Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Non-Deal Roadshow (October 2007)
51 slides from Vienna Insurance's roadshow presentation, October 2007
Slide 1: Vienna Insurance Group – Expanding the CEE Insurance Business
Vienna Insurance Group – Expanding the CEE Insurance Business Roadshow US/Canada October 2007
Slide 2: Contents
Contents A 2 A Investment Proposition B Targets and Summary C 6M 2007 Highlights D P&L and Balance Sheet E Appendix
Slide 3: Investment Case in Brief
Investment Case in Brief What is unique about VIG? A 3 § VIG has broadest diversification § VIG is the purest CEE insurance in this fast growing region play among listed insurance § Operates in countries with stable companies 1 2 legal and regulatory regimes § CEE business is vital § GDP and insuran
Slide 4: VIG Strategy Delivers
VIG Strategy Delivers Strong increase in profitability A 4 VIG's Path of Profitability Comments 8,000 450 GWP 400 § From 2002 to 2006 VIG succeeded 7,000 PBT in nearly doubling Group Gross 6,000 350 Written Premiums implying a CAGR 300 of more than 17% GWP in €mn PBT in €mn 5,000 250 4,000 200 § Fro
Slide 5: Geographical Overview
Geographical Overview VIG is the leading Austrian insurance group operating in 20 countries A 5 Footprint Data Statistical Background GDP (bn USD) 2,657 Population (mn) 378 Market Volume (bn USD) 86 Market Volume Life (bn USD) 28 Market Volume Non-life (bn USD) 58 Average Density (USD)1 212.5 Averag
Slide 6: Purest CEE Insurance Play
Purest CEE Insurance Play Only Vienna Insurance Group widely captures CEE potential A 6 CEE Premiums as % of Total Group Premiums 37.5% VIG 31.1% 28.7% 2006 2005 12.6% UNIQA 10.2% 2004 10.1% 3.6% Allianz 3.3% 3.0% VIG‘s unique share of CEE 2.6% business growing fastest ING 2.3% (6M 2007: already 40.
Slide 7: VIG Has Excellent CEE Market Position
VIG Has Excellent CEE Market Position VIG an early mover in CEE A 7 Overview of Core Markets Details Slovakia Czech Rep. Bulgaria Romania § leading market position in nearly all core markets Pop.: 5.4 mn Pop.: 10.2 mn Pop.: 8.2 mn Pop.: 21.6 mn § strong market positions GDP/Cap.: $ 10 k GDP/Cap.: $
Slide 8: VIG Is Well Positioned in Its Markets
VIG Is Well Positioned in Its Markets Broad portfolio of insurance markets with different dynamics A 8 Group 11 Market Number of Pop: 48.5 mn Position Countries A BG GEO RO GDP/Cap.: $ 7,2162 CZ SK TOP 7 AL Density: $ 2063 3 Group 1 TOP 2 SER Group 2 5 CRO Group 2 Pop: 60.6 mn PL TOP GDP/Cap.: $ 8,6
Slide 9: VIG – Top Player in CEE
VIG – Top Player in CEE Number 2 among international insurance groups A 9 Market Share in CEE2 Market Share in CEE2 Non-life ~ 15.7% ~ 15.7% ~ 13.2% ~ 13.4%1 1 ~ 11.5% ~ 11.1% ~ 5.9% ~ 4.9% ~ 4.8% ~4.5% ~ 3.3% ~0.0% G qa G z i BC al an VI IN G G a C nz er ni li K iq VI lli IN KB ra U en lia A Un ne
Slide 10: CEE Region Offers Twin Growth
CEE Region Offers Twin Growth Sustainable growth through GDP and insurance penetration A 10 4,000 GDP Growth Insurance EU-15 Penetration Mature Markets 2006 – 2008F 20061 CEE2 5.5% 3.3% Insurance Density (USD) Austria 2.8% 6.2% EU 15 2.5% 9.3% A 2,000 RUS SLO BG UKR RO CRO SK H PL SER CZ TR Growth M
Slide 11: VIG Markets – Underpenetrated in Insurance
donau\Analyst Presentation\16 Analyst Presentation 17-Nov-2005.ppt VIG Markets – Underpenetrated in Insurance Insurance Density, 2006 (Premiums per Capita) A 11 $3,500 3,305 Life $3,000 Non-life $2,500 2,397 $2,000 $1,500 1,101 $1,000 520 $500 376 337 310 308 173 101 94 89 77 60 $0 1 EU-15 A SLO CZ
Slide 12: CEE – A Long-term Growth Perspective
CEE – A Long-term Growth Perspective Markets need at least 20 years to catch up with the Austrian level of 2000 A 12 Austrian Insurance market CEE Insurance markets in 2006 Premium Insurance Insurance GDP/Capita GDP/Capita Year income penetration Density (EUR) penetration Density (EUR) (EUR) (EUR) (
Slide 13: Acquisitions – A Systematic Approach
Acquisitions A systematic approach A 13 Acquisition Process GWP by Geography 6M 07 § Sound risk assessment of target Other company 3.6% Criteria § What does the company add to help us Other CEE 16.8% Austria grab the lion´s share of future growth 56.1% § Appraisal of management skills § Leveraging o
Slide 14: Management Approach
Management Approach Excellent track record in integrating CEE subsidiaries into VIG A 14 Management Approach Track Record § Local incumbent management is responsible for § CEE already contributes 40 percent of sales and profitability - usually one board premium income and more than 30 percent of mem
Slide 15: Profit Drivers in CEE
Profit Drivers in CEE Creating value from cost ratio, investment income and reinsurance A 15 Earnings Potential Comments Loss Ratio (%) Cost Ratio (%) § Decrease in cost ratio 100 - economies of scale in less advanced markets 80 - cost reduction programmes in advanced 60 markets 40 - shared services
Slide 16: Proof of VIG's strategy
Proof of VIG’s strategy Development of PBT in selected CEE markets from 2002 - 2006 A 16 90 40 Czech Republic Slovakia 80 35 70 30 60 PBT €mn 25 PBT €mn 50 20 40 15 30 10 20 10 5 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Profitability 10 4 Poland Romania 5 3 0 2 PBT €mn 2002 2003 2004 20
Slide 17: VIG – Distribution Is Key (I)
VIG – Distribution Is Key (I) Multi-brand policy to retain loyalty A 17 Multi-brand Features § VIG is umbrella brand and “family name” of Group companies § Local companies retain individual brands as “first name” § Strong brand awareness in local markets § Retain loyalty of employees and management,
Slide 18: VIG – Distribution Is Key (II)
VIG – Distribution Is Key (II) Multi-channel strategy to get access to customers A 18 Strong Multi-channel distribution Details § Tied agents (employed sales force and/or exclusive agents) are backbone in all markets Tied § Extensive use of brokers, bank agents Financial cooperations, multilevel and
Slide 19: VIG in Austria
VIG in Austria Attractive franchise plus catch up potential in life insurance A 19 Situation in Austria Details Life Premium per Capita (USD) § Leading market position in all business lines 2,198 Source: SwissRe, Sigma - #1 in property & casualty with 21% market 2006 share 2000 1,130 1,105 - #1 in l
Slide 20: Contents
Contents B 20 A Investment Proposition B Targets and Summary C 6M 2007 Highlights D P&L and Balance Sheet E Appendix
Slide 21: Financial Targets
Financial Targets 2007 profit target will be exceeded; dividend increase of 25% B 21 VIG’s financial targets Comments Profit before Tax Targets in € mn CAGR: ~ 18% § Based on the 1st HY results the 2007 profit 520 - 530 470 - 480 target of € 410mn will be exceeded 410+ § VIG dividend policy is defin
Slide 22: Summary
Summary Progress in VIG´s strategic position B 22 Plan two years ago Position today § Increased market share in § Strengthening Austria by more than 2% pts of leading position in Austria thus attaining number one § Expansion of CEE business position through acquisitions and organic § VIG almost doub
Slide 23: Contents
Contents C 23 A Investment Proposition B Targets and Summary C 6M 2007 Highlights D P&L and Balance Sheet E Appendix
Slide 24: 6M 2007 Highlights (I)
6M 2007 Highlights (I) VIG expanding by organic growth and acquisitions C 24 VIG building swiftly on its unique CEE play § Above market organic growth in all major markets – increase of market shares - VIG no.1 in Non-life in Czech Republic with 34.3% market share - VIG no. 1 in motor business in Sl
Slide 25: 6M 2007 Highlights (II)
6M 2007 Highlights (II) GWP up by 15.3%; profitability rising significantly C 25 GWP Profit before Tax 321 5,882 15.3% 50.3% 5,008 240 4,101 215 3,493 3,029 156 143 2,636 125 2004 2005 2006 6M 05 6M 06 6M 07 2004 2005 2006 6M 05 6M 06 6M 07 IFRS IFRS Net Profit after Tax and Minorities Net Combined
Slide 26: 6M 2007 Highlights (III)
6M 2007 Highlights (III) Sound increase in EPS C 26 EPS (annualised) ROE before Tax (%) 26.2 3.06 21.9 2.48 19.5 2.27 2.17 16.9 2.07 14.8 13.2 1.41 2004 2005 2006 6M 05 6M 06 6M 07 2004 2005 2006 6M 05 6M 06 6M 07 IFRS IFRS
Slide 27: Contents
Contents D 27 A Investment Proposition B Targets and Summary C 6M 2007 Highlights D P&L and Balance Sheet E Appendix
Slide 28: 6M 2007 Income Statement
6M 2007 Income Statement IFRS (€mn) D 28 6M 2007 6M 2006 +/-% 1. Gross written premiums 3.493,1 3.029,3 15,3 2. Net earned premiums 2.829,1 2.411,3 17,3 1 3. Net investment income 553,2 361,1 53,2 4. Other income 20,7 29,0 -28,9 Total income 3.403,0 2.801,4 21,5 6. Expenses for claims incurred -2.42
Slide 29: 6M 2007 Balance Sheet
6M 2007 Balance Sheet IFRS (€mn) D 29 6M 2007 2006 +/- % Intangible assets 496 461 7.4 Total investments 18,912 17,260 9.6 Unit- and index-linked investments 2,825 2,341 20.7 Reinsurers’ share in technical provisions 1,188 963 23.3 Receivables 1,220 984 24.0 Deferred tax assets 38 24 63.1 Other asse
Slide 30: 6M 2007 P&L Major Items – Gross Written Premiums
6M 2007 P&L Major Items – Gross Written Premiums Largely growing above market in Austria and CEE (€ mn) D 30 § Group GWP increased by 15.3% to € 3,493mn 126.8 § Austria: total GWP up 5.8% to reach € 1,958mn. Life up 9.6% at 118.0 € 895.7mn with sound growth in subsidised pensions vs. weaker 1,408.6
Slide 31: GWP Split by Region
GWP Split by Region Share of Other CEE markets going up significantly D 31 GWP by Geography 6M 05 GWP by Geography 6M 06 GWP by Geography 6M 07 Other CEE Other Other Other 5.6% 5.4% 3.9% 3.6% Other CEE Other CEE Slovakia 10.9% 16.8% Austria 6.9% Austria Slovakia 56.1% Austria 65.5% 6.6% 61.0% Slovak
Slide 32: 6M 2007 P&L Major Items – Expenses for Claims Incurred
6M 2007 P&L Major Items – Expenses for Claims Incurred Loss ratio reduced substantially D 32 § Group loss ratio (net) with marked improvement by 2.9% to 64.7% despite €10mn net effect from Kyrill storm in Q1 2007 § Austrian loss ratio lower by 1.9% pts at 66.9% thus reaching regular level § Czech Re
Slide 33: 6M 2007 P&L Major Items – Operating Expenses
6M 2007 P&L Major Items – Operating Expenses Cost ratio impacted by strong business growth D 33 § Group cost ratio (net) up at 31.3%, driven by acquisition costs: VIG does not account for DACs which affects cost ratio roughly by 2% pts (premium income is high at start of the year and leads to higher
Slide 34: 6M 2007 P&L Major Items – Net Investment Income
6M 2007 P&L Major Items – Net Investment Income Sound growth in line with business expansion (€mn) D 34 § Increase in Group Net Investment Income by 53.2% to Net Investment Income € 553.2mn 11.1 63.3 § Austria grew by 53.0% influenced by trading gains, full 9.3 Other consolidation of Austrian life s
Slide 35: Contents
Contents E 35 A Investment Proposition B Targets and Summary C 6M 2007 Highlights D P&L and Balance Sheet E Appendix
Slide 36: 6M 2007 P&L – Business Segments (P&C)
6M 2007 P&L – Business Segments Property & Casualty, IFRS (€mn) E 36 6M 2007 6M 2006 +/-% 1. Gross written premiums 1,976.2 1,721.5 14.8 2. Net earned premiums 1,331.9 1,118.3 19.1 3. Net investment income 93.3 56.8 64.2 4. Other income 11.9 14.4 -17.4 Total income 1,437.2 1,189.6 20.8 6. Expenses f
Slide 37: 6M 2007 P&L – Business Segments (Life)
6M 2007 P&L – Business Segments Life, IFRS (€mn) E 37 6M 2007 6M 2006 +/-% 1. Gross written premiums 1,362.0 1,157.1 17.7 2. Net earned premiums 1,344.3 1,144.6 17.4 3. Net investment income 445.8 292.2 52.6 4. Other income 8.7 14.6 -40.2 Total income 1,798.8 1,451.4 23.9 6. Life benefits -1,423.9 -
Slide 38: 6M 2007 P&L – Business Segments (Health)
6M 2007 P&L – Business Segments Health, IFRS (€mn) E 38 6M 2007 6M 2006 +/-% 1. Gross written premiums 155.0 150.8 2.8 2. Net earned premiums 152.9 148.4 3.0 3. Net investment income 14.1 12.1 16.5 4. Other income 0.0 0.0 -100.0 Total income 166.9 160.5 4.0 6. Expenses for claims incurred -135.3 -13
Slide 39: 6M 2007 P&L - Split by Regions (I)
6M 2007 P&L - Split by Regions (I) Regional segments, IFRS (€mn) E 39 Austria Czech Republic Slovakia 6M 2007 6M 2006 +/-% 6M 2007 6M 2006 +/-% 6M 2007 6M 2006 +/-% 1. Gross written premiums 1,957.7 1,850.4 5.8 577.1 532.7 8.3 243.8 199.6 22.1 2. Net earned premiums 1,611.2 1,524.1 5.7 445.8 392.4 1
Slide 40: 6M 2007 P&L - Split by Regions (II)
6M 2007 P&L - Split by Regions (II) Regional segments, IFRS (€mn) E 40 Other CEE Other TOTAL 6M 2007 6M 2006 +/-% 6M 2007 6M 2006 +/-% 6M 2007 6M 2006 +/-% 1. Gross written premiums 587.7 328.7 78.8 126.8 118.0 7.5 3,493.1 3,029.3 15.3 2. Net earned premiums 470.2 251.3 87.1 112.0 103.9 7.8 2,829.1
Slide 41: 6M 2007 Results by Country
6M 2007 Results by Country IFRS (€mn) E 41 Non-Life Life Total Profit before Tax Combined Ratio 6M 2007 6M 2006 6M 2007 6M 2006 6M 2007 6M 2006 6M 2007 6M 2006 6M 2007 6M 2006 Austria 1,062.0 1,032.9 895.7 817.5 1,957.7 1,850.4 138.5 101.9 94.3% 95.8% Czech Rep. 442.3 417.7 134.8 115.0 577.1 532.7 3
Slide 42: Change in Group Shareholders' Equity / APE
Change in Group Shareholders‘ Equity / APE IFRS E 42 1.1. - 30.06.2007 1.1. - 30.06.2006 Equity as of 1 January 2.283.208 2.059.332 Currency Changes -1.957 -2.999 Changes in consolidation 39.396 15.995 Capital Increase - - Unrealised Gains and Losses on financial -69.667 -61.274 instruments availabl
Slide 43: Q2 2007 Income Statement
Q2 2007 Income Statement IFRS (€mn) E 43 Q2 2007 Q2 2006 +/-% 1. Gross written premiums 1,474.8 1,277.1 15.5 2. Net earned premiums 1,364.8 1,164.0 17.2 1 3. Net investment income 347.9 199.1 74.8 4. Other income 11.8 13.2 -10.9 Total income 1,724.4 1,376.3 25.3 6. Expenses for claims incurred -1,23
Slide 44: 6M 2007 Exchange Rates
6M 2007 Exchange Rates E 44 6M 2007 6M 2006 Balance Sheet P&L Balance Sheet P&L Country Curr. EUR EUR EUR EUR Bulgaria BGN 0.511300 0.511300 0.511300 0.511300 Croatia HRK 0.136921 0.135913 0.138036 0.136773 Liechtenstein CHF 0.604120 0.612838 0.638081 0.640615 Poland PLN 0.265414 0.260139 0.246633 0
Slide 45: Acquisition of Asirom
Acquisition of Asirom Strengthening VIG´s no.1 position in dynamic Romanian market E 45 Acquisition of Asirom1 Romanian Insurance Market Population (mn) 21.6 GDP/Capita 5,463 USD Penetration 1.7% 30 % Density 94.5 USD Market Growth (01-06, CAGR) 42.8% Asirom § listed Non-life and Life insurance comp
Slide 46: VIG Enters two New Promising Markets
VIG Enters two New Promising Markets Turkey and Albania offer high growth potential E 46 GDP Growth Penetration Density 2006 2004-2006F2 2006 (USD) EU 15 1.7% 9.3% 3,305 Austria 2.0% 6.1% 2,397 CEE1 4.2% 3.3% 173 Turkey 7.5% 1.6% 89 Albania 5.5% 0.5% 14 Turkish market data Albanian market data3 Popu
Slide 47: Turkey/Albania: Acquisition Details
Turkey/Albania: Acquisition Details Ray Sigorta and Sigma E 47 Acquisition of Ray Sigorta Acquisition of Sigma TBIH TBIH (60% owned by VIG) (60% owned by VIG) ~75% 75% Ray Sigorta Sigma Sh.a § listed Non-life insurance company with € 136mn § founded in 1998, Non-life insurance company with premium v
Slide 48: Shareholder Structure (I)
Shareholder Structure (I) Total number of shares 105,000,000 E 48 Shareholder Structure 28.7 % Free Float 71.3 % Wiener Städtische Wechselseitige Versicherungsanstalt- Vermögensverwaltung
Slide 49: Shareholder Structure (II)
Shareholder Structure (II) E 49 Free Float Geographical Split 0.3% Others 32.0 % Austria 20.9% Continental Europe 25.5% 21.3% North America UK & Ireland
Slide 50: Contact Details
Contact Details Investor Relations E 50 Wiener Städtische Versicherung AG Vienna Insurance Group Schottenring 30, 1010 Vienna, Austria www.wienerstaedtische.com Vienna Stock Exchange: WST Reuters: WISV.VI Bloomberg: WST AV Datastream: O:WNST § Thomas Schmee Tel. +43 (0)50 350 – 21900 t.schmee@staedt
Slide 51: Disclaimer
Disclaimer E 51 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 sha
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