Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — FY2017 Earnings Presentation
53 slides from Vienna Insurance's earnings presentation, Apr 18, 2018
Slide 1: Investor Presentation Full-year results 2017
VIENNA INSURANCE GROUP Investor Presentation Full-year results 2017
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 55% of premiums coming from CEE 25,000 employees 57% of profits coming from CEE Since Current market capitalization S&P Rating 1994 contin
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
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 2 2018: 25 markets Client/talent base: Country Market position Market share total 180mn people Austria 1 1 1 23.0% 10 Czech Rep. 1 2 1 32.3% 4 Slovakia 1 2 1 34.0% Poland 4 4 5
Slide 5: CEE region growing stronger than EU15
CEE REGION GROWING STRONGER THAN EU15 Promising GDP per capita growth 2018 - 2022 Gap in GDP growth in purchasing parities CEE vs. EU15 Forecast CAGR 8% 2018-2022 real GDP 6% 3.2% (CEE) vs. 1.6% (EU15) 4% 2% 0% -2% 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 -4% real GDP growth PPP (
Slide 6: Positive economic environment and strong growth potential going forward
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
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 Activities 2017 Mergers in AT, CZ, SK, HU and HR Shared Services VIG will merge the former insurance operations acquired in 2008 from
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 Activities 2017 Focus on health insurance and expansion of reinsurance activities Use of growth potentials Health premiums in the target markets of Poland,
Slide 9: Results 12M 2017
STRATEGY & AGENDA 2020 RESULTS 12M 2017 SEGMENTS APPENDIX 9 VIG VIENNA INSURANCE GROUP
Slide 10: Key facts 2017
KEY FACTS 2017 Strong full-year results with improvements in all key ratios Gross written premium Profit before taxes Combined Ratio € 9,386.0mn € 442.5mn 96.7% GWP up 3.7% y-o-y PBT increased by 8.8% y-o-y Down from 97.3% in 2016 Current premium business: +6.2% CEE profit growth of 17.7% y-o-y;
Slide 11: Gross written premiums of €9.4bn up 3.7%
GROSS WRITTEN PREMIUMS OF €9.4bn UP 3.7% Overview by segments Gross written premiums (€mn; y-o-y- chg.) Current premium business up 6.2% Premium growth in CEE 9.4% with strong contribution from PL, SK, HU and BG AT: Decrease driven by reduced single premium business (-€135mn) -2.4% RO: Devel
Slide 12: Dynamic premium development
DYNAMIC PREMIUM DEVELOPMENT Gross written premiums by lines of business (€mn; y-o-y chg.); incl. Central Functions MTPL Casco Other property Total premiums +3.7% 2016 1,300 959 3,752 9,386 9,051 +5.8% +12.2% +5.9% MTPL 1,300 1,375 2017 1,375 1,076 3,973 1,076 Casco 959 Other Property 3,752 3,973 Hea
Slide 13: Group profit before taxes of €442.5mn
GROUP PROFIT BEFORE TAXES OF €442.5mn Overview by segments Result before taxes (€mn; y-o-y change) CEE profit growth of 17.7% AT: Profit decline due to positive one-off in the financial result 2016 CZ: Slight decrease driven by CoR deterioration in P&C -10.4% PL: Positive development in moto
Slide 14: Combined ratio (P&C) improved to 96.7%
COMBINED RATIO (P&C) IMPROVED TO 96.7% …despite substantial weather-related claims (incl. storm Herwart with ~€30mn net impact) P&C Combined Ratio development Overview by segments (12M y-o-y development net, %) -36.4%p AT: improved claims ratio outweighs slight cost ratio increase +7.0%p -1.5%p -2
Slide 15: Solvency ratio target range for stock-listed VIG
SOLVENCY RATIO TARGET RANGE FOR STOCK-LISTED VIG YE 2017: Solvency ratio of 220% calculated at the level of the listed Group (2016: 195%) Solvency ratio >230% • Increase growth efforts, higher investments, re-risking, etc. >230% 230% Target range • Comfort zone 170% Solvency ratio • Active mid- and
Slide 16: Dividend proposal increased by 12.5% to €0.90 per share
DIVIDEND PROPOSAL INCREASED BY 12.5% TO €0.90 PER SHARE Earnings per share up 3.2%; payout ratio increased to 38.7% EPS (€) Dividend per share1 (€) 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
Slide 17: Outlook 2020
OUTLOOK 2020 Stable development and continuous improvement Gross written premium Profit before taxes Combined Ratio > € 10bn € 500mn - € 520mn 95% Based on the current positive In line with continuous premium growth, VIG VIG will further focus on its underwriting macroeconomic development, VIG targe
Slide 18: Segments Appendix
STRATEGY & AGENDA 2020 RESULTS 12M 2017 SEGMENTS APPENDIX 18 VIG VIENNA INSURANCE GROUP
Slide 19: Austria
AUSTRIA Premiums up by 1.2% adjusted for life single premium business GWP development (€mn) €mn 2017 2016 +/- % -2.4% Gross premiums written 3,848.5 3,941.3 -2.4 Financial result 2016 impacted by positive 3,941 Net earned premiums 3,165.1 3,247.9 -2.6 one-off from HETA (2016: ~€40mn) 3,848 MTPL 31
Slide 20: Czech Republic
CZECH REPUBLIC Solidly improved technical result in Life did not fully offset negative development in P&C GWP development (€mn) €mn 2017 2016 +/- % +4.9% Gross premiums written 1,603.2 1,529.1 4.9 Decrease in life single premium business 1,603 Net earned premiums 1,206.7 1,151.5 4.8 more than offs
Slide 21: Slovakia
SLOVAKIA Strong premium and profit growth GWP development (€mn) €mn 2017 2016 +/- % +10.6% Gross premiums written 810.0 732.3 10.6 Premium growth in all lines of business 810 Net earned premiums 679.3 597.9 13.6 except other property (-€5mn) Financial result1 53.6 52.8 1.5 732 Expenses for claim
Slide 22: Poland
POLAND Excellent developments in motor lines of business GWP development (€mn) €mn 2017 2016 +/- % +8.2% Gross premiums written 886.6 819.2 8.2 Lower financial result more than offset by 887 Net earned premiums 716.3 669.7 7.0 improved technical results in P&C 819 Financial result1 24.5 34.4 -28.8
Slide 23: Romania
ROMANIA CoR below 100% and strong performance in Life GWP development (€mn) €mn 2017 2016 +/- % -5.0% Gross premiums written 506.5 533.4 -5.0 Premium decrease driven by less MTPL 533 Net earned premiums 375.6 351.1 7.0 business (-€54.6mn); due to introduction 507 Financial result1 13.3 13.6 -2.4 o
Slide 24: Baltic states
BALTIC STATES First-time consolidation of BTA in 2017 on top of strong organic premium growth GWP development (€mn) €mn 2017 2016 +/- % +133.7% Gross premiums written 327.6 140.2 >100 BTA Baltics contributed ~€165mn in 328 Net earned premiums 242.9 108.1 >100 premiums; adjusted for BTA consolidati
Slide 25: Hungary
HUNGARY CoR strongly improved to 98.9% after 103.6% in 2016 GWP development (€mn) €mn 2017 2016 +/- % +10.0% Gross premiums written 246.7 224.2 10.0 All lines of business with positive premium 247 Net earned premiums 192.1 174.6 10.1 development Financial result1 6.4 6.9 -7.2 224 21 Other expens
Slide 26: Bulgaria
BULGARIA Biggest Bulgarian pension fund “Doverie” is a part of VIG GWP development (€mn) €mn 2017 2016 +/- % +9.8% Gross premiums written 150.1 136.7 9.8 All lines of business with positive premium 150 Net earned premiums 109.6 96.5 13.6 development except other property which Financial result1 9.
Slide 27: Turkey/Georgia
TURKEY/GEORGIA Negative FX impact on premium and profit GWP development (€mn) €mn 2017 2016 +/- % -0.4% Gross premiums written 207.8 208.7 -0.4 Premium development impacted by 209 208 Net earned premiums 101.6 102.1 -0.5 negative FX effects – especially in Turkey Financial result1 9.0 7.0 29.2 Oth
Slide 28: Remaining CEE
REMAINING CEE Result development impacted by impairments GWP development (€mn) €mn 2017 2016 +/- % +6.2% Gross premiums written 352.0 331.4 6.2 Main drivers of premium growth were 352 Net earned premiums 247.2 232.9 6.1 Serbia and Croatia 331 Financial result1 28.7 36.6 -21.8 Other income 14.4 5.1
Slide 29: Other Markets
OTHER MARKETS InterRisk - successful niche player in Germany with excellent CoR of 81.3% GWP development (€mn) €mn 2017 2016 +/- % -17.1% Gross premiums written 292.6 353.0 -17.1 Premium decrease driven by less life 353 Net earned premiums 248.8 311.6 -20.2 single premium business in Liechtenstein
Slide 30: Central Functions
CENTRAL FUNCTIONS Premium increase partly due to expansion of VIG Re GWP development (€mn) €mn 2017 2016 +/- % +6.5% Gross premiums written 1,411.5 1,324.8 6.5 Segment includes VIG Holding, VIG Re, 1,412 Net earned premiums 1,221.0 1,141.9 6.9 VIG Fund, the non-profit societies, Financial result1
Slide 31: Appendix
STRATEGY & AGENDA 2020 RESULTS 12M 2017 SEGMENTS APPENDIX 31 VIG VIENNA INSURANCE GROUP
Slide 32: 12M 2017 Key financials
12M 2017 KEY FINANCIALS Overview of KPIs Net result for the period after taxes and non-controlling interest (€mn) Combined Ratio (net, %) 288 298 97.3 97.3 96.9 96.9 96.7 215 146 69 2016 3M 17 6M 17 9M 17 2017 2016 3M 17 6M 17 9M 17 2017 EPS1 (€) ROE after tax and minorities (%) 2.20 2.23 7.3 7.2 7.
Slide 33: 12M 2017 Income statement
12M 2017 INCOME STATEMENT IFRS (€mn) €mn 2017 2016 +/- % Gross premiums written 9,386.0 9,051.0 3.7 Solid premium growth despite deliberate reduction of life Net earned premiums 8,509.6 8,191.3 3.9 single premium business (-€149mn) Financial result1 924.3 958.8 -3.6 SK (+€78mn), CZ (+€74mn) and
Slide 34: 12M 2017 Balance sheet
12M 2017 BALANCE SHEET IFRS (€mn) €mn 31.12.2017 31.12.2016 +/- % Intangible assets 1,971 2,055 -4.1 Intangible assets: Investments 35,933 34,646 3.7 Goodwill impairments of CGUs Unit- and index-linked investments 9,061 8,550 6.0 Ukraine, Moldova and Albania (incl. Reinsurers’ share in underwritin
Slide 35: Investment split and bond portfolio overview
INVESTMENT SPLIT AND BOND PORTFOLIO OVERVIEW No fundamental changes 2017: Total €37.4bn Bond portfolio by rating1 4.8% 1.3% 6.1% AAA AA A BBB Other 2016 10% 24% 41% 19% 5% 6.9% 2017 10% 22% 45% 17% 5% 5.7% 65.5% Bond portfolio by issuer 9.7% 2016 56% 8% 19% 18% Bonds Deposits and Cash Real Estate fr
Slide 36: Financial result down by 3.6%
FINANCIAL RESULT DOWN BY 3.6% Financial result incl. at equity consolidated companies Total Income 2017 2016 +/- % Current income 1,365,774 1,189,381 14.8 Fully consolidated non-profit housing societies impact Income from appreciations 27,761 59,372 -53.2 current income, depreciation of investment
Slide 37: 12M 2017 Financial result by segment (I)
12M 2017 FINANCIAL RESULT BY SEGMENT (I) IFRS (€'000) Austria Czech Republic Slovakia Poland Income 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % Current income 803,054 808,895 -0.7 103,287 102,412 0.9 44,676 43,938 1.7 33,384 30,824 8.3 Income from appreciations 11,050 44,828 -75.
Slide 38: 12M 2017 Financial result by segment (II)
12M 2017 FINANCIAL RESULT BY SEGMENT (II) IFRS (€'000) Romania Baltic states Hungary Bulgaria Income 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % Current income 17,117 14,138 21.1 7,103 5,161 37.6 8,062 8,589 -6.1 24,124 23,571 2.3 Income from appreciations 132 1,269 -89.6 781 738
Slide 39: 12M 2017 Financial result by segment (III)
12M 2017 FINANCIAL RESULT BY SEGMENT (III) IFRS (€'000) Turkey / Georgia Remaining CEE Other Markets Income 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % Current income 11,315 9,208 22.9 36,579 37,025 -1.2 21,288 20,056 6.1 Income from appreciations 1,912 1,745 9.6 691 211 >100 259 1,356 -80.9 of
Slide 40: 12M 2017 Financial result by segment (IV)
12M 2017 FINANCIAL RESULT BY SEGMENT (IV) IFRS (€'000) Central Functions Consolidation Total Income 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % Current income 376,603 192,596 95.5 -58,883 -59,402 -0.9 1,427,709 1,237,011 15.4 Income from appreciations 1,281 209 >100 0 0 - 27,761 59,370 -53.2 of
Slide 41: 12M 2017 Premiums by business lines and country (I)
12M 2017 PREMIUMS BY BUSINESS LINES AND COUNTRY (I) IFRS (€mn) MTPL Casco Other property 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % Austria 316.9 316.0 0.3 280.0 266.5 5.1 1,284.5 1,261.1 1.9 Czech Republic 278.4 266.1 4.6 232.7 213.4 9.0 438.8 405.2 8.3 Slovakia 148.1 136.5 8.5 105.2 99.5 5.7
Slide 42: 12M 2017 Premiums by business lines and country (II)
12M 2017 PREMIUMS BY BUSINESS LINES AND COUNTRY (II) IFRS (€mn) Life regular Life single Health 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % Austria 1,240.3 1,246.4 -0.5 321.9 456.4 -29.5 405.0 394.9 2.6 Czech Republic 576.7 534.0 8.0 63.3 97.0 -34.7 13.3 13.4 -0.6 Slovakia 169.6 163.2 4.0 272.7
Slide 43: 12M 2017 Country overview GWP / PBT / combined ratio
12M 2017 COUNTRY OVERVIEW GWP / PBT / COMBINED RATIO IFRS (€mn) GWP Total Result before taxes Combined Ratio net 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- %p Austria 3,848.5 3,941.3 -2.4 175.3 196.1 -10.6 95.5% 97.6% -2.1 Czech Republic 1,603.2 1,529.1 4.9 149.3 152.8 -2.2 97.5% 90.5% 7.0 Slovak
Slide 44: Q4 2017 Income statement
Q4 2017 INCOME STATEMENT IFRS (€mn) €mn Q4 2017 Q4 2016 +/- % Gross premiums written 2,233.4 2,089.2 6.9 Premium development in-line with previous quarters Net earned premiums 2,183.8 2,032.4 7.5 Financial result1 192.2 255.6 -24.8 Financial result in Q4 2016 included positive one-off Other inco
Slide 45: Life & health embedded value Austria / Germany
LIFE & HEALTH EMBEDDED VALUE AUSTRIA / GERMANY in €mn 17.3% 100.0 2,539.9 New Business Margin 261.1 (PVNBP-Ratio) increased to 2.4% in 2017 (2016: 2.0%) 40.2 28.2 2,165.7 Positive impact of prudent -55.3 reserves and assumptions 1,950.2 Positive impact of increase in economic rates 1,686.5 39.
Slide 46: Life & health embedded value CEE
LIFE & HEALTH EMBEDDED VALUE CEE in €mn 6.9% 89.0 New Business Margin 15.1 1,964.7 (PVNBP-Ratio) increased to 112.7 7.5% in 2017 (2016: 6.1%) -0.6 -90.0 1,838.5 Material contribution by new business sold in 2017 1,500.0 1,504.5 Favorable experience 112.7 variance, especially 90.9 persistency g
Slide 47: Life & health embedded value total
LIFE & HEALTH EMBEDDED VALUE TOTAL in €mn 12.5% 350.1 9.9 4,504.6 New Business Margin (PVNBP-Ratio) increased to 43.3 4.8% in 2017 (2016: 3.8%) 153.0 4,004.3 -55.9 Positive (Austria / Germany) and negative (CEE) economic 3,450.1 variance significantly 3,191.0 diversified 130.7 153.0 2016 2017 20
Slide 48: S&P rating confirmed in August 2017: A+/stable outlook
S&P RATING CONFIRMED IN AUGUST 2017: A+/STABLE OUTLOOK VIG remains best-rated company in the ATX Business Risk Profile: Financial Risk Profile: Other Assessments Strong Very Strong „Leading market position in Austria and „Capital adequacy, based on our internal Enterprise risk management: Adeq
Slide 49: 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 BUY Prague Bloomberg: VIG AV / VIG CP A+, stable outlook ATX
Slide 50: VIG Share (II)
VIG SHARE (II) Shareholder structure Free float split by region1 Continental Europe ~31% ~70% Austria ~30% Wiener Städtische Wechselseitiger North America ~24% Versicherungsverein - Vermögensverwaltung – Vienna Insurance Group UK & Ireland ~8% Remaining ~7% ~30% Free Float 1 Split of identified shar
Slide 51: VIG VIENNA INSURANCE GROUP
51 APPENDIX VIG VIENNA INSURANCE GROUP
Slide 52: Contact details / Financial calendar
CONTACT DETAILS / FINANCIAL CALENDAR Investor Relations Vienna Insurance Group Financial calendar 2018* Schottenring 30, 1010 Vienna Date Event investor.relations@vig.com 22 Mar. 2018 Preliminary results for the financial year 2017 www.vig.com 18 Apr. 2018 Results and Annual Report for the year 2017
Slide 53: 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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