Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — H1 2020 Earnings Presentation
52 slides from Vienna Insurance's earnings presentation, October 2020
Slide 1: Investor Presentation Half-year results 2020
VIENNA INSURANCE GROUP Investor Presentation Half-year results 2020
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 6M 2020 50% of premiums and profits coming A+ 183% with stable outlook based on Partial Internal Model from CEE Since Market capitalization
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
Slide 4: Best positioned in Austria and CEE
BEST POSITIONED IN AUSTRIA AND CEE Excellent market positions throughout the region Close to our customers in 30 markets Country Market position Austria 1 1 1 1 Czech Rep. 1 2 1 Slovakia 1 2 1 10 Poland 4 4 5 4 Romania 1 2 2 1 The Baltic 1 1 3 3 1 Hungary 6 6 4 1 6 3 Bulgaria 1 12 1 2 1 4 4 total no
Slide 5: Main Markets
Baltic MAIN MARKETS states No. of companies: 3 Half-year 2020 Overview Employees: 1.944 Market share: ~24% GWP: €251mn (-2.4%) Czech Republic PBT: €8mn (>100%) CoR: 94.8% (-2.2%p) No. of companies: 3 EE Employees: 4.889 Market share: ~31% Poland LV GWP: €880mn (-1.5%) PBT: €108mn (+39.4%) LT No. of
Slide 6: Long-term growth potential
LONG-TERM GROWTH POTENTIAL Annual insurance spending shows growth potential in Austria and CEE Insurance density 2019, in EUR (premiums per capita) 1,951 Ø EU-15*: ~€2,900 Ø CEE-VIG*: ~€200 1,211 576 413 374 369 365 344 342 296 213 151 131 112 104 104 83 63 50 50 49 43 23 North Macedonia Turkey Hung
Slide 7: High uncertainty regarding global outlook due to COVID-19
HIGH UNCERTAINTY REGARDING GLOBAL OUTLOOK DUE TO COVID-19 Based on their past, CEE markets better in dealing with crisis situation 105% Real GDP development expectations 2019 - 2021 • Global economy is projected to contract HU worse than during the financial crisis CZ 2008/2009 100% PL • In the shor
Slide 8: 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,
Slide 9: Successful Bancassurance
SUCCESSFUL BANCASSURANCE Premium growth despite COVID-19 ▪ Total premium volume generated in 6M 2020: €691mn (+2.3%) ▪ Premium growth in all lines of business ▪ Integral part of Agenda 2020 CZ ▪ Focus on increasing sale of P&C and health business via banks SK ▪ Successful cooperation in 11 countries
Slide 10: 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
Slide 11: 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
Slide 12: 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 Payo
Slide 13: 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
Slide 14: Results 6M 2020
STRATEGY RESULTS 6M 2020 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 ad
Slide 15: Highlights 6M 2020
HIGHLIGHTS 6M 2020 Solid operational performance supported by favourable claims experience Gross written premiums Profit before taxes Combined Ratio Solvency Ratio € 5,577.4mn € 201.2mn 95.5% 183% GWP up by 2.4% (+€130.7mn) PBT down by 21.8% (-€55.9mn) Improved by 0.9%p due to YE 2019: 210% better c
Slide 16: 6M 2020 Key Financials
6M 2020 KEY FINANCIALS Overview of KPIs Net result for the period after taxes and ROE before taxes and non-controlling interest (€mn) non-controlling interest1 (%) 151 9.4 9.1 137 126 8.5 6M 18 6M 19 6M 20 6M 18 6M 19 6M 20 EPS net of hybrid interest1 (€) Book value per share2 (€) 2.36 31.60 32.89 3
Slide 17: Growth in premiums and, adjusted for goodwill impairment, in profits
GROWTH IN PREMIUMS AND – ADJUSTED FOR GOODWILL IMPAIRMENT – IN PROFITS 6M 2020 Income statement €mn 6M 2020 6M 2019 +/- % Gross premiums written ▪ Premium growth driven by other property (+€180.0mn) and health 5,577.4 5,446.7 2.4 (+€8.9mn) Net earned premiums 4,738.6 4,621.8 2.5 Financial result* 38
Slide 18: Top-line growth supported by excellent start into 2020
TOP-LINE GROWTH SUPPORTED BY EXCELLENT START INTO 2020 Overview by segments Gross written premiums (€mn; y-o-y chg.) ▪ Overall premium growth of 2.4% to €5.6bn despite declining developments in some markets ▪ CEE premium growth in total of 0.8% ▪ Premium increases in Austria (+€100.0mn), Central Fun
Slide 19: Mixed picture in premium development by lines of business
MIXED PICTURE IN PREMIUM DEVELOPMENT BY LINES OF BUSINESS Gross written premiums by lines of business (€mn; y-o-y chg.); incl. Central Functions MTPL Casco Other property Total premiums +2.4% 6M 2019 781 663 2,554 5,447 5,577 0.0% -0.3% +7.0% MTPL 781 781 6M 2020 781 661 2,734 661 Casco 663 Other Pr
Slide 20: Group profit before taxes of €201.2mn down by 21.8%
GROUP PROFIT BEFORE TAXES OF €201.2MN DOWN BY 21.8% Adjusted for goodwill impairments in Bulgaria, Croatia und Georgia positive profit development Result before taxes (€mn; y-o-y change) ▪ Goodwill impairment of €118.1mn Based on the COVID-19 triggered goodwill review, impairment of the full outstan
Slide 21: Combined ratio (P&C) down to 95.5%
COMBINED RATIO (P&C) DOWN TO 95.5% Better claims experience and less weather-related claims P&C Combined Ratio development Overview by segments (y-o-y development net, %) ▪ Improved CoR in all market segments -0.9%p -0.9%p -10.3%p -1.1%p -6.2%p -2.2%p ▪ Claims ratio decrease driven by better claims
Slide 22: Investment split and bond portfolio overview
INVESTMENT SPLIT AND BOND PORTFOLIO OVERVIEW Overall investment strategy unchanged, certain industries to be reevaluated 6M 2020: Total €35.8bn Bond portfolio by rating1 in % 3.8% 1.4% 7.4% AAA AA A BBB Other 6M 2020 9.1 31.2 35.5 20.3 3.9 7.2% 12M 2019 9.0 31.0 36.8 19.1 4.1 7.1% 73.1% Bond portfol
Slide 23: Financial Result
FINANCIAL RESULT Current income down by 27.7% mainly due to consolidation change of non-profit housing societies €mn 6M 2020 6M 2019 +/- % Current income 476,104 658,407 -27.7 ▪ Change of consolidation method of non-profit housing societies Income from appreciations 12,384 14,682 -15.7 affects curre
Slide 24: Solvency ratio of VIG as of 6M 2020 at 183%
SOLVENCY RATIO OF VIG AS OF 6M 2020 AT 183% Solvency Position 6M 2020 compared to YE 2019 in EUR million 210% YE 2019 183% 6M 2020 7,657 7,083 3,652 3,868 YE 2019 6M 2020 Solvency II Own Funds SCR 24 RESULTS 6M 2020 VIG VIENNA INSURANCE GROUP
Slide 25: Key Messages 6M 2020
KEY MESSAGES 6M 2020 Well positioned to successfully continue operating business ▪ Ongoing focus on profitable insurance business and further digital transformation of the Group ▪ Strong capitalisation ▪ Unchanged commitment to shareholder participation ▪ Solid 6M 2020 results despite adverse effect
Slide 26: Segments
STRATEGY RESULTS 6M 2020 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 ad
Slide 27: Austria
AUSTRIA Strong premium and profit growth GWP development (€mn) €mn 6M 2020 6M 2019 +/- % +4.5% Gross premiums written 2,316.2 2,216.2 4.5 ▪ Premium growth of €100.0mn driven by 2,316 Net earned premiums 1,712.1 1,644.5 4.1 life single premium business (+€51.1mn), 2,216 Financial result* 301.9 305.3
Slide 28: Czech Republic
CZECH REPUBLIC Profit growth based on increased technical result in life and improved CoR GWP development (€mn) €mn 6M 2020 6M 2019 +/- % -1.5% Gross premiums written 879.5 893.1 -1.5 ▪ Premiums down by €13.6mn driven 893 Net earned premiums 656.6 666.0 -1.4 mainly by weaker life business 880 Financ
Slide 29: Slovakia
SLOVAKIA P&C business improvements outweigh weak life business in 6M 2020 GWP development (€mn) €mn 6M 2020 6M 2019 +/- % -5.9% Gross premiums written 383.2 407.3 -5.9 ▪ Premium growth in other property and 407 Net earned premiums 300.4 333.4 -9.9 health could not outweigh the premium 383 Financial
Slide 30: Poland
POLAND Successful premium and profit development in non-life and life GWP development (€mn) €mn 6M 2020 6M 2019 +/- % +8.5% Gross premiums written 590.5 544.1 8.5 ▪ Premium growth of €46.4mn driven 591 Net earned premiums 453.5 419.1 8.2 mainly by other property (+€29.6mn) Financial result 22.0 18.9
Slide 31: Romania
ROMANIA Focus on profitable business in motor and life pays off GWP development (€mn) €mn 6M 2020 6M 2019 +/- % -2.5% Gross premiums written 229.1 234.9 -2.5 ▪ Double-digit premium growth rates in 235 Net earned premiums 173.5 174.4 -0.5 health and other property were off-set 229 by declines in life
Slide 32: Baltic States
BALTIC STATES Favourable profit development due to reduced costs GWP development (€mn) €mn 6M 2020 6M 2019 +/- % -2.4% Gross premiums written 251.0 257.1 -2.4 ▪ Slight premium decrease driven by motor 257 Net earned premiums 190.9 189.3 0.8 (-€13.6mn) despite growing life 251 (+€4.8mn) and health (+
Slide 33: Hungary
HUNGARY Solid premium and profit development GWP development (€mn) €mn 6M 2020 6M 2019 +/- % +7.3% Gross premiums written 153.7 143.2 7.3 ▪ Premium growth of €10.5mn strongly 154 Net earned premiums 109.1 95.9 13.7 driven by life single (+€12.4mn) and life Financial result 4.3 2.9 49.0 regular (+€1.
Slide 34: Bulgaria
BULGARIA Impairment of goodwill in the size of €59.8mn GWP development (€mn) €mn 6M 2020 6M 2019 +/- % -10.5% Gross premiums written 111.7 124.8 -10.5 ▪ Premium decrease of €13.1mn due to 125 Net earned premiums 76.2 71.4 6.8 decreased health (-€13.4mn) and life Financial result 6.5 6.1 7.0 single p
Slide 35: Turkey/Georgia
TURKEY/GEORGIA Goodwill impairment in Georgia of €13.3mn GWP development (€mn) €mn 6M 2020 6M 2019 +/- % +14.2% Gross premiums written 127.4 111.5 14.2 ▪ Premiums up by €15.9mn with other 127 Net earned premiums 60.0 53.0 13.2 property growing by +€13.9mn and Financial result 4.3 5.9 -27.5 health by
Slide 36: Remaining CEE
REMAINING CEE Profit development impacted by goodwill impairment in Croatia in the size of €45.0mn GWP development (€mn) €mn 6M 2020 6M 2019 +/- % +5.7% Gross premiums written 231.3 218.8 5.7 ▪ Remaining CEE: Albania (incl. Kosovo), 231 Net earned premiums 165.3 157.5 4.9 Bosnia-Herzegovina, Croatia
Slide 37: Other Markets
OTHER MARKETS Germany and Liechtenstein GWP development (€mn) €mn 6M 2020 6M 2019 +/- % -13.5% Gross premiums written 142.0 164.1 -13.5 ▪ Premiums down by €22.1mn due to 164 Net earned premiums 117.1 140.4 -16.6 negative development in the life single Financial result 8.4 9.4 -10.4 premium business
Slide 38: Central Functions
CENTRAL FUNCTIONS Lower financial result following the consolidation change of the Austrian housing societies GWP development (€mn) €mn 6M 2020 6M 2019 +/- % +9.5% Gross premiums written 930.6 850.1 9.5 ▪ Central Functions include VIG Holding, 931 Net earned premiums 715.0 674.6 6.0 VIG Re, Wiener R
Slide 39: Appendix
STRATEGY RESULTS 6M 2020 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 ad
Slide 40: Managing Board of Vienna Insurance Group
MANAGING BOARD OF VIENNA INSURANCE GROUP As of 1 July 2020 Elisabeth Stadler, CEO Liane Hirner, CFO Peter Höfinger Gerhard Lahner Gabor Lehel Harald Riener Peter Thirring Credit: Ian Ehm 40 APPENDIX VIG VIENNA INSURANCE GROUP
Slide 41: VIG Fund - Real estate investment focused on CEE
VIG FUND - REAL ESTATE INVESTMENT FOCUSED ON CEE VIG Fund reached market value of more than EUR 400mn VIG Holding successfully built up a diversified real estate portfolio with top properties in CEE markets ▪ Entity fully managed by VIG Holding ▪ Strategy and investment decisions “inhouse” Key Facts
Slide 42: 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
Slide 43: 6M 2020 Balance Sheet
6M 2020 BALANCE SHEET IFRS (€mn) €mn 30.06.2020 31.12.2019 +/- % Intangible assets (incl. Right-of-Use Assets) 1,973 2,137 -7.7 Investments 34,253 34,456 -0.6 Unit- and index-linked investments 7,715 8,620 -10.5 Reinsurers’ share in underwriting provisions 1,323 1,283 3.1 Receivables 1,747 1,717 1.7
Slide 44: Equity Development
EQUITY DEVELOPMENT Decline due to negative market developments for investments and currencies Change in consolidated Shareholders’ Equity (€mn) -2% 133 -105 -129 5,191 5,091 -4 6 Equity as Profit for Currency AFS unrealised Dividend Other Equity as of 12M19 the period changes gains and losses paymen
Slide 45: 6M 2020 Premiums by business lines and country (I)
6M 2020 PREMIUMS BY BUSINESS LINES AND COUNTRY (I) IFRS (€mn) MTPL Casco Other property 6M 2020 6M 2019 +/- % 6M 2020 6M 2019 +/- % 6M 2020 6M 2019 +/- % Austria 191.8 188.7 1.6 172.4 169.8 1.6 901.1 859.0 4.9 Czech Republic 157.6 156.8 0.5 122.5 125.8 -2.7 255.3 258.3 -1.1 Slovakia 77.2 78.2 -1.3 5
Slide 46: 6M 2020 Premiums by business lines and country (II)
6M 2020 PREMIUMS BY BUSINESS LINES AND COUNTRY (II) IFRS (€mn) Life regular Life single Health 6M 2020 6M 2019 +/- % 6M 2020 6M 2019 +/- % 6M 2020 6M 2019 +/- % Austria 638.1 646.5 -1.3 187.8 136.8 37.3 225.0 215.4 4.5 Czech Republic 318.6 319.7 -0.3 16.8 24.6 -31.5 8.7 7.9 9.5 Slovakia 85.5 90.5 -5
Slide 47: 6M 2020 Country overview GWP / PBT / Combined Ratio
6M 2020 COUNTRY OVERVIEW GWP / PBT / COMBINED RATIO IFRS (€mn) GWP Total Result before Taxes Combined Ratio net (in %) 6M 2020 6M 2019 +/- % 6M 2020 6M 2019 +/- % 6M 2020 6M 2019 +/- % Austria 2,316.2 2,216.2 4.5 104.0 87.9 18.3 94.4% 95.3% -0.9 Czech Republic 879.5 893.1 -1.5 108.0 77.5 39.4 94.1%
Slide 48: VIG Share (I)
VIG SHARE (I) Number of common shares: 128,000,000 / ISIN: AT0000908504 General information Analyst recommendations (30 Sep 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 Pri
Slide 49: VIG Share (II)
VIG SHARE (II) Shareholder structure Free float split by region1 North America 35% Continental Europe 25% ~72% ~28% Austria 24% UK & Ireland 13% Other 3% Wiener Städtische Versicherungsverein Free Float (Mutual) 1: Split of identified shares, May 2020 (Source: Investor Update) 49 APPENDIX VIG VIENNA
Slide 50: Appendix
50 APPENDIX VIG VIENNA INSURANCE GROUP
Slide 51: 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
Slide 52: 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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