Talanx Ag · XETR:TLX
Talanx — Investor Day (November 2021)
100 slides from Talanx's investor day presentation, Nov 17, 2021
Slide 1: Talanx Capital Markets Day 2021
Talanx Capital Markets Day 2021 Frankfurt, 17 November 2021
Slide 2: Schedule
Schedule I Group Strategy 9.00 – 9.15 Torsten Leue II Group Financials 9.15 – 9.30 Jan Wicke Q&A - Group Strategy / Group Financials 9.30 – 10.00 III Industrial Lines 10.00 – 10.15 Edgar Puls IV HDI Global Specialty 10.15 – 10.30 Ulrich Wallin Q&A – Industrial Lines / Specialty 10.30 – 10.50 Coffee
Slide 3: Agenda of the day
I Group Strategy II III IV V VI VII Agenda of the day I Group Strategy Torsten Leue II Group Financials Jan Wicke III Industrial Lines Edgar Puls IV HDI Global Specialty Ulrich Wallin V Retail International Wilm Langenbach VI Retail Germany Christopher Lohmann VII Final Remarks Torsten Leue 3 Capita
Slide 4: Since the last CMD two new leaders on the Talanx Board
I Group Strategy II III IV V VI VII Since the last CMD two new leaders on the Talanx Board Jean-Jacques Henchoz Edgar Puls Reinsurance Industrial Lines Wilm Langenbach Retail International Christopher Lohmann Torsten Leue Jan Wicke Retail Germany, IT CEO CFO 4 Capital Markets Day – 17 November 2021
Slide 5: Talanx Group Strategy update 2021
I Group Strategy II III IV V VI VII Talanx Group Strategy update 2021 ✓ ✓ ✓ ✓ 2018 2019 2020 2021 2022 Final check Strategy Delivery 2019-2022 New Strategy Talanx 2025 5 Capital Markets Day – 17 November 2021
Slide 6: Our three promises 2019 - 2022
I Group Strategy II III IV V VI VII Our three promises 2019 - 2022 Targets Return on equity EPS growth Dividend payout ratio 1 2 3 ≥800bp ≥5% 35% - 45% above risk-free rate on average p.a. of IFRS earnings DPS at least stable y/y High level of Profitable Attractive profitability growth payout Note:
Slide 7: High level of profitability … Return on equity
I Group Strategy II III IV V VI VII 1 High level of profitability … Return on equity ~10% ~10% 9.8% 9.0%2 ≥8.2% ~9% 6.6% 1 Target 2019 2020 2021e 2022e 1 ≥8% above risk-free rate; average risk-free rate 2019-2020: 0.16%. 2 Adjusted for negative corona effects (EUR 486m) and positive special effects
Slide 8: … mainly driven by EPS growth above 5%
I Group Strategy II III IV V VI VII 2 … mainly driven by EPS growth above 5% Net income development in EURm Target 1,050-1,150 EPS2 growth 900-950 EPS growth path 923 941 1 (upper end) ≥5% 850 on average p.a. Baseline 268 2018 703 673 2018 2019 2020 2021e 2022e 1 Adjusted for negative corona effects
Slide 9: Payout ratio nearly 50% – stable DPS secured despite Corona crisis
I Group Strategy II III IV V VI VII 3 Payout ratio nearly 50% – stable DPS secured despite Corona crisis Dividend payout ratio Stable dividend secured Dividend per share (DPS) in EUR 35% - 45% 48% 1.50 1.50 1.45 Target Ø 2018-2021e 2018 2019 2020 2018-2022 Note: Dividend proposal for 2021 subject to
Slide 10: Delivery on our strategy
I Group Strategy II III IV V VI VII Delivery on our strategy 1 Enhanced capital management 2 Focused divisional strategies Retail Industrial Lines Retail Germany Reinsurance + + International ▪ Programme ▪ Programme ▪ Focus Sustainability ▪ Top 5 in core 20/20/20 KuRS Reinsurance markets ▪ Specialty
Slide 11: Growing cash pool and growing dividend
I Group Strategy II III IV V VI VII 1 Enhanced capital management Growing cash pool and growing dividend Growing cash pool Growing dividend Cash pool times annual dividend in EUR per share 2.0 1.5-2.0x Mid-term target +10% 1.5 1.60 1.3x ~1.3x 1.50 1.50 1.45 0.8x 0.3x 2018 2019 2020 2021e 2018 2019 2
Slide 12: Strong capitalisation in line with peers
I Group Strategy II III IV V VI VII 1 Enhanced capital management Strong capitalisation in line with peers Solvency ratio 209% 211% 210% ~215% 206% 200% Target range 150% vs. 2018 2019 2020 Q2 2021 Ø peers1 Q2 2021 Note: Solvency 2 ratio as of period end excluding transitional measure. 1 Peer group:
Slide 13: Strong growth – we continue profitable growth above peer average
I Group Strategy II III IV V VI VII 2 Focused divisional strategies Strong growth – we continue profitable growth above peer average GWP development since IPO GWP in %, indexed to 2012, as reported 160% +54% 140% ~6x 120% 100% peer average +9% 80% 2012 2013 2014 2015 2016 2017 2018 2019 2020 Note: T
Slide 14: Increased primary insurance profit share and improved resilience
I Group Strategy II III IV V VI VII 2 Focused divisional strategies Increased primary insurance profit share and improved resilience Primary insurance profit Improved primary resilience Primary insurance net income in EURm and total profit share in % Primary insurance resiliency reserves over WTW, i
Slide 15: Delivered on 20/20/20 and initiative Specialty – now path to double-digit RoE
I Group Strategy II III IV V VI VII 2 Focused divisional strategies – Industrial Lines Delivered on "20/20/20“ and initiative Specialty – now path to double-digit RoE Our way forward Promise delivered Combined ratio Industrial Lines ▪ Double-digit RoE -11 %-pts ▪ Global specialty player 109% Turnaro
Slide 16: Top 5 position in 4 motor markets – now targeting double-digit RoE
I Group Strategy II III IV V VI VII 2 Focused divisional strategies – Retail International Top 5 position in 4 motor markets – now targeting double-digit RoE Our way forward Promise delivered ▪ Double-digit RoE Motor: 4 out of 5 HINexT ▪ Top 5 in P&C in Core Top 5 2025 Markets RoE >10% 8.1% 8.2% 7.3
Slide 17: KuRS promise delivered – now targeting double-digit RoE
I Group Strategy II III IV V VI VII 2 Focused divisional strategies – Retail Germany KuRS promise delivered – now targeting double-digit RoE Our way forward Promise delivered EBIT, in EURm ▪ Double-digit RoE ~250 ▪ Leading player for SME ≥240 Target and bancassurance 2021 KuRS ▪ Focused life busines
Slide 18: Sustainable strong growth and continued outperformance
I Group Strategy II III IV V VI VII 2 Focused divisional strategies – Reinsurance Sustainable strong growth and continued outperformance Our way forward Promise delivered ▪ Double-digit RoE Strong growth ▪ Focus Reinsurance GWP, in EURbn ▪ Continuing Further information: outperformance +12 HanRe Inv
Slide 19: We are speeding up digitisation
I Group Strategy II III IV V VI VII 3 Digital transformation We are speeding up digitisation Advanced data analytics “Get skills” “Get bundled“ 200 risk consultants incl. IoT-services Leading platform partner “Get ready” Simplification of IT structure of identified legacy systems 75% already shut do
Slide 20: Turning sustainability into differentiation
I Group Strategy II III IV V VI VII Sustainability Turning sustainability into differentiation Sustainability Ratings focus 2021 Social engagement – Focus diversity – Net zero 20301 Operations (BBB) CCC to AAA (top) A 30% carbon intensity Full withdrawal from reduction2 by 2025 coal risks until 2038
Slide 21: New board remuneration system since January 2021
I Group Strategy II III IV V VI VII New board remuneration system since January 2021 Board remuneration 100% Group RoE 60% Variable Share Price 40% Fix Sustainability 21 Capital Markets Day – 17 November 2021
Slide 22: We are in People Business
I Group Strategy II III IV V VI VII We are in People Business 22 Capital Markets Day – 17 November 2021
Slide 23: Key messages
I Group Strategy II III IV V VI VII Key messages We delivered what we promised We increase our dividend 2025 We boost ambition in primary insurance 23 Capital Markets Day – 17 November 2021
Slide 24: Updated outlook 2021 and new outlook 2022 for Talanx Group
I Group Strategy II III IV V VI VII Updated outlook 2021 and new outlook 2022 for Talanx Group Outlook 2021 Outlook 2022 35 – 45% DPS at Z Dividend payout EUR 1.60 per share least stable y/y Return on equity ~9.0% ~10% upper end of between EUR 1,050 Group net income EUR 900 - EUR 950m and EUR 1,150m
Slide 25: Agenda of the day
I II Group Financials III IV V VI VII Agenda of the day I Group Strategy Torsten Leue II Group Financials Jan Wicke III Industrial Lines Edgar Puls IV HDI Global Specialty Ulrich Wallin V Retail International Wilm Langenbach VI Retail Germany Christopher Lohmann VII Final Remarks Torsten Leue 25 Cap
Slide 26: How to deliver on our promises and CFO/CIO agenda
I II Group Financials III IV V VI VII How to deliver on our promises and CFO/CIO agenda Delivering on our promises Return on equity Dividend payout + Execution of CFO/CIO agenda Green bond IFRS 9/17 transition ratio & Solvency 2 framework 1 2 3 4 Transparent ≥ 800bp 35% - 45% Support for claims rese
Slide 27: RoE – Talanx with higher return on equity than peers
I II Group Financials III IV V VI VII 1 RoE – Talanx with higher return on equity than peers IFRS standard Adjusted RoE2 TX vs. peers based on IFRS3 9.5% 8.2% 800bp Adjustment2 8.2% + rf1 6.7% 8.2% ⌀ 2019-2020 ⌀ 2019-2020 ⌀ 2019-2020 ⌀ 2019-2020 Peers3 Adjusted RoE almost Strategic target reached Pe
Slide 28: Dividend policy unchanged
I II Group Financials III IV V VI VII 2 Dividend policy unchanged Dividend policy Track record 35% - 45% 48% Target 1 Dividend payout ratio: ~35 - 45% payout ratio Target 2018-2022 Ø 2018-2021e >1.5x 1.3x 1.3x 2 Target cash pool: 1.5x-2.0x dividend1 Growing cash pool 0.3x 0.8x ( ) 2018 2019 2020 202
Slide 29: Strong Solvency 2 capitalisation supports resilience
I II Group Financials III IV V VI VII 2 Strong Solvency 2 capitalisation supports resilience Development of Solvency 2 capitalisation (Regulatory view, S2 CAR, excl. transitional) 211% 215% 207% 204% 203% 209% 204% 203% 206% 210% 204% 196% 196% 191% 187% Target range 150 – 200% Positioning at upper
Slide 30: Talanx green bond framework – strong support for sustainability strategy
I II Group Financials III IV V VI VII 3 Talanx green bond framework – strong support for sustainability strategy Green bond framework Second party opinion Use of proceeds Comprehensive green bond Sustainalytics certifies alignment Framework incorporates framework developed, in line with according to
Slide 31: IFRS 9/17 will fundamentally change accounting
I II Group Financials III IV V VI VII 4 IFRS 9/17 will fundamentally change accounting Next steps TODAY Until DEC 2021 Q1-Q4 2022 NOV 2022 CMD Results First live runs CMD IFRS 9/17 application Initial Internal Parallel year Further guidance starting 1 Jan 2023 communication third impact for 2022/23
Slide 32: Talanx well prepared for IFRS 9 – measures to manage P&L volatility underway
I II Group Financials III IV V VI VII 4 Talanx well prepared for IFRS 9 – measures to manage P&L volatility underway Talanx’s SPPI test results1 SPPI fail quota peers2 Peer 1 19.8% Peer 2 14.9% P&L volatility low, as: ▪ ~99% of SPPI pass assets are Peer 3 14.3% ECL stage 13 ▪ SPPI fail quota compara
Slide 33: Under IFRS 17, reserves will be lower in absolute terms
I II Group Financials III IV V VI VII 4 Under IFRS 17, reserves will be lower in absolute terms…. IFRS 4 “old” Discounting IFRS 17 “new” effect Risk adjustment -x “resiliency -x reserves” Market Best Best embedded best estimate Market best estimate estimate booked estimate booked in best estimate 33
Slide 34: Talanx reserve policy & governance remain unchanged
I II Group Financials III IV V VI VII 4 …but Talanx reserve policy & governance remain unchanged Balance Sheet Reserving Governance Assets Liabilities 1 Reserve setting by local actuaries / reserving committees Technical provisions 2 Actuarial function applies control P&C net claims reserves framewo
Slide 35: Resiliency reserves depend on underlying risks, size of portfolio and portfolio mix
I II Group Financials III IV V VI VII 4 Resiliency reserves depend on underlying risks, size of portfolio and portfolio mix Resiliency reserves are … … higher if in relevant accounting unit ▪ volume of claims in group of contracts is small ▪ “event not in data” claims are high Best ▪ volatility of w
Slide 36: Resiliency reserve level well within comfort range
I II Group Financials III IV V VI VII 4 Resiliency reserve level well within comfort range Reserve review to maintain capital efficiency ▪ S2 CAR at adequate level Comfort ▪ Auditor’s expectations range ▪ Rating requirements “yellow zone”, additional reserve review required 0% “red zone”, insufficie
Slide 37: Development of resiliency reserves since 2018
I II Group Financials III IV V VI VII 4 Development of resiliency reserves since 2018 Resiliency reserves embedded in best estimate in % of year-end IFRS net reserves 8.4% 7.1% 6.8% 6.3% 6.2% 5.6% 5.8% 5.6% 4.7% ▪ Resiliency reserves in the Talanx Primary Group have increased since 2018 ▪ At the sam
Slide 38: Primary Group reserve levels above Hannover Re's
I II Group Financials III IV V VI VII 4 Primary Group reserve levels above Hannover Re’s Group reserve quality assessment Reserves TX/HR External best Resiliency reserves Resiliency reserves Resiliency reserves ▪ Increase in resiliency embedded in best embedded in BE embedded in BE accounting view1
Slide 39: We will regularly disclose our annual reserve quality assessments
I II Group Financials III IV V VI VII 4 We will regularly disclose our annual reserve quality assessments Communication of reserve quality ▪ Transparency regarding reserving policy ▪ Confirmation of adequacy of reserves ▪ Proof of adequate capital efficiency Q1 Q2 Q3 Q4 AGM or with Q1 figures, early
Slide 40: Key messages
I II Group Financials III IV V VI VII Key messages We show a superior profitability vs. peers Our dividend policy is stable or upwards Our reserving policy provides for reliable future returns 40 Capital Markets Day – 17 November 2021
Slide 41: Appendix
I II Group Financials III IV V VI VII Appendix 41 Capital Markets Day – 17 November 2021
Slide 42: IFRS 9 investment result more volatile mainly due to unrealized gains/losses
I II Group Financials III IV V VI VII IFRS 9 investment result more volatile mainly due to unrealized gains/losses P&L volatility arising from ECL is expected to be comparably low for Talanx, as most debt ECL risk provisioning & instruments are rated invest- Ordinary income impairments ment grade. I
Slide 43: Talanx RoE with OCI adjustment on average 1.2 percentage points higher
I II Group Financials III IV V VI VII Talanx RoE with OCI adjustment on average 1.2 percentage points higher RoE adjusted in line with many peers1 Average equity Unrealised gains Net adjusted for unrealised gains in current market environment income & losses from investments Adjustment excluding non
Slide 44: Strategy 2022 – Mid-term target matrix
I II Group Financials III IV V VI VII Strategy 2022 – Mid-term target matrix Return on equity EPS growth Dividend payout ratio 35% - 45% Targets of IFRS earnings ≥ 800bp ≥ 5% on average p.a.2 Sustainable High level of above risk-free rate1 Profitable DPS at least & attractive profitability growth st
Slide 45: Details on reserve review by Willis Towers Watson
I II Group Financials III IV V VI VII Details on reserve review by Willis Towers Watson • Willis Towers Watson was separately engaged by Talanx AG and Hannover Rück SE to review certain parts of the held loss and loss adjustment expense reserve, net of outwards reinsurance, from the consolidated fin
Slide 46: Agenda of the day
I II III Industrial Lines IV V VI VII Agenda of the day I Group Strategy Torsten Leue II Group Financials Jan Wicke III Industrial Lines Edgar Puls IV HDI Global Specialty Ulrich Wallin V Retail International Wilm Langenbach VI Retail Germany Christopher Lohmann VII Final Remarks Torsten Leue 46 Cap
Slide 47: Delivered on 20/20/20 and initiative Specialty – now path to double-digit RoE
I II III Industrial Lines IV V VI VII Delivered on "20/20/20“ and initiative Specialty – now path to double-digit RoE Our way forward Promise delivered Combined ratio Industrial Lines ▪ Double-digit RoE -11 %-pts ▪ Global specialty player 109% Turnaround ~98.5% ▪ Leading innovation (e.g. programme "
Slide 48: Our management team to reach the top
I II III Industrial Lines IV V VI VII Our management team to reach the top David Hullin Thomas Kuhnt as of 1 January 2022 CMO Region Americas & COO, CIO & Group Accident Europe (ex Germany) New Mukadder Erdönmez Andreas Luberichs New CUO Liability, Cyber & Motor CMO Region Germany Over 20 years of e
Slide 49: Turnaround delivered!
I II III Industrial Lines IV V VI VII Promise delivered Turnaround delivered! Combined ratio has … is clearly below … driven by strong decrease significantly improved… peer average… in attritional loss ratio Combined ratio Combined ratio, 2020 Attritional loss ratio 109.1% 108.5% Peer average: 111%
Slide 50: Entire portfolio restructured beyond 20/20/20 while maintaining growth
I II III Industrial Lines IV V VI VII Promise delivered Entire portfolio restructured beyond 20/20/20 while maintaining growth From 2018 to 2020… On average every contract recalibrated Property GWP, in % 55% prices increased 39% 100% 35% 20/20/20 16% p.a. GWP not renewed 25% 2018 2019 2020 2018 – 20
Slide 51: Specialty business already outperformed initial growth ambition
I II III Industrial Lines IV V VI VII Promise delivered Specialty business already outperformed initial growth ambition +15-25% 1 market +34% CAGR ~2.5 Right timing / synergies extracted GWP 1.4 (in EURbn, including fronted business) 2019 2021e Growth target exceeded +41% CAGR ~833 Technical 42 unde
Slide 52: Reduced volatility through improved reserve buffer
I II III Industrial Lines IV V VI VII Promise delivered Reduced volatility through improved reserve buffer Taking the right actions Significantly improved our results Combined ratio in % 3x 110 Volatility buffer Low volatility: increased 105 avg. CR1 <100% 2018 2019 2020 Strictly Probable Maximum Lo
Slide 53: New strategy is lifting Industrial Lines to the next level
I II III Industrial Lines IV V VI VII Our way forward New strategy is lifting Industrial Lines to the next level Deep dive 1 2 3 4 5 Global Leading Underwriting Cost Digital player specialty insurer champion leader transformation 53 Capital Markets Day – 17 November 2021
Slide 54: Ambition 2025
I II III Industrial Lines IV V VI VII Our way forward 1 Global player – Continued but accelerated global growth Germany Europe International Global 1970 1980 – 1999 1999 – 2017 ≈ 2030 Commercial Lines Core markets Growth markets Opportunistic markets Specialty GWP in EUR bn Ambition 2025 +36% +85% +
Slide 55: Leading specialty insurer – Further development of HDI Global Specialty
I II III Industrial Lines IV V VI VII Our way forward 2 Leading specialty insurer – Further development of HDI Global Specialty 2025 2022 2018 New ambitions Optimising structure Growth synergies Bundling underwriting Scaling business model expertise and distribution channels Simplifying organisation
Slide 56: Underwriting champion – A more sophisticated approach has been established
I II III Industrial Lines IV V VI VII Our way forward 3 Underwriting champion – A more sophisticated approach has been established Our mission Rate change1 Technically superior Transparent and consistent 20% underwriting execution 17% 18% Best-in-class in risk Best-in-class cycle assessment, risk se
Slide 57: Stringent portfolio management process implemented
I II III Industrial Lines IV V VI VII Our way forward 3 Stringent portfolio management process implemented Portfolio screening Continued portfolio improvement Exemplary portfolios Potentially underperforming portfolios ~8% ~7% <4% identified1 -49% GWP 2019 2020 2021e Visible decrease in high risk po
Slide 58: Cost leader – 7%pts. better than peers
I II III Industrial Lines IV V VI VII Our way forward 4 Cost leader – 7%pts. better than peers Cost ratio… … compared to our peers We are the cost leader Net cost ratio Net cost ratio, 2018‒2020 average Low administrative costs due to lean operating model Peer average: 28% 22% 21% 20% Δ7%pts. 34% ~1
Slide 59: Digital transformation efforts along three core topics are well under way
I II III Industrial Lines IV V VI VII Our way forward 5 Digital transformation efforts along three core topics are well under way Dedicated data analytics “Get bundled“ “Get skills” >80 specialists insourced New digital solution team ~20 ongoing partners projects with corporate “Get ready” Simplific
Slide 60: Dedicated to double-digit RoE by 2025
I II III Industrial Lines IV V VI VII Our way forward Dedicated to double-digit RoE by 2025 2022e Return on Equity ~8% Ambition 2025 Combined ratio ~97% RoE >10% GWP growth (versus 2021) ~8% 60 Capital Markets Day – 17 November 2021
Slide 61: Key messages
I II III Industrial Lines IV V VI VII Key messages We increased our ambition level RoE 2025 >10% We have promised and delivered We accelerate global growth – commercial & specialty 61 Capital Markets Day – 17 November 2021
Slide 62: Agenda of the day
I II III IV HDI Global Specialty V VI VII Agenda of the day I Group Strategy Torsten Leue II Group Financials Jan Wicke III Industrial Lines Edgar Puls IV HDI Global Specialty Ulrich Wallin V Retail International Wilm Langenbach VI Retail Germany Christopher Lohmann VII Final Remarks Torsten Leue 62
Slide 63: HDI Global Specialty is a true success story
I II III IV HDI Global Specialty V VI VII HDI Global Specialty is a true success story 2025 2022 2018 3 New ambitions 2 Optimise structure 1 Growth synergies Bundling underwriting Scaling business model expertise and distribution channels Simplifying organisational + + structure and focus on core ac
Slide 64: Forming a focused global specialty player
I II III IV HDI Global Specialty V VI VII Forming a focused global specialty player Players in specialty market Global specialty players Combining our strength in Specialty Global Specialty creates a global Focus specialty player pays off Specialty part of Global via Commercial as an "add-on" for mu
Slide 65: Specialty has delivered: Initial growth ambition already outperformed
I II III IV HDI Global Specialty V VI VII 1 Growth synergies Specialty has delivered: Initial growth ambition already outperformed Targets +34% CAGR ~2.5 2.0 2.1 > 1.4 Growth target 2022 GWP already exceeded (in EURbn) 2019 2020 2021e 2022 target 95.4% 99.9% ~95% ~95% 100 Combined 76 2 ~83 ratio and
Slide 66: Current focus is on streamlining group operations and reaping synergies
I II III IV HDI Global Specialty V VI VII 2 Optimising structure Current focus is on streamlining group operations and reaping synergies Change in shareholder structure Advantages of reorganisation Win-win-win situation for Talanx, Industrial Lines 50.2% 100% and Hannover Re Global (Industrial Lines
Slide 67: Specialty will become a significant contributor to Industrial Lines' profitability
I II III IV HDI Global Specialty V VI VII 2 Optimising structure Specialty will become a significant contributor to Industrial Lines‘ profitability Quota-share structure Contribution to Industrial Lines’ EBIT1 New Recap CMD 2018 structure 25% ~ 1ൗ3 57% from overall 63% 70% Specialty business Industr
Slide 68: HDI Global Specialty has a very well diversified portfolio providing future stability
I II III IV HDI Global Specialty V VI VII 2 Optimising structure HDI Global Specialty has a very well diversified portfolio providing future stability 2021e portfolio structure1 in % of GWP Regional Short vs long tail Lines of business Motor 14% London ex US Financial 9% 22% US 42% Long tail 9% Liab
Slide 69: Continued focus on strategically promising business areas
I II III IV HDI Global Specialty V VI VII 2 Optimising structure Continued focus on strategically promising business areas GWP by single risk vs. delegated authority1 Targets portfolio steering Single risk Delegated authority 1 Focus on profitable growth in single risk business 45% 42% 50% 63% 2 Ver
Slide 70: Outlook and new targets: Raising the ambitions
I II III IV HDI Global Specialty V VI VII 3 New ambitions Outlook and new targets: Raising the ambitions 2025 2022 New ambitions 2018 Scaling business model and selective growth Optimising structure Growth synergies >10% CAGR Bundling GWP1 ~3.7 underwriting (in EURbn) expertise and 2.0 distribution
Slide 71: Key messages
I II III IV HDI Global Specialty V VI VII Key messages We delivered strong growth in promising lines of business We simplify ownership structure and streamline Global operations Specialty We raise ambitions to become a truly global specialty player 71 Capital Markets Day – 17 November 2021
Slide 72: Agenda of the day
I II III IV V Retail International VI VII Agenda of the day I Group Strategy Torsten Leue II Group Financials Jan Wicke III Industrial Lines Edgar Puls IV HDI Global Specialty Ulrich Wallin V Retail International Wilm Langenbach VI Retail Germany Christopher Lohmann VII Final Remarks Torsten Leue 72
Slide 73: Top 5 position in 4 motor markets – now targeting double-digit RoE
I II III IV V Retail International VI VII Focused divisional strategies – Retail International Top 5 position in 4 motor markets – now targeting double-digit RoE Our way forward Promise delivered ▪ Double-digit RoE Motor: 4 out of 5 HINexT ▪ Top 5 in P&C in Core Top 5 2025 Markets RoE >10% 8.1% 8.2%
Slide 74: New management team in place committed to build the next chapter
I II III IV V Retail International VI VII Our management team New management team in place committed to build the next chapter Oliver Schmid CFO New Christian Müller COO Europe Proven mathematical and Nicolas Masjuan New actuarial skills with over 20 COO Latin America years of experience in Former s
Slide 75: An excellent success story since 2010 despite some economic headwinds
I II III IV V Retail International VI VII Stock take An excellent success story since 2010 despite some economic headwinds Key indicators Key strengths to build on Retail International, EBIT, in EURm +26% Financial solidity CAGR2010-20 Solid earnings & strong reserves M&A / PMI2 track record 268 266
Slide 76: Set up for growth
I II III IV V Retail International VI VII Our focus Target regions offer attractive growth potential – despite some volatility Non-Life GWP market & growth1 Real GDP growth2 Penetration (2020, EURbn, %) (CAGR 2021-25, %) (% of GDP) Poland 10.4 0.8 3.6 2.0 Set up for growth Europe Turkey 7.7 17.0 2.7
Slide 77: Our strategy – defining the next chapter for Retail International
I II III IV V Retail International VI VII Our strategy Our strategy – defining the next chapter for Retail International 1 2 Outperform Higher peers diversification >10% RoE HINexT 3 Digital 2025 M&A / 4 transformation partnerships 5 TOP 5 in core P&C markets Ambition confirmed 77 Capital Markets Da
Slide 78: Further reinforcing technical excellence
I II III IV V Retail International VI VII 1 Outperform peers Further reinforcing technical excellence Ambitions Key driver turning solid performance Solid overall into excellence technical performance Combined ratio, IFRS, consolidated Enhancement of Strengthening of portfolio management digital cla
Slide 79: Supporting profitable growth by portfolio diversification
I II III IV V Retail International VI VII 2 Higher diversification Supporting profitable growth by portfolio diversification Non-motor Life Protection Health ▪ Grow non-motor share profitably ▪ Scale up Life Protection, which ▪ Enter “non-life“ Health with by EUR 900m offers growth opportunities wit
Slide 80: Digital transformation along three core topics well under way
I II III IV V Retail International VI VII 3 Digital transformation Digital transformation along three core topics well under way Warta pricing ecosystem “Get skills” “Get bundled“ MTPL +EUR margin +17% quotes1 10m p.a. 2 Expand New partnership in Chile Digitise customer core skills reach digital cus
Slide 81: Continued discipline with focus on LatAm & Europe
I II III IV V Retail International VI VII 4 M&A / partnerships Continued discipline with focus on LatAm & Europe Recent M&A and partnership transactions Assessment criteria Italy stand-alone combined Rank # 17 # 12 Focus on growth regions ✓ Chile Improving competitive position ✓ ✓ Rank stand-alone
Slide 82: HINexT 2025 – Focus on double-digit RoE
I II III IV V Retail International VI VII Our way forward HINexT 2025 – Focus on double-digit RoE 2022e Return on Equity ~8% Ambition 2025 Combined ratio (P/C) <95% RoE >10% GWP growth >8% (non-life, currency-adjusted, vs. 2021) 82 Capital Markets Day – 17 November 2021
Slide 83: Key messages
I II III IV V Retail International VI VII Key messages We deliver RoE ambition >10% & Top 5 in P&C core markets 2025 HINexT We focus on organic and inorganic profitable growth 2025 We build a more balanced portfolio 83 Capital Markets Day – 17 November 2021
Slide 84: Agenda of the day
I II III IV V VI Retail Germany VII Agenda of the day I Group Strategy Torsten Leue II Group Financials Jan Wicke III Industrial Lines Edgar Puls IV HDI Global Specialty Ulrich Wallin V Retail International Wilm Langenbach VI Retail Germany Christopher Lohmann VII Final Remarks Torsten Leue 84 Capit
Slide 85: KuRS promise delivered – Now targeting double-digit RoE
I II III IV V VI Retail Germany VII KuRS promise delivered – Now targeting double-digit RoE Our way forward Promise delivered EBIT, in EURm ▪ Double-digit RoE ~250 ▪ Leading player for SME ≥240 Target and bancassurance 2021 KuRS ▪ Focused life business target and de-risking 3 2015 2021e + Solvency 2
Slide 86: New management committed to GO25 targets
I II III IV V VI Retail Germany VII Our team New management committed to GO25 targets Jens Warkentin CFO Sven Lixenfeld New Herbert Rogenhofer New Life P/C Highly esteemed Life and IT expert, Thoroughbred entrepreneur with former consulting partner and deep IT and P/C skills insurance board member S
Slide 87: KuRS successfully executed with focus on stabilisation
I II III IV V VI Retail Germany VII Promise delivered KuRS successfully executed with focus on stabilisation Earnings growth Key strengths to build on EBIT, in EURm P/C Strong growth in SME Life GWP +6% CAGR (2015-2021e) ~250 ~2372 ≥240 Market-leading position in bancassurance Target 203 2021 9.9% m
Slide 88: GO25 repositions Retail Germany as focused player
I II III IV V VI Retail Germany VII Our way forward GO25 repositions Retail Germany as focused player Market position RoE Peer examples Focus Efficient Peer average specialisation "stuck in the middle“ economies of scale 88 Capital Markets Day – 17 November 2021
Slide 89: Focused strategy for future success
I II III IV V VI Retail Germany VII Our way forward Focused strategy for future success Strengthen the strengths Secure profitability 1 3 Best SME Competitive insurer in retail P/C Trim the business model >10% 2 4 5 RoE Best digital Profitable bancassurer life insurer Note: RoE includes Asset Manage
Slide 90: Transform into the best insurer for SMEs
I II III IV V VI Retail Germany VII 1 Best SME insurer Transform into the best insurer for SMEs Ambition Measures SME and self-employed professionals, GWP in EURm ≤ 95% Extend strong position in broker +13% CR segment CAGR ~800 ~520 435 Expand capabilities in digitised products and services 2020 202
Slide 91: Leverage existing strength in bancassurance
I II III IV V VI Retail Germany VII 2 Best digital bancassurer Leverage existing strength in bancassurance Ambition Measures Bancassurance1, GWP in EURm +2% Enlarge market-leading portfolio CAGR with currently 15 partners2 >3,000 New ~2,900 2,730 Leverage customer base of ~70m clients Develop capabi
Slide 92: Re-shaping retail P/C to create competitive private clients insurer
I II III IV V VI Retail Germany VII 3 Competitive in retail P/C Re-shaping retail P/C to create competitive private clients insurer Ambition Measures P/C excluding SME and bancassurance, GWP in EURm +2% Put client first in solutions and CAGR service (behavioral economics) ~1,000 901 ~920 Achieve com
Slide 93: Life: Focus new business and further de-risk
I II III IV V VI Retail Germany VII 4 Profitable life insurer Life: Focus new business and further de-risk Stabilisation achieved Measures Ambition Solvency 2 ratio Life1 RoE Life Asset Management contribution 269% RoE first: Focus new business Excl. Asset Management contribution (as reported) on <1
Slide 94: Mittelstand by heart
I II III IV V VI Retail Germany VII 5 Trim the business model Change the culture to act and think like the German Mittelstand Accelerate product Improve customer development satisfaction 4-6 months Top 5 time-to-market NPS in 2025 “Mittelstand by heart” Reduce Increase costs digital synergies by ~15
Slide 95: Digital transformation along three core topics well under way
I II III IV V VI Retail Germany VII Our way forward Digital transformation along three core topics well under way Advanced data analytics “Get bundled“ “Get skills” 34 specialists insourced Digital Claims Approach Integration in all leading SME/Financing platforms Leading platform partners #1 Porsch
Slide 96: Dedicated to double-digit RoE by 2025
I II III IV V VI Retail Germany VII Our way forward Dedicated to double-digit RoE by 2025 2022e Return on Equity 7.5 - 8% Ambition 2025 Combined ratio (P/C) ~96% RoE >10% P/C +7% GWP growth (versus 2021) Life -2% Note: RoE includes Asset Management contribution; RoE without Asset Management (as repo
Slide 97: Key messages
I II III IV V VI Retail Germany VII Key messages 2025 We are committed to deliver >10% RoE by 2025 We will secure profitability in Life and in the private clients business We will become the best SME & bancassurer 97 Capital Markets Day – 17 November 2021
Slide 98: Agenda of the day
I II III IV V VI VII Final Remarks Agenda of the day I Group Strategy Torsten Leue II Group Financials Jan Wicke III Industrial Lines Edgar Puls IV HDI Global Specialty Ulrich Wallin V Retail International Wilm Langenbach VI Retail Germany Christopher Lohmann VII Final Remarks Torsten Leue 98 Capita
Slide 99: Updated outlook 2021 and new outlook 2022 for Talanx Group
I II III IV V VI VII Final Remarks Updated outlook 2021 and new outlook 2022 for Talanx Group Outlook 2021 Outlook 2022 35 – 45% DPS at Z Dividend payout EUR 1.60 per share least stable y/y Return on equity ~9.0% ~10% upper end of between EUR 1,050 Group net income EUR 900 - EUR 950m and EUR 1,150m
Slide 100: Final remarks
I II III IV V VI VII Final Remarks Final remarks We delivered what we promised We increase our dividend 2025 We boost ambition in primary insurance 100 Capital Markets Day – 17 November 2021