Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Bank Conference 2018
51 slides from Vienna Insurance's conference presentation, Jun 13, 2018
Slide 1: Investor Presentation: Results for the first quarter 2018
VIENNA INSURANCE GROUP Investor Presentation Results for the first quarter 2018
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 50% of premiums coming from CEE 25,000 employees 65% 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 1 1 33.4% 4 Slovakia 1 2 1 33.3% 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: Mutual distribution agreement with Erste Group
MUTUAL DISTRIBUTION AGREEMENT WITH ERSTE GROUP Extension of strategic partnership ahead of schedule 2008: Start of mutual Distribution Agreement following CZ the acquisition of the insurance operations of Erste SK AT Extension & Intensification of existing agreement until 2033 HU RO HR Respective co
Slide 10: Results 3M 2018
STRATEGY & AGENDA 2020 RESULTS 3M 2018 SEGMENTS APPENDIX 10 VIG VIENNA INSURANCE GROUP
Slide 11: Highlights 3M 2018
HIGHLIGHTS 3M 2018 Sustainable development continued Gross written premium Profit before taxes Combined Ratio € 2,826.1mn € 117.3mn 96.2% GWP up 3.9% compared to 3M 2017 PBT increased by 7.0% Down from 96.9% in 3M 2017 Current premium business: +7.1% CEE profit growth of 10.4% Claims ratio imp
Slide 12: Gross written premiums of €2.8bn up 3.9%
GROSS WRITTEN PREMIUMS OF €2.8bn UP 3.9% Overview by segments Gross written premiums (€mn; y-o-y chg.) AT: premium decrease due to reduced life single premium business (-€40mn); premium growth of 1.9% adjusted for life single premium business -1.4% Strong premium growth in the Czech Republic (+€
Slide 13: Favourable premium development; life single premium business deliberately reduced
FAVOURABLE PREMIUM DEVELOPMENT; LIFE SINGLE PREMIUM BUSINESS DELIBERATELY REDUCED Gross written premiums by lines of business (€mn; y-o-y chg.); incl. Central Functions MTPL Casco Other property Total premiums +3.9% 3M 2017 369 284 1,318 2,826 +11.3% +9.3% +7.1% 2,720 410 MTPL 369 3M 2018 410 311 1,
Slide 14: Group profit before taxes of €117.3mn up 7.0%
GROUP PROFIT BEFORE TAXES OF €117.3mn UP 7.0% Overview by segments Result before taxes (€mn; y-o-y change) SK: Profit decrease by €4.7mn driven by higher cost ratio and reserve strengthening +8.7% CZ, PL and RO with profit growth based on CoR improvements Decrease in Other markets due to lower
Slide 15: Combined ratio (P&C) improved to 96.2%
COMBINED RATIO (P&C) IMPROVED TO 96.2% Positive development driven by improved claims ratio in AT, SK, PL, HU and the Baltic States P&C Combined Ratio development Overview by segments (3M y-o-y development net, %) SK: CoR above 100%; cost ratio up from 34.0% to 42.5% -0.2%p +6.8%p -1.6%p -0.4%p -6
Slide 16: Solvency ratio of 220% as of 31 Dec. 2017
SOLVENCY RATIO OF 220% AS OF 31 DEC. 2017 Calculation based on Partial Internal Model (PIM) in €mn 220% 195% YE 2017 Solvency ratio of 220% calculated at the level of the listed Group YE 2016 Application of Partial Internal Model improves solvency ratio by 46pp 6,636 7,764 PIM reduces SCR by E
Slide 17: 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 18: 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 share (€) 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 19: Outlook 2020
OUTLOOK 2020 Unchanged expectation of stable development and continuous improvement Gross written premium Profit before taxes Combined Ratio > € 10bn € 500mn - € 520mn 95% Based on the positive macroeconomic In line with continuous premium growth, VIG VIG will further focus on its underwriting devel
Slide 20: Segments
STRATEGY & AGENDA 2020 RESULTS 3M 2018 SEGMENTS APPENDIX 20 VIG VIENNA INSURANCE GROUP
Slide 21: Austria
AUSTRIA Premiums up by 1.9% adjusted for life single premium business GWP development (€mn) €mn 3M 2018 3M 2017 +/- % -1.4% Gross premiums written 1,272.9 1,290.7 -1.4 Except for life, premium growth in all lines 1,291 Net earned premiums 828.5 858.6 -3.5 of business 1,273 MTPL 107 Financial resul
Slide 22: Czech Republic
CZECH REPUBLIC Strong premium growth of 8.8% GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +8.8% Gross premiums written 465.3 427.5 8.8 Premium growth driven by other property 465 Net earned premiums 320.2 295.8 8.3 (+€18mn) and life regular premium Financial result1 33.9 25.4 33.4 business (+€1
Slide 23: Slovakia
SLOVAKIA Profit decrease driven by higher cost ratio and reserve strengthening GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +3.0% Gross premiums written 216.2 209.9 3.0 Premium increase in all lines of business 216 Net earned premiums 169.9 158.9 6.9 210 Acquisition and administrative expense
Slide 24: Poland
POLAND Strong growth in premiums and profit GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +9.1% Gross premiums written 232.8 213.3 9.1 Premium growth driven by motor lines of 233 Net earned premiums 170.5 174.5 -2.3 business (+€26mn) and other property Financial result1 5.9 6.0 -1.7 (+€16mn) off
Slide 25: Romania
ROMANIA Top-line and bottom-line growth GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +11.4% Gross premiums written 146.6 131.6 11.4 Premium growth mainly driven by MTPL 147 Net earned premiums 99.8 99.0 0.9 business (+€14mn) Financial result1 3.1 2.9 8.6 132 Other income 1.3 1.9 -30.5 Profit
Slide 26: Baltic states
BALTIC STATES Further improvement but still negative result before taxes GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +27.0% Gross premiums written 97.2 76.5 27.0 Premium growth in all lines of business 97 Net earned premiums 64.7 57.0 13.6 Financial result1 1.0 1.3 -26.6 Operational performa
Slide 27: Hungary
HUNGARY Improved profit despite less premiums GWP development (€mn) €mn 3M 2018 3M 2017 +/- % -2.0% Gross premiums written 72.2 73.7 -2.0 Other property – due to less corporate 74 Net earned premiums 41.4 38.1 8.7 business – drove premium decrease 72 Financial result1 1.6 2.0 -19.9 MTPL 8 9 Other
Slide 28: Bulgaria
BULGARIA Solid performance on top and bottom line GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +3.7% Gross premiums written 45.1 43.5 3.7 Premium increase driven by Casco 45 Net earned premiums 33.0 29.6 11.3 43 Financial result1 2.5 2.4 1.3 Profit before taxes up by €0.7mn due to 6 lower exp
Slide 29: Turkey/Georgia
TURKEY/GEORGIA Negative FX impact on premium and profit GWP development (€mn) €mn 3M 2018 3M 2017 +/- % -3.0% Gross premiums written 65.7 67.7 -3.0 Adjusted for FX effects premiums up 68 Net earned premiums 22.8 24.5 -6.8 13.5% 66 Financial result1 2.0 2.1 -7.5 Other income 2.0 1.5 36.1 Result b
Slide 30: Remaining CEE
REMAINING CEE Result development impacted by impairments GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +3.6% Gross premiums written 92.5 89.3 3.6 Remaining CEE includes Albania (incl. 93 Net earned premiums 61.6 61.2 0.7 Kosovo), Bosnia & Herzegovina, Croatia, 89 Financial result1 5.8 7.5 -22.8
Slide 31: Other markets
OTHER MARKETS Germany and Liechtenstein GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +13.7% Gross premiums written 77.3 68.0 13.7 Premium increase driven by life single 77 Net earned premiums 63.6 54.6 16.5 premium business in Liechtenstein Financial result1 5.3 5.3 -0.3 68 Other income 6.9 1.0
Slide 32: Central functions
CENTRAL FUNCTIONS Premium increase partly due to expansion of VIG Re GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +9.6% Gross premiums written 431.6 393.7 9.6 Premiums up 9.6% due to increased 432 Net earned premiums 323.5 299.3 8.1 Group internal reinsurance in connection Financial result1 -13
Slide 33: Results 12M 2017 Segments
STRATEGY & AGENDA 2020 RESULTS 12M 2017 SEGMENTS APPENDIX 33 VIG VIENNA INSURANCE GROUP
Slide 34: 3M 2018 key financials
3M 2018 KEY FINANCIALS Overview of KPIs Net result for the period after taxes and non-controlling interest (€mn) Combined Ratio (net, %) 288 298 97.3 96.9 96.7 96.2 69 76 2016 2017 3M 17 3M 18 2016 2017 3M 17 3M 18 EPS1 (€) ROE after tax and minorities (%) 2.23 2.27 7.3 7.2 2.16 6.8 7.0 2.07 2016 20
Slide 35: 3M 2018 income statement
3M 2018 INCOME STATEMENT IFRS (€mn) €mn 3M 2018 3M 2017 +/- % Gross premiums written 2,826.1 2,719.6 3.9 Premiums increased by 3.9%; adjusted for life single Net earned premiums 2,203.1 2,152.9 2.3 premium business premium growth of 7.1% Financial result1 238.4 247.7 -3.8 Other income 33.2 29.5 12
Slide 36: 3M 2018 balance sheet
3M 2018 BALANCE SHEET IFRS (€mn) €mn 31.03.2018 31.12.2017 +/- % Intangible assets 1,958 1,971 -0.6 Investments 35,919 35,933 0.0 Unit- and index-linked investments 8,949 9,061 -1.2 Reinsurers’ share in underwriting provisions 1,180 1,066 10.6 Receivables 1,724 1,476 16.8 Tax receivables and advance
Slide 37: Investment split and bond portfolio overview
INVESTMENT SPLIT AND BOND PORTFOLIO OVERVIEW No major changes 3M 2018: Total €37.5bn Bond portfolio by rating1 4.4% 1.4% 6.7% AAA AA A BBB Other 3M 2018 10% 22% 47% 16% 5% 6.7% 12M 2017 10% 22% 45% 17% 5% 5.8% 65.3% Bond portfolio by issuer 9.7% 3M 2018 54% 7% 19% 20% Bonds Deposits and Cash Real Es
Slide 38: Financial result down by 3.8% in line with market trends
FINANCIAL RESULT DOWN BY 3.8% IN LINE WITH MARKET TRENDS Financial result including at equity consolidated companies Total 3M 3M Income +/- % 2018 2017 Current income 324,167 325,337 -0.4 Financial result down by €9.3mn Income from appreciations 2,077 7,181 -71.1 Income from appreciations decrea
Slide 39: 3M 2018 financial result by segment (I)
3M 2018 FINANCIAL RESULT BY SEGMENT (I) IFRS (€'000) Austria Czech Republic Slovakia Poland 3M 3M 3M 3M 3M 3M 3M 3M Income +/- % +/- % +/- % +/- % 2018 2017 2018 2017 2018 2017 2018 2017 Current income 185,149 191,774 -3.5 31,446 26,363 19.3 10,736 10,957 -2.0 7,898 8,013 -1.4 Income from appreciati
Slide 40: 3M 2018 financial result by segment (II)
3M 2018 FINANCIAL RESULT BY SEGMENT (II) IFRS (€'000) Romania Baltic states Hungary Bulgaria 3M 3M 3M 3M 3M 3M 3M 3M Income +/- % +/- % +/- % +/- % 2018 2017 2018 2017 2018 2017 2018 2017 Current income 4,760 3,959 20.2 1,598 1,507 6.0 2,004 1,984 1.0 5,860 5,748 1.9 Income from appreciations 20 64
Slide 41: 3M 2018 financial result by segment (III)
3M 2018 FINANCIAL RESULT BY SEGMENT (III) IFRS (€'000) Turkey / Georgia Remaining CEE Other Markets 3M 3M 3M 3M 3M 3M Income +/- % +/- % +/- % 2018 2017 2018 2017 2018 2017 Current income 3,106 3,110 -0.1 8,875 9,578 -7.3 5,118 4,939 3.6 Income from appreciations 45 121 -62.8 17 655 -97.4 6 2 >100 o
Slide 42: 3M 2018 financial result by segment (IV)
3M 2018 FINANCIAL RESULT BY SEGMENT (IV) IFRS (€'000) Central Functions Consolidation Total 3M 3M 3M 3M 3M 3M Income +/- % +/- % +/- % 2018 2017 2018 2017 2018 2017 Current income 90,845 84,764 7.2 -15,989 -13,430 19.1 341,406 339,266 0.6 Income from appreciations 52 90 -42.2 0 0 - 2,077 7,180 -71.1
Slide 43: 3M 2018 premiums by business lines and country (I)
3M 2018 PREMIUMS BY BUSINESS LINES AND COUNTRY (I) IFRS (€mn) MTPL Casco Other property 3M 2018 3M 2017 +/- % 3M 2018 3M 2017 +/- % 3M 2018 3M 2017 +/- % Austria 110.3 106.9 3.2 94.1 92.4 1.8 545.5 530.2 2.9 Czech Republic 74.2 70.0 6.0 60.4 57.6 5.0 157.6 140.0 12.6 Slovakia 43.3 41.9 3.3 27.7 27.1
Slide 44: 3M 2018 premiums by business lines and country (II)
3M 2018 PREMIUMS BY BUSINESS LINES AND COUNTRY (II) IFRS (€mn) Life regular Life single Health 3M 2018 3M 2017 +/- % 3M 2018 3M 2017 +/- % 3M 2018 3M 2017 +/- % Austria 345.7 347.6 -0.5 70.0 110.2 -36.5 107.3 103.4 3.8 Czech Republic 153.3 137.4 11.6 16.3 19.3 -15.8 3.5 3.3 6.5 Slovakia 43.3 41.9 3.
Slide 45: 3M 2018 country overview GWP / PBT / combined ratio
3M 2018 COUNTRY OVERVIEW GWP / PBT / COMBINED RATIO IFRS (€mn) GWP Total Result before taxes Combined Ratio net 3M 2018 3M 2017 +/- % 3M 2018 3M 2017 +/- % 3M 2018 3M 2017 +/- %p Austria 1,272.9 1,290.7 -1.4 37.5 37.9 -1.0 95.6% 95.8% -0.2 Czech Republic 465.3 427.5 8.8 45.7 42.0 8.7 93.9% 94.9% -1.
Slide 46: 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 47: 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 3 BUY Prague Bloomberg: VIG AV / VIG CP A+, stable outlook A
Slide 48: 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 49: Appendix
49 APPENDIX VIG VIENNA INSURANCE GROUP
Slide 50: 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 51: 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