Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — FY2014 Earnings Presentation
51 slides from Vienna Insurance's earnings presentation, Apr 14, 2015
Slide 1: Vienna Insurance Group 2014 Full Year Results Presentation
Vienna Insurance Group 2014 Full Year Results Presentation Vienna, 14 April 2015 Highlights Financials Embedded Value 2015 onwards Main regions Appendix
Slide 2: 2014 Results conference call overview
2014 Results conference call overview Presenting team and topics Presenting team: Peter Hagen, CEO Martin Simhandl, CFO Peter Höfinger, Member of the Managing Board Roland Gröll, Head of Group Finance and Accounting Werner Matula, Group Chief Actuary Nina Higatzberger, Head of Investor Relations Top
Slide 3: Consistent focus on profitability
Consistent focus on profitability 5 consecutive years of dividend growth Strong increase of profit before taxes to €518.4mn (+46.0%) +46.0% Profit in CEE of €331.3mn contributing 64% to Group PBT Czech Republic contributing more than Austria for the first time Record results in Slovakia, Poland and
Slide 4: 25 years in Central and Eastern Europe (CEE)
25 years in Central and Eastern Europe (CEE) VIG - Value Inspired Growth Geographical distribution VIG – established confidence for the future GWP CEE First-mover advantage in the region with GWP 51% subsequent outperformance of the market 51% CEE From <5 to ~50 insurance companies 100% Footprint co
Slide 5: Continued growth in CEE
Continued growth in CEE Home-field advantage for VIG Development in CEE markets impacted by negative FX effects PBT CEE PBT Remaining GWP Remaining (€mn) markets CEE markets CEE 42% (€mn) 16% (€mn) 26% 331 33 799 810 28 740 268 271 641 233 23 3 12M11 12M12 12M13 12M14 12M11 12M12 12M13 12M14 12M11 1
Slide 6: Romania – back in profits
Romania – back in profits Improved market environment supports restructuring efforts 2013: Kitchen sinking in Romania 2014: Wind of change Implementation of a set of measures PBT (€mn) CoR (%, net) RO Non-Life: -74%p 6 Further increase of motor tariffs 179% Introduction of deductibles in Casco 105%
Slide 7: Net combined ratio in CEE of 93.4%
Net combined ratio in CEE of 93.4% CoR in CEE reaches new low Combined ratio development in CEE (net, %) Combined ratio in CEE excl. Romania (net, %) 102.00 -6.7%p 99.1 92.4 98.00 94.00 90.00 12M10 12M11 12M12 12M13 12M14 12M10 12M14 CoR CEE excl. RO Combined Ratio CEE Combined ratio in CEE Average
Slide 8: Business highlights 2014
Business highlights 2014 Main markets overview of VIG VIG #1 in Austria with overall market share of ~24% Solid premium development for an established market; PBT 2014 impacted by HETA (former HAA) VIG #1 in the Czech Republic with ~34% market share Czech Republic contributing more than Austria to G
Slide 9: Financials and investments
Financials and Highlights Embedded Value investments 2015 and onwards Main regions Appendix Highlights Financials Embedded Value 2015 onwards Main regions Appendix
Slide 10: Solid premium development in challenging environment
Solid premium development in challenging environment CEE Remaining markets premiums based on local currencies up by 9.1% Gross written premiums (€mn; y-o-y chg.) GWP regional split y-o-y chg. -1% Austria 4,077 0% 9,219 9,146 Czech Republic 1,683 -4% Health 398 386 -58 -3 -12 Slovakia 727 -2% Life 4,
Slide 11: Strong PBT growth driven by improved P&C segment
Strong PBT growth driven by improved P&C segment Czech Republic for the first time biggest contributor to PBT Profit before taxes (€mn; y-o-y change) PBT regional split y-o-y chg. +46% Austria 170 -28% 256 Czech Republic 178 -10% 12 518 47 Slovakia 59 8% -104 355 Poland 55 10% 162 Health 36 Romania
Slide 12: Significantly improved combined ratios
Significantly improved combined ratios Group combined ratio decreased to solid 96.7% P&C Combined ratio development P&C CoR 12M y-o-y regional development (net, %) -3.9%p AT 101.4 -1.4%p 100.6 96.7 99.9 CZ 91.5 -5.3%p 86.2 SK 93.6 -2.3%p 12M13 Claims ratio 69.4 65.8 91.3 96.2 12M14 PL +0.1%p 96.3 RO
Slide 13: Impacts on VIG of HETA (former Hypo Alpe Adria)
Impacts on VIG of HETA (former Hypo Alpe Adria) Write-downs of ~€79mn of investments VIG bond exposure to HETA – nominal values Subordinated with guarantee of Carinthia Senior with guarantee of Carinthia ~50% -50% 55 50 28 25 0 12M 2013 6M 2014 12M 2014 12M 2013 12M 2014 Remarks As of 6M 2014 about
Slide 14: Solvency 2 under way – VIG well prepared
Solvency 2 under way – VIG well prepared VIG working on partial internal model for non-life and real estate EIOPA Stress Test 2014 under standard formula Status quo of preparation for Solvency 2 VIG being part of the exercise VIG steering process out of Austria Excluding internal model VIG is in the
Slide 15: Maintaining steady dividends – DPS of €1.40
Maintaining steady dividends – DPS1 of €1.40 Dividend yield amounting to 3.8%2 for 2014 Dividend per share1 (€) Dividend pay-out (€mn) 8% CAGR 9% 1.40 179.2 1.30 166.4 1.20 153.6 1.10 140.8 1.00 128.0 2010 2011 2012 2013 2014p 2010 2011 2012 2013 2014p Dividend policy Unchanged dividend policy with
Slide 16: 12M 2014 – Strong equity and solvency position
12M 2014 – Strong equity and solvency position Shareholders’ equity Change in Group Shareholders’ Equity (€mn) +6% 213 391 5,283 -52 -201 -34 4,967 Equity restated Profit for Currency AFS unrealised Dividend payment Other Equity as as of YE 2013 the period changes gains and losses of YE 2014 Strong
Slide 17: Conservative investments with a well diversified bond portfolio
Conservative investments with a well diversified bond portfolio Biggest part invested in fixed income assets 12M 2014: Total €31.1bn Bond portfolio by rating1 Other 6% 6% 6.0% 12% 12% 3.1% BBB 0.0% A 38% 38% 10.0% AA 28% 29% 6.3% AAA 16% 15% 3.6% 12M 2013 12M 2014 Bond portfolio by issuer 71.0% Corp
Slide 18: Financial result 2014
Financial result 2014 Impacted by low yield environment and HETA impairments Financial result (€mn) Remarks -9% An enduring low yield environment will impact 1,227 the financial result in 2015 and going forward -20 which will highly likely not be fully compensated by improved technical 14 1,117 insu
Slide 19: Further investment diversification towards real estates
Further investment diversification towards real estates Increased investments in real estates to mitigate low yield environment Real estates portfolio development (€bn) Housing Societies effect on real estates -43% Gradual change of consolidation method 3.2 2.7 1.9 from full to at equity leading to
Slide 20: Embedded Value
Financials and Highlights Embedded Value investments 2015 and onwards Main regions Appendix Highlights Financials Embedded Value 2015 onwards Main regions Appendix
Slide 21: Group Embedded Value 2014 development
Group Embedded Value 2014 development Return on GEV (€mn) 2.0% 6,152.7 (+118.5) 203.6 6,111.7 6.9 5,993.2 -166.4 -85.1 2013 reported Dividends FX Effects 2013 adjusted Return in L&H Return in P&C 2014 and others Remarks High P&C growth with return of 10.1% Positive Return on GEV of 2.0% amounting to
Slide 22: EV 2014 – Analysis of Change (Austria/Germany)
EV 2014 – Analysis of Change Life & Health MCEV – Austria / Germany (€mn) -13.8% (-324.7) 112.4 31.3 22.8 2,356.9 -24.0 2,032.2 -467.2 2013 adjusted Value of New Roll forward Assumptions Experience and Economic and 2014 Business other operating other non-operating Remarks Operating return of 6.0% Ne
Slide 23: EV 2014 – Analysis of Change (CEE)
EV 2014 – Analysis of Change Life & Health MCEV – CEE (€mn) 14.7% (+239.6) 48.5 1,865.6 51.7 20.9 126.7 -8.3 1,625.9 2013 adjusted Value of New Roll forward Assumptions Experience and Economic and 2014 Business other operating other non-operating Remarks High growth with return of 15% Profitability
Slide 24: 2015 and onwards
Financials and Highlights Embedded Value investments 2015 and onwards Main regions Appendix Highlights Financials Embedded Value 2015 onwards Main regions Appendix
Slide 25: 2015 and onwards – Management assessment
2015 and onwards – Management assessment VIG sticks to its conservative roots VIG is mid-term committed to: Growth above market and to consolidate market leader position with unique strategy In non-life insurance further optimisation and increased profitability -> CoR below 96% Return on equity (RoE
Slide 26: Main regions
Financials and Highlights Embedded Value investments 2015 and onwards Main regions Appendix Highlights Financials Embedded Value 2015 onwards Main regions Appendix
Slide 27: Austria - burdened by Italy and HETA impairments
Austria - burdened by Italy and HETA impairments Premiums in P&C up 3.6% excl. Italian business of Donau GWP development (€mn) P&C GWP direct business split1 +0.1% MTPL 4,074 4,077 19% (23%) P&C 1,872 1,838 14% Health 357 368 (14%) Casco 67% Life 1,845 1,871 (63%) Non-motor 12M 13 12M 14 P&L: P&C bu
Slide 28: Czech Republic – excellent combined ratio of 86.2%
Czech Republic – excellent combined ratio of 86.2% GWPs adjusted for negative FX effects increased by 1.3% GWP development (€mn) P&C GWP direct business split1 -4.5% 1,762 1,683 MTPL 31% P&C 892 827 (29%) Non-motor 47% (51%) Life 870 857 22% (21%) 12M 13 12M 14 Casco P&L: P&C business (€mn) P&L: Lif
Slide 29: Slovakia – Profit growth of 7.6% to record result
Slovakia – Profit growth of overall 7.6% to record result of €59.5mn Development in life impacted by less single premium business GWP development (€mn) P&C GWP direct business split1 -2.4% 745 727 Non-motor 33% P&C 326 331 (32%) 40% MTPL (41%) Life 419 396 27% (27%) 12M 13 12M 14 Casco P&L: P&C busi
Slide 30: Poland – Overall record result of €55.2mn
Poland – Overall record result of €55.2mn despite fierce competition in motor Reduction of STEP in life ongoing GWP development (€mn) P&C GWP direct business split1 -9.5% 1,142 1,034 MTPL 32% P&C 560 Non-motor 43% (33%) 554 (41%) Life 582 480 25% (26%) 12M 13 12M 14 Casco P&L: P&C business (€mn) P&L
Slide 31: Romania – going according to script for improvement
Romania – going according to script for improvement, currently supported by better market environment Restructuring efforts will be maintained GWP development (€mn) P&C GWP direct business split1 -6.1% 362 340 Non-motor 35% 38% MTPL (38%) (29%) P&C 300 285 Life 62 27% 54 (33%) 12M 13 12M 14 Casco P&
Slide 32: Remaining markets – premiums excl. FX up 14.5%
Remaining markets – premiums excl. FX up 14.5% Increased profit contribution; overall PBT up 5.4% GWP development (€mn) P&C GWP direct business split1 +8.9% MTPL 1,156 1,062 23% (20%) 606 P&C 607 18 57% Health 40 Non-motor (58%) 20% 531 (22%) Life 414 Casco 12M 13 12M 14 P&L: P&C business (€mn) P&L:
Slide 33: Appendix
Financials and Highlights Embedded Value investments 2015 and onwards Main regions Appendix Please note: The figures for 2013 have been restated due to changes in the scope of consolidation. Highlights Financials Embedded Value 2015 onwards Main regions Appendix
Slide 34: 12M 2014 Key financials
12M 2014 Key financials Overview of KPIs Net Profit after tax and minorities (€mn) Combined Ratio (net, %) 426 96.7 100.6 96.7 367 234 2012 2013 2014 2012 2013 2014 EPS1 (€) ROE before Taxes (%) 3.01 10.5 10.1 2.75 6.7 1.57 2012 2013 2014 2012 2013 2014 1: EPS net of hybrid interest, annualised figu
Slide 35: 12M 2014 – Income statement
12M 2014 – Income statement IFRS (€mn) €mn 12M 2014 12M 2013 +/-% Gross premiums written 9,145.7 9,218.6 -0.8 Net earned premiums 8,353.7 8,479.1 -1.5 Financial result1 1,116.9 1,226.9 -9.0 Other income 125.5 143.9 -12.8 Total income 9,596.1 9,849.8 -2.6 Expenses for claims and insurance benefits -6
Slide 36: 12M 2014 – Balance sheet
12M 2014 – Balance sheet IFRS (€mn) €mn 31.12.2014 31.12.2013 +/-% Intangible assets 2,370 2,318 2.3 Investments 30,360 29,094 4.4 Unit- and index-linked investments 7,742 6,707 15.4 Reinsurers’ share in underwriting provisions 1,106 1,028 7.5 Receivables 1,502 1,562 -3.8 Tax receivables and advance
Slide 37: 12M 2014 – Financial result
12M 2014 – Financial result Net realised gains of less than €50mn Income P&C Life Health Total in € '000 12M 2014 12M 2013 12M 2014 12M 2013 12M 2014 12M 2013 12M 2014 12M 2013 Current income 271,935 368,767 858,710 893,016 50,831 42,484 1,181,477 1,304,267 Income from appreciations 62,595 22,004 17
Slide 38: 12M 2014 P&L – Property & Casualty
12M 2014 P&L – Property & Casualty IFRS (€mn) €mn 12M 2014 12M 2013 +/-% Gross premiums written 4,560.4 4,618.4 -1.3 Net earned premiums 3,791.3 3,910.0 -3.0 Financial result 247.5 267.5 -7.5 Other income 79.4 85.2 -6.9 Total income 4,118.2 4,262.8 -3.4 Expenses for claims and insurance benefits -2,
Slide 39: 12M 2014 P&L – Life
12M 2014 P&L – Life IFRS (€mn) €mn 12M 2014 12M 2013 +/-% Gross premiums written 4,199.0 4,202.4 -0.1 Net earned premiums 4,166.2 4,168.6 -0.1 Financial result 835.8 940.1 -11.1 Other income 46.0 58.5 -21.4 Total income 5,048.0 5,167.2 -2.3 Expenses for claims and insurance benefits -4,094.4 -4,162.
Slide 40: 12M 2014 P&L – Health
12M 2014 P&L – Health IFRS (€mn) €mn 12M 2014 12M 2013 +/-% Gross premiums written 386.3 397.8 -2.9 Net earned premiums 396.2 400.4 -1.0 Financial result 33.5 19.3 74.0 Other income 0.1 0.2 -26.7 Total income 429.9 419.8 2.4 Expenses for claims and insurance benefits -330.3 -333.6 -1.0 Acquisition a
Slide 41: 12M 2014 P&L – Split by regions (I)
12M 2014 P&L – Split by regions (I) IFRS (€mn) Austria Czech Republic Slovakia €mn 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-% Gross premiums written 4,077.0 4,073.9 0.1 1,683.4 1,762.1 -4.5 727.0 744.7 -2.4 Net earned premiums 3,370.8 3,348.5 0.7 1,366.0 1,429.6 -4.4 597.0
Slide 42: 12M 2014 P&L – Split by regions (II)
12M 2014 P&L – Split by regions (II) IFRS (€mn) Poland Romania Remaining €mn 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-% Gross premiums written 1,034.1 1,142.3 -9.5 339.7 361.8 -6.1 1,155.6 1,061.6 8.9 Net earned premiums 852.9 939.7 -9.2 184.5 171.0 7.9 880.1 809.3 8.8 Fina
Slide 43: 12M 2014 P&L – Split by regions (III)
12M 2014 P&L – Split by regions (III) IFRS (€mn) Central Functions Consolidation TOTAL €mn 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-% Gross premiums written 1,289.8 1,303.9 -1.1 -1,160.9 -1,231.6 n.a. 9,145.7 9,218.6 -0.8 Net earned premiums 1,105.5 1,160.1 -4.7 -3.2 5.8 n.
Slide 44: 12M 2014 – Results by country (I)
12M 2014 – Results by country (I) IFRS (€mn) GWP P&C GWP Life GWP Health GWP Total 12M 12M 12M 12M 12M 12M 12M 12M +/-% +/-% +/-% +/-% 2014 2013 2014 2013 2014 2013 2014 2013 Austria 1,838.1 1,871.9 -1.8% 1,870.7 1,844.5 1.4% 368.2 357.4 3.0% 4,077.0 4,073.9 0.1% Czech Rep. 826.7 892.0 -7.3% 856.8 8
Slide 45: 12M 2014 – Results by country (II)
12M 2014 – Results by country (II) IFRS (€mn) Profit before Taxes Net Combined Ratio 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-%p Austria 169.7 235.1 -27.8% 99.9% 101.4% -1.4 Czech Rep. 177.9 197.8 -10.1% 86.2% 91.5% -5.3 Slovakia 59.5 55.3 7.6% 91.3% 93.6% -2.3 Poland 55.2 50.2 9.8% 96.3% 96.2% 0
Slide 46: 12M 2014 – P&C Claims and cost ratio details
12M 2014 – P&C Claims and cost ratio details Overall claims ratio decreased by 3.6%p and cost ratio down by 0.3%p Claims ratio 12M y-o-y regional development (net, %) Remarks for claims incurred Austria: claims ratio down 1.2%p driven by development of Donau 12M13 12M14 -46.4 Versicherung (less busi
Slide 47: 12M 2014 – Exchange rates
12M 2014 – Exchange rates 12M 2014 12M 2013 Balance Sheet Balance Sheet Country Currency P & L EUR P & L EUR EUR EUR Albania EUR/ALL 140.1400 139.9692 140.2000 140.2723 Belarus EUR/BYR 14,380.0000 13,578.3288 13,080.0000 11,799.1233 Bosnia EUR/BAM 1.9558 1.9558 1.9558 1.9558 Bulgaria EUR/BGN 1.9558
Slide 48: VIG share (I)
VIG share (I) Current analyst recommendation split Share price development 3M 2015 Sell Buy High EUR 42.550 Low EUR 35.825 Price as of 31 Mar. EUR 41.200 Average daily volume EUR 4.1 mn Market cap. EUR 5.3 bn Development YTD % 11.1 Hold VIG compared to ATX and Stoxx Europe 600 Ins. 125 120 115 110 1
Slide 49: VIG share (II)
VIG share (II) General information Shareholder structure Number of common shares: 128mn ISIN: AT0000908504 ~30% Wiener Städtische Free Float Listings: Wechselseitiger Versicherungsverein - Vienna – since 17 Oct. 1994 Vermögensverwaltung – Vienna Insurance Group ~70% Prague – since 5 Feb. 2008 Ticker
Slide 50: Contact details
Contact details Investor Relations Financial calendar 2015 Investor Relations Team Date Event Vienna Insurance Group Schottenring 30, 1010 Vienna Publication: Preliminary E-Mail: investor.relations@vig.com 27 Jan. 2015 unconsolidated premiums 2014 www.vig.com/ir Nina Higatzberger (Head of IR) 14 Apr
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
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