Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — Q1 2015 Earnings Presentation
35 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, May 13, 2015
Slide 1: PZU Group's Q1 2015 financial results
Warsaw Riga Vilnius Kiev PZU Group’s Q1 2015 financial results Warsaw, 13 May 2015
Slide 2: Agenda
Agenda 1. Polish insurance market in the four quarters of 2014 2. Operating results in Q1 2015 3. Shareholder value 4. Implementation of the PZU 3.0 strategy 5. Detailed financials 1
Slide 3: Non-life insurance market in Poland
Non-life insurance market in Poland Gross written premium in non-life insurance (m PLN) 4.5% ● Sales contraction following growth 26 603 (1.3)% trend lasting until 2013 as the 26 250 26 253 25 291 outcome of fierce price 21 059 22 739 competition ● Clear upward trend in PZU’s share in the non-life i
Slide 4: Life insurance market in Poland
Life insurance market in Poland Gross written premium on regular business (m PLN) 3.9% ● PZU Życie’s regular premium 2.8% market share stable at 42.8% at 15 806 16 037 16 488 the end of Q4 2014. 14 759 15 040 13 621 ● Another year of decline in total gross written premium on the life insurance marke
Slide 5: PZU maintains its leadership position in insurance in Poland
PZU maintains its leadership position in insurance in Poland Non-life insurance Life insurance market share market share (regular premium) ∆ Q4 2014 – Q4 2013 ∆ Q4 2014 – Q4 2013 (0.1) p.p. 4.5% 0.1 p.p. 4.1% 4.7% (0.1) p.p. 7.9% 0.1 p.p. 5.8% 0.0 p.p. 8.9% (0.1) p.p. 5.8% (0.0) p.p. 13.1% (0.8) p.p
Slide 6: Agenda
Agenda 1. Polish insurance market in the four quarters of 2014 2. Operating results in Q1 2015 3. Shareholder value 4. Implementation of the PZU 3.0 Strategy 5. Detailed financials 5
Slide 7: High results on investment activity and implementation of 3.0 Strategy
High results on investment activity and implementation of 3.0 Strategy ● Persistently high profitability despite the higher loss ratio in the motor insurance portfolio: - lower level of claims and benefits in general TPL insurance and financial risks; Non-life - fierce price competition continues to
Slide 8: Review of the Group's financial results
Review of the Group’s 2014 financial results Gross written premium (m PLN) Net profit (m PLN) 7.5% 23.8% 4 354 4 681 760 941 03.2014 03.2015 03.2014 03.2015 Equity (bn PLN) Return on equity (ROE) (%)* 1.4% 5.1 p.p. 13.9 14.1 27.6% 22.5% 03.2014 03.2015 03.2014 03.2015 7 x% - change year on year * An
Slide 9: Non-life insurance
Non-life insurance Lower profitability of motor insurance Mass segment Corporate segment Gross written premium (m PLN) Gross written premium (m PLN) 8.6% 1 949 (15.2)% 1 796 including 1 066 Link4 - 90 985 including 486 412 Link4 - 32 including 884 190 201 Link4 - 4 811 296 212 including Link4 - 6 03
Slide 10: Summary - non-life insurance
Summary - non-life insurance Mass segment Corporate segment Gross written premium yoy: Gross written premium yoy: • Higher gross written premium in motor insurance, mainly as a result of • climbing sales of motor insurance, mainly MOD as a result of the the acquisition of Link4 which has contributed
Slide 11: Life insurance
Life insurance Lower profitability Group and continued insurance segment Individual insurance segment Gross written premium (m PLN) Gross written premium (m PLN) 2.0% 1.9% 4.0% 1 631 1 661 326 339 114 131 212 208 03.2014 03.2015 03.2014 03.2015 Single Premium Regular Premium Margin (%)(a) Margin (%)
Slide 12: Summary – life insurance
Summary – life insurance Group and continued Individual Drivers of higher gross written premium: Gross written premium expansion resulting from the following: • expansion of the group protection insurance portfolio and rising • record-breaking subscription of a structured product in the dedicated av
Slide 13: International business
International business Non-life insurance Life insurance Non-life insurance Life insurance Gross written premium (m PLN) Gross written premium (m PLN) 221.7% (16.5)% 308 37 Estonia 73 Latvia 96 118 Lithuania (LD) 4 8 PZU Lithuania * 56 53 20 17 Lithuania 27 28 Ukraine 8 10 12 Ukraine 03.2014 03.2015
Slide 14: Summary – international business
Summary – international business Gross written premium Operating results Non-life insurance Non-life insurance • Gross written premium has grown on the contribution made by the • Combined ratio decline: newly-acquired companies: • loss ratio (61.1%) - up 0.7 p.p. due to the Baltic states segment • L
Slide 15: Higher administrative expenses
Higher administrative expenses Outcome of executing projects m PLN PZU Group’s administrative expenses The following factors contributed to the increase in administrative 22.1% expenses year on year: Others 408 (including • rising administrative costs related to implementing the strategy to 334 58 N
Slide 16: Agenda
Agenda 1. Polish insurance market in the four quarters of 2014 2. Operating results in Q1 2015 3. Shareholder value 4. Implementation of the PZU 3.0 Strategy 5. Detailed financials 15
Slide 17: Managing TSR - high return on equity
Managing TSR - high return on equity Growth rate of PZU’s share price adjusted for dividends paid out from its first listing compared to selected indices 12 May 2010 = 100* 34.00 PLN / share for 2013 (on top Return from of the interim dividend paid in 2013) Index 12.05.2010 - 31.03.2015 31.03.2015 P
Slide 18: Agenda
Agenda 1. Polish insurance market in the four quarters of 2014 2. Operating results in Q1 2015 3. Shareholder value 4. Implementation of the PZU 3.0 Strategy 5. Detailed financials 17
Slide 19: Strategy 3.0 execution in numbers
Strategy 3.0 execution in numbers #1 in Poland #1 in Lithuania and Latvia insurance activity following acquisitions in 2014 non-life market share in Poland (gross written premium in the four quarters of 2014) 33.1% 28.5% 24.3% life insurance market share in Poland non-life market share non-life mark
Slide 20: Agenda
Agenda 1. Polish insurance market in the four quarters of 2014 2. Operating results in Q1 2015 3. Shareholder value 4. Implementation of the PZU 3.0 Strategy 5. Detailed financials 19
Slide 21: Detailed financials
Slide 22: PZU Group's key financial highlights
PZU Group’s key financial highlights Change Q1 2015 m PLN, IFRS Q1 2014 Q1 2015 Change YoY Q4 2014 over Q4 2014 Profit and Loss Statement Gross Written Premium 4 354 4 681 7.5% 4 476 4.6% Premium Earned 3 990 4 307 8.0% 4 286 0.5% Investment Result 543 951 75.3% 570 66.8% Operating Profit 1 012 1 09
Slide 23: Segment results
Segment results m PLN Gross written premium 1 949 1 796 1 661 (according to 1 631 local GAAP) 486 412 326 339 167 43 290 39 35 77 POLAND – NON-LIFE INTERNATIONAL – LIFE POLAND – LIFE INSURANCE POLAND - OTHER INSURANCE AND NON-LIFE SEGMENTS Corporate client Mass client Group and continued Individual
Slide 24: 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 2014 Q1 2015 Change YoY Q1 2014 Q1 2015 Change YoY Q1 2014 Q1 2015 Total Non-Life - Poland 2 282 2 362 3.5% 470 404 (14.1)% 80.9% 83.2%
Slide 25: Normalized operating profit
Normalized operating profit YTD, m PLN m PLN, IFRS 03.2014 03.2015 Operating Profit (according to financial 1 Impact exerted by conversion of long-term policies into 1 011.7 1 094.0 statements) yearly renewable term agreements in type P group including: insurance. 1 Conversion effect 29.2 23.4 24
Slide 26: Profitability of the mass segment (non-life insurance)
Profitability of the mass segment (non-life insurance) Profitability of the mass segment Combined ratio (COR - %) • Loss ratio growth driven by the following: • claims and benefits in motor insurance up (+11.8%, net of Link4 +2.9%), COR 03.2014 81.3% mainly as a result of average claim value growth;
Slide 27: Profitability of the corporate insurance segment (non-life insurance)
Profitability of the corporate insurance segment (non-life insurance) Profitability corporate insurance Combined ratio (COR - %) • Loss ratio contraction due to the following: • declining claims and benefits in insurance against claims caused by forces of nature (fewer high unit value claims) and in
Slide 28: Group and continued insurance segment (life insurance)
Group and continued insurance segment (life insurance) Fundamental components of operating profit in the group and continued insurance segment (m PLN) • Gross written premium up by 1.9% yoy mostly due to incremental growth in Gross Operating Profit Q1 '14 385 Change year on year the portfolio of ris
Slide 29: Individual insurance segment (life insurance)
Individual insurance segment (life insurance) Fundamental components of operating profit in the individual insurance segment (m PLN) • Gross written premium climbed 4.0% yoy primarily as an effect of rising sales Gross Operating Profit Q1 '14 38 Change of structured products in our own network, high
Slide 30: Profitability of international companies (non-life insurance)
Profitability of international companies (non-life insurance) Profitability of international companies Combined ratio (COR - %) • Loss ratio growth due to the higher loss ratio in the newly-acquired Baltic companies. COR 03.2014 105.2% • Administrative expense ratio down driven mostly by lower expen
Slide 31: Investments
Investments Great results achieved on equities and derivatives m PLN Net investment result Equities and derivatives* Interest-bearing financial assets* 03.2015 Investment composition** 75.3% 4.2% Total: 6.3% 54.3 bn PLN 3.6% 335.1% 7.3% 951 6.1% 543 466 499 107 481 11.3% 64.8% 01-03 2014 01-03 2015
Slide 32: Investments
Investments Great results achieved on equities and derivatives m PLN Net investment result Net investment result on the PZU Group’s main portfolio 951 759 543 476 01-03 2014 01-03 2015 01-03 2014 01-03 2015 Net investment result 03.2015 Investment products*: 6.4 on investment products* bn PLN No imp
Slide 33: Robust capitalization and high solvency ratios
Robust capitalization and high solvency ratios YTD m PLN 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) 766.2% 650.9% 258.1% 233.9% 10 356.0 8 796.6 4 556.8 4 194.8 03.2014 03.2015 03.2014 03.2015
Slide 34: Questions and answers
Questions and answers Contact data: PZU Al. Jana Pawła II 24 00-133 Warsaw, Poland Planning and Controlling Department Piotr W iśniew ski – M anager, Investor R elations Team Tel.: (+48 22) 582 26 23 ir@pzu.pl www.pzu.pl/ir Spokesman M ichał W itkow ski, tel.: (+48 22) 582 58 07 rzecznik@pzu.pl 33
Slide 35: Disclaimer
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. This Presentation contains forward-looking statements concerning the 3.0 Strategy pu
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