Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Non-Deal Roadshow (April 2010)
56 slides from Vienna Insurance's roadshow presentation, Apr 29, 2010
Slide 1: V.I.G. – Getting in shape for economic recovery in CEE
V.I.G. – Getting in shape for economic recovery in CEE Zurich Roadshow - 29 April 2010
Slide 2: Contents
Contents A 2 A V.I.G. – a model expansion B Adopting to a changing environment C Distribution is key in insurance D Exploiting potential going forward E Appendix
Slide 3: V.I.G. in 1990 – The Big Bang
V.I.G. in 1990 – The Big Bang Leading Austrian position as basis for international growth story A 3 1990 – Pioneer in CEE Footprint in 1990 § Early mover advantage due to exploiting opportunities offered by underdeveloped insurance markets in CEE - Gross written premiums: € 1.2bn - Profit before tax
Slide 4: Building a Strong Franchise
Building a Strong Franchise Dynamic yet risk-aware expansion into CEE A 4 1989 1996-1998 2000-2002 2004-2008 2009/2010 Pioneer in CEE Cautious steps Demonopolisation Market split-up Reorganisation § “Big fish in a small § In a 2nd wave § Demonopolisation § Strong upturn of § New Group pond” V.I.G. t
Slide 5: V.I.G. Today
V.I.G. Today A leading insurer in CEE A 5 2009 – No. 1 in its Core Markets Footprint in 2009 - Gross written premiums: € 8.0bn Core Markets - Profit before tax: € 441mn - Employees: ~ 24,000 - Presence in 23 countries - Clear No. 1 position in CEE1: ~15% Total market share 14.7% 11.9% 11.4% 4.2% V.I
Slide 6: Contents
Contents B 6 A V.I.G. – a model expansion B Adopting to a changing environment C Distribution is key in insurance D Exploiting potential going forward E Appendix
Slide 7: Focus on Efficiency
Focus on Efficiency Setting the basis for future sustainable profitability B 7 Efficiency Programme Savings of € 100mn by 2010 >€ 100mn Streamlining of regional head offices in A 1 Focus on reduction of administrative tasks ~€ 60mn Accelerated implementation of shared services 2 concept in line with
Slide 8: New Governance Structure
New Governance Structure Improving Group transparency by spinning-off WSTV B 8 Details Shareholders § Continuous expansion of V.I.G. resulted in greater group-wide management requirements § Existing governance framework does not reflect increasing scope of management tasks + § Evolving Group archite
Slide 9: Contents
Contents C 9 A V.I.G. – a model expansion B Adopting to a changing environment C Distribution is key in insurance D Exploiting potential going forward E Appendix
Slide 10: Distribution Model (I)
Distribution Model (I) Multi-brand strategy is paramount for distribution C 10 Multi-Brand Features § Strong brand awareness in local markets § Entrepreneurship of management builds up well established local brands thus retaining loyalty of employees and management, customers and distribution networ
Slide 11: Distribution Model (II)
Distribution Model (II) Diversified distribution supports future growth C 11 Comment Multi-Channel Tied agents <10% § V.I.G. has one of the broadest distribution 11% - 20% Brokers Banks networks 21% - 30% Other 31% - 40% § Distribution differs from country to country > 41% according to local market
Slide 12: Contents
Contents D 12 A V.I.G. – a model expansion B Adopting to a changing environment C Distribution is key in insurance D Exploiting potential going forward E Appendix
Slide 13: Development of Insurance Demand
Development of Insurance Demand GDP growth and underpenetration are insurance drivers D 13 2008 Mature Markets Growth Markets Insurance Density (USD) H SK PL 1,000 CZ Emerging Markets Insurance demand RO CRO also strongly driven by UA BG SER catch-up process TR 0 1,000 GDP per Capita (USD) 10,000 10
Slide 14: Low Penetration of Insurance Markets
Low Penetration of Insurance Markets Catch-up potential in CEE in Non-life and Life D 14 Insurance Density 2008 (USD) Proportion of NL & L in CEE Markets 3,727 Non-life Life Non-life 2,866 Life 58% 53% 54% NL 73% 65% 61% 37% 41% 80% L 55% 59% 53% 47% 74% 86% 83% 88% 87% 86% 20% 27% 35% 39% 42% 47% 4
Slide 15: Macro Environment in CEE Countries
Macro Environment in CEE Countries Recovery in CEE region exceeds development of Euro area D 15 GDP Development (real, % change vs. previous year) GDP Development vs. Euro Area (indexed, Euro area = 100) 108 2008 2009f 2010f 2011f CZ SK PL RO 106 Euro area 0.6% -4.0% 0.7% 1.5% Czech Rep. 2.3% -4.0%
Slide 16: V.I.G. – Building its Market Position (I)
V.I.G. – Building its Market Position (I) Expansion focus mainly on Poland and Hungary D 16 Market share Non-life Diversified CEE-Portfolio Market share Life 9% 24% 29% 3% 5% 25% Market share Total § About 50% of V.I.G.-premium volume is generated in CEE, 34% 32%NL L T 27% thus purest CEE insurance
Slide 17: V.I.G. – Building its Market Position (II)
V.I.G. – Building its Market Position (II) Recent steps D 17 Montenegro Lithuania § Planning to set up a life insurance company § Opening of branch office of Compensa Non- in Montenegro in 2010 life (Poland) § Distribution of products via Erste Group § Launch of Non-life insurance business as of sub
Slide 18: Capitalisation
Capitalisation Strong capitalisation is excellent basis for future expansion D 18 Shareholders‘ Equity Capitalisation Change in Group Shareholders’ Equity (€mn) +11.8% 4,628.6 § Group shareholders’ equity increased by 11.8% to about 4,138.8 € 4.6bn in YE 2009 § S&P-Rating of A+ (stable outlook) § Co
Slide 19: Summary
Summary V.I.G. to benefit from its strong position D 19 § 20 years of experience in CEE insurance markets § Current management drive for § Multi-brand and multi-channel more efficiency and strategy is paramount for streamlining build the basis for leading market position sustainable profitability §
Slide 20: Contents
Contents E 20 A V.I.G. – a model expansion B Adopting to a changing environment C Distribution is key in insurance D Exploiting potential going forward E Appendix
Slide 21: Outlook for 2010
Outlook for 2010 Confidence about rising PBT despite economic uncertainty E 21 V.I.G.'s Path of Profitability 2010 CAGR: § Subdued GDP growth outlook for Austria, +16.4% higher unemployment rates expected €540 § CEE core countries slowly regaining GDP growth €437 €441 €321 €240 - Single-digit premiu
Slide 22: Dividend
Dividend Consistent long-term dividend policy E 22 Development of Dividend1 Comments Payout volume Dividend/share € 256.0mn Bonus/share § 2005 – 2007 payout ratio ranging from 33-37% § One-off bonus dividend paid-out last year as a reward for shareholder € 115.5mn € 115.2mn support during capital in
Slide 23: Highlights
YE 2009 Highlights V.I.G. with continuing solid performance E 23 § EUR 441mn PBT - solid performance § Combined ratio (net) stable at § Group Embedded Value: 96.3% - cost reduction Value added Increase to € 4.59bn programme balancing higher - RoEV of 15.4% claims § Increase of profitability in Life
Slide 24: Financial Highlights (I)
YE 2009 Financial Highlights (I) V.I.G. caught up with year 2007 PBT level E 24 GWP 1.5% Profit before Tax 541 -18.4% 7,899 8,019 6,912 437 441 5,882 321 2006 2007 2008 2009 2006 2007 2008 2009 IFRS IFRS Net Profit after Tax and Minorities Combined Ratio (net) 96.9 -16.7% 96.4 96.3 409 340 313 95.5
Slide 25: Financial Highlights (II)
YE 2009 Financial Highlights (II) E 25 EPS ROE before Tax (%) 18,0 3,41 2,98 14,8 14,3 2,66 2,48 10,0 2006 2007 2008 2009 2006 2007 2008 2009 IFRS IFRS
Slide 26: YE 2009 Income Statement
YE 2009 Income Statement IFRS (€mn) E 26 YE 2009 YE 2008 +/-% 1. Gross premiums written 8,019.3 7,898.9 1.5 2. Net earned premiums 7,242.3 6,961.6 4.0 3. Financial result 929.1 918.1 1.2 4. Other income 125.0 127.5 -1.9 Total income 8,296.4 8,007.2 3.6 6. Expenses for claims and insurance benefits -
Slide 27: YE 2009 Balance Sheet
YE 2009 Balance Sheet IFRS (€mn) E 27 YE 2009 YE 2008 +/- % Intangible assets 1,975 1,649 19.8 Investments 25,894 24,548 5.5 Unit- and index-linked investments 4,628 3,602 28.5 Reinsurers’ share in underwriting provisions 1,117 1,222 -8.6 Receivables 1,563 1,475 6.0 Tax receivables and advance payme
Slide 28: P&L Major Items – Gross Written Premiums (I)
YE 2009 P&L Major Items – Gross Written Premiums (I) Premium development affected by weak CEE currencies (€mn) E 28 GWP Non-life GWP Life Total Development of s YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% Versicherung Group in CEE Austria 1,888.7 1,883.4 0.3% 1,985.4 1,872.4 6.0%
Slide 29: P&L Major Items – Gross Written Premiums (II)
YE 2009 P&L Major Items – Gross Written Premiums (II) E 29 Premium adjusted for currency effects (€mn) FX development YE 09 vs YE 08 (vs. €; average exchange rates) GWP Non-life GWP Life Total CZK YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% SKK Austria 1,888.7 1,883.4 0.3% 1,985.4
Slide 30: Premium Portfolio
Premium Portfolio Basis of business origination substantially widened E 30 GWP by Geography YE 06 GWP by Geography YE 09 Other CEE Other 4.1% Other Romania 3.4% Other CEE 2.6% 4.0% 6.9% Poland Romania 5.7% 7.6% Austria Austria Slovakia 56.7% Poland 48.3% 6.6% 6.8% Czech Slovakia Republic 7.8% 17.8%
Slide 31: P&L Major Items – Expenses for Claims Incurred
YE 2009 P&L Major Items – Expenses for Claims Incurred Loss ratio up due to higher claims in CEE and floods in A, CZ E 31 § Group loss ratio (net) at 65.3% (64.5% in YE § Poland increasing by 5.5% pts to 63.1% due to 2008, 65.1% in HY09) increase of reserves as a consequence of legal § Austrian loss
Slide 32: P&L Major Items – Operating Expenses
YE 2009 P&L Major Items – Operating Expenses Cost ratio down as a result of savings programmes E 32 § Group cost ratio (net) decreasing by 0.9% pts § Poland showing lower cost ratio at 37.5% to reach 31.0% (YE 08: 41.1%) thanks to lower administration costs as well as abolition of Religa tax § Cost
Slide 33: P&L Major Items – Financial Result
YE 2009 P&L Major Items – Financial Result Sound financial result E 33 Income P&C Life Health Total in € '000 YE 2009 YE 2008 YE 2009 YE 2008 YE 2009 YE 2008 YE 2009 YE 2008 Current income 176,724 207,956 1,095,810 1,007,718 39,729 39,201 1,312,263 1,254,875 Income from appreciations 11,505 12,112 5
Slide 34: YE 2009 Investment Split
YE 2009 Investment Split V.I.G. follows a consistent investment approach E 34 Portfolio Overview +5.5% ~ € 25.9bn € 24.5bn ~ Cash & Deposits ~ 4% 1% Alternatives ~ 7% ~ 3% Affiliated Companies ~ 2% Loans ~ 5% ~ 15% ~ 19% ~ 13% Real Estate ~ 3% Equities ~ 12% ~ 3% ~ 52% ~ 62% Bonds YE 2008 YE 2009
Slide 35: Development of Bond Portfolio
Development of Bond Portfolio E 35 By Issuer By Rating 6% 2% 3% 7% 7% 9% 36% 45% 49% 48% 13% 16% 21% 21% 44% 33% 21% 19% YE 2008 YE 2009 YE 2008 YE 2009 Government 1 Pfandbriefe/Covered Bonds AAA AA A BBB Other Financials Corporates 1: Government and government guaranteed
Slide 36: Composition of Real Estate
Composition of Real Estate E 36 Real Estate (€mn) ~7% ~9% ~6% ~31% ~30% § More than 60% of real estate with ~32% regulated Austrian housing societies § Entities are governed by a specific legal framework ~62% 3,090.4 3,301.2 § Rents are subsidised by government => ~62% ~61% low vacancies § Residents
Slide 37: P&L – Business Segments (Property & Casualty)
YE 2009 P&L – Business Segments Property & Casualty, IFRS (€mn) E 37 YE 2009 YE 2008 +/-% 1. Gross premiums written 4,206.7 4,278.9 -1.7 2. Net earned premiums 3,457.7 3,375.4 2.4 3. Financial result 164.9 307.0 -46.3 4. Other income 77.3 77.9 -0.7 Total income 3,699.9 3,760.3 -1.6 6. Expenses for c
Slide 38: P&L – Business Segments (Life)
YE 2009 P&L – Business Segments Life, IFRS (€mn) E 38 YE 2009 YE 2008 +/-% 1. Gross premiums written 3,491.2 3,305.7 5.6 2. Net earned premiums 3,464.0 3,272.9 5.8 3. Financial result 748.4 598.5 25.0 4. Other income 47.6 49.6 -4.0 Total income 4,259.9 3,920.9 8.6 6. Expenses for claims and insuranc
Slide 39: P&L – Business Segments (Health)
YE 2009 P&L – Business Segments Health, IFRS (€mn) E 39 YE 2009 YE 2008 +/-% 1. Gross premiums written 321.4 314.3 2.3 2. Net earned premiums 320.7 313.3 2.3 3. Financial result 15.8 12.7 25.0 4. Other income 0.1 0.0 69.2 Total income 336.6 326.0 3.2 6. Expenses for claims and insurance benefits -27
Slide 40: P&L - Split by Regions (I)
YE 2009 P&L - Split by Regions (I) Regional segments, IFRS (€mn) E 40 Austria Czech Republic YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% 1. Gross premiums written 3,874.2 3,755.7 3.2 1,603.3 1,419.7 12.9 2. Net earned premiums 3,529.6 3,409.3 3.5 1,441.0 1,189.5 21.1 3. Financial result 682.3 732.7 -6
Slide 41: P&L - Split by Regions (II)
YE 2009 P&L - Split by Regions (II) Regional segments, IFRS (€mn) E 41 Slovakia Poland Romania YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% 1. Gross premiums written 628.4 605.6 3.8 548.3 795.1 -31.0 606.7 608.2 -0.3 2. Net earned premiums 552.8 523.2 5.6 496.2 747.5 -33.6 550.6 52
Slide 42: P&L - Split by Regions (III)
YE 2009 P&L - Split by Regions (III) Regional segments, IFRS (€mn) E 42 1 Other CEE Other TOTAL YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% 1. Gross premiums written 546.5 496.4 10.1 212.0 218.1 -2.8 8,019.3 7,898.9 1.5 2. Net earned premiums 464.6 378.8 22.6 207.6 185.0 12.2 7,24
Slide 43: Results by Country
YE 2009 Results by Country IFRS (€mn) E 43 GWP Non-Life Life GWP GWP Total Profit before Taxes Net Combined Ratio YE 2009 YE 2008 YE 2009 YE 2008 YE 2009 YE 2008 YE 2009 YE 2008 YE 2009 YE 2008 Austria 1,888.7 1,883.4 1,985.4 1,872.4 3,874.2 3,755.7 247.5 344.3 96.0% 94.6% Czech Rep. 975.5 982.8 627
Slide 44: Shareholders’ Equity
YE 2009 Shareholders’ Equity Shareholders’ equity supports strong capitalisation E 44 Change in Group Shareholders’ Equity (€mn) 363.7 -293.4 4,628.6 174.0 250.0 4,138.8 -7.3 2.7 Increase of 11.8% in YE 2009 Equity as of YE Currency Changes in Capital increase AFS unrealised Profit for the Dividend
Slide 45: Change in Group Shareholders‘ Equity
Change in Group Shareholders‘ Equity IFRS (€‘000) E 45 1.1. - 31.12.2009 1.1. - 31.12.2008 Equity as of 1 January 4,138,790 2,615,563 Exchange rate changes -7,276 -40,833 Changes in scope of consolidation 2,659 31,628 Capital increase 250,000 1,343,454 Unrealised gains and losses from financial 174,
Slide 46: Life Insurance Premium Split
Life Insurance Premium Split IFRS (€mn) E 46 Premiums written - direct business YE 2009 YE 2008 +/- % Regular premiums 2,144.1 1,931.6 11.0% Single premiums 1,332.5 1,363.1 -2.2% Total premiums written - direct business 3,476.6 3,294.7 5.5% thereof: Policies with profit participation 1,953.3 1,851.7
Slide 47: Q4 2009 Income Statement
Q4 2009 Income Statement IFRS (€mn) E 47 Q4 2009 Q4 2008 +/-% 1. Gross premiums written 1,913.3 1,881.1 1.7 2. Net earned premiums 1,868.0 1,792.5 4.2 3. Financial result 201.9 111.9 80.4 4. Other income 39.4 84.8 -53.5 Total income 2,109.3 1,989.2 6.0 6. Expenses for claims and insurance benefits -
Slide 48: YE 2009 Exchange Rates
YE 2009 Exchange Rates National currency unit per EUR E 48 YE 2009 YE 2008 Balance Sheet Balance Sheet Country Curr. P & L EUR P & L EUR EUR EUR Bulgaria EUR/BGN 1.9558 1.9558 1.9558 1.9558 Croatia EUR/HRK 7.3000 7.3400 7.3555 7.2239 Estonia EUR/EEK 15.6466 15.6466 - - Liechtenstein EUR/CHF 1.4836 1
Slide 49: Group Embedded Value 2009
Group Embedded Value 2009 Results (€mn) E 49 L&H P&C Total Austria / Germany 2009 2008(*) 2009 2008(*) 2009 2008(*) Comments Free Surplus 227.6 351.0 Required Capital 356.7 320.5 § All results based on local GAAP ANAV 584.2 671.4 73.3 164.4 657.6 835.8 § GEV reflects amounts deemed to be PVFP 1,440.
Slide 50: Group Embedded Value 2009 – Return on EV
Group Embedded Value 2009 Return on Adjusted Embedded Value (€mn) E 50 L&H P&C Total Change in Methodology and Assumptions Austria / Germany EV Dec 31, 2009 1,684.2 73.3 1,757.5 EV Dec 31, 2008 Reported 1,670.3 151.4 1,821.7 § The reference interest rates EV Dec 31, 2008 Restated 1,658.9 164.4 1,823
Slide 51: Group Embedded Value 2009 – New Business Values
Group Embedded Value 2009 New Business Values (€mn) E 51 L&H 2009 2008(*) Comments Austria / Germany NBV 51.0 62.8 -18.8% § The NBV represents the value generated APE 203.8 259.1 by new business sold during the reporting APE-Ratio 25.0% 24.2% 3.2% period. PVNBP 1,991.1 2,529.8 § The NBV has decrease
Slide 52: V.I.G. Has Excellent CEE Market Position
V.I.G. Has Excellent CEE Market Position V.I.G. an early mover in CEE E 52 Overview of Core Markets Details Slovakia Czech Rep. Romania Bulgaria § leading market position in nearly all core markets Pop.: 5.4 mn Pop.: 10.2 mn Pop.: 21.3 mn Pop.: 7.6 mn § strong market positions GDP/Cap.: $ 17 k GDP/C
Slide 53: Shareholder Structure (I)
Shareholder Structure (I) Total number of shares 128,000,000 E 53 Shareholder Structure ~ 30 % Free Float ~70 % Wiener Städtische Wechselseitige Versicherungsanstalt- Vermögensverwaltung
Slide 54: Shareholder Structure (II)
Shareholder Structure (II) Total number of shares 128,000,000 E 54 Free Float Geographical Split ~26 % Austria ~3% Others ~14% North America ~24% UK & Ireland ~33% Continental Europe
Slide 55: V.I.G. Share & Contact Details
V.I.G. Share & Contact Details Investor Relations E 55 V.I.G. Share Investor Relations Vienna Insurance Group § Number of common shares Schottenring 30, 1010 Vienna E-Mail: investor.relations@vig.com 128mn www.vig.com/ir § ISIN AT0000908504 § Thomas Schmee (Head of IR) § Listing Tel. +43 (0)50 350 -
Slide 56: Disclaimer
Disclaimer E 56 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 sha
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