Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — Q3 2014 Earnings Presentation
32 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, Nov 13, 2014
Slide 1: PZU Group's financial results in the first three quarters of 2014
PZU Group’s financial results in the first three quarters of 2014 Warsaw, 13 November 2014
Slide 2: Agenda
Agenda 1 Polish insurance market in the first two quarters of 2014 2. Operating results in the first three quarters of 2014 3. Shareholder value 4. PZU 2.0 Strategy – selected elements 5. Detailed financial data 1
Slide 3: Non-life insurance market in Poland
Non-life insurance market in Poland Gross written premium non-life insurance (m PLN) ● Sales down following an upward 4.4% (2.9)% trend lasting until 2013. 13 596 13 886 13 481 12 757 11 218 ● PZU’s non-life insurance market 10 876 share at the level of 31.9% at the end of Q2. 06.2009 06.2010 06.201
Slide 4: Life insurance market in Poland
Life insurance market in Poland Regular gross written premium (m PLN) ● Return to lasting upward trend 3.3% after slight deceleration in 2013. 3.1% 7 956 7 953 8 201 ● PZU Życie’s regular premium 7 251 7 825 6 987 market share at a stable 42.8% at the end of H1 2014. ● Potential adverse impact of re
Slide 5: PZU continues to be the insurance leader in Poland
PZU continues to be the insurance leader in Poland Market share Market share non-life insurance life insurance (regular premium) ∆ Q2 2014 – Q2 2013 ∆ Q2 2014 – Q2 2013 (0.2) p.p. 4.4% (0.1) p.p. 4.2% 4.8% 0.0 p.p. 8.0% 0.3 p.p. 0.2 p.p. 5.6% 9.1% 0.1 p.p. (0.2) p.p. 5.7% 12.8% (0.9) pp 0.5 p.p. 7.7
Slide 6: Agenda
Agenda 1 Polish insurance market in the first two quarters of 2014 2. Operating results in the first three quarters of 2014 3. Shareholder value 4. PZU 2.0 Strategy – selected elements 5. Detailed financial data 5
Slide 7: High profitability and cost discipline are the outcome of strategy implementation
High profitability and cost discipline are the outcome of strategy implementation ● Persistently high profitability despite higher provisions for claims from previous years: Non-life - claims frequency down in motor insurance; - level of claims paid down in household insurance and property under SME
Slide 8: Review of the Group's financial results in the first three quarters of 2014
Review of the Group’s financial results in the first three quarters of 2014 Gross written premium (m PLN) Net profit (m PLN) 0.1% (7.3)% 12 403 12 409 2 767 2 564 09.2013 09.2014 09.2013 09.2014 Equity (bn PLN) Return on equity ROE (%)* 0.8% (1.0) p.p.. 12.7 12.8 27.4% 26.4% 09.2013 09.2014 09.2013
Slide 9: Non-life insurance
Non-life insurance Combined ratio at a low level Mass segment Corporate segment Gross written premium (m PLN) Gross written premium (m PLN) (1.4)% 4 931 4 861 (0.9)% 3 015 2 900 1 306 1 294 605 571 1 916 1 961 701 723 09.2013 09.2014 09.2013 09.2014 Combined ratio (%) Combined ratio (%) 82.6% 89.0%
Slide 10: Summary - non-life insurance
Summary - non-life insurance Mass segment Corporate segment Gross written premium y/y: Gross written premium y/y: • lower sales of motor TPL insurance driven by lower average premium • higher sales of financial insurance as a result of extending large and rate cuts introduced (ensuing from strong pr
Slide 11: Life insurance
Life insurance Higher profitability Group and Continued segment Individual segment Regular gross written premium (m PLN) Gross written premium (m PLN) 2.0% 2.1% (8.1)% 4 800 4 898 1 032 948 362 344 670 604 09.2013 09.2014 09.2013 09.2014 Single Premium Regular Premium Margin (%) 23.9% 24.9% Margin (
Slide 12: Summary – Life insurance
Summary – Life insurance Group and Continued segment Individual segment Factors contributing to higher gross written premium: Gross written premium down driven by: • expansion of the group protection portfolio and higher average • lower than last year sales of the structured product in cooperation p
Slide 13: Higher administrative expenses
Higher administrative expenses Driven by executing projects from previous years m PLN Administrative expenses* ADMINISTRATIVE EXPENSES UNDER CONTROL Other 9.5% • higher expense ratio as a percentage of premium as a (including 1 058 project 966 result of executing business investments calling for exp
Slide 14: Agenda
Agenda 1 Polish insurance market in the first two quarters of 2014 2. Operating results in the first three quarters of 2014 3. Shareholder value 4. PZU 2.0 Strategy – selected elements 5. Detailed financial data 13
Slide 15: TSR management - high return on equity
TSR management - high return on equity Evolution of PZU’s share price adjusted for dividends paid from first listing compared to selected indices 12.05.2010=100* 30.09.2014 Return from 20.00 PLN per share on an Index 28.04.2010 - interim basis from the 2013 30.09.2014 result 590.54 PLN 190,0 PZU SA
Slide 16: Agenda
Agenda 1 Polish insurance market in the first two quarters of 2014 2. Operating results in the first three quarters of 2014 3. Shareholder value 4. PZU 2.0 Strategy – selected elements 5. Detailed financial data 15
Slide 17: PZU Pomoc replacement vehicle network
PZU Pomoc replacement vehicle network Pioneer undertaking on the Polish insurance market. New nationwide partner network of replacement vehicles in PZU Pomoc, to afford certainty of smoothly receiving a safe replacement vehicle. • PZU’s partner car rental agencies located across the country will rec
Slide 18: PZU's expansion in the CEE region
PZU’s expansion in the CEE region Acquisition status of the three companies in the Baltic market and the direct insurance leader in Poland: Estonia: 1 AAS Balta • CODAN 12.2% ● 21% market share in Latvia, gross written premium roughly 200 m PLN per annum • PZU Branch Estonia 2.0% ● Acquisition trans
Slide 19: Agenda
Agenda 1 Polish insurance market in the first two quarters of 2014 2. Operating results in the first three quarters of 2014 3. Shareholder value 4. PZU 2.0 Strategy – selected elements 5. Detailed financial data 18
Slide 20: Detailed financial data
Slide 21: PZU Group's key financial highlights
PZU Group’s key financial highlights Q1-Q3 Q1-Q3 Change Q3 2014 Change Q3 2014 m PLN, IFRS Change YoY Q3 2013 Q3 2014 Q2 2014 2013 2014 over Q3 2013 over Q2 2014 Profit and Loss Statement Gross Written Premium 12 403 12 409 0.1% 3 907 3 971 1.6% 4 084 (2.8)% Premium Earned 12 240 12 143 (0.8)% 4 063
Slide 22: Segment results
Segment results Year to date , m PLN Gross written premium 4 931 4 861 4 801 4 898 (according to local GAAP) 1 306 1 294 1 032 948 974 330 143 123 194 288 POLAND NON-LIFE INTERNATIONAL NON- POLAND LIFE INSURANCE POLAND - OTHER INSURANCE LIFE AND LIFE INSURANCE Group and Corporate Mass-market individ
Slide 23: Profitability by insurance segment
Profitability by insurance segment Combined Ratio / Insurance Business Segments Gross Written Premium Operating Profit Operating profit ratio* m PLN, local GAAP Q1-Q3 2013 Q1-Q3 2014 Change YoY Q1-Q3 2013 Q1-Q3 2014 Change YoY Q1-Q3 2013 Q1-Q3 2014 Total Non-Life - Poland 6 237 6 155 (1.3)% 1 456 1
Slide 24: Normalized operating profit
Normalized operating profit Year to date m PLN, IFRS Q1-Q3 2013 Q1-Q3 2014 Operating Profit (according to financial 3 502.2 3 349.6 Impact exerted by converting long-term contracts into statements) 1 yearly-renewable term insurance contracts according to including: IFRS. 1 2 Income under the settlem
Slide 25: Profitability of the mass insurance segment (non-life insurance)
Profitability of the mass insurance segment (non-life insurance) Segment profitability mass insurance Combined ratio (COR - %) • Higher loss ratio driven by: o claims incurred in Motor TPL being up as a result of average claim growth and a larger provision for claims from previous years; COR 09.2013
Slide 26: Profitability of the corporate insurance segment (non-life insurance)
Profitability of the corporate insurance segment (non-life insurance) Segment profitability corporate insurance Combined ratio (COR - %) • Higher loss ratio driven by: o lower earned premium in motor insurance (lower rates of fleet and lease insurance) coupled with slight growth in claims paid compa
Slide 27: Group and continued insurance segment (life insurance)
Group and continued insurance segment (life insurance) Main components of operating profit in the group and continued insurance segment (m PLN) • Gross written premium up 2.0% y/y primarily following incremental growth in Change Gross Operating Profit 09.2013 1 249 year-on-year the risk portfolio in
Slide 28: Individual insurance segment (life insurance)
Individual insurance segment (life insurance) Main components of operating profit in the individual insurance segment (m PLN) • Gross written premium down by 8.1% y/y mostly driven by lower sales of Gross Operating Profit 09.2013 Change investment products in the bancassurance channel. 106 year-on-y
Slide 29: Investments
Investments Falling interest rates m PLN Equity instruments and Total investment income derivatives Interest-bearing financial 09.2014 investment composition* assets*** 16.3% 2.6% 0.1% 41.6% Total: 5.6% 54.7 bn PLN 6.3% 2 163 (42.4)% 1 947 10.0% 1 861 1 375 264 458 12.7% 62.7% 01-09.2013 01-09.2014
Slide 30: Investments
Investments Falling interest rates Year to date Result on investing activities (total m PLN) Result on investing activity in the PZU Group’s main portfolio (m PLN) Including the non-recurring effect of funds consolidation +172.7 m PLN 2 163 1 861 1 943 1 708 01-09.2013 01-09.2014 01-09.2013 01-09.20
Slide 31: Strong capitalization and high solvency ratios
Strong capitalization and high solvency ratios Year to date PZU’s own funds and solvency margin PZU Życie’s own funds and solvency margin coverage ratio (m PLN, Polish GAAP) coverage ratio (m PLN, Polish GAAP) 668.9% 633.1% 214.4% 243.8% 9 122.0 8 632.8 3 791.9 4 330.5 09.2013 09.2014 09.2013 09.201
Slide 32: Questions and answers
Questions and answers Contact data: PZU Al. Jana Pawła II 24 00-133 Warsaw, Poland Planning and Controlling Department Piotr Wiśniewski – Manager of the Investor Relations Section Tel.: (+48 22) 582 26 23 ir@pzu.pl www.pzu.pl/ir Spokesman Michał Witkowski Tel.: (+48 22) 582 58 07 rzecznik@pzu.pl 31
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