Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Non-Deal Roadshow (January 2008)
52 slides from Vienna Insurance's roadshow presentation, Jan 30, 2008
Slide 1: Vienna Insurance Group – Expanding the CEE Insurance Business
Vienna Insurance Group – Expanding the CEE Insurance Business Prague Roadshow, 30 January 2008
Slide 2: VIG – Dual Listing
VIG – Dual Listing 2 Reasons for Dual listing in Prague Procedure for Dual listing § VIG is the purest CEE insurance § Trading name changed to Vienna play Insurance Group to reflect internationalisation of the Group § To reflect and strengthen market (Trading symbol: VIG) presence in the Czech Repub
Slide 3: Contents
Contents A 3 A Investment Proposition B Outlook and Summary C 9M 2007 Highlights D P&L and Balance Sheet E Appendix
Slide 4: Investment Case in Brief
Investment Case in Brief What is unique about VIG? A 4 § VIG has broadest diversification § VIG is the purest CEE insurance in this fast growing region play among listed insurance § Operates in countries with stable companies 1 2 legal and regulatory regimes § CEE business is vital § GDP and insuran
Slide 5: VIG Strategy Delivers Strong increase in profitability
VIG Strategy Delivers Strong increase in profitability A 5 VIG's Path of Profitability Comments 8.000 450 GWP 400 § From 2002 to 2006 VIG succeeded 7.000 PBT in nearly doubling Group gross 6.000 350 written premiums implying a CAGR 300 of more than 17% GWP in €mn PBT in €mn 5.000 250 4.000 200 § Fro
Slide 6: Purest CEE Insurance Play
Purest CEE Insurance Play VIG is the leading Austrian insurance group operating in 20 countries A 6 Footprint CEE Premiums as % of Total Group Premiums 37.5% VIG 31.1% 28.7% 12.6% 2006 UNIQA 10.2% 2005 10.1% 2004 3.6% Allianz 3.3% 3.0% VIG‘s unique share of CEE business growing fastest 2.6% ING 2.3%
Slide 7: VIG – Top Player in its CEE Markets
VIG – Top Player in its CEE Markets Number 2 among international insurance groups (based on premiums) A 7 Market Share in CEE2 overall Market Share in CEE2 Non-life ~ 17.1% ~ 12.8% ~ 15.8% ~ 12.5% ~ 10.9%1 ~ 13.4%1 ~ 5.0% ~ 4.9% ~ 5.8% ~ 3.4% ~4.5% ~0.0% G G qa C z i G G a C nz al i an al VI IN KB i
Slide 8: VIG Is Well Positioned in Its Markets
VIG Is Well Positioned in Its Markets Broad portfolio of insurance markets with different dynamics A 8 Group 11 Market Number of Pop: 48.5 mn Position Countries A BG RO GDP/Cap.: $ 7,2162 CZ SK GEO TOP 7 AL Density: $ 2063 3 Group 1 CRO TOP 2 SER Group 2 5 Group 2 Pop: 107.9 mn PL UKR TOP GDP/Cap.:
Slide 9: Geographical Diversification Enhanced
Geographical Diversification Enhanced GWP split by region A 9 GWP by Geography 9M 05 GWP by Geography 9M 06 GWP by Geography 9M 07 Other Other Other Other CEE 5.3% Other CEE 3.7% Other CEE 3.5% 5.9% PL: 1.3% 12.7% 18.2% RO: 2.3% PL: 5.4% PL: 7.8% RO: 3.9% RO: 6.0% Slovakia Austria Austria Austria 6.
Slide 10: CEE Region Offers Twin Growth
CEE Region Offers Twin Growth Growth driven by GDP and insurance penetration A 10 4,000 GDP Growth Insurance EU-15 Penetration Mature Markets 2006 – 2008F 20061 CEE2 5.5% 3.3% Insurance Density (USD) Austria 2.8% 6.2% EU 15 2.5% 9.3% A 2,000 RUS SLO BG UKR RO CRO SK H PL SER CZ TR Growth Markets Imm
Slide 11: CEE Region Offers Twin Drivers
CEE Region Offers Twin Drivers Growth driven by GDP and insurance penetration A 11 1,000 1 Premiums in % of GDP. Estimated development of density from 1998 -2010e 2 weighted averages for CEE; CEE is 900 G1 10e defined as Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia,
Slide 12: CEE – A Long-term Growth Perspective
CEE – A Long-term Growth Perspective Markets need at least 20 years to catch up with the Austrian level of 2000 A 12 Austrian Insurance market CEE Insurance markets in 2006 Premium Insurance Insurance GDP/Capita GDP/Capita Year income penetration Density (EUR) penetration Density (EUR) (EUR) (EUR) (
Slide 13: VIG Markets – Underpenetrated in Insurance
VIG Markets – Underpenetrated in Insurance Insurance density, 2006 (Premiums per Capita) A 13 Insurance Density 2006 Example: Romania $3,500 § Market volume Romania 3,305 Life YE 2006: USD 2.0bn Non-life $3,000 § Assuming that Romania will reach $2,500 2,397 density level of Czech Republic in 2006 t
Slide 14: Acquisitions – A systematic approach
Acquisitions A systematic approach A 14 Acquisition Process in CEE Acquisition of Seesam Life* § Sound risk assessment of target company Criteria § What does the company add to help us grab the lion´s share of future growth 100 % § Appraisal of management skills Seesam Life § Leveraging of local bra
Slide 15: Management Approach
Management Approach Excellent track record in integrating CEE subsidiaries into VIG A 15 Management Approach Track Record § Local incumbent management is responsible for § CEE already contributes 40 percent of sales and profitability - usually one board premium income and more than 30 percent of mem
Slide 16: Profit Drivers in CEE
Profit Drivers in CEE Creating value from cost ratio, investment income and reinsurance A 16 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 17: VIG – Distribution Is Key (I)
VIG – Distribution Is Key (I) Multi-brand policy to retain loyalty A 17 Multi-brand Features § VIG is “family name” of Group companies § Local companies retain individual brands as “first name” § Strong brand awareness in local markets § Retain loyalty of employees and management, customers, affinit
Slide 18: VIG – Distribution Is Key (II)
VIG – Distribution Is Key (II) Multi-channel strategy to get access to customers A 18 Strong Multi-channel distribution Details § Tied agents (employed sales force and/or exclusive agents) are backbone in all markets Tied § Extensive use of brokers, bank agents Financial cooperations, multilevel and
Slide 19: VIG in Austria
VIG in Austria Attractive franchise plus catch up potential in life insurance A 19 Situation in Austria Details Market Shares in Austria § Leading market position in all business lines 25% Source: VVO 23.3% 21.5% VIG 23% 21.3% 21.7% - #1 in property & casualty with 21% market 21% 21.7% UNIQA 19.1% 2
Slide 20: Contents
Contents B 20 A Investment Proposition B Outlook and Summary C 9M 2007 Highlights D P&L and Balance Sheet E Appendix
Slide 21: Recent Developments
Recent Developments Preliminary GWP for 2007 (unconsolidated, unaudited)1 B 21 § Increase of 17.2% in preliminary unconsolidated Total Group Premiums (€ bn) premiums written to a total of EUR 7.17 billion (unconsolidated) § Austrian premiums amounted to EUR 3.85 billion 17.2% (+7.6%). Premium volume
Slide 22: Financial Targets
Financial Targets Ambitious Group targets for the period of 2007 - 2010 B 22 VIG’s Financial Targets Comments § 9M results allow to expect YE 2007 PBT of about Profit before tax targets in € mn € 435mn ~770 § PBT target for 2008 set at ~€ 530mn CAGR: ~21% § For the first time VIG sets PBT target for
Slide 23: VIG Outperforming Promises
VIG Outperforming Promises Progress in VIG´s strategic and operative position B 23 Undertaking two years ago Position today § Increased market share in § Strengthening Austria by more than 2% pts – of leading position in Austria VIG clearly no. 1 § Expansion of CEE business § CEE premium volume doub
Slide 24: Contents
Contents C 24 A Investment Proposition B Outlook and Summary C 9M 2007 Highlights D P&L and Balance Sheet E Appendix
Slide 25: 9M 2007 Highlights (I)
9M 2007 Highlights (I) CEE business expanding at fast pace C 25 § Continued organic growth in all major markets – increase of market shares § CEE premium share in non-life at 55% § Total CEE business already at 42% of Group premiums § Poland and Romania new business segments due to dynamic growth §
Slide 26: 9M 2007 Highlights (II)
9M 2007 Highlights (II) GWP growing faster than in first half year; C/R below 96% C 26 GWP Profit before Tax 16.5% 40.5% 321 324 5,882 5,008 5,032 240 4,321 231 4,101 3,778 188 156 2004 2005 2006 9M 05 9M 06 9M 07 2004 2005 2006 9M 05 9M 06 9M 07 IFRS IFRS Net Profit after Tax and Minorities Combine
Slide 27: 9M 2007 Highlights (III)
9M 2007 Highlights (III) Record EPS; ROE climbing fast towards 18% C 27 EPS (annualised) ROE before Tax 3.18 23.9 21.9 2.48 19.5 2.27 2.32 17.6 14.8 14.8 1.64 1.41 2004 2005 2006 9M 05 9M 06 9M 07 2004 2005 2006 9M 05 9M 06 9M 07 IFRS IFRS
Slide 28: Contents
Contents D 28 A Investment Proposition B Outlook and Summary C 9M 2007 Highlights D P&L and Balance Sheet E Appendix
Slide 29: 9M 2007 Income Statement
9M 2007 Income Statement IFRS (€mn) D 29 9M 2007 9M 2006 +/-% 1. Gross written premiums 5,031.8 4,320.6 16.5 2. Net earned premiums 4,220.3 3,586.8 17.7 1 3. Net investment income 743.1 538.6 38.0 4. Other income 31.8 38.7 -17.9 Total income 4,995.2 4,164.2 20.0 6. Expenses for claims incurred -3,56
Slide 30: 9M 2007 Balance Sheet
9M 2007 Balance Sheet IFRS (€mn) D 30 9M 2007 2006 +/- % Intangible assets 503 461 8.9 Total investments 19,212 17,260 11.3 Unit- and index-linked investments 2,887 2,341 23.3 Reinsurers’ share in technical provisions 1,149 963 19.3 Receivables 1,161 984 18.0 Deferred tax assets 32 24 35.3 Other ass
Slide 31: 9M 2007 P&L Major Items – Gross Written Premiums
9M 2007 P&L Major Items – Gross Written Premiums Again growing above market in Austria and CEE (€ mn) D 31 § Group GWP gained 16.5% to € 5,032mn § Austria: total GWP up 7.3% to reach € 2,737mn. Life up 12.5% at 175.3 € 1,292mn with sound growth in subsidised pensions; includes 159.0 ~€140mn premium
Slide 32: 9M 2007 P&L Major Items – Expenses for Claims Incurred
9M 2007 P&L Major Items – Expenses for Claims Incurred Loss ratio improving vs. last year D 32 § Group loss ratio (net) with marked improvement § Poland improving by 1.4% pts to 60.1% due to by 1.6% pts to 65.4% despite €10mn net effect effective claims and risk management from Kyrill storm in Q1 20
Slide 33: 9M 2007 P&L Major Items – Operating Expenses
9M 2007 P&L Major Items – Operating Expenses Cost ratio stable despite dynamic business growth D 33 § Group cost ratio (net) gaining just 0.5% to reach § Costs in the Czech Republic slightly higher at 30.5% despite tremendous growth in CEE with 27.1% due to acquisition costs acquisition cost effect:
Slide 34: 9M 2007 P&L Major Items – Net Investment Income
9M 2007 P&L Major Items – Net Investment Income Sound growth in line with business expansion (€mn) D 34 § Increase in Group Net Investment Income by 38.0% to Net Investment Income € 743.1mn 15.3 96.1 § Austria grew by 37.2% influenced by trading gains, full 13.7 consolidation of Austrian life subsid
Slide 35: Contents
Contents E 35 A Investment Proposition B Outlook and Summary C 9M 2007 Highlights D P&L and Balance Sheet E Appendix
Slide 36: 9M 2007 P&L – Business Segments (Property & Casualty)
9M 2007 P&L – Business Segments Property & Casualty, IFRS (€mn) E 36 9M 2007 9M 2006 +/-% 1. Gross written premiums 2,793.1 2,413.8 15.7 2. Net earned premiums 1,997.5 1,690.5 18.2 3. Net investment income 132.7 94.6 40.3 4. Other income 19.2 26.2 -26.9 Total income 2,149.4 1,811.3 18.7 6. Expenses
Slide 37: 9M 2007 P&L – Business Segments (Life)
9M 2007 P&L – Business Segments Life, IFRS (€mn) E 37 9M 2007 9M 2006 +/-% 1. Gross written premiums 2,007.6 1,681.8 19.4 2. Net earned premiums 1,993.9 1,673.5 19.1 3. Net investment income 598.8 436.2 37.3 4. Other income 12.6 12.5 0.9 Total income 2,605.4 2,122.2 22.8 6. Life benefits -2,064.9 -1
Slide 38: 9M 2007 P&L – Business Segments (Health)
9M 2007 P&L – Business Segments Health, IFRS (€mn) E 38 9M 2007 9M 2006 +/-% 1. Gross written premiums 231.1 225.0 2.7 2. Net earned premiums 228.9 222.8 2.7 3. Net investment income 11.5 7.9 46.7 4. Other income 0.0 0.0 -100.0 Total income 240.5 230.7 4.2 6. Expenses for claims incurred -195.9 -189
Slide 39: 9M 2007 P&L - Split by Regions (I)
9M 2007 P&L - Split by Regions (I) Regional segments, IFRS (€mn) E 39 Austria Czech Republic 9M 2007 9M 2006 +/-% 9M 2007 9M 2006 +/-% 1. Gross written premiums 2,736.7 2,550.2 7.3 842.3 775.3 8.6 2. Net earned premiums 2,375.0 2,216.2 7.2 665.4 595.0 11.8 3. Net investment income 631.7 460.6 37.2 3
Slide 40: 9M 2007 P&L - Split by Regions (II)
9M 2007 P&L - Split by Regions (II) Regional segments, IFRS (€mn) E 40 Slovakia Poland Romania 9M 2007 9M 2006 +/-% 9M 2007 9M 2006 +/-% 9M 2007 9M 2006 +/-% 1. Gross written premiums 362.8 287.1 26.4 390.7 232.6 68.0 301.7 167.2 80.4 2. Net earned premiums 288.6 203.5 41.9 337.3 176.3 91.3 221.1 13
Slide 41: 9M 2007 P&L - Split by Regions (III)
9M 2007 P&L - Split by Regions (III) Regional segments, IFRS (€mn) E 41 Other CEE Other TOTAL 9M 2007 9M 2006 +/-% 9M 2007 9M 2006 +/-% 9M 2007 9M 2006 +/-% 1. Gross written premiums 222.3 149.3 48.9 175.3 159.0 10.2 5,031.8 4,320.6 16.5 2. Net earned premiums 178.9 118.7 50.7 154.1 139.0 10.9 4,220
Slide 42: 9M 2007 Results by Country
9M 2007 Results by Country IFRS (€mn) E 42 Non-Life Life Total Profit before Tax Combined Ratio 9M 2007 9M 2006 9M 2007 9M 2006 9M 2007 9M 2006 9M 2007 9M 2006 9M 2007 9M 2006 Austria 1,444.5 1,401.5 1,292.3 1,148.6 2,736.7 2,550.2 206.8 151.8 94.5% 95.8% Czech Rep. 637.1 597.9 205.2 177.4 842.3 775
Slide 43: Change in Group Shareholders' Equity / APE
Change in Group Shareholders‘ Equity / APE IFRS E 43 1.1. - 30.09.2007 1.1. - 30.09.2006 Equity as of 1 January 2,283,208 2,059,332 Currency Changes 1,302 2,066 Changes to consolidation 55,719 2,113 Capital Increase - - Unrealised Gains and Losses on financial -90,081 -56,687 instruments available f
Slide 44: Life Insurance Premium Split
Life Insurance Premium Split IFRS (€mn) E 44 Premiums written - direct business 9M 2007 9M 2006 +/- % Regular premiums 1,343.8 1,075.5 24.9% Single premiums 662.3 594.9 11.3% Total premiums written - direct business 2,006.1 1,670.3 20.1% thereof: Policies with profit participation 1,134.7 1,096.5 3.
Slide 45: Q3 2007 Income Statement
Q3 2007 Income Statement IFRS (€mn) E 45 Q3 2007 Q3 2006 +/-% 1. Gross written premiums 1,538.7 1,291.3 19.2 2. Net earned premiums 1,391.2 1,175.5 18.4 1 3. Net investment income 189.9 177.5 6.9 4. Other income 11.1 9.7 14.8 Total income 1,592.2 1,362.7 16.8 6. Expenses for claims incurred -1,146.8
Slide 46: 9M 2007 Exchange Rates
9M 2007 Exchange Rates E 46 9M 2007 9M 2006 Balance Sheet P&L Balance Sheet P&L Country Curr. EUR EUR EUR EUR Bulgaria BGN 0.511300 0.511300 0.511300 0.511300 Croatia HRK 0.137414 0.136226 1.475579 1.460814 Liechtenstein CHF 0.602373 0.610855 0.629683 0.638430 Poland PLN 0.265041 0.261391 0.251807 0
Slide 47: VIG Has Excellent CEE Market Position
VIG Has Excellent CEE Market Position VIG an early mover in CEE E 47 Overview of Core Markets Details Slovakia Romania Czech Rep. Bulgaria § leading market position in nearly all core markets Pop.: 5.4 mn Pop.: 21.6 mn Pop.: 10.2 mn Pop.: 8.2 mn § strong market positions GDP/Cap.: $ 10 k GDP/Cap.: $
Slide 48: Acquisition of Asirom in Steps
Acquisition of Asirom in 3 Steps Strengthening VIG´s no.1 position in dynamic Romanian market E 48 Acquisition of Asirom Romanian Insurance Market Population (mn) 21.6 GDP/Capita 5,463 USD 98.5 % Penetration 1.7% Density 94.5 USD Asirom Market Growth (01-06, CAGR) 42.8% § listed Non-life and Life in
Slide 49: Shareholder Structure (I)
Shareholder Structure (I) Total number of shares 105,000,000 E 49 Shareholder Structure ~ 30 % Free Float ~70 % Wiener Städtische Wechselseitige Versicherungsanstalt- Vermögensverwaltung
Slide 50: Shareholder Structure (II)
Shareholder Structure (II) E 50 Free Float Geographical Split 0.3% Others 32.0 % Austria 20.9% Continental Europe 25.5% 21.3% North America UK & Ireland
Slide 51: Contact Details
Contact Details Investor Relations E 51 Wiener Städtische Versicherung AG Vienna Insurance Group Schottenring 30, 1010 Vienna, Austria www.wienerstaedtische.com Vienna Stock Exchange: WST Reuters: WISV.VI Bloomberg: WST AV Datastream: O:WNST § Thomas Schmee Tel. +43 (0)50 350 – 21900 t.schmee@staedt
Slide 52: Disclaimer
Disclaimer E 52 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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