Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Bank Conference London 2019
45 slides from Vienna Insurance's conference presentation, Jan 31, 2019
Slide 1: Investor Presentation: Results for the first three quarters 2018
VIENNA INSURANCE GROUP Investor Presentation Results for the first three quarters 2018
Slide 2: VIG – The leading insurance group in Austria & CEE
VIG – THE LEADING INSURANCE GROUP IN AUSTRIA & CEE Close to Around Represented in 200 years of experience 50 Group companies 25 markets More than More than Solvency Ratio 50% of premiums and profits coming 25,000 employees 222% based on Partial Internal Model from CEE Since Current market capitaliza
Slide 3: Management principles
MANAGEMENT PRINCIPLES 1 Local entrepreneurship Knowledge of local needs and markets Decentralised structures and efficient decision-making procedures 2 Multi-brand strategy Around 50 brands in 25 countries Utilisation of established local brands 3 Multi-channel distribution Various distrib
Slide 4: VIG is best positioned to leverage on the positive market development in CEE
VIG IS BEST POSITIONED TO LEVERAGE ON THE POSITIVE MARKET DEVELOPMENT IN CEE Excellent market shares throughout the region 1 2018: 25 markets Client/talent base: Country Market position Market share total 180mn people Austria 1 1 1 23.6% 10 Czech Rep. 1 2 1 32.0% 4 Slovakia 1 2 1 33.4% Poland 4 4 5
Slide 5: CEE region growing stronger than EU-15
CEE REGION GROWING STRONGER THAN EU-15 Promising GDP per capita growth 2019 - 2023 Gap in GDP growth in purchasing parities CEE vs. EU-15 Forecast CAGR 8% 2019-2023 real GDP 6% 2.7% (CEE) vs. 4% 1.5% (EU-15) 2% 0% 2000 2003 2006 2009 2012 2015 2018 2021 -2% -4% real GDP growth PPP (USD) CEE real GDP
Slide 6: Positive economic environment and strong growth potential going forward
POSITIVE ECONOMIC ENVIRONMENT AND STRONG GROWTH POTENTIAL GOING FORWARD Annual insurance spending shows significant growth potential in the CEE region Real GDP growth p.a. 2019-2023 Insurance density 2017, in EUR (premiums per capita) Austria 1.5 Austria 1,948.5 Croatia 2.3 Croatia 289.7 Hungary 2.3
Slide 7: Agenda 2020: Creating added value by increasing operating performance
AGENDA 2020: CREATING ADDED VALUE BY INCREASING OPERATING PERFORMANCE Medium-term target: combined ratio sustainably at level of 95% Optimisation of business model Ongoing activities Shared Services Mergers in AT, CZ, SK, HU and HR Creating cost benefits by merging back-office VIG merged the forme
Slide 8: Agenda 2020: Specific initiatives to contribute to future success
AGENDA 2020: SPECIFIC INITIATIVES TO CONTRIBUTE TO FUTURE SUCCESS Main focus is on digital transformation of the Group Ensuring future growth Ongoing activities Focus on health insurance and expansion of reinsurance activities Use of growth potentials Health premiums in the target markets of Polan
Slide 9: Results 9M 2018
STRATEGY & AGENDA 2020 RESULTS 9M 2018 SEGMENTS APPENDIX 9 VIG VIENNA INSURANCE GROUP
Slide 10: Highlights 9M 2018
HIGHLIGHTS 9M 2018 VIG well on track to reach full-year targets 2018 Gross written premiums Profit before taxes Combined Ratio € 7,357.5mn € 352.3mn 96.3% GWP up by 2.9% compared to 9M 2017 PBT increased by 6.4% Down from 97.3% in 9M 2017 Current premium business: +5.4% CEE profit growth impacte
Slide 11: Gross written premiums of €7.4bn up by €205mn
GROSS WRITTEN PREMIUMS OF €7.4bn UP BY €205mn Overview by segments Gross written premiums (€mn; y-o-y chg.) Premiums in Austria and Poland slightly lower y-o-y; adjusted for life single-premium business, premium growth in Austria of 1.9% and in Poland of 11.1% Premium decrease in Turkey/Georgia
Slide 12: Premium development by lines of business
PREMIUM DEVELOPMENT AS EXPECTED – ALL BUSINESS LINES EXPERIENCE GROWTH, EXCEPT FOR LIFE SINGLE PREMIUM BUSINESS Gross written premiums by lines of business (€mn; y-o-y chg.); incl. Central Functions MTPL Casco Other property Total premiums +2.9% 9M 2017 1,039 811 3,119 7,153 7,357 +5.8% +8.6% +5.5%
Slide 13: Group profit before taxes of €352.3mn up by 6.4%
GROUP PROFIT BEFORE TAXES OF €352.3mn UP BY 6.4% Overview by segments Result before taxes (€mn; y-o-y change) Profit growth in AT and CZ driven by CoR improvements and better financial results SK: profit decrease of €8.1mn due to higher cost ratio and reserve strengthening in Q1 PL: provisions
Slide 14: Combined ratio (P&C) improved to 96.3%
COMBINED RATIO (P&C) IMPROVED TO 96.3% Positive development driven by improved claims ratio in AT, CZ and PL P&C Combined Ratio development Overview by segments (9M y-o-y development net, %) AT and CZ: improved cost and claims ratios +8.2%p -2.1%p -3.1%p +1.8%p -1.2%p -2.4%p SK: CoR increase dri
Slide 15: VIG with solid results well on track to reach targets for 2018
VIG WITH SOLID RESULTS WELL ON TRACK TO REACH TARGETS FOR 2018 Executive summary Highlights Consolidation ongoing Mergers of local composite insurers with life insurance companies specialised in bank distribution completed in Austria, Slovakia, Hungary and Croatia in 2018; merger in Czech Republic
Slide 16: Segments
STRATEGY & AGENDA 2020 RESULTS 9M 2018 SEGMENTS APPENDIX 16 VIG VIENNA INSURANCE GROUP
Slide 17: Austria
AUSTRIA Merger of Wiener Städtische and S-Versicherung successfully completed GWP development (€mn) €mn 9M 2018 9M 2017 +/- % -0.4% Gross premiums written 2,996.4 3,009.6 -0.4 Adjusted for life single premium business, 3,010 Net earned premiums 2,364.5 2,380.3 -0.7 premiums in Austria up by 1.9%;
Slide 18: Czech Republic
CZECH REPUBLIC Ongoing strong premium and profit development GWP development (€mn) €mn 9M 2018 9M 2017 +/- % +5.6% Gross premiums written 1,274.4 1,206.5 5.6 Premium growth driven by life regular 1,274 Net earned premiums 955.7 896.6 6.6 premium business (+€35mn), other 1,206 Financial result1 79.
Slide 19: Slovakia
SLOVAKIA Premiums up in all lines of business, except for life single premium business GWP development (€mn) €mn 9M 2018 9M 2017 +/- % +0.4% Gross premiums written 591.7 589.2 0.4 Premium growth of 3.8% adjusted for life 589 592 Net earned premiums 490.0 486.3 0.8 single premium business Financial
Slide 20: Poland
POLAND Adjusted for life-single premium business, premium growth of 11.1% GWP development (€mn) €mn 9M 2018 9M 2017 +/- % -1.0% Gross premiums written 668.7 675.2 -1.0 Premium growth in motor lines of business 675 Net earned premiums 508.6 541.4 -6.1 (+€45mn) and other property (+€21mn) 669 Financ
Slide 21: Romania
ROMANIA After goodwill impairment of €50.1mn in Q2 2018, reserve strengthening and special provision in Q3 2018 GWP development (€mn) €mn 9M 2018 9M 2017 +/- % +5.2% Gross premiums written 392.9 373.4 5.2 Deterioration of motor market requires 393 Net earned premiums 294.2 278.2 5.7 reserve streng
Slide 22: Baltic states
BALTIC STATES CoR below 100% GWP development (€mn) €mn 9M 2018 9M 2017 +/- % +16.5% Gross premiums written 279.2 239.7 16.5 Strong premium growth in all lines of 279 Net earned premiums 202.1 179.0 12.9 business Financial result 4.1 4.7 -13.8 Other income 0.9 1.5 -41.2 Positive result contributi
Slide 23: Hungary
HUNGARY Double-digit top- and bottom-line growth GWP development (€mn) €mn 9M 2018 9M 2017 +/- % +11.2% Gross premiums written 191.1 171.8 11.2 Premium growth driven by life single 191 Net earned premiums 143.5 121.8 17.8 premium business (+€10mn), motor Financial result 4.8 4.9 -2.4 (+€6mn) and h
Slide 24: Bulgaria
BULGARIA Solid overall development despite slight CoR increase GWP development (€mn) €mn 9M 2018 9M 2017 +/- % +8.4% Gross premiums written 129.6 119.6 8.4 Premium increase driven by motor and 130 Net earned premiums 93.8 83.1 12.9 health business 120 Financial result 7.6 8.3 -9.2 17 Other income
Slide 25: Turkey/Georgia
TURKEY/GEORGIA Developments impacted mainly by FX situation in Turkey GWP development (€mn) €mn 9M 2018 9M 2017 +/- % -3.6% Gross premiums written 149.1 154.7 -3.6 Premiums as well as the result impacted 155 Net earned premiums 70.2 76.9 -8.8 mainly by TRY FX effects 149 Financial result 5.1 6.7 -
Slide 26: Remaining CEE
REMAINING CEE Ongoing strong performance in the 9M 2018 GWP development (€mn) €mn 9M 2018 9M 2017 +/- % +8.2% Gross premiums written 284.6 263.1 8.2 Remaining CEE includes Albania (incl. 285 Net earned premiums 213.3 183.8 16.0 Kosovo), Bosnia-Herzegovina, Croatia, Financial result 26.1 20.1 29.9
Slide 27: Other markets
OTHER MARKETS Germany and Liechtenstein GWP development (€mn) €mn 9M 2018 9M 2017 +/- % +1.8% Gross premiums written 232.7 228.5 1.8 Premium increase driven by other property 233 Net earned premiums 198.3 196.0 1.2 and life business in Germany 229 Financial result 14.6 15.4 -5.3 Other income 2.0 3
Slide 28: Central Functions
CENTRAL FUNCTIONS Substantial improvement driven by financial result and other expenses GWP development (€mn) €mn 9M 2018 9M 2017 +/- % +9.4% Gross premiums written 1,168.1 1,068.1 9.4 Central Functions include VIG Holding, 1,168 Net earned premiums 979.7 901.2 8.7 VIG Re, VIG Fund, the non-profit
Slide 29: Appendix
STRATEGY & AGENDA 2020 RESULTS 9M 2018 SEGMENTS APPENDIX 29 VIG VIENNA INSURANCE GROUP
Slide 30: Managing Board as of 1 July 2018
MANAGING BOARD AS OF 1 JULY 2018 Fotos: Ian Ehm, Thomas Pitterle Elisabeth Stadler, CEO Franz Fuchs Judit Havasi Liane Hirner, CFO Peter Höfinger Peter Thirring Mgmt. of the VIG Group, Performance Planning & Controlling Finance & Accounting Corporate and Large Group external income General Secretari
Slide 31: 9M 2018 key financials
9M 2018 KEY FINANCIALS Overview of KPIs Net result for the period after taxes and non-controlling interest (€mn) ROE after tax and minorities1 (%) 288 298 7.3 7.2 7.0 215 6.6 207 2016 2017 9M 17 9M 18 2016 2017 9M 17 9M 18 EPS net of hybrid interest1 (€) Book value per share (€) 2.23 35.66 37.75 36.
Slide 32: Dividend per share at €0.90 for the business year 2017
DIVIDEND PER SHARE AT €0.90 FOR THE BUSINESS YEAR 2017 Earnings per share up 3.2%; payout ratio increased to 38.7% EPS (€) Dividend per share (€) Payout ratio (%) 2.16 2.23 38.7 UNCHANGED DIVIDEND POLICY 35.6 Distribution of at least 30% of Group net profits after minorities 0.90 0.80 Dividend p
Slide 33: Strong overall performance of VIG
STRONG OVERALL PERFORMANCE OF VIG 9M 2018 Income statement GWP development (€mn) €mn 9M 2018 9M 2017 +/- % Premiums up by €205mn; adjusted for Gross premiums written 7,357.5 7,152.6 2.9 life single premium business premium +2.9% Net earned premiums 6,518.1 6,325.8 3.0 growth of 5.4% 7,357 Financia
Slide 34: Trends of previous quarters continue in Q3 2018
TRENDS OF PREVIOUS QUARTERS CONTINUE IN Q3 2018 Q3 2018 Income statement €mn Q3 2018 Q3 2017 +/- % Gross premiums written 2,207.2 2,180.2 1.2 Premiums up by 1.2% despite the lower single premium life Net earned premiums 2,163.2 2,106.7 2.7 business; growth driven by other property and motor Financ
Slide 35: 9M 2018 balance sheet
9M 2018 BALANCE SHEET IFRS (€mn) €mn 30.09.2018 31.12.2017 +/- % Intangible assets 1,905 1,971 -3.3 Investments 36,530 35,933 1.7 Unit- and index-linked investments 8,743 9,061 -3.5 Reinsurers’ share in underwriting provisions 1,081 1,066 1.4 Receivables 1,544 1,476 4.6 Tax receivables and advance p
Slide 36: Investment split and bond portfolio overview
INVESTMENT SPLIT AND BOND PORTFOLIO OVERVIEW Bond portfolio split by rating changed due to rating upgrade of CZ in Q3 9M 2018: Total €37.5bn Bond portfolio by rating1 4.3% 1.5% 5.5% AAA AA A BBB Other 9M 2018 10% 32% 36% 16% 6% 6.6% 12M 2017 10% 22% 45% 17% 5% 5.7% 66.5% Bond portfolio by issuer 9.9
Slide 37: Financial result increased by 8.7%
FINANCIAL RESULT INCREASED BY 8.7% Current income and income from disposal of investments incl. at equity consolidated companies Total 9M 9M Income +/- % 2018 2017 Current income 1,022,521 1,020,810 0.2 Financial result up by €63.8mn incl. at equity consolidated companies Income from appreciations
Slide 38: 9M 2018 premiums by business lines and country (I)
9M 2018 PREMIUMS BY BUSINESS LINES AND COUNTRY (I) IFRS (€mn) MTPL Casco Other property 9M 2018 9M 2017 +/- % 9M 2018 9M 2017 +/- % 9M 2018 9M 2017 +/- % Austria 258.8 253.2 2.2 227.1 221.4 2.6 1,080.0 1,056.5 2.2 Czech Republic 219.4 208.8 5.1 182.3 172.3 5.8 365.2 343.6 6.3 Slovakia 114.2 108.9 4.
Slide 39: 9M 2018 premiums by business lines and country (II)
9M 2018 PREMIUMS BY BUSINESS LINES AND COUNTRY (II) IFRS (€mn) Life regular Life single Health 9M 2018 9M 2017 +/- % 9M 2018 9M 2017 +/- % 9M 2018 9M 2017 +/- % Austria 937.1 932.4 0.5 179.8 244.5 -26.4 313.5 301.7 3.9 Czech Republic 457.7 422.7 8.3 39.4 49.1 -19.8 10.4 9.9 5.4 Slovakia 128.0 123.6
Slide 40: 9M 2018 country overview GWP / PBT / combined ratio
9M 2018 COUNTRY OVERVIEW GWP / PBT / COMBINED RATIO IFRS (€mn) GWP Total Result before taxes Combined Ratio net 9M 2018 9M 2017 +/- % 9M 2018 9M 2017 +/- % 9M 2018 9M 2017 +/- %p Austria 2,996.4 3,009.6 -0.4 130.2 105.7 23.2 94.9% 97.0% -2.1 Czech Republic 1,274.4 1,206.5 5.6 123.8 113.7 9.0 93.6% 9
Slide 41: 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 2 BUY Prague Bloomberg: VIG AV / VIG CP A+, stable outlook A
Slide 42: VIG share (II)
VIG SHARE (II) Shareholder structure Free float split by region1 Continental Europe 30% Austria 28% ~70% ~30% North America 28% UK & Ireland 11% Other 3% Wiener Städtische Versicherungsverein Free Float (Mutual) 1 Split of identified shares, May 2018 (Source: CMi2i) 42 APPENDIX VIG VIENNA INSURANCE
Slide 43: Appendix
43 APPENDIX VIG VIENNA INSURANCE GROUP
Slide 44: Contact details / financial calendar
CONTACT DETAILS / FINANCIAL CALENDAR Investor Relations / investor.relations@vig.com / www.vig.com Nina Higatzberger-Schwarz Sylvia Machherndl Financial calendar 2019* Head of Investor Relations Team Leader Corporate Reporting Date Event Tel. +43 (0)50 390 – 21920 Tel. +43 (0) 50 390 – 21151 21 Mar.
Slide 45: 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