Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Merger or Acquisition (March 2008)
49 slides from Vienna Insurance's merger presentation, Mar 27, 2008
Slide 1: Acquisition of s Versicherung, Long-Term Bancassurance Agreement with Erste Bank and 2007 Results
Acquisition of s Versicherung, Long-Term Bancassurance Agreement with Erste Bank and 2007 Results Investor Presentation – 27 March 2008
Slide 2: Disclaimer
Disclaimer A 2 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 shal
Slide 3: Contents
Contents A 3 A Transaction Highlights B Rationale C Transaction Structure and Targets D 2007 Results - Highlights E 2007 Results - P&L and Balance Sheet
Slide 4: Transaction Highlights
Transaction Highlights The acquisition in a snapshot A 4 Long-Term Preferred Bancassurance Agreement Acquisition Highlights Acquisition of Erste Bank’s Insurance Activities 95% in >87% of s Versicherung Group BCR Asigurari Life and Non-Life § Vienna Insurance Group (“VIG”) becomes the No. 1 insurer
Slide 5: Transaction Scope
Transaction Scope The acquisition in a snapshot (cont’d) A 5 Acquisition of Insurance Operations Outstanding Bank Distribution Platform Czech Republic Slovakia Ukraine s Versicherung Group Branches: 636 Branches: 273 Branches: 71 Clients (m): 5.3 Clients (m): 2.5 Clients (m): 0.1 GWP Market # Austri
Slide 6: Contents: Rationale
Contents B 6 A Transaction Highlights B Rationale C Transaction Structure and Targets D 2007 Results - Highlights E 2007 Results - P&L and Balance Sheet
Slide 7: Rationale
Rationale Cornerstones of the transaction B 7 § Expands the existing CEE franchise § Creates No. 1 insurance group in in one go to create a diversified, true CEE core markets(1) Pan-CEE insurance platform 1 2 § Low execution risk given § Preferred bancassurance existing P&C co-operation, alike partn
Slide 8: Creating No.1 Insurance Group in CEE
1 Creating No.1 Insurance Group in CEE Extending leadership to life insurance B 8 Total Market Share in CEE(1),(2) Market Share in CEE(1),(2) Life 10.8% 10.0% 9.3% 9.1% 14.0% 8.3% 8.2% 12.8% 12.1% 7.4% 11.3% 5.8% 3.8% 5.0% 4.9% 4.4% 4.3% 2.6% 3.4% 2.1% 3.0% 1.9% KBC ING sVersicherung VIG AIG s Versi
Slide 9: Diversified, Pan-CEE Insurance Platform
2 Diversified, Pan-CEE Insurance Platform Leading position in all key life insurance markets B 9 Combined Market Ranking in CEE Countries Czech Rep.—life Slovakia—life Premia Insurer Premia (€m) Rank # Insurer (€m) Rank # Česká p. & Generali 574 1 VIG & Poist.Slov. 240 1 VIG & 523 2 Allianz 236 2 sV
Slide 10: Upside Through Preferred Distribution Partnership
Upside Through Preferred Distribution 3 Partnership CEE bancassurance agreement with Erste Bank offering outstanding client access B 10 Distribution agreement Erste Bank‘s Presence Hungary Ukraine § Preferred partnership for sale of life, non-life Total Market share: 6.1% Market share: 0.1% Branches
Slide 11: Strengthen VIG's Life Business (I)
4 Strengthen VIG’s Life Business (I) Right time to capture strong growth in life insurance business B 11 Pro-Forma Business Mix (GWP) Comments § Transaction rebalances VIG’s business Indicative Total mix towards life insurance segment Non-life 13.5% Non-life 57.5% Non-life § Creating the leading pla
Slide 12: Strengthen VIG's Life Business (II)
4 Strengthen VIG’s Life Business (II) GDP and life insurance penetration are twin drivers for sustainable growth B 12 Increasing contribution from CEE Life Markets Expected to Catch-up Rapidly P&C – Premium by Region (%) Life – Premium by Region (%) Life Penetration (%) 6.2% 2.8% 1.5% 1.7% 1.3% 0.9%
Slide 13: Strengthen VIG's Life Business (III)
4 Strengthen VIG’s Life Business (III) Strong Austrian franchise with catch-up potential in life insurance B 13 Situation in Austria High growth potential § Leading market position in all business lines Life insurance density is low in Austria § #1 in life $3,500 3,305 § #1 in P&C Life $3,000 § #2 i
Slide 14: Significant Synergy Potential
5 Significant Synergy Potential Combining VIG and s Versicherung Group: Synergies from shared services B 14 Synergies are reflected in new Financial Targets for 2011 Expected revenue synergies § Extended product and service offering tailored to the bancassurance distribution channel § New product de
Slide 15: Low Execution Risk
6 Low Execution Risk Extensive experience in bancassurance and acquisition integration B 15 Experience in bancassurance Extensive integration track record § Existing successful regional partnership with § 19 Acquisitions in 14 countries executed Erste Bank in P&C with 95,000 contracts since 2004 arr
Slide 16: Contents: Transaction Structure and Targets
Contents C 16 A Transaction Highlights B Rationale C Transaction Structure and Targets D 2007 Results - Highlights E 2007 Results - P&L and Balance Sheet
Slide 17: Transaction Structure
Transaction Structure Acquisition of s Versicherung Group and Ownership Structure C 17 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 18: Financial Targets
Financial Targets New, increased targets for 2011 due to s Versicherung acquisition C 18 VIG’s Financial Targets Comments Profit before tax targets in € mn § More than EUR 12bn GWP in 2011 due to s Versicherung acquisition CAGR: ~25% ~1,050 § Majority of GWP to come from CEE region by ~850 2011 ~650
Slide 19: Summary
Summary C 19 § Transaction creates the No. 1 insurance group in Central and Eastern Europe(1) § Expands VIG’s growth story - with access to Erste Bank’s outstanding bank distribution network according to bancassurance agreement for 15 years - with significant growth potential in life insurance busin
Slide 20: Contents: 2007 Results - Highlights
Contents D 20 A Transaction Highlights B Rationale C Transaction Structure and Targets D 2007 Results - Highlights E 2007 Results - P&L and Balance Sheet
Slide 21: YE 2007 Highlights (I)
YE 2007 Highlights (I) GWP growth gaining momentum in Q4; C/R reduced to just above 95% D 21 GWP Profit before Tax 17.5% 6,912 36.2% 5,882 437 5,008 4,101 321 240 156 2004 2005 2006 2007 2004 2005 2006 2007 IFRS IFRS Net Profit after Tax and Minorities Combined Ratio 19.8% 97.0 313 96.9 261 95.5 197
Slide 22: YE 2007 Highlights (II)
YE 2007 Highlights (II) Record EPS; ROE already at 18% D 22 EPS (annualised) ROE before Tax (%) 2.98 21.9 2.48 19.5 2.27 18.0 14.8 1.41 2004 2005 2006 2007 2004 2005 2006 2007 IFRS IFRS
Slide 23: Contents: 2007 Results - P&L and Balance Sheet
Contents E 23 A Transaction Highlights B Rationale C Transaction Structure and Targets D 2007 Results - Highlights E 2007 Results – P&L and Balance Sheet
Slide 24: YE 2007 Income Statement
YE 2007 Income Statement IFRS (€mn) E 24 YE 2007 YE 2006 +/-% 1. Gross written premiums 6,911.9 5,881.5 17.5 2. Net earned premiums 5,941.7 5,038.7 17.9 3. Net investment income1 1,002.6 716.4 39.9 4. Other income 52.0 61.4 -15.4 Total income 6,996.3 5,816.5 20.3 6. Expenses for claims incurred -5,0
Slide 25: YE 2007 Balance Sheet
YE 2007 Balance Sheet IFRS (€mn) E 25 YE 2007 YE 2006 +/- % Intangible assets 525 461 13.7 Total investments 20,171 17,260 16.9 Unit- and index-linked investments 3,066 2,341 31.0 Reinsurers’ share in technical provisions 1,187 963 23.2 Receivables 1,200 984 22.0 Deferred tax assets 34 24 43.8 Other
Slide 26: YE 2007 P&L Major Items – Gross Written Premiums
YE 2007 P&L Major Items – Gross Written Premiums Again growing above market in Austria and CEE (€ mn) E 26 § Group GWP gained 17.5% to € 6,912mn § Austria: total GWP up 7.6% to reach € 3,695mn. Life up 10.2% at 251.2 € 1,902mn with sound growth in subsidised pensions; includes 240.8 ~€180mn premium
Slide 27: Geographical Diversification Enhanced
Geographical Diversification Enhanced GWP split by region E 27 GWP by Geography YE 05 GWP by Geography YE 06 GWP by Geography YE 07 Other Other Other Other CEE 4.1% 3.6% 5.5% Other CEE Other CEE 6.7% PL: 1.5% 13.1% 19.3% RO: 2.7% PL: 5.7% PL: 7.9% RO: 4.0% RO: 6.0% Slovakia Austria Austria Austria 6
Slide 28: YE 2007 P&L Major Items – Expenses for Claims Incurred
YE 2007 P&L Major Items – Expenses for Claims Incurred Loss ratio improving vs. last year E 28 § Group loss ratio (net) with marked improvement § Poland improving by 3.1% pts to 59.9% due to by 2.8% pts to 64.2% despite €10mn net effect effective claims and risk management and from Kyrill storm in Q
Slide 29: YE 2007 P&L Major Items – Operating Expenses
YE 2007 P&L Major Items – Operating Expenses Cost ratio gaining slightly due to dynamic business growth E 29 § Group cost ratio (net) gaining just 1.4% to reach § Cost ratio in Slovakia up by 1.5% as a result of 31.2% due to tremendous growth in CEE with higher acquisition costs acquisition cost eff
Slide 30: YE 2007 P&L Major Items – Net Investment Income
YE 2007 P&L Major Items – Net Investment Income Sound growth in line with business expansion (€mn) E 30 Net Investment Income § Increase in Group Net Investment Income by 39.9% to 18.7 € 1,002.6mn 135.6 17.9 Other § Austria grew by 40.5% influenced by trading gains, full CEE consolidation of Austria
Slide 31: Appendix
Appendix A 31 A Appendix – Transaction B Appendix – 2007 Results
Slide 32: s Versicherung & BCR
s Versicherung & BCR Company overview A 32 Business description s Versicherung Business description BCR § Established in 1985 § BCR Asigurari was set up in 2001 § With a market share of 11.0% one of the leading § In October 2005 the life business was transferred life insurers in Austria to the new e
Slide 33: Financial Overview - Individual Entities (I)
Financial Overview - Individual Entities (I) Key financials(1) of s Versicherung and BCR Insurance Operations (€mn) A 33 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 200
Slide 34: Financial Overview - Individual Entities (II)
Financial Overview - Individual Entities (II) Key financials(1) of s Versicherung and BCR Insurance Operations (€mn) A 34 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
Slide 35: Appendix – 2007 Results
Appendix B 35 A Appendix – Transaction B Appendix – 2007 Results
Slide 36: YE 2007 P&L – Business Segments (Property & Casualty)
YE 2007 P&L – Business Segments Property & Casualty, IFRS (€mn) B 36 YE 2007 YE 2006 +/-% 1. Gross written premiums 3,671.2 3,067.2 19.7 2. Net earned premiums 2,746.8 2,264.7 21.3 3. Net investment income 148.5 114.3 29.9 4. Other income 35.3 39.8 -11.3 Total income 2,930.5 2,418.7 21.2 6. Expenses
Slide 37: YE 2007 P&L – Business Segments (Life)
YE 2007 P&L – Business Segments Life, IFRS (€mn) B 37 YE 2007 YE 2006 +/-% 1. Gross written premiums 2,934.2 2,516.5 16.6 2. Net earned premiums 2,889.4 2,477.5 16.6 3. Net investment income 838.0 588.1 42.5 4. Other income 16.7 21.3 -21.9 Total income 3,744.1 3,086.9 21.3 6. Life benefits -3,000.2
Slide 38: YE 2007 P&L – Business Segments (Health)
YE 2007 P&L – Business Segments Health, IFRS (€mn) B 38 YE 2007 YE 2006 +/-% 1. Gross written premiums 306.6 297.9 2.9 2. Net earned premiums 305.5 296.5 3.0 3. Net investment income 16.1 14.0 14.9 4. Other income 0.0 0.3 -88.4 Total income 321.7 310.9 3.5 6. Expenses for claims incurred -266.9 -261
Slide 39: YE 2007 P&L - Split by Regions (I)
YE 2007 P&L - Split by Regions (I) Regional segments, IFRS (€mn) B 39 Austria Czech Republic YE 2007 YE 2006 +/-% YE 2007 YE 2006 +/-% 1. Gross written premiums 3,695.4 3,434.7 7.6 1,130.5 1,048.0 7.9 2. Net earned premiums 3,304.5 3,100.4 6.6 919.0 827.6 11.0 3. Net investment income 848.4 603.8 40
Slide 40: YE 2007 P&L - Split by Regions (II)
YE 2007 P&L - Split by Regions (II) Regional segments, IFRS (€mn) B 40 Slovakia Poland Romania YE 2007 YE 2006 +/-% YE 2007 YE 2006 +/-% YE 2007 YE 2006 +/-% 1. Gross written premiums 494.5 387.7 27.6 543.1 335.1 62.1 413.5 236.9 74.5 2. Net earned premiums 398.8 281.4 41.7 483.9 262.8 84.1 314.9 19
Slide 41: YE 2007 P&L - Split by Regions (III)
YE 2007 P&L - Split by Regions (III) Regional segments, IFRS (€mn) B 41 Other CEE Other TOTAL YE 2007 YE 2006 +/-% YE 2007 YE 2006 +/-% YE 2007 YE 2006 +/-% 1. Gross written premiums 383.8 198.4 93.5 251.2 240.8 4.3 6,911.9 5,881.5 17.5 2. Net earned premiums 300.3 161.4 86.0 220.3 211.6 4.1 5,941.7
Slide 42: YE 2007 Results by Country
YE 2007 Results by Country IFRS (€mn) B 42 Non-Life Life Total Profit before Tax Combined Ratio YE 2007 YE 2006 YE 2007 YE 2006 YE 2007 YE 2006 YE 2007 YE 2006 YE 2007 YE 2006 Austria 1,793.7 1,709.7 1,901.6 1,725.0 3,695.4 3,434.7 286.8 209.1 93.8% 96.1% Czech Rep. 838.1 788.5 292.3 259.5 1,130.5 1
Slide 43: Change in Group Shareholders' Equity
Change in Group Shareholders‘ Equity IFRS B 43 1.1. - 31.12.2007 1.1. - 31.12.2006 Equity as of 1 January 2,283,208 2,059,332 Currency Changes 8,726 24,480 Changes to consolidation 259,295 3,040 Capital Increase - - Unrealised Gains and Losses on financial -182,682 4,482 instruments available for sa
Slide 44: Life Insurance Premium Split
Life Insurance Premium Split IFRS (€mn) B 44 Premiums written - direct business YE 2007 YE 2006 +/- % Regular premiums 1,795.9 1,489.5 20.6% Single premiums 1,135.1 1,013.3 12.0% Total premiums written - direct business 2,931.0 2,502.8 17.1% thereof: Policies with profit participation 1,724.7 1,646.
Slide 45: YE 2007 Investments
YE 2007 Investments Conservative investment policy paying off B 45 Investment policy Rough Portfolio Outline § VIG keeps conservative Affiliated Alternative Inv. Companies ~ 1% investment policy throughout ~ 5% market cycles Loans ~ 6% § VIG has no US-subprime Bonds investments ~ 65% Real Estate § V
Slide 46: YE 2007 Exchange Rates
YE 2007 Exchange Rates National currency unit per EUR B 46 YE 2007 YE 2006 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 7.3308 7.3376 7.3504 7.3247 Liechtenstein EUR/CHF 1.6547 1.6427 1.6069 1.5729 Poland EUR/PLN 3.593
Slide 47: Shareholder Structure (I)
Shareholder Structure (I) Total number of shares outstanding 105,000,000 B 47 Shareholder Structure ~ 30 % Free Float ~70 % Wiener Städtische Wechselseitige Versicherungsanstalt- Vermögensverwaltung
Slide 48: Shareholder Structure (II)
Shareholder Structure (II) B 48 Free Float Geographical Split 0.3% Others 32.0 % Austria 20.9% Continental Europe 25.5% 21.3% North America UK & Ireland
Slide 49: Contact Details
Contact Details Investor Relations B 49 Wiener Städtische Versicherung AG Vienna Insurance Group Schottenring 30, 1010 Vienna, Austria www.viennainsurancegroup.com Vienna Stock Exchange: VIG Reuters: VIGR.VI Bloomberg: VIG AV § Thomas Schmee Tel. +43 (0)50 350 – 21900 t.schmee@staedtische.co.at § Ni
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