Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Shareholder Meeting (May 2015)
58 slides from Vienna Insurance's shareholder meeting presentation, May 29, 2015
Slide 1: Vienna Insurance Group
VIENNA INSURANCE GROUP TWOTHOUSANDAND SAFE
Slide 2: 24th Annual General Meeting
24th Annual General Meeting VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe Vienna, 29 May 2015
Slide 3: Agenda
Agenda 1. Presentation of the consolidated financial statements for the year 2014 and the management report on these accounts, presentation of the audited and approved financial statements of the Company for the year 2014, the management report on these accounts, the report of the Supervisory Board
Slide 4: Clear strategy focusing on Austria and the CEE region
Clear strategy focusing on Austria and the CEE region Strategic cornerstones of VIG Core business: Insurance Multi-brand strategy Multi-channel distribution Conservative investment policy Local entrepreneurship 4
Slide 5: VIG – Value Inspired Growth
VIG – Value Inspired Growth Within 25 years from Austria towards CEE and into 25 markets Premiums Premiums 1.0 9.1 EUR bn EUR bn Profit Profit 76 518 EUR mn EUR mn Employees Employees 5,451 23,360 Companies Companies 2 ~50 1989 2014 5
Slide 6: Top market positions in Austria and CEE
Top market positions in Austria and CEE LEADING Excellent market position in Austria and CEE INSURER No 1 TOP 3 TOP 5 TOP 10 Austria Bulgaria Poland Hungary Czech Ukraine Croatia Bosnia and Republic Herzegovina Albania Serbia Slovakia Romania Georgia Core markets Macedonia Other VIG markets Source:
Slide 7: VIG the clear No 1 in its core markets
Market share VIG the clear No 1 in its core markets 20% 18.9% 18.5% 17.7% 17.9% 18% 17.5% 17.3% VIG Market share premiums in % 16% 14% 12% Italian competitor 10% Austrian competitor German competitor 8% 6% 2009 2010 2011 2012 2013 2014 * Core markets: Austria, Czech Republik, Slovakia, Poland, Roman
Slide 8: A clear strategy for success: conservative investment policy
A clear strategy for success As of 31.12.2014 CONSERVATIVE INVESTMENT POLICY Solvency I. ratio > 200% VIG Total EUR 31.1bn* Bonds Loans Real estate 71% 10% 6% 83% of the bonds with AAA, AA, A rating Other investments 6% Shares 4% Affiliated companies 3% * Without fund and index-linked life insurance
Slide 9: A clear strategy for success: multi-brand strategy
A clear strategy for success MULTI-BRAND STRATEGY 9
Slide 10: Multi-channel distribution
A clear strategy for success MULTI-CHANNEL DISTRIBUTION Broad diversification of distribution channels Austria Czech Rep. Slovakia React quickly within sales to Poland changing customer preferences Romania Rem. Markets Tied agents Brokers/Agents Provide service to the new Banks Others emerging middl
Slide 11: Local entrepreneurship
A clear strategy for success LOCAL ENTREPRENEURSHIP 11
Slide 12: A lean holding company
Flat hierarchy A LEAN HOLDING COMPANY ● Strengthening of local ● Corporate Governance entrepreneurship no hierarchical level inbetween local operating management and holding management board ● Ratio holding to local employees 1:100 etc. Requirement for profitable growth in small markets
Slide 13: Employer of Choice
Employer of Choice Employer of Choice VIG Corporate University: Programmes in the field Leadership & Management
Slide 14: A glance at 2014/2015
VIENNA INSURANCE GROUP… A GLANCE AT 2014/2015 Rating Market entry Acquisitions Action plan Group results & Low-interest rate Bond Awards current news 14
Slide 15: Rating
Rating Standard & Poor's A+ VIG rating with Stable confirms again Outlook VIG ● “Capital adequacy is excellent, remains the exceeding the benchmark for the AAA rating” best rated ● “VIG will sustain its very strong competitive company position in Austria and its leading market position in in the ATX
Slide 16: Market entry
Market entry Acquisition of Donaris completed With Moldova last country to be covered in CEE 25 th country 16
Slide 17: Acquisitions (completed)
Acquisitions (completed) VIG anchored in 25 countries PL Merger (Life) HU 17
Slide 18: Romania: Action plan shows positive effects
Romania: Action plan shows positive effects Profit before taxes Measures taken in EUR mn 20 6.1 ● Further restructuring of 0 product portfolios -20 ● Stop of sales of Employee benefit product (Life) -40 ● Continuous increase of motor tariffs -60 -80 ● Strict cost management -100 ● Implementation of
Slide 19: Italy: Action plan shows positive effects
Italy: Action plan shows positive effects Measures taken Changes in management in Restructuring manager hired Italy Restructuring of sales network Further restructuring of product (end of cooperation portfolio; strictly conservative with 202 Agencies) reserving policy Reduction of discount pouvior E
Slide 20: Portfolio premiums Donau Italy
Portfolio premiums Donau Italy in EUR mn -76.7% 121 28 IT 31.12.2013 31.12.2014 20
Slide 21: Low-interest rate environment & Guaranteed interest rate
Low-interest rate environment & Guaranteed interest rate 21
Slide 22: Challenge: development of bank interest rates
Challenge (Development of bank interest rates) until 1998 discount rate, afterwards main refinancing rate (in %) Lowest interest rate since 190 years Source 1824 2014 22
Slide 23: VIG well prepared!
EIOPA Stress test „Japan scenario“ VIG included 34.1% 25.7% 25.7% Long-lasting low interest 12.6% phase impact of economic stagnation 1.8% <50% 50-99% 100-149% 150-199% >200% Stress Test: Core: (Unweighted) Distribution of pre-stress SCR ratios ● VIG‘s solvability ratio is in the upper middle range
Slide 24: Low-interest rate environment on life insurance
Challenge (Low-interest rate environment on life insurance) VIENNA INSURANCE GROUP • Guaranteed interest rate: USP of insurance • Long-term conservative investment policy and good Asset-Liability Management is requiered • Well balanced portfolio mix between guaranteed interest rate and other life in
Slide 25: Life insurance
Life insurance No. of policies, development Risk insurance Traditional Annuity insurance & 1,432,641 +28.3% Endowment insurance 1,838,340 2,889,527 -2.9% 2,806,178 Unit- and index-linked insurance 1,598,967 +16.0% 1,854,370 As of 31.12.2013 As of 31.12.2014 Rounding differences 25
Slide 26: Bond 2015
Bond 2015 VIG: Successful bond issue strengthens capital structure Coupon p.a. 3.75 400 Maturity 31 years fix for the first 11 years EUR mn Repurchases - of the first tranche of the hybrid bond issued in 2008 and - of the supplementary capital notes 2005–2022 issued in 2005 26
Slide 27: Awards 2014
Awards 2014 Examples …received “Company worth recommendation“ certification for professional corporate governance, innovative distribution PL channels and products, and a strong customer orientation SK AT … as one of two companies received “Slovak Gold Exclusive” award and ...has been awarded four t
Slide 28: Awards 2014
Awards 2014 Examples “Golden Crown“ Kooperativa ranked 6th Seven of the nine possible awards went among the most to Kooperativa and the remaining two admired companies in were received by PČS the Czech Republic and 1st in the financial industry Romanian Insurance Market Awards Gala: CZ For the secon
Slide 29: Group Results 2014
VIG VIENNA INSURANCE GROUP a Se er ithe eae
Slide 30: Highlights 2014
VIENNA INSURANCE GROUP… HIGHLIGHTS 2014 Premium volume EUR 9.1 bn (-0.8%) • Adjusted for exchange rate changes +0.9% Combined Ratio Combined Ratio at very good 96.7% reduced by -3.9%p Profit before taxes EUR 518 mn (+46.0%) • profit after taxes and minorities at EUR 367mn (+56.5%) Earnings per share
Slide 31: Premium income
VIG? VIENNA INSURANCE GROUP PREMIUM INCOME
Slide 32: Factors influencing the premium development
Factors influencing the premium development in EUR mn 9,219 277 9,146 -159 74 -169 -96 Premium Exchange Short-term single- Donau First-time consolidation Organic growth Premium volume 2013 rate changes premiums in Poland Italy of Vienna Life volume 2014 (Hungary), Skandia (Poland) Rounding differenc
Slide 33: Premiums by lines of business
Premiums Gross written premiums by lines of business, IFRS, in EUR mn Growth in premiums +0.9% adjusted for exchange rate changes -0.8% …despite -1.3% 9,219 9,146 ● Optimization measures in -0.1% Italy 4,618 4,560 4,202 4,199 ● FX effects ● Reduction of the short- term single-premium business in Pol
Slide 34: Premiums by regions
Premiums Gross written premiums by regions, IFRS, in EUR mn STABLE AT “Remaining Markets” EUR 9.1bn again with pleasant growth -0.8% +0.1% 9,219 9,146 4,074 4,077 -4.5% -9.5% +8.9% 1,762 1,683 -2.4% 1,142 1,034 -6.1% 1,062 1,156 745 727 362 340 Austria Czech Republic Slovakia Poland Romania Remainin
Slide 35: CEE growth drivers 2014
CEE Growth drivers 2014 Baltic States +23% Profitable growth over the years in CEE Gross written premiums Remaining Markets CEE in EUR mn +26% +36% 872 799 810 740 641 Hungary +11% Albania +41% 2011 2012 2013 2014 2014 Bulgaria Adjusted for Lifeinsurance FX Macedonia +24% +18% 35
Slide 36: Successful cooperation with Erste Group
Successful cooperation with Erste Group Profitable growth over the years in CEE Pleasent growth in CEE of “Sparkassen Versicherung” Premiums in EUR mn +15,3% 617 535 CZ SK AT HU RO HR 2010 2014 PCS (CZ), PSLSP (SK), ESB (HU), BCR Life (RO), ESO (HR) 36
Slide 37: Premium income 2014
Premium income 2014 (2013) Premium share according to lines of business Premium share according to regions* Rounding differences Health 18.7% 4.2% CEE 51% 12.8% 11.5% Remaining Markets** 8.0% 3.8% RO SK PL CZ 45.9% 49.9% Life 2014 45.2% 54.8% Property/Casualty Austria Outside of Austria 2013: 50.1%
Slide 38: Combined Ratio
VIG? VIENNA INSURANCE GROUP COMBINED RATIO
Slide 39: Combined Ratio
Combined Ratio net, in % Significant improvement of -3.9p% Combined Ratio CEE-region 93.4% 100.6 98.4 96.8 96.7 96.7 2010 2011 2012 2013 2014 Share of weather related claims 3.7%p 39
Slide 40: Profit before taxes
VIG? VIENNA INSURANCE GROUP PROFIT BEFORE TAXES
Slide 41: Impact of HETA on VIG
Impact of HETA (former Hypo Alpe Adria) on VIG Write downs of EUR ~79mn, Pbt impact of EUR 72mn Subordinated bonds Senior bonds with guarantee of Carinthia with guarantee of Carinthia ~50% -50% 55 50 28 25 0 2013 1-6 2014 2014 2013 2014 Rounding differences 41
Slide 42: Profit before taxes by lines of business
Profit before taxes By lines of business, IFRS, in EUR mn POSITIVE Significant increase in profit IN ALL SEGMENTS in 2014 +46.0% …despite 518 ● Impairment Hypo Alpe Adria >100% ● Exchange rate -39.3% 355 changes 310 266 ● Weather related claims 162 +32.6% 54 36 47 Property/Casualty Life Health VIG 2
Slide 43: Profit before taxes by regions
Profit before taxes By regions, IFRS, in EUR mn CZ contributing more to profit than AT for the first time POSITIVE Romania returned to profitability IN ALL REGIONS Record results in many countries +46.0% 518 355 -27.8% -10.1% 235 198 170 178 +7.6% +9.8% +5.4% 55 59 50 55 49 52 6 VIG -99 Austria Czec
Slide 44: Developments of CEE countries
Developments of CEE countries Profit before taxes Profit before taxes CEE Remaining Markets CEE in EUR mn in EUR mn Profitable +42% x11 growth over 331 28 33 268 271 the years 233 23 3 2011 2012 2013 2014 2011 2012 2013 2014 adjusted adjusted 44
Slide 45: Profit before taxes: profit shares
Profit before taxes 2014 (2013 adjusted) Profit share according to lines of business Profit share according to regions Health Non-CEE 9.1% 36.1% 31.2% 59.7% 63.9% Life Property/Casualty CEE* 2013 adjusted : 15.1% 74.9% 10.0% 2013 adjusted: 65.5% 34.5% * AL, BA, BG, CZ, EE, GE, HR, HU, LT, LV, MD (as
Slide 46: Embedded Value
VIG? VIENNA INSURANCE GROUP EMBEDDED VALUE
Slide 47: Group Embedded Value 2014
Group Embedded Value 2014 Generating value despite low interest rate environment CEE new business margin 6.5% In EUR mn 5,993 6,112 EUR 119mn (+2.0%) Return on Group Embedded Value 2013* 2014 *Adjusted Group Embedded Value 47
Slide 48: Dividend
VIG? VIENNA INSURANCE GROUP DIVIDEND
Slide 49: Maintaining steady dividends
Maintaining steady dividends 2014, in EUR +3.8%* Dividend yield +10 Cent per share +7.7% 1.4 179.2 1.3 166.4 1.2 153.6 1.1 140.8 1.0 128.0 0.9 115.2 2009 2010 2011 2012 2013 2014** 2009 2010 2011 2012 2013 2014** Dividend per share in EUR Dividend pay-out total, in EUR mn * Based on YE 2014 share pr
Slide 50: Corporate Social Responsibility
CORPORATE SOCIAL RESPONSIBILITY
Slide 51: Social Active Day 2014
Social Active Day 2014 Social commitment Practising responsibility – show social commitment Employees Working Supporting Participating participated hours countries companies 4.150 33.200 22 41 51
Slide 52: Social Active Day 2014 Impressions
Social Active Day 2014 Exemplary list / Impressions Impressions Czech Republic „Pomocné tlapky“ – Trainings of assistance dogs to help physically disabled people Turkey Slovakia Help to Şehit Üstteğmen Ali „Back to Life“ Helping women, Büyük school for children children and youth who are victims wit
Slide 53: Kids Camp 2014
Kids Camp 2014 Exemplary list VIG Kids About 500 children of employees Camp promotes participated from more than 20 countries intercultural exchange Choice between 3 camp locations Already took place for the 5th time These activities are supported to a large extent by the main shareholder of Wiener
Slide 54: Group Results First Quarter 2015
GROUP RESULTS FIRST QUARTER 2015
Slide 55: Premiums: Solid start into 2015
Premiums Gross written premiums by lines of business, IFRS, in EUR mn Solid start into 2015 +0.9% +1.4% 2,731 2,756 1,474 1,496 +0.4% 1,154 1,159 -0.8% 103 102 Property/Casualty Life Health VIG 1-3 2014 1-3 2015 55
Slide 56: Premiums by regions Q1 2015
Premiums Gross written premiums by regions, IFRS, in EUR mn INCREASED TO “Remaining markets” with double-digit growth EUR 2.8bn +0.9% -2.5% 2,731 2,756 1,375 1,341 -1.8% +15.9% +0.7% -7.6% 466 458 +21.7% 357 258 308 213 215 238 82 100 Austria Czech Republic Slovakia Poland Romania Remaining VIG Mark
Slide 57: Profit before taxes Q1 2015
Profit before taxes By lines of business, IFRS, in EUR mn -15.2% ● Weather related claims 154 ● Low-interest rate environment affected 131 current income in the -16.4% financial result 94 79 ● Precaution for personnel -17.6% provisions in Austria 48 40 +3.9% ● First time recognition of the interest
Slide 58: Thank you for your attention
VIG* VIENNA INSURANCE GROUP Thank you for your attention
Vienna Insurance Group — Shareholder Meeting (May 2015) on 6ix