Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Non-Deal Roadshow (October 2008)
53 slides from Vienna Insurance's roadshow presentation, October 2008
Slide 1: VIG – A Top Insurance Player in CEE
VIG – A Top Insurance Player in CEE London/Edinburgh Roadshow – October 2008
Slide 2: Contents
Contents A 2 A Investment proposition B Growth potential in CEE and Austria C Value creation D Progressing on the path of growth E 6M 2008 results - highlights F Appendix
Slide 3: Investment Proposition at a Glance
Investment Proposition at a Glance VIG set two strategic milestones A 3 Footprint Milestone 1 § VIG - Pioneer in CEE; start of expansion in 1990 - “Big fish in a small pond” - Going east immediately after the fall of the iron curtain due to potential of emerging markets and proximity § VIG - Progres
Slide 4: Contents
Contents B 4 A Investment proposition B Growth potential in CEE and Austria C Value creation D Progressing on the path of growth E 6M 2008 results - highlights F Appendix
Slide 5: Macro Environment in CEE Countries
Macro Environment in CEE Countries CEE growth to outperform EU-15 levels B 5 GDP Growth Comparison1 Comments 12.00% § CEE region still appears to be resilient to economic downturn 10.00% SK - Prospects for investments RO remain positive thanks to 8.00% robust business activity and a number of infras
Slide 6: CEE Region Offers Multiple Growth
CEE Region Offers Multiple Growth Insurance density and product demand correlate with GDP growth B 6 4,000 EU-15 Mature Markets Insurance Density (USD) RUS BG A 2,000 UKR RO CRO H SK SLO PL SER TR CZ Insurance demand also strongly driven by catch-up process Growth Markets 0 Emerging Markets 0 10,000
Slide 7: Catch-Up Potential in CEE
Catch-Up Potential in CEE Potential both in Non-life and Life B 7 Insurance Density 2007 Proportion of NL & L in CEE Markets $4,000 3,668 Life Non-life $3,500 $3,000 Non-life 58% 53% 54% NL 73% 65% 61% 83% 79% 2,621 80% L Life 61% 58% 54% $2,500 80% 73% 83% $2,000 17% 21% 20% 27% 35% 39% 42% 47% 46%
Slide 8: Acquisition of s Versicherung
Acquisition of s Versicherung A deal to reap CEE life growth potential B 8 Long-Term Preferred Bancassurance Agreement Acquisition of Erste Bank’s Insurance Operations § Long-term agreement: 15 years plus renewal for 10 Erste Bank Strengths years § VIG successfully diversifies its distribution § Lar
Slide 9: VIG Management Approach
VIG Management Approach Success in CEE is based on three cornerstones B 9 Steering Approach Multi-Brand Multi-Channel § Each board member of VIG parent has direct responsibility for CEE countries Tied agents § VIG board members closely Brokers Banks Other involved in management of subsidiaries to bu
Slide 10: Contents
Contents C 10 A Investment proposition B Growth potential in CEE and Austria C Value creation D Progressing on the path of growth E 6M 2008 results - highlights F Appendix
Slide 11: Group Wide Initiatives
Group Wide Initiatives Measures to enhance future performance C 11 Business growth and shared services concept within each country + Rollout of Group IT + Business growth Group reinsurance company + Efficiency + Group underwriting platform for corporate clients + New management structure
Slide 12: Value Drivers in CEE
Value Drivers in CEE Business growth, cost ratio and investment income C 12 Local entrepreneurship and market know how + Expansion of distribution channels + Cross selling potential + Diversification of business mix Value Creation Decrease in Cost Ratio Investment Income from Reserves - Long-term bu
Slide 13: VIG – Exploiting the Potential
VIG – Exploiting the Potential Building on market shares – tremendous expansion C 13 Development of Market Shares Development of Premium Volume (€mn) Poland YE 05 YE 07 6M 08 Poland YE 05 YE 07 6M 08 Total Total 74,1 543.1 339.9 3.2% 5.1% 5.0% Market TU PZM 1.4 7.4 20.2 Romania YE 05 YE 07 6M 08 Rom
Slide 14: Measures to Enhance Performance (I)
Measures to Enhance Performance (I) Long-term process to enhance operational efficiency C 14 IT Restructuring in VIG VIG IT Strategy 2008 § Fast expansion of VIG resulted in higher Group IT complexity: - 23 countries, 20 currencies, 21 languages - 45 companies with individual organisation § One inte
Slide 15: Measures to Enhance Performance (II)
Measures to Enhance Performance (II) Set-up of a CEE reinsurance company C 15 VIG Re – 3 Year Business Plan Key Considerations Premiums ceded to external re-insurers § Levering longstanding market knowledge and strong CEE footprint – incorporated in Czech Republic § Pooling of VIG reinsurance volume
Slide 16: Measures to Enhance Performance (III)
Measures to Enhance Performance (III) VIU – Group platform for multinational corporates C 16 Vienna International Underwriters Features § Increasing demand for insurance solutions for large corporate clients in CEE § Target group are top 250 corporate clients in CEE countries § Focus on property ins
Slide 17: Measures to Enhance Performance (IV)
Measures to Enhance Performance (IV) New management structure C 17 Management Structure of VIG Comments § Today VIG is operating in 23 countries with more than 50 companies and about 21,000 employees Managing Board § Vigorous growth over the past few years requires an amended, future- oriented form
Slide 18: Contents
Contents D 18 A Investment proposition B Growth potential in CEE and Austria C Value creation D Progressing on the path of growth E 6M 2008 results - highlights F Appendix
Slide 19: Strengthening No.1 Position in CEE
Strengthening No.1 Position in CEE Taking on leadership in life insurance D 19 Total Market Share in CEE1 Market Share in CEE1 Life 13.3% 9.6% 8.8% 8.8% 10.4% 10.1% 7.3% 5.6% 5.0% 4.6% 5.1% 5.0% 4.5% 3.3% 4.0% 3.1% 2.5% 2.1% 1.8% 1.2% KBC VIG ING AIG KBC ING VIG AIG Aviva Uniqa Aegon Allianz Groupam
Slide 20: VIG Growth Strategy Delivers
VIG Growth Strategy Delivers Growth materialises in strong increase in profitability D 20 VIG's Path of Profitability VIG’s Financial Outlook 8,000 450 Profit before tax target in €mn GWP 7,000 400 ~540 PBT 350 6,000 437 300 GWP in €mn 5,000 PBT in €mn 250 4,000 288 200 3,000 150 2,000 100 1,000 50
Slide 21: VIG - Progressing on the Path of Growth
VIG - Progressing on the Path of Growth VIG outperformed own commitments D 21 Undertakings Proof § Expansion of its position in Austria § Increased market share in Austria by more than 3% pts – VIG no. 1 § Expansion of CEE business through § CEE premium volume doubled acquisitions and organic growth
Slide 22: Contents
Contents E 22 A Investment proposition B Growth potential in CEE and Austria C Value creation D Progressing on the path of growth E 6M 2008 results - highlights F Appendix
Slide 23: 6M 2008 Highlights (I)
6M 2008 Highlights (I) Guidance for 2008 unchanged E 23 § Excellent top-line growth, in particular in CEE (also net of acquisitions) § For the first time ever, in Q2 share of CEE business more than 50 % of total premiums § Combined ratio (net) stable at 95.9% § Profit before tax growing at faster pa
Slide 24: 6M 2008 Highlights (II)
6M 2008 Highlights (II) VIG defying market trends E 24 GWP Profit before Tax 6,912 5,882 20.7% 437 5,008 33.9% 4,215 321 288 3,493 240 3,029 215 143 2005 2006 2007 6M 06 6M 07 6M 08 2005 2006 2007 6M 06 6M 07 6M 08 IFRS IFRS Net Profit after Tax and Minorities Combined Ratio (net) 313 29.3% 97.9 261
Slide 25: 6M 2008 Highlights (III)
6M 2008 Highlights (III) E 25 EPS* ROE before Tax (%)* 3.72 2.98 3.06 21.9 2.48 18.0 2.27 2.17 16.9 17.0 14.8 13.2 2005 2006 2007 6M 06 6M 07 6M 08 2005 2006 2007 6M 06 6M 07 6M 08 * diluted, annualised IFRS * diluted, annualised IFRS
Slide 26: 6M 2008 Investment Split
6M 2008 Investment Split Prudent investment policy paying off E 26 Investment Policy Portfolio Overview Alternative Inv. Affiliated § VIG follows a conservative Companies ~ 1% investment policy throughout Loans ~ 5% ~ 6% market cycles § VIG has no US-subprime investments Real Estate Bonds § VIG has
Slide 27: Appendix
Appendix F 27 A Investment proposition B Growth potential in CEE and Austria C Value creation D Progressing on the path of growth E 6M 2008 results - highlights F Appendix
Slide 28: 6M 2008 Income Statement
6M 2008 Income Statement IFRS (€mn) F 28 6M 2008 6M 2007 +/-% 1. Gross written premiums 4,215.1 3,493.1 20.7 2. Net earned premiums 3,471.3 2,829.1 22.7 3. Net investment income 618.7 553.2 11.8 4. Other income 30.7 20.7 48.5 Total income 4,120.7 3,403.0 21.1 6. Expenses for claims incurred -2,912.4
Slide 29: 6M 2008 Balance Sheet
6M 2008 Balance Sheet IFRS (€mn) F 29 6M 2008 YE 2007 +/- % Intangible assets 848 525 61.7 Total investments 18,625 20,171 -7.7 Unit- and index-linked investments 2,214 3,066 -27.8 Reinsurers’ share in technical provisions 1,088 1,187 -8.3 Receivables 1,976 1,200 64.6 Deferred tax assets 83 34 144.4
Slide 30: 6M 2008 P&L Major Items – Gross Written Premiums
6M 2008 P&L Major Items – Gross Written Premiums Premium growth stronger than in Q1 (€mn) F 30 § Group GWP gained 20.7% to € 4,215mn (+ 15.4% net of acquisitions) § Austria: total GWP up 8.3% to reach € 2,120mn. Life up 13.3% at 112.7 € 1,014mn (strong single premiums); P&C up 4.5% at 126.8 € 947.7m
Slide 31: Geographical Diversification Enhanced
Geographical Diversification Enhanced GWP split by region F 31 GWP by Geography 6M 06 GWP by Geography 6M 07 GWP by Geography 6M 08 Other CEE Other Other CEE Other 3.9% Other Romania 3.1% 4.2% 3.6% Other CEE 2.6% Romania 5.7% 3.5% 5.5% Poland Romania 4.2% Poland 8.6% Austria Austria Austria Slovakia
Slide 32: 6M 2008 P&L Major Items – Expenses for Claims Incurred
6M 2008 P&L Major Items – Expenses for Claims Incurred Loss ratio improving despite one-off effects in RO, SK F 32 § Group loss ratio (net) at 63.4% (down from § Poland improving by 8.6% pts to 54.2% due to 64.7% in 6M 2007 ) effective claims and risk management and benign motor pricing § Austrian l
Slide 33: 6M 2008 P&L Major Items – Operating Expenses
6M 2008 P&L Major Items – Operating Expenses Cost ratio slightly up due to acquisition expenses F 33 § Group cost ratio (net) increasing by 1.2% to § Poland showing higher cost ratio at 42.1% reach 32.5% influenced by acquisition costs resulting from fast business growth and Religa tax issue § Impac
Slide 34: 6M 2008 P&L Major Items – Net Investment Income
6M 2008 P&L Major Items – Net Investment Income One-off gains balanced by market downturn (€mn) F 34 Net Investment Income § Increase in Group Net Investment Income by 8.1 11.8% to € 618.7mn influenced mainly by 11.1 122.5 63.3 - one-off gains from sale of BACAV and UNITA Other CEE - adverse market
Slide 35: 6M 2008 P&L – Business Segments (P&C)
6M 2008 P&L – Business Segments Property & Casualty, IFRS (€mn) F 35 6M 2008 6M 2007 +/-% 1. Gross written premiums 2,403.8 1,976.2 21.6 2. Net earned premiums 1,690.1 1,331.9 26.9 3. Net investment income 154.2 93.3 65.3 4. Other income 19.2 11.9 60.9 Total income 1,863.5 1,437.2 29.7 6. Expenses f
Slide 36: 6M 2008 P&L – Business Segments (Life)
6M 2008 P&L – Business Segments Life, IFRS (€mn) F 36 6M 2008 6M 2007 +/-% 1. Gross written premiums 1,653.1 1,362.0 21.4 2. Net earned premiums 1,625.5 1,344.3 20.9 3. Net investment income 458.3 445.8 2.8 4. Other income 11.5 8.7 31.5 Total income 2,095.2 1,798.8 16.5 6. Life benefits -1,701.0 -1,
Slide 37: 6M 2008 P&L – Business Segments (Health)
6M 2008 P&L – Business Segments Health, IFRS (€mn) F 37 6M 2008 6M 2007 +/-% 1. Gross written premiums 158.2 155.0 2.1 2. Net earned premiums 155.7 152.9 1.8 3. Net investment income 6.2 14.1 -56.0 4. Other income 0.0 0.0 0.0 Total income 161.9 166.9 -3.0 6. Expenses for claims incurred -139.1 -135.
Slide 38: 6M 2008 P&L - Split by Regions (I)
6M 2008 P&L - Split by Regions (I) Regional segments, IFRS (€mn) F 38 Austria Czech Republic 6M 2008 6M 2007 +/-% 6M 2008 6M 2007 +/-% 1. Gross written premiums 2,120.4 1,957.7 8.3 691.0 577.1 19.7 2. Net earned premiums 1,757.8 1,611.2 9.1 542.0 445.8 21.6 3. Net investment income 488.1 478.7 2.0 2
Slide 39: 6M 2008 P&L - Split by Regions (II)
6M 2008 P&L - Split by Regions (II) Regional segments, IFRS (€mn) F 39 Slovakia Poland Romania 6M 2008 6M 2007 +/-% 6M 2008 6M 2007 +/-% 6M 2008 6M 2007 +/-% 1. Gross written premiums 297.5 243.8 22.1 393.9 247.6 59.1 360.5 192.3 87.5 2. Net earned premiums 245.7 189.9 29.4 361.4 216.3 67.1 289.6 13
Slide 40: 6M 2008 P&L - Split by Regions (III)
6M 2008 P&L - Split by Regions (III) Regional segments, IFRS (€mn) F 40 Other CEE Other TOTAL 6M 2008 6M 2007 +/-% 6M 2008 6M 2007 +/-% 6M 2008 6M 2007 +/-% 1. Gross written premiums 239.2 147.8 61.8 112.7 126.8 -11.1 4,215.1 3,493.1 20.7 2. Net earned premiums 178.5 114.3 56.2 96.4 112.0 -13.9 3,47
Slide 41: 6M 2008 Results by Country
6M 2008 Results by Country IFRS (€mn) F 41 Non-Life Life Total Profit before Tax Combined Ratio 6M 2008 6M 2007 6M 2008 6M 2007 6M 2008 6M 2007 6M 2008 6M 2007 6M 2008 6M 2007 Austria 1,105.9 1,062.0 1,014.4 895.7 2,120.4 1,957.7 154.5 138.5 92.4% 94.3% Czech Rep. 520.5 442.3 170.5 134.8 691.0 577.1
Slide 42: Change in Group Shareholders' Equity
Change in Group Shareholders‘ Equity IFRS F 42 1.1. - 30.06.2008 1.1. - 30.06.2007 Equity as of 1 January 2,615,563 2,283,208 Currency Changes 55,336 -1,957 Changes to consolidation 39,270 39,396 Capital Increase 1,343,078 - Unrealised Gains and Losses on financial -76,857 -69,667 instruments availa
Slide 43: Life Insurance Premium Split
Life Insurance Premium Split IFRS (€mn) F 43 Premiums written - direct business 6M 2008 6M 2007 +/- % Regular premiums 926.9 880.5 5.3% Single premiums 723.7 480.3 50.7% Total premiums written - direct business 1,650.6 1,360.8 21.3% thereof: Policies with profit participation 936.9 783.4 19.6% Polic
Slide 44: Q2 2008 Income Statement
Q2 2008 Income Statement IFRS (€mn) F 44 Q2 2008 Q2 2007 +/-% 1. Gross written premiums 1,903.9 1,474.8 29.1 2. Net earned premiums 1,734.5 1,364.8 27.1 3. Net investment income 443.1 347.9 27.4 4. Other income 13.2 11.8 12.1 Total income 2,190.8 1,724.4 27.0 6. Expenses for claims incurred -1,553.2
Slide 45: Embedded Value (I)
Embedded Value (I) Group Embedded Value - Dec 31, 2007 F 45 in €mn Life & Health Property & Casualty Total Austria/Germany ANAV 735,4 617,5 1.352,9 VIF 1.384,5 n/a 1.384,5 - FOG -31,6 n/a -31,6 - CoCNMR -75,7 n/a -75,7 2.012,6 617,5 2.630,1 CEE ANAV 148,2 1.374,2 1.522,4 VIF 429,1 n/a 429,1 - FOG -1
Slide 46: Embedded Value (II)
Embedded Value (II) Group Embedded Value - Dec 31, 2007 F 46 2007 2006 30% 20% 44% A/G L&H A/G P&C 10% CEE L&H 50% CEE P&C 12% 20% 14% GEV = € 4,551.0mn GEV = € 4,258.8mn1 1 restated
Slide 47: Embedded Value (III)
Embedded Value (III) New Business Values F 47 in €mn Life & Health 2007 2006 + / - % Austria / Germany NBV 63,1 50,9 + 24,0% APE 205,1 225,1 APE-Ratio 30,7% 22,6% PVNBP 1.906,3 1.982,6 PVNBP-Ratio 3,3% 2,6% CEE NBV 45,0 30,7 + 46,6% APE 71,0 45,4 APE-Ratio 63,3% 67,5% PVNBP 409,7 262,4 PVNBP-Ratio 1
Slide 48: 6M 2008 Exchange Rates
6M 2008 Exchange Rates National currency unit per EUR F 48 6M 2008 6M 2007 Balance Sheet Balance Sheet Country Curr. P & L EUR P & L EUR EUR EUR Bulgaria EUR/BGN 1.9558 1.9558 1.9558 1.9558 Croatia EUR/HRK 7.2365 7.2556 7.3035 7.3576 Liechtenstein EUR/CHF 1.6056 1.6114 1.6553 1.6318 Poland EUR/PLN 3
Slide 49: VIG Has Excellent CEE Market Position
VIG Has Excellent CEE Market Position VIG an early mover in CEE F 49 Overview of Core Markets Details Slovakia Romania Czech Rep. Bulgaria § leading market position in nearly all core markets Pop.: 5.4 mn Pop.: 21.4 mn Pop.: 10.2 mn Pop.: 7.6 mn § strong market positions GDP/Cap.: $ 14 k GDP/Cap.: $
Slide 50: Shareholder Structure (I)
Shareholder Structure (I) Total number of shares 128,000,000 F 50 Shareholder Structure ~71 % Wiener Städtische Wechselseitige Versicherungsanstalt- Vermögensverwaltung ~ 29 % Free Float
Slide 51: Shareholder Structure (II)
Shareholder Structure (II) Total number of shares 128,000,000 F 51 Free Float Geographical Split ~21 % Austria ~20% ~14% North America Others ~32% ~13% Continental Europe UK & Ireland
Slide 52: Contact Details
Contact Details Investor Relations F 52 Wiener Städtische Versicherung AG Vienna Insurance Group Schottenring 30, 1010 Vienna, Austria www.viennainsurancegroup.com Stock exchange listing: VIENNA / PRAGUE Ticker symbol: VIG / VIG Reuters: VIGR.VI / VIGR.PR Bloomberg: VIG AV / VIG CP § Thomas Schmee T
Slide 53: Disclaimer
Disclaimer F 53 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 sha
Vienna Insurance Group — Non-Deal Roadshow (October 2008) on 6ix