Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — Q1 2016 Earnings Presentation
38 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, May 12, 2016
Slide 1: PZU Group's financial results for Q1 2016
Warsaw Vilnius Riga Tallinn Kiev PZU Group’s financial results for Q1 2016 Vilnius Warsaw, 12 May 2016
Slide 2: Management Board
Michat Krupitiski CEO Dariusz Beata Koztowska- Roger Hodgkiss Robert Pietryszyn M Sebastian ed rev eu oe | ee 7 Eee | cee ie PZU Board Member Board Member Boerd Member Board Member rd Member pee ‘Aleksandra Stawomir Roman Patac Pawet Suréwk: Tomasz _ Agatowska Niemierka PZU Zycie Board PZU Zycie Boa
Slide 3: What makes us stand out
What makes us stand out ~16 million clients in Poland, including ~12 million clients of group and individually continued life insurance 1st place in Poland in terms of gross written premium in non-life insurance and life insurance 1st place in Lithuania and Latvia in terms of gross written premium i
Slide 4: Agenda
Agenda 1. Insurance market in Poland, the Baltic States and Ukraine 2. Summary of the PZU Group’s financial results for Q1 2016 3. Operating results for Q1 2016 4. Detailed financial data 5. Preliminary SII data as at 31 December 2015 3
Slide 5: Non-life insurance market in Poland
Non-life insurance market in Poland Gross written premium (m PLN) ● Reversion to growth trend after slight deceleration in 2014. 4.4% 3.9% ● PZU Group’s strong market position in motor own damage 26 250 26 603 26 260 27 276 insurance with a market share of 40.7%(1) and motor TPL with 25 291 a market
Slide 6: Life insurance market in Poland
Life insurance market in Poland Regular gross written premium (m PLN) ● PZU Życie’s regular premium market share stable at 43.9% at the 3.2% end of Q4 2015. 0.1% 15 806 16 037 16 488 ● Only slight growth y/y in regular gross written premium on the life 14 759 16 498 15 040 insurance market - growth
Slide 7: Insurance leader in Poland and the CEE region
Insurance leader in Poland and the CEE region PZU in Poland PZU in the CEE region2 non-life insurance 34.3% Lietuvos Draudimas 27.1% 1.8% 15.5% 13.7% 7.4% 7.3% 3.7% Lietuva Gyvybës Draudimas 5.4% AAS Balta 26.0% life insurance (regular premium) PZU Estonia 14.2% 43.9% PZU Ukraine 2.9% 10.0% 7.4% 5.6
Slide 8: Agenda
Agenda 1. Insurance market in Poland, the Baltic States and Ukraine 2. Summary of the PZU Group’s financial results for Q1 2016 3. Operating results for Q1 2016 4. Detailed financial data 5. Preliminary SII data as at 31 December 2015 7
Slide 9: Net profit affected by growth in claims in agricultural insurance and falling valuation
Net profit affected by growth in claims in agricultural insurance and the falling valuation of equity instruments Gross written premium (m PLN) Net profit (m PLN) 2.6% (43.0)% 4 681 4 801 941 536 03.2015 03.2016 03.2015 03.2016 Equity – parent company (bn PLN) Return on equity (ROE) – consolidated (
Slide 10: Lower administrative expenses in the insurance business in Poland
Lower administrative expenses in the insurance business in Poland as a result of cost discipline m PLN PZU Group’s administrative expenses • The increase in the PZU Group’s administrative expenses y/y largely ensued from commencing the consolidation of Alior Bank. 51.8% • At the same time, a positiv
Slide 11: Agenda
Agenda 1. Insurance market in Poland, the Baltic States and Ukraine 2. Summary of the PZU Group’s financial results for Q1 2016 3. Operating results for Q1 2016 4. Detailed financial data 5. Preliminary SII data as at 31 December 2015 10
Slide 12: Drivers of the Group's performance
Drivers of the Group’s performance ● Contraction of profitability due to the following: Non-life - significantly higher level of claims and benefits y/y in the agricultural insurance portfolio as a consequence of the adverse effects of ground frost; insurance - y/y growth in the loss ratio of the mo
Slide 13: Non-life insurance
Non-life insurance Positive growth rate in sales of motor insurance Mass segment Corporate segment Gross written premium (m PLN) Gross written premium (m PLN) 10.1% 15.1% 1 949 2 147 118 90 475 1 066 1 279 412 1 4 12 201 260 884 32 868 6 5 212 215 03.2015 03.2016 03.2015 03.2016 Combined ratio (%) C
Slide 14: Recap – non-life insurance
Recap – non-life insurance Mass segment Corporate segment Higher gross written premium y/y as a function of the following: Higher gross written premium y/y as a function of the following: • higher motor insurance sales (higher average premium due to the • rising sales of motor insurance offered to l
Slide 15: Life insurance
Life insurance High operating profit margin Group and continued insurance segment Individual insurance segment Gross written premium (m PLN) Gross written premium (m PLN) 1.7% (27.2)% 1 661 1 689 339 247 131 128 208 119 03.2015 03.2016 03.2015 03.2016 Single Premium Regular Premium Margin (%) (4) Ma
Slide 16: Recap – life insurance
Recap – life insurance Group and continued insurance segment Individual insurance segment Drivers of higher gross written premium: Gross written premium down driven by the following: • rising number of insureds in group protection products and rising • lower payments to unit-linked insurance account
Slide 17: International business
International business Higher result driven by lower insurance activity expenses in the Baltic States Non-life insurance Life insurance Gross written premium (m PLN) Gross written premium (m PLN) 1.0% 20.6% 308 311 37 46 Estonia 73 86 Latvia Lithuania (LD) 20 118 131 17 Lithuania 53 PZU Lithuania (5
Slide 18: Recap – international business
Recap – international business Gross written premium Operating results Non-life insurance Non-life insurance • Slight increase in gross written premium on account of PZU Lithuania’s • Combined ratio decline: share of premium income last year (the divestment of PZU Lithuania • loss ratio (64.0%) – up
Slide 19: Alior Bank
Alior Bank Positive growth rate in loan receivables Portfolio composition Bank segment Credit portfolio by segment (m PLN) Operating profit (m PLN) 6.1% (9.4)% 30 332 32 170 13 335 14 232 16 997 17 938 117 106 12.2015 03.2016 03.2015 03.2016 Retail Corporate Comparative data, consolidated since Alio
Slide 20: Agenda
Agenda 1. Insurance market in Poland, the Baltic States and Ukraine 2. Summary of the PZU Group’s financial results for Q1 2016 3. Operating results for Q1 2016 4. Detailed financial data 5. Preliminary SII data as at 31 December 2015 19
Slide 21: Key financial highlights
Key financial highlights Change Q1 2016 m PLN, IFRS Q1 2015 Q1 2016 Change YoY Q4 2015 over Q4 2015 Profit and Loss Statement Gross Written Premium 4 681 4 801 2.6% 4 898 (2.0)% Premium Earned 4 307 4 317 0.2% 4 267 1.2% Net investment Result 1 024 1 031 0.7% 329 213.3% Interest Expenses (35) (274)
Slide 22: Operating segment results
Operating segment results m PLN Gross written 2 147 premium 1 949 1 689 (according to 1 661 local GAAP) 412 475 339 247 290 274 43 47 35 58 INTERNATIONAL – LIFE POLAND – NON-LIFE POLAND – LIFE INSURANCE POLAND - OTHER AND NON-LIFE SEGMENTS Corporate client Mass client Group and continued Individual
Slide 23: Profitability by insurance activity segment
Profitability by insurance activity segment Combined Ratio / Insurance Business Segments Gross Written Premium Operating Profit Operating profit ratio(9) m PLN, local GAAP Q1 2015 Q1 2016 Change YoY Q1 2015 Q1 2016 Change YoY Q1 2015 Q1 2016 Total Non-Life - Poland 2 362 2 622 11.0% 404 180 (55.5)%
Slide 24: Normalized operating profit
Normalized operating profit Year to date, m PLN Operating profit (according to the financial statements) Impact exerted by conversion of long-term policies into yearly 1 renewable term agreements in type P group insurance. m PLN, IFRS 03.2015 03.2016 Claims in agricultural insurance higher than the
Slide 25: Profitability of the mass insurance segment
Profitability of the mass insurance segment (non-life insurance) Segment profitability Mass insurance • Change in the loss ratio driven by the following: • higher loss ratio in agricultural insurance, chiefly insurance for subsidized COR 03.2015 87.2% crops as an effect of the occurrence of numerous
Slide 26: Profitability of the corporate insurance segment
Profitability of the corporate insurance segment (non-life insurance) Segment profitability Corporate insurance • Change in the loss ratio driven by the following: • higher claims and benefits in the general third party liability insurance group (lower level of provisions for claims for losses from
Slide 27: Group and continued insurance segment
Group and continued insurance segment (life insurance) m PLN Main components of operating profit in the group and continued insurance segment • Gross written premium up by 1.7% y/y mostly due to incremental growth in the portfolio of risks in protection and health insurance (including riders to cont
Slide 28: Individual insurance segment
Individual insurance segment (life insurance) m PLN Main components of operating profit in the individual insurance segment • Decline y/y in gross written premium by 92 m PLN chiefly as a result of lower payments to unit-linked insurance accounts offered jointly with Bank Millennium. Change Operatin
Slide 29: Profitability of international companies
Profitability of international companies (non-life insurance) Profitability of international companies • Higher loss ratio y/y due to the higher loss ratio in Ukraine and Estonia. • Lower administrative expense ratio mostly ensuing from PZU Lithuania’s COR 03.2015 102.7% contribution in the correspo
Slide 30: Investments
Investments Poorer performance on equity instruments m PLN Equity instruments and Interest-bearing financial Net investment result 03.2016 investment derivatives (13) assets (13) composition (14) 0.7% 50.3% Total: 5.9% 2.2% 56.4 bn PLN 6.6% (71.1)% 8.7% 1 024 1 031 879 11.1% 466 585 65.6% 135 01-03.
Slide 31: Investments
Investments Poorer performance of unit-linked products m PLN Net investment result Net investment result 1 on PZU Group’s portfolio 0.7% 1 026 1 024 1 031 832 01-03.2015 01-03.2016 01-03.2015 01-03.2016 Net investment result Investment composition 03.2016 2 in investment products (15) Investment pro
Slide 32: Agenda
Agenda 1. Insurance market in Poland, the Baltic States and Ukraine in 2015 2. Recap of the PZU Group’s financial results for 2015 3. Operating results for 2015 4. Detailed financial data 5. Preliminary SII data as at 31 December 2015 31
Slide 33: Group solvency ratio as at 31 December 2015
Group solvency ratio as at 31 December 2015 Solvency I versus Solvency II bn PLN, unaudited data Solvency I Solvency II • In 2015 Solvency II own funds rose by 1.8 bn PLN, i.e. by 9%. 303% 310% Own funds at the end of 2014 were decreased by 2,6 bn PLN of the dividend paid from PZU’s result in 2015.
Slide 34: Solvency II
Solvency II Own funds to cover the Group’s solvency capital requirement bn PLN, unaudited data Comparison of own funds under Solvency I and Solvency II rules On 31 December 2015 the previous provisions were still in force (Solvency I regulations, “S1”). On 1 January 2016 the previous method of deter
Slide 35: Group's capital requirement by risk category
Group’s capital requirement by risk category Solvency I versus Solvency II on 31 December 2015 bn PLN, unaudited data Solvency II Solvency I The Solvency Capital Requirement (SCR) is calculated using the standard Basic formula it takes into account the following risks among others: actuarial, solven
Slide 36: Footnotes
Footnotes The data presented may not add up due to rounding. Footnotes according to their sequence: (1) According to the Polish FSA’s Q4 2015 report; the market and market shares including PZU’s inward reinsurance from Link4; (2) Market shares for Ukraine and Latvia for 2015, for Lithuania and Eston
Slide 37: Questions and answers
Questions and answers Contact data: 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 36
Slide 38: Disclaimer
Disclaimer This Presentation has been prepared by 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. The PZU Group is not liable for the consequences of decisions made after reading thi
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