Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — FY2015 Earnings Presentation
42 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, Mar 15, 2016
Slide 1: PZU Group's financial results for 2015
Warsaw Riga Vilnius Kiev Tallin PZU Group’s financial results for 2015 Warsaw, 15 March 2016
Slide 2: PZU Management Board
PZU Management Board Michat Krupinski CEO Dariusz Przemysiaw ‘Beata Koztowsk: Roger Hodgkis bert Pietr Pawel Suréwka ‘Stawomir Roman Patac Tomasz Peboee ceo) Dabrowski -Chyta P2U / PZU Zycie PZU/ PZU fee" PZU / PZU Zycie i PZU Zycie Board Karusewicz Pal cvae Ga PU P2U 2ycie PZU / P2U Zycie Board Mem
Slide 3: Agenda
Agenda 1. Recap of the PZU Group’s financial results for 2015 2. Conclusions of the PZU strategy review 3. Polish insurance market at the end of Q3 2015 4. Operating results for 2015 5. Detailed financials 6. Group highlights as at 30 Sep. 2015 according to Solvency II 2
Slide 4: Net profit affected by fierce competition in motor insurance and falling debt valuation
Net profit affected by fierce competition in motor insurance and the falling valuation of debt instruments Gross written premium (m PLN) Net profit (m PLN) 8.7% (21.1)% 16,885 18,359 2,968 2,342 12.2014 12.2015 12.2014 12.2015 Equity – parent company (bn PLN) Return on equity (ROE) – parent company
Slide 5: Agenda
Agenda 1. Recap of the PZU Group’s financial results for 2015 2. Conclusions of the PZU strategy review 3. Polish insurance market at the end of Q3 2015 4. Operating results for 2015 5. Detailed financials 6. Group highlights as at 30 Sep. 2015 according to Solvency II 4
Slide 6: 2015 results are an impulse to focus on core business
2015 results are an impulse to focus on core business PZU Group’s IFRS-compliant net financial result (m PLN) • Understand customer needs better and constantly adjust the organizational (21.1)% 3 295 model to be customer-centric. 3 254 2 968 • Retain current market share to take 2 344 2 342 full adv
Slide 7: Effective execution of growth initiatives (1/2)
Effective execution of growth initiatives (1/2) Premium on international business stated as a percentage of the PZU Group’s premium (IFRS-compliant data) • Expanding the significance of international business – the percentage of non-Polish revenues will >20.0% exceed 20% by 2020. 7.4% 4.2% 2.1% 2.8%
Slide 8: Effective execution of growth initiatives (2/2)
Effective execution of growth initiatives (2/2) PZU Zdrowie revenues (m PLN) • PZU Zdrowie as an insurance activity and a provider of outpatient services on a scale that allows on providing services ~4x across the country – 1 bn PLN revenues in 2020. >1,000 • Investment treated as a strategic option
Slide 9: PZU Group as the most innovative financial group in Europe
PZU Group as the most innovative financial group in Europe Accelerator of ● Build a culture of innovation – PZU as the market leader in innovation, creation of modern solutions and market standards in PZU and PZU Życie, test solutions beating the market to the punch with Alior Bank, Link4 innovation
Slide 10: Agenda
Agenda 1. Recap of the PZU Group’s financial results for 2015 2. Conclusions of the PZU strategy review 3. Polish insurance market at the end of Q3 2015 4. Operating results for 2015 5. Detailed financials 6. Group highlights as at 30 Sep. 2015 according to Solvency II 9
Slide 11: Non-life insurance market in Poland
Non-life insurance market in Poland Gross written premium in non-life insurance (m PLN) 3.8% ● Reversion to growth trend after slight deceleration in 2014. 2.4% 19 758 20 084 19 582 20 054 ● PZU Group’s strong market position in 18 956 motor own damage insurance with a 16 045 16 783 market share of
Slide 12: Life insurance market in Poland
Life insurance market in Poland Gross written premium on regular business (m PLN) ● PZU Życie’s regular premium market share stable at 43.9% at the end of 3.6% Q3 2015. 0.6% ● Another year of growth in regular gross 11 827 11 901 12 279 12 347 written premium on the life insurance 10 958 11 114 9 97
Slide 13: PZU is the insurance leader in Poland
PZU is the insurance leader in Poland Market share Market share non-life insurance life insurance (regular premium) ∆ 3Q 2014 – 3Q 2015 ∆ 3Q 2014 – 3Q 2015 (0.4) p.p. 4.8% 0.1 p.p. 3.8% 5.2% (0.5) p.p. 7.5% (0.5) p.p. 5.4% 0.1 p.p. 7.5% (1.6) p.p. 5.6% (0.1) p.p. 13.6% 0.6 p.p. 7.4% (0.1) p.p. 16.5%
Slide 14: Agenda
Agenda 1. Recap of the PZU Group’s financial results for 2015 2. Conclusions of the PZU strategy review 3. Polish insurance market at the end of Q3 2015 4. Operating results for 2015 5. Detailed financials 6. Group highlights as at 30 Sep. 2015 according to Solvency II 13
Slide 15: Factors affecting Group's results
Factors affecting Group's results ● Fierce price competition continues to be felt, translating into a low average premium in motor TPL insurance, thereby adversely affecting portfolio profitability. Non-life ● Lower level of claims and benefits in general third party liability insurance (decline in
Slide 16: Non-life insurance
Non-life insurance Fierce price competition continues to be felt mass segment corporate segment Gross written premium* (m PLN) Gross written premium* (m PLN) 11.4% 7 309 6 560 Including (2.3)% including Link4 - 392 Link4 - 110 4 322 3 952 1 807 including 1 765 including including Link4 - 25 includin
Slide 17: Recap – non-life insurance
Recap – non-life insurance Mass segment Corporate segment Higher gross written premium* y/y as a result of the following: Lower gross written premium* y/y as a result of the following: • higher motor insurance sales (including the effect of acquiring Link4 • lower sales in the other TPL insurance gr
Slide 18: Life insurance
Life insurance Persistently high operating profit margin group and continued insurance segment individual insurance segment Gross written premium (m PLN) Gross written premium (m PLN) 2.0% 2.3% (2.7)% 1 269 1 234 6 539 6 689 477 507 791 728 12.2014 12.2015 12.2014 12.2015 Single Premium Regular Prem
Slide 19: Recap – life insurance
Recap – life insurance group and continued insurance segment individual insurance segment Drivers of higher gross written premium: Gross written premium down driven by the following: • rising number of insureds in group protection products and rising • lower sales of single premium investment produc
Slide 20: International business
International business Higher result driven by greater business volume in the Baltic States non-life insurance life insurance Gross written premium (m PLN) Gross written premium (m PLN) 103.8% (5.4)% 1 288 Estonia 165 Latvia 632 282 41 Lithuania (LD) 147 539 78 74 228 83 PZU Lithuania * 37 Litwa 164
Slide 21: Recap – international business
Recap – international business gross written premium operating results Non-life insurance Non-life insurance • Gross written premium has grown on the contribution made by the • Combined ratio drop: newly-acquired companies: • loss ratio (60.6%) - down 0.5 p.p. due to the Baltic States • Lithuanian m
Slide 22: Higher administrative expenses
Higher administrative expenses Effect of implementing strategic projects and Group consolidation m PLN PZU Group’s administrative expenses The following factors contributed to higher administrative expenses year on year: Other (project- 1 658 • inclusion of administrative expenses incurred by newly-
Slide 23: Agenda
Agenda 1. Recap of the PZU Group’s financial results for 2015 2. Conclusions of the PZU strategy review 3. Polish insurance market at the end of Q3 2015 4. Operating results for 2015 5. Detailed financials 6. Group highlights as at 30 Sep. 2015 according to Solvency II 22
Slide 24: Key financial highlights
Key financial highlights Q1- Q4 Q1- Q4 Change Q4 2015 m PLN, IFRS Change YoY Q4 2014 Q4 2015 2014 2015 over Q4 2014 Profit and Loss Statement Gross Written Premium 16 885 18 359 8.7% 4 476 4 898 9.4% Premium Earned 16 429 17 385 5.8% 4 286 4 267 (0.4)% Net investment Result 2 647 1 739 (34.3)% 497 3
Slide 25: Operating segment results
Operating segment results m PLN 7 309 6 560 6 689 6 539 Gross written premium (according to local GAAP) 1 807 1 765 1 269 1 234 1 194 374 141 174 168 536 INTERNATIONAL – LIFE POLAND – NON-LIFE** POLAND – LIFE INSURANCE POLAND - OTHER AND NON-LIFE SEGMENTS Corporate client Mass client Group and conti
Slide 26: Profitability by insurance activity segment
Profitability by insurance activity segment Combined Ratio / Insurance Business Segments Gross Written Premium *** Operating Profit Operating profit ratio* Q1-Q4 Q1-Q4 Q1-Q4 Q1-Q4 Q1-Q4 Q1-Q4 m PLN, local GAAP Change YoY Change YoY 2014 2015 2014 2015 2014 2015 Total Non-Life - Poland 8 367 9 074 8.
Slide 27: Normalized operating profit
Normalized operating profit YTD, m PLN m PLN, IFRS 2014 2015 1 Loss due to movement in the fair value of the shares acquired under tranche I between the date of their Operating Profit (according to financial statements) 3 693.2 2 939.4 purchase and the date of taking control of Alior Bank, i.e. 18 D
Slide 28: Profitability of the mass insurance segment
Profitability of the mass insurance segment (non-life insurance) Profitability of the mass segment • Change in the loss ratio driven by the following: Combined Ratio (COR - %) • loss ratio down in the property and agricultural insurance group (fewer mass claims); • lower level of claims and benefits
Slide 29: Profitability of the corporate insurance segment
Profitability of the corporate insurance segment (non-life insurance) Profitability corporate insurance • Change in the loss ratio driven by the following: Combined Ratio (COR - %) • Decline in claims and benefits in other TPL insurance as a result of the lower level of provisions for previous years
Slide 30: Group and continued insurance segment
Group and continued insurance segment (life insurance) Fundamental components of operating profit in the group and • Gross written premium up by 2.3% y/y mostly due to incremental growth in the portfolio of continued insurance segment (m PLN) risks in protection and health insurance (including rider
Slide 31: Individual insurance segment
Individual insurance segment (life insurance) Fundamental components of operating profit in the • Gross written premium fell by 2.7% y/y primarily as the effect of curtailing cooperation with individual insurance segment (m PLN) banks (suppressed sales of unit-linked products and this year’s absence
Slide 32: Profitability of international companies
Profitability of international companies (non-life insurance) Profitability of international companies • Loss ratio y/y down due to the higher share of the newly-acquired Combined ratio (COR - %) Baltic companies with a lower level of costs of claims • The administrative expense ratio fell chiefly d
Slide 33: Investments
Investments Poorer performance on debt instruments due to rising yields on Polish T-bonds Net investment result* Equity instruments Interest-bearing financial and derivatives** assets** Dec. 2015 Investment composition*** (34.3)% (39.9)% Total: 6.4% 2.1% 55.4 bn PLN 6.4% 8.5% 2 647 2 555 1 739 1 536
Slide 34: Investments
Investments Poorer performance of unit-linked products due to rising yields on Polish T-bonds and softer market conditions on capital markets m PLN Net investment result Net investment result on the PZU Group’s main portfolio 2 647 2 420 1 739 1 697 01-12.2014 01-12.2015 01-12.2014 01-12.2015 Net in
Slide 35: Impact exerted by starting to consolidate Alior Bank
Impact exerted by starting to consolidate Alior Bank Consolidated assets (bn PLN) • PZU’s target stake in Alior Bank’s equity of 29.22% as a result of acquiring 18,318,473 shares for a total of 1.63 bn PLN. 56.0% • As a result of consolidation as of 18 December 2015 the following was recorded: • tot
Slide 36: Agenda
Agenda 1. Recap of the PZU Group’s financial results for 2015 2. Conclusions of the PZU strategy review 3. Polish insurance market at the end of Q3 2015 4. Operating results for 2015 5. Detailed financials 6. Group highlights as at 30 Sep. 2015 according to Solvency II 35
Slide 37: Group's solvency ratios as at 30 September 2015
Group’s solvency ratios as at 30 September 2015 Solvency I and Solvency II bn PLN, unaudited data Solvency I Solvency II 296% 26 p.p. 20.8 270% 9.3 7.0 3.5 09.2015 09.2015 Środki własne Own funds Margines wypłacalności/SCR Solvency Margin/SCR x% Percentage change SII to SI 36 Own funds to solvency m
Slide 38: Group's solvency ratios as at 30 September 2015
Group’s solvency ratios as at 30 September 2015 Solvency I and Solvency II bn PLN, unaudited data Solvency I Solvency II • In the 9 months of 2015 own funds according to Solvency II were higher by 1.1 bn PLN, i.e. 6% - compared to the 303% 296% end of 2014. Own funds at the end of 2014 diminished by
Slide 39: Own funds to cover the Group's capital requirement
Own funds to cover the Group’s capital requirement as at 30 September 2015 – Solvency I and Solvency II bn PLN, unaudited data 0.1 (1.2) 3.2 (1.5) (0.1) 2.3 3.0 9.7 Grupa Group(łącznie) PZU PZU 124% PZU PZUŻycie Życie 20.8 Pozostałe zakłady 0.7 Other insurance companies 9.3 Środki Group Ownwłasne Fu
Slide 40: Group's capital requirement by risk category
Group’s capital requirement by risk category as at 30 September 2015 – Solvency I and Solvency II bn PLN, unaudited data Solvency II Solvency I The Solvency Capital Requirement (SCR) calculated using the standard formula Podstawowy estimated for the following risks: actuarial, kapitałowy Basic Solve
Slide 41: Questions and answers
Questions and answers Contact data: Kinga Kobus - Spokeswoman tel.: (+48 22) 582 58 07 rzecznik@pzu.pl www.media.pzu.pl Piotr Wiśniewski – IRO telephone: (+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 40
Slide 42: 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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