Vienna Insurance Group Ag · VIE:VIG

Vienna Insurance — FY2019 Earnings Presentation

49 slides from Vienna Insurance's earnings presentation, Mar 17, 2020

  1. Slide 1: 2019 Preliminary Results Presentation

    2019 PRELIMINARY RESULTS PRESENTATION Vienna, 17 March 2020

  2. Slide 2: Presenting team and topics

    2019 PRELIMINARY RESULTS CONFERENCE CALL Presenting team and topics Participants Topics  Elisabeth Stadler, CEO  Key Messages p. 3  Liane Hirner, CFO  Financials & Investments p. 8  Werner Matula, Group Chief Actuary  Life & Health Embedded Value p. 17  Q&A session:  Business Profile & Strat

  3. Slide 3: Key Messages

    KEY MESSAGES FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE BUSINESS PROFILE & STRATEGY APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS Please note: Rounding differences may occur when rounded amounts or percentages are added up. 3 VIG VIENNA INSURANCE GROUP

  4. Slide 4: Excellent 2019 results confirm business strength of VIG Group

    EXCELLENT 2019 RESULTS CONFIRM BUSINESS STRENGTH OF VIG GROUP Key messages  Premium volume of €10bn exceeded for the first time – growth potential to be further explored due to unique market position of VIG Group companies in Austria and CEE  Full commitment to bancassurance from both Erste Group

  5. Slide 5: Agenda 2020: Update 2019

    AGENDA 2020: UPDATE 2019 Overview Ensuring future growth Optimisation of business model Use of growth potentials Digitalisation Anti-Fraud-Management Health insurance  ~180 ongoing digitalisation projects  2019: Roll-out in 8 additional companies 42% premium increase in the 5 key countries of BG,

  6. Slide 6: ESG at VIG Group

    ESG AT VIG GROUP Environmental, social and governance initiatives throughout the Group  VIG share is listed in the international sustainability index FTSE4Good and the Austrian VÖNIX  Annual CSR meeting with more than 30 participants; agenda included best practise sharing of individual Group initi

  7. Slide 7: VIG Group Climate Change Strategy

    VIG GROUP CLIMATE CHANGE STRATEGY Published in May 2019 Binding regulations for Group companies regarding investments and underwriting in coal power energy  Support of green investments and a low-carbon future:  Consciously increasing the share of green investments (e.g. green bonds, environmental

  8. Slide 8: Financials & Investments

    KEY MESSAGES FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE BUSINESS PROFILE & STRATEGY APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 8 VIG VIENNA INSURANCE GROUP

  9. Slide 9: Highlights: results ahead of targets set for 2019

    HIGHLIGHTS Results ahead of targets set for 2019 Gross written premium Profit before taxes Combined Ratio € 10.4bn € 521.6mn 95.4% GWP up by 7.7% compared to 2018 PBT increased by 7.4% Down from 96.0% in 2018  CEE premium growth: +10.6%  PBT includes entire Romanian goodwill  Claims ratio improve

  10. Slide 10: Favourable premium and double-digit net profit growth

    FAVOURABLE PREMIUM AND DOUBLE-DIGIT NET PROFIT GROWTH 2019 Income statement €mn 2019 2018 +/- % Gross premiums written  Premium volume exceeds €10bn threshold driven by strong 10,399.4 9,657.3 7.7 growth in other property (+€398mn), motor (+€195mn) and health Net earned premiums 9,317.9 8,729.4 6.7

  11. Slide 11: Encouraging top-line growth

    ENCOURAGING TOP-LINE GROWTH Overview by segments Gross written premiums (€mn; y-o-y chg.)  Overall GWP of €10.4bn (+7.7%); organic growth of +5.3%  CEE growth of 10.6%  Premium growth drivers are Poland (+€234mn) and the Baltics (+€124mn) - incl. first-time consolidation of Wiener TU (former Goth

  12. Slide 12: Consistent growth in all lines of business

    CONSISTENT GROWTH IN ALL LINES OF BUSINESS; DOUBLE-DIGIT GROWTH IN CASCO & HEALTH Gross written premiums by lines of business (€mn; y-o-y chg.); incl. Central Functions MTPL Casco Other property Total premiums +7.7% 12M 2018 1.429 1.162 4.261 10,399 +5.5% +10.0% +9.3% 9,657 1.507 12M 2019 1.507 1.27

  13. Slide 13: Group profit before taxes of €521.6mn up by 7.4%

    GROUP PROFIT BEFORE TAXES OF €521.6MN UP BY 7.4% Net profit after taxes and non-controlling interests of €331.3mn up by 23.2% (+€62mn) Result before taxes (€mn; y-o-y change)  AT: €36.9mn profit growth; positive development driven mainly by P&C  CZ/SK: increase of €5.7mn and €1.7mn respectively in

  14. Slide 14: Combined ratio (P&C) down to 95.4%

    COMBINED RATIO (P&C) DOWN TO 95.4% Continuous improvement of claims ratio helps to offset cost pressure P&C Combined Ratio development Overview by segments (y-o-y development net, %)  Improved CoR in all market segments, despite Poland -0.2%p -6.7%p -1.0%p -0.7%p -0.7%p +2.2%p  CoR in Poland impac

  15. Slide 15: Investment split and bond portfolio overview

    INVESTMENT SPLIT AND BOND PORTFOLIO OVERVIEW Change in investment split due to deconsolidation of non-profit housing societies 2019: Total €35.9bn Bond portfolio by rating1 in % 4.5% 1.5% 7.3% AAA AA A BBB Other 2019 9,0 31,0 36,8 19,1 4.1 6.7% 2018 9,9 32,1 35,3 17,1 5,6 7.0% 73.0% Bond portfolio b

  16. Slide 16: Financial result

    FINANCIAL RESULT Current income down by 10.4% due to consolidation change of non-profit societies Total in EUR ′000 2019 2018 +/- % Current income 1,216,582 1,358,192 -10.4  Change of consolidation method of non-profit Income from appreciations 34,892 13,054 >100 societies affects current income, d

  17. Slide 17: Life & Health Embedded Value

    KEY MESSAGES FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE BUSINESS PROFILE & STRATEGY APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 17 VIG VIENNA INSURANCE GROUP

  18. Slide 18: Life & Health Embedded Value Austria / Germany

    LIFE & HEALTH EMBEDDED VALUE AUSTRIA / GERMANY in €mn -17.9% 267.5  New Business Margin 2,025.6 36.8 (PVNBP-Ratio) decreased to -7.1 1.7% in 2019 (2018: 2.7%) -104.0 2,124.3 1,662.6  Updated persistency -556.2 assumptions 1,807.4  Positive experience variance due to optimized reinsurance structur

  19. Slide 19: Life & Health Embedded Value CEE

    LIFE & HEALTH EMBEDDED VALUE CEE in €mn 11.9% 138.0  New Business Margin 1,976.6 -35.8 (PVNBP-Ratio) down by 0.8% 25.5 16.2 to 5.8% in 2019 (2018: 6.6%) 66.8 1,766.0  Material contribution by new business written in 2019 1.413,1 1.148,9  Positive experience variance includes renewals (due to Solv

  20. Slide 20: Life & Health Embedded Value Total

    LIFE & HEALTH EMBEDDED VALUE TOTAL in €mn  New Business Margin (PVNBP-Ratio) decreased to 3.2% in 2019 (2018: 4.4%)  Restatement includes updated treatment of Solvency II compliant treatment of contract boundaries in Czech Republic -4.0% 405.5 4,104.7 3,898.5 103.6 18.4 -206.2 31.9 3,791.7 -138.7

  21. Slide 21: Business Profile & Strategy

    KEY MESSAGES FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE BUSINESS PROFILE & STRATEGY APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 21 VIG VIENNA INSURANCE GROUP

  22. Slide 22: Dividend increase of 15% to €1.15 per share

    DIVIDEND INCREASE OF 15% TO €1.15 PER SHARE Fourth consecutive increase in DPS 2016 2017 2018 2019 Earnings per share 2.16 2.23 2.04 2.59 (€) DIVIDEND POLICY Dividend per share 0.80 0.90 1.00 1.15* Payout Ratio in a range of (€) 30 – 50% of Group profits after taxes and non-controlling interests Pay

  23. Slide 23: Business profile and strategy

    BUSINESS PROFILE AND STRATEGY VIG Group characterised by solid business profile and strong balance sheet Proven Well Agenda 2020 business diversified initiatives to drive model portfolio over profitability in countries and many lines of lines of business, business especially in motor also in 2020 St

  24. Slide 24: Appendix 1: Segments

    KEY MESSAGES FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE BUSINESS PROFILE & STRATEGY APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 24 VIG VIENNA INSURANCE GROUP

  25. Slide 25: Austria

    AUSTRIA Outstanding overall profit development due to strong extraordinary financial result in Q4 and improved CoR GWP development (€mn) €mn 2019 2018 +/- % +2.7% Gross premiums written 3,943.3 3,839.9 2.7  Premium growth driven mainly by other 3,943 Net earned premiums 3,226.2 3,158.3 2.1 property

  26. Slide 26: Czech Republic

    CZECH REPUBLIC Excellent business development in life; focus on risk insurance pays off GWP development (€mn) €mn 2019 2018 +/- % +3.7% Gross premiums written  Premiums up by €61.6mn driven by other 1,745.8 1,684.2 3.7 property, life regular premium and motor 1,746 Net earned premiums 1,312.8 1,265

  27. Slide 27: Slovakia

    SLOVAKIA Profit growth despite slightly decreased premium volume and less financial result GWP development (€mn) €mn 2019 2018 +/- % -0.1% Gross premiums written 798.9 799.6 -0.1  Premium growth in life regular premium 800 799 Net earned premiums 671.6 670.2 0.2 (+€11.7mn) as well as in other prope

  28. Slide 28: Poland

    POLAND Favourable premium and profit development; successful cooperation with TUW “TUW” GWP development (€mn) €mn 2019 2018 +/- % +26.1%  Premium growth of €234.2mn driven by Gross premiums written 1,132.0 897.8 26.1 other property (+€131.6mn) and motor 1,132 Net earned premiums 886.5 685.8 29.3 (+

  29. Slide 29: Romania

    ROMANIA Impairment of outstanding goodwill of €108.8mn; focus on profitable business growth GWP development (€mn) €mn 2019 2018 +/- % -9.1% Gross premiums written 468.2 515.3 -9.1  Premiums down by €47.1mn driven by Net earned premiums 346.9 323.5 7.2 intentional decrease of the MTPL business 515 F

  30. Slide 30: Baltic States

    BALTIC STATES First-time consolidation of Seesam Insurance GWP development (€mn) €mn 2019 2018 +/- % +33.1% Gross premiums written 500.3 375.8 33.1  Double-digit premium growth of 10.1% 500 Net earned premiums 385.2 277.1 39.0 adjusted for first-time consolidation of Financial result 11.4 5.2 >100

  31. Slide 31: Hungary

    HUNGARY Strong performance of Union Biztositó GWP development (€mn) €mn 2019 2018 +/- % +9.9% Gross premiums written 289.5 263.5 9.9  Premium growth mainly driven by MTPL 290 Net earned premiums 219.6 205.2 7.0 (+€17.0mn) and other property (+€7.8mn) Financial result 4.9 6.7 -27.4 264  Other expen

  32. Slide 32: Bulgaria

    BULGARIA Bulgarian Group companies with sound development in 2019 and strongly improved CoR GWP development (€mn) €mn 2019 2018 +/- % +30.7% Gross premiums written 223.9 171.3 30.7  Premium growth in all lines of business; 224 Net earned premiums 137.7 122.8 12.1 strongest development in health wit

  33. Slide 33: Turkey/Georgia

    TURKEY/GEORGIA Strong premium growth in Turkey; CoR improvement in both markets GWP development (€mn) €mn 2019 2018 +/- % +18.5% Gross premiums written 234.9 198.3 18.5  Premiums up by €36.6mn with other 235 Net earned premiums 112.4 97.1 15.7 property growing +€20.5mn and motor Financial result 7.

  34. Slide 34: Remaining CEE

    REMAINING CEE Excellent top line growth of all markets; overall satisfying profit development GWP development (€mn) €mn 2019 2018 +/- % +19.3% Gross premiums written 446.9 374.7 19.3  Remaining CEE: Albania (incl. Kosovo), 447 Net earned premiums 328.8 285.7 15.1 Bosnia-Herzegovina, Croatia, Moldov

  35. Slide 35: Other Markets

    OTHER MARKETS Germany and Liechtenstein GWP development (€mn) €mn 2019 2018 +/- % +18.5% Gross premiums written 380.4 321.0 18.5  Premiums up by €59.4mn driven by single 380 Net earned premiums 332.3 275.1 20.8 premium business in Liechtenstein Financial result 16.6 19.2 -13.6 Other income 3.9 3.5

  36. Slide 36: Central Functions

    CENTRAL FUNCTIONS Deterioration due to lower financial result GWP development (€mn) €mn 2019 2018 +/- % +2.5% Gross premiums written 1,623.5 1,584.3 2.5  Central Functions include VIG Holding, 1,623 Net earned premiums 1,351.5 1,356.5 -0.4 VIG Re, VIG Fund, the non-profit societies Financial result

  37. Slide 37: Appendix 2: Financials

    KEY MESSAGES FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE BUSINESS PROFILE & STRATEGY APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 37 VIG VIENNA INSURANCE GROUP

  38. Slide 38: 2019 Key Financials

    2019 KEY FINANCIALS Overview of KPIs Net result for the period after taxes and non-controlling interest (€mn) ROE before taxes and non-controlling interest (%) 331 10,6 298 269 8,9 8,3 2017 2018 2019 2017 2018 2019 EPS net of hybrid interest1 (€) Book Value per share1 (€) 2,59 31,93 32,64 33,67 2,23

  39. Slide 39: 2019 Balance Sheet

    2019 BALANCE SHEET IFRS (€mn) €mn 31.12.2019 31.12.2018 +/- % Intangible assets 2.137 1 961 9,0 Investments 34.456 36 288 -5,1 Unit- and index-linked investments 8.620 8 049 7,1 Reinsurers’ share in underwriting provisions 1.283 1 136 13,0 Receivables 1.717 1 563 9,9 Tax receivables and advance paym

  40. Slide 40: Equity Development

    EQUITY DEVELOPMENT Decrease due to change of consolidation method of non-profit housing societies Change in consolidated Shareholders’ Equity (€mn) -11% 401 413 10 -143 5,836 5,191 -1,326 Equity as Profit for Currency AFS unrealised Dividend Other1) Equity as of 2018 the period changes gains and los

  41. Slide 41: 2019 Premiums by Business Lines and Country (I)

    2019 PREMIUMS BY BUSINESS LINES AND COUNTRY (I) IFRS (€mn) MTPL Casco Other property 2019 2018 +/- % 2019 2018 +/- % 2019 2018 +/- % Austria 319.4 320.8 -0.4 295.3 288.0 2.5 1,384.5 1,312.2 5.5 Czech Republic 305.6 290.5 5.2 246.6 243.1 1.4 498.5 476.9 4.5 Slovakia 152.9 154.0 -0.7 106.3 108.9 -2.5

  42. Slide 42: 2019 Premiums by Business Lines and Country (II)

    2019 PREMIUMS BY BUSINESS LINES AND COUNTRY (II) IFRS (€mn) Life regular Life single Health 2019 2018 +/- % 2019 2018 +/- % 2019 2018 +/- % Austria 1,238.8 1,240.3 -0.1 271.9 258.0 5.4 433.4 420.7 3.0 Czech Republic 633.7 609.4 4.0 44.5 50.2 -11.3 16.8 14.0 19.5 Slovakia 188.4 176.7 6.6 226.5 241.9

  43. Slide 43: 2019 Country Overview GWP / PBT / Combined Ratio

    2019 COUNTRY OVERVIEW GWP / PBT / COMBINED RATIO IFRS (€mn) GWP Total Result before taxes Combined Ratio net (in %) 2019 2018 +/- % 2019 2018 +/- % 2019 2018 +/- %p Austria 3,943.3 3,839.9 2.7 207.3 170.4 21.7 93.5% 94.2% -0.7 Czech Republic 1,745.8 1,684.2 3.7 172.4 166.7 3.5 92.0% 92.7% -0.7 Slova

  44. Slide 44: 2019 Exchange Rates

    2019 EXCHANGE RATES Balance Sheet: period-end exchange rate / P&L: average exchange rate 2019 2018 Country Currency Balance Sheet P&L Balance Sheet P&L EUR EUR EUR EUR Albania EUR/ALL 121.7700 122.9982 123.4200 127.5752 Belarus EUR/BYN 2.3524 2.3423 2.4734 2.4051 Bosnia & Herzegovina EUR/BAM 1.9558

  45. Slide 45: Q4 2019 Income Statement

    Q4 2019 INCOME STATEMENT IFRS (€mn) €mn Q4 2019 Q4 2018 +/- % Gross premiums written 2,548.2 2,299.8 10.8  Premiums up by €248.4mn due to growth in all lines of Net earned premiums 2,392.0 2,211.3 8.2 business, especially in other property Financial result1 383.8 241.6 58.9 Other income 59.1 48.2 2

  46. Slide 46: VIG Share (I)

    VIG SHARE (I) Number of common shares: 128,000,000 / ISIN: AT0000908504 General information Analyst recommendations (31 Dec. 2019) Current listings Ticker Rating Major Indices SELL Vienna  Vienna Stock Exchange: VIG Standard & Poor´s: ATX 1 BUY Prague  Bloomberg: VIG AV / VIG CP A+, stable outlook

  47. Slide 47: VIG Share (II)

    VIG SHARE (II) Shareholder structure Free float split by region1 North America 34% Continental Europe 27% ~70% ~30% Austria 25% UK & Ireland 12% Other 2% Wiener Städtische Versicherungsverein Free Float (Mutual) 1 Split of identified shares, April 2019 (Source: CMi2i) 47 APPENDIX 2: FINANCIALS VIG V

  48. Slide 48: Contact Details / Financial Calendar

    CONTACT DETAILS / FINANCIAL CALENDAR Investor Relations / investor.relations@vig.com / www.vig.com Financial calendar 2020* Nina Higatzberger-Schwarz Sylvia Machherndl Date Event Tel. +43 (0)50 390 – 21920 Tel. +43 (0) 50 390 – 21151 17 Mar. 2020 Preliminary results for the financial year 2019 nina.

  49. Slide 49: Disclaimer

    DISCLAIMER IMPORTANT NOTICE These materials do not constitute or form part, or all, of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in any jurisdiction in which such solicitation, offer or sale would be unlawful, nor shall pa

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