Vienna Insurance Group Ag · VIE:VIG
Vienna Insurance — H1 2016 Earnings Presentation
61 slides from Vienna Insurance's earnings presentation, Aug 23, 2016
Slide 1: Vienna Insurance Group 6M 2016 Results Presentation
Vienna Insurance Group 6M 2016 Results Presentation Vienna, 23 August 2016 Highlights Financials Solvency II Appendix
Slide 2: 6M 2016 Results conference call
6M 2016 Results conference call Presenting team and topics Presenting team: Elisabeth Stadler, CEO Martin Simhandl, CFO Roland Gröll, Member of the Managing Board Judit Havasi, Member of the Managing Board Peter Höfinger, Member of the Managing Board Topics: Highlights p. 3 Financials p. 6 Solvency
Slide 3: Overview of the 6M 2016 results
Overview of the 6M 2016 results Business development in line with expectations €4.9bn Total premium volume increased by 0.4% Solid development in all lines of business – motor, other property, life GWP regular premium and health business growing y-o-y Ongoing targeted reduction of life single premiu
Slide 4: VIG strengthening its growth platform in CEE
VIG strengthening its growth platform in CEE VIG is aiming to grow its market share in Croatia, Hungary, Poland and Serbia to at least 10% in the mid-term Croatia: With total GWP up 6.2% in HY 2016, VIG Croatia is growing above market; driven by double-digit growth rates in motor casco and other pro
Slide 5: Profitable growth remains key focus of VIG strategy
Profitable growth remains key focus of VIG strategy Management agenda Challenges from current market environment, legal requirements and disruptive technologies Profit-oriented growth and cost discipline are key Digitalisation and health insurance Strengthening leadership position in Austria and CEE
Slide 6: Financials
Highlights Financials Solvency II Appendix Highlights Financials Solvency II Appendix
Slide 7: Premium development in major markets impacted by single premium business reduction
Premium development in major markets impacted by single premium business reduction Overview of premiums by segments (I) Gross written premiums (€mn; y-o-y chg.) 6M15 6M16 -0.9% 2,286.2 2,264.9 -5.2% 835.2 -3.7% -7.8% +37.3% 791.9 388.5 374.1 449.4 414.5 194.2 266.7 Austria Czech Republic Slovakia Po
Slide 8: Strong GWP growth in new segments of CEE region
Strong GWP growth in new segments of CEE region Overview of premiums by segments (II) Gross written premiums (€mn; y-o-y chg.) 6M15 6M16 -4.4% +4.9% 211.6 202.3 +15.4% +19.1% 165.8 158.0 +138.4% +2.4% 116.8 113.0 101.2 94.9 70.2 73.3 75.0 29.4 The Baltic Hungary Bulgaria Turkey/ Remaining CEE Other
Slide 9: Solid premium development in all lines of business except for life single premium business
Solid premium development in all lines of business except for life single premium business Gross written premiums (€mn; y-o-y chg.) MTPL Casco Other property Total premiums +13.2% +7.7% +3.8% +0.4% 697 496 2,050 2,128 4,908 4,928 616 461 MTPL 616 697 Casco 461 496 6M15 6M16 6M15 6M16 6M15 6M16 Other
Slide 10: Group PBT of €201.3mn down by 17.6% y-o-y
Group PBT of €201.3mn down by 17.6% y-o-y Overview of profits by segments (I) Profit before taxes (€mn; y-o-y change) -12.3% -11.9% 6M15 6M16 85.7 88.1 75.2 77.6 -1.3% -46.6% 26.2 25.9 26.0 +3.2% 13.9 3.5 3.6 Austria Czech Republic Slovakia Poland Romania Remarks In Austria (-€10.5mn) and the Czech
Slide 11: Profit development of new segments
Profit development of new segments Overview of profits by segments (II) Profit before taxes (€mn; y-o-y change) +3.8% 6M15 6M16 -13.8% 10.1 10.1 10.5 +24.9% +138.0% 8.7 +45.5% n.a. 3.8 3.9 3.0 1.2 1.7 1.7 0.9 -6.3 The Baltic Hungary Bulgaria Turkey/ Remaining CEE Other markets Georgia Remarks Start-
Slide 12: Combined ratio at 97.9%
Combined ratio at 97.9% P&C Combined ratio development P&C CoR 6M y-o-y regional development (net, %) +2.0%p 96.6 AT +2.7%p 97.9 99.3 95.9 89.8 31.4 CZ +3.0%p Cost ratio 31.7 92.8 95.6 SK +0.9%p 96.5 Claims ratio 64.2 66.5 96.8 PL +2.9%p 99.7 103.2 RO -2.2%p 6M15 6M16 101.0 The Baltic 131.1 106.5 Re
Slide 13: Investment split and bond portfolio overview
Investment split and bond portfolio overview Investment strategy focused on stable returns 6M 2016: Total €32.3bn Bond portfolio by rating1 Other 6% 6% 17% 19% 1.5% 6.0% BBB 0.0% 8.9% A 31% 31% 6.2% AA 34% 34% AAA 4.1% 11% 11% 12M15 6M16 Bond portfolio by issuer 73.2% Corporates 16% 18% Financials 2
Slide 14: Financial result decreased by 13.2%
Financial result decreased by 13.2% Financial result incl. at-equity consolidated companies Income Total in € '000 6M 2016 6M 2015 Remarks Current income 549,655 561,511 Overall financial result down by €68.5mn Income from appreciations 8,807 13,390 Income from the disposal of investments 65,104 112
Slide 15: Equity development
Equity development 12M 2015 restated for changed valuation of non-profit housing societies Change in Group Shareholders’ Equity (€mn) +4% 148 -10 4,665 155 -24 -95 4,490 Equity restated Profit for the period Currency changes AFS unrealised Dividend payment Other Equity as of 6M16 as of 12M15 gains a
Slide 16: Non-profit Housing Societies
Non-profit Housing Societies Changed valuation method and consolidation approach VIG owns such companies for more than 30 years History Up to 2012 the housing societies were fully consolidated Change from full to at-equity consolidation between 2012 – 2014 in light of Solvency II and the capital cha
Slide 17: Non-profit Housing Societies - Restatement
Non-profit Housing Societies - Restatement Main impact on PBT and Equity CONSOLIDATED INCOME STATEMENT (€mn) 1-12/2015 adjusted 1-12/2015 reported Net earned premiums 8,180.5 8,180.5 Financial result excl. at equity consolidated companies 1,000.0 1,000.0 Result from shares in at equity consolidated
Slide 18: Solvency II
Highlights Financials Solvency II Appendix Highlights Financials Solvency II Appendix
Slide 19: Solvency II ratio of 196% as of Dec. 2015
Solvency II ratio of 196% as of 31 Dec. 2015 Calculation based on Partial Internal Model (PIM) in EURmn Solvency II ratio of 196% on level of stock-listed VIG Application of Partial Internal Model improves Solvency II ratio by 40pp PIM reduces SCR by EUR 800mn Results include volatility adjustment N
Slide 20: Solvency Capital Requirement (SCR) Overview
Solvency Capital Requirement (SCR) Overview Standard formula and Partial Internal Model SCR SCR operational SCR adjustments Basis SCR risk SCR intangible SCR market SCR life SCR non-life SCR counterparty SCR health assets premium & health health property mortality catastrophe reserve similar to life
Slide 21: Positive impact of PIM on SCR
Positive impact of PIM on SCR Comparison of standard formula and PIM in EURmn Reduction by 66% Reduction by 65% Reduction by 57% Note: Single risk types without consideration of diversification effects. Highlights Financials Solvency II Appendix 21
Slide 22: Solvency Capital Requirement (I)
Solvency Capital Requirement (I) SCR as of 31 Dec. 2015 based on PIM in EURmn SCR PIM gross PIM effect Highlights Financials Solvency II Appendix 22
Slide 23: Solvency Capital Requirement (II)
Solvency Capital Requirement (II) Risk mitigating effects in EURmn Highlights Financials Solvency II Appendix 23
Slide 24: SCR risk category split
SCR risk category split Data based on PIM Major risks: Market risk accounts for more than 50% of total risk 85% of total market risk derives from spread, interest rate and equity risk Life underwriting risk contributes 25% Lapse risk with 68% of total life underwriting risk by far biggest driver in
Slide 25: Overview Own Funds
Overview Own Funds Reconciliation of IFRS equity to Solvency II Own Funds as of 31 Dec. 2015 in Mio. Euro 8 000 7 000 665 210 1.333 194 6 000 1.177 152 5 000 4 000 6.346 3 000 5.058 2 000 1 000 0 IFRS Equity (incl. Minorities Differences in Transferability Supplementary Deferred taxes Planned divide
Slide 26: Composition of Eligible Own Funds
Composition of Eligible Own Funds Capital structure as of 31 Dec. 2015 € 6,346mn Tier 1 – unrestricted (>50% of SCR) 17% EUR 4,819mn (76% of Own Funds) 8% Tier 1 – restricted (<20% of total Tier 1) Tier 2 EUR 479mn (8% of Own Funds) Tier 1 - restricted Capacity for additional Tier 1 of roughly EUR 5
Slide 27: Sensitivity analysis for market risk categories
Sensitivity analysis for market risk categories Highlights Financials Solvency II Appendix 27
Slide 28: Outlook
Outlook Short-term / medium-term / general Profit before taxes 2016 VIG aims to at least double the 2015 PBT up to €400mn Outlook Profitable growth – either organic or via acquisitions Mid-term Retaining market leadership positions in AT, CZ and SK goals Market share of at least 10% in HR, HU, PL, R
Slide 29: Appendix
Highlights Financials Solvency II Appendix Note: Rounding differences may occur when rounded amounts or percentages are added up. Highlights Financials Solvency II Appendix
Slide 30: 6M 2016 Key financials
6M 2016 Key financials Overview of KPIs Net Profit after tax and minorities (€mn) Combined Ratio (net, %) 367 97.9 97.3 96.7 95.9 188 153 98 2014 2015 6M15 6M16 2014 2015 6M15 6M16 EPS1 (€) ROE after tax and minorities (%) 2.75 2.80 9.1 7.9 7.7 2.26 0.66 1.7 2014 2015 6M15 6M16 2014 2015 6M15 6M16 1
Slide 31: 6M 2016 Income statement
6M 2016 Income statement IFRS (€mn) / 6M 2015 restated €mn 6M 2016 6M 2015 +/-% Gross premiums written 4,928.1 4,908.0 0.4 Net earned premiums 4,191.6 4,208.9 -0.4 Financial result1 449.5 517.9 -13.2 Other income 103.9 50.2 107.0 Total income 4,744.9 4,776.9 -0.7 Expenses for claims and insurance be
Slide 32: 6M 2016 Balance sheet
6M 2016 Balance sheet IFRS (€mn) / YE 2015 restated €mn 30.06.2016 31.12.2015 +/-% Intangible assets 2,052 2,080 -1.4 Investments 31,013 30,142 2.9 Unit- and index-linked investments 8,191 8,144 0.6 Reinsurers’ share in underwriting provisions 1,148 1,031 11.4 Receivables 1,492 1,392 7.2 Tax receiva
Slide 33: Austria: stable premium development; PBT impacted by reduced financial result
Austria: stable premium development; PBT impacted by reduced financial result CoR impact due to changed personnel provisions GWP development (€mn) P&L: P&C business (€mn) -0.9% 6M16 Y-o-Y 2,286 2,265 Underwriting and financial result 25.6 -57.3% MTPL 189 185 Other non-technical result 6.8 n.a. Casco
Slide 34: Czech Republic: lower financial result main driver for decreased PBT
Czech Republic: lower financial result main driver for decreased PBT Excellent CoR of 92.8% GWP development (€mn) P&L: P&C business (€mn) -5.2% 6M16 Y-o-Y 835 Underwriting and financial result 30.7 -37.0% 792 Other non-technical result -1.2 -25.2% MTPL 132 136 Result (pre tax) 29.5 -37.4% Casco 95 C
Slide 35: Slovakia: Premium decrease driven by reduced life single premium
Slovakia: Premium decrease driven by reduced life single premium Stable development in all other lines of business GWP development (€mn) P&L: P&C business (€mn) -3.7% 6M16 Y-o-Y 388 Underwriting and financial result 11.3 -20.3% 374 Other non-technical result -1.0 >100% MTPL 69 72 Result (pre tax) 10
Slide 36: Poland: pricing pressure in motor and lower financial result
Poland: pricing pressure in motor and lower financial result are main drivers of negative developments Premiums and profit before taxes down GWP development (€mn) P&L: P&C business (€mn) -7.8% 6M16 Y-o-Y 449 Underwriting and financial result 10.8 -53.9% 415 Other non-technical result -1.3 >-100% MTP
Slide 37: Romania: strong premium increase and overall PBT slightly up 3.2%
Romania: strong premium increase and overall PBT slightly up 3.2% CoR constantly moving towards 100% GWP development (€mn) P&L: P&C business (€mn) +37.3% 6M16 Y-o-Y 267 Underwriting and financial result 1.7 >100% Other non-technical result -1.0 >100% Result (pre tax) 0.7 21.8% 194 Claims ratio 64.8%
Slide 38: Premium development of new segments (I)
Premium development of new segments (I) The Baltic GWP development (€mn) Hungary GWP development (€mn) +138.4% +15.4% 70 117 MTPL MTPL 101 8 16 8 6 Casco Casco 8 7 33 7 Other Property Other Property 32 3 29 9 Health Health 2 39 21 Life regular Life regular 38 18 Life single Life single 26 7 9 15 6M1
Slide 39: Premium development of new segments (II)
Premium development of new segments (II) Remaining CEE GWP development (€mn) Other markets GWP development (€mn) +4.9% -4.4% 158 166 212 202 MTPL 40 Other Property 51 40 55 Casco 19 20 Life regular 36 Other Property 37 46 51 Health 4 4 Life single 125 Life regular 111 31 30 Life single 17 21 6M15 6M
Slide 40: 6M 2016 P&L by segments (I)
6M 2016 P&L by segments (I) IFRS (€mn) / 6M 2015 restated Austria Czech Republic Slovakia €mn 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% Gross premiums written 2,264.9 2,286.2 -0.9 791.9 835.2 -5.2 374.1 388.5 -3.7 Net earned premiums 1,710.9 1,729.7 -1.1 573.9 638.6 -10.1 294.7
Slide 41: 6M 2016 P&L by segments (II)
6M 2016 P&L by segments (II) IFRS (€mn) / 6M 2015 restated Poland Romania The Baltic €mn 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% Gross premiums written 414.5 449.4 -7.8 266.7 194.2 37.3 70.2 29.4 >100 Net earned premiums 344.7 386.2 -10.7 166.4 122.0 36.4 54.3 28.7 89.3 Financ
Slide 42: 6M 2016 P&L by segments (III)
6M 2016 P&L by segments (III) IFRS (€mn) / 6M 2015 restated Hungary Bulgaria Turkey/Georgia €mn 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% Gross premiums written 116.8 101.2 15.4 75.0 73.3 2.4 113.0 94.9 19.1 Net earned premiums 79.7 67.5 18.2 49.8 46.9 6.2 49.1 45.4 8.2 Financia
Slide 43: 6M 2016 P&L by segments (IV)
6M 2016 P&L by segments (IV) IFRS (€mn) / 6M 2015 restated Remaining CEE Other markets €mn 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% Gross premiums written 165.8 158.0 4.9 202.3 211.6 -4.4 Net earned premiums 112.2 106.3 5.6 180.8 191.4 -5.5 Financial result1 17.7 17.7 0.0 9.3 9.4 -1.0 Other income
Slide 44: 6M 2016 P&L by segments (V)
6M 2016 P&L by segments (V) IFRS (€mn) / 6M 2015 restated Central Functions Consolidation TOTAL €mn 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% Gross premiums written 699.6 675.8 3.5 -626.7 -589.8 n.a. 4,928.1 4,908.0 0.4 Net earned premiums 569.6 534.0 6.7 5.4 1.2 n.a. 4,191.6 4,
Slide 45: 6M 2016 Financial result by segments (I)
6M 2016 Financial result by segments excluding at equity consolidated companies (I) IFRS (€ '000) / 6M 2015 restated Income Austria Czech Republic Slovakia Poland in € '000 6M 2016 6M 2015 6M 2016 6M 2015 6M 2016 6M 2015 6M 2016 6M 2015 Current income 403,560 404,439 52,873 56,571 22,037 22,711 15,4
Slide 46: 6M 2016 Financial result by segments (II)
6M 2016 Financial result by segments excluding at equity consolidated companies (II) IFRS (€ '000) / 6M 2015 restated Income Romania The Baltic Hungary Bulgaria in € '000 6M 2016 6M 2015 6M 2016 6M 2015 6M 2016 6M 2015 6M 2016 6M 2015 Current income 6,971 6,346 2,489 1,686 4,445 4,471 10,956 10,761
Slide 47: 6M 2016 Financial result by segments (III)
6M 2016 Financial result by segments excluding at equity consolidated companies (III) IFRS (€ '000) / 6M 2015 restated Income Turkey/Georgia Remaining CEE Other markets in € '000 6M 2016 6M 2015 6M 2016 6M 2015 6M 2016 6M 2015 Current income 4,159 3,652 19,042 18,739 10,469 10,130 Income from apprec
Slide 48: 6M 2016 Financial result by segments (IV)
6M 2016 Financial result by segments excluding at equity consolidated companies (IV) IFRS (€ '000) / 6M 2015 restated Income Central Functions Consolidation Total in € '000 6M 2016 6M 2015 6M 2016 6M 2015 6M 2016 6M 2015 Current income 44,880 50,140 -28,820 -31,376 568,558 577,942 Income from apprec
Slide 49: 6M 2016 development for P&C business according to VAG
6M 2016 development for P&C business according to VAG (Austrian Insurance Supervision Act) IFRS (€ '000) / 6M 2015 restated 6M 2016 6M 2015 +/-% Overall result for direct business Gross direct premiums written 2,662.65 2,495.00 6.7 Gross direct 170.75 327.68 -47.9 Underwriting result 160.58 251.18 -
Slide 50: 6M 2016 development for life business according to VAG
6M 2016 development for life business according to VAG (Austrian Insurance Supervision Act) IFRS (€ '000) / 6M 2015 restated 6M 2016 6M 2015 +/-% Overall result for direct business Gross direct premiums written 1,977.44 2,127.28 -7.0 Gross direct 136.91 129.90 5.4 Underwriting result 0.00 0.00 n.a.
Slide 51: 6M 2016 development for health business according to VAG
6M 2016 development for health business according to VAG (Austrian Insurance Supervision Act) IFRS (€ '000) / 6M 2015 restated 6M 2016 6M 2015 +/-% Overall result for direct business Gross direct premiums written 206.85 199.95 3.5 Gross direct 17.19 24.74 -30.5 Underwriting result 0.00 0.00 n.a. Fin
Slide 52: 6M 2016 Premiums by business lines and country (I)
6M 2016 Premiums by business lines and country (I) IFRS (€mn) GWP MTPL GWP Casco GWP Other property 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% Austria 184.7 188.9 -2.2% 151.5 148.1 2.3% 792.7 785.4 0.9% Czech Republic 136.5 131.9 3.5% 106.6 95.1 12.1% 228.0 206.6 10.3% Slovakia 7
Slide 53: 6M 2016 Premiums by business lines and country (II)
6M 2016 Premiums by business lines and country (II) IFRS (€mn) GWP Life regular GWP Life single GWP Health 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% Austria 650.7 651.9 -0.2% 288.3 321.8 -10.4% 196.9 190.2 3.6% Czech Republic 263.0 247.1 6.4% 51.1 147.6 -65.4% 6.7 6.7 0.2% Slova
Slide 54: 6M 2016 Country overview GWP / PBT / CoR
6M 2016 Country overview GWP / PBT / CoR IFRS (€mn) GWP Total Profit before taxes Combined Ratio net 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-% 6M 2016 6M 2015 +/-pp Austria 2,264.9 2,286.2 -0.9% 75.2 85.7 -12.3% 99.3% 96.6% 2.7 Czech Republic 791.9 835.2 -5.2% 77.6 88.1 -11.9% 92.8% 89.8% 3.0 Slovak
Slide 55: Q2 2016 – Income statement
Q2 2016 – Income statement IFRS (€mn) / Q2 2015 restated €mn Q2 2016 Q2 2015 +/-% Gross premiums written 2,222.3 2,152.1 3.3 Net earned premiums 2,053.8 1,998.2 2.8 Financial result1 225.4 255.5 -11.8 Other income 67.0 21.9 205.6 Total income 2,346.1 2,275.6 3.1 Expenses for claims and insurance ben
Slide 56: 6M 2016 P&C Claims and cost ratio details
6M 2016 P&C Claims and cost ratio details Claims ratio 6M y-o-y regional development (net, %) Remarks for claims incurred 6M15 6M16 Slovakia: claims ratio development distorted by non- recurring positive impacts last year +0.6 +4.6 +1.7 +1.7 +6.8 Poland: increase because of motor as well as some 67.
Slide 57: 6M 2016 – Exchange rates
6M 2016 – Exchange rates 6M 2016 6M 2015 Balance Sheet Balance Sheet Country Currency P & L EUR P & L EUR EUR EUR Albania EUR/ALL 137.3300 138.2728 140.2900 140.2398 Belarus EUR/BYR 22,210.0000 22,557.6264 16,974.0000 16,408.1492 Bosnia EUR/BAM 1.9558 1.9558 1.9558 1.9558 Bulgaria EUR/BGN 1.9558 1.9
Slide 58: VIG share (I)
VIG share (I) Current analyst recommendation split Share price development 6M 2016 Buy High EUR 24.790 Low EUR 16.275 Sell Price as of 30 June EUR 17.005 Market cap. EUR 2.2 bn Development YTD % -32.76 Hold VIG compared to ATX and Stoxx Europe 600 Ins. 105 95 85 75 65 55 Jan-16 Feb-16 Mar-16 Apr-16
Slide 59: VIG share (II)
VIG share (II) General information Shareholder structure Number of common shares: 128mn ISIN: AT0000908504 ~30% Wiener Städtische Free Float Listings: Wechselseitiger Versicherungsverein - Vienna – since 17 Oct. 1994 Vermögensverwaltung – Vienna Insurance Group ~70% Prague – since 5 Feb. 2008 Ticker
Slide 60: Contact details
Contact details Investor Relations Financial calendar 2016 Investor Relations Team Date Event Publication: Preliminary Vienna Insurance Group 26 Jan. 2016 Schottenring 30, 1010 Vienna unconsolidated premiums 2015 E-Mail: investor.relations@vig.com 07 Apr. 2016 Results and Embedded Value 2015 www.vig
Slide 61: 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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