Vienna Insurance Group AG · VIE:VIG

Vienna Insurance — H1 2018 Earnings Presentation

51 slides from Vienna Insurance's earnings presentation, September 2018

  1. Slide 1: Investor Presentation Half-year results 2018

    VIENNA INSURANCE GROUP Investor Presentation Half-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 About 50% of premiums coming from CEE 25,000 employees 55% of profits coming from CEE Since Current market capitalization S&P Rating 1994 contin

  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 24.4% 10 Czech Rep. 1 1 1 32.6% 4 Slovakia 1 2 1 33.4% 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 2018 - 2022 Gap in GDP growth in purchasing parities CEE vs. EU-15 Forecast CAGR 8% 2018-2022 real GDP 6% 3.2% (CEE) vs. 1.6% (EU-15) 4% 2% 0% -2% 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 -4% real GDP growth PP

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

    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. 2018-2022 Insurance density 2016, in EUR (premiums per capita) Austria 1.5 Austria 1,955.0 Czech Republic 2.3 Czech Republic 504

  7. Slide 7: Agenda 2020: Creating added value by increasing operating performance

    AGENDA 2020: CREATING ADDED VALUE BY INCREASING OPERATING PERFORMANCE Medium-term target: combined ratio sustainably at level of 95% Optimisation of business model Ongoing activities  Shared Services Mergers in AT, CZ, SK, HU and HR Creating cost benefits by merging back-office VIG merged the forme

  8. Slide 8: Agenda 2020: Specific initiatives to contribute to future success

    AGENDA 2020: SPECIFIC INITIATIVES TO CONTRIBUTE TO FUTURE SUCCESS Main focus is on digital transformation of the Group Ensuring future growth Ongoing activities Focus on health insurance and expansion of reinsurance activities  Use of growth potentials Health premiums in the target markets of Polan

  9. Slide 9: Strategy & Agenda 2020 / Key Developments / Results 6M 2018

    STRATEGY & AGENDA 2020 KEY DEVELOPMENTS RESULTS 6M 2018 SEGMENTS APPENDIX 9 VIG VIENNA INSURANCE GROUP

  10. Slide 10: Key developments in the first half-year of 2018

    KEY DEVELOPMENTS IN THE FIRST HALF-YEAR OF 2018 Overview VIG well on track in implementing Agenda 2020 initiatives Erste  Mutual distribution agreement with Erste Group Acquisitions  Poland Group extended until 2033 Acquisition of Gothaer cooperation  Bosnia and Herzegovina Acquisition of Merkur

  11. Slide 11: VIG purchases Gothaer Insurance Company in Poland

    VIG PURCHASES GOTHAER INSURANCE COMPANY IN POLAND Another decisive step towards achieving the goal of a market share of at least 10% in Poland Key facts Portfolio split 2017*  More than 632,000 customers Other 14%  Around 2 million insurance policies Personal Motor  530 employees 9% 59%  Strong

  12. Slide 12: VIG is included in two sustainability indices

    VIG IS INCLUDED IN TWO SUSTAINABILITY INDICES Sustainability forms an integral part of the Group’s corporate DNA Austria’s first sustainability index. It is comprised of listed Austrian companies that are leaders in terms of social and environmental performance. VIG shares have been included in this

  13. Slide 13: S&P rating confirmed in August 2018: A+/stable outlook

    S&P RATING CONFIRMED IN AUGUST 2018: A+/STABLE OUTLOOK VIG remains best-rated company in the ATX Business Risk Profile Financial Risk Profile  “…VIG has a strong competitive position,  “Based on the analysis of our risk-based capital mainly reflecting the group's market leading model, we assess VI

  14. Slide 14: Results 6M 2018

    STRATEGY & AGENDA 2020 KEY DEVELOPMENTS RESULTS 6M 2018 SEGMENTS APPENDIX 14 VIG VIENNA INSURANCE GROUP

  15. Slide 15: Highlights

    HIGHLIGHTS Strong operating performance in the first half-year of 2018 despite impairment of goodwill in Romania Gross written premium Profit before taxes € 5,150.3mn € 232.7mn GWP up 3.6% compared to 6M 2017 PBT increased by 5.5%  Current premium business: +5.7%  CEE profit growth impacted by €50

  16. Slide 16: Gross written premiums of €5.2bn up 3.6%

    GROSS WRITTEN PREMIUMS OF €5.2bn UP 3.6% Overview by segments Gross written premiums (€mn; y-o-y chg.)  Premium growth in all segments  Adjusted for life single-premium business, overall premium growth of 5.7% +0.1%  CZ: Premium growth driven by life regular premium business (+€27mn) and other +7

  17. Slide 17: Excellent premium development, apart from planned reduction of life single premium

    EXCELLENT PREMIUM DEVELOPMENT, APART FROM ONGOING PLANNED REDUCTION OF LIFE SINGLE PREMIUM BUSINESS Gross written premiums by lines of business (€mn; y-o-y chg.); incl. Central Functions MTPL Casco Other property Total premiums +3.6% 6M 2017 717 555 2,246 5,150 +7.9% +9.0% +6.3% 4,972 773 MTPL 717 6

  18. Slide 18: Group profit before taxes of €232.7mn up 5.5%

    GROUP PROFIT BEFORE TAXES OF €232.7mn UP 5.5% Overview by segments Result before taxes (€mn; y-o-y change)  CZ: Profit growth driven by CoR improvement and better financial result  RO: impairment test during the period triggered by changing market environment; review of planning data and conservat

  19. Slide 19: Combined ratio (P&C) improved to 96.3%

    COMBINED RATIO (P&C) IMPROVED TO 96.3% Positive development driven by improved claims ratio in AT, CZ and PL P&C Combined Ratio development Overview by segments (6M y-o-y development net, %)  CZ: improved cost and claims ratio -0.5%p +3.4%p -0.6%p -3.3%p -1.8%p -0.7%p  SK: CoR increase driven by c

  20. Slide 20: Solvency ratio of 222% as of 30 June 2018

    SOLVENCY RATIO OF 222% AS OF 30 JUNE 2018 Calculation based on Partial Internal Model (PIM) in €mn 222% 220% 6M 2018  Solvency ratio of Vienna Insurance Group at 222% YE 2017  Results include volatility adjustment 7,764 7,659  Solvency target range 170% - 230% 3,525 3,452 Solvency II SCR Solvency

  21. Slide 21: Outlook 2020 and targets for 2018 unchanged

    OUTLOOK 2020 AND TARGETS FOR 2018 UNCHANGED Despite a more cautious stance towards Romania, VIG maintains its guidance Gross written premium Profit before taxes Combined Ratio > € 10bn € 500mn - € 520mn 95% Based on the positive macroeconomic In line with continuous premium growth, VIG VIG will furt

  22. Slide 22: Segments

    STRATEGY & AGENDA 2020 KEY DEVELOPMENTS RESULTS 6M 2018 SEGMENTS APPENDIX 22 VIG VIENNA INSURANCE GROUP

  23. Slide 23: Austria

    AUSTRIA Merger of Wiener Städtische and S-Versicherung progressing according to plan GWP development (€mn) €mn 6M 2018 6M 2017 +/- % +0.1% Gross premiums written 2,170.0 2,167.0 0.1  Except for life, premium growth in all lines 2,167 2,170 Net earned premiums 1,611.5 1,609.6 0.1 of business; adjust

  24. Slide 24: Czech Republic

    CZECH REPUBLIC Strong premium and profit growth GWP development (€mn) €mn 6M 2018 6M 2017 +/- % +7.2% Gross premiums written 881.7 822.2 7.2  Premium growth driven by life regular 882 Net earned premiums 641.1 593.3 8.0 premium business (+€27mn) and other Financial result1 56.5 48.2 17.3 property (

  25. Slide 25: Slovakia

    SLOVAKIA Premiums up 4.3% adjusted for life single premium business GWP development (€mn) €mn 6M 2018 6M 2017 +/- % +0.7% Gross premiums written 401.8 399.2 0.7  Premium increase in all lines of business, 399 402 Net earned premiums 323.6 322.9 0.2 except for life single premium business Financial

  26. Slide 26: Poland

    POLAND Double-digit premium growth in non-life and health GWP development (€mn) €mn 6M 2018 6M 2017 +/- % +2.3% Gross premiums written 455.2 445.0 2.3  Premium growth driven by motor lines of 455 Net earned premiums 338.1 358.1 -5.6 business (+€37mn) and other property 445 (+€22mn) more than offset

  27. Slide 27: Romania

    ROMANIA Goodwill impairment of €50.1mn in Q2 2018 GWP development (€mn) €mn 6M 2018 6M 2017 +/- % +5.5% Gross premiums written 272.7 258.5 5.5  Impairment test during the period triggered 273 Net earned premiums 194.0 188.9 2.7 by changing market environment; review 258 Financial result 6.3 6.6 -4.

  28. Slide 28: Baltic states

    BALTIC STATES Break-even reached in the first half-year 2018 GWP development (€mn) €mn 6M 2018 6M 2017 +/- % +18.8% Gross premiums written 193.2 162.7 18.8  Strong premium growth in all lines of 193 Net earned premiums 132.1 120.9 9.3 business Financial result 2.7 3.0 -10.9 Other income 0.5 0.5 0.9

  29. Slide 29: Hungary

    HUNGARY Positive top- and bottom-line development GWP development (€mn) €mn 6M 2018 6M 2017 +/- % +2.0% Gross premiums written 125.6 123.1 2.0  Premium growth driven by MTPL and 126 Net earned premiums 85.8 78.6 9.1 health business 123 Financial result 3.3 3.2 3.9 MTPL 13 15 Other income 3.5 0.9 >1

  30. Slide 30: Bulgaria

    BULGARIA Strong top-line growth GWP development (€mn) €mn 6M 2018 6M 2017 +/- % +5.8% Gross premiums written 87.3 82.5 5.8  Premium increase driven by Casco 87 Net earned premiums 64.4 56.0 14.9 83 Financial result 5.1 5.5 -6.6  Result before taxes nearly at same level 11 as last year 11 Other inc

  31. Slide 31: Turkey/Georgia

    TURKEY/GEORGIA Developments driven by FX situation in Turkey GWP development (€mn) €mn 6M 2018 6M 2017 +/- % +2.1% Gross premiums written 116.5 114.1 2.1  Premiums as well as the result mainly 117 Net earned premiums 47.5 50.9 -6.7 impacted by TRY FX effects 114 Financial result 3.3 4.4 -23.6 23 Ot

  32. Slide 32: Remaining CEE

    REMAINING CEE Strong performance in the first half-year 2018 GWP development (€mn) €mn 6M 2018 6M 2017 +/- % +2.3% Gross premiums written 185.1 181.0 2.3  Remaining CEE includes Albania (incl. 185 Net earned premiums 133.4 121.8 9.5 Kosovo), Bosnia & Herzegovina, Croatia, 181 Macedonia, Moldova, Se

  33. Slide 33: Other markets

    OTHER MARKETS Germany and Liechtenstein GWP development (€mn) €mn 6M 2018 6M 2017 +/- % +8.6% Gross premiums written 149.7 137.9 8.6  Premium increase driven by other property 150 Net earned premiums 126.5 115.3 9.7 in Germany and life single premium Financial result 10.1 10.9 -7.1 business in Liec

  34. Slide 34: Central functions

    CENTRAL FUNCTIONS Substantial improvement driven by financial result and other expenses GWP development (€mn) €mn 6M 2018 6M 2017 +/- % +11.0% Gross premiums written 819.7 738.2 11.0  Central Functions include VIG Holding, 820 Net earned premiums 653.2 600.1 8.9 VIG Re, VIG Fund, the non-profit Fin

  35. Slide 35: Appendix

    STRATEGY & AGENDA 2020 KEY DEVELOPMENTS RESULTS 6M 2018 SEGMENTS APPENDIX 35 VIG VIENNA INSURANCE GROUP

  36. Slide 36: 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

  37. Slide 37: 6M 2018 key financials

    6M 2018 KEY FINANCIALS Overview of KPIs Net result for the period after taxes and non-controlling interest (€mn) ROE after tax and minorities (%) 288 298 7.3 7.2 7.2 6.4 147 137 2016 2017 6M 17 6M 18 2016 2017 6M 17 6M 18 EPS1 (€) Book value per share (€) 2.23 2.20 35.66 37.75 36.04 36.59 2.16 2.04

  38. Slide 38: Dividend per share at €0.90 for the business year 2017

    DIVIDEND PER SHARE AT €0.90 FOR THE BUSINESS YEAR 2017 Earnings per share up 3.2%; payout ratio increased to 38.7% EPS (€) Dividend per share (€) Payout ratio (%) 2.16 2.23 38.7 UNCHANGED DIVIDEND POLICY 35.6  Distribution of at least 30% of Group net profits after minorities 0.90 0.80  Dividend p

  39. Slide 39: 6M 2018 income statement

    6M 2018 INCOME STATEMENT Strong operating performance despite impairment in Romania GWP development (€mn) €mn 6M 2018 6M 2017 +/- % Gross premiums written 5,150.3 4,972.4 3.6  Premiums increased by 3.6%; +3.6% adjusted for life single premium Net earned premiums 4,354.9 4,219.0 3.2 5,150 Financial

  40. Slide 40: Q2 2018 income statement

    Q2 2018 INCOME STATEMENT IFRS (€mn) €mn Q2 2018 Q2 2017 +/- % Gross premiums written 2,324.2 2,252.9 3.2  Premiums up by 3.2% due to positive development of other Net earned premiums 2,151.8 2,066.2 4.1 property and motor Financial result1 272.9 240.6 13.4 Other income 33.1 30.3 9.2  Financial res

  41. Slide 41: 6M 2018 balance sheet

    6M 2018 BALANCE SHEET IFRS (€mn) €mn 30.06.2018 31.12.2017 +/- % Intangible assets 1,895 1,971 -3.8 Investments 36,193 35,933 0.7 Unit- and index-linked investments 8,742 9,061 -3.5 Reinsurers’ share in underwriting provisions 1,134 1,066 6.3 Receivables 1,666 1,476 12.9 Tax receivables and advance

  42. Slide 42: Investment split and bond portfolio overview

    INVESTMENT SPLIT AND BOND PORTFOLIO OVERVIEW Bond portfolio split by rating expected to change in Q3 due to rating upgrade of CZ 6M 2018: Total €37.4bn Bond portfolio by rating1 4.3% 1.1% 6.2% AAA AA A BBB Other 6M 2018 10% 23% 46% 16% 5% 6.7% 12M 2017 10% 22% 45% 17% 5% 5.8% 66.1% Bond portfolio by

  43. Slide 43: Financial result increased by 4.7%

    FINANCIAL RESULT INCREASED BY 4.7% Current income and income from disposal of investments incl. at equity consolidated companies Total 6M 6M Income +/- % 2018 2017 Current income 668,209 667,002 0.2  Financial result up by €22.9mn incl. at equity consolidated companies Income from appreciations 7,0

  44. Slide 44: 6M 2018 premiums by business lines and country (I)

    6M 2018 PREMIUMS BY BUSINESS LINES AND COUNTRY (I) IFRS (€mn) MTPL Casco Other property 6M 2018 6M 2017 +/- % 6M 2018 6M 2017 +/- % 6M 2018 6M 2017 +/- % Austria 188.1 183.0 2.8 162.5 157.9 2.9 822.1 809.9 1.5 Czech Republic 149.4 141.8 5.3 123.5 116.3 6.2 264.4 242.7 8.9 Slovakia 79.5 75.7 5.0 55.0

  45. Slide 45: 6M 2018 premiums by business lines and country (II)

    6M 2018 PREMIUMS BY BUSINESS LINES AND COUNTRY (II) IFRS (€mn) Life regular Life single Health 6M 2018 6M 2017 +/- % 6M 2018 6M 2017 +/- % 6M 2018 6M 2017 +/- % Austria 643.5 647.8 -0.7 144.3 166.6 -13.4 209.6 201.7 3.9 Czech Republic 305.8 279.0 9.6 31.6 35.9 -11.9 6.9 6.5 5.8 Slovakia 85.5 83.4 2.

  46. Slide 46: 6M 2018 country overview GWP / PBT / combined ratio

    6M 2018 COUNTRY OVERVIEW GWP / PBT / COMBINED RATIO IFRS (€mn) GWP Total Result before taxes Combined Ratio net 6M 2018 6M 2017 +/- % 6M 2018 6M 2017 +/- % 6M 2018 6M 2017 +/- %p Austria 2,170.0 2,167.0 0.1 76.7 77.5 -1.1 95.3% 95.8% -0.5 Czech Republic 881.7 822.2 7.2 84.9 76.6 10.8 94.6% 96.5% -1.

  47. Slide 47: 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

  48. Slide 48: 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) 48 APPENDIX VIG VIENNA INSURANCE

  49. Slide 49: Appendix

    49 APPENDIX VIG VIENNA INSURANCE GROUP

  50. Slide 50: Contact details / financial calendar

    CONTACT DETAILS / FINANCIAL CALENDAR Investor Relations / investor.relations@vig.com / www.vig.com Nina Higatzberger-Schwarz Sylvia Machherndl Financial calendar 2018/2019* Head of Investor Relations Team Leader Corporate Reporting Date Event Tel. +43 (0)50 390 – 21920 Tel. +43 (0) 50 390 – 21151 28

  51. Slide 51: 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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