Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — Q3 2017 Earnings Presentation
35 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, Nov 15, 2017
Slide 1: PZU Group's financial results in the first 3 quarters of 2017
Warsaw Vilnius Riga Tallinn Kiev PZU Group’s financial results in the first 3 quarters of 2017 Wilno Warsaw, 15 November 2017
Slide 2: PZU Group's position on the changing insurance market
1. PZU Group’s position on the changing insurance market 2. Major drivers of the PZU Group’s result PZU Group’s position 3. Execution of the Group’s strategy for 2016-2020 on the changing 4. Recap of financial results by segment insurance market 5. Detailed financials 6. Group figures as at 30 June
Slide 3: Non-life insurance market in Poland
Non-life insurance market in Poland Gross written premium (m PLN) 19 366 7.2% 24.9% 15 500 13 886 13 665 7 496 13 596 13 481 12 757 6 811 10.1% 6 049 6 829 6 697 6 793 5 641 11 871 7 547 8 689 36.6% 7 116 7 057 6 784 6 872 06.2011 06.2012 06.2013 06.2014 06.2015 06.2016 06.2017 Motor Non-motor Marke
Slide 4: Life insurance market in Poland
Life insurance market in Poland Gross periodic premium (m PLN) (0.5)% 0.8% 2.4% 0.2% 7 956 7 953 8 201 8 349 8 173 8 193 7 825 4 730 (1.2)% 4 445 4 571 4 594 4 483 4 690 4 498 2.0% 3 254 3 362 3 470 3 511 3 620 3 675 3 748 06.2011 06.2012 06.2013 06.2014 06.2015 06.2016 06.2017 PZU Życie Other life
Slide 5: Major drivers of PZU Group's result
1. PZU Group’s position on the changing insurance market 2. Major drivers of the PZU Group’s result Najważniejsze Major drivers ofczynniki the 3. Execution of the Group’s strategy for 2016-2020 kształtujące PZU Group’s wynik result 4. Recap of financial results by segment Grupy PZU 5. Detailed finan
Slide 6: The most important events and drivers of the results in Q3 2017
The most important events and drivers of the results in Q3 2017 The S&P rating agency raised PZU’s rating outlook from negative to stable. PZU’s rating of A- is one notch above Poland’s long-term foreign currency rating. The PZU Group’s gross written premium climbed 10.0% Q3 2017 / Q3 2016. Stable p
Slide 7: Stable profitability in other non-life insurance
Stable profitability in other non-life insurance Combined ratio (COR) in non-motor insurance Combined ratio (COR) in non-motor insurance – mass segment – corporate segment Including the Including the Including the effect exerted effect exerted by effect exerted by by ground frost weather weather 87.
Slide 8: Enhanced performance in motor insurance coupled with a stable market share
Enhanced performance in motor insurance coupled with a stable market share PZU Group's motor insurance market share1) (Poland) Technical result (quarterly) 404 35.4% 35.3% 35.0% 38.0% 39.1% 38.9% 201 338 168 162 170 197 15 67 (15) 79 (74) (52) Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Slide 9: Ongoing profitability expansion in group and individually continued insurance in Q3
Ongoing profitability expansion in group and individually continued insurance in Q3 Gross written premium (m PLN) ● Lessening the pressure on the premium growth rate making it 1.7% possible to control the loss ratio. 1.3% 2.3% 1.4% ● Rising share of health insurance premiums - new clients in 2.0% 5
Slide 10: Profitability of the group and individually continued insurance segment versus the loss ratio
Profitability of the group and individually continued insurance segment versus the loss ratio in protection products 78% 0.32% • Mortality’s quarterly seasonality in Poland (upswing in winter months and downturn in 76% summer months) and its overall upward trend 74% 0.30% (aging of the general publi
Slide 11: Better performance of the main portfolio driven by equity portfolios
Better performance of the main portfolio driven chiefly by the improved result generated by equity portfolios m PLN 3 334 256 142 (167) 4 949 502 (137) 1 019 1 615 0 0 Interest-bearing financial Banking activity Investment products FX on own debt Other interest expense (including Equity instruments
Slide 12: Net result nearly twice as high as last year's result
Net result nearly twice as high as last year’s result PZU Group’s net profit (m PLN) Net profit – parent company (m PLN) 99.1% 63.9% 3 003 1 508 2 146 1 309 09.2016 09.2017 09.2016 09.2017 PZU Group’s gross written premium (m PLN) Return on equity (ROE) (%) * 15.1% 7.5 p.p. 16 933 14 706 21.3% 13.8%
Slide 13: Further improvement in cost effectiveness
Further improvement in cost effectiveness m PLN Administrative expense ratio in the insurance business • The declining administrative expense ratio in Poland was driven mainly by maintaining cost discipline coupled with the rapidly grow magnitude of business. • The impact exerted by the change in fe
Slide 14: Execution of the Group's strategy for 2016-2020
1. PZU Group’s position on the changing insurance market 2. Major drivers of the PZU Group’s result Execution of the Group’s 3. Execution of the Group’s strategy for 2016-2020 strategy for 4. Recap of financial results by segment 2016-2020 5. Detailed financials 6. Group figures as at 30 June 2017 a
Slide 15: Key metrics of the Strategy for 2016-2020
Key metrics of the Strategy for 2016-2020 ROE1 09.2017 2020 21.3% 18% LIFE NON-LIFE INSURANCE INVESTMENTS HEALTH BANKING INSURANCE Number of clients Assets under management PZU Group's Assets (bn PLN) for third party clients (bn Revenues (m PLN)6 BUSINESS market share2 PZU Życie (m) SIZE PLN) 06.201
Slide 16: Recap of financial results by segment
1. PZU Group’s position on the changing insurance market Recap of financial results 2. Major drivers of the PZU Group’s result 3. Execution of the Group’s strategy for 2016-2020 by segment 4. Recap of financial results by segment 5. Detailed financials 6. Group figures as at 30 June 2017 according t
Slide 17: Operating results in the first 3 quarters of 2017
Operating results in the first 3 quarters of 2017 ● Higher profitability due to the following: Non-life - enhanced profitability of the motor insurance portfolio; - despite the losses caused by hurricanes, the combined ratio in non-motor insurance is down from 2016 insurance (extensive losses caused
Slide 18: Non-life insurance
Non-life insurance Growth in motor insurance sales Mass segment Corporate segment Gross written premium (m PLN) Gross written premium (m PLN) 7 508 including 18.4% 29.5% 706 6 339 including 452 5 255 1 894 4 168 1 463 including including including including 2 1 150 3 40 56 850 including including 2
Slide 19: Recap – non-life insurance
Recap – non-life insurance Mass segment Corporate segment Higher gross written premium y/y as the outcome of the following: Higher gross written premium y/y as the outcome of the following: • higher motor insurance gross written premium (+26.1% y/y) as an effect of • upswing in motor insurance sales
Slide 20: Life insurance
Life insurance Further growth in profitability in Q3 on rising sales Group and continued insurance segment Individual insurance segment Gross written premium (m PLN) Gross written premium (m PLN) 1.3% 40.7% 1 196 850 443 5 078 5 145 391 753 459 09.2016 09.2017 09.2016 09.2017 Single premium Periodic
Slide 21: Recap – life insurance
Recap – life insurance Group and continued insurance segment Individual insurance segment Drivers of higher gross written premium: Gross written premium’s upward movement resulted from the • acquisition of premium in group health insurance products; PZU has more following: than 1.4 million active ag
Slide 22: International business
International business Higher sales in non-life insurance Non-life insurance Life insurance Gross written premium (m PLN) Gross written premium (m PLN) 17.1% 14.3% 960 1 124 169 Estonia 147 277 Latvia 245 72 Lithuania Lithuania 63 439 540 37 42 Ukraine 129 138 Ukraine 26 30 09.2016 09.2017 09.2016 0
Slide 23: Recap – international business
Recap – international business Gross written premium Insurance results Non-life insurance Non-life insurance • Gross written premium growth in the Baltic companies precipitated • Combined ratio decline as a result of the following: chiefly by the introduction of higher rates for motor insurance in t
Slide 24: Investments
Investments Better results on equity portfolios m PLN Net investment result* September 2017 Investment portfolio composition** 58.5% Total: 5.6% 1 615 9.2% 47.5 bn PLN 1 019 of which 5.8% investment 2.8% products 01-09.2016 01-09.2017 6.3 bn PLN 10.8% 65.8% The net investment result (after factoring
Slide 25: Banking activity
Banking activity Positive growth rate in credit receivables Portfolio composition Bank segment Loan portfolio by segment (m PLN) Operating profit (m PLN) and the Cost/Income ratio* 166 735 270.5% 56 431 47.0% 47.1% Pekao 44 998 329.9% 1 440 61 209 9.1% 918 Pekao 19 695 22 106 55.8% Alior Bank Alior
Slide 26: Detailed financials
1. PZU Group’s position on the changing insurance market 2. Major drivers of the PZU Group’s result Detailed financials 3. Execution of the Group’s strategy for 2016-2020 4. Recap of financial results by segment 5. Detailed financials 6. Group figures as at 30 June 2017 according to Solvency II
Slide 27: Key financial highlights
Key financial highlights Change Q3 2017 m PLN, IFRS 3Q 2016 3Q 2017 Change YoY Q2 2017 Q3 2017 over Q2 2017 Profit and Loss Statement Gross Written Premium 14 706 16 933 15.1% 5 838 5 327 (8.8)% Premium Earned 13 784 15 849 15.0% 5 275 5 502 4.3% Net investment Result 2 635 5 833 121.4% 1 373 2 801
Slide 28: Normalized operating profit
Normalized operating profit Operating profit YTD, m PLN Change m PLN, IFRS 09.2016 09.2017 1 Impact exerted by conversion of long-term yoy policies into yearly renewable term agreements in type P group insurance. Operating Profit 1 960 3 896 98.8% 2 Above average claims in agricultural insurance in
Slide 29: Profitability by operating segments
Profitability by operating segments Combined Ratio / Insurance Business Segments Gross Written Premium Insurance Result/ Operating Profit Operating profit ratio* Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 m PLN, local GAAP Change YoY Change YoY 2016 2017 2016 2017 2016 2017 Total Non-Life - Poland 7 802 9
Slide 30: Group figures as at 30 June 2017 according to Solvency II
1. PZU Group’s position on the changing insurance market 2. Major drivers of the PZU Group’s result Group figures as at 30 3. Execution of the Group’s strategy for 2016-2020 June 2017 according to 4. Recap of financial results by segment Solvency II 5. Detailed financials 6. Group figures as at 30 J
Slide 31: Group solvency ratios
Group solvency ratios Group Solvency II data as at 30 June 2017 bn PLN, unaudited data Solvency II (Group) • Solvency II own funds rose by PLN 1.0 bn, i.e. 12% during H1. 256% 253% 250% 277% 247% • The main drivers of the growth of own funds in H1 were: 23.5 22.5 21.0 • Pekao Bank acquisition (decre
Slide 32: Group own funds
Group own funds Solvency II data as at 30 June 2017 bn PLN, unaudited data Comparison of own funds and consolidated equity according to IFRS Own funds according to Solvency II are calculated using the +2.3 -2.3 net assets carried in the Group’s economic balance sheet. +2.4 -2.6 For the purpose of SI
Slide 33: Group solvency capital requirement
Group solvency capital requirement Solvency II as at the end of 2016 and H1 2017 bn PLN, unaudited data SII 12.2016 SII 06.2017 The Solvency Capital Requirement (SCR) is calculated using the standard Diversification Diversification formula and it includes, among others, the following risks: actuaria
Slide 34: Piotr Wiśniewski – IRO
Piotr Wiśniewski – IRO tel.: (+48 22) 582 26 23 ir@pzu.pl www.pzu.pl/ir PZU Al. Jana Pawła II 24 00-133 Warsaw, Poland www.pzu.pl https://twitter.com/GrupaPZU 33
Slide 35: Disclaimer
Disclaimer This Presentation has been prepared PZU SA (“PZU”) and is purely informational in nature. Its purpose is to present selected data concerning the PZU Group (“PZU Group”), including its growth prospects. PZU does not undertake to publish any updates, changes or adjustments to information, d
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