Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — Q1 2012 Earnings Presentation
29 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, May 15, 2012
Slide 1: PZU Group's 1Q 2012 financial results
PZU Group’s 1Q 2012 financial results Warsaw, 15 May 2012
Slide 2: Management Board, operating performance, financial results overview
Current composition of the PZU Group’s Management Board Operating performance in Q1 2012 Financial results overview 2
Slide 3: PZU Group's Management Board
PZU Group’s Management Board Andrzej Klesyk CEO PZU Dariusz Krzewina Przemysław Dąbrowski Witold Jaworski Bogusław Skuza Tomasz Tarkowski Ryszard Trepczyński Rafał Grodzicki Przemysław Sławomir CEO PZU Życie Henschke Niemierka CFO PZU P P P P P PZU Życie P P P P P P P P Responsible for life Responsi
Slide 4: Agenda
Agenda Operating performance in 1Q 2012 Financial results overview Questions and answers 4
Slide 5: Key Messages Describing PZU's Performance in 1Q 2012
Key Messages Describing PZU’s Performance in 1Q 2012 • Sales in line with Group’s Strategy for 2012 – 2014 • GWP increase in individual life • GWP increase in corporate non-life (new products) • Profitability as main focus • high profitability in group life • non-life COR 91.2%, i.e. below long term
Slide 6: Rebranding
Rebranding Aim of campaign: • underpinning changes; • introduction of a fresh, modern look... • ...in order to diverge from old beaurocratic image. Large scale operation: • ~1.000 locations; • >2,000 cars; • >1,000 model documents; • ~30 IT systems; were rebranded or modified. 30 mln Poles will see
Slide 7: Overview of PZU Group's 1Q 2012 Financial Results
Overview of PZU Group’s 1Q 2012 Financial Results m PLN 1Q 2011 1Q 2012 Change Y/Y Gross Written Premium 3 977 4 323 8.7% Investment Result 474 873 84.1% Operating Profit 962 1 035 7.5% Net Profit 791 823 4.0% ROE * 23.9% 24.7% 0.8 p.p. * Annualized ratio computed using equity at beginning and end o
Slide 8: Non-life Insurance Market – Strong Growth due to Price Increases in 2010/2011
Non-life Insurance Market – Strong Growth due to Price Increases in 2010/2011 GWP Technical Result YTD, m PLN Non-life Insurance Non-life Insurance 7.6% 20 306 21 059 22 739 25 301 722 429 Price increases for mass market: (1 276) • Motor TPL: +13%(‘10) & +9%(‘11) (255) • MOD: +19%(‘10) & +4%(‘11) 4Q
Slide 9: Growth in Life Insurance Market Coupled with a Stable Level of Profitability
Growth in Life Insurance Market Coupled with a Stable Level of Profitability Regular GWP Technical Result YTD, m PLN Life Insurance Life Insurance 3.4% 14 758 15 040 13 623 13 624 4 316 3 452 3 601 3 345 4Q '08 4Q '09 4Q '10 4Q '11 4Q '09 4Q '10 4Q '11 4Q '12 0.0% 8.3% 1.9% • Last year PZU Life repo
Slide 10: Effect of Restructuring Corporate Insurance & Changes in Price Positioning
Decelerating Pace of Market Share Constriction Effect of Restructuring Corporate Insurance & Changes in Price Positioning PZU Life Market Share PZU’s Market Share YTD Life Insurance (Regular Premium) Non-life Insurance ∆‘2010 - ’2011 ∆‘2010 - ’2011 19.4% 20.8% Others 1.4 p.p. 32.1% 32.0% Others (0.1
Slide 11: Group Life Insurance and Continued Business Remain Stable
Group Life Insurance and Continued Business Remain Stable... YTD, m PLN Gross Written Premium Operating Profit Group and Continued Segment Group and Continued Segment* 26.4% 4.3% 281 222 5.0% 79 5.0% 76 12.7% 1 523 1 589 9.6% 202 146 1Q '11 1Q '12 1Q 2011 1Q 2012 14.6% / 13.8% 17.7% / 20.1% Higher g
Slide 12: Individual Insurance Is Expanding Rapidly
… while Individual Insurance Is Expanding Rapidly YTD, m PLN Gross Written Premium Individual Life Segment APE in Individual Life Segment* 31.5% 24.9 59.2% 18.9 16.1 218 18.3 137 8.7 0.6 1Q '11 1Q '12 1Q '11 1Q '12 Bancassurance Own sales channel • Success of unit-linked and structured products Succ
Slide 13: Mass Client Segment Profitability deteriorated due to winter crop damages
Mass Client Segment Profitability deteriorated due to winter crop damages PZU’s Gross Written Premium PZU’s Technical Result YTD, m PLN in Mass Client Segment in Mass Client Segment 2.4% 1 780 1 823 (32.8)% 997 1 043 209 141 59 48 783 780 111 132 39 (39) 1Q '11 1Q '12 1Q 2011 1Q 2012 • Lower loss ra
Slide 14: Corporate Client Segment Sales and Profitability improved
Corporate Client Segment Sales and Profitability improved PZU’s Gross Written Premium PZU’s Technical Result YTD, m PLN in Corporate Client Segment in Corporate Client Segment 29.6% 618 477 42.8% 278 274 97 340 68 16 19 203 25 12 62 31 1Q '11 1Q '12 1Q 2011 1Q 2012 • Increase of GWP in products for
Slide 15: PZU Group's Administrative Expenses
PZU Group’s Administrative Expenses Lower Recurring Administrative Expenses YTD, m PLN Administrative Expenses Recurring Administrative Expenses 11.0% (3.8)% 365 329 322 309 1Q '11 1Q '12 1Q '11 1Q '12 Administrative expense ratio (%)* 8.2% 8.4% 8.0% 7.5% • Decrease of recurring administrative expen
Slide 16: Agenda
Agenda Operating performance in 1Q 2012 Financial results overview Questions and answers 16
Slide 17: Overview of the PZU Group's 1Q 2012 Financial Results
Overview of the PZU Group’s 1Q 2012 Financial Results Gross Written Premium (m PLN) Net Profit (m PLN) 8.7% 4.0% 3 977 4 323 791 823 1Q '11 1Q '12 1Q '11 1Q '12 Equity (bn PLN) ROE (%)* 0.4% 0.8 p.p. 13.7 13.8 23.9% 24.7% 1Q '11 1Q '12 1Q '11 1Q '12 * Annualized ratio computed using equity at beginn
Slide 18: Overview of PZU Group's Financial Highlights
Overview of PZU Group’s Financial Highlights Change 1Q 2012 m PLN, IFRS 1Q 2011 1Q 2012 Change Y/Y 4Q 2011 over 4Q 2011 Profit and Loss Statement Gross Written Premium 3 977 4 323 8.7% 3 853 12.2% Premium Earned 3 572 3 869 8.3% 3 836 0.9% Investment Result 474 873 84.1% 554 57.6% Operating Profit 9
Slide 19: Profitability by Insurance Business Segments
Profitability by Insurance Business Segments Insurance Business Combined Ratio / Gross Written Premium Operating Profit Segments Operating profit ratio * m PLN, local GAAP 1Q 2011 1Q 2012 Change Y/Y 1Q 2011 1Q 2012 Change Y/Y 1Q 2011 1Q 2012 Total Non-Life 2 318 2 516 8.6% 278 242 (12.9)% 88.8% 91.2
Slide 20: Extraordinary Items Affecting the Results
Extraordinary Items Affecting the Results m PLN, IFRS 1Q 2011 1Q 2012 Operating Profit (according to financial 962.2 1034.7 statements) including: Movement in insurance provisions – Impact of converting long-term contracts into yearly-renewable 1 +217.7 +123.7 1 release of type P insurance provision
Slide 21: Change in Segment Presentation – Comparable data for 1Q 2011
Change in Segment Presentation – Comparable data for 1Q 2011 Segments m PLN Segments under Previous Presentation under New Presentation POLAND – ABROAD – POLAND – LIFE POLAND - OTHER NON-LIFE NON-LIFE Non- Life Pension Other TOTAL TOTAL Corp. Mass Group Indiv. I. contracts Ukrain Lithuan. Invest Pen
Slide 22: Life Insurance New Segment Profitability
Life Insurance New Segment Profitability (Group and Continued business) Changes in operating profit ratio due to changes in Changes in operating profit ratio due to changes in segmentation 2011 segmentation 2012 Operating profit margin Operating profit margin 1Q 2011- old 9.3% 4.5% 13.8% 11.7% 8.4%
Slide 23: Group and Continued Life Insurance Segment
Group and Continued Life Insurance Segment Primary Operating Profit Components in Group and Continued Life Insurance (m PLN) Remarks Gross Operating Profit Y/Y • GWP growth +4.3% Y/Y due to group protection 1Q 2011 452 contracts and bancassurance products with single premium. Gross Written Premium 6
Slide 24: Individual Life Insurance Segment
Individual Life Insurance Segment Primary Operating Profit Components in Individual Life Insurance (m PLN) Remarks Gross Operating Profit • GWP increase by 59.2% Y/Y particularly due to 1Q 2011 48 Y/Y success of bancassurance products. Gross Written Premium 81 59.2% • Higher investment result mainly
Slide 25: Profitability of Corporate Non-life Insurance Segment
Profitability of Corporate Non-life Insurance Segment Profitability of Corporate Non-life Insurance (COR %) Remarks • Decrease of loss ratio as a result of motor business 1Q 2011 88.5% profitability improvement and lack of large single losses. Loss Ratio (12.0)% • Increase of administrative expense
Slide 26: Profitability in Mass Non-life Insurance Segment
Profitability in Mass Non-life Insurance Segment Profitability of Mass Non-life Insurance (COR %) Remarks • Increase of loss ratio as a result of negative effects of 1Q 2011 88.0% winter crop damages in agricultural insurance (loss ratio 61.1% 1Q 2011 vs 66.2% 1Q 2012; excluding winter crop damage 5
Slide 27: High profitability of Debt and Capital Instruments
High profitability of Debt and Capital Instruments 1Q `11 Investment Composition* 1Q `12 Investment Composition* 1% Debt securities 1% 2% Quoted capital instruments 7% 6% Other capital instruments 14% 7% Revers repo and deposits 6% Loans 5% Other investments 72% 79% Investment revenues* Debt securit
Slide 28: Robust Capitalization, Strong Solvency Ratios and Stable Dividends
Robust Capitalization, Strong Solvency Ratios and Stable Dividends PZU SA’s Own Funds and Solvency Margin PZU Życie SA’s Own Funds and Solvency Margin Coverage Ratio (m PLN, PAS) Coverage Ratio (m PLN, PAS) 780.3% 756.7% 405.3% 360.0% 10 408 10 206 6 727 6 343 1Q '11 1Q '12 1Q '11 1Q '12 Solvency Ma
Slide 29: Questions and Answers
Questions and Answers Contact data: PZU Al. Jana Pawła II. 24 00-133 Warsaw, Poland ir@pzu.pl www.pzu.pl/ir Management Board Office Investor Relations Team: Piotr Wiśniewski, phone (+48 22) 582 26 23 Agata Bednarczyk, phone (+48 22) 582 36 05 Aleksandra Jakima-Moskwa, phone (+48 22) 582 26 17 Janusz
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