Vienna Insurance Group Ag · VIE:VIG

Vienna Insurance — FY2018 Earnings Presentation

54 slides from Vienna Insurance's earnings presentation, Mar 21, 2019

  1. Slide 1: 2018 Preliminary Results Presentation

    2018 PRELIMINARY RESULTS PRESENTATION Vienna, 21 March 2019

  2. Slide 2: Presenting team and topics

    2018 PRELIMINARY RESULTS CONFERENCE CALL Presenting team and topics Participants Topics  Elisabeth Stadler, CEO  Highlights p. 3  Liane Hirner, CFO  Financials & Investments p. 10  Werner Matula, Group Chief Actuary  Life & Health Embedded Value p. 19  Q&A session:  Summary p. 23 Members of

  3. Slide 3: Highlights

    HIGHLIGHTS FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE SUMMARY APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 3 VIG VIENNA INSURANCE GROUP

  4. Slide 4: VIG with positive outlook for 2019-20 and beyond

    VIG WITH POSITIVE OUTLOOK FOR 2019-20 AND BEYOND Key messages  Guidance targets for 2018 met and exceeded, good momentum for 2019-20 and beyond  On track to significantly improve Combined Ratio to a sustainable 95% by 2020 underpinning strategy of profitable growth  Agenda 2020 well advanced to f

  5. Slide 5: Highlights 2018

    HIGHLIGHTS 2018 Results ahead of targets set for 2018 Gross written premium Profit before taxes Combined Ratio € 9,657.3mn € 485.4mn 96.0% GWP up by 2.9% compared to 2017 PBT increased by 9.7% Down from 96.7% in 2017  Current premium business: +5.2%  After adjusting for goodwill impairments in  C

  6. Slide 6: M&A activities 2018 until Q1 2019

    M&A ACTIVITIES 2018 UNTIL Q1 2019 VIG continues with bolt-on acquisitions Acquisitions Mergers  Poland  Successful completion of mergers for strengthening VIG has obtained an interest in mutual bancassurance insurance association TUW “TUW” through AT: Wiener Städtische & S-Versicherung InterRisk i

  7. Slide 7: Agenda 2020

    AGENDA 2020 Review after half time Ensuring future growth Optimisation of business model Use of growth potentials Digitalisation Anti-Fraud-Management Health insurance  >150 ongoing digitalisation projects  Roll-out in 13 companies in 10 countries 58% premium increase in the 5 key countries of BG,

  8. Slide 8: Attractive dividend policy with newly defined payout range

    ATTRACTIVE DIVIDEND POLICY WITH NEWLY DEFINED PAYOUT RANGE Payout ratio increased consistently to 48.0% by 2018 2016 2017 2018 Earnings per share 2.16 2.23 2.04 NEW DIVIDEND POLICY (€) Dividend per share Payout Ratio in a range of 0.80 0.90 1.00* (€) 30 – 50% of Group profits after taxes and non-con

  9. Slide 9: New targets for 2019 and updated outlook for 2020

    NEW TARGETS FOR 2019 AND UPDATED OUTLOOK FOR 2020 Strategy of profitable growth with higher targets against tightening economic cycle Gross written Profit before Combined premium taxes Ratio Based on progress made through Agenda 2020 and VIG continuously strives 2019 €9.9bn €500mn - €520mn to improv

  10. Slide 10: Financials & Investments

    HIGHLIGHTS FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE SUMMARY APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 10 VIG VIENNA INSURANCE GROUP

  11. Slide 11: Financial reporting 2019

    FINANCIAL REPORTING 2019 Changes in Austrian prime market regulation provide for option to reduce scope of quarterly reporting Financial reporting from Q1 2019 onwards Q1 Q2 Q3 Q4 IR earnings release Following the change in the Analyst prime market rules of the presentation Vienna Stock Exchange and

  12. Slide 12: Premium and profit before taxes ahead of plan

    PREMIUM AND PROFIT BEFORE TAXES AHEAD OF PLAN 2018 Income statement €mn 2018 2017 +/- %  Premiums up by €271mn; adjusted for life single premium business Gross premiums written 9,657.3 9,386.0 2.9 premium growth of 5.2% Net earned premiums 8,729.4 8,509.6 2.6 Financial result1 1,037.5 924.3 12.2 

  13. Slide 13: Gross written premiums of €9.7bn up by 2.9%

    GROSS WRITTEN PREMIUMS OF €9.7bn UP BY 2.9% Overview by segments Gross written premiums (€mn; y-o-y chg.)  Premiums in Austria and Slovakia slightly lower y-o-y; however, adjusted for life single- premium business, premium growth in Austria of 1.6% and in Slovakia of 3.8%  Premium decrease in Turk

  14. Slide 14: Double-digit growth in health while life single premium down

    DOUBLE-DIGIT GROWTH IN HEALTH WHILE LIFE SINGLE PREMIUM BUSINESS FURTHER DOWN AS PLANNED Gross written premiums by lines of business (€mn; y-o-y chg.); incl. Central Functions MTPL Casco Other property Total premiums +2.9% 2017 1,375 1,076 3,973 9,657 9,386 +3.9% +8.0% +7.2% MTPL 1,375 1,429 2018 1,

  15. Slide 15: Group profit before taxes of €485.4mn up by 9.7%

    GROUP PROFIT BEFORE TAXES OF €485.4mn UP BY 9.7% Overview by segments Result before taxes (€mn; y-o-y change)  AT: negative developments in life not entirely offset by growth in P&C based on CoR improvement  CZ: profit up by €18mn driven by CoR improvements and better financial result  SK: profit

  16. Slide 16: Combined ratio (P&C) improved to 96.0%

    COMBINED RATIO (P&C) IMPROVED TO 96.0% Positive development driven by improved claims ratio in AT, CZ and PL P&C Combined Ratio development Overview by segments (12M y-o-y development net, %)  AT and CZ with improved claims ratio  SK: CoR increase driven by cost ratio (up from 31.9% to 35.8%) +9.0

  17. Slide 17: Investment split and bond portfolio overview

    INVESTMENT SPLIT AND BOND PORTFOLIO OVERVIEW Bond portfolio split by rating changed due to rating upgrade of CZ in Q3 2018: Total €37.6bn Bond portfolio by rating1 3.7% 1.1% 6.2% AAA AA A BBB Other 2018 10% 32% 35% 17% 6% 6.5% 2017 10% 22% 45% 17% 5% 6.0% 66.3% Bond portfolio by issuer 10.0% 2018 54

  18. Slide 18: Financial result increased by 13.8%

    FINANCIAL RESULT INCREASED BY 13.8% Positive development mainly driven by revenues from real estate including housing societies Total Income 2018 2017 +/- % Current income 1,358,192 1,323,020 2.7  Financial result up by €121.5mn excl. at equity Income from appreciations 13,054 27,761 -53.0 consolid

  19. Slide 19: Life & Health Embedded Value

    HIGHLIGHTS FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE SUMMARY APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 19 VIG VIENNA INSURANCE GROUP

  20. Slide 20: Life & Health Embedded Value Austria / Germany

    LIFE & HEALTH EMBEDDED VALUE AUSTRIA / GERMANY in €mn 4.0% 165.5  New Business Margin (PVNBP-Ratio) increased to 24.0 2,061.1 2.7% in 2018 (2017: 2.4%) 48.8 1,982.1 -5.3 -154.0  Significant positive impact on updated assumptions and 1,807.4 negative impact on experience and other operating varianc

  21. Slide 21: Life & Health Embedded Value CEE

    LIFE & HEALTH EMBEDDED VALUE CEE in €mn 6.2% 21.2 31.5  New Business Margin 2,043.6 93.3 2.4 (PVNBP-Ratio) down to 6.6% -28.4 in 2018 (2017: 7.5%) 1,923.5  Material contribution by new business sold in 2017 1,504.5 1,413.1  Favorable experience variance, but prudent update 112.7 of assumptions 93

  22. Slide 22: Life & Health Embedded Value Total

    LIFE & HEALTH EMBEDDED VALUE TOTAL in €mn  New Business Margin (PVNBP-Ratio) slightly decreased to 4.4% in 2018 (2017: 4.8%)  Diversification of positive (Austria / Germany) and negative (CEE) economic variances  Material impact of mergers in 2018 4,504.6 4,487.3 5.1% -17.3 -133.4 197.0 -16.1 142

  23. Slide 23: Summary

    HIGHLIGHTS FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE SUMMARY APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 23 VIG VIENNA INSURANCE GROUP

  24. Slide 24: Strong confidence in business outlook

    STRONG CONFIDENCE IN BUSINESS OUTLOOK Summary 2018  CEE share in premiums and profits > 50%  Premium growth adjusted for life single premium business 5.2%  Attractive life business with new business margins of 2.7% in Austria/Germany and 6.6% in CEE  Combined ratio (P&C, net) reduced by 0.7%p to

  25. Slide 25: Appendix 1: Segments

    HIGHLIGHTS FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE SUMMARY APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 25 VIG VIENNA INSURANCE GROUP

  26. Slide 26: Austria

    AUSTRIA Excellent CoR of 94.2% drives solid development in non-life but cannot off-set decrease in life GWP development (€mn) €mn 2018 2017 +/- % -0.2% Gross premiums written 3,839.9 3,848.5 -0.2  Adjusted for life single premium business, 3,848 Net earned premiums 3,158.3 3,165.1 -0.2 premiums in

  27. Slide 27: Czech Republic

    CZECH REPUBLIC Strong performance driven by non-life business GWP development (€mn) €mn 2018 2017 +/- % +5.0% Gross premiums written 1,684.2 1,603.2 5.0  Premium growth mainly driven by other 1,684 Net earned premiums 1,265.7 1,206.7 4.9 property (+€38mn) and life regular 1,603 Financial result1 97

  28. Slide 28: Slovakia

    SLOVAKIA More cautious approach in 2018 with reserve strengthening and conservative reserving levels GWP development (€mn) €mn 2018 2017 +/- % -1.3% Gross premiums written 799.6 810.0 -1.3  Premium growth of 3.8% adjusted for life 810 Net earned premiums 670.2 679.3 -1.3 single premium business 800

  29. Slide 29: Poland

    POLAND Excellent development in non-life with further improved CoR not to off-set downturn in life GWP development (€mn) €mn 2018 2017 +/- % +1.3% Gross premiums written 897.8 886.6 1.3  Adjusted for life-single premium business, 898 Net earned premiums 685.8 716.3 -4.3 premium growth of 12.5%; str

  30. Slide 30: Romania

    ROMANIA Business in 2018 marked by reference tariffs in motor and an overall difficult insurance market environment GWP development (€mn) €mn 2018 2017 +/- % +1.7% Gross premiums written 515.3 506.5 1.7  Double-digit premium growth rates in other 515 Net earned premiums 323.5 375.6 -13.9 property a

  31. Slide 31: Baltic States

    BALTIC STATES Strong performance of the Baltics with further improved CoR in 2018 GWP development (€mn) €mn 2018 2017 +/- % +14.7% Gross premiums written 375.8 327.6 14.7  Strong premium growth in all lines of 376 Net earned premiums 277.1 242.9 14.1 business Financial result 5.2 6.1 -14.9 328 Othe

  32. Slide 32: Hungary

    HUNGARY Strong top- and bottom-line development in 2018 GWP development (€mn) €mn 2018 2017 +/- % +6.8% Gross premiums written 263.5 246.7 6.8  Premium growth mainly driven by MTPL 264 Net earned premiums 205.2 192.1 6.8 (+€8.5mn) and health business (+€7.3mn); 247 Financial result 6.7 6.4 5.0 the

  33. Slide 33: Bulgaria

    BULGARIA Double-digit premium and profit growth in 2018 GWP development (€mn) €mn 2018 2017 +/- % +14.1% Gross premiums written 171.3 150.1 14.1  Premium increase driven by motor 171 Net earned premiums 122.8 109.6 12.1 (+€10mn) and health business (+€9mn) Financial result 11.1 9.4 19.0 150 25 Othe

  34. Slide 34: Turkey/Georgia

    TURKEY/GEORGIA Development 2018 impacted by goodwill impairment of €5.1mn and FX situation in Turkey GWP development (€mn) €mn 2018 2017 +/- % -4.6% Gross premiums written 198.3 207.8 -4.6  Adjusted for TRY FX effects, premiums up 208 Net earned premiums 97.1 101.6 -4.4 19.8% 198 Financial result 7

  35. Slide 35: Remaining CEE

    REMAINING CEE Solid contribution to premium and profit development of the Group GWP development (€mn) €mn 2018 2017 +/- % +6.4% Gross premiums written 374.7 352.0 6.4  Remaining CEE includes Albania (incl. 375 Net earned premiums 285.7 247.2 15.6 Kosovo), Bosnia-Herzegovina, Croatia, 352 Financial

  36. Slide 36: Other Markets

    OTHER MARKETS Germany and Liechtenstein GWP development (€mn) €mn 2018 2017 +/- % +9.7% Gross premiums written 321.0 292.6 9.7  Premium increase driven by single 321 Net earned premiums 275.1 248.8 10.6 premium business in Liechtenstein and Financial result 19.2 21.3 -9.7 supported by growth in all

  37. Slide 37: Central Functions

    CENTRAL FUNCTIONS Substantial improvement driven by financial result and other expenses GWP development (€mn) €mn 2018 2017 +/- % +12.2% Gross premiums written 1,584.3 1,411.5 12.2  Central Functions include VIG Holding, 1,584 Net earned premiums 1,356.5 1,221.0 11.1 VIG Re, VIG Fund, the non-profi

  38. Slide 38: Appendix 2: Financials

    HIGHLIGHTS FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE SUMMARY APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 38 VIG VIENNA INSURANCE GROUP

  39. Slide 39: 2018 Key Financials

    2018 KEY FINANCIALS Overview of KPIs Net result for the period after taxes and non-controlling interest (€mn) ROE after taxes and non-controlling interests1 (%) 298 7.2 7.0 269 6.6 6.4 6.4 207 137 76 2017 3M 18 6M 18 9M 18 2018 2017 3M 18 6M 18 9M 18 2018 EPS net of hybrid interest1 (€) Book value p

  40. Slide 40: Equity development in 2018

    EQUITY DEVELOPMENT IN 2018 Change in yield curve impacts valuation of fixed-yield investments Change in Group Shareholders’ Equity (€mn) -3% 368 -198 -21 -184 6,044 -36 5,836 -137 Equity as of 2017 Profit for the period Repayment Currency changes AFS unrealised Dividend payment Other Equity as of 20

  41. Slide 41: 2018 Balance Sheet

    2018 BALANCE SHEET IFRS (€mn) €mn 31.12.2018 31.12.2017 +/- % Intangible assets 1,961 1,971 -0.5 Investments 36,288 35,933 1.0 Unit- and index-linked investments 8,049 9,061 -11.2 Reinsurers’ share in underwriting provisions 1,136 1,066 6.5 Receivables 1,563 1,476 5.9 Tax receivables and advance pay

  42. Slide 42: Strong quarterly result in Q4 2018

    STRONG QUARTERLY RESULT IN Q4 2018 Q4 2018 Income statement €mn Q4 2018 Q4 2017 +/- % Gross premiums written 2,299.8 2,233.4 3.0  Premiums up by 3.0% despite the lower single premium life Net earned premiums 2,211.3 2,183.8 1.3 business; growth driven by other property and motor Financial result1 2

  43. Slide 43: 2018 Financial Result by Segment (I)

    2018 FINANCIAL RESULT BY SEGMENT (I) IFRS (€'000) Austria Czech Republic Slovakia Poland Income 2018 2017 +/- % 2018 2017 +/- % 2018 2017 +/- % 2018 2017 +/- % Current income 755,768 746,656 1.2 94,791 96,067 -1.3 44,079 43,384 1.6 22,024 22,051 -0.1 Income from appreciations 6,213 11,050 -43.8 3,47

  44. Slide 44: 2018 Financial Result by Segment (II)

    2018 FINANCIAL RESULT BY SEGMENT (II) IFRS (€'000) Romania Baltic states Hungary Bulgaria Income 2018 2017 +/- % 2018 2017 +/- % 2018 2017 +/- % 2018 2017 +/- % Current income 19,390 16,294 19.0 7,711 7,048 9.4 5,458 6,098 -10.5 4,157 4,027 3.2 Income from appreciations 10 132 -92.4 192 781 -75.4 0

  45. Slide 45: 2018 Financial Result by Segment (III)

    2018 FINANCIAL RESULT BY SEGMENT (III) IFRS (€'000) Turkey / Georgia Remaining CEE Other Markets Income 2018 2017 +/- % 2018 2017 +/- % 2018 2017 +/- % Current income 11,200 10,279 9.0 37,980 35,653 6.5 20,207 20,908 -3.4 Income from appreciations 0 1,912 n.a. 455 691 -34.2 143 259 -44.8 of which re

  46. Slide 46: 2018 Financial Result by Segment (IV)

    2018 FINANCIAL RESULT BY SEGMENT (IV) IFRS (€'000) Central Functions Consolidation Total Income 2018 2017 +/- % 2018 2017 +/- % 2018 2017 +/- % Current income 400,010 372,961 7.3 -64,583 -58,407 10.6 1,358,192 1,323,019 2.7 Income from appreciations 160 1,281 -87.5 0 0 13,054 27,761 -53.0 of which r

  47. Slide 47: 2018 Premiums by Business Lines and Country (I)

    2018 PREMIUMS BY BUSINESS LINES AND COUNTRY (I) IFRS (€mn) MTPL Casco Other property 2018 2017 +/- % 2018 2017 +/- % 2018 2017 +/- % Austria 320.8 316.9 1.2 288.0 280.0 2.9 1,312.2 1,284.5 2.2 Czech Republic 290.5 278.4 4.4 243.1 232.7 4.5 476.9 438.8 8.7 Slovakia 154.0 148.1 4.0 108.9 105.2 3.6 106

  48. Slide 48: 2018 Premiums by Business Lines and Country (II)

    2018 PREMIUMS BY BUSINESS LINES AND COUNTRY (II) IFRS (€mn) Life regular Life single Health 2018 2017 +/- % 2018 2017 +/- % 2018 2017 +/- % Austria 1,240.3 1,240.3 0.0 258.0 321.9 -19.8 420.7 405.0 3.9 Czech Republic 609.4 576.7 5.7 50.2 63.3 -20.7 14.0 13.3 5.5 Slovakia 176.7 169.6 4.2 241.9 272.7

  49. Slide 49: 2018 Country Overview GWP / PBT / Combined Ratio

    2018 COUNTRY OVERVIEW GWP / PBT / COMBINED RATIO IFRS (€mn) GWP Total Result before taxes Combined Ratio net 2018 2017 +/- % 2018 2017 +/- % 2018 2017 +/- %p Austria 3,839.9 3,848.5 -0.2 170.4 175.3 -2.8 94.2% 95.5% -1.3 Czech Republic 1,684.2 1,603.2 5.0 166.7 149.3 11.6 92.7% 97.5% -4.8 Slovakia 7

  50. Slide 50: 2018 Exchange Rates

    2018 EXCHANGE RATES Balance Sheet: period-end exchange rate / P&L: average exchange rate 2018 2017 Country Currency Balance Sheet P&L Balance Sheet P&L EUR EUR EUR EUR Albania EUR/ALL 123.4200 127.5752 132.9500 134.1279 Belarus EUR/BYN 2.4734 2.4051 2.3553 2.1831 Bosnia & Herzegovina EUR/BAM 1.9558

  51. Slide 51: VIG Share (I)

    VIG SHARE (I) Number of common shares: 128,000,000 / ISIN: AT0000908504 General information Current analyst recommendation split Current listings Ticker Rating Major Indices SELL Vienna  Vienna Stock Exchange: VIG Standard & Poor´s: ATX 2 BUY Prague  Bloomberg: VIG AV / VIG CP A+, stable outlook A

  52. Slide 52: VIG Share (II)

    VIG SHARE (II) Shareholder structure Free float split by region1 Continental Europe 30% Austria 28% ~70% ~30% North America 28% UK & Ireland 11% Other 3% Wiener Städtische Versicherungsverein Free Float (Mutual) 1 Split of identified shares, May 2018 (Source: CMi2i) 52 APPENDIX 2: FINANCIALS VIG VIE

  53. Slide 53: Contact Details / Financial Calendar

    CONTACT DETAILS / FINANCIAL CALENDAR Investor Relations / investor.relations@vig.com / www.vig.com Nina Higatzberger-Schwarz Sylvia Machherndl Financial calendar 2019* Head of Investor Relations Team Leader Corporate Reporting Date Event Tel. +43 (0)50 390 – 21920 Tel. +43 (0) 50 390 – 21151 17 Apr.

  54. Slide 54: 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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