of the division, the brokerage company Wüstenrot Immobilien posted an increase in sales of 13% in the first six months to EUR 296 million. Moreover, Wüstenrot Haus- und Städtebau handed over 63 flats and terrace houses to owners in the first half of the year. The volume amounted to EUR 34 million, which was triple the figure for the prior-year period. In addition, there are projects in development with a volume of more than EUR 440 million.

Insurance division

In the first half of 2020, the Württembergische Insurance Group continued to post growth in life and health insurance and occupational pension schemes, with gross premiums written rising slightly by 1% to EUR 1.19 billion. In property and casualty insurance, gross premiums increased in the first six months by 5.7% to EUR 1.33 billion, with contributions being made by all three segments (motor, corporate customers, retail customers). Materials costs increased, although proportionately less than premium development. The combined ratio in property/casualty insurance remained good at 88.6%, following 88.0% for the first half of 2019.

Digital offerings further expanded

In the first half of the year, the W&W Group further expanded its digital offerings, which are grouped together in the W&W brandpool division.

• For instance, brandpool launched the Rente.de app, which provides individuals covered by statutory insurance with an introduction to the complex topic of retirement planning.
• The digital brand Adam Riese continues to grow and now has more than 130,000 customers, who have used the portal to obtain basic insurance policies easily and at affordable prices.
• FinanzGuide, the digital financial assistant for customers of the W&W Group, now includes a free insurance cover that, among other things, offers protection against financial losses.

Outlook for the year as a whole

For the year 2020 as a whole, the Executive Board continues to expect consolidated net profit to come in below the target range EUR 220 to 250 million, which has been long been the objective. Because of the continuing uncertainties with respect to the capital and financial markets and the further progression of the coronavirus pandemic, a more specific forecast is not reliably possible.