Glossary

A

• Asset liability management

  Management concept whereby decisions related to company assets and the equity and liabilities are coordinated. Strategies related to the assets and the equity and liabilities are formulated, implemented, monitored and revised with this in a continuous process in order to attain the financial objectives given the risk tolerances and restrictions specified.

• Associated companies

  Associates are all the entities over which UNIQA has significant influence but does not exercise control or joint control over their financial and operating policies. This is generally the case as soon as there is a voting share of between 20 and 50 per cent or a comparable significant influence is guaranteed legally or in practice via other contractual regulations.

B

• Best estimate

  Calculation based on the best estimate. This is the probability-weighted average of future cash flows taking into account the expected present value and using the relevant risk-free yield curve.

• Biodiversity or biological diversity

  Variability among living organisms of any origin, including, but not limited to, terrestrial, freshwater, marine and other aquatic ecosystems and the ecological complexes of which they are part.

C

• Carbon dioxide equivalent (CO₂ equivalent, CO₂e)

  Universal unit of measurement to indicate the global warming potential (GWP) of each greenhouse gas, expressed as the GWP of a unit of carbon dioxide. The unit of measurement is used to assess the release (or avoidance of release) of various greenhouse gases on a common basis.

• Carbon footprint

  Greenhouse gas emissions indicator of the investment portfolio, which assesses the Scope 1 and Scope 2 GHG emissions of the companies in which investments are made per € million invested and thus reflects the company’s actual exposure to financed greenhouse gas emissions.

• Climate change mitigation (CCM)

  For the context of the CSRD Directive, the term climate change mitigation is understood to mean the process of reducing greenhouse gas emissions and limiting the increase in the global average temperature to 1.5 °C above pre-industrial levels, in accordance with the Paris Agreement.

• Climate resilience

  The ability of an entity to adapt to climate change and to developments or uncertainties related to climate change. Climate resilience encompasses the ability to manage climate-related risks and capitalise on climate-related opportunities, including the ability to respond and adapt to transition risks and physical risks.

• Contractual service margin (CSM)

  The contractual service margin represents the expected future profit that an insurer will recognise as it provides insurance contract services for a specific group of insurance contracts.

• Corporate governance

  Corporate governance refers to the legal and factual framework for managing and monitoring companies. Corporate governance regulations serve to ensure transparency and thereby boost confidence in responsible company management and controls based around added value.

• Customer Centricity Index (CCI Index)

  The CCI is an operational analysis tool that makes customer centricity measurable and comparable on the basis of customer surveys.

D

• Directly attributable expenses

  Directly attributable expenses are expenditures that can be clearly allocated to a specific insurance contract. Examples include sales commissions and the administrative expenses for this contract.

• Double materiality

  Double materiality refers to the approach of evaluating sustainability issues from two perspectives: on the one hand, the extent to which they influence a company’s financial situation, earning power or risk profile, and on the other, the impact of the company’s business activities on the environment and society. Only topics that are material from at least one of these perspectives are reported.

• Duration

  Duration refers to the weighted average term of an interest rate-sensitive investment or of a portfolio and is a measure of risk for the sensitivity of investments in the event of changes to interest rates.

E

• Environmental, Social and Governance (ESG)

  ESG stands for Environmental, Social and Governance and describes criteria that encourage companies to act sustainably and responsibly. Investors use these criteria to evaluate companies that take on environmental and social responsibility in addition to financial responsibility.

• Equity method

  Investment in associates is accounted for using this method. The value carried corresponds to the Group’s proportional equity in these companies. In the case of shares in companies that prepare their own consolidated financial statements, their Group equity is assessed accordingly in each case. Within the scope of ongoing measurement, this value must be updated to incorporate proportional changes in equity with the share of net income/(loss) being allocated to consolidated profit/(loss).

• EU Taxonomy

  The EU Taxonomy is a classification system introduced by the European Union that defines which economic activities are considered environmentally sustainable. It serves as a guide for investors to assess the extent to which companies are actually contributing to the achievement of environmental goals such as climate change mitigation or adaptation to climate change.

• European Sustainability Reporting Standards (ESRS) and Corporate Sustainability Reporting Directive (CSRD)

  The European Sustainability Reporting Standards (ESRS) are part of the Corporate Sustainability Reporting Directive (CSRD) and serve to ensure standardised and comparable disclosure of ESG data by companies in the EU. The aim is to create transparency about sustainability practices and enable a better assessment by investors and stakeholders.

F

• Fossil fuels

  Non-renewable carbon-based energy sources such as solid fuels, natural gas and petroleum.

G

• Gender pay gap

  The gender pay gap is defined as the difference in the average salary level between female and male employees, expressed as a percentage of the average salary level of male employees based on gross hourly earnings including variable remuneration, social benefits and other non-cash benefits such as company cars, insurance or pension commitments. Reimbursement of travelling expenses, employer contributions and out-of-pocket reimbursements are not taken into account.

• General measurement model (GMM)

  General measurement model under IFRS 17 that is generally to be applied if the premium allocation model or the variable fee approach are not to be applied.

• Greenhouse gas emissions – direct and indirect

  Greenhouse gas emissions are divided into direct (Scope 1) and indirect (Scope 2 and Scope 3) emissions. Scope 1 emissions are from sources that are owned or controlled by the company. Indirect emissions are greenhouse gas emissions that arise as a result of a company’s activities but are caused by sources that are not owned or controlled by the company. Scope 2 emissions are emissions from the generation of purchased or received electricity, steam, heat or cooling consumed by the entity. Scope 3 emissions are all indirect greenhouse gas emissions (not covered by Scope 2) that occur in the reporting company’s value chain – both upstream and downstream emissions.

• Greenhouse gas emissions

  Emissions of greenhouse gases into the earth’s atmosphere which can absorb and re-radiate heat, thereby increasing the greenhouse effect and contributing to global warming. Greenhouse gases include carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), sulphur hexafluoride (SF₆), nitrogen trifluoride (NF₃), hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs).

H

• Harmonised C-SAT

  The “Harmonised C-SAT” stands for harmonised customer satisfaction and is an internationally standardised indicator for measuring customer satisfaction based on a five-star scale.

I

• IAS

  International Accounting Standards

• IFRS

  International Financial Reporting Standards. Since 2002 the term IFRS has applied to the overall concept of standards adopted by the International Accounting Standards Board. Standards already adopted beforehand continue to be referred to as International Accounting Standards (IAS).

• Insurance revenue

  The insurance revenue reflects the portion of the total consideration received, adjusted for the time value of money and investment components, that is allocated to the insurance benefits provided in the period, which are caused by the reduction in the LRC for the period.

• Insurance service expenses

  The insurance service expenses reflect the expenditures for the services rendered in the period (which correspond to the insurance income) as well as the losses from groups of onerous contracts and the subsequent reversal of such losses and changes.

• Insurance service result

  The insurance service result is the difference between the insurance income and the insurance service expenses (for example benefits, directly attributable costs) and indicates whether the insurance business is operationally profitable.

L

• Liability for incurred claims (LIC)

  Reserve for claims incurred but not yet paid

• Liability for remaining coverage (LRC)

  Technical provision under IFRS 17 for the obligation to provide future benefits arising from the business existing on the reporting date.

M

• Minimum capital requirement (MCR)

  The minimum level of security below which the eligible basic own funds should not fall. The MCR is calculated using a formula in relation to the solvency capital requirement.

N

• Net Promoter Score

  The Net Promoter Score is a value that indicates the overall willingness of UNIQA customers’ to recommend UNIQA.

• Net zero (net-zero emissions)

  Net-zero emissions are defined on the one hand as the greatest possible reduction of operational greenhouse gas emissions (Scope 1, 2 and 3), bringing them to zero or to a residual level that aligns with achieving net-zero emissions at global or sectoral level in corresponding scenarios or sector pathways within the framework of the goals of the Paris Agreement, and on the other hand as the neutralisation of all residual emissions by the net-zero target year and all greenhouse gas emissions released into the atmosphere thereafter.

O

• Own risk and solvency assessment (ORSA)

  The company’s own forward-looking risk and solvency assessment process. It forms an integral part of corporate strategy and the planning process – but is also part of the overall risk management strategy.

P

• (Partial) internal model

  Internally generated model developed by the insurance or reinsurance entity concerned and at the instruction of the FMA to calculate the solvency capital requirement or relevant risk modules (on a partial basis).

• Premium allocation approach (PAA)

  The premium allocation approach is a simplified, less complex measurement approach under IFRS 17 that is only permissible if certain criteria are met. This measurement model is primarily used in short-term property insurance.

• Profit participation

  In life and health insurance, policyholders have the right, under statutory and contractual regulations, to appropriately participate in the company’s surpluses. The level of this profit participation is determined on an annual basis.

R

• Retrocession

  Retrocession means reinsurance of inward reinsurance and is used as a risk policy instrument by professional reinsurance companies as well as in active reinsurance by other insurance companies.

• Revaluation reserve

  Unrealised gains and losses resulting from the difference between the fair value and amortised cost are recorded directly in equity in the items “Measurement of equity and debt instruments”, “Remeasurement of defined benefit obligations” and “Measurement of insurance and reinsurance contracts” after deduction of deferred taxes.

• Risk appetite

  Conscious assumption and handling of risk within risk-bearing capacity.

• Risk limit

  Limits the level of risk and ensures that, based on a specified probability, a certain level of loss or a certain negative variance from budgeted values (estimated performance) is not exceeded.

S

• Solvency capital requirement (SCR)

  The solvency capital requirement applies to insurance and reinsurance companies and is calibrated to ensure that all quantifiable risks (such as market risk, credit risk, life underwriting risk) are reliably taken into account. It covers both current operating activities and the new business expected in the subsequent twelve months.

• Solvency II

  European Union Directive on publication obligations and solvency rules for the own funds of an insurance company

• Solvency

  An insurance company’s equity base

• Stress test

  Stress tests are a special form of scenario analysis. The objective is to provide a quantitative statement on the loss potential for portfolios in the event of extreme market fluctuations.

• Sustainable investments

  Investments that contribute to climate change adaptation by investing in green bonds and infrastructure projects focusing on renewable energies, among other things. Sustainable investments finance issuers that contribute to reducing greenhouse gas emissions or to social projects. These can be categorised as green, social and sustainability bonds, SFDR Article 9 funds as well as sustainable infrastructure projects and technologies.

T

• Tiers

  Classification of the basic own fund components into Tier 1, Tier 2 and Tier 3 capital using the own funds list in accordance with the criteria specified in the EU implementing regulation. If a component of basic own funds is not included in the list, an entity must carry out its own assessment and decide on a classification.

V

• Value at risk

  Risk quantification method. This involves the calculation of the expected value of a loss that may arise in the event of unfavourable market developments with a probability specified within a defined period.

• Variable fee approach (VFA)

  The VFA was introduced to take account of the special characteristics of insurance contracts with direct participation features. This is primarily used for business with profit participation in health and life insurance.

W

• Weighted average carbon emission intensity (WACI)

  Carbon emission indicator of the investment portfolio which measures the greenhouse gas emissions of the portfolio companies in relation to their revenue and thus indicates the carbon efficiency of their business activities.