Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — H1 2015 Earnings Presentation
35 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, Aug 26, 2015
Slide 1: PZU Group's financial results in H1 2015
Warsaw Riga Vilnius Kiev Tallinn PZU Group’s financial results in H1 2015 Warsaw, 26 August 2015
Slide 2: Agenda
Agenda 1. Polish insurance market in Q1 2015 2. Operating results in H1 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) ● Reversion to growth trend after 4.1% 2.2% slight deceleration in 2013. 7 046 6 953 7 191 6 377 7 037 ● PZU Group’s strong position in 5 655 5 719 motor own damage insurance with a market share of 38.7% and moto
Slide 4: Life insurance market in Poland
Life insurance market in Poland Gross written premium on regular business (m PLN) 3.4% ● PZU Życie’s regular premium market share at a stable level of 42.7% at 2.9% the end of Q1 2015. 3 645 3 970 3 991 4 107 4 226 ● Another year of growth in regular 3 774 3 460 gross written premium on the life ins
Slide 5: PZU maintains its leadership position in insurance in Poland
PZU maintains its leadership position in insurance in Poland Market share Market share non-life insurance life insurance (regular premium) ∆ Q1 2014 – Q1 2015 ∆ Q1 2014 – Q1 2015 (0.3) p.p. 4.7% (0.1) p.p. 4.1% 5.4% 0.0 p.p. 7.4% (1.6) p.p. 5.7% 0.0 p.p. 7.5% (0.5) p.p. 6.0% 0.3 p.p. 12.5% 0.2 p.p.
Slide 6: Agenda
Agenda 1. Polish insurance market in Q1 2015 2. Operating results in H1 2015 3. Shareholder value 4. Implementation of the PZU 3.0 Strategy 5. Detailed financials 5
Slide 7: High profitability of insurance business despite persistent price pressure
High profitability of insurance business despite persistent price pressure ● Persistently high profitability despite the higher loss ratio in the motor insurance portfolio: - lower level of claims and benefits in general TPL insurance, fire insurance and for other physical damages; Non-life - still
Slide 8: Overview of the Group's financial results in H1 2015
Overview of the Group’s financial results in H1 2015 Gross written premium (m PLN) Net profit (m PLN) 8.2% (23.2)% 8 438 9 126 1 720 1 322 06.2014 06.2015 06.2014 06.2015 Equity (bn PLN) Return on equity (ROE) (%)* (0.5)% (6.4) p.p. 27.5% 11.92 11.85 21.1% 06.2014 06.2015 06.2014 06.2015 7 x% - chan
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) 10.8% 3 689 3 330 including (16.6)% Link4 - 188 2 212 1 971 of which 964 including 804 Link4 - 39 Link4 - 11 399 1 359 1 477 405 including 565 399 Link
Slide 10: Summary - non-life insurance
Summary - non-life insurance Mass segment Corporate segment Drivers of higher gross written premium yoy: Drivers of lower gross written premium yoy: • gross written premium in motor insurance up 12.3%, both as a result • lower sales of fire, other property and other TPL insurance as an of the acquis
Slide 11: Life insurance
Life insurance Decline in profitability Group and continued insurance segment Individual insurance segment Gross written premium (m PLN) Gross written premium (m PLN) 2.0% 2.2% 5.7% 643 680 3 266 3 338 227 258 416 422 06.2014 06.2015 06.2014 06.2015 Single Premium Regular Premium Margin (%)(a) 24.4%
Slide 12: Summary – life insurance
Summary – life insurance Group and continued Individual Drivers of higher gross written premium: Drivers of higher gross written premium: • growth in the number of insured in group protection products and • higher average payments to IKE individual retirement accounts; rising average premiums; • ris
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) 227.1% (8.0)% 648 Estonia 80 140 Latvia 198 258 Lithuania (LD) 11 14 PZU Lithuania * 38 35 116 110 18 20 Lithuania 57 60 Ukraine 20 Ukraine 15 06.201
Slide 14: Summary – international business
Summary – international business Gross written premium Operating profit Non-life insurance Non-life insurance • Combined ratio decline: • Gross written premium has grown on the contribution made by the • loss ratio (60.8%) - 4.4 p.p. higher yoy due to larger share of newly-acquired companies: Baltic
Slide 15: Higher administrative expenses
Higher administrative expenses Effect of faster implementation of PZU Strategy 3.0 and Group consolidation m PLN PZU Group’s administrative expenses The following factors contributed to the increase in administrative expenses year on year: • inclusion of administrative expenses incurred by newly-acq
Slide 16: Agenda
Agenda 1. Polish insurance market in Q1 2015 2. Operating results in H1 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 Index 12.05.2010 - 2013) 30.06.2015 30.06.2015 2
Slide 18: Agenda
Agenda 1. Polish insurance market in Q1 2015 2. Operating results in H1 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 Lithuania and Latvia insurance activity #1 in Poland following acquisitions in 2014 non-life market share in Poland 32.8% (gross written premium in Q1 2015) 30.3% 25.3% life market share in Poland non-life market share non-life market share 42.7% (regular prem
Slide 20: Purchase of shares in Alior Bank
Purchase of shares in Alior Bank • PZU signed a preliminary share purchase agreement Alior Bank’s share price dynamics (%) on 30 May 2015 for a 25.25% stake in Alior Bank for a price of 89.25 PLN per share; 170 • these shares will be acquired in 3 tranches. The 150 execution of the various tranches
Slide 21: Detailed financials
Slide 22: PZU Group's key financial highlights
PZU Group’s key financial highlights Change Q1 2015 m PLN, IFRS H1 2014 H1 2015 Change YoY Q2 2015 Q1 2015 over Q2 2014 Profit and Loss Statement Gross Written Premium 8 438 9 126 8.2% 4 446 4 681 (5.0)% Premium Earned 8 033 8 744 8.9% 4 437 4 307 3.0% Net investment Result 1 370 1 058 (22.8)% 107 9
Slide 23: Operating segment results
Operating segment results m PLN 3 689 3 330 3 338 3 266 Gross written premium (according to local GAAP) 964 804 643 680 608 278 159 74 77 74 INTERNATIONAL – LIFE POLAND – NON-LIFE POLAND – LIFE INSURANCE POLAND - OTHER AND NON-LIFE SEGMENTS Corporate client Mass client Group and continued Individual
Slide 24: Profitability by insurance activity segment
Profitability by insurance activity segment Combined Ratio / Insurance Business Segments Gross Written Premium Operating Profit Operating profit ratio* m PLN, local GAAP H1 2014 H1 2015 Change YoY H1 2014 H1 2015 Change YoY H1 2014 H1 2015 Total Non-Life - Poland 4 294 4 493 4.6% 821 648 (21,1)% 85.
Slide 25: Normalized operating profit
Normalized operating profit YTD, m PLN m PLN, IFRS 06.2014 06.2015 Impact exerted by conversion of long-term policies into 1 yearly renewable term agreements in type P group Operating Profit (according to financial 2 235.7 1 637.0 insurance. statements) including: 2 In 2014 the additional contributi
Slide 26: Profitability of the mass segment (non-life insurance)
Profitability of the mass segment (non-life insurance) Profitability of the mass segment • Drivers of loss ratio change: Combined ratio (COR - %) • level of claims and benefits up in motor insurance (+15.8%, net of the Link4 effect of +6.4%), largely as a result of the rising average claim value and
Slide 27: Profitability of the corporate insurance segment (non-life insurance)
Profitability of the corporate insurance segment (non-life insurance) Profitability corporate insurance • Drivers of loss ratio change: Combined ratio (COR - %) • higher level of claims and benefits in motor insurance as a result of the rising average payout, the growing number of reported claims an
Slide 28: Group and continued insurance segment (life insurance)
Group and continued insurance segment (life insurance) • Gross written premium up by 2.2% yoy mostly due to incremental growth in the portfolio Fundamental components of operating profit in the group and of risks in protection and health insurance (including riders to continued insurance) and the co
Slide 29: Individual insurance segment (life insurance)
Individual insurance segment (life insurance) Fundamental components of operating profit in the • Gross written premium climbed 5.7% yoy primarily as an effect of higher average individual insurance segment (m PLN) contributions to IKE individual retirement accounts, rising sales of unit-linked prod
Slide 30: Profitability of international companies (non-life insurance)
Profitability of international companies (non-life insurance) Profitability of international companies • Loss ratio growth due to the higher loss ratio in the newly-acquired Baltic companies. Combined ratio (COR - %) • Administrative expense ratio down driven mostly by lower expenses in the newly-ac
Slide 31: Investments
Investments Poorer performance in debt instruments partially offset by more robust performance in equities and derivatives m PLN Net investment result* Equity instruments Interest-bearing financial and derivatives** assets** June 2015 investment composition*** 22.8% Total: 47.0% 6.8% 4.5% 53.2 bn PL
Slide 32: Investments
Investments Poorer performance in debt instruments partially offset by more robust performance in equities and derivatives m PLN Net investment result Net investment result on the PZU Group’s main portfolio 1 370 1 058 1 221 913 01-06.2014 01-06.2015 01-06.2014 01-06.2015 Net investment result 06.20
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 coverage ratio (m PLN, Polish GAAP) (m PLN, Polish GAAP) 598.2% 486.0% 211.6% 195.4% 8 190 6 654 3 750 3 510 06.2014 06.2015 06.2014 06.2015 Solvency
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 Wiśniewski – Manager of the Investor Relations Team 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 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 and Strategy 3.0 published on 28 January 2015. PZU does not undertake to publish any
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