Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — ING Financials Conference 2015
55 slides from Vienna Insurance's conference presentation, Oct 13, 2015
Slide 1: Vienna Insurance Group Investor Presentation
Vienna Insurance Group Investor Presentation ING Financials Conference Warsaw, 13 October 2015 6M 2015 Strategy Potential Main regions Appendix
Slide 2: Development 6M 2015 / Successful strategy / Long-term potential
Development 6M 2015 Successful strategy Long-term potential Main regions Appendix 6M 2015 Strategy Potential Main regions Appendix
Slide 3: The first half year 2015 at a glance
The first half year 2015 at a glance Focus on profitable non-motor business and regular premium business in life €4.9bn Decrease of 1.5% driven by conservative approach towards single premium business due to current low interest rate environment Successful focus on regular premiums in life with grow
Slide 4: Premiums decreased slightly but many CEE markets with solid top-line growth
Premiums decreased slightly but many CEE markets with solid top-line growth Remaining markets premium up by 18.4% Gross written premiums (€mn; y-o-y chg.) GWP regional split y-o-y chg. -2% Austria 2,286 -2% 4,984 10 3 4,908 Czech Republic 835 -6% Health 197 200 -89 388 Slovakia 0% Life 2,223 2,134 P
Slide 5: Profit before taxes of €250.5mn, down by 16.8%
Profit before taxes of €250.5mn, down by 16.8% Remaining markets PBT up by 11.5% to a new record result Profit before taxes (€mn; y-o-y change) PBT regional split y-o-y chg. -17% Austria 86 -32% 301 Health 32 Czech Republic 88 3% -20 250 -22 23 Slovakia 26 2% -9 Life 104 Poland 28 -16% 82 Romania 3
Slide 6: Group combined ratio improved to 95.9%
Group combined ratio improved to 95.9% Best CoR of the last 5 comparison periods P&C Combined ratio development P&C CoR 6M y-o-y regional development (net, %) -1.2%p AT 99.7 -3.1%p 97.1 95.9 96.6 CZ 88.7 +1.0%p 89.8 SK 94.5 +1.1%p 6M14 Claims ratio 66.0 64.2 95.6 96.0 6M15 PL +0.8%p 96.8 RO 108.3 -5
Slide 7: Development 6M 2015 Successful strategy Long-term potential
Development 6M 2015 Successful strategy Long-term potential Main regions Appendix 6M 2015 Strategy Potential Main regions Appendix
Slide 8: Adaptive growth policy (I)
Adaptive growth policy (I) CEE growth potentials develop in a step function Market growth Recovery period VIG Strategy Growth period Elevate potential in changing market phases through adaptive growth policy Time Accelerated Differentiated growth growth - Accelerate growth in all - Consolidation of
Slide 9: Adaptive growth policy (II)
Adaptive growth policy (II) Elevate growth potentials correspondingly VIG Strategy Elevate potential also during Market growth Recovery period recovery period through differentiated growth policies Consolidation of high margin business Growth period Push non-motor business SME Unit-linked life and t
Slide 10: Clear strategy focusing on Austria and the CEE region
Clear strategy focusing on Austria and the CEE region Strategic cornerstones of VIG Local entrepreneurship Multi-brand strategy Multi-channel distribution Conservative investments 6M 2015 Strategy Potential Main regions Appendix 10
Slide 11: Dynamic expansion into CEE out of Austria
Dynamic expansion into CEE out of Austria VIG with the most diversified network throughout the region 1990: 3 Markets Today: 25 Markets Client/talent base: 24mn people Client/talent base: 180mn people VIG Core markets 1990 1996 1999 2001/2002 2004 2006 2007 2008 2010 2011 2014 CZ, SK HU, PL, IT, LI,
Slide 12: 25 years in Central and Eastern Europe (CEE)
25 years in Central and Eastern Europe (CEE) VIG - Value Inspired Growth Geographical distribution VIG – established confidence for the future GWP CEE First-mover advantage in the region with GWP 51% subsequent outperformance of the market 51% CEE From <5 to ~50 insurance companies 100% Footprint co
Slide 13: Focus on insurance business
Focus on insurance business Successful banc-assurance in Austria and CEE Insurance business is core business of VIG Business mix 2014 Today around 50 insurance companies are Health part of VIG 4% Nearly all lines of retail and commercial business covered – pension fund business 46% Life being not co
Slide 14: Local entrepreneurship as basis for success
Local entrepreneurship as basis for success Clear commitment to local management Insurance business is local business Local management with best understanding of their markets and customer needs Members of the management board of VIG all have different country responsibilities and are members in the
Slide 15: Unique market approach with long-term focus
Unique market approach with long-term focus Multi-brand and multi-channel provide best access to customers Multi-brand Multi-channel Local brands with good customer recognition Austria are retained Different brands target different client groups Czech Rep. Multi-brand allows for internal benchmarkin
Slide 16: Excellent market positions of VIG
Excellent market positions of VIG VIG is the clear No 1 in its core markets Market positions Country Total market share Total N-life Life Austria 1 1 1 24.2% Czech Republic 1 1 1 34.1% Slovakia 1 2 1 33.7% Poland 4 4 5 6.7% Romania 1 1 2 20.0% Bulgaria 1 2 2 15.0% Croatia 4 6 3 8.1% Serbia 4 5 2 9.1
Slide 17: Development 6M 2015 Successful strategy Long-term potential
Development 6M 2015 Successful strategy Long-term potential Main regions Appendix 6M 2015 Strategy Potential Main regions Appendix
Slide 18: Insurance growth is a catching-up process
Insurance growth is a catching-up process Model of insurance demand development still valid 2 500 Insurance density in EUR GDP growth and catch- up process are 2 000 AT insurance drivers 1 500 AT 1 000 500 CZ PL SK CZ HU PL HU 2000 2014 SK RO 0 RO 1 000,0 6 000,0 36 000,0 GDP per capita in EUR Sourc
Slide 19: Striking under-penetration shows potential
Striking under-penetration shows potential Annual premiums per capita (insurance density), in EUR 2,845 10x Long-term growth potential 2,007 in CEE still lies ahead Life 527 Non-life 403 341 277 262 201 126 91 82 38 Ø EU-15 AT Ø CEE CZ SK PL HU HR BG RO SR UA Source: Local insurance authorities; IMF
Slide 20: CEE offers access to long-term growth potential
CEE offers access to long-term growth potential Presence in more mature markets as well as in high growth countries Growth region Core region Countries EE, LV, LT, PL, Population ~ 34 mn UA, RO, BG Countries AT, CZ, SK, HU Population ~ 121 mn Ø-premium per capita 803 EUR Premium per cap. 157 EUR Ø-p
Slide 21: The Baltics: Growing region with a common population of ~6.3mn inhabitants
The Baltics: Growing region with a common population of ~6.3mn inhabitants Three countries with favourable macroeconomic data GDP per capita (PPP, in USD) Premium per capita 2014 (in €) 40 000 Estonia 335 35 000 Lithuania 203 30 000 Latvia 172 25 000 Austria 2,007 20 000 Ø EU-15 2,845 15 000 Estonia
Slide 22: The Baltics: VIG further increasing business activities
The Baltics: VIG further increasing business activities in order to benefit from promising development Acquisitions and formation of a new insurance company Acquisition of Finsaltas Compensa Life Estonia Life Insurance sales company Life insurer active in all Baltic ~300 insurance brokers states Bro
Slide 23: Main regions
Development 6M 2015 Successful strategy Long-term potential Main regions Appendix 6M 2015 Strategy Potential Main regions Appendix
Slide 24: Austria – effected by low interest rate environment
Austria – effected by low interest rate environment CoR improved to 96.6% GWP development (€mn) P&C GWP direct business split1 -2.3% MTPL 2,341 2,286 17% (19%) P&C 1,121 1,122 13% Casco (13%) Health 184 190 70% Life 1,035 974 (68%) Non-motor 6M14 6M15 P&L: P&C business (€mn) P&L: Life business (€mn)
Slide 25: Czech Republic – contributing most to Group profits
Czech Republic – contributing most to Group profits CoR maintained at excellent 89.8% GWP development (€mn) P&C GWP direct business split1 -6.3% 892 MTPL 835 31% P&C 443 (30%) 440 47% Non-motor (50%) Life 449 395 22% (20%) 6M14 6M15 Casco P&L: P&C business (€mn) P&L: Life business (€mn) 6M15 Y-o-Y 6
Slide 26: Slovakia – overall positive development
Slovakia – overall positive development Life business impacted by decreased single premiums GWP development (€mn) P&C GWP direct business split1 +0.3% 387 388 Non-motor 34% P&C 182 179 40% MTPL (34%) (41%) Life 205 209 26% (25%) 6M14 6M15 Casco P&L: P&C business (€mn) P&L: Life business (€mn) 6M15 Y
Slide 27: Poland – challenging market environment persists
Poland – challenging market environment persists Increased price competition in fleet and leasing business GWP development (€mn) P&C GWP direct business split1 -20.5% 565 MTPL 449 31% P&C 296 Non-motor 43% (32%) 245 (44%) Life 269 205 26% (24%) 6M14 6M15 Casco P&L: P&C business (€mn) P&L: Life busin
Slide 28: Romania – substantial premium increase
Romania – substantial premium increase Positive profit contribution from P&C and life GWP development (€mn) P&C GWP direct business split1 +17.6% 194 Non-motor 165 28% (33%) 44% MTPL 160 (38%) P&C 138 Life 27% 28 34 (29%) 6M14 6M15 Casco P&L: P&C business (€mn) P&L: Life business (€mn) 6M15 Y-o-Y 6M
Slide 29: Remaining markets – record result with ongoing top and bottom line growth
Remaining markets – record result with ongoing top and bottom line growth in P&C and life Health business of Georgia declining in 6M 2015 GWP development (€mn) P&C GWP direct business split1 +18.4% MTPL 669 22% 564 (21%) 346 P&C 319 10 59% 19% Health 13 Non-motor (60%) 313 (19%) Life 232 Casco 6M14
Slide 30: Appendix
Development 6M 2015 Successful strategy Long-term potential Main regions Appendix Please note: The figures for 2013 have been restated due to changes in the scope of consolidation. 6M 2015 Strategy Potential Main regions Appendix
Slide 31: 6M 2015 – Key financials
6M 2015 – Key financials Overview of KPIs Net Profit after tax and minorities (€mn) Combined Ratio (net, %) 367 100.6 96.7 97.1 95.9 234 223 193 2013 2014 6M14 6M15 2013 2014 6M14 6M15 EPS1 (€) ROE before Taxes² (%) 3.33 12.9 2.75 2.87 11.0 10.6 7.1 1.57 2013 2014 6M14 6M15 2013 2014 6M14 6M15 1: EP
Slide 32: 6M 2015 – Income statement
6M 2015 – Income statement IFRS (€mn) €mn 6M 2015 6M 2014 +/-% Gross premiums written 4,908.0 4,983.8 -1.5 Net earned premiums 4,208.9 4,321.5 -2.6 Financial result1 524.5 565.1 -7.2 Other income 50.2 58.1 -13.6 Total income 4,783.5 4,944.6 -3.3 Expenses for claims and insurance benefits -3,352.6 -3
Slide 33: 6M 2015 – Balance sheet
6M 2015 – Balance sheet IFRS (€mn) €mn 30.06.2015 31.12.2014 +/-% Intangible assets 2,370 2,370 0.0 Investments 30,239 30,360 -0.4 Unit- and index-linked investments 8,185 7,742 5.7 Reinsurers’ share in underwriting provisions 1,215 1,106 9.8 Receivables 1,619 1,502 7.8 Tax receivables and advance p
Slide 34: 6M 2015 – Strong equity and solvency position
6M 2015 – Strong equity and solvency position Shareholders’ equity decrease impacted by repurchase of hybrid bond Change in Group Shareholders’ Equity (€mn) -2% 197 19 5,283 -128 47 5,157 -200 -61 Equity restated Profit for Currency AFS unrealised Dividend Repurchase Other Equity as as of 12M14 the
Slide 35: VIG strongly capitalised also under Solvency 2
VIG strongly capitalised also under Solvency 2: S2 ratio of ~170% at year-end 2014 VIG working on partial internal model for non-life and real estate VIG is well prepared for Solvency 2 Process steered out of Austria Common guidelines, calculation and reporting implemented Work on a partial internal
Slide 36: S&P rating confirmed in July 2015: A+/stable
S&P rating confirmed in July 2015: A+/stable/-- VIG remains the best rated company in the ATX Anchor: Business Risk Profile: Very Strong aa- „Very strong competitive position, based on leading market positions in Austria and CEE“ „Sound diversification by business line and a well-established multich
Slide 37: Conservative investment strategy to be maintained
Conservative investment strategy to be maintained Bond rating split impacted by rating downgrades of Austrian banks 6M 2015: Total €31.3bn Bond portfolio by rating1 Other 6% 6% 6.2% 12% 16% BBB 3.4% 0.0% 38% A 33% 9.5% AA 29% 34% 6.4% AAA 15% 11% 4.3% 12M14 6M15 Bond portfolio by issuer 70.2% Corpor
Slide 38: 6M 2015 – Financial result
6M 2015 – Financial result Current income decreased by more than €40mn Income P&C Life Health Total in € '000 6M 2015 6M 2014 6M 2015 6M 2014 6M 2015 6M 2014 6M 2015 6M 2014 Current income 143,494 151,182 403,733 436,219 20,869 21,279 568,096 608,680 Income from appreciations 7,024 17,282 6,308 9,65
Slide 39: 6M 2015 – P&L Property & Casualty
6M 2015 – P&L Property & Casualty IFRS (€mn) €mn 6M 2015 6M 2014 +/-% Gross premiums written 2,573.7 2,563.5 0.4 Net earned premiums 1,907.7 1,926.7 -1.0 Financial result 83.1 111.8 -25.7 Other income 28.2 38.4 -26.6 Total income 2,018.9 2,076.9 -2.8 Expenses for claims and insurance benefits -1,223
Slide 40: 6M 2015 – P&L Life
6M 2015 – P&L Life IFRS (€mn) €mn 6M 2015 6M 2014 +/-% Gross premiums written 2,134.4 2,223.2 -4.0 Net earned premiums 2,105.9 2,195.6 -4.1 Financial result 421.7 435.4 -3.1 Other income 21.6 19.6 9.9 Total income 2,549.2 2,650.5 -3.8 Expenses for claims and insurance benefits -1,963.8 -2,168.8 -9.5
Slide 41: 6M 2015 – P&L Health
6M 2015 – P&L Health IFRS (€mn) €mn 6M 2015 6M 2014 +/-% Gross premiums written 200.0 197.1 1.5 Net earned premiums 195.2 199.2 -2.0 Financial result 19.7 17.9 10.3 Other income 0.5 0.1 >100 Total income 215.4 217.2 -0.8 Expenses for claims and insurance benefits -165.1 -161.3 2.3 Acquisition and ad
Slide 42: 6M 2015 – P&L regions (I)
6M 2015 – P&L regions (I) IFRS (€mn) Austria Czech Republic Slovakia €mn 6M 2015 6M 2014 +/-% 6M 2015 6M 2014 +/-% 6M 2015 6M 2014 +/-% Gross premiums written 2,286.2 2,340.6 -2.3 835.2 891.5 -6.3 388.5 387.3 0.3 Net earned premiums 1,729.7 1,788.5 -3.3 638.6 713.0 -10.4 311.1 308.7 0.8 Financial re
Slide 43: 6M 2015 – P&L regions (II)
6M 2015 – P&L regions (II) IFRS (€mn) Poland Romania Remaining €mn 6M 2015 6M 2014 +/-% 6M 2015 6M 2014 +/-% 6M 2015 6M 2014 +/-% Gross premiums written 449.4 565.3 -20.5 194.2 165.2 17.6 668.6 564.5 18.4 Net earned premiums 386.2 453.1 -14.8 122.0 87.9 38.8 486.1 409.9 18.6 Financial result 25.9 27
Slide 44: 6M 2015 – P&L regions (III)
6M 2015 – P&L regions (III) IFRS (€mn) Central Functions Consolidation TOTAL €mn 6M 2015 6M 2014 +/-% 6M 2015 6M 2014 +/-% 6M 2015 6M 2014 +/-% Gross premiums written 675.8 684.8 -1.3 -589.8 -615.4 n.a. 4,908.0 4,983.8 -1.5 Net earned premiums 534.0 563.4 -5.2 1.2 -2.9 n.a. 4,208.9 4,321.5 -2.6 Fina
Slide 45: 6M 2015 – Results by country (I)
6M 2015 – Results by country (I) IFRS (€mn) GWP P&C GWP Life GWP Health GWP Total 6M 6M 6M 6M 6M 6M 6M 6M +/-% +/-% +/-% +/-% 2015 2014 2015 2014 2015 2014 2015 2014 Austria 1,122.4 1,121.4 0.1% 973.7 1,035.1 -5.9% 190.2 184.1 3.3% 2,286.2 2,340.6 -2.3% Czech Rep. 440.4 442.7 -0.5% 394.7 448.8 -12.1
Slide 46: 6M 2015 – Results by country (II)
6M 2015 – Results by country (II) IFRS (€mn) Profit before Taxes Net Combined Ratio 6M 2015 6M 2014 +/-% 6M 2015 6M 2014 +/-%p Austria 85.7 126.9 -32.5% 96.6% 99.7% -3.1 Czech Rep. 88.1 85.8 2.7% 89.8% 88.7% 1.0 Slovakia 26.2 25.7 2.0% 95.6% 94.5% 1.1 Poland 28.2 33.7 -16.3% 96.8% 96.0% 0.8 Romania
Slide 47: 6M 2015 – P&C Claims and cost ratio details
6M 2015 – P&C Claims and cost ratio details Claims ratio 6M y-o-y regional development (net, %) Remarks for claims incurred 6M14 6M15 Austria: claims ratio down 4.0%p driven by development of Donau Versicherung (less business volume in Italy) -4.0 +6.2 -1.2 Stable claims ratios in the Czech Republic
Slide 48: 2Q 2015 – Income statement
2Q 2015 – Income statement IFRS (€mn) €mn 2Q 2015 2Q 2014 +/-% Gross premiums written 2,152.1 2,252.6 -4.5 Net earned premiums 1,998.2 2,109.0 -5.3 Financial result1 251.1 289.3 -13.2 Other income 21.9 30.5 -28.2 Total income 2,271.3 2,428.8 -6.5 Expenses for claims and insurance benefits -1,622.8 -
Slide 49: 6M 2015 – Exchange rates
6M 2015 – Exchange rates 6M 2015 6M 2014 Balance Sheet Balance Sheet Country Currency P & L EUR P & L EUR EUR EUR Albania EUR/ALL 140.2900 140.2398 140.2600 140.2106 Belarus EUR/BYR 16,974.0000 16,408.1492 13,890.0000 13,529.0055 Bosnia EUR/BAM 1.9558 1.9558 1.9558 1.9558 Bulgaria EUR/BGN 1.9558 1.9
Slide 50: Maintaining steady dividends – DPS of €1.40
Maintaining steady dividends – DPS of €1.40 Dividend yield amounting to 3.8%1 for 2014 Dividend per share (€) Dividend pay-out (€mn) 8% CAGR 9% 1.40 179.2 1.30 166.4 1.20 153.6 1.10 140.8 1.00 128.0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Dividend policy Unchanged dividend policy with a pa
Slide 51: VIG share (I)
VIG share (I) Current analyst recommendation split Share price development 9M 2015 Sell High EUR 42.620 Low EUR 25.515 Price as of 30 Sep EUR 26.350 Hold Buy Average daily volume EUR 7.6 mn Market cap. EUR 3.4 bn Development YTD % -28.9 VIG compared to ATX and Stoxx Europe 600 Ins. 135 125 115 105 9
Slide 52: VIG share (II)
VIG share (II) General information Shareholder structure Number of common shares: 128mn ISIN: AT0000908504 ~30% Wiener Städtische Free Float Listings: Wechselseitiger Versicherungsverein - Vienna – since 17 Oct. 1994 Vermögensverwaltung – Vienna Insurance Group ~70% Prague – since 5 Feb. 2008 Ticker
Slide 53: Contact details
Contact details Investor Relations Financial calendar 2015/16 Investor Relations Team Date Event Vienna Insurance Group Results for the first three quarters Schottenring 30, 1010 Vienna 24 Nov. 2015 2015 E-Mail: investor.relations@vig.com www.vig.com/ir Publication: Preliminary 26 Jan. 2016 Nina Hig
Slide 54: 6M 2015 Strategy Potential
6M 2015 Strategy Potential Main regions Appendix
Slide 55: 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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