Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — Q3 2016 Earnings Presentation
43 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, Nov 10, 2016
Slide 1: PZU Group's financial results for Q3 2016
Warsaw Vilnius Riga Tallinn Kiev PZU Group’s financial results for Q3 2016 Vilnius Warsaw, 10 November 2016
Slide 2: Agenda
Agenda 1. The most important drivers of the PZU Group’s financial results for Q3 2016 2. The Group’s strategy for 2016-2020 3. Recap of the PZU Group’s financial results for Q3 2016 4. Operating results for Q3 2016 5. Detailed financials 6. The Group’s preliminary data as at 30 June 2016 according t
Slide 3: The most important events and drivers of the results for Q3 2016
The most important events and drivers of the results for Q3 2016 PZU’s retention of its A- rating and removal of PZU’s rating from the Watchlist Market share in life and non-life insurance up significantly Cost discipline despite portfolio expansion Maintain high profitability of group and individua
Slide 4: Insurance market in Poland
Insurance market in Poland Gross written premium in non-life insurance (m PLN) 12.3% 5.0% 15 348 13 596 13 886 13 481 13 664 12 757 10 876 11 218 06.2009 06.2010 06.2011 06.2012 06.2013 06.2014 06.2015 06.2016 Periodical gross written premium in life insurance (m PLN) 2.3% (2.1)% 7 825 7 956 7 953 8
Slide 5: Market share in life and non-life insurance in Poland up significantly
Market share in life and non-life insurance in Poland up significantly ● PZU Group’s strong market position in motor own damage insurance with Non-life insurance a market share of 42.5%* and motor TPL with a market share of 40.8%*. ● The PZU Group’s share in the non-life insurance market in H1 2016
Slide 6: The PZU Group is the insurance leader in the Baltic States
The PZU Group is the insurance leader in the Baltic States PZU in the CEE region Lietuvos Draudimas 29.1% Lietuva Gyvybës Draudimas 5.5% AAS Balta 27.5% PZU Estonia 14.4% PZU Ukraina 3.9% PZU Ukraina Życie 8.3% * Market share in Ukraine and Latvia for Q2 2016, for Lithuania and Estonia for the perio
Slide 7: Cost discipline - lower administrative expenses in the insurance business in Poland
Cost discipline - lower administrative expenses in the insurance business in Poland m PLN PZU Group’s administrative expenses • The y/y increase in the PZU Group’s administrative expenses was driven by commencing the consolidation of Alior Bank. • The decline in the costs of the newly-acquired insur
Slide 8: Maintain high profitability of group and individually continued insurance
Maintain high profitability of group and individually continued insurance Gross written premium (m PLN) ● Lessening the pressure on the premium growth rate making it 1.6% possible to control the loss ratio. 1.4% 2.3% ● New riders to group and continued insurance and modification of 2.0% existing pol
Slide 9: Adverse consequences of ground frost in crop insurance
Adverse consequences of ground frost in crop insurance m PLN Claims of adverse consequences of ground frost • The adverse consequences of ground frost signify losses caused by crops being affected by frost or wetness from the beginning of December to the end of April leading to partial or total crop
Slide 10: Low profitability of the motor insurance portfolio
Low profitability of the motor insurance portfolio Loss ratio in motor insurance (Poland)* • Following the price war from 2005 to 2010 (that ended after flooding in 2010), the overall motor insurance market started to improve. Another price war ensued shortly thereafter... • --- that is visible in t
Slide 11: Continued adverse impact of the revaluation of the equity stake in Grupa Azoty
Continued adverse impact of the revaluation of the equity stake in Grupa Azoty m PLN Change in net investment result following the recognition The net investment result (net of Alior Bank) including the of interest expense (m PLN) interest expenses in the first 9 months of 2016 fell chiefly followin
Slide 12: Agenda
Agenda 1. The most important drivers of the PZU Group’s financial results for Q3 2016 2. The Group’s strategy for 2016-2020 3. Recap of the PZU Group’s financial results for Q3 2016 4. Operating results for Q3 2016 5. Detailed financials 6. The Group’s preliminary data as at 30 June 2016 according t
Slide 13: Key metrics of the Strategy for 2016-2020
Key metrics of the Strategy for 2016-2020 ROE1 09.2016 2020 13.8% 18% LIFE NON-LIFE INSURANCE INVESTMENTS HEALTH BANKING INSURANCE Number of clients Assets of third party clients Assets (bn PLN) PZU Group's under management (bn Revenues (m PLN) BUSINESS market share2 in PZU Życie (million) SIZE PLN)
Slide 14: Agenda
Agenda 1. The most important drivers of the PZU Group’s financial results for Q3 2016 2. The Group’s strategy for 2016-2020 3. Recap of the PZU Group’s financial results for Q3 2016 4. Operating results for Q3 2016 5. Detailed financials 6. The Group’s preliminary data as at 30 June 2016 according t
Slide 15: Net profit affected by the revaluation of the equity stake in Grupa Azoty
Net profit affected by the revaluation of the equity stake in Grupa Azoty Gross written premium (m PLN) Net profit – parent company (m PLN) 9.2% (28.6)% 13 461 14 706 1 832 1 309 09.2015 09.2016 09.2015 09.2016 Equity – parent company (bn PLN) Return on equity (ROE) – parent company (%) * 0.1% (5.3)
Slide 16: Agenda
Agenda 1. The most important drivers of the PZU Group’s financial results for Q3 2016 2. The Group’s strategy for 2016-2020 3. Recap of the PZU Group’s financial results for Q3 2016 4. Operating results for Q3 2016 5. Detailed financials 6. The Group’s preliminary data as at 30 June 2016 according t
Slide 17: Operating results for Q3 2016
Operating results for Q3 2016 ● Suppressed profitability due to the following: - significantly higher y/y level of claims and benefits in the agricultural insurance portfolio as a consequence of Non-life the adverse effect of ground frost in Q1 and hail storms in the summer; - persistently low profi
Slide 18: Non-life insurance
Non-life insurance Growth in motor insurance sales Mass segment Corporate segment Gross written premium (m PLN) Gross written premium (m PLN) 19.1% 25.1% 6 339 5 321 452 289 4 168 3 222 1 463 1 169 2 40 15 49 604 850 2 099 2 171 19 114 565 613 09.2015 09.2016 09.2015 09.2016 Combined ratio (%) Combi
Slide 19: Recap – non-life insurance
Recap – non-life insurance Mass segment Corporate segment Higher gross written premium y/y as an effect of the following: Higher gross written premium y/y as an effect of the following: • increased written premium in motor insurance (+29.4% y/y) as an effect • motor insurance sales growth (+40.7% y/
Slide 20: Life insurance
Life insurance High operating profit margin Group and continued insurance segment Individual insurance segment Gross written premium (m PLN) Gross written premium (m PLN) 1.4% (11.0)% 954 850 5 010 5 078 376 391 578 458 09.2015 09.2016 09.2015 09.2016 Single Premium Periodical Premium Margin (%)* Ma
Slide 21: 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: • growth in group protection insurance - higher average premium and • lower contributions to the unit-linked insuranc
Slide 22: International business
International business Higher result driven by lower insurance activity expenses in the Baltic States Non-life insurance Life insurance Gross written premium (m PLN) Gross written premium (m PLN) (1.8)% 18.6% 977 960 120 63 147 Estonia 53 206 245 Latvia 31 37 395 Lithuania (LD) Lithuania 439 PZU Lit
Slide 23: Recap – international business
Recap – international business Gross written premium Operating results Non-life insurance Non-life insurance • Rapid growth in the gross written premium generated by respective • Combined ratio decline as a result of the following: insurance companies acquired in 2014: • savings mostly in IT among t
Slide 24: Health
Health Rapid growth in health care in excess of 1 million clients Revenues in health (m PLN)* ● Another year of rapid health insurance growth – pace of revenue growth equal to 30.7%. ● Offer expanded to include health subscriptions (2015). 30.7% 240.6 ● Development of proprietary medical centers. 18
Slide 25: Alior Bank
Alior Bank Positive growth rate in credit receivables Portfolio composition Bank segment Loan portfolio by segment (m PLN) Operating profit (m PLN) 14.0% (0.1)% 34 501 30 254 13 331 15 042 335 335 16 923 19 459 12.2015 09.2016 09.2015 09.2016 Retail segment Corporate segment Highlighs, Alior Bank su
Slide 26: Agenda
Agenda 1. The most important drivers of the PZU Group’s financial results for Q3 2016 2. The Group’s strategy for 2016-2020 3. Recap of the PZU Group’s financial results for Q3 2016 4. Operating results for Q3 2016 5. Detailed financials 6. The Group’s preliminary data as at 30 June 2016 according t
Slide 27: Key financial highlights
Key financial highlights Q1-Q3 Q1-Q3 Change Q3 2016 m PLN, IFRS Change YoY Q3 2016 Q2 2016 2015* 2016 over Q2 2016 Profit and Loss Statement Gross Written Premium 13 461 14 706 9.2% 4 844 5 061 (4.3)% Premium Earned 13 118 13 784 5.1% 4 799 4 668 2.8% Net investment Result 1 410 2 703 91.7% 1 247 47
Slide 28: Operating segment results
Operating segment results m PLN 6 339 Gross written 5 321 5 078 premium 5 010 (according to local GAAP) 1 463 1 169 954 850 914 868 105 69 116 155 INTERNATIONAL – LIFE POLAND – NON-LIFE POLAND – LIFE INSURANCE POLAND - OTHER AND NON-LIFE SEGMENTS Corporate client Mass client Group and continued Indy
Slide 29: Profitability by insurance activity segment
Profitability by insurance activity segment Combined Ratio / Insurance Business Segments Gross Written Premium Operating Profit Operating profit ratio* Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 m PLN, local GAAP Change YoY Change YoY 2015 2016 2015 2016 2015 2016 Total Non-Life - Poland 6 490 7 802 20.2%
Slide 30: Normalized operating profit
Normalized operating profit YTD, m PLN Operating profit (according to the financial statements) m PLN, IFRS 09.2015 09.2016 Impact exerted by conversion of long-term policies into 1 yearly renewable term agreements in type P group insurance. Operating Profit 2 279.8 1 959.9 2 Above average claims in
Slide 31: Profitability of the mass insurance segment
Profitability of the mass insurance segment (non-life insurance) Profitability of the mass insurance segment • Change in the loss ratio driven by the following: • higher loss ratio in insurance for other property losses, mostly for subsidized crop insurance as a consequence of the occurrence of many
Slide 32: Profitability of the corporate insurance segment
Profitability of the corporate insurance segment (non-life insurance) Profitability of the corporate insurance segment • Movement in the loss ratio shaped by the following: • declining claims and benefits mostly in motor TPL and third party liability insurance; COR 09.2015 95.0% • higher loss ratio
Slide 33: Group and continued insurance segment
Group and continued insurance segment (life insurance) m PLN Fundamental components of operating profit in the group and continued insurance segment • Gross written premium up by 1.4% y/y due to the development of the portfolio of protection and health insurance and consistent upselling of riders to
Slide 34: Individual insurance segment
Individual insurance segment (life insurance) m PLN Fundamental components of operating profit in the individual insurance segment • The y/y decline in gross written premium of 104.5 m PLN transpired mostly as a result of lower contributions to the existing unit-linked insurance accounts offered Cha
Slide 35: Profitability of international companies
Profitability of international companies (non-life insurance) Profitability of international companies • The lower loss ratio y/y as a result of the divesture from PZU Lithuania in H2 2015 and of the lower loss ratio in a company in Ukraine (especially property, travel and health insurance). Partial
Slide 36: Investments
Investments Lower result mainly due to Grupa Azoty revaluation offset by the better result in the unit-linked and debt portfolio The higher net investment result after the first 3 quarters of 2016 is above all the effect of incorporating the activity conducted by the banking sector (among others, in
Slide 37: Investments
Investments Better performance of unit-linked products m PLN Net investment result Net investment result 1 on the PZU Group’s portfolio 91.7% 2 597 2 703 1 429 1 410 01-09.2015 01-09.2016 01-09.2015 01-09.2016 Net investment result 2 on investment products* Investment composition as at 09.2016 Inves
Slide 38: Agenda
Agenda 1. The most important drivers of the PZU Group’s financial results for Q3 2016 2. The Group’s strategy for 2016-2020 3. Recap of the PZU Group’s financial results for Q3 2016 4. Operating results for Q3 2016 5. Detailed financials 6. The Group’s preliminary data as at 30 June 2016 according t
Slide 39: Group solvency ratios
Group solvency ratios Solvency II data as at 30 June 2016 bn PLN, unaudited data • Starting from 1 January 2016 the basis for assessing the Group’s capital Solvency I Solvency II adequacy is Solvency II; the Group does not calculate Solvency I requirements. • In H1 2016 own funds according to Solven
Slide 40: Group's own funds
Group’s own funds Solvency II data as at 30 June 2016 bn PLN, unaudited data Comparison of own funds and consolidated equity according to IFRS Own funds according to Solvency II (“SII”) are calculated using the net assets carried in the Group’s economic balance sheet. For the purpose of SII, the dat
Slide 41: The Group's solvency capital requirement
The Group’s solvency capital requirement Solvency II data as at 31 December 2015 and 30 June 2016 bn PLN, unaudited data SII 12.2015 SII 06.2016 The Solvency Capital Requirement (SCR) is calculated using the standard formula and it includes, among others, the following risks: actuarial, market, coun
Slide 42: Investor relations contact
Piotr Wiśniewski – IRO tel.: (+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 41
Slide 43: 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. The PZU Group is not liable for the consequences of decisions made after reading thi
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