Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Non-Deal Roadshow (July 2008)
62 slides from Vienna Insurance's roadshow presentation, Jul 21, 2008
Slide 1: VIG – A Top Insurance Player in CEE
VIG – A Top Insurance Player in CEE US Roadshow, 21 – 23 July 2008
Slide 2: Contents
Contents A 2 A Investment proposition B Growth potential in CEE and Austria C Exploiting the potential D Acquisition of Erste Bank insurance operations E Progressing on the path of growth F 3M 2008 Results - Highlights
Slide 3: Investment Proposition at a Glance
Investment Proposition at a Glance VIG set two strategic milestones Milestone 1 A 3 § VIG is pioneer in CEE; start of expansion in 1990 - “Big fish in a small pond” - Going east immediately after the fall of the iron curtain due to potential of emerging markets and proximity § VIG - Progressing on t
Slide 4: VIG Growth Strategy Delivers
VIG Growth Strategy Delivers Growth materialises in strong increase in profitability A 4 VIG's Path of Profitability Extensive Track Record § VIG is early mover into CEE 8,000 450 GWP § Entry into new markets at the right 400 7,000 PBT point of time when relevant 6,000 350 insurance business lines a
Slide 5: Geographical Overview
Geographical Overview VIG is the leading Austrian insurance group operating in 23 countries A 5 Footprint Data Statistical Background GDP (bn USD) 2,096 Population (mn) 234 Market Volume (bn USD) 69 Market Volume Life (bn USD) 27 Market Volume Non-life (bn USD) 42 Average Density (USD)1 285.9 1 Aver
Slide 6: VIG Has Excellent CEE Market Positions
VIG Has Excellent CEE Market Positions VIG has grabbed lion’s share in non-life A 6 Overview of Core Markets Other CEE Romania Bulgaria Slovakia Czech Rep. Pop.: 21.4 mn Pop.: 7.4 mn Pop.: 5.4 mn Pop.: 10.2 mn § Leading market Density NL: $ 109 Density NL: $ 118 Density NL: $ 241 Density NL: $ 370 p
Slide 7: Purest CEE Insurance Play
Purest CEE Insurance Play VIG is the only international insurer with 43% of business from CEE A 7 CEE Premiums as % of Total Group Premiums 42.9% VIG 37.5% 31.1% 28.7% 15.5% 2007 UNIQA 12.6% 2006 10.2% 10.1% 2005 2004 5.0% Allianz 3.6% 3.3% 3.0% VIG‘s unique share of CEE 3.0% business growing fastes
Slide 8: Proven Record of Exploiting Potentials
Proven Record of Exploiting Potentials Clear leadership in non-life insurance already attained A 8 Total Market Share in CEE1,2 Market Share in CEE1,2 Non-life 16.9% 15.1% 13.7% 12.1% 12.0% 11.4% 5.8% 5.1% 5.1% 4.4% 4.6% 4.1% 3.5% 2.8% 3.1% 1.9% 1.2% 1.0% 0.3% 0.2% KBC VIG ING AIG s Versicherung Avi
Slide 9: VIG Has Excellent CEE Market Positions
VIG Has Excellent CEE Market Positions Top positioning combined with potential in less advanced markets A 9 VIG Is Well Positioned in its Markets Market # countries Position Group 11 A CZ BG GEO RO SK TOP AL Pop: 94.5 mn 8 3 PL Group 1 GDP/Cap.: $ 13,2482 CRO SER TOP Density: $ 5313 5 2 Group 2 Grou
Slide 10: Contents
Contents B 10 A Investment proposition B Growth potential in CEE and Austria C Exploiting the potential D Acquisition of Erste Bank insurance operations E Progressing on the path of growth F 3M 2008 Results - Highlights
Slide 11: CEE Region Offers Multiple Growth (I)
CEE Region Offers Multiple Growth (I) Insurance density growing above GDP increase B 11 4,000 EU-15 Mature Markets GDP Growth Insurance Penetration 2007 – 2009F 20071 CEE2 5.0% 3.3% Insurance Density (USD) Austria 2.3% 5.8% A EU 15 1.8% 9.2% 2,000 RUS SLO BG RO CRO UKR H SK PL SER CZ TR Growth Marke
Slide 12: CEE Region Offers Multiple Growth (II)
CEE Region Offers Multiple Growth (II) GDP, insurance penetration, wealth composition are growth drivers B 12 Shift in Households' Financial Wealth Composition Comments 0% 0% 4% Other Accounts § With increasing wealth household asset 29% Receivalbe allocation in CEE is to change in favour Cash & Dep
Slide 13: The Austrian Case
The Austrian Case VIG capitalises on catch-up potential in life insurance B 13 Situation in Austria High Growth Potential Life insurance density is low in Austria § Austria is a largely mature market $4,000 3,668 Life § Still strong growth potential in life: Austria $3,500 Non-life $3,000 2,621 lags
Slide 14: Contents
Contents C 14 A Investment proposition B Growth potential in CEE and Austria C Exploiting the potential D Acquisition of Erste Bank insurance operations E Progressing on the path of growth F 3M 2008 Results - Highlights
Slide 15: Management Approach
Management Approach Excellent track record in integrating CEE subsidiaries into VIG C 15 Management Approach Track Record § CEE already contributes 43 percent of § Each board member of VIG parent has direct premium income and more than 30 percent of responsibility for CEE countries Group profits § V
Slide 16: VIG – Distribution Is Key in Insurance
VIG – Distribution Is Key in Insurance Multi-brand & multi-channel provide best customer access C 16 Multi-brand Multi-channel Life Tied agents distribution Brokers channels Banks Other Austria ü ü ü ü Czech Republic ü ü ü Slovakia ü ü ü Romania ü ü ü Croatia ü ü ü Hungary ü ü ü Serbia ü ü ü Ukraine
Slide 17: Now is the Time for Life Business
Now is the Time for Life Business Banking distribution is key for harvesting CEE life potential C 17 CEE Insurance Markets1 Comments § Life gaining importance in mature 58% 53% 54% NL markets 73% 65% 61% 83% 79% 80% L § In EU-15 about 2/3 of insurance market is life business 17% 21% 20% 27% 35% 39%
Slide 18: Contents
Contents D 18 A Investment proposition B Growth potential in CEE and Austria C Exploiting the potential D Acquisition of Erste Bank insurance operations E Progressing on the path of growth F 3M 2008 Results - Highlights
Slide 19: Acquisition of s Versicherung
Acquisition of s Versicherung Long-term CEE cooperation agreement D 19 Long-Term Preferred Bancassurance Agreement Acquisition Highlights Acquisition of Erste Bank’s Insurance Operations 95% in >87% of s Versicherung Group BCR Asigurari Life and Non-Life § VIG strengthens the No. 1 position in Centr
Slide 20: Potential of 16mn Erste Bank Clients
Potential of 16mn Erste Bank Clients Bancassurance agreement offering outstanding access to clients D 20 Acquisition of Insurance Operations Mutual Distribution Agreement s Versicherung Group § Preferred partnership for sale of life, non-life GWP Market # and health products – building on existing A
Slide 21: Erste Bank – A Perfect Fit
Erste Bank – A Perfect Fit Closing an important gap in life distribution D 21 Erste Bank Strengths VIG Life Distribution after Closing § Largest retail bank in the CEE region Tied agents § More than 16mn customers and 2,900 branches Brokers § Present in nearly all existing core markets, Banks Other
Slide 22: Performance Drivers
Performance Drivers VIG and s Versicherung: Growth through shared services D 22 Experience in P&C Bancassurance Profitability Drivers § Similar mindset and corporate culture Business Growth § Existing exemplary P&C cooperation with Erste § Extended product and service offering tailored to Bank in Au
Slide 23: Strengthening No.1 Position in CEE
Strengthening No.1 Position in CEE Taking on leadership in life insurance D 23 Total Market Share in CEE1,2 Market Share in CEE1,2 Life 11.0% 10.3% 14.0% 9.1% 8.8% 8.4% 12.1% 12.0% 7.6% 7.6% 11.4% 5.6% 5.1% 5.1% 5.1% 4.4% 4.1% 2.7% 3.5% 2.3% 2.8% 1.9% KBC sVersicherung VIG ING AIG s Versicherung KBC
Slide 24: Contents
Contents E 24 A VIG on a steady path of growth B Growth potential in CEE and Austria C Exploiting the potential D Acquisition of Erste Bank insurance operations E Progressing on the path of growth F 3M 2008 Results - Highlights
Slide 25: Profit Drivers in CEE
Profit Drivers in CEE Creating value from cost ratio, investment income and reinsurance E 25 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 26: Financial Targets
Financial Targets Targets including s Versicherung acquisition E 26 VIG’s Financial Targets Comments Premium Target for 2011: > EUR 12bn § Majority of GWP to come from CEE region by 2011 Profit before tax targets in € mn § Acquisition expected to be earnings accretive CAGR: ~25% ~1,050 within the bu
Slide 27: VIG - Progressing on the Path of Growth
VIG - Progressing on the Path of Growth VIG outperformed own commitments E 27 Undertaking three years ago Position Today § Expansion of its position in Austria § Increased market share in Austria by more than 3% pts – VIG no. 1 § Expansion of CEE business through acquisitions and organic growth § CE
Slide 28: Contents
Contents F 28 A VIG on a steady path of growth B Growth potential in CEE and Austria C Exploiting the potential D Acquisition of Erste Bank insurance operations E Progressing on the path of growth F 3M 2008 Results - Highlights
Slide 29: 3M 2008 Highlights (I)
3M 2008 Highlights (I) CEE supporting growth in Q1; marked reduction of C/R F 29 GWP Profit before Tax 6,912 5,882 437 5,008 321 14.5% 240 23.9% 2,018 2,311 1,752 125 101 73 2005 2006 2007 3M 06 3M 07 3M 08 2005 2006 2007 3M 06 3M 07 3M 08 IFRS IFRS Net Profit after Tax and Minorities Combined Ratio
Slide 30: 3M 2008 Highlights (II)
3M 2008 Highlights (II) EPS with another record high; ROE reaching 19% level F 30 EPS1 ROE before Tax (%)2 3.48 2.98 2.89 21.9 2.48 18.0 18.9 2.27 2.22 17.1 14.8 14.0 2005 2006 2007 3M 06 3M 07 3M 08 2005 2006 2007 3M 06 3M 07 3M 08 1 annualised, pre SPO 2008 IFRS 2 pre SPO 2008 IFRS
Slide 31: Appendix
Appendix A 31 A Appendix – Transaction B Appendix – 3M 2008 Results
Slide 32: Transaction Structure
Transaction Structure Acquisition of s Versicherung Group and Ownership Structure A 32 Ownership Structure Post Transaction Vienna Insurance Group 95% (of which 10% 95% 95% 95% 95% 87% 88% pre-transaction) Erste CS SSP Erste Erste BCR BCR Bank Czech Slovakia Hungary Croatia Romania Romania Austria R
Slide 33: s Versicherung & BCR
s Versicherung & BCR Company overview A 33 Business Description s Versicherung Business Description BCR § Established in Austria in 1985 § BCR Asigurari was set up in 2001 § With a market share of 11.0% one of the main § In October 2005 the life business was transferred life insurers in Austria to t
Slide 34: Financial Overview - Individual Entities (I)
Financial Overview - Individual Entities (I) Key financials1 of s Versicherung and BCR Insurance Operations (€mn) A 34 Austria Czech Republic Hungary Slovakia Pojišt’ovna Erste Sparkassen Poist’ovňa Slovenskej s Versicherung České spořitelny, a.s Biztosító Zrt. sporitel’ne, a.s. 2007 2006 2007 2006
Slide 35: Financial Overview - Individual Entities (II)
Financial Overview - Individual Entities (II) Key financials1 of s Versicherung and BCR Insurance Operations (€mn) A 35 Croatia Romania Erste Sparkassen osiguranje d.d. za životno BCR Asigurari osiguranje BCR Asigurari de Viata 2007 2006 2007 2006 2007 2006 Total gross premiums written 8.9 7.0 155.2
Slide 36: TEV of Erste Bank Insurance Operations
TEV of Erste Bank Insurance Operations Traditional Embedded Value (€mn), New Business Value (€mn); YE 2007 A 36 Traditional Embedded Value 2007 2006 New Business Value 2007 ANAV 250.3 235.1 Value of New Business (VNB) 36.1 VIF before CoC 319.7 308.4 Annual premium equivalent (APE) 152.3 CoC -55.4 -5
Slide 37: Appendix
Appendix B 37 A Appendix – Transaction B Appendix – 3M 2008 Results
Slide 38: 3M 2008 Income Statement
3M 2008 Income Statement IFRS (€mn) B 38 3M 2008 3M 2007 +/-% 1. Gross written premiums 2,311.2 2,018.4 14.5 2. Net earned premiums 1,736.8 1,464.3 18.6 1 3. Net investment income 175.6 205.3 -14.5 4. Other income 17.5 8.9 96.8 Total income 1,929.8 1,678.5 15.0 6. Expenses for claims incurred -1,359
Slide 39: 3M 2008 Balance Sheet
3M 2008 Balance Sheet IFRS (€mn) B 39 3M 2008 YE 2007 +/- % Intangible assets 865 525 64.9 Total investments 20,099 20,171 -0.4 Unit- and index-linked investments 2,943 3,066 -4.0 Reinsurers’ share in technical provisions 1,364 1,187 15.0 Receivables 1,605 1,200 33.7 Deferred tax assets 48 34 42.5 O
Slide 40: 3M 2008 P&L Major Items – Gross Written Premiums
3M 2008 P&L Major Items – Gross Written Premiums Continuing double digit premium growth (€mn) B 40 § Group GWP gained 14.5% to € 2,311mn § Austria: total GWP up 1.6% to reach € 1,216mn. Life up 2.2% at € 532.0mn in line with market development; P&C up 1.1% at € 75.3 602.1mn influenced by flat motor
Slide 41: Geographical Diversification Enhanced
Geographical Diversification Enhanced GWP split by region B 41 GWP by Geography 3M 06 GWP by Geography 3M 07 GWP by Geography 3M 08 Other Other Other CEE Other 3.9% Other CEE 3.5% 8.5% Other CEE 3.2% PL: 2.8% 14.7% 21.6% RO: 3.5% PL: 6.0% PL: 7.5% RO: 5.3% RO: 8.7% Slovakia Austria Austria Austria 6
Slide 42: 3M 2008 P&L Major Items – Expenses for Claims Incurred
3M 2008 P&L Major Items – Expenses for Claims Incurred Loss ratio on stable level B 42 § Group loss ratio (net) at 63.9% (YE 2007 64.2%) § Poland improving by 9.4% pts to 54.7% due to effective claims and risk management and § Austrian loss ratio higher by 2.3% pts at 68.3%, benign motor pricing aff
Slide 43: 3M 2008 P&L Major Items – Operating Expenses
3M 2008 P&L Major Items – Operating Expenses Cost ratio decreasing by 1.5% pts B 43 § Group cost ratio (net) decreasing by 1.5% to § Cost ratio in Slovakia down by 2.9% pts in line reach 31.6% - sensible economies of scale in with YE 2007 CEE § Poland showing higher cost ratio at 40.3% § Austrian co
Slide 44: 3M 2008 P&L Major Items – Net Investment Income
3M 2008 P&L Major Items – Net Investment Income Moderate decrease due to weak financial markets (€mn) B 44 Net Investment Income § Decrease in Group Net Investment Income by 4.2 34.0 3.5 Other 14.5% to € 175.6mn influenced mainly by 24.1 CEE widening of credit spreads and share prices AUT 167.2 148.
Slide 45: 3M 2008 P&L – Business Segments (P&C)
3M 2008 P&L – Business Segments Property & Casualty, IFRS (€mn) B 45 3M 2008 3M 2007 +/-% 1. Gross written premiums 1,382.6 1,185.3 16.6 2. Net earned premiums 841.9 667.3 26.2 3. Net investment income 23.8 33.1 -28.1 4. Other income 7.7 4.5 72.5 Total income 873.4 704.9 23.9 6. Expenses for claims
Slide 46: 3M 2008 P&L – Business Segments (Life)
3M 2008 P&L – Business Segments Life, IFRS (€mn) B 46 3M 2008 3M 2007 +/-% 1. Gross written premiums 847.0 753.2 12.5 2. Net earned premiums 816.8 720.6 13.4 3. Net investment income 154.8 168.1 -7.9 4. Other income 9.8 4.4 121.3 Total income 981.4 893.1 9.9 6. Life benefits -758.4 -699.0 8.5 7. Ope
Slide 47: 3M 2008 P&L – Business Segments (Health)
3M 2008 P&L – Business Segments Health, IFRS (€mn) B 47 3M 2008 3M 2007 +/-% 1. Gross written premiums 81.7 79.9 2.2 2. Net earned premiums 78.0 76.4 2.1 3. Net investment income -3.0 4.2 -172.6 4. Other income 0.0 0.0 0.0 Total income 75.0 80.6 -6.9 6. Expenses for claims incurred -62.4 -63.1 -1.1
Slide 48: 3M 2008 P&L - Split by Regions (I)
3M 2008 P&L - Split by Regions (I) Regional segments, IFRS (€mn) B 48 Austria Czech Republic 3M 2008 3M 2007 +/-% 3M 2008 3M 2007 +/-% 1. Gross written premiums 1,215.8 1,196.3 1.6 359.7 312.6 15.1 2. Net earned premiums 895.7 869.7 3.0 268.3 219.7 22.2 3. Net investment income 148.1 167.2 -11.4 6.4
Slide 49: 3M 2008 P&L - Split by Regions (II)
3M 2008 P&L - Split by Regions (II) Regional segments, IFRS (€mn) B 49 Slovakia Poland Romania 3M 2008 3M 2007 +/-% 3M 2008 3M 2007 +/-% 3M 2008 3M 2007 +/-% 1. Gross written premiums 161.3 141.4 14.1 174.0 121.4 43.3 200.9 106.2 89.1 2. Net earned premiums 122.6 93.9 30.6 157.4 104.3 51.0 136.4 62.
Slide 50: 3M 2008 P&L - Split by Regions (III)
3M 2008 P&L - Split by Regions (III) Regional segments, IFRS (€mn) B 50 Other CEE Other TOTAL 3M 2008 3M 2007 +/-% 3M 2008 3M 2007 +/-% 3M 2008 3M 2007 +/-% 1. Gross written premiums 124.3 69.9 77.7 75.3 70.6 6.6 2,311.2 2,018.4 14.5 2. Net earned premiums 90.5 52.1 73.7 65.8 62.0 6.1 1,736.8 1,464.
Slide 51: 3M 2008 Results by Country
3M 2008 Results by Country IFRS (€mn) B 51 Non-Life Life Total Profit before Tax Combined Ratio 3M 2008 3M 2007 3M 2008 3M 2007 3M 2008 3M 2007 3M 2008 3M 2007 3M 2008 3M 2007 Austria 683.8 675.6 532.0 520.7 1,215.8 1,196.3 76.1 62.5 95.7% 95.7% Czech Rep. 275.8 245.0 83.9 67.6 359.7 312.6 20.6 18.3
Slide 52: Change in Group Shareholders' Equity
Change in Group Shareholders‘ Equity IFRS B 52 1.1. - 31.03.2008 1.1. - 31.03.2007 Equity as of 1 January 2,615,563 2,283,208 Currency Changes 16,465 -4,004 Changes to consolidation 6,607 37,987 Capital Increase - - Unrealised Gains and Losses on financial -58,179 28,168 instruments available for sa
Slide 53: Life Insurance Premium Split
Life Insurance Premium Split IFRS (€mn) B 53 Premiums written - direct business 3M 2008 3M 2007 +/- % Regular premiums 473.9 466.8 1.5% Single premiums 371.7 278.4 33.5% Total premiums written - direct business 845.6 745.2 13.5% thereof: Policies with profit participation 482.5 448.7 7.5% Policies w
Slide 54: YE 2007 Investment Split
YE 2007 Investment Split Conservative investment policy paying off B 54 Investment policy Rough Portfolio Outline § VIG follows a conservative Affiliated Alternative Inv. Companies ~ 1% investment policy throughout ~ 5% market cycles Loans ~ 6% § VIG has no US-subprime Bonds investments ~ 65% Real E
Slide 55: Embedded Value (I)
Embedded Value (I) Group Embedded Value - Dec 31, 2007 B 55 in € mn Life & Health Property & Casualty Total Austria/Germany ANAV 735,4 617,5 1.352,9 VIF 1.384,5 n/a 1.384,5 - FOG -31,6 n/a -31,6 - CoCNMR -75,7 n/a -75,7 2.012,6 617,5 2.630,1 CEE ANAV 148,2 1.374,2 1.522,4 VIF 429,1 n/a 429,1 - FOG -
Slide 56: Embedded Value (II)
Embedded Value (II) Group Embedded Value - Dec 31, 2007 B 56 2007 2006 30% 20% 44% A/G L&H A/G P&C 10% CEE L&H 50% CEE P&C 12% 20% 14% GEV = € 4,551.0mn GEV = € 4,258.8mn1 1 restated
Slide 57: Embedded Value (III)
Embedded Value (III) New Business Values B 57 in € mn Life & Health 2007 2006 + / - % Austria / Germany NBV 63,1 50,9 + 24,0% APE 205,1 225,1 APE-Ratio 30,7% 22,6% PVNBP 1.906,3 1.982,6 PVNBP-Ratio 3,3% 2,6% CEE NBV 45,0 30,7 + 46,6% APE 71,0 45,4 APE-Ratio 63,3% 67,5% PVNBP 409,7 262,4 PVNBP-Ratio
Slide 58: 3M 2008 Exchange Rates
3M 2008 Exchange Rates National currency unit per EUR B 58 3M 2008 3M 2007 Balance P&L Balance Sheet P&L Country Curr. Sheet EUR EUR EUR EUR Bulgaria EUR/BGN 1.9558 1.9558 1.9558 1.9558 Croatia EUR/HRK 7.2690 7.2852 7.4050 7.3656 Liechtenstein EUR/CHF 1.5738 1.6014 1.6247 1.6162 Poland EUR/PLN 3.522
Slide 59: Shareholder Structure (I)
Shareholder Structure (I) Total number of shares 128,000,000 B 59 Shareholder Structure ~ 29 % Free Float ~71 % Wiener Städtische Wechselseitige Versicherungsanstalt- Vermögensverwaltung
Slide 60: Shareholder Structure (II)
Shareholder Structure (II) Total number of shares 128,000,000 B 60 Free Float Geographical Split ~11% Others ~28 % Austria ~21% Continental Europe ~22% North America ~18% UK & Ireland
Slide 61: Contact Details
Contact Details Investor Relations B 61 Wiener Städtische Versicherung AG Vienna Insurance Group Schottenring 30, 1010 Vienna, Austria www.viennainsurancegroup.com Stock exchange listing: VIENNA / PRAGUE Ticker symbol: VIG / VIG Reuters: VIGR.VI / VIGR.PR Bloomberg: VIG AV / VIG CP § Thomas Schmee T
Slide 62: Disclaimer
Disclaimer B 62 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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