Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Non-Deal Roadshow (October 2009)
49 slides from Vienna Insurance's roadshow presentation, Oct 23, 2009
Slide 1: Building its Market Position and Financial Strength
V.I.G. Building its Market Position and Financial Strength Zurich Roadshow - 23 October 2009
Slide 2: Contents
Contents A 2 A Investment proposition B Growth potential in CEE and Austria C Recent developments D 6M 2009 results – highlights E Appendix
Slide 3: Investment Proposition at a Glance
Investment Proposition at a Glance V.I.G. set two strategic milestones A 3 Footprint Milestone 1 § V.I.G. - 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 geographic proximit
Slide 4: V.I.G. – Leading Insurer in CEE
V.I.G. – Leading Insurer in CEE Market strategy proves effective A 4 2005 2008 § Gross written premiums: € 5.0bn § Gross written premiums: € 7.9bn § Profit before tax: € 240mn § Profit before tax: € 541mn § Presence in 15 countries § Presence in 23 countries § No. 2 in CEE1 § No. 1 in CEE1 Strategy
Slide 5: Contents
Contents B 5 A Investment proposition B Growth potential in CEE and Austria C Recent developments D 6M 2009 results – highlights E Appendix
Slide 6: V.I.G.'s Path of Growth
V.I.G.’s Path of Growth CEE markets still growing B 6 18.4% 19.1% § Reported Group growth rates (2005 – 2008 20.0% 17.8% 2005-2008 CAGR) showed strong double-digit Non-life development 10.0% Life § About two thirds of growth rates were Total organic 0.0% Reported Growth (2005-2008 CAGR) § Extraordin
Slide 7: V.I.G. Business Model Still in Place (I)
V.I.G. Business Model Still in Place (I) GDP growth and underpenetration are insurance drivers B 7 1998 Growth Markets Mature Markets Insurance Density (USD) 1,000 CRO Emerging Markets PL H RO Insurance demand BG SK CZ also strongly driven by UA SER TR catch-up process 0 1,000 10,000 GDP per Capita
Slide 8: V.I.G. Business Model Still in Place (II)
V.I.G. Business Model Still in Place (II) Catch-up potential in CEE in Non-life and Life B 8 Insurance Density 2008 (USD) Proportion of NL & L in CEE Markets 3,727 Life Non-life 2,866 Non-life 58% 53% 54% NL 73% 65% 61% Life 37% 80% L 41% 55% 59% 53% 47% 74% 86% 83% 88% 87% 86% 20% 27% 35% 39% 42% 4
Slide 9: V.I.G. Management Approach
V.I.G. Management Approach Strength of distribution supports future growth B 9 Multi-Brand Multi-Channel <10% Tied agents 11% - 20% Brokers 21% - 30% Banks Other 31% - 40% > 41% Austria Czech Rep. Slovakia + Romania Poland Hungary in total about 40 brands Croatia Others § Strong brand awareness in l
Slide 10: Contents
Contents C 10 A Investment proposition B Growth potential in CEE and Austria C Recent developments D 6M 2009 results – highlights E Appendix
Slide 11: Financial Control and Business Initiatives
Financial Control and Business Initiatives Setting the basis for future performance C 11 Cost savings Annual cost savings target of at least € 100mn, to be >€ 100mn >€ 100mn reached by end of 2010 Scale-based § Streamlining of regional head offices § Bundling of operating and service departments ~€
Slide 12: Capitalisation
Capitalisation Strong capitalisation is excellent basis for future expansion C 12 Shareholders‘ Equity Capitalisation Change in Group Shareholders’ Equity (€mn) +8.5% § Group shareholders’ equity 4,488.8 increased by 8.5% to about € 4.5bn 4,138.8 in 6M 2009 § Comfortable solvency ratio of above 180%
Slide 13: Contents
Contents D 13 A Investment proposition B Growth potential in CEE and Austria C Recent developments D 6M 2009 results – highlights E Appendix
Slide 14: Highlights
6M 2009 Highlights V.I.G. – showing a solid business performance D 14 § EUR 230mn PBT – stable performance § Ongoing synergy projects § In a difficult economic period plus recently launched action V.I.G. focuses on profitable programme bear fruit growth - € ~ 40mn cost savings - 3% premium growth ex
Slide 15: Financial Highlights
6M 2009 Financial Highlights HY results shaped by good operations and weaker capital markets D 15 GWP Profit before Tax 541 7,899 6,912 437 5,882 0.9% -20.1% 321 288 4,215 4,251 3,493 215 230 2006 2007 2008 6M 07 6M 08 6M 09 2006 2007 2008 6M 07 6M 08 6M 09 IFRS IFRS Net Profit after Tax and Minorit
Slide 16: Investment Summary
Investment Summary D 16 V.I.G. ahead of the game000 Local knowledge and brand awareness Extending distribution power and product development Significant catch-up potential in underpenetrated CEE insurance markets Experienced management and strong integration skills Strong balance sheet and prudent f
Slide 17: Contents
Contents E 17 A Investment proposition B Growth potential in CEE and Austria C Recent developments D 6M 2009 results – highlights E Appendix
Slide 18: Performance/Outlook
Performance/Outlook Economic uncertainty and market volatility constrain forecasts E 18 Development of HY profits vs. YE Outlook Profit before Taxes (€mn) 541 § Current economic forecasts do not show a sufficiently stable 437 picture. Thus management is not in a position to provide financial targets
Slide 19: Financial Highlights (II)
6M 2009 Financial Highlights (II) E 19 EPS ROE before Tax (%) 3.72 * 18.0 3.41* 16.9 17.0* 2.98 3.06 2.81* 14.8 14.3* 2.48 10.6* 2006 2007 2008 6M 07 6M 08 6M 09 2006 2007 2008 6M 07 6M 08 6M 09 * Diluted for SPO 2008 IFRS * Diluted for SPO 2008 IFRS
Slide 20: Income Statement
6M 2009 Income Statement IFRS (€mn) E 20 6M 2009 6M 2008 +/-% 1. Gross premiums written 4,251.1 4,215.1 0.9 2. Net earned premiums 3,612.8 3,471.3 4.1 3. Financial result 471.6 618.7 -23.8 4. Other income 62.0 30.7 >100 Total income 4,146.4 4,120.7 0.6 6. Expenses for claims and insurance benefits -
Slide 21: Balance Sheet
6M 2009 Balance Sheet IFRS (€mn) E 21 6M 2009 YE 2008 +/- % Intangible assets 2,011 1,649 22.0 Investments 25,078 24,548 2.2 Unit- and index-linked investments 4,022 3,602 11.6 Reinsurers’ share in underwriting provisions 1,081 1,222 -11.6 Receivables 1,762 1,500 17.5 Deferred tax assets 137 131 4.3
Slide 22: P&L Major Items – Gross Written Premiums (I)
6M 2009 P&L Major Items – Gross Written Premiums (I) Premium development affected by weak CEE currencies (€mn) E 22 GWP Non-life GWP Life Total FX development 6M 09 vs 6M 08 (vs. €; average exchange rates) 6M 2009 6M 2008 +/-% 6M 2009 6M 2008 +/-% 6M 2009 6M 2008 +/-% Austria 1,125.5 1,105.9 1.8% 1,
Slide 23: P&L Major Items – Gross Written Premiums (II)
6M 2009 P&L Major Items – Gross Written Premiums (II) Stable premiums, supported by new consolidations1 (€mn) E 23 § Group GWP stable, reaching € 4,251mn § Austria: total GWP up 3.1% to reach € 2,185mn. Life up 4.5% at € 1,060mn, inclusion of s Versicherung offsets ongoing weak single 112.7 88.4 pre
Slide 24: P&L Major Items – Expenses for Claims Incurred
6M 2009 P&L Major Items – Expenses for Claims Incurred Loss ratio up due to higher claims in CEE and floods in A, CZ E 24 § Group loss ratio (net) at 65.1% (63.4% in 6M § Poland increasing by 9.7% pts to 63.9% due to 2008 ) increase of reserves as a consequence of legal changes § Austrian loss ratio
Slide 25: P&L Major Items – Operating Expenses
6M 2009 P&L Major Items – Operating Expenses Cost ratio down as a result of savings programmes E 25 § Group cost ratio (net) decreasing by 2.1% pts § Poland showing lower cost ratio at 35.4% to reach 30.4% (6M 08: 42.1%) thanks to lower administration costs and sales commissions § Cost ratio in Aust
Slide 26: P&L Major Items – Financial Result
6M 2009 P&L Major Items – Financial Result Sound financial result (€mn) E 26 Income P&C Life Health Total in € '000 6M 2009 6M 2008 6M 2009 6M 2008 6M 2009 6M 2008 6M 2009 6M 2008 Current income 80,353 84,498 553,814 426,371 17,746 15,940 651,913 526,809 Income from appreciations 4,864 2,168 31,818
Slide 27: P&L – Business Segments (Property & Casualty)
6M 2009 P&L – Business Segments Property & Casualty, IFRS (€mn) E 27 6M 2009 6M 2008 +/-% 1. Gross premiums written 2,349.6 2,403.8 -2.3 2. Net earned premiums 1,734.2 1,690.1 2.6 3. Financial result 86.9 154.2 -43.7 4. Other income 38.6 19.2 >100 Total income 1,859.7 1,863.5 -0.2 6. Expenses for cl
Slide 28: P&L – Business Segments (Life)
6M 2009 P&L – Business Segments Life, IFRS (€mn) E 28 6M 2009 6M 2008 +/-% 1. Gross premiums written 1,738.6 1,653.1 5.2 2. Net earned premiums 1,718.2 1,625.5 5.7 3. Financial result 379.5 458.3 -17.2 4. Other income 23.3 11.5 >100 Total income 2,121.1 2,095.2 1.2 6. Expenses for claims and insuran
Slide 29: P&L – Business Segments (Health)
6M 2009 P&L – Business Segments Health, IFRS (€mn) E 29 6M 2009 6M 2008 +/-% 1. Gross premiums written 162.8 158.2 2.9 2. Net earned premiums 160.4 155.7 3.0 3. Financial result 5.2 6.2 -16.4 4. Other income 0.1 0.0 >100 Total income 165.7 161.9 2.3 6. Expenses for claims and insurance benefits -137
Slide 30: Premium Portfolio
Premium Portfolio Source of business origination substantially widened E 30 GWP by Geography 6M 06 GWP by Geography 6M 09 Other CEE Other 3.9% Other Other CEE Romania 3.1% 2.1% 7.1% 3.5% Poland Romania 4.2% 7.4% Austria Austria Slovakia 61.1% Poland 51.4% 6.6% 6.2% Czech Slovakia Republic 7.6% 17.6%
Slide 31: P&L - Split by Regions (I)
6M 2009 P&L - Split by Regions (I) Regional segments, IFRS (€mn) E 31 Austria Czech Republic 6M 2009 6M 2008 +/-% 6M 2009 6M 2008 +/-% 1. Gross premiums written 2,185.2 2,120.4 3.1 776.6 691.0 12.4 2. Net earned premiums 1,847.2 1,757.8 5.1 663.0 542.0 22.3 3. Financial result 358.5 488.1 -26.5 26.3
Slide 32: P&L - Split by Regions (II)
6M 2009 P&L - Split by Regions (II) Regional segments, IFRS (€mn) E 32 Slovakia Poland Romania 6M 2009 6M 2008 +/-% 6M 2009 6M 2008 +/-% 6M 2009 6M 2008 +/-% 1. Gross premiums written 324.4 297.5 9.0 262.9 393.9 -33.3 313.0 360.5 -13.2 2. Net earned premiums 270.8 245.7 10.2 241.0 361.4 -33.3 272.3
Slide 33: P&L - Split by Regions (III)
6M 2009 P&L - Split by Regions (III) Regional segments, IFRS (€mn) E 33 Other CEE 1 Other TOTAL 6M 2009 6M 2008 +/-% 6M 2009 6M 2008 +/-% 6M 2009 6M 2008 +/-% 1. Gross premiums written 300.7 239.2 25.7 88.4 112.7 -21.6 4,251.1 4,215.1 0.9 2. Net earned premiums 233.9 178.5 31.0 84.6 96.4 -12.2 3,612
Slide 34: Results by Country
6M 2009 Results by Country IFRS (€mn) E 34 GWP Non-Life Life GWP GWP Total Profit before Taxes Net Combined Ratio 6M 2009 6M 2008 6M 2009 6M 2008 6M 2009 6M 2008 6M 2009 6M 2008 6M 2009 6M 2008 Austria 1,125.5 1,105.9 1,059.7 1,014.4 2,185.2 2,120.4 132.3 154.5 94.7% 92.4% Czech Rep. 507.6 520.5 268
Slide 35: Shareholders' Equity
6M 2009 Shareholders’ Equity Shareholders’ equity supports strong capitalisation E 35 Change in Group Shareholders’ Equity (€mn) 190.0 -141.8 4,488.8 250.0 51.7 4,138.8 -1.8 1.9 Increase of 8.5% in 6M 2009 Equity as of YE Currency Changes to Capital increase AFS unrealised Profit for the Dividend Eq
Slide 36: Change in Group Shareholders' Equity
Change in Group Shareholders‘ Equity IFRS (€‘000) E 36 1.1. - 30.06.2009 1.1. - 30.06.2008 Equity as of 1 January 4,138,790 2,615,563 Exchange rate changes -1,788 55,336 Changes in scope of consolidation 1,920 39,270 Capital increase 250,000 1,343,078 Unrealised gains and losses from financial 51,73
Slide 37: Investment Split
6M 2009 Investment Split V.I.G. follows a prudent investment approach E 37 Portfolio Overview Current Investment Strategy +2.2% € 25.0bn € 24.6bn Cash & Deposits ~ 4% ~ 7% ~ 1% Alternatives Further investments into high quality Affiliated Companies ~ 2% ~ 5% ~ 3% 1 sovereign bonds ~ 16% Loans ~ 19%
Slide 38: Development of Bond Portfolio
Development of Bond Portfolio E 38 By Issuer By Rating 5% 2% 1% 1% 6% 7% 8% 7% 9% 45% 46% 43% 49% 51% 50% 16% 15% 14% 21% 20% 20% 33% 34% 35% 21% 20% 20% YE 2008 3M 2009 6M 2009 YE 2008 3M 2009 6M 2009 Government 1 Pfandbriefe/Covered Bonds AAA AA A BBB Other Financials Corporates 1: Government and
Slide 39: Life Insurance Premium Split
Life Insurance Premium Split IFRS (€mn) E 39 Premiums written - direct business 6M 2009 6M 2008 +/- % Regular premiums 1,080.2 926.9 16.5% Single premiums 649.4 723.7 -10.3% Total premiums written - direct business 1,729.6 1,650.6 4.8% thereof: Policies with profit participation 953.0 936.9 1.7% Pol
Slide 40: Q2 2009 Income Statement
Q2 2009 Income Statement IFRS (€mn) E 40 Q2 2009 Q2 2008 +/-% 1. Gross premiums written 1,905.7 1,903.9 0.1 2. Net earned premiums 1,814.6 1,734.5 4.6 3. Financial result 233.4 443.1 -47.3 4. Other income 20.8 13.2 57.4 Total income 2,068.8 2,190.8 -5.6 6. Expenses for claims and insurance benefits
Slide 41: Exchange Rates
6M 2009 Exchange Rates National currency unit per EUR E 41 6M 2009 6M 2008 Balance Sheet Balance Sheet Country Curr. P & L EUR P & L EUR EUR EUR Bulgaria EUR/BGN 1.9558 1.9558 1.9558 1.9558 Croatia EUR/HRK 7.2730 7.3824 7.2365 7.2556 Estonia EUR/EEK 15.6466 15.6466 - - Liechtenstein EUR/CHF 1.5265 1
Slide 42: Group Embedded Value 2008
Group Embedded Value 2008 Results (€mn) E 42 L&H P&C Total Austria/Germany 2008 2007 2008 2007 2008 2007 Comments Free Surplus 403.6 525.3 Required Capital 320.5 325.9 § Group Embedded Value (GEV) ANAV 724.1 851.2 151.4 426.6 875.5 1,277.8 calculated as Value of In-Force Business PVFP 1,233.9 1,568.
Slide 43: Group Embedded Value 2008 – Return on Adjusted Embedded Value
Group Embedded Value 2008 Return on Adjusted Embedded Value (€mn) E 43 L&H P&C Total Change in Methodology Austria / Germany and Assumptions EV Dec 31, 2008 1,670.3 151.4 1,821.7 EV Dec 31, 2007 Reported 2,012.7 617.5 2,630.2 § Allowance for Cost for Residual EV Dec 31, 2007 Restated 2,037.4 570.7 2
Slide 44: Group Embedded Value 2008 – New Business Values
Group Embedded Value 2008 New Business Values (€mn) E 44 L&H 2008 2007 +/-% Comments Austria / Germany NBV 61.6 76.2 - 19.2% APE 259.1 262.2 § The NBV represents the value generated APE-Ratio 23.8% 29.1% by new business sold during the PVNBP 2,479.2 2,398.6 reporting period. PVNBP-Ratio 2.5% 3.2% §
Slide 45: V.I.G. Has Excellent CEE Market Position
V.I.G. Has Excellent CEE Market Position V.I.G. an early mover in CEE E 45 Overview of Core Markets Details Slovakia Czech Rep. Romania Bulgaria § leading market position in nearly all core markets Pop.: 5.4 mn Pop.: 10.2 mn Pop.: 21.3 mn Pop.: 7.6 mn § strong market positions GDP/Cap.: $ 17 k GDP/C
Slide 46: Shareholder Structure (I)
Shareholder Structure (I) Total number of shares 128,000,000 E 46 Shareholder Structure ~ 30 % Free Float ~70 % Wiener Städtische Wechselseitige Versicherungsanstalt- Vermögensverwaltung
Slide 47: Shareholder Structure (II)
Shareholder Structure (II) Total number of shares 128,000,000 E 47 Free Float Geographical Split ~27 % Austria ~15% Others ~12% North America ~10% UK & Ireland ~36% Continental Europe
Slide 48: V.I.G. Share & Contact Details
V.I.G. Share & Contact Details Investor Relations E 48 V.I.G. Share Investor Relations Vienna Insurance Group § Number of common shares Schottenring 30, 1010 Vienna E-Mail: investor.relations@vig.com 128mn www.vig.com/ir § ISIN AT0000908504 § Thomas Schmee § Stock exchange listing Tel. +43 (0)50 350
Slide 49: Disclaimer
Disclaimer E 49 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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