Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — Powszechny Zakład Ubezpieczeń SA (PZU) — H1 2017 Earnings Presentation
37 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, Aug 31, 2017
Slide 1: PZU Group's financial results in H1 2017
Warsaw Vilnius Riga Tallinn Kiev PZU Group’s financial results in H1 2017 Wilno Warsaw, 31 August 2017
Slide 2: PZU Group's position on the changing insurance market
1. PZU Group’s position on the changing insurance market PZU Group’s position 2. Major drivers of the PZU Group’s result on the changing 3. Execution of the Group’s strategy for 2016-2020 insurance market 4. Recap of financial results by segment 5. Detailed financials 6. Group’s data as at 31 March
Slide 3: Non-life insurance market in Poland
Non-life insurance market in Poland Gross written premium (m PLN) 7.5% 9 835 27.2% 7 729 7 046 6 953 7 037 7 191 3 748 6 377 6.9% 3 508 3 313 3 449 3 681 3 814 2 960 6 087 44.2% 3 733 4 221 3 418 3 504 3 356 3 377 03.2011 03.2012 03.2013 03.2014 03.2015 03.2016 03.2017 motor non-motor Market shares*
Slide 4: Life insurance market in Poland
Life insurance market in Poland Gross periodic premium (m PLN) 0.7% 1.5% 2.5% 1.1% 4 107 4 226 4 083 4 126 3 970 3 991 3 774 (0.4)% 2 352 2 420 2 253 2 244 2 291 2 247 2 148 2.8% 1 626 1 679 1 744 1 755 1 806 1 830 1 881 03.2011 03.2012 03.2013 03.2014 03.2015 03.2016 03.2017 PZU Życie Other life in
Slide 5: Major drivers of the PZU Group's result
1. PZU Group’s position on the changing insurance market Major drivers of the 2. Major drivers of the PZU Group’s result PZU Group’s result 3. Execution of the Group’s strategy for 2016-2020 4. Recap of financial results by segment 5. Detailed financials 6. Group’s data as at 31 March 2017 under Sol
Slide 6: The most important events and drivers of the results in H1 2017
The most important events and drivers of the results in H1 2017 PZU is the largest capital group in Poland, changing the structure of the Group with the start of consolidation of Pekao Group results Success of subordinated bond issue – the largest corporate issue in the Catalyst history PZU Group re
Slide 7: PZU is the largest financial Group in Poland after acquisition of Pekao
PZU is the largest financial Group in Poland after acquisition of Pekao PZU Group after finalization of the deal to acquire shares of Pekao is the largest financial Group on the polish market in terms of value of assets and net profit. Data for 2016 Assets Net profit(a) in PLN billion 1 64.5 174.2 6
Slide 8: Success of bond issue
Success of bond issue Impact of the bond issue on the Group’s own funds bn PLN, unaudited data Pro forma Solvency II data as at 30 June 2017 Transaction highlights: 250% 277% ~200% ~225% One of the largest corporate issues in the Catalyst history in terms of value; 21.0 22.5 2.25 22.3 20.1 First
Slide 9: Stable profitability in other non-life insurance
Stable profitability in other non-life insurance Combined ratio (COR) in non-motor insurance Combined ratio (COR) in non-motor insurance – mass segment – corporate segment Including winter survival 86.1% 84.1% of crops effect 105.0% 76.6% 75.0% 75.2% 69.1% 76.0% 70.7% 67.1% 68.5% 60.7% 64.6% 54.7% 0
Slide 10: Enhanced performance in motor insurance coupled with a rising market share
Enhanced performance in motor insurance coupled with a rising market share PZU Group's motor insurance market share * (Poland) • As the price war lasting from 2005 to 2010 ended (after the flood of 2010), the overall motor insurance sector’s results in Poland started to improve. Shortly thereafter,
Slide 11: Higher profitability of group insurance and individually continued insurance in Q2
Higher profitability of group insurance and individually continued insurance in Q2 Gross written premium (m PLN) 1.8% ● Limit the pressure on the premium growth rate making it possible 1.2% to control the loss ratio. 2.2% 1.6% 2.1% 3 338 3 390 3 429 3 199 3 266 ● Rising share of health insurance pre
Slide 12: Profitability of the group and individually continued insurance segment versus loss ratio
Profitability of the group and individually continued insurance segment versus the loss ratio in protection products 78% 0.32% • Mortality’s quarterly seasonality in Poland 76% (upswing in winter months and downturn in 74% 0.30% summer months) and its overall upward trend (aging of the general publi
Slide 13: Further improvement in cost efficiency
Further improvement in cost efficiency Administrative expense ratio in the insurance business • The declining administrative expense ratio in Poland was driven mainly by maintaining cost discipline coupled with the rapidly growing magnitude of business. • The impact exerted by the change in fee sett
Slide 14: Better result on equity instruments
Better result on equity instruments m PLN 1 519 (54) 2 606 (289) 309 776 1 087 345 Other FX on own debt Banking activity Interest-bearing Net investment result Net investment result Net investment result Equity instruments and interest expense and interest expense and interest expense financial asse
Slide 15: Twofold increase of the net result
Twofold increase of the net result PZU Group’s net profit (m PLN) Net profit – parent company (m PLN) 119.4% 119.1% 1 733 1 446 790 660 06.2016 06.2017 06.2016 06.2017 PZU Group’s gross written premium (m PLN) Return on equity (ROE) (%) * 17.7% 11.4 p.p. 11 606 22.1% 9 862 10.7% 06.2016 06.2017 06.2
Slide 16: Execution of the Group's strategy for 2016-2020
1. PZU Group’s position on the changing insurance market Execution of the Group’s 2. Major drivers of the PZU Group’s result strategy for 3. Execution of the Group’s strategy for 2016-2020 2016-2020 4. Recap of financial results by segment 5. Detailed financials 6. Group’s data as at 31 March 2017 u
Slide 17: KPIs of the Strategy for 2016-2020
KPIs of the Strategy for 2016-2020 ROE1 06.2017 2020 22.1% 18% LIFE NON-LIFE INSURANCE INVESTMENTS HEALTH BANKING INSURANCE Number of clients Assets under management PZU Group's Assets (bn PLN) for third party clients (bn Revenues (m PLN)6 BUSINESS market share2 PZU Życie (m) SIZE PLN) 03.2017 2020
Slide 18: Recap of financial results by segment
Recap of financial results 1. PZU Group’s position on the changing insurance market 2. Major drivers of the PZU Group’s result by segment 3. Execution of the Group’s strategy for 2016-2020 4. Recap of financial results by segment 5. Detailed financials 6. Group’s data as at 31 March 2016 under Solve
Slide 19: Operating results in H1 2017
Operating results in H1 2017 ● Higher profitability due to the following: Non-life - considerably lower level of claims and benefits y/y in the agricultural insurance portfolio - in the corresponding insurance period of 2016 there were many mass losses (adverse effects of ground frost); - enhanced p
Slide 20: 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) 5 218 Incl. 21.2% 477 4 305 Incl. 274 34.1% 3 588 2 745 1 381 1 030 Incl. Incl. Incl. Incl. 1 25 37 2 766 557 Incl. Incl. 1 560 1 630 473 615 273 67 06.2016 0
Slide 21: Recap – non-life insurance
Recap – non-life insurance Mass segment Corporate segment Higher gross written premium y/y as the outcome of the following: Higher gross written premium y/y as the outcome of the following: • rising motor insurance sales (+30.7% y/y) as an effect of the higher • upswing in motor insurance sales offe
Slide 22: Life insurance
Life insurance Increase of profitability in Q2 on rising sales Group and continued insurance segment Individual insurance segment Gross written premium (m PLN) Gross written premium (m PLN) 1.2% 47.2% 792 538 297 3,390 3,429 263 495 275 06.2016 06.2017 06.2016 06.2017 Single premium Periodic premium
Slide 23: Recap – life insurance
Recap – life insurance Group and continued insurance segment Individual insurance segment Drivers of higher gross written premium: Gross written premium’s upward movement resulted from the • acquisition of premium in group health insurance products; PZU now has following: 1.4 million active agreemen
Slide 24: International business
International business Higher sales in non-life insurance Non-life insurance Life insurance Gross written premium (m PLN) Gross written premium (m PLN) 14.0% 14.6% 650 741 111 Estonia 100 47 188 Latvia 41 170 28 Lithuania Lithuania 24 291 346 (LD) 89 96 Ukraine 17 19 Ukraine 06.2016 06.2017 06.2016
Slide 25: Recap – international business
Recap – international business Gross written premium Insurance results Non-life insurance Non-life insurance • Gross written premium growth in the Baltic companies precipitated • Combined ratio decline as a result of the following: chiefly by the introduction of higher rates for motor insurance in t
Slide 26: Investments
Investments Better results on equity instruments m PLN Net investment result* June 2017 Investment portfolio composition** 215.1% Total: 5.8% 9.1% 45.5 bn PLN 1 087 including 6.3% Investment products 345 5.1% 6.1 bn PLN 01-06.2016 01-06.2017 13.0% 60.7% The net investment result in H1 2017 (after co
Slide 27: Banking activity
Banking activity Positive growth rate in credit receivables Portfolio composition Bank segment Loan portfolio by segment (m PLN) Operating profit (m PLN) and the Cost/Income ratio* 157 290 249.3% 50 276 47.7% 46.7% Pekao 45 029 59 574 123.5% 485 5.4% 227 Pekao 19 720 21 026 18.9% Alior Bank 258 Alio
Slide 28: Detailed financials
1. PZU Group’s position on the changing insurance market Detailed financials 2. Major drivers of the PZU Group’s result 3. Execution of the Group’s strategy for 2016-2020 4. Recap of financial results by segment 5. Detailed financials 6. Group figures as at 31 March 2017 under Solvency II
Slide 29: Key financial highlights
Key financial highlights Change Q2 m PLN, IFRS H1 2016 H1 2017 Change YoY Q2 2016 Q2 2017 2017 over Q2 2016 Profit and Loss Statement Gross Written Premium 9 862 11 606 17.7% 5 061 5 838 15.4% Premium Earned 8 986 10 347 15.1% 4 669 5 275 13.0% Net investment Result 1 405 3 032 115.8% 451 1 373 204.
Slide 30: Normalized operating profit
Normalized operating profit Operating profit YTD, m PLN Change 1 Impact exerted by conversion of long-term m PLN, IFRS 06.2016 06.2017 yoy policies into yearly renewable term agreements in type P group insurance. Operating Profit 1 050 2 199 109.4% 2 Above average claims in agricultural insurance in
Slide 31: Profitability by operating activity segment
Profitability by operating activity segment Combined Ratio / Insurance Business Segments Gross Written Premium Insurance Result/ Operating Profit Operating profit ratio* m PLN, local GAAP 1H 2016 1H 2017 Change YoY 1H 2016 1H 2017 Change YoY 1H 2016 1H 2017 Total Non-Life - Poland 5 335 6 599 23.7%
Slide 32: Group figures as at 31 March 2017 under Solvency II
1. PZU Group’s position on the changing insurance market Group figures as at 31 2. Major drivers of the PZU Group’s result March 2017 3. Execution of the Group’s strategy for 2016-2020 under Solvency II 4. Recap of financial results by segment 5. Detailed financials 6. Group figures as at 31 March 2
Slide 33: Group solvency ratios
Group solvency ratios Group preliminary Solvency II data as at 31 March 2017 bn PLN, unaudited Group data Solvency II (Group data) 276% 266% 256% 253% 250% 277% • Solvency II own funds rose by PLN 1.5 bn, i.e. 7% during Q1. • The main driver of the growth of own funds in Q1 was high operating and in
Slide 34: Group's own funds
Group’s own funds Preliminary Solvency II data as at 31 March 2017 bn PLN, unaudited data Comparison of own funds and consolidated equity according to IFRS Own funds according to Solvency II are calculated using the net assets +2.0 -2.2 carried in the Group’s economic balance sheet. For the purpose
Slide 35: The Group's solvency capital requirement
The Group’s solvency capital requirement Preliminary Solvency II data as at the end of 2016 and Q1 2017 bn PLN, unaudited data SII 12.2016 SII 03.2017 The Solvency Capital Requirement (SCR) is calculated using the standard 0.7 diversification effect diversification effect formula and it includes, am
Slide 36: Piotr Wiśniewski – IRO
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 35
Slide 37: 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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