Grupo De Inversiones Suramericana S.a. · BVC:GRUPOSURA
Grupo De Inversiones Suramericana — Investor Presentation (June 2021)
49 slides from Grupo De Inversiones Suramericana's investor presentation, June 2021
Slide 1: Grupo SURA Corporate Presentation
C O R P O R AT E P R E S E N TAT I O N GRUPO SURA
Slide 2: Disclaimer
The forward-looking statements contained herein are based on Management’s current DISCLAIMER forecasts and outlook. For better illustration and decision-making, figures for Suramericana, SURA Asset Management and its subsidiaries are administrative rather than accounting, and therefore may differ fr
Slide 3: 2021 Update & Q1 results
2021 Update & Q1 results Company presentation & evolution
Slide 4: Investment Management Organization
Diversified investment portfolio Both by industries and countries S U S TA I N A B L E P R O F I TA B I L I T Y 76% in financial Generating economic value / Harmonious society development services INVESTMENT MANAGEMENT ORGANIZATION 49% in publicly listed companies Nutresa Argos Bancolombia Surameric
Slide 5: Growth history and evolution of the strategy
Growth history And evolution of the strategy #1 in Colombia y #4 Latin America #1 Pension Fund Manager in the region #1 bank in Colombia and a leader in Central America 1944 / 1990 1990 / 2007 2007 / 2016 2017- LEADERSHIP FINANCIAL SERVICES INTERNATIONAL EXPANSION FOOTPRINT OPTIMIZATION IN INSURANCE
Slide 6: Regional footprint and diversification
Regional footprint and diversification DIVERSIFIED SOURCE OF DIVIDENDS (2020) MARKET CAP. Grupo Argos USD 3.3 bn Grupo 8% March 31, 2021 Nutresa SURA Asset 10% Management CREDIT RATINGS: 29% FITCH BBB- (Int) AAA (Col) S&P BB+ Bancolombia 36% Suramericana 17% 11 countries Caribe Otros 7% EEUU 3% 3% P
Slide 7: Grupo SURA financial metrics evolution
Grupo SURA financial metrics evolution CONSOLIDATED REVENUES ADJUSTED ROE EVOLUTION (USD billion) 10.9% 9.3% 9.7% 9.1% 6.0 5.9 5.5 5.4 5.1 3.9 2.0% 2016 2017 2018 2019 2020 Adjusted ROE 2015 2016 2017 2018 2019 2020 STABLE AND CONSISTENT DIVIDEND PAYMENT TO SHAREHOLDERS CONSOLIDATED NET INCOME (USD
Slide 8: Growth in received dividends
Growth in received dividends Has allowed to decrease debt after the international expansión phase COP DENOMINATED DEBT (in COP MM) 2,575,861 COP 813,028 MM (USD ~ 234 MM) 1,762,833 DIVIDENDS RECEIVED BY GRUPO SURA (HOLDING) (USD million) 280 284 258 241 Other 220 222 200 Protección 163 March 2017 Ma
Slide 9: Cashflow holding company
Cashflow holding company 39 83 223 288 287 2020 98 11 9 Initial cash Received Opex and Interests Paid Investments Var. Debt Final cash dividends & taxes dividends and others 23 182 87 94 8 2021 287 250 7 Initial cash Received Opex and Interests Paid Investments Var. Debt Final cash dividends taxes d
Slide 10: Debt
Debt We anticipated to manage 2021 debt maturities INDICATORS 503 NET DEBT/ DIVIDENDS (LTM) 4.1x 121 74 99 80 78 81 66 49 NET DEBT/ - 27 26 DIVIDENDS (FTM) 2021 2022 2023 2024 2025 2026 2027 … 2029 2030 … 2032 … 2040 Banks Local Bonds Repos International Bonds … 2049 6.6x Max. 5x Individual Net Debt
Slide 11: 1Q 2021 results show recovery signs
1Q 2021 results show recovery signs STRATEGIC POSITIVE BUSINESS SOCIAL AND RESULTS VALUE CREATION RELEVANCE POLITICAL SITUATION Sustainable Profitability: Revenue Growth Share Repurchase Colombia • Economic value + • Consolidated: +13.7% • Process began in • Social Protests Harmonic development of 2
Slide 12: Recovery of operating performance continues
Recovery of operating performance continues Supported on revenue increase and expense control C O N S O L I D AT E D I N C O M E S TAT E M E N T 4.4 4.8 3.9 mar-21 mar-20 Var$ Var% Written premiums 4,761 4,446 315 7.1% Var. vs Q1-20: Retained earned premiums 4,094 4,156 (62) -1.5% +7.1% 0.65 0.69 0.
Slide 13: Positive net income
Possitive net income Providing evidence of the benefits of diversification in our portfolio CONTRIBUTION TO CONSOLIDATED NET INCOME mar-21 mar-20 mar-19 Suramericana (11) 107 118 SURA AM 116 (130) 228 Equity Method Grupo SURA 220 145 271 Grupo SURA (holding) and Others (114) (197) (57) 211 (76) 560
Slide 14: Premium growth and expense control continues
Premium growth and expense control continues Partially mitigating an increase in claims mar-21 mar-20 Var% WRITTEN PREMIUMS RETAINED CLAIMS Written premiums 4,605 4,290 7.3% % Retained earned premiums Retained premiums 3,927 3,684 6.6% 5.2 67% 67% 70% 65% Adjustments to reserves 66 87 -24.0% 4.5 4.7
Slide 15: Commission income growth accelerates
Commission income growth accelerates Together with a recovery of the return on investments, although still below historical average RETURN ON LEGAL RESERVE OPERATING EARNINGS (“ENCAJE”) OPERATING EARNINGS EXC. ENCAJE* mar-21 mar-20 Var$ Var% 437 Commission income 621 577 44 7.5% 284 377 Income from
Slide 16: Our Investments
Our Investments Subsidiaries Associates
Slide 17: Suramericana overview
#4 LATAM INSURANCE GROUP #1 INSURANCE COMPANY with an established growth platform in 9 in Colombia with top 5 positions in 4 countries Latam countries MULTICHANNEL APPROACH DIVERSIFIED BUSINESS MODEL developing new channels BY GEOGRAPHY BUSINESS LINES throughout the region 44% P&C +22,000 35% 28% Li
Slide 18: Suramericana financial metrics evolution
Suramericana financial metrics evolution OPERATING REVENUES (USD bn) CLAIMS AND EXPENSE RATIO 10% 5.3 Combined ratio 14% 4.8 3% 4.2 106% 104% 103% 105% 105% 23% 4.1 1.3 101% 1.1 Mandatory health 3.4 0.8 0.9 93% 92% 93% 92% cost ratio Insurance 89% 90% 55% 0.6 2.2 GWP 57% 57% 57% 53% 54% 53% Retained
Slide 19: SURA Asset Management overview
RETIREMENT INVERSIONES INVESTMENT SAVINGS SURA (RETAIL MANAGEMENT (PENSION) INVESTING) (INSTITUTIONAL) Stable cash flow Underpenetrated Regional platform business business with high connecting Latam to growth potential the world 88% 6% 6% USD 150 bn AUM AUM AUM AUM AUM AUM AUM 20.9 MM USD 130 bn USD
Slide 20: SURA Asset Management financial metrics evolution
SURA Asset Management financial metrics evolution AUM (USD Bn) COMMISSION INCOME (USD MM) 645 658 142 554 588 131 506 531 76 91 114 58 65 109 41 46 567 566 92 496 523 CAGR 88 4.0% 15.4% 8.4% 466 485 4.4% 18.7% Mandatory 4.0% Voluntary 17.6% 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020
Slide 21: Investments in publicly listed companies
Investments in publicly listed companies With leading positions in their respective industries #1 BANK IN COLOMBIA STRATEGIC FOCUS LARGEST PROCESSED FOODS with a relevant presence in Central in cement, energy and road and airport GROUP IN COLOMBIA with leading America concessions brands in the main
Slide 22: Results and Appendix
Results and Appendix Q1-2021 Results Appendix
Slide 23: Macroeconomic context and perspectives
Macroeconomic context and perspectives GDP – REAL GROWTH (%) COVID-19 FISCAL STIMULUS (% OF GDP) 15.0 2019 2020P 2021P 14.5 2020-21 net contraction (E) 9.5 7.8 5.2 5.2 4.9 4.0 3.5 3.3 10.0 9.8 3.3 3.0 1.4 1.1 2.2 9.6 0.3 8.3 8.2 (0.1) (2.2) 5.7 6.2 (4.5) 5.7 5.4 (6.1) (6.8) (5.5) (8.5) 3.8 4.1 (10.6
Slide 24: 1Q 2021 results show recovery signs
1Q 2021 results show recovery signs POSSITIVE BUSINESS SOCIAL AND STRATEGIC VALUE CREATION RESULTS POLITICAL RELEVANCE SITUATION Sustainable Profitability: Revenue Growth Share Repurchase Colombia • Economic value + • Consolidated: +13.7% • Process began in • Social Protests Harmonic development of
Slide 25: Recovery of operating performance continues
Recovery of operating performance continues Supported on revenue increase and expense control C O N S O L I D AT E D I N C O M E S TAT E M E N T 4.4 4.8 3.9 mar-21 mar-20 Var$ Var% Written premiums 4,761 4,446 315 7.1% Var. vs Q1-20: Retained earned premiums 4,094 4,156 (62) -1.5% +7.1% 0.65 0.69 0.
Slide 26: Recovery in equity method and investment income
Recovery in equity method and investment income Explained by an improvement in operating performance and capital markets Equity Method 400 340 mar-21 mar-20 Var$ Var% 300 239 Bancolombia 133 82 51 61.8% Grupo Argos 7 -4 11 200 Grupo Nutresa 81 67 14 21.5% 95 100 Protección 18 -56 74 Otros (1) 5 (6)
Slide 27: Positive net income
Possitive net income Providing evidence of the benefits of diversification in our portfolio CONTRIBUTION TO CONSOLIDATED NET INCOME mar-21 mar-20 mar-19 Suramericana (11) 107 118 SURA AM 116 (130) 228 Equity Method Grupo SURA 220 145 271 Grupo SURA (holding) and Others (114) (197) (57) 211 (76) 560
Slide 28: Premium growth and expense control continues
Premium growth and expense control continues Partially mitigating an increase in claims mar-21 mar-20 Var% WRITTEN PREMIUMS RETAINED CLAIMS Written premiums 4,605 4,290 7.3% % Retained earned premiums Retained premiums 3,927 3,684 6.6% 5.2 67% 67% 70% 65% Adjustments to reserves 66 87 -24.0% 4.5 4.7
Slide 29: Results affected by higher COVID-related costs
Results are affected by higher COVID-related costs and expenses And are not comparable to 1Q2020 which had no material impacts related to COVID CONTRIBUTION TO NET INCOME BY SEGMENT mar-21 mar-20 Var$ Var% Life 48 123 (75) -61% P&C (10) 3 (13) -436% Health Care 1 16 (15) -95% Operating Expenses* (23
Slide 30: Net income in Life segment returns to positive numbers
Net income in Life segment returns to positive numbers Supported by an increase in premiums and expense efficiency Occupational Risk Solution: claims are recovering +2% 416 424 1.4 1.5 1.4 1.3 1.3 Var 1Q2021: 65% 67% 68% +5.9% 83% 59% 79% 50% 72% 70% 60% 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 1T2019 3T2
Slide 31: P&C segment premiums increased
P&C segment premiums increased Despite lower dynamism in car solution 2.5 30% 2.1 26% 27% 2.1 1.9 1.9 Var 1Q2021: 20% 53% 50% 51% 53% 17% 18% +0.7% 42% 11% 9% 8% 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 Written premiums (COP tn) Claims ratio (%REP*) Admin Expense Net Com
Slide 32: Health care segment continues its growth in premiums
Health care segment continues its growth in premiums While COVID claims remain and are compensated by expense efficiency 25% 27% 27% 27% 18% 91.2% 89.6% 90.9% 1.7 89.0% 1.5 1.5 85.6% 1.3 1.3 9.9% 9.1% 10.7% 8.7% 7.5% 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 Written premi
Slide 33: Commission income growth accelerates
Commission income growth accelerates Together with a recovery of the return on investments, although still below historical average RETURN ON LEGAL RESERVE OPERATING EARNINGS (“ENCAJE”) OPERATING EARNINGS EXC. ENCAJE* mar-21 mar-20 Var$ Var% 437 Commission income 621 577 44 7.5% 284 377 Income from
Slide 34: Retirement savings segment
Retirement savings segment Increases commission income, leveraged by Mexico and Chile Total AUM (COP tn) COMMISSION INCOME 542 521 Total: (+4.6%) 457 +5.0% 480 427 367 246 258 AUM-based: (+4.9%) 355 Flow-based: (+4.4%) 258 269 dic-17 dic-18 dic-19 dic-20 mar-21 1T2020 2T2020 3T2020 4T2020 1T2021 Flo
Slide 35: Inversiones SURA + Investment Management
Inversiones SURA + Investment Management With doble digit income growth reaches a second consecutive quarter with positive net income 72.3 +28% 56.4 6.5x 1.9 0.3 1T2020 2T2020 3T2020 4T2020 1T2021 1T2020 2T2020 3T2020 4T2020 1T2021 AUM(COP AUM (COPbn) tn) Flujo NetoSavings Net flow Ahorro and e Inve
Slide 36: ESG and ratings
ESG and ratings ESG Ratings Evolution Other Initiatives / Standards Index / Standard 2016 2017 2018 2019 2020 DJSI (max. 100) 83 75 79 73 81 FTSE4GOOD (max. 5) 3.5 3.9 3.8 4.1 3.3 MSCI (max. AAA) BBB BBB BB BBB BBB ISS ESG C+ C+ C C DJSI Results 98 100 93 87 88 81 84 82 80 80 73 76 76 67 60 Prioriti
Slide 37: Strong financial position of Grupo SURA and subsidiaries
Strong financial position of Grupo SURA and subsidiaries STEADY GROW TH OF OUR EQUITY CREDIT RATINGS – GRUPO SURA 28,968 28,091 LOCAL INTERNATIONAL INTERNATIONAL 26,901 26,227 25,396 AAA BBB BBB- dic-16 dic-17 dic-18 dic-19 mar-20 Figures in COP billion Stable perspective Negative Perspective Feb-20
Slide 38: Recognized issuer in local and international markets
Recognized issuer in local and international markets LOCAL BONDS » INTERNATIONAL BONDS» RATE AMOUNT BID TO AMOUNT BID TO ISSUANCE ISSUER YEAR MATURITY YIELD ISSUER YEAR MATURITY OPTIMIZATION (USD MM) COVER (COP MM) COVER RATE (pbs) 2009 2019 54,500 8.16x IPC + 4.40% 100 2011 2021 300 17.3x 5.79% 200
Slide 39: Shareholding structure
Shareholding structure SHAREHOLDERS TOTAL SHARES OUTSTANDING 27.1% Gru po Argos and 33.7% 10.5% subsidiarie s Gru po Nutresa 581,977,548 13.0% Common Preferred 28.7% Colombian Pe nsion (COMMON 20.8% Funds Shares Shares SHARES) (COMM. + PREF.) 11.0% Inte rnational Funds 80.6% 19.4% 11.5% Retail Inves
Slide 40: Crossholding structure
Crossholding structure FINANCIAL SERVICES 13% 34%* 35% 35% PROCESSED FOODS INFRASTRUCTURE 12% 10% Stakes in common shares 40 *Includes stake held in Grupo SURA by Cementos Argos which owns 6% of Grupo SURA’s common shares. 40
Slide 41: Sustainability operating model aligned with strategy
Sustainability operating model alligned with strategy WE MANAGE RESPONSIBLE STRENGTHEN STAKEHOLDERS CONTRIBUTE risks, trends and business practices public institutions engagement to make to social development opportunities decisions Responsible ▪ Responsible investment ▪ Materiality Analysis Educati
Slide 42: Leaders in pension fund management in the region
Leaders in pension fund management in the region 22.3% 19.4% 15.0% 35.8% 37.1% 17.9% 47.6% Ranking 1O Ranking 3º Ranking 4O Ranking 2O Ranking 1O Ranking 2O Ranking 2O Habitat 12.9% 27.7% 7.3% 13.6% Metlife 9.5% 25.2% Principal 8.9% 17.4% 6.7% Banorte 7.0% 20.2% Grupo AVAL 6.2% 44.3% Citgroup 6.4% 1
Slide 43: Ranking insurance companies in Latam
Ranking insurance companies in Latam RKG GROUP COUNTRY 2009 2018 2019 Mkt. Share 2019 Var% 10 yr CAGR 1 Bradesco Brazil 8,041 10,032 10,132 6.6% 1.0% 2.3% 2 Brasilprev1 Brazil 2,106 8,715 9,942 6.5% 14.1% 16.8% 3 Mapfre Spain 5,626 8,421 8,729 5.7% 3.7% 4.5% 4 Zurich Switzerland 1,671 7,608 8,679 5.
Slide 44: Market share of Suramericana by country
Market share of Suramericana by country 14.1% Uruguay 16.8% 10.7% Domincan Republic 10.5% 1.3% Mexico 1.5% 19.2% El Salvador 21.3% Colombia Life 28.9% 25.1% 19.7% Colombia P&C 19.8% 14.5% Chile 15.1% 0.7% Brazil 0.8% 3.3% Argentina 2015 2018 3.5% Source: Latinoinsurance 44 44
Slide 45: Penetration of insurance industry by country
Penetration of insurance industry by country (% of GDP) Country 2008 2010 2015 2016 2017 2018 ARGENTINA 2.1% 2.0% 2.6% 2.6% 2.6% 2.4% BRAZIL 2.8% 2.9% 3.8% 4.0% 4.1% 3.9% CHILE 3.9% 3.8% 4.6% 4.9% 4.7% 4.6% COLOMBIA 2.2% 2.3% 2.7% 2.8% 2.8% 2.8% MEXICO 1.8% 1.9% 2.2% 2.2% 2.2% 2.2% PANAMA 3.1% 3.1%
Slide 46: Penetration of P&C insurance industry by country
Penetration of P&C insurance industry by country (% of GDP) Country 2008 2010 2015 2016 2017 2018 ARGENTINA 1.5% 1.7% 2.2% 2.2% 2.2% 2.0% BRAZIL 1.5% 1.4% 1.8% 1.8% 1.8% 1.8% CHILE 1.6% 1.5% 1.8% 1.8% 1.8% 1.8% COLOMBIA 1.4% 1.6% 1.9% 1.9% 1.9% 1.9% MEXICO 1.0% 1.1% 1.2% 1.2% 1.2% 1.2% PANAMA 2.2% 2
Slide 47: Penetration of life insurance industry by country
Penetration of life insurance industry by country (% of GDP) Country 2008 2010 2015 2016 2017 2018 ARGENTINA 0.5% 0.3% 0.4% 0.4% 0.4% 0.3% BRAZIL 1.3% 1.5% 2.1% 2.3% 2.3% 2.1% CHILE 2.3% 2.3% 2.8% 3.1% 2.8% 2.8% COLOMBIA 0.8% 0.7% 0.8% 0.9% 0.9% 0.9% MEXICO 0.8% 0.8% 1.0% 1.0% 1.0% 1.0% PANAMA 0.9%
Slide 48: Penetration and market share
Penetration and market share Life Insurance P&C Penetration SURA P&C CAGR 3yr GWP Penetration EVOLUTION OF KPIs 2008 2018 2008 2018 MKT. SHARE RANKING SURA MARKET ARGENTINA 1.5% 2.0% 0.5% 0.3% 3.3% 11 36.0% 33.6% BRAZIL 1.5% 1.8% 1.3% 2.1% 0.9% 20 7.6% 3.5% CHILE 1.6% 1.8% 2.3% 2.8% 14.9% 1 6.7% 5.4
Slide 49: Investor Relations Contact Information
INVESTOR RELATIONS CONTACT INFORMATION Head of Investors and Capital Markets: CARLOS EDUARDO GONZALEZ cegonzalezt@gruposura.com.co IR Specialist: ANDRÉS ZULUAGA azuluagaa@gruposura.com.co (574) 3197039 https://www.gruposura.com/en/investor-relations/reports/
Grupo de Inversiones Suramericana S.A. (Grupo SURA) — Investor Presentation (June 2021) on 6ix