Powszechny Zaklad Ubezpieczen Spolka Akcyjna · GPW:PZU
Powszechny Zaklad Ubezpieczen Spolka Akcyjna — PZU Group — Q3 2019 Earnings Presentation
52 slides from Powszechny Zaklad Ubezpieczen Spolka Akcyjna's earnings presentation, Nov 14, 2019
Slide 1: PZU Group's Financial Results in 3Q19
PZU Group’s Financial Results in 3Q19 Warsaw, 14 November 2019
Slide 2: Table of contents
Table of contents 1. PZU Group’s main accomplishments 3 2. Business development 10 3. Financial results 25 4. Group’s strategy execution in 2017 – 2020 32 5. Attachments 35 2
Slide 3: 1. PZU Group's main accomplishments
1. PZU Group’s main accomplishments
Slide 4: Business development: record-breaking sales
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Business development Record – breaking sales - gross written premium over 17 bn PLN in 9M19 • Acceleration of the pace of growth of gross written premium and earned premium in 3Q19 in comparison to the first half o
Slide 5: Financial results: net profit of 2.4 bn PLN in 9M19
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Financial results Net profit (ex minorities) of 2.4 bn PLN in 9M19 • Quarter with the highest net result in 2019 ( 879 m PLN - significant improvement versus the average of 741 m PLN in 1H19) ROE YTD result 2.4 bn
Slide 6: Capital: Solvency II ratio of 222%
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Capital Solvency II ratio of 222% – business safety • Affirmation of S&P’s rating of A- and positive outlook, with a capital Solvency II ratio for European insurers strength rating of AAA • Dividend paid of 2.80 PL
Slide 7: Digital transformation (1)
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Digital transformation (1) Digitalization of processes and better utilization of data Artificial intelligence (AI) in motor claims handling - implementing AI will make it possible to shortern the duration of handli
Slide 8: Digital transformation (2): PZU Ready for Startups
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Digital transformation (2) PZU Ready for Startups - innovation deployment in PZU PZU Ready for Startups - cooperation program with startups to implement innovations in PZU. PZU has an opportunity to implement innov
Slide 9: 2. Business development
2. Business development
Slide 10: Client
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Client 10
Slide 11: Non-life insurance (1): Non-life insurance market in Poland
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Non-life insurance (1): Non-life insurance market in Poland Gross written premium (bn PLN) 12.0 • Growth of the non-motor insurance market by 3.7% y/y in 1H19 10.0 • Rate of growth of premium in motor insurance was
Slide 12: Non-life insurance (2): Motor insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Non-life insurance (2): Motor insurance PZU Group's motor insurance market share 1 (Poland) • Slowdown in the growth rate of gross written premium on the motor UNIQA Others insurance market, including the first det
Slide 13: Non-life insurance (3): Non-motor insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Non-life insurance (3): Non-motor insurance Combined ratio (COR 1) in PZU Group’s non-motor insurance mass segment 96% 84% 84% 82% 81% 80% 82% 80% • Mass segment: 32% 11% 8% 4% 4% 73% 5% 3% – sustaining high profit
Slide 14: Client
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Client 14
Slide 15: Life insurance (1): Life insurance market
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Life insurance (1): Life insurance market Gross written premium, quarterly (bn PLN) • The market periodic premium in life insurance held steady 12 at a stable level y/y of 4.2 bn PLN quarterly, but single premium f
Slide 16: Life (2): Group and individually continued insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Life (2): Group and individually continued insurance Gross written premium (bn PLN) • The expanding health insurance portfolio, including a new 1.73 1.74 1.74 1.71 1.72 1.72 1.71 1.72 1.72 1.72 1.73 rider to contin
Slide 17: Life (3): Individual insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Life (3): Individual insurance Gross written premium (m PLN) 468 408 421 384 404 367 339 341 346 343 • Record-breaking sales of individual protection products 324 318 339 327 274 280 292 312 (141 m PLN). 246 311 21
Slide 18: Employee Capital Schemes
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Employee Capital Schemes By helping our corporate clients set up an Employee Capital Scheme... … we offer: ... and invite their participants to join the PZU ecosystem Full support to handle Specialist exam formalit
Slide 19: Client
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Client 19
Slide 20: Health (1): PZU Zdrowie's next acquisition: Tomma Diagnostyka Obrazowa
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Health (1): PZU Zdrowie’s next acquisition*: Tomma Diagnostyka Obrazowa Nationwide footprint: High level of Expected rapid growth 35 centers operating in profitability: in revenue and 28 cities: the EBITDA margin i
Slide 21: Health (2): Development of business size
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Health (2): Development of business size 1 2 3 4 ~ 2,200 cooperating 49 1,900 physicians ~ 8,000 medical partners hospitals >50 specializations pharmacies ~ 100 proprietary locations Flexible and comprehensive Serv
Slide 22: Health (2): Development of business size
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Health (2): Development of business size Revenues (m PLN) 556 • Growing number of products per client – according to the strategic 404 objectives, in addition to PZU Życie and PZU Zdrowie products, the CAGR 316 pro
Slide 23: Client
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Client 23
Slide 24: Finance: Assets under management and cooperation with banks
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Finance: Assets under management and development of cooperation with banks Assets of third party clients of TFI and OFE PZU clients (bn PLN) • TFI PZU asset growth was driven by the following: – positive balance of
Slide 25: 3. Financial results
3. Financial results
Slide 26: Gross written premium of the PZU Group
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Gross written premium of the PZU Group Insurance segments m PLN, local GAAP 3Q18 2Q19 3Q19 Change y/y Change q/q External gross written premium 5,377 5,938 5,662 5.3% (4.6%) Total non-life insurance – Poland 2,881
Slide 27: PZU Group's net result
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments PZU Group’s net result Net operating profit net of banks is up y/y despite growing price pressure and the higher loss ratio PZU Group’s net result adjusted for the impact exerted by regulatory changes (Bank Guarant
Slide 28: PZU Group's results – contribution of activity to date and banking activity
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments PZU Group’s results – contribution of activity to date and banking activity m PLN 3Q185 2Q19 3Q19 change y/y change q/q PZU GROUP NET OF ALIOR BANK AND PEKAO Gross written premium1 5,377 5,938 5,662 5.3% (4.6%) Net
Slide 29: Investment performance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Investment performance • 2.3 p.p. surplus return on the main portfolio incl. FX above the risk-free rate in change change 3Q19 and year to date MSSF, mln zł 3Q18 2Q19 3Q19 y/y q/q • Stable interest income Net inves
Slide 30: Cost effectiveness
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Cost effectiveness Administrative expense ratio increase in earned • The higher administrative expense ratio in 3Q19 premium decline in costs versus 3Q18 was due to the following: (0.14)p.p. – higher personnel cost
Slide 31: Group's high level of solvency
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Group’s high level of solvency PZU Group’s Solvency II data, 30 June 2019 (bn PLN) • In 2Q19 upswing in own funds of 0.4 bn PLN. Major drivers: – current flow on insurance and investment activity (+1.3 bn PLN) 45 3
Slide 32: 4. Strategy execution
4. Strategy execution
Slide 33: Execution of the key metrics of the strategy for 2017-2020
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Execution of the key metrics of the strategy for 2017-2020 Non-life insurance Life insurance Investments Health Banks PZU Group's market share 2,3 Number of clients in PZU5 Assets under management for Revenues (m P
Slide 34: PZU Group Standard - Green PZU
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments PZU Group Standard - Green PZU • Adoption of “PZU Group Standard - Green PZU” by PZU and PZU ecological plan for 2018-2020: PZU Zycie • curtailing the consumption of utilities • Appointing the Management Board Repr
Slide 35: 5. Attachments
5. Attachments
Slide 36: Profitability by operating segments
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Profitability by operating segments Insurance result / Combined ratio / Insurance segments Gross written premium operating result Margin Change Change m PLN, local GAAP 1-3Q18 1-3Q19 y/y 1-3Q18 1-3Q19 y/y 1-3Q18 1-
Slide 37: Non-life insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Non-life insurance Higher sales of motor insurance in the corporate segment Mass segment Corporate segment 7,702 7,665 2,054 2,000 2,340 2,470 863 810 Gross written 5,362 5,195 1,191 390 1,190 Gross written 773 774
Slide 38: Recap – non-life insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – non-life insurance Mass segment Lower gross written premium y/y as a result of the following: • lower gross written premium in motor insurance (-3.1% y/y) as the outcome of the 5.8% y/y decline in motor TPL
Slide 39: Recap – non-life insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – non-life insurance Corporate segment Lower gross written premium y/y was the outcome of the following: • lower premium in insurance against fire and other damage to property – in the corresponding period of
Slide 40: Life insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Life insurance Maintaining the profitability of group and individually continued insurance, higher margin in individual insurance Group and individually continued insurance Individual insurance 1,007 1,115 536 545
Slide 41: Recap – life insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – life insurance Group and individually continued insurance Drivers of higher gross written premium y/y: • acquiring more health insurance contracts, including a new rider to continued insurance launched unde
Slide 42: Recap – life insurance
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – life insurance Individual insurance segment Higher gross written premium y/y was the result of the following: • constantly rising periodic premium level in protection products, also thanks to implementing n
Slide 43: International business
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments International business Business growth, improved profitability Non-life insurance 1,273 1,422 Life insurance 192 108 143 204 192 87 335 379 55 40 Gross written Gross written premium 603 647 53 premium 47 (m PLN) (m
Slide 44: Recap – international business
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – international business Gross written premium Non-life insurance: • The growth in gross written premium in the Baltic companies was possible chiefly by maintaining the fast rate of growth in motor insurance
Slide 45: Recap – international business
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – international business Insurance results Non-life insurance: • Combined ratio decline as a result of the following: – reducing the loss ratio – slight increase in the Baltic States offset by its decline in
Slide 46: Banking activity
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Banking activity Stable results excluding BFG fees Volumes Profitability and ratios 324 710 Operating profit1 3,220 178 193 2,070 3,133 (m PLN) 2,070 58 64 Loans 24 25 (bn PLN) 739 67 73 440 29 31 09.2018 09.2019 0
Slide 47: Investments
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Investments Quarterly results and portfolio structure Net investment result (m PLN) 458 446 371 390 383 21 178 96 11 46 (3) (119) ( 7) ( 0) ( 27) 3Q18 4Q18 1Q19 2Q19 3Q19 Main Portfolio with FX on issues Investment
Slide 48: Recap – investments
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Recap – investments • The improvement in the main portfolio’s investment result under IFRS while giving consideration to the FX impact versus 3Q18 is principally the effect of better performance delivered by the po
Slide 49: Group's own funds
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Group’s own funds PZU Group’s data under Solvency II / 30 June 2019 (bn PLN) Comparison of own funds and consolidated own funds according to IFRS Own funds accord ing to SII calcu lated using th e net assets carrie
Slide 50: SCR up following the acquisition of Pekao
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments SCR up following the acquisition of Pekao PZU Group’s data under Solvency II / 2Q19 (bn PLN, unaudited data) Basic solvency capital requirement Solvency capital requirement (SCR) Solvency requirement moved up in 2Q
Slide 51: Disclaimer
1. Main accomplishments 2. Business development 3. Results 4. Strategy 5. Attachments Disclaimer This Presentation has been prepared by PZU SA (“PZU”) and is purely informational in nature. Its purpose is to present select ed data concerning the PZU Group (“PZU Group”), including its growth prospect
Slide 52: Thank you
Thank you Contact: Magdalena Komaracka, CFA +48 22 582 22 93 mkomaracka@pzu.pl .pzu.pl/ir Contact: Piotr Wisniewski +48 22 582 26 23 pwisniewski@pzu.pl .pzu.pl/ir