Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — 9M 2017 Earnings Presentation
54 slides from Vienna Insurance's earnings presentation, Dec 7, 2017
Slide 1: Vienna Insurance Group Investor Presentation
Vienna Insurance Group Investor Presentation Results for the first three quarters 2017 Results 9M 2017 Agenda 2020 Segments Appendix
Slide 2: Results 9M 2017
Results 9M 2017 Agenda 2020 Segments Appendix Note: Rounding differences may occur when rounded amounts or percentages are added up. Results 9M 2017 Agenda 2020 Segments Appendix
Slide 3: Overview of the 9M 2017 results
Overview of the 9M 2017 results Another quarter with solid developments €7,153mn GWP up 2.7% y-o-y Growth in overall current premium business: +5.6% GWP CEE premium growth: +8.7%; more than 50% of premiums deriving from CEE PBT increased by 9.9% y-o-y €331.2mn PBT in CEE up 12.4% y-o-y; more than 60
Slide 4: Overall premium growth of 2.7%
Overall premium growth of 2.7% Overview of premiums by segments (I) Gross written premiums (€mn; y-o-y change) 9M16 9M17 -3.1% 3,107.4 3,009.6 +4.3% +7.5% +9.5% 1,156.7 1,206.5 -4.7% 547.9 589.2 616.5 675.2 391.8 373.4 Austria Czech Republic Slovakia Poland Romania Austria: premium decrease driven b
Slide 5: Positive CEE premium development
Positive CEE premium development Overview of premiums by segments (II) 9M16 9M17 Gross written premiums (€mn; y-o-y change) +9.4% -15.2% +129.4% 263.1 269.4 239.7 +6.1% 240.4 -3.7% 228.5 +10.9% 162.0 171.8 160.7 154.7 119.6 104.5 107.8 The Baltic Hungary Bulgaria Turkey/ Remaining CEE Other Georgia
Slide 6: Solid premium development with ongoing life single premium reduction
Solid premium development with ongoing life single premium reduction Gross written premiums (€mn; y-o-y change) MTPL Casco Other property Total premiums +3.7% +12.5% +5.5% +2.7% 1,002 1,039 811 2,957 3,119 7,153 721 6,962 1,039 MTPL 1,002 Casco 721 811 9M16 9M17 9M16 9M17 9M16 9M17 Other Property 2,
Slide 7: Group PBT of €331.2mn up by 9.9% y-o-y
Group PBT of € 331.2mn up by 9.9% y-o-y Overview of profits by segments (I) Profit before taxes (€mn; y-o-y change) 9M16 9M17 -0.4% +2.2% 114.1 113.7 103.4 105.7 +0.7% +79.0% 39.6 39.9 +39.0% 31.0 17.3 6.4 8.9 Austria Czech Republic Slovakia Poland Romania Austria: better technical result in P&C mor
Slide 8: Double-digit profit growth in CEE
Double-digit profit growth in CEE Overview of profits by segments (II) Profit before taxes (€mn; y-o-y change) 9M16 9M17 +21.8% +6.2% 20.3 16.7 +7.5% +0.3% 11.6 12.4 +24.9% 5.7 6.9 6.9 5.3 2.8 3.5 n.a. -1.2 -7.8 The Baltic* Hungary Bulgaria Turkey/ Remaining CEE Other Georgia markets The Baltic: sig
Slide 9: Combined ratio (P&C) at 97.3%
Combined ratio (P&C) at 97.3% Mixed picture for CoR developments P&C Combined ratio development P&C CoR 9M y-o-y regional development (net, %) 99.3 AT -2.3%p 97.9 97.3 96.9 96.9 97.3 97.0 92.9 30.5 30.4 31.9 31.3 30.5 CZ +3.9%p 96.8 95.3 SK +0.6%p 95.8 67.4 66.9 64.9 65.6 66.8 100.7 PL -6.0%p 94.7 1
Slide 10: Solvency ratio of 225% at 9M 2017
Solvency ratio of 225% at 9M 2017 Solvency ratio calculated at the level of stock-listed VIG 225% 195% 9M 2017 YE 2016 in EUR mn 6,636 7,821 3,411 3,479 Solvency II SCR Solvency II SCR Own funds Own funds Calculation based on Partial Internal Model (PIM), including volatility adjustment Results 9M 2
Slide 11: Solvency ratio target range for stock-listed VIG
Solvency ratio target range for stock-listed VIG Management targets a range between 170% and 230% Solvency ratio • Increase growth efforts, higher investments, >230% >230% re-risking, etc. 230% Target range • Comfort zone 170% Solvency ratio • Active mid- and long-term risk management <170% measures
Slide 12: Profitable growth remains key focus of VIG
Profitable growth remains key focus of VIG Executive summary Implementation and roll-out of Agenda 2020 projects Focus on optimisation of business model, digitisation and growth in health and SME business Project with bank insurance partner Erste Group ongoing; decision on mergers in Austria, Hungar
Slide 13: Agenda 2020
Results 9M 2017 Agenda 2020 Segments Appendix Note: Rounding differences may occur when rounded amounts or percentages are added up. Results 9M 2017 Agenda 2020 Segments Appendix
Slide 14: Agenda 2020: Key strategic areas
Agenda 2020: Key strategic areas Directions of impact Optimisation of business model Ensuring future viability • Shared Services • Use of growth potentials Creating cost benefits by merging back-office Intensify selected business areas e.g. health functions and companies insurance, reinsurance, co
Slide 15: Further enhance cooperation with Erste Group
Further enhance cooperation with Erste Group Agenda 2020 Optimisation of business model Strengthening bank insurance with Erste Group Shared Services • Common project with Erste Group Profit optimisation in motor Target: optimisation of products, distribution and profits for both with focus on healt
Slide 16: New product development to target SME growth potential
New product development to target SME growth potential Agenda 2020 GWP generated from SMEs Cyber Protect – new product in AT (in €mn) Ensuring future • Data security, the protection of IT viability systems and cyber crime are important CAGR topics today Use of growth +5.1% • Wiener Städtische develo
Slide 17: Poland started Genesis digitisation project
Poland started “Genesis” digitisation project Agenda 2020 Ensuring future Compensa & VIG invest up to EUR 25mn in innovative technologies viability • Goals: - Test new ideas and innovations - Use the results of the project for other Group companies Use of growth - Enhance cost effectiveness and incr
Slide 18: Successful implementation of own assistance companies provides cost advantages
Successful implementation of own assistance companies provides cost advantages Extension of assistance services to third party clients in CZ and BG Agenda 2020 Update HY 2017 Development of new business areas (IT assistance) as well as revision of Ensuring future CZ existing assistance products (e.g
Slide 19: CEE: robust economic growth attracts strong FDI
CEE: robust economic growth attracts strong FDI FDI inflows to EU–CEE up 23% compared to 2015 Foreign Direct Investments (FDI) to EU-CEE Number of greenfield investment projects to in EUR mn Central, East and Southeast Europe (CESEE) 29,020 23,278 +18% above average Total 2016 EU-CEE from 2010 - 201
Slide 20: 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. 2016-2019 Insurance density 2016, in EUR (premiums per capita) AT 1.9 AT 1,955.0 HR 2.7 HR 278.9 CZ 2.8 CZ 504.4 UA 2.9 UA 29.2
Slide 21: Leading insurer in Austria and Central- and Eastern Europe (CEE)
Leading insurer in Austria and Central- and Eastern Europe (CEE) VIG best positioned to leverage on positive market development in CEE Market positions Country Total Market Share Total Non-life Life Austria 1 1 1 24,0% Czech 1 2 1 32,7% Republic Slovakia 1 2 1 32,9% Poland 4 4 4 6,1% Romania 1 1 2 2
Slide 22: Segments
Results 9M 2017 Agenda 2020 Segments Appendix Note: Rounding differences may occur when rounded amounts or percentages are added up. Results 9M 2017 Agenda 2020 Segments Appendix
Slide 23: Austria: Overall PBT up 2.2% to €105.7mn
Austria: Overall PBT up 2.2% to €105.7mn CoR improved y-o-y to 97.0% GWP development (€mn) P&L: P&C business (€mn) -3.1% 9M17 Y-o-Y 3,107 Underwriting and financial result 68.9 77.6% 3,010 MTPL 254 Other non-technical result -7.1 n.a. 253 Casco 211 221 Result (pre tax) 61.8 58.5% Claims ratio 68.6%
Slide 24: Czech Republic: overall PBT slightly decreased despite strong development in life
Czech Republic: overall PBT slightly decreased (-0.4%) despite strong development in life CoR increased to 96.8% driven by higher claims expenses GWP development (€mn) P&L: P&C business (€mn) +4.3% 9M17 Y-o-Y 1,206 Underwriting and financial result 38.4 -21.7% 1,157 Other non-technical result -2.8 2
Slide 25: Slovakia: premiums up 7.5%, PBT overall stable
Slovakia: premiums up 7.5%, PBT overall stable Positive life development offset decreased P&C result GWP development (€mn) P&L: P&C business (€mn) +7.5% 9M17 Y-o-Y 589 Underwriting and financial result 17.1 -8.2% 548 Other non-technical result -0.6 -42.3% 109 MTPL 101 Result (pre tax) 16.4 -6.1% Cla
Slide 26: Poland: excellent top and bottom-line development
Poland: excellent top and bottom-line development CoR further improved to 94.7% GWP development (€mn) P&L: P&C business (€mn) +9.5% 9M17 Y-o-Y 675 Underwriting and financial result 24.7 74.6% 617 Other non-technical result -1.9 >100% 134 Result (pre tax) 22.8 63.9% MTPL 108 Claims ratio 65.1% -5.0%p
Slide 27: Romania: MTPL-driven premium decrease; CoR improvement
Romania: MTPL-driven premium decrease; CoR improvement supported operating result Overall PBT up 39%; CoR again below 100% GWP development (€mn) P&L: P&C business (€mn) 9M17 Y-o-Y -4.7% 392 Underwriting and financial result 7.9 >100% 373 Other non-technical result -10.7 >100% Result (pre tax) -2.8 n
Slide 28: Premium development in new segments (I)
Premium development in new segments (I) The Baltic GWP development (€mn) Hungary GWP development (€mn) +129.4% +6.1% 240 162 172 MTPL MTPL 11 17 74 12 13 Casco Casco 42 44 42 Other Property Other Property 105 4 6 49 Health Health 24 59 65 11 Life regular Life regular 13 12 27 31 36 Life single Life
Slide 29: Premium development in new segments (II)
Premium development in new segments (II) Remaining CEE GWP development (€mn) Other markets GWP development (€mn) +9.4% -15.2% 263 269 240 MTPL 66 229 Other Property 81 63 Casco 32 87 Other Property 29 Life regular 55 79 Health 70 56 Life regular 6 9 45 Life single 134 45 86 Life single 28 31 9M16 9M
Slide 30: Appendix
Results 9M 2017 Agenda 2020 Segments Appendix Note: Rounding differences may occur when rounded amounts or percentages are added up. Results 9M 2017 Agenda 2020 Segments Appendix
Slide 31: 9M 2017 Key financials
9M 2017 Key financials Overview of KPIs Net Profit after tax and minorities (€mn) Combined Ratio (net, %) 288 97.9 220 215 97.3 97.3 97.3 n.a. 2015 2016 9M16 9M17 2015* 2016 9M16 9M17 EPS1 (€) ROE after tax and minorities (%) 7.3 7.3 7.0 2.16 2.17 2.15 n.a. n.a. 2015* 2016 9M16 9M17 2015* 2016 9M16
Slide 32: 9M 2017 Income statement
9M 2017 Income statement IFRS (€mn) €mn 9M 2017 9M 2016 +/-% Gross premiums written 7,152.6 6,961.8 2.7 Net earned premiums 6,325.8 6,158.9 2.7 Financial result1 732.1 703.2 4.1 Other income 131.7 122.8 7.3 Total income 7,189.6 6,984.9 2.9 Expenses for claims and insurance benefits -5,167.8 -5,091.5
Slide 33: 9M 2017 Balance sheet
9M 2017 Balance sheet IFRS (€mn) €mn 30.09.2017 31.12.2016 +/-% Intangible assets 2,047 2,055 -0.3 Investments 35,645 34,646 2.9 Unit- and index-linked investments 8,919 8,550 4.3 Reinsurers’ share in underwriting provisions 1,147 985 16.5 Receivables 1,571 1,460 7.7 Tax receivables and advance paym
Slide 34: Overview of investments and bond portfolio
Overview of investments and bond portfolio No material changes in 9M 2017 9M 2017: Total €37.2bn Bond portfolio by rating1 Other 5% 5% 6.7% 17% 1.3% BBB 19% 7.1% 0.0% Real Estate total 15.5% A 41% 44% 5.8% AA 24% 23% AAA 10% 10% 9.7% 12M16 9M17 4.3% 65.2% Bond portfolio by issuer Corporates 18% 19%
Slide 35: Financial result impacted by fully consolidated housing societies
Financial result* impacted by fully consolidated housing societies Adjusted for housing societies, current income decreased by ~4% Income Total in € '000 9M 2017 9M 2016 +/-% Current income 1,020,810 848,225 20.3 Overall financial result up by €28.9mn, including impact Income from appreciations 16,4
Slide 36: 9M 2017 P&L by segment (I)
9M 2017 P&L by segment (I) IFRS (€mn) Austria Czech Republic Slovakia €mn 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% Gross premiums written 3,009.6 3,107.4 -3.1 1,206.5 1,156.7 4.3 589.2 547.9 7.5 Net earned premiums 2,380.3 2,481.3 -4.1 896.6 861.5 4.1 486.3 444.5 9.4 Financial
Slide 37: 9M 2017 P&L by segment (II)
9M 2017 P&L by segment (II) IFRS (€mn) Poland Romania The Baltic €mn 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% Gross premiums written 675.2 616.5 9.5 373.4 391.8 -4.7 239.7 104.5 >100 Net earned premiums 541.4 502.7 7.7 278.2 253.4 9.8 179.0 80.8 >100 Financial result1 24.2 26.8
Slide 38: 9M 2017 P&L by segment (III)
9M 2017 P&L by segment (III) IFRS (€mn) Hungary Bulgaria Turkey/Georgia €mn 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% Gross premiums written 171.8 162.0 6.1 119.6 107.8 10.9 154.7 160.7 -3.7 Net earned premiums 121.8 117.3 3.8 83.1 73.8 12.6 76.9 75.8 1.4 Financial result1 4.9 5
Slide 39: 9M 2017 P&L by segment (IV)
9M 2017 P&L by segment (IV) IFRS (€mn) Remaining CEE Other markets €mn 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% Gross premiums written 263.1 240.4 9.4 228.5 269.4 -15.2 Net earned premiums 183.8 166.3 10.5 196.0 239.0 -18.0 Financial result1 20.1 26.2 -23.4 15.4 13.6 12.7 Other income 10.6 3.6 >100
Slide 40: 9M 2017 P&L by segment (V)
9M 2017 P&L by segment (V) IFRS (€mn) Central Functions Consolidation TOTAL €mn 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% Gross premiums written 1,068.1 1,019.0 4.8 -946.8 -922.5 n.a. 7,152.6 6,961.8 2.7 Net earned premiums 901.2 855.3 5.4 1.3 7.3 n.a. 6,325.8 6,158.9 2.7 Financ
Slide 41: 9M 2017 Financial result by segment (I)
9M 2017 Financial result by segment (I) IFRS (€ '000) Income Austria Czech Republic Slovakia Poland in € '000 9M 2017 9M 2016 9M 2017 9M 2016 9M 2017 9M 2016 9M 2017 9M 2016 Current income 601,244 610,886 79,484 76,992 33,143 32,879 26,357 23,455 Income from appreciations 3,812 3,859 3,059 2,038 1,9
Slide 42: 9M 2017 Financial result by segment (II)
9M 2017 Financial result by segment (II) IFRS (€ '000) Income Romania The Baltic Hungary Bulgaria in € '000 9M 2017 9M 2016 9M 2017 9M 2016 9M 2017 9M 2016 9M 2017 9M 2016 Current income 12,452 10,777 5,515 3,831 5,653 6,413 17,902 16,790 Income from appreciations 114 1,309 630 478 0 0 803 1,148 of
Slide 43: 9M 2017 Financial result by segment (III)
9M 2017 Financial result by segment (III) IFRS (€ '000) Income Turkey/Georgia Remaining CEE Other markets in € '000 9M 2017 9M 2016 9M 2017 9M 2016 9M 2017 9M 2016 Current income 8,432 6,556 27,026 28,246 15,855 15,390 Income from appreciations 1,263 1,642 727 149 34 3 of which reduction in impairme
Slide 44: 9M 2017 Financial result by segment (IV)
9M 2017 Financial result by segment (IV) IFRS (€ '000) Income Central Functions Consolidation Total in € '000 9M 2017 9M 2016 9M 2017 9M 2016 9M 2017 9M 2016 Current income 271,051 91,906 -43,358 -43,659 1,060,756 880,462 Income from appreciations 159 32 0 0 16,461 14,625 of which reduction in impai
Slide 45: 9M 2017 Premiums by business lines and country (I)
9M 2017 Premiums by business lines and country (I) IFRS (€mn) GWP MTPL GWP Casco GWP Other property 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% Austria 253.2 253.6 -0.2% 221.4 210.9 5.0% 1,056.5 1,035.8 2.0% Czech Republic 208.8 199.7 4.5% 172.3 156.6 10.0% 343.6 317.5 8.2% Slovak
Slide 46: 9M 2017 Premiums by business lines and country (II)
9M 2017 Premiums by business lines and country (II) IFRS (€mn) GWP Life regular GWP Life single GWP Health 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% Austria 932.4 936.7 -0.5% 244.5 376.4 -35.0% 301.7 294.0 2.6% Czech Republic 422.7 395.5 6.9% 49.1 77.3 -36.4% 9.9 10.1 -2.2% Slov
Slide 47: 9M 2017 Country overview GWP / PBT / CoR
9M 2017 Country overview GWP / PBT / CoR IFRS (€mn) GWP Total Profit before taxes Combined Ratio net 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-% 9M 2017 9M 2016 +/-pp Austria 3,009.6 3,107.4 -3.1% 105.7 103.4 2.2% 97.0% 99.3% -2.3 Czech Republic 1,206.5 1,156.7 4.3% 113.7 114.1 -0.4% 96.8% 92.9% 3.9 S
Slide 48: Q3 2017 – Income statement
Q3 2017 – Income statement IFRS (€mn) €mn Q3 2017 Q3 2016 +/-% Gross premiums written 2,180.2 2,033.7 7.2 Net earned premiums 2,106.7 1,967.3 7.1 Financial result1 243.7 253.8 -4.0 Other income 71.9 18.9 >100 Total income 2,422.3 2,239.9 8.1 Expenses for claims and insurance benefits -1,773.1 -1,624
Slide 49: 9M 2017 P&C claims and cost ratio details
9M 2017 P&C claims and cost ratio details Claims ratio 9M y-o-y (net, %) Remarks 9M16 9M17 Austria: claims ratio down in Wiener Städtische and Donau Versicherung -2.0 +4.2 -5.0 -1.2 +0.7 Czech Republic: disproportionately high claims 70.6 68.6 70.1 65.1 expenses in other property and MTPL 61.6 65.8
Slide 50: A+ with stable outlook
S&P rating confirmed in August 2017: A+/stable outlook VIG remains best-rated company in the ATX Business Risk Profile: Financial Risk Profile: Other Assessments Strong Very Strong • „Leading market position in Austria • „Capital adequacy, based on our • Enterprise risk management: and Central and E
Slide 51: VIG share (I)
VIG share (I) Current analyst recommendation split Share price development 9M 2017 Sell High EUR 26.200 Low EUR 21.590 Buy Price as of 29 Sept. EUR 25.010 Market cap. EUR 3.20bn Development YTD % +17.42 Hold VIG compared to ATX and Stoxx Europe 600 Ins. 120 110 100 90 Jan-17 Feb-17 Mar-17 Apr-17 May
Slide 52: VIG share (II)
VIG share (II) General information Shareholder structure Number of common shares: 128mn ISIN: AT0000908504 ~30% Wiener Städtische Free Float Listings: Wechselseitiger Versicherungsverein - Vienna – since 17 Oct. 1994 Vermögensverwaltung – Vienna Insurance Group ~70% Prague – since 5 Feb. 2008 Ticker
Slide 53: Contact details
Contact details Investor Relations Financial calendar 2018* Investor Relations Team Date Event Vienna Insurance Group Schottenring 30, 1010 Vienna 22 Mar. 2018 Preliminary results for the E-Mail: investor.relations@vig.com financial year 2017 www.vig.com/ir 18 Apr. 2018 Results and Annual Report Nin
Slide 54: 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
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