Vienna Insurance Group, the largest insurer in Austria, says its bottom line is impacted by outdated IT systems.
In the company's third-quarter earnings release, which came out today, it notes a writedown of nearly 200 million Euros related to "IT impairment." The financial fallout is more than half of the company's total third-quarter profit.
"Vienna Insurance Group continuously checks its existing IT systems’ landscape in the course of the regular evaluation of technical usability and in view of the rapidly changing requirements of the insurance market as well as the accelerating rate of technological change. This review was done with external assistance," the company said in a statement. "The analysis now showed that there is a high probability that certain IT systems respectively programme sections will no longer be able to satisfy future technical and business requirements, or no longer fully satisfy these requirements. The balance sheet items covering these programmes or programme sections are therefore being written down by EUR 195 million."
In a conference call with investors, CFO Martin Simhandl elaborated on the strategy, noting that Vienna has acquired several businesses over the past decade.
"With every company you acquire, a new IT system is added to your group," he said. "It's a heterogeneous IT world, and we are over time working on that to define what is useful for the future and what has to be changed, what we can further develop, what is not sensible to develop."
