Vienna Insurance Group Ag · VIE:VIG

Vienna Insurance — FY2017 Earnings Presentation

54 slides from Vienna Insurance's earnings presentation, Mar 22, 2018

  1. Slide 1: 2017 Preliminary Results Presentation

    2017 PRELIMINARY RESULTS PRESENTATION Vienna, 22 March 2018

  2. Slide 2: Presenting team and topics

    2017 PRELIMINARY RESULTS CONFERENCE CALL Presenting team and topics Presenting Topics team  Elisabeth Stadler, CEO  Highlights & Agenda 2020 p. 3  Martin Simhandl, CFO  Financials & Investments p. 8  Werner Matula, Group Chief Actuary  Life & Health Embedded Value p. 15  Q&A session:  Divide

  3. Slide 3: Highlights & Agenda 2020

    HIGHLIGHTS & AGENDA 2020 FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE DIVIDEND & OUTLOOK APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 3 VIG VIENNA INSURANCE GROUP

  4. Slide 4: Key Facts 2017

    KEY FACTS 2017 Strong preliminary full-year results with improvements in all key ratios Gross written premium Profit before taxes Combined Ratio € 9,386.0mn € 442.5mn 96.7% GWP up 3.7% y-o-y PBT increased by 8.8% y-o-y Down from 97.3% in 2016  Current premium business: +6.2%  CEE profit growth of

  5. Slide 5: M&A in 2017

    M&A IN 2017 VIG successfully manages diversity and fully subscribes to multi-brand approach Mergers Acquisitions  Serbia  Romania In August 2017 merger of Wiener Städtische Osiguranje Closing of acquisition of AXA Life in April 2017 and the two AXA companies acquired in 2016 (fully consolidated si

  6. Slide 6: 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

  7. Slide 7: 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,

  8. Slide 8: Financials & Investments

    HIGHLIGHTS & AGENDA 2020 FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE DIVIDEND & OUTLOOK APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 8 VIG VIENNA INSURANCE GROUP

  9. Slide 9: Gross written premiums of €9.4bn up 3.7%

    GROSS WRITTEN PREMIUMS OF €9.4bn UP 3.7% Overview by segments Gross written premiums (€mn; y-o-y- chg.)  Current premium business up 6.2%  Premium growth in CEE 9.4% with strong contribution from PL, SK, HU and BG  AT: Decrease driven by reduced single premium business (-€135mn) -2.4%  RO: Devel

  10. Slide 10: Dynamic premium development

    DYNAMIC PREMIUM DEVELOPMENT Gross written premiums by lines of business (€mn; y-o-y chg.); incl. Central Functions MTPL Casco Other property Total premiums +3.7% 2016 1,300 959 3,752 9,386 9,051 +5.8% +12.2% +5.9% MTPL 1,300 1,375 2017 1,375 1,076 3,973 1,076 Casco 959 Other Property 3,752 3,973 Hea

  11. Slide 11: Group profit before taxes of €442.5mn

    GROUP PROFIT BEFORE TAXES OF €442.5mn Overview by segments Result before taxes (€mn; y-o-y change)  CEE profit growth of 17.7%  AT: Profit decline due to positive one-off in the financial result 2016  CZ: Slight decrease driven by CoR deterioration in P&C -10.4%  PL: Positive development in moto

  12. Slide 12: Combined ratio (P&C) improved to 96.7%

    COMBINED RATIO (P&C) IMPROVED TO 96.7% …despite substantial weather-related claims (incl. storm Herwart with ~€30mn net impact) P&C Combined Ratio development Overview by segments (12M y-o-y development net, %) -36.4%p  AT: improved claims ratio outweighs slight cost ratio increase +7.0%p -1.5%p -2

  13. Slide 13: Investment split and bond portfolio overview

    INVESTMENT SPLIT AND BOND PORTFOLIO OVERVIEW No fundamental changes 2017: Total €37.4bn Bond portfolio by rating1 4.8% 1.3% 6.1% AAA AA A BBB Other 2016 10% 24% 41% 19% 5% 6.9% 2017 10% 22% 45% 17% 5% 5.7% 65.5% Bond portfolio by issuer 9.7% 2016 56% 8% 19% 18% Bonds Deposits and Cash Real Estate fr

  14. Slide 14: Financial result down by 3.6%

    FINANCIAL RESULT DOWN BY 3.6% Financial result incl. at equity consolidated companies Total Income 2017 2016 +/- % Current income 1,365,774 1,189,381 14.8  Fully consolidated non-profit housing societies impact Income from appreciations 27,761 59,372 -53.2 current income, depreciation of investment

  15. Slide 15: Life & Health Embedded Value

    HIGHLIGHTS & AGENDA 2020 FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE DIVIDEND & OUTLOOK APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 15 VIG VIENNA INSURANCE GROUP

  16. Slide 16: Life & Health Embedded Value Austria / Germany

    LIFE & HEALTH EMBEDDED VALUE AUSTRIA / GERMANY in €mn 17.3% 100.0 2,539.9  New Business Margin 261.1 (PVNBP-Ratio) increased to 2.4% in 2017 (2016: 2.0%) 40.2 28.2 2,165.7  Positive impact of prudent -55.3 reserves and assumptions 1,950.2  Positive impact of increase in economic rates 1,686.5 39.

  17. Slide 17: Life & Health Embedded Value CEE

    LIFE & HEALTH EMBEDDED VALUE CEE in €mn 6.9% 89.0  New Business Margin 15.1 1,964.7 (PVNBP-Ratio) increased to 112.7 7.5% in 2017 (2016: 6.1%) -0.6 -90.0 1,838.5  Material contribution by new business sold in 2017 1,500.0 1,504.5  Favorable experience 112.7 variance, especially 90.9 persistency g

  18. Slide 18: Life & Health Embedded Value Total

    LIFE & HEALTH EMBEDDED VALUE TOTAL in €mn 12.5% 350.1 9.9 4,504.6  New Business Margin (PVNBP-Ratio) increased to 43.3 4.8% in 2017 (2016: 3.8%) 153.0 4,004.3 -55.9  Positive (Austria / Germany) and negative (CEE) economic 3,450.1 variance significantly 3,191.0 diversified 130.7 153.0 2016 2017 20

  19. Slide 19: Dividend & Outlook

    HIGHLIGHTS & AGENDA 2020 FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE DIVIDEND & OUTLOOK APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 19 VIG VIENNA INSURANCE GROUP

  20. Slide 20: 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 share1 (€) 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

  21. Slide 21: Outlook 2020

    OUTLOOK 2020 Stable development and continuous improvement Gross written premium Profit before taxes Combined Ratio > € 10bn € 500mn - € 520mn 95% Based on the current positive In line with continuous premium growth, VIG VIG will further focus on its underwriting macroeconomic development, VIG targe

  22. Slide 22: Appendix 1: Segments

    HIGHLIGHTS & AGENDA 2020 FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE DIVIDEND & OUTLOOK APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 22 VIG VIENNA INSURANCE GROUP

  23. Slide 23: Austria

    AUSTRIA Premiums up by 1.2% adjusted for life single premium business GWP development (€mn) €mn 2017 2016 +/- % -2.4% Gross premiums written 3,848.5 3,941.3 -2.4  Financial result 2016 impacted by positive 3,941 Net earned premiums 3,165.1 3,247.9 -2.6 one-off from HETA (2016: ~€40mn) 3,848 MTPL 31

  24. Slide 24: Czech Republic

    CZECH REPUBLIC Solidly improved technical result in Life did not fully offset negative development in P&C GWP development (€mn) €mn 2017 2016 +/- % +4.9% Gross premiums written 1,603.2 1,529.1 4.9  Decrease in life single premium business 1,603 Net earned premiums 1,206.7 1,151.5 4.8 more than offs

  25. Slide 25: Slovakia

    SLOVAKIA Strong premium and profit growth GWP development (€mn) €mn 2017 2016 +/- % +10.6% Gross premiums written 810.0 732.3 10.6  Premium growth in all lines of business 810 Net earned premiums 679.3 597.9 13.6 except other property (-€5mn) Financial result1 53.6 52.8 1.5 732  Expenses for claim

  26. Slide 26: Poland

    POLAND Excellent developments in motor lines of business GWP development (€mn) €mn 2017 2016 +/- % +8.2% Gross premiums written 886.6 819.2 8.2  Lower financial result more than offset by 887 Net earned premiums 716.3 669.7 7.0 improved technical results in P&C 819 Financial result1 24.5 34.4 -28.8

  27. Slide 27: Romania

    ROMANIA CoR below 100% and strong performance in Life GWP development (€mn) €mn 2017 2016 +/- % -5.0% Gross premiums written 506.5 533.4 -5.0  Premium decrease driven by less MTPL 533 Net earned premiums 375.6 351.1 7.0 business (-€54.6mn); due to introduction 507 Financial result1 13.3 13.6 -2.4 o

  28. Slide 28: Baltic States

    BALTIC STATES First-time consolidation of BTA in 2017 on top of strong organic premium growth GWP development (€mn) €mn 2017 2016 +/- % +133.7% Gross premiums written 327.6 140.2 >100  BTA Baltics contributed ~€165mn in 328 Net earned premiums 242.9 108.1 >100 premiums; adjusted for BTA consolidati

  29. Slide 29: Hungary

    HUNGARY CoR strongly improved to 98.9% after 103.6% in 2016 GWP development (€mn) €mn 2017 2016 +/- % +10.0% Gross premiums written 246.7 224.2 10.0  All lines of business with positive premium 247 Net earned premiums 192.1 174.6 10.1 development Financial result1 6.4 6.9 -7.2 224 21  Other expens

  30. Slide 30: Bulgaria

    BULGARIA Biggest Bulgarian pension fund “Doverie” is a part of VIG GWP development (€mn) €mn 2017 2016 +/- % +9.8% Gross premiums written 150.1 136.7 9.8  All lines of business with positive premium 150 Net earned premiums 109.6 96.5 13.6 development except other property which Financial result1 9.

  31. Slide 31: Turkey/Georgia

    TURKEY/GEORGIA Negative FX impact on premium and profit GWP development (€mn) €mn 2017 2016 +/- % -0.4% Gross premiums written 207.8 208.7 -0.4  Premium development impacted by 209 208 Net earned premiums 101.6 102.1 -0.5 negative FX effects – especially in Turkey Financial result1 9.0 7.0 29.2 Oth

  32. Slide 32: Remaining CEE

    REMAINING CEE Result development impacted by impairments GWP development (€mn) €mn 2017 2016 +/- % +6.2% Gross premiums written 352.0 331.4 6.2  Main drivers of premium growth were 352 Net earned premiums 247.2 232.9 6.1 Serbia and Croatia 331 Financial result1 28.7 36.6 -21.8 Other income 14.4 5.1

  33. Slide 33: Other Markets

    OTHER MARKETS InterRisk - successful niche player in Germany with excellent CoR of 81.3% GWP development (€mn) €mn 2017 2016 +/- % -17.1% Gross premiums written 292.6 353.0 -17.1  Premium decrease driven by less life 353 Net earned premiums 248.8 311.6 -20.2 single premium business in Liechtenstein

  34. Slide 34: Central Functions

    CENTRAL FUNCTIONS Premium increase partly due to expansion of VIG Re GWP development (€mn) €mn 2017 2016 +/- % +6.5% Gross premiums written 1,411.5 1,324.8 6.5  Segment includes VIG Holding, VIG Re, 1,412 Net earned premiums 1,221.0 1,141.9 6.9 VIG Fund, the non-profit societies, Financial result1

  35. Slide 35: Appendix 2: Financials

    HIGHLIGHTS & AGENDA 2020 FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE DIVIDEND & OUTLOOK APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 35 VIG VIENNA INSURANCE GROUP

  36. Slide 36: 12M 2017 Key Financials

    12M 2017 KEY FINANCIALS Overview of KPIs Net result for the period after taxes and non-controlling interest (€mn) Combined Ratio (net, %) 288 298 97.3 97.3 96.9 96.9 96.7 215 146 69 2016 3M 17 6M 17 9M 17 2017 2016 3M 17 6M 17 9M 17 2017 EPS1 (€) ROE after tax and minorities (%) 2.20 2.23 7.3 7.2 7.

  37. Slide 37: 12M 2017 Income Statement

    12M 2017 INCOME STATEMENT IFRS (€mn) €mn 2017 2016 +/- % Gross premiums written 9,386.0 9,051.0 3.7  Solid premium growth despite deliberate reduction of life Net earned premiums 8,509.6 8,191.3 3.9 single premium business (-€149mn) Financial result1 924.3 958.8 -3.6  SK (+€78mn), CZ (+€74mn) and

  38. Slide 38: 12M 2017 Balance Sheet

    12M 2017 BALANCE SHEET IFRS (€mn) €mn 31.12.2017 31.12.2016 +/- % Intangible assets 1,971 2,055 -4.1  Intangible assets: Investments 35,933 34,646 3.7 Goodwill impairments of CGUs Unit- and index-linked investments 9,061 8,550 6.0 Ukraine, Moldova and Albania (incl. Reinsurers’ share in underwritin

  39. Slide 39: 12M 2017 Financial Result by Segment (I)

    12M 2017 FINANCIAL RESULT BY SEGMENT (I) IFRS (€'000) Austria Czech Republic Slovakia Poland Income 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % Current income 803,054 808,895 -0.7 103,287 102,412 0.9 44,676 43,938 1.7 33,384 30,824 8.3 Income from appreciations 11,050 44,828 -75.

  40. Slide 40: 12M 2017 Financial Result by Segment (II)

    12M 2017 FINANCIAL RESULT BY SEGMENT (II) IFRS (€'000) Romania Baltic states Hungary Bulgaria Income 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % Current income 17,117 14,138 21.1 7,103 5,161 37.6 8,062 8,589 -6.1 24,124 23,571 2.3 Income from appreciations 132 1,269 -89.6 781 738

  41. Slide 41: 12M 2017 Financial Result by Segment (III)

    12M 2017 FINANCIAL RESULT BY SEGMENT (III) IFRS (€'000) Turkey / Georgia Remaining CEE Other Markets Income 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % Current income 11,315 9,208 22.9 36,579 37,025 -1.2 21,288 20,056 6.1 Income from appreciations 1,912 1,745 9.6 691 211 >100 259 1,356 -80.9 of

  42. Slide 42: 12M 2017 Financial Result by Segment (IV)

    12M 2017 FINANCIAL RESULT BY SEGMENT (IV) IFRS (€'000) Central Functions Consolidation Total Income 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % Current income 376,603 192,596 95.5 -58,883 -59,402 -0.9 1,427,709 1,237,011 15.4 Income from appreciations 1,281 209 >100 0 0 - 27,761 59,370 -53.2 of

  43. Slide 43: 2017 Development for P&C Business according to VAG

    2017 DEVELOPMENT FOR P&C BUSINESS ACCORDING TO VAG (AUSTRIAN INSURANCE SUPERVISION ACT) IFRS (€'000) €mn 2017 2016 +/- % Gross direct premiums written 5,089.36 4,751.29 7.1 Gross direct1 352.06 462.58 -23.9 Underwriting result 263.64 408.74 -35.5 Financial result 88.42 53.83 64.3 Direct reinsurance

  44. Slide 44: 2017 Development for Life Business according to VAG

    2017 DEVELOPMENT FOR LIFE BUSINESS ACCORDING TO VAG (AUSTRIAN INSURANCE SUPERVISION ACT) IFRS (€'000) €mn 2017 2016 +/- % Gross direct premiums written 3,650.20 3,746.57 -2.6 Gross direct 335.70 347.90 -3.5 Underwriting result 0.00 0.00 - Financial result 0.00 0.00 - Direct reinsurance cessions -15.

  45. Slide 45: 2017 Development for Health Business according to VAG

    2017 DEVELOPMENT FOR HEALTH BUSINESS ACCORDING TO VAG (AUSTRIAN INSURANCE SUPERVISION ACT) IFRS (€'000) €mn 2017 2016 +/- % Gross direct premiums written 458.21 412.48 11.1 Gross direct 42.57 58.79 -27.4 Underwriting result 0.00 0.00 0.00 Financial result 0.00 0.00 0.00 Direct reinsurance cessions -

  46. Slide 46: 12M 2017 Premiums by Business Lines and Country (I)

    12M 2017 PREMIUMS BY BUSINESS LINES AND COUNTRY (I) IFRS (€mn) MTPL Casco Other property 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % Austria 316.9 316.0 0.3 280.0 266.5 5.1 1,284.5 1,261.1 1.9 Czech Republic 278.4 266.1 4.6 232.7 213.4 9.0 438.8 405.2 8.3 Slovakia 148.1 136.5 8.5 105.2 99.5 5.7

  47. Slide 47: 12M 2017 Premiums by Business Lines and Country (II)

    12M 2017 PREMIUMS BY BUSINESS LINES AND COUNTRY (II) IFRS (€mn) Life regular Life single Health 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- % Austria 1,240.3 1,246.4 -0.5 321.9 456.4 -29.5 405.0 394.9 2.6 Czech Republic 576.7 534.0 8.0 63.3 97.0 -34.7 13.3 13.4 -0.6 Slovakia 169.6 163.2 4.0 272.7

  48. Slide 48: 12M 2017 Country Overview GWP / PBT / Combined Ratio

    12M 2017 COUNTRY OVERVIEW GWP / PBT / COMBINED RATIO IFRS (€mn) GWP Total Result before taxes Combined Ratio net 2017 2016 +/- % 2017 2016 +/- % 2017 2016 +/- %p Austria 3,848.5 3,941.3 -2.4 175.3 196.1 -10.6 95.5% 97.6% -2.1 Czech Republic 1,603.2 1,529.1 4.9 149.3 152.8 -2.2 97.5% 90.5% 7.0 Slovak

  49. Slide 49: Q4 2017 Income Statement

    Q4 2017 INCOME STATEMENT IFRS (€mn) €mn Q4 2017 Q4 2016 +/- % Gross premiums written 2,233.4 2,089.2 6.9  Premium development in-line with previous quarters Net earned premiums 2,183.8 2,032.4 7.5 Financial result1 192.2 255.6 -24.8  Financial result in Q4 2016 included positive one-off Other inco

  50. Slide 50: 12M 2017 – Exchange Rates

    12M 2017 – EXCHANGE RATES 2017 2016 Country Currency Balance Sheet P&L Balance Sheet P&L EUR EUR EUR EUR Albania EUR/ALL 132.9500 134.1279 135.2300 137.3710 Belarus EUR/BYN 2.3553 2.1831 2.0450 2.2001 Bosnia & Herzegovina EUR/BAM 1.9558 1.9558 1.9558 1.9558 Bulgaria EUR/BGN 1.9558 1.9558 1.9558 1.95

  51. Slide 51: 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 BUY Prague  Bloomberg: VIG AV / VIG CP A+, stable outlook ATX

  52. Slide 52: 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

  53. Slide 53: 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

  54. Slide 54: 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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