Vienna Insurance Group AG · VIE:VIG

Vienna Insurance — Bank Conference Zürs 2019

50 slides from Vienna Insurance's conference presentation, Apr 2, 2019

  1. Slide 1: Investor Presentation: Preliminary full year results 2018

    VIENNA INSURANCE GROUP Investor Presentation Preliminary full year results 2018

  2. Slide 2: VIG – The leading insurance group in Austria & CEE

    VIG – THE LEADING INSURANCE GROUP IN AUSTRIA & CEE Close to Around Represented in 200 years of experience 50 Group companies 25 markets More than More than Solvency Ratio 50% of premiums and profits coming 25,000 employees 239% based on Partial Internal Model from CEE Since Current market capitaliza

  3. Slide 3: Management principles

    MANAGEMENT PRINCIPLES 1 Local entrepreneurship  Knowledge of local needs and markets  Decentralised structures and efficient decision-making procedures 2 Multi-brand strategy  Around 50 brands in 25 countries  Utilisation of established local brands 3 Multi-channel distribution  Various distrib

  4. Slide 4: VIG best positioned to leverage positive market development in CEE

    VIG IS BEST POSITIONED TO LEVERAGE ON THE POSITIVE MARKET DEVELOPMENT IN CEE Excellent market shares throughout the region 1 2018: 25 markets Client/talent base: Country Market position Market share total 180mn people Austria 1 1 1 22.7% 10 Czech Rep. 1 2 1 31.6% 4 Slovakia 1 2 1 32.8% Poland 4 4 5

  5. Slide 5: CEE region growing stronger than EU-15

    CEE REGION GROWING STRONGER THAN EU-15 Promising GDP per capita growth 2019 - 2023 Gap in GDP growth in purchasing parities CEE vs. EU-15 Forecast CAGR 8% 2019-2023 real GDP 6% 2.7% (CEE) vs. 4% 1.5% (EU-15) 2% 0% 2000 2003 2006 2009 2012 2015 2018 2021 -2% -4% real GDP growth PPP (USD) CEE real GDP

  6. Slide 6: Positive economic environment and strong growth potential going forward

    POSITIVE ECONOMIC ENVIRONMENT AND STRONG GROWTH POTENTIAL GOING FORWARD Annual insurance spending shows significant growth potential in the CEE region Real GDP growth p.a. 2019-2023 Insurance density 2017, in EUR (premiums per capita) Austria 1.5 Austria 1,948.5 Croatia 2.3 Croatia 289.7 Hungary 2.3

  7. Slide 7: Agenda 2020: Creating added value and contribution to future success

    AGENDA 2020 CREATING ADDED VALUE AND CONTRIBUTION TO FUTURE SUCCESS Optimisation of business model Ensuring future growth  Shared Services  Use of growth potentials Creating cost benefits by merging back-office functions Intensify selected business areas  e.g. health and companies insurance, rein

  8. Slide 8: Agenda 2020: Review after half time

    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,

  9. Slide 9: 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

  10. Slide 10: 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

  11. Slide 11: Results 2018

    STRATEGY & OUTLOOK RESULTS 2018 SEGMENTS APPENDIX Please note: All information for the financial year 2018 is based on preliminary unaudited data. 11 VIG VIENNA INSURANCE GROUP

  12. Slide 12: 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

  13. Slide 13: 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 

  14. Slide 14: 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

  15. Slide 15: Double-digit growth in health while life single premium business 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,

  16. Slide 16: 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

  17. Slide 17: 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

  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: 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

  20. Slide 20: Executive summary 2018

    EXECUTIVE SUMMARY 2018 VIG with positive outlook for 2019-20 and beyond  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 adv

  21. Slide 21: Segments

    STRATEGY & OUTLOOK RESULTS 2018 SEGMENTS APPENDIX Please note: All information for the financial year 2018 is based on preliminary unaudited data. 21 VIG VIENNA INSURANCE GROUP

  22. Slide 22: 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

  23. Slide 23: 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

  24. Slide 24: 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

  25. Slide 25: 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

  26. Slide 26: 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

  27. Slide 27: 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

  28. Slide 28: 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

  29. Slide 29: 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

  30. Slide 30: 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

  31. Slide 31: 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

  32. Slide 32: 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

  33. Slide 33: 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

  34. Slide 34: Appendix

    STRATEGY & OUTLOOK RESULTS 2018 SEGMENTS APPENDIX Please note: All information for the financial year 2018 is based on preliminary unaudited data. 34 VIG VIENNA INSURANCE GROUP

  35. Slide 35: Managing Board as of 1 July 2018

    MANAGING BOARD AS OF 1 JULY 2018 Fotos: Ian Ehm, Thomas Pitterle Elisabeth Stadler, CEO Franz Fuchs Judit Havasi Liane Hirner, CFO Peter Höfinger Peter Thirring Mgmt. of the VIG Group, Performance Planning & Controlling Finance & Accounting Corporate and Large Group external income General Secretari

  36. Slide 36: 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

  37. Slide 37: 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

  38. Slide 38: 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

  39. Slide 39: 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

  40. Slide 40: 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

  41. Slide 41: 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

  42. Slide 42: 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

  43. Slide 43: 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

  44. Slide 44: 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

  45. Slide 45: 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

  46. Slide 46: 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

  47. Slide 47: 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) 47 APPENDIX VIG VIENNA INSURANCE

  48. Slide 48: Appendix

    48 APPENDIX VIG VIENNA INSURANCE GROUP

  49. Slide 49: 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.

  50. Slide 50: 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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