Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — Q1 2017 Earnings Presentation
37 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, May 17, 2017
Slide 1: PZU Group's financial results for Q1 2017
Warsaw Vilnius Riga Tallinn Kiev PZU Group’s financial results for Q1 2017 Wilno Warsaw, 17 May 2017
Slide 2: PZU Group's position on the changing insurance market
1. PZU Group’s position on the changing insurance market PZU Group’s position 2. Major drivers of the PZU Group’s result on the changing 3. Execution of the Group’s strategy for 2016-2020 insurance 4. Recap of the financial results by the business segments 5. Detailed financials market 6. Group figu
Slide 3: Non-life insurance market in Poland
Non-life insurance market in Poland Gross written premium (m PLN) 6.0% 32 182 16.7% 26 603 27 577 25 291 26 250 26 260 22 739 13 438 10 747 11 469 12 657 12 863 13 394 0.3% 9 808 32.2% 18 744 12 931 14 543 14 781 13 945 13 397 14 183 12.2010 12.2011 12.2012 12.2013 12.2014 12.2015 12.2016 Motor Non-
Slide 4: Life insurance market in Poland
Life insurance market in Poland Periodical gross written premium (m PLN) 1.1% 1.7% 2.5% (0.9)% 16 037 16 488 16 498 16 341 15 826 14 759 15 040 9 429 9 250 (3.0)% 8 970 9 008 9 089 8 395 8 510 1.7% 6 363 6 530 6 818 6 948 7 059 7 247 7 371 12.2010 12.2011 12.2012 12.2013 12.2014 12.2015 12.2016 PZU
Slide 5: Major drivers of the PZU Group's result
1. PZU Group’s position on the changing insurance market Major drivers of the 2. Major drivers of the PZU Group’s result PZU Group’s 3. Execution of the Group’s strategy for 2016-2020 result 4. Recap of the financial results by the business segments 5. Detailed financials 6. Group figures as at 31 D
Slide 6: The most important events and drivers of the results in Q1 2017
The most important events and drivers of the results in Q1 2017 Planned acquisition of shares in Pekao SA: Polish FSA does not voice an objection to the acquisition of shares in Pekao SA by the PZU Group and PFR (Polish Development Fund) – the final condition precedent Consent to issue bonds given b
Slide 7: Pekao share price
Pekao share price 110 115 120 125 145 150 130 135 140 2016-12-05 2016-12-08 2016-12-11 2016-12-14 2016-12-17 2016-12-20 2016-12-23 2016-12-26 2016-12-29 2017-01-01 2017-01-04 2017-01-07 2017-01-10 2017-01-13 2017-01-16 2017-01-19 2017-01-22 2017-01-25 2017-01-28 2017-01-31 (+20.1%) 2017-02-03 2017-0
Slide 8: Enhanced performance in motor insurance coupled with a rising market share
Enhanced performance in motor insurance coupled with a rising market share • As the price war lasting from 2005 to 2010 ended (after the flood of 2010), the PZU Group's motor insurance market share * (Poland) overall motor insurance sector’s results in Poland started to improve. Another period of pr
Slide 9: Maintenance of cost discipline – improved administrative expense ratio
Maintenance of cost discipline – improved administrative expense ratio coupled with growing business volume m PLN Administrative expense ratio in the insurance business • The declining administrative expense ratio in Poland was driven mainly by maintaining cost discipline coupled with the rapidly gr
Slide 10: Better results on equity instruments
Better results on equity instruments m PLN 527 48 45 (161) 584 1 487 960 443 Other Alior Bank (excluding Alior Bank) Portfolio and on own (excluding Alior Bank) Equity instruments (excluding FX on PZU Net investment result (including Alior Bank) Net investment result Net investment result and intere
Slide 11: Softer profitability of group and individually continued insurance in Q1
Softer profitability of group and individually continued insurance in Q1 Gross written premium (m PLN) ● Lessening the pressure on the premium growth rate making it 1.8% possible to control the loss ratio. 1.5% 1.7% 2.0% 1.9% ● New riders to group and continued insurance and modification of 1 661 1
Slide 12: Profitability of the group and individually continued insurance segment versus the loss ratio
Profitability of the group and individually continued insurance segment versus the loss ratio in protection products 78% 0.32% • Mortality’s quarterly seasonality in Poland (upswings in winter months and downturns in 76% summer months) and its overall upward trend 74% 0.30% (aging of the general pub
Slide 13: Net profit at the beginning of the year is at a record-breaking level
… meaning that the net profit generated at the beginning of the year is at a record-breaking level PZU Group’s net profit (m PLN) Net profit – parent company (m PLN) 80.1% 91.1% 1 007 940 559 492 03.2016 03.2017 03.2016 03.2017 PZU Group’s gross written premium (m PLN) Return on equity (ROE) (%)* 20
Slide 14: Execution of the Group's strategy for 2016-2020
1. PZU Group’s position on the changing insurance market Execution of the Group’s 2. Major drivers of the PZU Group’s result strategy for 2016-2020 3. Execution of the Group’s strategy for 2016-2020 4. Recap of the financial results by the business segments 5. Detailed financials 6. Group figures as
Slide 15: Key metrics of the Strategy for 2016-2020
Key metrics of the Strategy for 2016-2020 ROE1 Q1 2017 2020 27.9% 18% LIFE NON-LIFE INSURANCE INVESTMENTS HEALTH BANKING INSURANCE Number of clients Assets under management Assets (bn PLN) PZU Group's Revenues (m PLN)6 in PZU Życie (million) for third party clients market share2 BUSINESS (bn PLN) SI
Slide 16: Recap of the financial results by the business segments
1. PZU Group’s position on the changing insurance market Recap of the financial 2. Major drivers of the PZU Group’s result results by the business 3. Execution of the Group’s strategy for 2016-2020 segments 4. Recap of the financial results by the business segments 5. Detailed financials 6. Group fi
Slide 17: Operating results in Q1 2017
Operating results in Q1 2017 ● Higher profitability due to the following: Non-life - considerably lower level of claims and benefits y/y in the agricultural insurance portfolio – in the corresponding period of 2016 there were many losses caused by the forces of nature (adverse effects of ground fros
Slide 18: Non-life insurance
Non-life insurance Growth in motor insurance sales Mass segment Corporate segment Gross written premium (m PLN) Gross written premium (m PLN) 2 653 23.6% 32.6% 2 147 including including 223 118 1 767 1 279 630 475 including including 1 including 373 including 12 18 260 including 100 868 886 215 8 25
Slide 19: Recap – non-life insurance
Recap – non-life insurance Mass segment Corporate segment Higher gross written premium y/y as an effect of the following: Higher gross written premium y/y as the outcome of the following: • higher motor insurance sales (+38.2% y/y) as an effect of the growing • higher motor insurance sales (+43.5% y
Slide 20: Life insurance
Life insurance Softer profitability and sales growing at the same time Group and continued insurance segment Individual insurance segment Gross written premium (m PLN) Gross written premium (m PLN) 1.5% 65.9% 408 246 154 1 689 1 714 127 254 119 03.2016 03.2017 03.2016 03.2017 single premium periodic
Slide 21: Recap – life insurance
Recap – life insurance Group and continued insurance segment Individual insurance segment Drivers of higher gross written premium: Gross written premium’s upward movement resulted from the • acquisition of premium in group health insurance products; PZU now following: insures more than 1.3 million p
Slide 22: International business
International business Higher result in non-life insurance driven by lower insurance expenses Non-life insurance Life insurance Gross written premium (m PLN) Gross written premium (m PLN) 10.3% 15.0% 344 312 52 Estonia 46 86 93 Latvia 23 20 131 156 Lithuania (LD) Lithuania 11 14 Ukraine 9 9 Ukraine
Slide 23: Recap – international business
Recap – international business Gross written premium Insurance results Non-life insurance Non-life insurance • Premium growth in the Baltic companies precipitated chiefly by the • Combined ratio decline as a result of the following: introduction of higher rates for motor insurance in the region, act
Slide 24: Alior Bank
Alior Bank Positive growth rate in credit receivables Portfolio composition Bank segment Loan portfolio by segment (m PLN) Operating profit (m PLN) and Cost/Income ratio* 4.3% 47.8% 56.4% 45 029 46 949 19 720 21 081 11.3% 25 309 25 868 106 118 12.2016 03.2017 03.2016 03.2017 Retail segment Corporate
Slide 25: Detailed financials
1. PZU Group’s position on the changing insurance market Detailed financials 2. Major drivers of the PZU Group’s result 3. Execution of the Group’s strategy for 2016-2020 4. Recap of the financial results by the business segments 5. Detailed financials 6. Group figures as at 31 December 2016 accordi
Slide 26: Key financial highlights
Key financial highlights Change Q1 2017 m PLN, IFRS Q1 2016 Q1 2017 Change YoY Q4 2016 over Q4 2016 Profit and Loss Statement Gross Written Premium 4 801 5 768 20.1% 5 513 4.6% Premium Earned 4 317 5 072 17.5% 4 841 4.8% Net investment Result 1 057 1 674 58.4% 884 89.3% Interest Expenses (274) (187)
Slide 27: Normalized operating profit
Normalized operating profit Operating profit YTD, m PLN Change 1 Impact exerted by conversion of long-term m PLN, IFRS 03.2016 03.2017 yoy policies into yearly renewable term agreements in type P group insurance. Operating Profit 716 1 259 75.8% 2 Above average claims in agricultural insurance versu
Slide 28: Profitability by insurance activity segment
Profitability by insurance activity segment Combined Ratio / Insurance Business Segments Gross Written Premium Insurance Result/ Operating Profit Operating profit ratio* m PLN, local GAAP Q1 2016 Q1 2017 Change YoY Q1 2016 Q1 2017 Change YoY Q1 2016 Q1 2017 Total Non-Life - Poland 2 622 3 283 25.2%
Slide 29: Investments
Investments Better performance of equity instruments m PLN Net investment result* March 2017 Investment portfolio composition** Total: 116.7% 5.4% 7.6% 52.8 bn PLN 7.3% 960 3.1% 443 12.1% 64.5% 01-03.2016 01-03.2017 The net investment result in Q1 2017 (including interest expense net of Alior Bank)
Slide 30: Investments
Investments Better performance of unit-linked products, especially WPI and Pogodna Przyszłość PZU Group’s net investment result Net investment result 1 116.7% 960 732 443 438 01-03.2016 01-03.2017 01-03.2016 01-03.2017 Net investment result 2 in investment products* Investment portfolio composition
Slide 31: Group figures as at 31 December 2016 according to Solvency II
1. PZU Group’s position on the changing insurance market Group figures as at 2. Major drivers of the PZU Group’s result 31 December 2016 3. Execution of the Group’s strategy for 2016-2020 according to 4. Recap of the financial results by the business segments 5. Detailed financials Solvency II 6. Gr
Slide 32: Group solvency ratios
Group solvency ratios Preliminary Group Solvency II data as at 31 December 2016 bn PLN, unaudited group data Solvency II (Group) • Solvency II own funds rose by PLN 2.7 bn, i.e. 14% during 2016. 276% 266% 256% 253% 245% • The main drivers of the growth of own funds in Q4 were: decrease of technical
Slide 33: Group own funds
Group own funds Preliminary Solvency II data as at 31 December 2016 bn PLN, unaudited data Reconciliation of own funds and consolidated equity according to IFRS Own funds according to Solvency II are calculated using the net assets carried in the Group’s economic balance sheet. For the purpose of SI
Slide 34: Group solvency capital requirement
Group solvency capital requirement Solvency II data as at 31 December 2015 and 30 September 2016 bn PLN, unaudited data SII 12.2015 SII 12.2016 Diversification The Solvency Capital Requirement (SCR) is calculated using the standard 0.7 formula and it includes, among others, the following risks: actu
Slide 35: Impact of the acquisition of Bank Pekao SA
Impact of the acquisition of Bank Pekao SA Pro forma Solvency II data as at 30 December 2016 bn PLN, unaudited data • PZU Group’s solvency ratio will fall as a consequence of the acquisition of Pekao: • the surplus of the acquisition price above PZU’s share of Pekao’s own funds will reduce the Group
Slide 36: Piotr Wiśniewski – IRO
Piotr Wiśniewski – IRO tel.: (+48 22) 582 26 23 ir@pzu.pl www.pzu.pl/ir PZU Al. Jana Pawła II 24 00-133 Warsaw, Poland www.pzu.pl https://twitter.com/GrupaPZU 35
Slide 37: Disclaimer
Disclaimer This Presentation has been prepared by PZU SA (“PZU”) and is purely informational in nature. Its purpose is to present selected data concerning the PZU Group (“PZU Group”), including its growth prospects. PZU does not undertake to publish any updates, changes or adjustments to information
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