Vienna Insurance Group AG · VIE:VIG

Vienna Insurance — FY2019 Earnings Presentation

49 slides from Vienna Insurance's earnings presentation, April 2020

  1. Slide 1: Vienna Insurance Group Preliminary full year results 2019

    VIENNA INSURANCE GROUP Investor Presentation, April 2020 Preliminary full year results 2019

  2. Slide 2: We are the leading insurance group in Austria & CEE

    WE ARE THE LEADING INSURANCE GROUP IN AUSTRIA & CEE Represented in More than 50 group companies 30 25,000 markets employees More than S&P Rating Solvency Ratio YE 2019 50% of premiums and profits coming A+ 210% with stable outlook based on Partial Internal Model from CEE Since Market capitalization

  3. Slide 3: Group history

    GROUP HISTORY Long-term experience in organic growth and M&A 1824 1990 1996 1999 2001/2002 2004 2006 2007 2008 2010 2011 2014 2019 AT CZ, SK HU, PL, IT, LI, HR RO, BY SI GE TR, AL EE, LV ME BA MD Nordics DE BG, RS UA MK LT (industrial business) While maintaining management principles… …we refine the

  4. Slide 4: Best positioned in Austria and CEE

    BEST POSITIONED IN AUSTRIA AND CEE Excellent market shares throughout the region Close to our customers in 30 markets Country Market position Market share total 1 Austria 1 1 1 22.8% Czech Rep. 1 2 1 31.1% Slovakia 1 2 1 30.6% 10 Poland 4 4 6 8.1% 4 Romania 1 2 2 20.2% 1 2 1 The Baltic 1 1 3 24.2% 1

  5. Slide 5: Long-term growth potential

    LONG-TERM GROWTH POTENTIAL Annual insurance spending shows growth potential in Austria and CEE Insurance density 2018, in EUR (premiums per capita) 1,940 Ø EU-15: ~€2,800 Ø CEE-VIG: ~€200 542 418 380 370 331 319 314 284 184 138 121 112 110 105 78 54 46 46 35 19 North Macedonia Turkey Hungary Lithuan

  6. Slide 6: Agenda 2020: Update 2019

    AGENDA 2020: UPDATE 2019 Overview Ensuring future growth Optimisation of business model Use of growth potentials Digitalisation Anti-Fraud-Management Health insurance  ~180 ongoing digitalisation projects  2019: Roll-out in 8 additional companies 42% premium increase in the 5 key countries of BG,

  7. Slide 7: Successful bancassurance

    SUCCESSFUL BANCASSURANCE Growth rates exceeding plans  Total premium volume generated in 2019: €1.3bn (+5.2%)  Life: +4.3%, Non-Life: +10.9% (thereof Health +24.2%)  CEE: double-digit growth rates in Life regular and Non-Life CZ  Integral part of Agenda 2020 SK  Focus on increasing sale of P&C

  8. Slide 8: ESG at VIG Group

    ESG AT VIG GROUP Environmental, social and governance initiatives throughout the Group  VIG share is listed in the international sustainability index FTSE4Good and the Austrian VÖNIX  Annual CSR meeting with more than 30 participants; agenda included best practise sharing of individual Group initi

  9. Slide 9: VIG Group climate change strategy

    VIG GROUP CLIMATE CHANGE STRATEGY Published in May 2019 Binding regulations for Group companies regarding investments and underwriting in coal power energy  Support of green investments and a low-carbon future:  Consciously increasing the share of green investments (e.g. green bonds, environmental

  10. Slide 10: Dividend increase of 15% to €1.15 per share

    DIVIDEND INCREASE OF 15% TO €1.15 PER SHARE Fourth consecutive increase in DPS 2016 2017 2018 2019 Earnings per share 2.16 2.23 2.04 2.59 (€) DIVIDEND POLICY Dividend per share 0.80 0.90 1.00 1.15* Payout Ratio in a range of (€) 30 – 50% of Group profits after taxes and non-controlling interests Pay

  11. Slide 11: Business profile and strategy

    BUSINESS PROFILE AND STRATEGY VIG Group characterised by solid business profile and strong balance sheet Proven Well Agenda 2020 business diversified initiatives to drive model portfolio over profitability in countries and many lines of lines of business, business especially in motor also in 2020 St

  12. Slide 12: Results 2019

    STRATEGY RESULTS 2019 SEGMENTS APPENDIX Please note: The quarterly figures for net assets, financial position and results of operations are prepared in accordance with the International Financial Reporting Standards (IFRS). Rounding differences may occur when rounded amounts or percentages are added

  13. Slide 13: Highlights

    HIGHLIGHTS Results ahead of targets set for 2019 Gross written premium Profit before taxes Combined Ratio € 10.4bn € 521.6mn 95.4% GWP up by 7.7% compared to 2018 PBT increased by 7.4% Down from 96.0% in 2018  CEE premium growth: +10.6%  PBT includes entire Romanian goodwill  Claims ratio improve

  14. Slide 14: Favourable premium and double-digit net profit growth

    FAVOURABLE PREMIUM AND DOUBLE-DIGIT NET PROFIT GROWTH 2019 Income statement €mn 2019 2018 +/- % Gross premiums written  Premium volume exceeds €10bn threshold driven by strong 10,399.4 9,657.3 7.7 growth in other property (+€398mn), motor (+€195mn) and health Net earned premiums 9,317.9 8,729.4 6.7

  15. Slide 15: Encouraging top-line growth

    ENCOURAGING TOP-LINE GROWTH Overview by segments Gross written premiums (€mn; y-o-y chg.)  Overall GWP of €10.4bn (+7.7%); organic growth of +5.3%  CEE growth of 10.6%  Premium growth drivers are Poland (+€234mn) and the Baltics (+€124mn) - incl. first-time consolidation of Wiener TU (former Goth

  16. Slide 16: Consistent growth in all lines of business

    CONSISTENT GROWTH IN ALL LINES OF BUSINESS; DOUBLE-DIGIT GROWTH IN CASCO & HEALTH Gross written premiums by lines of business (€mn; y-o-y chg.); incl. Central Functions MTPL Casco Other property Total premiums +7.7% 12M 2018 1,429 1,162 4,261 10,399 +5.5% +10.0% +9.3% 9,657 1,507 12M 2019 1,507 1,27

  17. Slide 17: Group profit before taxes of €521.6mn up by 7.4%

    GROUP PROFIT BEFORE TAXES OF €521.6MN UP BY 7.4% Net profit after taxes and non-controlling interests of €331.3mn up by 23.2% (+€62mn) Result before taxes (€mn; y-o-y change)  AT: €36.9mn profit growth; positive development driven mainly by P&C  CZ/SK: increase of €5.7mn and €1.7mn respectively in

  18. Slide 18: Combined ratio (P&C) down to 95.4%

    COMBINED RATIO (P&C) DOWN TO 95.4% Continuous improvement of claims ratio helps to offset cost pressure P&C Combined Ratio development Overview by segments (y-o-y development net, %)  Improved CoR in all market segments, despite Poland -0.2%p -6.7%p -1.0%p -0.7%p -0.7%p +2.2%p  CoR in Poland impac

  19. Slide 19: Financial result

    FINANCIAL RESULT Current income down by 10.4% due to consolidation change of non-profit societies Total in EUR ′000 2019 2018 +/- % Current income 1,216,582 1,358,192 -10.4  Change of consolidation method of non-profit Income from appreciations 34,892 13,054 >100 societies affects current income, d

  20. Slide 20: Investment split and bond portfolio overview

    INVESTMENT SPLIT AND BOND PORTFOLIO OVERVIEW Change in investment split due to deconsolidation of non-profit housing societies 2019: Total €35.9bn Bond portfolio by rating1 in % 4.5% 1.5% 7.3% AAA AA A BBB Other 2019 9.0 31.0 36.8 19.1 4.1 6.7% 2018 9.9 32.1 35.3 17.1 5.6 7.0% 73.0% Bond portfolio b

  21. Slide 21: 2019 results confirm business strength of VIG Group

    2019 RESULTS CONFIRM BUSINESS STRENGTH OF VIG GROUP Key messages  Premium volume of €10bn exceeded for the first time – growth potential to be further explored due to unique market position of VIG Group companies in Austria and CEE  Full commitment to bancassurance from both Erste Group and VIG Gr

  22. Slide 22: Segments

    STRATEGY RESULTS 2019 SEGMENTS APPENDIX Please note: The quarterly figures for net assets, financial position and results of operations are prepared in accordance with the International Financial Reporting Standards (IFRS). Rounding differences may occur when rounded amounts or percentages are added

  23. Slide 23: Austria

    AUSTRIA Outstanding overall profit development due to strong extraordinary financial result in Q4 and improved CoR GWP development (€mn) €mn 2019 2018 +/- % +2.7% Gross premiums written 3,943.3 3,839.9 2.7  Premium growth driven mainly by other 3,943 Net earned premiums 3,226.2 3,158.3 2.1 property

  24. Slide 24: Czech Republic

    CZECH REPUBLIC Excellent business development in life; focus on risk insurance pays off GWP development (€mn) €mn 2019 2018 +/- % +3.7% Gross premiums written  Premiums up by €61.6mn driven by other 1,745.8 1,684.2 3.7 property, life regular premium and motor 1,746 Net earned premiums 1,312.8 1,265

  25. Slide 25: Slovakia

    SLOVAKIA Profit growth despite slightly decreased premium volume and less financial result GWP development (€mn) €mn 2019 2018 +/- % -0.1% Gross premiums written 798.9 799.6 -0.1  Premium growth in life regular premium 800 799 Net earned premiums 671.6 670.2 0.2 (+€11.7mn) as well as in other prope

  26. Slide 26: Poland

    POLAND Favourable premium and profit development; successful cooperation with TUW “TUW” GWP development (€mn) €mn 2019 2018 +/- % +26.1%  Premium growth of €234.2mn driven by Gross premiums written 1,132.0 897.8 26.1 other property (+€131.6mn) and motor 1,132 Net earned premiums 886.5 685.8 29.3 (+

  27. Slide 27: Romania

    ROMANIA Impairment of outstanding goodwill of €108.8mn; focus on profitable business growth GWP development (€mn) €mn 2019 2018 +/- % -9.1% Gross premiums written 468.2 515.3 -9.1  Premiums down by €47.1mn driven by Net earned premiums 346.9 323.5 7.2 intentional decrease of the MTPL business 515 F

  28. Slide 28: Baltic states

    BALTIC STATES First-time consolidation of Seesam Insurance GWP development (€mn) €mn 2019 2018 +/- % +33.1% Gross premiums written 500.3 375.8 33.1  Double-digit premium growth of 10.1% 500 Net earned premiums 385.2 277.1 39.0 adjusted for first-time consolidation of Financial result 11.4 5.2 >100

  29. Slide 29: Hungary

    HUNGARY Strong performance of Union Biztositó GWP development (€mn) €mn 2019 2018 +/- % +9.9% Gross premiums written 289.5 263.5 9.9  Premium growth mainly driven by MTPL 290 Net earned premiums 219.6 205.2 7.0 (+€17.0mn) and other property (+€7.8mn) Financial result 4.9 6.7 -27.4 264  Other expen

  30. Slide 30: Bulgaria

    BULGARIA Bulgarian Group companies with sound development in 2019 and strongly improved CoR GWP development (€mn) €mn 2019 2018 +/- % +30.7% Gross premiums written 223.9 171.3 30.7  Premium growth in all lines of business; 224 Net earned premiums 137.7 122.8 12.1 strongest development in health wit

  31. Slide 31: Turkey/Georgia

    TURKEY/GEORGIA Strong premium growth in Turkey; CoR improvement in both markets GWP development (€mn) €mn 2019 2018 +/- % +18.5% Gross premiums written 234.9 198.3 18.5  Premiums up by €36.6mn with other 235 Net earned premiums 112.4 97.1 15.7 property growing +€20.5mn and motor Financial result 7.

  32. Slide 32: Remaining CEE

    REMAINING CEE Excellent top line growth of all markets; overall satisfying profit development GWP development (€mn) €mn 2019 2018 +/- % +19.3% Gross premiums written 446.9 374.7 19.3  Remaining CEE: Albania (incl. Kosovo), 447 Net earned premiums 328.8 285.7 15.1 Bosnia-Herzegovina, Croatia, Moldov

  33. Slide 33: Other markets

    OTHER MARKETS Germany and Liechtenstein GWP development (€mn) €mn 2019 2018 +/- % +18.5% Gross premiums written 380.4 321.0 18.5  Premiums up by €59.4mn driven by single 380 Net earned premiums 332.3 275.1 20.8 premium business in Liechtenstein Financial result 16.6 19.2 -13.6 Other income 3.9 3.5

  34. Slide 34: Central Functions

    CENTRAL FUNCTIONS Deterioration due to lower financial result GWP development (€mn) €mn 2019 2018 +/- % +2.5% Gross premiums written 1,623.5 1,584.3 2.5  Central Functions include VIG Holding, 1,623 Net earned premiums 1,351.5 1,356.5 -0.4 VIG Re, VIG Fund, the non-profit societies Financial result

  35. Slide 35: Appendix

    STRATEGY RESULTS 2019 SEGMENTS APPENDIX Please note: The quarterly figures for net assets, financial position and results of operations are prepared in accordance with the International Financial Reporting Standards (IFRS). Rounding differences may occur when rounded amounts or percentages are added

  36. Slide 36: Managing Board of Vienna Insurance Group

    MANAGING BOARD OF VIENNA INSURANCE GROUP As of 1 January 2020 Elisabeth Stadler, CEO Franz Fuchs Liane Hirner, CFO Peter Höfinger Gerhard Lahner Gabor Lehel Harald Riener Peter Thirring Regional and functional responsibilities will be available in due course on www.vig.com; Copyright of pictures: Ia

  37. Slide 37: 2019 Key financials

    2019 KEY FINANCIALS Overview of KPIs Net result for the period after taxes and non-controlling interest (€mn) ROE before taxes and non-controlling interest (%) 331 10.5 298 269 8.9 8.3 2017 2018 2019 2017 2018 2019 EPS net of hybrid interest1 (€) Book Value per share1 (€) 2.59 31,93 32,64 33,67 2.23

  38. Slide 38: S&P rating confirmed in August 2019

    S&P RATING CONFIRMED IN AUGUST 2019 VIG remains best-rated company in the ATX Financial Risk Profile: Business BusinessRisk Financial RiskProfile: Profile: Very Strong Strong Strong Very Strong  „Leading market position in Austria and  Confirmation of “comfortable capital in most Central and Easte

  39. Slide 39: Equity development

    EQUITY DEVELOPMENT Decrease due to change of consolidation method of non-profit housing societies Change in consolidated Shareholders’ Equity (€mn) -11% 401 413 10 -143 5,836 5,191 -1,326 Equity as Profit for Currency AFS unrealised Dividend Other1 Equity as of 2018 the period changes gains and loss

  40. Slide 40: 2019 Balance sheet

    2019 BALANCE SHEET IFRS (€mn) €mn 31.12.2019 31.12.2018 +/- % Intangible assets 2.137 1 961 9,0 Investments 34.456 36 288 -5,1 Unit- and index-linked investments 8.620 8 049 7,1 Reinsurers’ share in underwriting provisions 1.283 1 136 13,0 Receivables 1.717 1 563 9,9 Tax receivables and advance paym

  41. Slide 41: 2019 Premiums by business lines and country (I)

    2019 PREMIUMS BY BUSINESS LINES AND COUNTRY (I) IFRS (€mn) MTPL Casco Other property 2019 2018 +/- % 2019 2018 +/- % 2019 2018 +/- % Austria 319.4 320.8 -0.4 295.3 288.0 2.5 1,384.5 1,312.2 5.5 Czech Republic 305.6 290.5 5.2 246.6 243.1 1.4 498.5 476.9 4.5 Slovakia 152.9 154.0 -0.7 106.3 108.9 -2.5

  42. Slide 42: 2019 Premiums by business lines and country (II)

    2019 PREMIUMS BY BUSINESS LINES AND COUNTRY (II) IFRS (€mn) Life regular Life single Health 2019 2018 +/- % 2019 2018 +/- % 2019 2018 +/- % Austria 1,238.8 1,240.3 -0.1 271.9 258.0 5.4 433.4 420.7 3.0 Czech Republic 633.7 609.4 4.0 44.5 50.2 -11.3 16.8 14.0 19.5 Slovakia 188.4 176.7 6.6 226.5 241.9

  43. Slide 43: 2019 Country overview GWP / PBT / combined ratio

    2019 COUNTRY OVERVIEW GWP / PBT / COMBINED RATIO IFRS (€mn) GWP Total Result before taxes Combined Ratio net (in %) 2019 2018 +/- % 2019 2018 +/- % 2019 2018 +/- %p Austria 3,943.3 3,839.9 2.7 207.3 170.4 21.7 93.5% 94.2% -0.7 Czech Republic 1,745.8 1,684.2 3.7 172.4 166.7 3.5 92.0% 92.7% -0.7 Slova

  44. Slide 44: 2019 Exchange rates

    2019 EXCHANGE RATES Balance Sheet: period-end exchange rate / P&L: average exchange rate 2019 2018 Country Currency Balance Sheet P&L Balance Sheet P&L EUR EUR EUR EUR Albania EUR/ALL 121.7700 122.9982 123.4200 127.5752 Belarus EUR/BYN 2.3524 2.3423 2.4734 2.4051 Bosnia & Herzegovina EUR/BAM 1.9558

  45. Slide 45: VIG Share (I)

    VIG SHARE (I) Number of common shares: 128,000,000 / ISIN: AT0000908504 General information Analyst recommendations (31 Mar. 2020) Current listings Ticker Rating Major Indices Vienna  Vienna Stock Exchange: VIG Standard & Poor´s: ATX BUY Prague  Bloomberg: VIG AV / VIG CP A+, stable outlook ATX Pr

  46. Slide 46: VIG Share (II)

    VIG SHARE (II) Shareholder structure Free float split by region1 North America 34% Continental Europe 27% ~70% ~30% Austria 25% UK & Ireland 12% Other 2% Wiener Städtische Versicherungsverein Free Float (Mutual) 1: Split of identified shares, April 2019 (Source: CMi2i) 46 APPENDIX VIG VIENNA INSURAN

  47. Slide 47: Appendix

    47 APPENDIX VIG VIENNA INSURANCE GROUP

  48. Slide 48: Contact details / financial calendar

    CONTACT DETAILS / FINANCIAL CALENDAR Investor Relations / investor.relations@vig.com / www.vig.com Nina Higatzberger-Schwarz Sylvia Machherndl Financial calendar 20201 Tel. +43 (0)50 390 – 21920 Tel. +43 (0) 50 390 – 21151 Date Event nina.higatzberger@vig.com sylvia.machherndl@vig.com 17 Mar. 2020 P

  49. Slide 49: 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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