Vienna Insurance Group Ag · VIE:VIG
Vienna Insurance — FY2020 Earnings Presentation
52 slides from Vienna Insurance's earnings presentation, Mar 9, 2021
Slide 1: 2020 Preliminary Results Presentation
2020 PRELIMINARY RESULTS PRESENTATION Vienna, 9 March 2021
Slide 2: Presenting team and topics
2020 PRELIMINARY RESULTS CONFERENCE CALL Presenting team and topics Participants Topics ▪ Elisabeth Stadler, CEO ▪ Key Messages & Strategy p. 3 ▪ Liane Hirner, CFO ▪ Financials & Investments p. 9 ▪ Werner Matula, Group Chief Actuary ▪ Life & Health Embedded Value p. 18 ▪ Q&A session: ▪ Dividend & Ou
Slide 3: VIG Group with resilient operative performance in 2020
VIG GROUP WITH RESILIENT OPERATIVE PERFORMANCE IN 2020 Key messages ▪ Business continuity in all Group companies secured ▪ Diversity and local entrepreneurship were key drivers of overall solid operative performance of VIG Group ▪ Initiatives of Agenda 2020 consistently pursued and successfully impl
Slide 4: Results highlights: solid operative business performance
RESULTS HIGHLIGHTS Solid operative business performance Gross written premiums Profit before taxes Combined Ratio € 10.4bn € 345.9mn 95.0% GWP up by 0.3% compared to 2019 PBT decreased by 33.7% Down from 95.4% in 2019 ▪ Austria, Poland, Romania and VIG Re ▪ Main driver is declining financial result
Slide 5: Agenda 2020 accomplishments 2016-2020
AGENDA 2020 Accomplishments 2016-2020 Ensuring future growth Optimisation of business model Use of growth potentials Digitalisation Anti-Fraud-Management Health insurance ▪ ~180 ongoing digitalisation projects ▪ Savings in claims payments of >3% 122% premium increase in the 5 key countries BG, PL, ▪
Slide 6: VIG is highly experienced in acquiring, integrating and merging companies
VIG IS HIGHLY EXPERIENCED IN ACQUIRING, INTEGRATING AND MERGING COMPANIES Optimising our company structure and looking for acquisitions in our region to support organic growth Mergers of VIG insurance companies Acquisitions (insurance sector) Strategic 13 mergers concluded Merged companies AXA Non-L
Slide 7: Aegon CEE transaction
AEGON CEE TRANSACTION Delivering on ▪ Announced transaction is in line with VIG’s strategy of building further scale in CEE 1 strategy ▪ Confirms VIG’s #1 position in CEE ▪ Acquisition of Aegon’s non-life and life insurance companies as well as pension funds, and asset management in Hungary, Poland,
Slide 8: CSR: key initiatives and accomplishments 2020
CSR: KEY INITIATIVES AND ACCOMPLISHMENTS 2020 General ▪ VIG is listed in international sustainability index FTSE4Good and the Austrian VÖNIX ▪ Annual CSR meetings to promote best practise sharing and the exchange of individual Group initiatives Core business Customers Employees Society Environment ▪
Slide 9: KEY MESSAGES & STRATEGY FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE
KEY MESSAGES & STRATEGY FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE DIVIDEND & OUTLOOK APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 9 VIG VIENNA INSURANCE GROUP
Slide 10: Profit development impacted by financial result decrease
PROFIT DEVELOPMENT IMPACTED BY FINANCIAL RESULT DECREASE 2020 Income statement €mn 2020 2019 +/- % Gross premiums written 10,428.5 10,399.4 0.3 ▪ Premium growth driven by other property (+€219.9mn) and health (+€9.7mn) Net earned premiums 9,336.6 9,317.9 0.2 Financial result* 596.3 1,010.8 -41.0 ▪ F
Slide 11: Main market developments
Baltic MAIN MARKET DEVELOPMENTS states No. of companies: 3 Overview 2020 Employees: 1,905 Market share: ~25% GWP: €493mn (-1.5%) Czech Republic PBT: €9mn (+24.1%) CoR: 97.2% (-0.4%p) No. of companies: 3 EE Employees: 4,925 Market share: ~31% Poland LV GWP: €1,732mn (-0.8%) PBT: €192mn (+11.4%) LT No
Slide 12: Overall premium growth of 0.3%
OVERALL PREMIUM GROWTH OF 0.3% Overview by segments Gross written premiums (€mn; y-o-y change) ▪ Top line up by €29.1mn to €10.4bn supported by strong start into the year 2020 ▪ Negative currency effects in CZ and HU: adjusted for FX, premium growth of 2.2% in CZ and 7.1% in HU ▪ Premium decreases i
Slide 13: Increased other property, health and casco business
INCREASED OTHER PROPERTY, HEALTH AND CASCO BUSINESS Gross written premiums by lines of business (€mn; y-o-y change); incl. Central Functions MTPL Casco Other property Total premiums +0.3% 2019 1,507 1,279 4,659 10,399 10,428 -0.1% +0.8% +4.7% MTPL 1,507 1,507 2020 1,507 1,289 4,879 1,289 Casco 1,279
Slide 14: Group profit before taxes of €345.9mn down by 33.7%
GROUP PROFIT BEFORE TAXES OF €345.9MN DOWN BY 33.7% Declining financial result and consolidation change of non-profit housing societies in 2019 Result before taxes (€mn; y-o-y change) ▪ Goodwill impairments 2020 in Bulgaria (€59.8mn), Georgia (€12.5mn) and Croatia (Segment: Remaining CEE - €45.0mn);
Slide 15: Combined ratio (P&C) at 95.0%
COMBINED RATIO (P&C) AT 95.0% CoR improvements in all market segments, except Poland P&C Combined Ratio development Overview by segments (y-o-y development net, %) ▪ Constant decrease of claims ratio supported by Agenda 2020 +1.9%p -1.9%p -0.4%p -0.7%p -1.2%p -8.2%p initiatives and better claims act
Slide 16: Investment split and bond portfolio overview
INVESTMENT SPLIT AND BOND PORTFOLIO OVERVIEW No substantial changes to investment strategy 2020: Total €36.6bn Bond portfolio by rating1 in % 4.2% 1.5% 7.5% AAA AA A BBB Other 2020 9.0 30.0 35.4 21.6 4.0 7.0% 2019 9.0 31.0 36.8 19.1 4.1 7.1% 72.7% Bond portfolio by issuer in % 2020 52.4 6.5 17.3 23.
Slide 17: Financial result
FINANCIAL RESULT Consolidation change of housing societies and COVID-19 related impacts in EUR ‘000 2020 2019 +/- % Current income 953,928 1,216,582 -21.6 ▪ Change of consolidation method of non-profit housing societies in Income from appreciations 20,706 34,892 -40.7 2019 affects current income, de
Slide 18: KEY MESSAGES & STRATEGY FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE
KEY MESSAGES & STRATEGY FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE DIVIDEND & OUTLOOK APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 18 VIG VIENNA INSURANCE GROUP
Slide 19: Life & Health Embedded Value Austria / Germany
LIFE & HEALTH EMBEDDED VALUE AUSTRIA / GERMANY in €mn -28.3% 106.6 ▪ New Business Margin 105.9 1,659.9 20.3 15.7 (PVNBP-Ratio) decreased to 1.0% in 2020 (2019: 1.7%) 1,190.6 ▪ Significant negative impact of 2,124.3 the economic environment -717.7 ▪ Includes profitable long-term- health business 1,99
Slide 20: Life & Health Embedded Value CEE
LIFE & HEALTH EMBEDDED VALUE CEE in €mn 10.7% 162.8 2,037.8 ▪ New Business Margin -10.5 (PVNBP-Ratio) down to 4.4% in 2020 (2019: 5.8%) 48.5 14.3 1,841.3 -18.5 ▪ Material contribution by new business written in 2020 1,148.9 ▪ Positive experience variance 1,103.4 includes renewals (due to 66.8 Solven
Slide 21: Life & Health Embedded Value Total
LIFE & HEALTH EMBEDDED VALUE TOTAL in €mn ▪ New Business Margin (PVNBP-Ratio) decreased to 2.2% in 2020 (2019: 3.2%) ▪ CEE contributes with 63% the Life & Health Embedded Value -7.8% 269.3 3,639.2 30.0 87.4 3,501.1 68.8 -102.7 -35.4 3,228.4 3,273.2 -728.2 3,100.0 103.6 68.8 2019 2020 2019 Dividends
Slide 22: KEY MESSAGES & STRATEGY FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE
KEY MESSAGES & STRATEGY FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE DIVIDEND & OUTLOOK APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 22 VIG VIENNA INSURANCE GROUP
Slide 23: Strong business profile and successful strategy
STRONG BUSINESS PROFILE AND SUCCESSFUL STRATEGY Well diversified M&A - based on Five-pillar Strong balance Numerous portfolio over Proven strong footprint, sustainability sheet and initiatives to drive countries and business VIG follows strategy: prudent profitability and Core business lines of mode
Slide 24: Dividend proposal of 75 cents per share
DIVIDEND PROPOSAL OF 75 CENTS PER SHARE In line with dividend policy 2017 2018 2019 2020 Earnings per share 2.23 2.04 2.59 1.81 (€) DIVIDEND POLICY Dividend per share 0.90 1.00 1.15 0.75* Payout Ratio in a range of (€) 30 – 50% of Group profits after taxes and non-controlling interests Payout ratio
Slide 25: Outlook 2021
OUTLOOK 2021 End of pandemic not yet foreseeable – global macroeconomic uncertainty remains high Targets (excluding Aegon CEE) Gross written Profit before Combined premium taxes Ratio at level of 2020 €450mn – €500mn sustainable at ~95% Outlook is subject to overall economic environment and to furth
Slide 26: KEY MESSAGES & STRATEGY FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE
KEY MESSAGES & STRATEGY FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE DIVIDEND & OUTLOOK APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 26 VIG VIENNA INSURANCE GROUP
Slide 27: Austria
AUSTRIA PBT decrease driven by lower financial result GWP development (€mn) €mn 2020 2019 +/- % +2.2% Gross premiums written 4,030.7 3,943.3 2.2 ▪ Premium growth of €87.4mn driven by Net earned premiums 3,275.6 3,226.2 1.5 other property (+€57.9mn); life regular 3,943 4,031 Financial result* 505.4 7
Slide 28: Czech Republic
CZECH REPUBLIC Positive developments in non-life and life with double-digit profit growth GWP development (€mn) €mn 2020 2019 +/- % -0.8% Gross premiums written 1,732.4 1,745.8 -0.8 ▪ Currency-related decline in premiums; 1,746 Net earned premiums 1,295.5 1,312.8 -1.3 +2.2% FX adjusted 1,732 Financi
Slide 29: Slovakia
SLOVAKIA Favourable development in non-life GWP development (€mn) €mn 2020 2019 +/- % -8.7% Gross premiums written 729.5 798.9 -8.7 ▪ Premium declines (-€69.4mn) mainly 799 Net earned premiums 597.3 671.6 -11.1 driven by life Financial result 36.4 49.6 -26.5 730 ▪ Result before taxes up by €2.5mn MT
Slide 30: Poland
POLAND One-off effects impacting results GWP development (€mn) €mn 2020 2019 +/- % +5.7% Gross premiums written 1,196.2 1,132.0 5.7 ▪ Premium growth of €64.2mn driven 1,196 Net earned premiums 926.6 886.5 4.5 mainly by other property (+€35.4mn) 1,132 Financial result 36.1 30.8 17.5 and MTPL (+€18.7m
Slide 31: Romania
ROMANIA Solid business performance in 2020; last year impacted by entire goodwill impairment of €108.8mn GWP development (€mn) €mn 2020 2019 +/- % +5.5% Gross premiums written 493.8 468.2 5.5 ▪ Sound premium growth of €25.6mn 494 Net earned premiums 375.9 346.9 8.4 coming from casco (+€18.6mn), othe
Slide 32: Baltic states
BALTIC STATES Stable development in difficult market environment GWP development (€mn) €mn 2020 2019 +/- % -1.5% Gross premiums written 492.9 500.3 -1.5 ▪ Slight premium decline of €7.4mn; 500 Net earned premiums 393.3 385.2 2.1 double-digit growth rates in life and 493 Financial result 9.4 11.4 -17
Slide 33: Hungary
HUNGARY Apart from adverse currency effects, strong business development in 2020 GWP development (€mn) €mn 2020 2019 +/- % -0.6% Gross premiums written 287.7 289.5 -0.6 ▪ Currency-related decline in premiums; 290 Net earned premiums 223.6 219.6 1.8 +7.1% FX adjusted 288 Financial result 3.3 4.9 -31.
Slide 34: Bulgaria
BULGARIA Goodwill impairment in Q2 2020 GWP development (€mn) €mn 2020 2019 +/- % -10.8% Gross premiums written 199.6 223.9 -10.8 ▪ Premium decrease of €24.3mn mainly 224 Net earned premiums 145.3 137.7 5.6 driven by health (-€24.8mn) Financial result 12.3 11.7 5.0 MTPL 34 200 Other income 5.0 1.1 >
Slide 35: Turkey/Georgia
TURKEY/GEORGIA Solid performance adjusted for goodwill impairment in Georgia in Q2 2020 GWP development (€mn) €mn 2020 2019 +/- % +7.1% Gross premiums written 251.7 234.9 7.1 ▪ Premiums up by €16.8mn with double- 252 Net earned premiums 113.0 112.4 0.6 digit growth rates in other property and 235 Fi
Slide 36: Remaining CEE
REMAINING CEE Profit development impacted by full goodwill impairment in Croatia in Q2 2020 GWP development (€mn) €mn 2020 2019 +/- % -1.6% Gross premiums written 439.6 446.9 -1.6 ▪ Remaining CEE: Albania (incl. Kosovo), 447 Net earned premiums 318.6 328.8 -3.1 Bosnia-Herzegovina, Croatia, Moldova,
Slide 37: Other markets
OTHER MARKETS Germany and Liechtenstein GWP development (€mn) €mn 2020 2019 +/- % -26.4% Gross premiums written 280.0 380.4 -26.4 ▪ Premiums down by €100.4mn due to 380 Net earned premiums 230.9 332.3 -30.5 negative development in the life single Financial result 17.2 16.6 3.6 premium business in Li
Slide 38: Central functions
CENTRAL FUNCTIONS Lower financial result related to the consolidation change of the Austrian housing societies GWP development (€mn) €mn 2020 2019 +/- % +7.0% Gross premiums written 1,736.5 1,623.5 7.0 ▪ Central Functions include VIG Holding, 1,737 Net earned premiums 1,425.7 1,351.5 5.5 VIG Re, Wie
Slide 39: KEY MESSAGES & STRATEGY FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE
KEY MESSAGES & STRATEGY FINANCIALS & INVESTMENTS LIFE & HEALTH EMBEDDED VALUE DIVIDEND & OUTLOOK APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 39 VIG VIENNA INSURANCE GROUP
Slide 40: 2020 key financials
2020 KEY FINANCIALS Overview of KPIs Net result for the period after taxes and ROE before taxes and non-controlling interest (€mn) non-controlling interest (%) 331 10.6 269 8.9 232 7.9 2018 2019 2020 2018 2019 2020 Earnings per share (€) Book value per share2 (€) 2.59 32.64 33.67 33.36 2.04 1.81 201
Slide 41: 2020 balance sheet
2020 BALANCE SHEET IFRS (€mn) €mn 31.12.2020 31.12.2019 +/- % Intangible assets (incl. Right-of-Use Assets) 1,918 2,137 -10.2 Investments 34,901 34,456 1.3 Unit- and index-linked investments 7,968 8,620 -7.6 Reinsurers’ share in underwriting provisions 1,396 1,283 8.8 Receivables 1,699 1,717 -1.1 Ta
Slide 42: Equity development
EQUITY DEVELOPMENT Increase in shareholders’ equity by ~2% despite adverse currency effects Change in consolidated Shareholders’ Equity (€mn) +2% 129 243 -110 5,286 -155 -12 5,191 Equity as Profit for Currency AFS unrealised Dividend Other Equity as of 2019 the period changes gains and losses paymen
Slide 43: 2020 premiums by business lines and country (I)
2020 PREMIUMS BY BUSINESS LINES AND COUNTRY (I) IFRS (€mn) MTPL Casco Other property 2020 2019 +/- % 2020 2019 +/- % 2020 2019 +/- % Austria 324,1 319,4 1,5 302,8 295,3 2,6 1 442,4 1 384,5 4,2 Czech Republic 311,9 305,6 2,0 244,3 246,6 -1,0 492,4 498,5 -1,2 Slovakia 150,3 152,9 -1,7 105,6 106,3 -0,6
Slide 44: 2020 premiums by business lines and country (II)
2020 PREMIUMS BY BUSINESS LINES AND COUNTRY (II) IFRS (€mn) Life regular Life single Health 2020 2019 +/- % 2020 2019 +/- % 2020 2019 +/- % Austria 1 215,8 1 238,8 -1,9 293,7 271,9 8,0 451,9 433,4 4,3 Czech Republic 630,9 633,7 -0,4 34,7 44,5 -22,1 18,3 16,8 9,2 Slovakia 169,0 188,4 -10,3 177,2 226,
Slide 45: 2020 country overview GWP / PBT / combined ratio
2020 COUNTRY OVERVIEW GWP / PBT / COMBINED RATIO IFRS (€mn) GWP Total Result before taxes Combined Ratio net (in %) 2020 2019 +/- % 2020 2019 +/- % 2020 2019 +/- %p Austria 4 030,7 3 943,3 2,2 178.7 207.3 -13.8 92.7% 93.5% -0.7 Czech Republic 1 732,4 1 745,8 -0,8 192.1 172.4 11.4 90.7% 92.0% -1.2 Sl
Slide 46: Q4 2020 income statement
Q4 2020 INCOME STATEMENT IFRS (€mn) €mn Q4 2020 Q4 2019 +/- % Gross premiums written 2,442.1 2,548.2 -4.2 ▪ Premiums down by €106.1mn mainly due to decreases in life Net earned premiums 2,312.1 2,392.0 -3.3 business in Q4 Financial result* 83.5 383.8 -78.3 Other income 7.9 59.1 -86.6 ▪ Financial res
Slide 47: S&P rating confirmed in November 2020: A+
S&P RATING CONFIRMED IN NOVEMBER 2020 VIG remains best-rated company in the ATX Financial Risk Profile: Business Risk Profile: Very Strong Strong ▪ Excellent capitalization in 2019 ▪ “Market leading position in Austria and the Central and Eastern Europe (CEE) region“ ▪ “VIG's prudent underwriting st
Slide 48: VIG share (I)
VIG SHARE (I) Number of common shares: 128,000,000 / ISIN: AT0000908504 General information Analyst recommendations (9 March 2021) Current listings Ticker Rating Major Indices SELL Vienna ▪ Vienna Stock Exchange: VIG Standard & Poor’s: ATX 1 BUY Prague ▪ Bloomberg: VIG AV / VIG CP A+, stable outlook
Slide 49: VIG share (II)
VIG SHARE (II) Shareholder structure Free float split by region* North America 35% Continental Europe 25% ~72% ~28% Austria 24% UK & Ireland 13% Other 3% Wiener Städtische Versicherungsverein Free Float (Mutual) * Split of identified shares, May 2020 (Source: Investor Update) 49 APPENDIX 2: FINANCIA
Slide 50: Appendix 2: Financials
50 APPENDIX 2: FINANCIALS 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 2021* Tel. +43 (0)50 390 – 21920 Tel. +43 (0) 50 390 – 21151 Date Event nina.higatzberger@vig.com sylvia.machherndl@vig.com 09 Mar. 2021 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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