Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — FY2006 Earnings Presentation
24 slides from Vienna Insurance's earnings presentation, Apr 25, 2007
Slide 1: Group Embedded Value Results 2006
Vienna Insurance Group Group Embedded Value Results 2006 - April 25, 2007
Slide 2: Introduction
Introduction 2 § Austria / Germany (Life & Health); CEE - Czech Republic / Slovakia (Life) European Embedded Value (EEV): Bottom-up, market consistent methodology fully compliant with EEV Principles § CEE - Hungary (Life) Traditional Embedded Value (TEV): Deterministic calculations that allow for ri
Slide 3: Methodology
Methodology 3 § All results based on local GAAP § GEV reflects amounts deemed to be distributable to shareholders § ANAV for P&C includes Surplus in Claims Reserves based on undiscounted, actuarial best estimates of claims payments § EEV based on stochastic cashflow projections using market consiste
Slide 4: Methodology: New Minimum Profit Participation Rules
Methodology New Minimum Profit Participation Rules 4 Life Insurance / Austria § Minimum Profit Participation amount to 85% of the Assessment Base which is defined as the Operating Surplus resulting from a P&L-account for Life insurance products with profit participation. § Unit Linked-, Index Linked
Slide 5: Methodology
Methodology 5 § EEV and TEV for L&H determined as Adjusted Net Asset Value (ANAV) plus Value of In-Force (VIF) minus Cost of Capital (CoC) minus Cost of Non-Market Risk (CoNMR) – only for EEV § EEV includes explicit allowance for time value of financial options and guarantees § Reported TEV 2005 for
Slide 6: Group Embedded Value (GEV) split into four segments
Results Group Embedded Value (GEV) 6 GEV is split into four segments GEV Austria / CEE Germany Life & Property & Life Property & Health Casualty Casualty § GEV allows for consolidation adjustments and minority interests § Within CEE, the EEV, TEV (L) and ANAV (P&C) only calculated for the KOOPERATIV
Slide 7: Group Embedded Value 2006
Results Group Embedded Value - Dec 31, 2006 7 in € mn Life & Health Property & Casualty Total Austria/Germany ANAV 1.048,6 832,4 1.881,0 VIF 1.205,5 n/a 1.205,5 - FOG -32,6 n/a -32,6 - CoCNMR -62,4 n/a -62,4 2.159,1 832,4 2.991,5 CEE ANAV 94,9 833,6 928,5 VIF 322,2 n/a 322,2 - FOG -34,3 n/a -34,3 -
Slide 8: Group Embedded Value - Dec 31, 2005
Results Group Embedded Value - Dec 31, 2005 8 in € mn Life & Health Property & Casualty Total Austria/Germany ANAV 841,8 1.032,9 1.874,7 VIF 1.073,6 n/a 1.073,6 - FOG -38,6 n/a -38,6 - CoCNMR -52,3 n/a -52,3 1.824,5 1.032,9 2.857,4 CEE ANAV 66,5 504,0 570,5 VIF 289,9 n/a 289,9 - FOG -37,3 n/a -37,3
Slide 9: Group Embedded Value 2006 vs 2005
Results Group Embedded Value - Dec 31, 2006 9 2006 2005 (*) 20% 14% 8% A/G L&H 9% A/G P&C 51% 50% CEE L&H CEE P&C 28% 20% GEV = € 4,194.9 mn GEV = € 3,669.9 mn (*) restated
Slide 10: P&C Austria VIF
P&C Austria VIF – Dec 31, 2006 10 § VIF for P&C personal lines segments of Wiener Städtische AG and Donau § Only in respect of business sold via employed sales forces § These inforce portfolios are comparable to the run off of a life insurance portfolio § VIF amounts to € 576.9 mn § Used internally
Slide 11: New Business Values
Results New Business Values 11 in € mn Life & Health 2006 2005 no t r es t at ed Austria / Germany NBV 50.9 52.5 APE 225.1 215.9 NBV in % APE 22.6% 24.3% PVNBP 1,982.6 n/a NBV in % PVNBP 2.6% n/a CEE NBV 30.7 22.3 APE 45.4 38.8 NBV in % APE 67.5% 57.5% PVNBP 262.4 n/a NBV in % PVNBP 11.7% n/a
Slide 12: Sensitivities EEV Austria / Germany Life & Health
Results Sensitivities EEV Dec 31, 2006 12 Austria / Germany – Life & Health in € mn As % Value of Base Base value 2,159.1 +1% 2,180.8 101.0% Change in Yield Curve -1% 2,070.3 95.9% Equity and Property Prices -10% 2,077.4 96.2% -10% 2,205.9 102.2% Administration Expenses +10% 2,112.4 97.8% -10% 2,172
Slide 13: Sensitivities EEV/TEV CEE Life
Results Sensitivities EEV/TEV Dec 31, 2006 13 CEE – Life in € mn As % Value of Base Base value 369.8 +1% 396.3 107.3% Change in Yield Curve -1% 317.3 85.8% Equity and Property Prices -10% 368.1 99.5% -10% 383.0 103.0% Administration Expenses +10% 356.7 96.5% -10% 380.8 103.0% Lapses +10% 359.6 97.2%
Slide 14: Sensitivities NBV (EEV) Austria / Germany
Results Sensitivities NBV (EEV) Dec 31, 2006 14 Austria / Germany – Life & Health in € mn As % Value of Base Base value 50.9 +1% 53.8 105.7% Change in Yield Curve -1% 43.0 84.5% -10% 54.7 107.5% Administration Expenses +10% 47.1 92.5% -10% 53.4 104.9% Lapses +10% 48.9 96.1% for assurances -5% 51.7 1
Slide 15: Sensitivities NBV (EEV/TEV) CEE Life
Results Sensitivities NBV (EEV/TEV) Dec 31, 2006 15 CEE – Life in € mn As % Value of Base Base value 30.7 +1% 32.2 104.9% Change in Yield Curve -1% 27.0 88.0% -10% 32.2 104.6% Administration Expenses +10% 29.2 95.1% -10% 32.7 106.5% Lapses +10% 28.8 93.8% for assurances -5% 31.4 102.4% Mortality for
Slide 16: Analysis of Change: Life & Health Austria / Germany
EE V as at D ec 1200 31 1.400 1.600 1.800 2.000 2.200 2.400 ,2 00 5 re po R r te es d t 2.003 at em en EE tc V ha as ng at es D -179 ec 31 ,2 00 D 5 ivi re de st at nd ed s an 1.824 d O th er Tr an sf er s -32 R ol lf or w ar d Analysis of Change 78 As su m pt io ns Life & Health – Austria / Germany
Slide 17: Analysis of Change: Life CEE
EE V as at De c 31 100 150 200 250 300 350 400 450 ,2 00 5 re po rte 238 Re st d at em EE en V t as ch an Life – CEE at ge 71 De c s 31 ,2 Di 00 vi de 5 re nd st s 309 at an ed d O th er T ra ns -1 f er s Ro ll fo rw Analysis of Change ar 14 d As su m pt io -9 ns O pe ra tin In g ve va Operating st
Slide 18: Development of Total Group Embedded Value
Development Total: Group Embedded Value 18 in € mn 4.900 4.400 167 4.195 Initial 429 Plus (CEE) 3.900 3.778 -108 3.670 -71 Plus (A/G) Minus Final 3.400 2.900 2400 GEV as at GEV GEV as at Dividends and Other Return in L & H Return in P & C GEV as at Dec 31, 2005 Restatement Dec 31, 2005 Transfers Dec
Slide 19: Reconciliation IFRS Equity to ANAV
Reconciliation IFRS Equity ⇒ ANAV 19 in € mn 2006 2005 Consolidated IFRS equity 2.283,2 2.059,3 Minorities -70,8 -57,8 Intangible assets -461,4 -316,9 Sub Total 1.751,0 1.684,6 Differences Add back goodwill for non GEV companies 320,7 180,2 Differences in capital consolidation 118,2 122,1 Difference
Slide 20: Key assumptions: EEV Life & Health Austria / Germany
Key assumptions EEV: Life & Health – Austria / Germany 20 Yield curve Interest rate volatility (*) 2006 2005 2006 2005 14.25% 17.90% 1 year 3.87% 2.52% 5 years 3.91% 3.14% Equity volatility 10 years 4.02% 3.39% 2006 2005 15 years 4.10% 3.55% 22.31% 22.37% 20 years 4.11% 3.67% 25 years 4.11% 3.73% Me
Slide 21: Key assumptions: EEV Life Czech Republic / Slovakia
Key assumptions EEV: Life – Czech Republic / Slovakia 21 Yield curve Interest rate volatility (*) 2006 2005 2006 2005 2006 2005 Czech Czech Slovakia Slovakia 15.89% 20.56% 1 year 2.94% 2.47% 4.88% 3.30% Equity volatility 5 years 3.41% 3.20% 4.19% 3.49% 2006 2005 10 years 3.87% 3.61% 4.19% 3.69% 24.7
Slide 22: Key assumptions: TEV Life CEE (Hungary)
Key assumptions TEV: Life – CEE (Hungary) 22 2006 2005 Average reinvestment rate in % 7.55% 6.52% 10 year government bonds in % 6.71% 6.97% Risk discount rates in % 10.5% 10.00% Expense inflation in % 3.9% 3.6% Tax rate in % 20.00% 16.00% Currency rate in % 251.77% 252.87%
Slide 23: Summary
Summary GEV Dec 31, 2006 23 § Introduction of European Embedded Value methodology for L&H in Czech Republic / Slovakia § Traditional Embedded Value for Hungary included § All results shown after corporation tax and minority interests § 2006 Return on GEV amounts to € 595.8 mn (16.6%) - Positive impa
Slide 24: Disclaimer
Disclaimer 24 Cautionary statement regarding forward-looking information § This presentation contains forward-looking statements. § Forward-looking statements involve inherent risks and uncertainties, and it might not be possible to achieve the predictions, forecasts, projections and other outcomes
Vienna Insurance Group — FY2006 Earnings Presentation on 6ix