Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — Q4 2019 Earnings Presentation
53 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, Mar 12, 2020
Slide 1: PZU Group's Financial Results in 4Q19
PZU Group’s Financial Results in 4Q19 Warsaw, 12 March 2020
Slide 2: Table of contents
Table of contents 1. PZU Group’s main accomplishments 3 2. Business development 11 3. Financial results 26 4. Group’s strategy execution in 2017 – 2020 33 5. Attachments 36 2
Slide 3: 1. PZU Group's main accomplishments
1. PZU Group’s main accomplishments
Slide 4: Business development: record-breaking sales, over 24 bn PLN premium in 2019
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Business development Record-breaking sales – more than 24 bn PLN of premium in 2019 • Acceleration of the pace of growth of gross written premium and earned premium in 4Q19 versus the beginning of the year (growth
Slide 5: Financial results: 3.3 bn PLN net profit
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Financial results 3.3 bn PLN in net profit - best result in PZU’s history on the stock exchange • Result for the full year of 2019 at the level of 3,295 m PLN, highest since 2010, growing y/y despite incomparable c
Slide 6: Capital: Solvency II ratio of 220%
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Capital Solvency II ratio of 220% – business safety • Affirmation of S&P’s rating of A- and positive outlook, with a capital Solvency II ratio for insurers in Europe strength rating of AAA • Dividend paid of by the
Slide 7: Employee engagement in PZU
1. Główne osiągnięcia 2. Rozwój działalności 3. Wyniki 4. Strategia 5. Załączniki Employee engagement in PZU Engagement result Participation 51% 84% Kincentric is the leader in employee PZU in the top ten best employers in research, building engagement and an independent research „Employer positive
Slide 8: Digital transformation (1/3)
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Digital transformation (1/3) Innovation creates new value for PZU Group’s clients ... #my PZU Cash RPA – robotic proces automation Most developed platform available on the insurance, The Cash Platform is a one-of-a
Slide 9: Digital transformation (2/3)
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Digital transformation (2/3) ... caring for their life and health PZU GO Telemedicine Office Band of life PZU GO is a small electronic device which looks Poland’s first telemedicine office. Using the “Band of life”
Slide 10: Digital transformation (3/3)
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Digital transformation (3/3) Awards and distinctions PZU Ready for Start-ups Efma & Accenture Insurance Awards 2019 8 pilot projects with startups launched during two workforce transformation Robotic Process Automa
Slide 11: 2. Business development
2. Business development
Slide 12: Client
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Client 12
Slide 13: Non-life insurance (1): Non-life insurance market in Poland
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Non-life insurance (1): Non-life insurance market in Poland Gross written premium (bn PLN) 12.0 • 16% growth in the non-motor insurance market in 3Q19 (versus 21%5 10.0 for the PZU Group) 8.0 • Rate of growth of pr
Slide 14: Non-life insurance (2): Motor insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Non-life insurance (2): Motor insurance PZU Group's motor insurance market share1 (Poland) UNIQA Others GENERALI 2.3% 3.6% • Persistently strong market position in motor insurance with a market share of 4.7% 36.1%
Slide 15: Non-life insurance (3): Non-motor insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Non-life insurance (3): Non-motor insurance Combined ratio (COR1) in PZU Group’s non-motor insurance mass segment 96% 84% 84% • Mass segment: 82% 81% 80% 82% 80% 78% 32% 17% 11% 8% 4% 4% 64% 73% 5% 3% 3% – sustaini
Slide 16: Client
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Client 16
Slide 17: Life insurance (1): Life insurance market
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Life insurance (1): Life insurance market Gross periodic premium, quarterly (bn PLN) Life insurance market 4.5 1.95 • Higher sales in PZU Życie year to date of 2.5% versus the 4.0 1.90 market’s negative rate of gro
Slide 18: Life (2): Group and individually continued insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Life (2): Group and individually continued insurance Gross written premium (bn PLN) 1.75 • The expanding health insurance portfolio, including a new 1.73 1.74 1.74 1.70 1.69 1.70 1.711.72 1.72 1.71 1.721.72 1.72 1.
Slide 19: Life (3): Individual insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Life (3): Individual insurance Gross written premium (m PLN) 468 466 408 421 384 404 367 339 341 346 343 • Record-breaking sales of individual protection products (145 m 324 318 339 327 274 280 292 312 253 PLN). 24
Slide 20: Client
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Client 20
Slide 21: Zdrowie (1): Tomma Diagnostyka Obrazowa acquisition
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Zdrowie (1): Key acquisition made by PZU Zdrowie in December 2019: Tomma Diagnosis Obrazowa Nationwide footprint: 35 High level of Expected rapid growth centers operating in 28 profitability: the EBITDA in revenue
Slide 22: Health (2): Development of business size
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Health (2) Development of business size 1 2 3 4 ~2,200 cooperating 49 hospitals 2,200 physicians ~8,000 medical partners >50 specializations pharmacies ~130 proprietary locations Flexible and comprehensive Service
Slide 23: Health (3): Development of business size
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Health (3): Development of business size Revenues (m PLN) 844 575 • Growing number of products per client – according to the strategic CAGR objectives, in addition to PZU Życie and PZU Zdrowie health products, 433
Slide 24: Client
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Client 24
Slide 25: Finance: Assets under management and cooperation with banks
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Finance: Assets under management and development of cooperation with banks Assets of third party clients of TFI and OFE PZU clients (bn PLN) • TFI PZU asset growth was driven by the following: 30.6 29.4 30.9 – gene
Slide 26: 3. Financial results
3. Financial results
Slide 27: Gross written premium of the PZU Group
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Gross written premium of the PZU Group Insurance segments m PLN, local GAAP 4Q18 3Q19 4Q19 Change y/y Change q/q External gross written premium 6,212 5,662 6,690 7.7% 18.2% Total non-life insurance – Poland 3,656 2
Slide 28: PZU Group's net result
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments PZU Group’s net result Net profit excluding banking activities is up 8.6% y/y despite growing price pressure and the higher loss ratio PZU Group’s net result adjusted for the impact exerted by regulatory changes (B
Slide 29: Results: contribution of insurance and banking activity
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments PZU Group’s results – contribution of activity to date and banking activity m PLN 4Q18 3Q19 4Q19 change y/y change q/q PZU GROUP NET OF ALIOR BANK AND PEKAO Gross written premium1 6,212 5,662 6,690 7.7% 18.2% Net i
Slide 30: Investment performance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Investment performance change change MSSF, m PLN 4Q18 3Q19 4Q19 y/y q/q • 2.7 p.p. surplus profitability in the main portfolio on FX above the risk-free rate Net investment result 1,933 2,215 2,416 25.0% 9.1% in 4Q
Slide 31: Cost effectiveness
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Cost effectiveness Administrative expense ratio • The change in the administrative expense ratio in 4Q19 versus 4Q18 due to the following: – higher personnel costs as a result of wage presure, including higher vari
Slide 32: Group's high level of solvency
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Group’s high level of solvency SII ratio according to the previous standards, i.e. without subtracting expected dividends from own funds PZU Group’s Solvency II data, 30 September 2019 (bn PLN) • Decline in own fun
Slide 33: 4. Strategy execution
4. Strategy execution
Slide 34: Execution of key strategy metrics for 2017-2020
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Execution of the key metrics of the strategy for 2017-2020 Non-life insurance Life insurance Investments Health Banks PZU Group's market share 2,3 Number of clients in PZU Assets under management for Revenues (m PL
Slide 35: Challenge of 2020: COVID-19 – monitoring business risk
1. Główne osiągnięcia 2. Rozwój działalności 3. Wyniki 4. Strategia 5. Załączniki Challenge of the year 2020: COVID-19 – monitoring business risk Non-life insurance Life and health insurance Investment portfolio • Business interruption insurance - No exposure linked to coronavirus. A claim • Conserv
Slide 36: 5. Attachments
5. Attachments
Slide 37: Profitability by operating segments
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Profitability by operating segments Insurance result / Combined ratio / Insurance segments Gross written premium operating result Margin Change Change m PLN, local GAAP 2018 2019 y/y 2018 2019 y/y 2018 2019 Total n
Slide 38: Non-life insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Non-life insurance Higher sales of motor insurance in the corporate segment Mass segment Corporate segment 10,401 10,403 3,097 3,316 3,221 3,412 1,370 1,670 Gross written 7,180 6,991 690 Gross written 1,026 1,021 1
Slide 39: Recap – non-life insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – non-life insurance Mass segment Maintaining gross written premium y/y at a balanced level as the outcome of the following: • lower gross written premium in motor TPL insurance due to a decrease in the numbe
Slide 40: Recap – non-life insurance (corporate)
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – non-life insurance Corporate segment Higher gross written premium y/y was the outcome of the following: • Higher premium in insurance against fire and other damage to property (+16.3% y/y) – including in Q4
Slide 41: Life insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Life insurance Maintaining the profitability of group and individually continued insurance, higher margin in individual insurance Group and individually continued insurance Individual insurance 1,581 1,346 798 681
Slide 42: Recap – life insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – life insurance Group and individually continued insurance Drivers of higher gross written premium y/y: • acquiring more health insurance contracts, including a new rider to continued insurance launched unde
Slide 43: Recap – life insurance (individual)
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – life insurance Individual insurance segment Higher gross written premium y/y was the result of the following: • constantly rising periodic premium level in protection products, also thanks to modifications
Slide 44: International business
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments International business Business growth, improved profitability Non-life insurance 1,729 1,897 Life insurance 256 151 202 255 270 120 447 492 79 55 Gross written Gross written premium 825 879 72 premium 65 (m PLN) (
Slide 45: Recap – international business
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – international business Gross written premium Non-life insurance: • The growth in gross written premium in the Baltic companies was possible chiefly by maintaining the fast rate of growth in motor insurance
Slide 46: Recap – international business (results)
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – international business Insurance results Non-life insurance: • Combined ratio decline as a result of the following: – lower loss ratio – both in the Baltic States and in Ukraine, among others due to the dec
Slide 47: Banking activity
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Banking activity Stable results excluding BFG fees Volumes Profitability and ratios 195 372 182 1,077 65 Operating profit1 60 4,575 3,046 4,403 (m PLN) 25 24 3,003 Loans 68 74 (bn PLN) 985 495 29 32 12.2018 12.2019
Slide 48: Investments
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Investments Quarterly results and portfolio structure Net investment result (m PLN) 458 446 438 390 383 178 96 11 46 106 26 (119) ( 7) ( 0) ( 27) 4Q18 1Q19 2Q19 3Q19 4Q19 Main Portfolio with FX on issues Investment
Slide 49: Recap – investments
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – investments 1,726 1,321 124 75 84 104 40 6 157 1,356 1,726 (35) Result of the main Impact 1Q19 vs. Impact 2Q19 vs. Impact 3Q19 vs. Investment Treasury debt Polish listed Other Result of the main portfolio 1
Slide 50: Group's own funds
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Group’s own funds PZU Group’s data under Solvency II / 30 September 2019 (bn PLN) Comparison of own funds and consolidated own funds according to IFRS Own funds according to SII calculated using the net assets carr
Slide 51: SCR up following the acquisition of Pekao
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments SCR up following the acquisition of Pekao PZU Group’s data under Solvency II / 30 September 2019 (bn PLN, unaudited data) Basic solvency capital requirement Solvency requirement down in the first 3 quarters of 2019
Slide 52: Disclaimer
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Disclaimer This Presentation has been prepared by PZU SA (“PZU”) and is purely informational in nature. Its purpose is to present selected data concerning the PZU Group (“PZU Group”), including its growth prospects
Slide 53: Thank you
Thank you Contact: Magdalena Komaracka, CFA +48 22 582 22 93 mkomaracka@pzu.pl .pzu.pl/ir Contact: Piotr Wisniewski +48 22 582 26 23 pwisniewski@pzu.pl .pzu.pl/ir
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