Vienna Insurance Group Ag · VIE:VIG

Vienna Insurance — Q1 2018 Earnings Presentation

58 slides from Vienna Insurance's earnings presentation, May 23, 2018

  1. Slide 1: 3M 2018 Results Presentation

    3M 2018 RESULTS PRESENTATION Vienna, 23 May 2018

  2. Slide 2: 3M 2018 Results Conference Call: Presenting team and topics

    3M 2018 RESULTS CONFERENCE CALL Presenting team and topics Presenting Topics team  Liane Hirner, incoming CFO  Highlights p. 3  Judit Havasi, Member of the Board  Financials & Investments p. 7  Peter Höfinger, Member of the Board  Outlook p. 14  Solvency II p. 16  Appendix 1: Segments p. 27

  3. Slide 3: Highlights

    HIGHLIGHTS FINANCIALS & INVESTMENTS OUTLOOK SOLVENCY II (YE 2017) APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 3 VIG VIENNA INSURANCE GROUP

  4. Slide 4: Highlights 3M 2018

    HIGHLIGHTS 3M 2018 Sustainable development continued Gross written premium Profit before taxes Combined Ratio € 2,826.1mn € 117.3mn 96.2% GWP up 3.9% compared to 3M 2017 PBT increased by 7.0% Down from 96.9% in 3M 2017  Current premium business: +7.1%  CEE profit growth of 10.4%  Claims ratio imp

  5. Slide 5: Mutual Distribution Agreement with Erste Group

    MUTUAL DISTRIBUTION AGREEMENT WITH ERSTE GROUP Extension of strategic partnership ahead of schedule 2008: Start of mutual Distribution Agreement following CZ the acquisition of the insurance operations of Erste SK AT Extension & Intensification of existing agreement until 2033 HU RO HR Respective co

  6. Slide 6: Agenda 2020 Initiative: VIG Re

    AGENDA 2020 INITIATIVE: VIG RE GRADUAL EXPANSION WITH FOCUS ON RISK-APPROPRIATE RETURN Successful niche player targeting specific customer and market segments  Further internationalisation announced as part of the Agenda 2020 initiatives  In 2017, VIG Re1 generated premiums of ~€460mn (+10.2%), th

  7. Slide 7: Financials & Investments

    HIGHLIGHTS FINANCIALS & INVESTMENTS OUTLOOK SOLVENCY II (YE 2017) APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 7 VIG VIENNA INSURANCE GROUP

  8. Slide 8: Gross Written Premiums of €2.8bn Up 3.9%

    GROSS WRITTEN PREMIUMS OF €2.8bn UP 3.9% Overview by segments Gross written premiums (€mn; y-o-y chg.)  AT: premium decrease due to reduced life single premium business (-€40mn); premium growth of 1.9% adjusted for life single premium business -1.4%  Strong premium growth in the Czech Republic (+€

  9. Slide 9: Favourable Premium Development; Life Single Premium Business Deliberately Reduced

    FAVOURABLE PREMIUM DEVELOPMENT; LIFE SINGLE PREMIUM BUSINESS DELIBERATELY REDUCED Gross written premiums by lines of business (€mn; y-o-y chg.); incl. Central Functions MTPL Casco Other property Total premiums +3.9% 3M 2017 369 284 1,318 2,826 +11.3% +9.3% +7.1% 2,720 410 MTPL 369 3M 2018 410 311 1,

  10. Slide 10: Group Profit Before Taxes of €117.3mn Up 7.0%

    GROUP PROFIT BEFORE TAXES OF €117.3mn UP 7.0% Overview by segments Result before taxes (€mn; y-o-y change)  SK: Profit decrease by €4.7mn driven by higher cost ratio and reserve strengthening +8.7%  CZ, PL and RO with profit growth based on CoR improvements  Decrease in Other markets due to lower

  11. Slide 11: Combined Ratio (P&C) Improved to 96.2%

    COMBINED RATIO (P&C) IMPROVED TO 96.2% Positive development driven by improved claims ratio in AT, SK, PL, HU and the Baltic States P&C Combined Ratio development Overview by segments (3M y-o-y development net, %)  SK: CoR above 100%; cost ratio up from 34.0% to 42.5% -0.2%p +6.8%p -1.6%p -0.4%p -6

  12. Slide 12: Investment Split and Bond Portfolio Overview

    INVESTMENT SPLIT AND BOND PORTFOLIO OVERVIEW No major changes 3M 2018: Total €37.5bn Bond portfolio by rating1 4.4% 1.4% 6.7% AAA AA A BBB Other 3M 2018 10% 22% 47% 16% 5% 6.7% 12M 2017 10% 22% 45% 17% 5% 5.8% 65.3% Bond portfolio by issuer 9.7% 3M 2018 54% 7% 19% 20% Bonds Deposits and Cash Real Es

  13. Slide 13: Financial Result Down by 3.8% in Line with Market Trends

    FINANCIAL RESULT DOWN BY 3.8% IN LINE WITH MARKET TRENDS Financial result including at equity consolidated companies Total 3M 3M Income +/- % 2018 2017 Current income 324,167 325,337 -0.4  Financial result down by €9.3mn Income from appreciations 2,077 7,181 -71.1  Income from appreciations decrea

  14. Slide 14: Outlook

    HIGHLIGHTS FINANCIALS & INVESTMENTS OUTLOOK SOLVENCY II (YE 2017) APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 14 VIG VIENNA INSURANCE GROUP

  15. Slide 15: Outlook 2020

    OUTLOOK 2020 Unchanged expectation of stable development and continuous improvement Gross written premium Profit before taxes Combined Ratio > € 10bn € 500mn - € 520mn 95% Based on the positive macroeconomic In line with continuous premium growth, VIG VIG will further focus on its underwriting devel

  16. Slide 16: Solvency II (YE 2017)

    HIGHLIGHTS FINANCIALS & INVESTMENTS OUTLOOK SOLVENCY II (YE 2017) APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 16 VIG VIENNA INSURANCE GROUP

  17. Slide 17: Solvency Ratio of 220% as of Dec. 2017

    SOLVENCY RATIO OF 220% AS OF 31 DEC. 2017 Calculation based on Partial Internal Model (PIM) 7,764 in €mn  Solvency ratio of 220% calculated at the level of the listed Group  Application of Partial Internal Model improves solvency ratio by 46pp  PIM reduces SCR by EUR 927mn  Results include volat

  18. Slide 18: 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  Partial Internal Model of VIG approved by the Financial property mortality p

  19. Slide 19: Positive Impact of PIM on SCR

    POSITIVE IMPACT OF PIM ON SCR Comparison of Standard Formula and Partial Internal Model 1,716 in €mn Reduction Reduction Reduction by 61% by 56% by 70% 754 666 378 227 167 Non-life underwriting risk NSLT health underwriting risk Property risk Standard Formula Partial Internal Model 19 SOLVENCY II VI

  20. Slide 20: Solvency Capital Requirement (I)

    SOLVENCY CAPITAL REQUIREMENT (I) SCR as of 31 Dec 2017 and PIM effects in €mn 10,000 SCR PIM gross PIM effect 8,000 1,050 0 184 666 6,000 364 1,912 929 296 1,874 768 1,094 4,000 20 927 442 43 462 57 36 314 81 90 4,682 2,000 3,377 3,525 Market risk Counterparty Life Health Non-life Intangible Diversi

  21. Slide 21: Solvency Capital Requirement (II)

    SOLVENCY CAPITAL REQUIREMENT (II) Risk mitigating effects in €mn Net SCR after diversification Diversification effects Loss-absorbing capacity of technical provisions PIM effects 5,000 1,050 4,000 929 927 396 400 0 296 36 442 184 462 57 546 21 209 265 81 90 3,000 134 995 20 932 11 313 159 2,000 144

  22. Slide 22: Solvency Capital Requirement (III)

    SOLVENCY CAPITAL REQUIREMENT (III) Allocation of risks  Market risk accounts for more than 50%  Life underwriting risk contributes to the  Operational risk ranks third with 7% of of total solvency capital requirement total solvency capital requirement with 23% total solvency capital requirement 

  23. Slide 23: Solvency Capital Requirement (IV)

    SOLVENCY CAPITAL REQUIREMENT (IV) SCR 2017 compared to SCR 2016 VIG AG in €mn 31.12.2017 31.12.2016 in €mn Solvency capital requirement 3,525 3,411 Market risk 3,377 3,458 Counterparty default risk 314 280 220% 195% YE 2017 Life underwriting risk 1,874 1,635 YE 2016 Health underwriting risk 364 325

  24. Slide 24: Own Funds (I)

    OWN FUNDS (I) Capital structure as of 31 Dec. 2017 EUR 7,764mn 0.5% Tier 1 – unrestricted (>50% of SCR) 19% Tier 3  EUR 5,955mn (77% of Own Funds) Tier 2 4% Tier 1 - restricted Tier 1 – restricted (<20% of total Tier 1)  EUR 326mn (4% of Own Funds) Tier 1 - unrestricted  Capacity for additional r

  25. Slide 25: Own Funds (II)

    OWN FUNDS (II) Own Funds 2016 compared to Own Funds 2017 110 504 127 7,764 65 475 79 373 6,636 Solvency II Own IFRS surplus IFRS effects Subordinated Differences Deferred taxes Planned Other Solvency II Own Funds 2016 from reserves bonds in valuation dividends Funds 2017 and interest on hybrids 25 S

  26. Slide 26: Sensitivity Analysis

    SENSITIVITY ANALYSIS Market Sensitivities Interest rate curve +100bps 12% 232% Interest rate curve -100bps -30% 190% Ultimate Forward Rate (UFR) -50bps -11% 209% Property -10pps -8% 212% Equity -20pps -5% 215% Spread +100bps -31% 189% Rating downshift -1 notch -8% 212% Absolute change in Impact of a

  27. Slide 27: Appendix 1: Segments

    HIGHLIGHTS FINANCIALS & INVESTMENTS OUTLOOK SOLVENCY II (YE 2017) APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 27 VIG VIENNA INSURANCE GROUP

  28. Slide 28: Austria

    AUSTRIA Premiums up by 1.9% adjusted for life single premium business GWP development (€mn) €mn 3M 2018 3M 2017 +/- % -1.4% Gross premiums written 1,272.9 1,290.7 -1.4  Except for life, premium growth in all lines 1,291 Net earned premiums 828.5 858.6 -3.5 of business 1,273 MTPL 107 Financial resul

  29. Slide 29: Czech Republic

    CZECH REPUBLIC Strong premium growth of 8.8% GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +8.8% Gross premiums written 465.3 427.5 8.8  Premium growth driven by other property 465 Net earned premiums 320.2 295.8 8.3 (+€18mn) and life regular premium Financial result1 33.9 25.4 33.4 business (+€1

  30. Slide 30: Slovakia

    SLOVAKIA Profit decrease driven by higher cost ratio and reserve strengthening GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +3.0% Gross premiums written 216.2 209.9 3.0  Premium increase in all lines of business 216 Net earned premiums 169.9 158.9 6.9 210  Acquisition and administrative expense

  31. Slide 31: Poland

    POLAND Strong growth in premiums and profit GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +9.1% Gross premiums written 232.8 213.3 9.1  Premium growth driven by motor lines of 233 Net earned premiums 170.5 174.5 -2.3 business (+€26mn) and other property Financial result1 5.9 6.0 -1.7 (+€16mn) off

  32. Slide 32: Romania

    ROMANIA Top-line and bottom-line growth GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +11.4% Gross premiums written 146.6 131.6 11.4  Premium growth mainly driven by MTPL 147 Net earned premiums 99.8 99.0 0.9 business (+€14mn) Financial result1 3.1 2.9 8.6 132 Other income 1.3 1.9 -30.5  Profit

  33. Slide 33: Baltic States

    BALTIC STATES Further improvement but still negative result before taxes GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +27.0% Gross premiums written 97.2 76.5 27.0  Premium growth in all lines of business 97 Net earned premiums 64.7 57.0 13.6 Financial result1 1.0 1.3 -26.6  Operational performa

  34. Slide 34: Hungary

    HUNGARY Improved profit despite less premiums GWP development (€mn) €mn 3M 2018 3M 2017 +/- % -2.0% Gross premiums written 72.2 73.7 -2.0  Other property – due to less corporate 74 Net earned premiums 41.4 38.1 8.7 business – drove premium decrease 72 Financial result1 1.6 2.0 -19.9 MTPL 8 9 Other

  35. Slide 35: Bulgaria

    BULGARIA Solid performance on top and bottom line GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +3.7% Gross premiums written 45.1 43.5 3.7  Premium increase driven by Casco 45 Net earned premiums 33.0 29.6 11.3 43 Financial result1 2.5 2.4 1.3  Profit before taxes up by €0.7mn due to 6 lower exp

  36. Slide 36: Turkey/Georgia

    TURKEY/GEORGIA Negative FX impact on premium and profit GWP development (€mn) €mn 3M 2018 3M 2017 +/- % -3.0% Gross premiums written 65.7 67.7 -3.0  Adjusted for FX effects premiums up 68 Net earned premiums 22.8 24.5 -6.8 13.5% 66 Financial result1 2.0 2.1 -7.5 Other income 2.0 1.5 36.1  Result b

  37. Slide 37: Remaining CEE

    REMAINING CEE Result development impacted by impairments GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +3.6% Gross premiums written 92.5 89.3 3.6  Remaining CEE includes Albania (incl. 93 Net earned premiums 61.6 61.2 0.7 Kosovo), Bosnia & Herzegovina, Croatia, 89 Financial result1 5.8 7.5 -22.8

  38. Slide 38: Other Markets

    OTHER MARKETS Germany and Liechtenstein GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +13.7% Gross premiums written 77.3 68.0 13.7  Premium increase driven by life single 77 Net earned premiums 63.6 54.6 16.5 premium business in Liechtenstein Financial result1 5.3 5.3 -0.3 68 Other income 6.9 1.0

  39. Slide 39: Central Functions

    CENTRAL FUNCTIONS Premium increase partly due to expansion of VIG Re GWP development (€mn) €mn 3M 2018 3M 2017 +/- % +9.6% Gross premiums written 431.6 393.7 9.6  Premiums up 9.6% due to increased 432 Net earned premiums 323.5 299.3 8.1 Group internal reinsurance in connection Financial result1 -13

  40. Slide 40: Appendix 2: Financials

    HIGHLIGHTS FINANCIALS & INVESTMENTS SOLVENCY II OUTLOOK APPENDIX 1: SEGMENTS APPENDIX 2: FINANCIALS 40 VIG VIENNA INSURANCE GROUP

  41. Slide 41: 3M 2018 Key Financials

    3M 2018 KEY FINANCIALS Overview of KPIs Net result for the period after taxes and non-controlling interest (€mn) Combined Ratio (net, %) 288 298 97.3 96.9 96.7 96.2 69 76 2016 2017 3M 17 3M 18 2016 2017 3M 17 3M 18 EPS1 (€) ROE after tax and minorities (%) 2.23 2.27 7.3 7.2 2.16 6.8 7.0 2.07 2016 20

  42. Slide 42: 3M 2018 Income Statement

    3M 2018 INCOME STATEMENT IFRS (€mn) €mn 3M 2018 3M 2017 +/- % Gross premiums written 2,826.1 2,719.6 3.9  Premiums increased by 3.9%; adjusted for life single Net earned premiums 2,203.1 2,152.9 2.3 premium business premium growth of 7.1% Financial result1 238.4 247.7 -3.8 Other income 33.2 29.5 12

  43. Slide 43: 3M 2018 Balance Sheet

    3M 2018 BALANCE SHEET IFRS (€mn) €mn 31.03.2018 31.12.2017 +/- % Intangible assets 1,958 1,971 -0.6 Investments 35,919 35,933 0.0 Unit- and index-linked investments 8,949 9,061 -1.2 Reinsurers’ share in underwriting provisions 1,180 1,066 10.6 Receivables 1,724 1,476 16.8 Tax receivables and advance

  44. Slide 44: 3M 2018 Financial Result by Segment (I)

    3M 2018 FINANCIAL RESULT BY SEGMENT (I) IFRS (€'000) Austria Czech Republic Slovakia Poland 3M 3M 3M 3M 3M 3M 3M 3M Income +/- % +/- % +/- % +/- % 2018 2017 2018 2017 2018 2017 2018 2017 Current income 185,149 191,774 -3.5 31,446 26,363 19.3 10,736 10,957 -2.0 7,898 8,013 -1.4 Income from appreciati

  45. Slide 45: 3M 2018 Financial Result by Segment (II)

    3M 2018 FINANCIAL RESULT BY SEGMENT (II) IFRS (€'000) Romania Baltic states Hungary Bulgaria 3M 3M 3M 3M 3M 3M 3M 3M Income +/- % +/- % +/- % +/- % 2018 2017 2018 2017 2018 2017 2018 2017 Current income 4,760 3,959 20.2 1,598 1,507 6.0 2,004 1,984 1.0 5,860 5,748 1.9 Income from appreciations 20 64

  46. Slide 46: 3M 2018 Financial Result by Segment (III)

    3M 2018 FINANCIAL RESULT BY SEGMENT (III) IFRS (€'000) Turkey / Georgia Remaining CEE Other Markets 3M 3M 3M 3M 3M 3M Income +/- % +/- % +/- % 2018 2017 2018 2017 2018 2017 Current income 3,106 3,110 -0.1 8,875 9,578 -7.3 5,118 4,939 3.6 Income from appreciations 45 121 -62.8 17 655 -97.4 6 2 >100 o

  47. Slide 47: 3M 2018 Financial Result by Segment (IV)

    3M 2018 FINANCIAL RESULT BY SEGMENT (IV) IFRS (€'000) Central Functions Consolidation Total 3M 3M 3M 3M 3M 3M Income +/- % +/- % +/- % 2018 2017 2018 2017 2018 2017 Current income 90,845 84,764 7.2 -15,989 -13,430 19.1 341,406 339,266 0.6 Income from appreciations 52 90 -42.2 0 0 - 2,077 7,180 -71.1

  48. Slide 48: 3M 2018 Development for P&C Business According to VAG

    3M 2018 DEVELOPMENT FOR P&C BUSINESS ACCORDING TO VAG (AUSTRIAN INSURANCE SUPERVISION ACT) IFRS (€'000) €mn 3M 2018 3M 2017 +/- % Gross direct premiums written 1,701.03 1,581.58 7.6 Gross direct1 153.12 149.12 2.7 Underwriting result 131.30 116.44 12.8 Financial result 21.82 32.68 -33.2 Direct reins

  49. Slide 49: 3M 2018 Development for Life Business According to VAG

    3M 2018 DEVELOPMENT FOR LIFE BUSINESS ACCORDING TO VAG (AUSTRIAN INSURANCE SUPERVISION ACT) IFRS (€'000) €mn 3M 2018 3M 2017 +/- % Gross direct premiums written 917.51 965.46 -5.0 Gross direct 57.25 136.47 -58.1 Underwriting result 0.00 0.00 - Financial result 0.00 0.00 - Direct reinsurance cessions

  50. Slide 50: 3M 2018 Development for Health Business According to VAG

    3M 2018 DEVELOPMENT FOR HEALTH BUSINESS ACCORDING TO VAG (AUSTRIAN INSURANCE SUPERVISION ACT) IFRS (€'000) €mn 3M 2018 3M 2017 +/- % Gross direct premiums written 133.20 119.85 11.1 Gross direct 9.70 10.95 -11.4 Underwriting result 0.00 0.00 0.00 Financial result 0.00 0.00 0.00 Direct reinsurance ce

  51. Slide 51: 3M 2018 Premiums by Business Lines and Country (I)

    3M 2018 PREMIUMS BY BUSINESS LINES AND COUNTRY (I) IFRS (€mn) MTPL Casco Other property 3M 2018 3M 2017 +/- % 3M 2018 3M 2017 +/- % 3M 2018 3M 2017 +/- % Austria 110.3 106.9 3.2 94.1 92.4 1.8 545.5 530.2 2.9 Czech Republic 74.2 70.0 6.0 60.4 57.6 5.0 157.6 140.0 12.6 Slovakia 43.3 41.9 3.3 27.7 27.1

  52. Slide 52: 3M 2018 Premiums by Business Lines and Country (II)

    3M 2018 PREMIUMS BY BUSINESS LINES AND COUNTRY (II) IFRS (€mn) Life regular Life single Health 3M 2018 3M 2017 +/- % 3M 2018 3M 2017 +/- % 3M 2018 3M 2017 +/- % Austria 345.7 347.6 -0.5 70.0 110.2 -36.5 107.3 103.4 3.8 Czech Republic 153.3 137.4 11.6 16.3 19.3 -15.8 3.5 3.3 6.5 Slovakia 43.3 41.9 3.

  53. Slide 53: 3M 2018 Country Overview GWP / PBT / Combined Ratio

    3M 2018 COUNTRY OVERVIEW GWP / PBT / COMBINED RATIO IFRS (€mn) GWP Total Result before taxes Combined Ratio net 3M 2018 3M 2017 +/- % 3M 2018 3M 2017 +/- % 3M 2018 3M 2017 +/- %p Austria 1,272.9 1,290.7 -1.4 37.5 37.9 -1.0 95.6% 95.8% -0.2 Czech Republic 465.3 427.5 8.8 45.7 42.0 8.7 93.9% 94.9% -1.

  54. Slide 54: 3M 2018 Exchange Rates

    3M 2018 EXCHANGE RATES Balance Sheet: period-end exchange rate / P&L: average exchange rate 2018 2017 Country Currency Balance Sheet P&L Balance Sheet P&L EUR EUR EUR EUR Albania EUR/ALL 130.4400 132.5390 136.1300 135.8393 Belarus EUR/BYN 2.4032 2.4248 2.0111 2.0382 Bosnia & Herzegovina EUR/BAM 1.95

  55. Slide 55: VIG Share (I)

    VIG SHARE (I) Number of common shares: 128,000,000 / ISIN: AT0000908504 General information Current analyst recommendation split Current listings Ticker Rating Major Indices SELL Vienna  Vienna Stock Exchange: VIG Standard & Poor´s: ATX 4 BUY Prague  Bloomberg: VIG AV / VIG CP A+, stable outlook A

  56. Slide 56: VIG Share (II)

    VIG SHARE (II) Shareholder structure Free float split by region1 Continental Europe ~31% ~70% Austria ~30% Wiener Städtische Wechselseitiger North America ~24% Versicherungsverein - Vermögensverwaltung – Vienna Insurance Group UK & Ireland ~8% Remaining ~7% ~30% Free Float 1 Split of identified shar

  57. Slide 57: Contact Details / Financial Calendar

    CONTACT DETAILS / FINANCIAL CALENDAR Investor Relations Vienna Insurance Group Financial calendar 2018* Schottenring 30, 1010 Vienna Date Event investor.relations@vig.com 22 Mar. 2018 Preliminary results for the financial year 2017 www.vig.com 18 Apr. 2018 Results and Annual Report for the year 2017

  58. Slide 58: 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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