The BHW Group generated significant growth in new business in 2002, with double digit growth achieved in some segments. In the private home finance sector, in particular, the company has again outperformed the rather restrained growth typifying the market, explained BHW Management Board Chairman Reinhard Wagner at the Group's press conference in Hamelin.

"With a double digit increase in Bauspar contracts and a record result in mortgage business we have again succeeded in increasing our market share in 2002," Wagner stressed. BHW is the fastest growing company in its industry and expanded its market position in private home finance still further whilst simultaneously increasing its client base by 190,000 to some 3.5 million clients.

Record results in the Private Home Finance segment
New Bauspar business enjoyed the fastest growth
Growth in the core Private Home Finance segment is marked by the success of the Group's two Bauspar institutions in generating new business. In new Bauspar business they achieved a rise of 10.6 per cent in domestic business alone. As a result, BHW demonstrated by far the fastest growth rate among the private Bauspar institutions. New Bauspar contract applications rose to a total of almost € 11 billion and the number of contracts rose by 9 per cent to 474,200. In addition to the impressive sales performance of the Group's own sales teams, Wagner also attributed the increase in Bauspar business to successful cooperative ventures and the sales partnerships with banks and insurance companies. BHW was able to strengthen its market position and extend the gap between it and its nearest competitors still further in the German Bauspar market.
BHW also significantly increase its new Bauspar business abroad. The rise of 9.3 per cent was due, above all, to substantial levels of new business in Italy, Belgium and Luxembourg.

Including these branches, the BHW Bauspar institutions achieved growth of 11.7 per cent. The volume of new Bauspar contracts where the contract fee was fully paid rose by 9.2 per cent to € 9.6 billion.

A boom in financing business

The two Bauspar institutions achieved a record result in non-Bauspar home finance, which essentially comprises mortgage business. In contrast to the decline in the market as a whole, they increased financing business by almost 10 per cent to a record figure of € 5.7 billion. This is also linked to gains in market share. Sharp rises in business in the last few months of the year were also a decisive factor here. The portfolio of non-Bauspar loans rose by 12.5 per cent as a result to € 23.7 billion.

Within the Group as a whole, the volume of new business in the Private Home Finance segment rose to € 20.1 billion, which equates to a rise of € 1 billion or 5.3 per cent. In addition to new business generated by the two German Bauspar institutions, this figure also includes foreign business and home finance loans provided by the subsidiary AHBR. Due to restructuring, these loans were down on the figure for the previous year.

In the past year, BHW provided its clients with private residential construction finance of almost € 10 billion, of which some € 3 billion was in the form of allocated Bauspar loans.

Private Asset Accumulation reflects developments in the market as a whole

Difficult market conditions, marked by the weakness of the stock exchange, also impacted on BHW's performance in the Private Asset Accumulation segment. This includes BHW Bank's funds business and BHW Lebensversicherung's personal insurance products. As a result, new business for funds products was 13 per cent down on the previous year in terms of numbers and 22.5 per cent down in terms of the sum invested.

By contrast, demand for BHW Lebensversicherung's personal insurance products increased. These include life insurance and pension products, fund based insurance policies and government subsidised pension products. Sales volume was up by around 7 per cent to € 920 million. Across all BHW Lebensversicherung's products, the number of applications received rose by 12.4 per cent. The sum insured of new policies issued with paidup premiums for all products stands at around € 2.6 billion.

Improved earnings growth in the second half of the year

According to Wagner, the BHW Group's earnings growth cannot be seen separately from general trends in the financial services sector. However, he assumed that the turnaround, which started in the middle of the year, had stabilised further in the fourth quarter. As a result, the expected deviation from the previous year's results will be less than that indicated in the half-yearly report.

Outlook for the personal insurance growth market

According to Wagner, the significant increase in new business confirms the BHW Group's strategic direction and its target of ranking among the top 3 providers of personal insurance in Germany by 2005. The Group’s client base has risen to 3.5 million while its sales team has increased by a further 175 to reach 3,750 business development officers.

Wagner is optimistic with regard to 2003, when BHW will celebrate the 75th anniversary of its incorporation. Despite the currently weak housing market, BHW is set to expand its position as the leading provider of home finance still further. BHW is also focusing increasingly on the growth market for personal insurance, which will offer promising market potential in the medium and long term.

Key figures at a glance

 

		Total
		€ bn	(+/-)
1. Private Home Finance segment
	- New Bauspar business, BHW Bauspar institutions
	- Germany	10.9	+ 10,6%
	- Abroad	1.7	+ 9.3%
	- New business with fully paid-up contract fees	9.6	+9.2%
	- Home finance business, BHW Bauspar institutions   (mortgage business)
	- Loans accepted	5.7	+ 9.8%
	- Of which loans accepted abroad	942m	+ 46.3%
2. Personal insurance segment
	- Life assurance pension products	Approx. 920m	+ 7.0%
	- BHW Bank funds business	130m	- 22.5%
3. Total sales, BHW sales organisation		22.0	+ 6.7%
4. No. of clients		+ 190,000	Total 3.5m
5. Increase in sales staff numbers		+ 175	Total 3,750