Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Erste Bank Stegersbach conference 2008
23 slides from Vienna Insurance's conference presentation, Oct 1, 2008
Slide 1: VIG – A Top Insurance Player in CEE
VIG – A Top Insurance Player in CEE Erste Bank – Stegersbach, 1 – 2 October 2008
Slide 2: Contents
Contents A 2 A Investment proposition B Growth potential in CEE and Austria C Exploiting the potential D Progressing on the path of growth
Slide 3: Investment Proposition at a Glance
Investment Proposition at a Glance VIG set two strategic milestones Milestone 1 A 3 § VIG is pioneer in CEE; start of expansion in 1990 - “Big fish in a small pond” - Going east immediately after the fall of the iron curtain due to potential of emerging markets and proximity § VIG - Progressing on t
Slide 4: VIG Growth Strategy Delivers
VIG Growth Strategy Delivers Growth materialises in strong increase in profitability A 4 VIG's Path of Profitability Extensive Track Record § VIG is early mover into CEE 8,000 450 GWP § Entry into new markets at the right 400 7,000 PBT point of time when relevant 6,000 350 insurance business lines a
Slide 5: Purest CEE Insurance Play
Purest CEE Insurance Play VIG is the only international insurer with 43% of business from CEE A 5 Footprint CEE Premiums as % of Total Group Premiums 42.9% VIG 37.5% 31.1% 28.7% 15.5% 2007 UNIQA 12.6% 2006 10.2% 10.1% 2005 2004 5.0% Allianz 3.6% 3.3% 3.0% 3.0% VIG‘s unique share of CEE ING 2.6% busi
Slide 6: Strengthening No.1 Position in CEE
Strengthening No.1 Position in CEE Taking on leadership in life insurance A 6 Total Market Share in CEE1 Market Share in CEE1 Life 12.7% 14.6% 9.9% 11.4% 8.3% 8.2% 11.0% 6.7% 6.1% 4.6% 3.9% 4.5% 3.5% 3.2% 3.1% 3.9% 3.8% 2.4% 2.3% 2.2% KBC VIG ING AIG KBC VIG ING AIG Aviva Uniqa Aegon Allianz Groupam
Slide 7: Contents
Contents B 7 A Investment proposition B Growth potential in CEE and Austria C Exploiting the potential D Progressing on the path of growth
Slide 8: CEE Region Offers Multiple Growth
CEE Region Offers Multiple Growth Insurance density and product demand correlate with GDP growth B 8 4,000 EU-15 Mature Markets Insurance Density (USD) RUS BG A 2,000 UKR RO CRO H SK SLO PL SER TR CZ Growth Markets 0 Emerging Markets 0 10,000 20,000 30,000 40,000 50,000 GDP per Capita (USD) Pension
Slide 9: Macro Environment in CEE Countries
Macro Environment in CEE Countries CEE growth to outperform EU levels B 9 Czech Republic Slovakia 9.0% 12.0% 8.0% GDP Grow th GDP Grow th CPI 10.0% CPI 7.0% Une m ploym ent Unemployment 6.0% 8.0% 5.0% 6.0% 4.0% 3.0% 4.0% 2.0% 2.0% 1.0% 0.0% 0.0% 2006 2007 2008f 2009f 2010f 2006 2007 2008f 2009f 2010
Slide 10: Now is the Time for Life Business
Now is the Time for Life Business Banking distribution is key for harvesting CEE life potential B 10 CEE Insurance Markets1 Comments § Life gaining importance in mature 58% 53% 54% NL markets 73% 65% 61% 83% 79% 80% L § In EU-15 about 2/3 of insurance market is life business 17% 21% 20% 27% 35% 39%
Slide 11: The Austrian Case
The Austrian Case VIG capitalises on catch-up potential in life insurance B 11 Life Insurance Density is low in Austria VIG capitalises on Life Insurance Growth $4,000 3,668 $3,500 Life $3,000 2,621 Non-life $2,500 2,376 $2,000 1,190 13.6% $1,500 $1,000 6.0% 9.8% 1,291 1,431 $500 273 $0 EU-15 A CEE
Slide 12: Contents
Contents C 12 A Investment proposition B Growth potential in CEE and Austria C Exploiting the potential D Progressing on the path of growth
Slide 13: Acquisition of s Versicherung
Acquisition of s Versicherung A deal to reap CEE life growth potential C 13 Long-Term Preferred Bancassurance Agreement Acquisition of Erste Bank’s Insurance Operations Erste Bank Strengths § VIG successfully diversifies its distribution channels in core markets § Erste Bank’s distribution system is
Slide 14: VIG Management Approach
VIG Management Approach Success in CEE is based on three cornerstones C 14 Steering Multi-Brand Multi-Channel § Each board member of VIG parent has direct responsibility for CEE countries Tied agents § VIG board members closely Brokers Banks Other involved in management of subsidiaries to build know
Slide 15: Group Wide Performance Initiatives
Group Wide Performance Initiatives Measures to enhance future performance C 15 Shared services concept within each country + Rollout of Group IT Efficiency + + Business Growth Group reinsurance company + Group underwriting platform for corporate clients
Slide 16: Measures to Enhance Performance (I)
Measures to Enhance Performance (I) Long-term process to enhance operational efficiency C 16 IT Restructuring in VIG VIG IT Strategy 2008 § Fast expansion of VIG resulted in higher Group IT complexity: - 23 countries, 20 currencies, 21 languages - 45 companies with individual organisation § One inte
Slide 17: Measures to Enhance Performance (II)
Measures to Enhance Performance (II) Set-up of a CEE reinsurance company C 17 VIG Re – 3 Year Business Plan Key Considerations Premiums ceded to external re-insurers § Levering longstanding market knowledge and strong CEE footprint – incorporated in Czech Republic § Pooling of VIG reinsurance volume
Slide 18: Measures to Enhance Performance (III)
Measures to Enhance Performance (III) VIU – Group platform for multinational corporates C 18 Vienna International Underwriters Features § Increasing demand for insurance solutions for large corporate clients in CEE § Target group are Top 250 corporate clients in CEE countries § Focus on property ins
Slide 19: Contents
Contents D 19 A VIG on a steady path of growth B Growth potential in CEE and Austria C Exploiting the potential D Progressing on the path of growth
Slide 20: Profit Drivers in CEE
Profit Drivers in CEE Creating value from cost ratio, investment income and reinsurance D 20 Earnings Potential Comments Loss Ratio (%) Cost Ratio (%) § Decrease in cost ratio 100 - economies of scale in less advanced markets 80 - cost reduction programmes in advanced 60 markets 40 - shared services
Slide 21: 6M 2008 Investment Split
6M 2008 Investment Split Prudent investment policy paying off D 21 Investment Policy Portfolio Overview Alternative Inv. Affiliated § VIG follows a conservative Companies ~ 1% Loans ~ 5% investment policy throughout ~ 6% market cycles § VIG has no US-subprime investments Real Estate Bonds ~ 16% ~ 65
Slide 22: Financial Outlook
Financial Outlook Year end 2008 D 22 VIG’s Financial Outlook Comments Profit before tax target in € mn ~540 - It is company philosophy to keep the Combined Ratio well below 100% 437 throughout the business cycle 288 - VIG dividend policy is defined as a payout ratio of min. 30% of Group net profit 2
Slide 23: VIG - Progressing on the Path of Growth
VIG - Progressing on the Path of Growth VIG outperformed own commitments D 23 Undertaking Three Years Ago Position Today § Expansion of its position in Austria § Increased market share in Austria by more than 3% pts – VIG no. 1 § Expansion of CEE business through acquisitions and organic growth § CE
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