Vienna Insurance Group Ag · VIE:VIG
Vienna Insurance — FY2016 Earnings Presentation
53 slides from Vienna Insurance's earnings presentation, Apr 20, 2017
Slide 1: YE 2016 Results, Group Embedded Value and Solvency II
Vienna Insurance Group YE 2016 Results, Group Embedded Value and Solvency II Vienna, 20 April 2017 Year-end 2016 Embedded Value Solvency II Appendix I Appendix II
Slide 2: Presenting team and topics
YE 2016 Results, Group Embedded Value and Solvency II Presenting team and topics Presenting team: Martin Simhandl, CFO Judit Havasi, Member of the Managing Board Werner Matula, Group Chief Actuary Topics: Year-end results 2016 p. 3 Appendix I: Main Segments p. 22 Group Embedded Value p. 6 Appendix I
Slide 3: Final results for the financial year 2016
Final results for the financial year 2016 Embedded Value and Solvency II results €6,015mn Growth by 6.3% based on adjusted GEV 2015 of €5,659.2mn GEV reporting aligned with Solvency II methodology Embedded Value Methodology, assumptions and calculation reviewed by KPMG Austria €406.7mn PBT 2016 conf
Slide 4: Adjustments in accordance with IAS 8 imply goodwill impairments for 2015
Adjustments in accordance with IAS 8 imply goodwill impairments for 2015 Group shareholders’ equity adjusted by EUR 90.6mn Calculation Modified capitalization rate (WACC), whose tier 2 components were derived from a peer group, was used to determine the interest rate for calculating the value in use
Slide 5: Adjustments in accordance with IAS 8
Adjustments in accordance with IAS 8 Goodwill impairment corrections effecting PBT and Equity Income statement (€mn) 1-12/2016 1-12/2015 adjusted Gross premiums written 9,051.0 9,019.8 Net earned premiums 8,191.3 8,180.5 Financial result1 958.8 1,040.2 Other income 150.4 150.2 Total income 9,300.5 9
Slide 6: Group Embedded Value
Group Embedded Value Solvency II Appendix I: Appendix II: Main Segments Financials Year-end 2016 Embedded Value Solvency II Appendix I Appendix II
Slide 7: Group Embedded Value 2016 development
Group Embedded Value 2016 development Return on GEV (€mn) Harmonization 6,455.1 of MCEV and Solvency II 6.3% (+356.2) 85.7 6,015.4 270.6 5,746.9 -708.2 5,659.2 -76.8 -10.9 2015 reported Restatement 2015 restated Dividends Foreign 2015 adjusted Return in L&H Return in P&C 2016 exchange effects and ot
Slide 8: EV 2016 – Analysis of Change: Life & Health Austria/Germany
EV 2016 – Analysis of Change Life & Health MCEV – Austria / Germany (€mn) +9.3% (+189.3) 134.4 291.4 2,216.5 -318.9 42.6 39.8 2,027.2 2015 adjusted Value of New Roll forward Assumptions Experience and Economic and 2016 Business other operating other non-operating Remarks New business profitability i
Slide 9: EV 2016 – Analysis of Change: Life & Health CEE
EV 2016 – Analysis of Change Life & Health MCEV – CEE (€mn) 4.6% (+81.3) 26.7 20.9 90.9 -12.1 1,841.8 -45.0 1,760.5 2015 adjusted Value of New Roll forward Assumptions Experience and Economic and 2016 Business other operating other non-operating Remarks Significant new business contribution of € 90.
Slide 10: Solvency II
Group Embedded Value Solvency II Appendix I: Appendix II: Main Segments Financials Year-end 2016 Embedded Value Solvency II Appendix I Appendix II
Slide 11: Stable Solvency II ratio 2016
Stable Solvency II ratio 2016 in EUR mn 7000 195% Solvency II ratio at level of stock-listed 6000 VIG at 195% 5000 Repurchase of subordinated bonds already considered in own funds 4000 Calculation based on Partial Internal 6,636 3000 Model (PIM) which improves Solvency II ratio by 41pp 2000 3,411 PI
Slide 12: Solvency II Capital Requirement (SCR) Overview
Solvency II Capital Requirement (SCR) Overview Standard Formula and Partial Internal Model SCR SCR operational SCR adjustments Basis SCR risk SCR intangible SCR market SCR life SCR non-life SCR counterparty SCR health assets premium & health health property mortality catastrophe reserve similar to l
Slide 13: Positive impact of PIM on SCR
Positive impact of PIM on SCR Comparison of Standard Formula and Partial Internal Model in EUR mn Reduction 1800 by 65% 1600 1400 1200 1000 Reduction 1,691 by 67% 800 Reduction by 60% 600 400 709 586 200 387 234 154 0 Non-life underwriting risk NSLT health underwriting risk Property risk Standard Fo
Slide 14: Solvency II Capital Requirement (I)
Solvency II Capital Requirement (I) SCR as of 31 Dec 2016 and PIM effects in EUR mn SCR PIM gross PIM effect 8000 7000 1,105 0 6000 586 207 325 1,729 5000 972 1,635 301 1,040 4000 810 23 923 446 23 463 58 280 72 3000 4,555 2000 3,458 3,411 1000 0 Year-end 2016 Embedded Value Solvency II Appendix I A
Slide 15: Solvency II Capital Requirement (II)
Solvency II Capital Requirement (II) Risk mitigating effects in EUR mn Net SCR after diversification Diversification effects Loss-absorbing capacity of technical provisions PIM effects 5000 4500 1,105 4000 416 446 358 0 301 207 463 3500 58 522 18 191 228 72 3000 866 23 116 9 698 2500 148 241 122 200
Slide 16: Solvency II Capital Requirement (III)
Solvency II Capital Requirement (III) Allocation of risks EUR 3,411mn Market risk accounts for more than 60% of 2% total Solvency II capital requirement 3.0% 3.2% 6% 58% of total market risk consists of spread risk Other capital requirements 8% and equity risk Health underwriting risk 18% Interest r
Slide 17: Solvency II Capital Requirement (IV)
Solvency II Capital Requirement (IV) SCR 2016 compared to SCR 2015 VIG AG 31.12.2016 31.12.2015 in EUR mn Solvency capital requirement 3,411.09 3,242.24 Market risk 3,457.66 3,311.36 Counterparty default risk 279.55 255.11 Life underwriting risk 1,635.36 1,810.64 Health underwriting risk 325.49 331.
Slide 18: Own Funds (I)
Own Funds (I) Capital structure as of 31 Dec. 2016 EUR 6,636mn Tier 1 – unrestricted (>50% of SCR) 14% EUR 5,390mn (81% of Own Funds) 5% Tier 1 – restricted (<20% of total Tier 1) Tier 2 EUR 333mn (5% of Own Funds) Tier 1 - restricted Capacity for additional restricted Tier 1 capital of roughly Tier
Slide 19: Own Funds (II)
Own Funds (II) Evolution of Own Funds, 2015 - 2016 in EUR mn 6900 6800 20 114 6700 63 31 6600 316 252 6500 288 6400 6,636 6300 6200 6,346 6100 6000 Solvency II Own IFRS surplus IFRS effects from Repurchase ofof Differences in Deferred taxes Planned dividends Other Solvency II Own Funds 2015 reserves
Slide 20: Capital generation in 2016
Capital generation in 2016 in EUR mn 8,000 7,000 114 252 289 VIG generated EUR 655mn of new capital 6,000 Capital generation at 19% of SCR 5,000 4,000 6,346 3,000 2,000 3,411 1,000 - Solvency II Own Funds SCR Solvency II Own Funds 2015 Increace of Solvency II Own Funds 2016 Repurchase ofHybrid Repur
Slide 21: Sensitivity Analysis
Sensitivity Analysis Change in market parameters Interest Rate +100bps 21% 216% Interest Rate -100bps -16% 178% UFR to 4.05% -2% 192% UFR to 3.65% -11% 184% w/o Volatility Adjustment -9% 185% Property -10% -7% 188% Equity -20% -3% 192% Credit Spreads +100bps -19% 175% Absolute change in Impact of ab
Slide 22: Appendix I: Main Segments
Group Embedded Value Solvency II Appendix I: Appendix II: Main Segments Financials Year-end 2016 Embedded Value Solvency II Appendix I Appendix II
Slide 23: Austria: PBT decrease in P&C driven by lower financial result
Austria: PBT decrease in P&C driven by substantially lower financial result CoR nearly unchanged compared to last year GWP development (€mn) P&L: P&C business (€mn) -2.8% 12M16 Y-o-Y 4,056 Underwriting and financial result 65.5 -51.8% 3,941 MTPL 321 Other non-technical result -1.6 -90.6% 316 Casco 2
Slide 24: Czech Republic: less financial result reason for decreased PBT
Czech Republic: less financial result reason for decreased PBT Excellent CoR of 90.5% GWP development (€mn) P&L: P&C business (€mn) -1.7% 12M16 Y-o-Y 1,555 1,529 Underwriting and financial result 78.4 -0.4% Other non-technical result -4.2 -1.4% MTPL 257 266 Result (pre tax) 74.2 -0.4% Casco 190 Clai
Slide 25: Slovakia: significantly improved cost ratio
Slovakia: significantly improved cost ratio Overall CoR down to 94.9% GWP development (€mn) P&L: P&C business (€mn) +2.2% 12M16 Y-o-Y 732 Underwriting and financial result 24.6 11.4% 716 Other non-technical result -1.6 n.a. MTPL 131 136 Result (pre tax) 23.0 -12.3% Claims ratio 61.9% 4.3%p Casco 90
Slide 26: Poland: lower financial result and negative one-off in life
Poland: lower financial result and negative one-off in life are main drivers for PBT decrease CoR at 99.4% rather stable compared to last year GWP development (€mn) P&L: P&C business (€mn) -2.3% 839 12M16 Y-o-Y 819 Underwriting and financial result 21.7 -35.4% MTPL 151 148 Other non-technical result
Slide 27: Romania: considerable premium increase and solid PBT growth
Romania: considerable premium increase and solid overall PBT growth CoR further decreased but not yet below 100% GWP development (€mn) P&L: P&C business (€mn) +24.4% 12M16 Y-o-Y 533 Underwriting and financial result 7.5 >100 Other non-technical result -10.2 -89.1% 429 232 Result (pre tax) -2.6 -97.2
Slide 28: Premium development of new segments (I)
Premium development of new segments (I) The Baltic GWP development (€mn) Hungary GWP development (€mn) +136.4% +9.8% 140 224 204 14 MTPL MTPL 15 32 11 Casco Casco 15 16 49 46 16 Other Property Other Property 5 4 59 15 Health Health 77 82 8 43 Life regular Life regular 37 Life single Life single 52 5
Slide 29: Premium development of new segments (II)
Premium development of new segments (II) Remaining CEE GWP development (€mn) Other markets GWP development (€mn) +7.9% -13.9% 331 410 307 MTPL 353 83 Other Property 101 83 Casco 109 40 Life regular 73 Other Property 40 92 75 Health 83 8 8 Life regular Life single 237 64 63 169 Life single 46 29 12M1
Slide 30: Appendix II: Financials
Group Embedded Value Solvency II Appendix I: Appendix II: Main Segments Financials Year-end 2016 Embedded Value Solvency II Appendix I Appendix II
Slide 31: 12M 2016 Income statement
12M 2016 Income statement IFRS (€mn) / 12M 2015 restated €mn 12M 2016 12M 2015 +/-% Gross premiums written 9,051.0 9,019.8 0.3 Net earned premiums 8,191.3 8,180.5 0.1 Financial result1 958.8 1,040.2 -7.8 Other income 150.4 150.2 0.2 Total income 9,300.5 9,370.9 -0.8 Expenses for claims and insurance
Slide 32: 12M 2016 Balance sheet
12M 2016 Balance sheet IFRS (€mn) / YE 2016/2015 restated €mn 31.12.2016 31.12.2015 +/-% Intangible assets 2,055 1,989 3.3 Investments 34,646 30,142 14.9 Unit- and index-linked investments 8,550 8,144 5.0 Reinsurers’ share in underwriting provisions 985 1,031 -4.4 Receivables 1,460 1,392 4.9 Tax rec
Slide 33: 12M 2016 P&L by segment (I)
12M 2016 P&L by segment (I) IFRS (€mn) / 12M 2015 restated Austria Czech Republic Slovakia €mn 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% Gross premiums written 3,941.3 4,055.5 -2.8 1,529.1 1,554.8 -1.7 732.3 716.5 2.2 Net earned premiums 3,247.9 3,370.0 -3.6 1,151.5 1,204.
Slide 34: 12M 2016 P&L by segment (II)
12M 2016 P&L by segment (II) IFRS (€mn) / 12M 2015 restated Poland Romania The Baltic €mn 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% Gross premiums written 819.2 838.9 -2.3 533.4 428.6 24.4 140.2 59.3 136.4 Net earned premiums 669.7 716.3 -6.5 351.1 265.0 32.5 108.1 57.7 87
Slide 35: 12M 2016 P&L by segment (III)
12M 2016 P&L by segment (III) IFRS (€mn) / 12M 2015 restated Hungary Bulgaria Turkey/Georgia €mn 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% Gross premiums written 224.2 204.3 9.8 136.7 131.1 4.3 208.7 182.3 14.5 Net earned premiums 174.6 159.7 9.3 96.5 89.0 8.4 102.1 92.7 1
Slide 36: 12M 2016 P&L by segment (IV)
12M 2016 P&L by segment (IV) IFRS (€mn) / 12M 2015 restated Remaining CEE Other markets €mn 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% Gross premiums written 331.4 307.2 7.9 353.0 410.0 -13.9 Net earned premiums 232.9 211.4 10.2 311.6 371.2 -16.1 Financial result1 36.6 36.5 0.4 19.9 18.9 5.3 Othe
Slide 37: 12M 2016 P&L by segment (V)
12M 2016 P&L by segment (V) IFRS (€mn) / 12M 2015 restated Central Functions Consolidation TOTAL €mn 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% Gross premiums written 1,324.8 1,248.9 6.1 -1,223.3 -1,117.7 n.a. 9,051.0 9,019.8 0.3 Net earned premiums 1,141.9 1,066.8 7.0 5.4
Slide 38: 12M 2016 Financial result by segment (I)
12M 2016 Financial result by segment (I) IFRS (€ '000) / 12M 2015 restated Income Austria Czech Republic Slovakia Poland in € '000 12M 2016 12M 2015 12M 2016 12M 2015 12M 2016 12M 2015 12M 2016 12M 2015 Current income 808,895 832,249 102,412 109,521 43,938 44,453 30,824 37,296 Income from appreciati
Slide 39: 12M 2016 Financial result by segment (II)
12M 2016 Financial result by segment (II) IFRS (€ '000) / 12M 2015 restated Income Romania The Baltic Hungary Bulgaria in € '000 12M 2016 12M 2015 12M 2016 12M 2015 12M 2016 12M 2015 12M 2016 12M 2015 Current income 14,138 12,346 5,161 3,519 8,589 9,915 23,571 21,912 Income from appreciations 1,269
Slide 40: 12M 2016 Financial result by segment (III)
12M 2016 Financial result by segment (III) IFRS (€ '000) / 12M 2015 restated Income Turkey/Georgia Remaining CEE Other markets in € '000 12M 2016 12M 2015 12M 2016 12M 2015 12M 2016 12M 2015 Current income 9,208 7,782 37,025 36,905 20,056 19,978 Income from appreciations 1,745 2,550 211 167 1,356 2,
Slide 41: 12M 2016 Financial result by segment (IV)
12M 2016 Financial result by segment (IV) IFRS (€ '000) / 12M 2015 restated Income Central Functions Consolidation Total in € '000 12M 2016 12M 2015 12M 2016 12M 2015 12M 2016 12M 2015 Current income 192,596 98,440 -59,402 -62,392 1,237,011 1,171,924 Income from appreciations 209 0 0 0 59,370 21,066
Slide 42: 12M 2016 development for P&C business according to VAG
12M 2016 development for P&C business according to VAG (Austrian Insurance Supervision Act) IFRS (€ '000) / 12M 2015 restated 12M 2016 12M 2015 +/-% Overall result for direct business Gross direct premiums written 4,751.29 4,478.28 6.1 Gross direct 462.58 517.86 -10.7 Underwriting result 408.74 399.
Slide 43: 12M 2016 development for life business according to VAG
12M 2016 development for life business according to VAG (Austrian Insurance Supervision Act) IFRS (€ '000) / 12M 2015 restated 12M 2016 12M 2015 +/-% Overall result for direct business Gross direct premiums written 3,746.57 4,009.89 -6.6 Gross direct 347.90 316.29 10.0 Underwriting result 0.00 0.00
Slide 44: 12M 2016 development for health business according to VAG
12M 2016 development for health business according to VAG (Austrian Insurance Supervision Act) IFRS (€ '000) / 12M 2015 restated 12M 2016 12M 2015 +/-% Overall result for direct business Gross direct premiums written 412.48 397.86 3.7 Gross direct 58.79 55.15 6.6 Underwriting result 0.00 0.00 0.00 F
Slide 45: 12M 2016 Premiums by business lines and country (I)
12M 2016 Premiums by business lines and country (I) IFRS (€mn) GWP MTPL GWP Casco GWP Other property 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% Austria 316.0 320.9 -1.5% 266.5 256.6 3.9% 1,261.1 1,252.9 0.7% Czech Republic 266.1 256.8 3.6% 213.4 190.3 12.1% 405.2 377.4 7.4%
Slide 46: 12M 2016 Premiums by business lines and country (II)
12M 2016 Premiums by business lines and country (II) IFRS (€mn) GWP Life regular GWP Life single GWP Health 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% 12M 2016 12M 2015 +/-% Austria 1,246.4 1,248.4 -0.2% 456.4 595.5 -23.4% 394.9 381.2 3.6% Czech Republic 534.0 507.6 5.2% 97.0 209.1 -53.6% 13.4 13
Slide 47: 12M 2016 Country overview GWP / PBT / CoR
12M 2016 Country overview GWP / PBT / CoR IFRS (€mn) GWP Total Profit before taxes Combined Ratio net 12M 2015 12M 2016 12M 2015 +/-% 12M 2016 +/-% 12M 2016 12M 2015 +/-pp adjusted Austria 3,941.3 4,055.5 -2.8% 196.1 213.0 -7.9% 97.6% 97.5% 0.1 Czech Republic 1,529.1 1,554.8 -1.7% 152.8 163.0 -6.3%
Slide 48: Q4 2016 – Income statement
Q4 2016 – Income statement IFRS (€mn) / Q4 2015 restated €mn Q4 2016 Q4 2015 +/-% Gross premiums written 2,089.2 2,107.3 -0.9 Net earned premiums 2,032.4 2,033.2 0.0 Financial result1 255.6 258.5 -1.1 Other income 27.7 71.9 -61.5 Total income 2,315.6 2,363.7 -2.0 Expenses for claims and insurance be
Slide 49: 12M 2016 – Exchange rates
12M 2016 – Exchange rates 12M 2016 12M 2015 Balance Sheet Balance Sheet Country Currency P & L EUR P & L EUR EUR EUR Albania EUR/ALL 135.2300 137.3710 137.2800 139.7463 Belarus EUR/BYN 2.0450 2.2001 20 300.0000 17 654.5370 Bosnia EUR/BAM 1.9558 1.9558 1.9558 1.9558 Bulgaria EUR/BGN 1.9558 1.9558 1.9
Slide 50: VIG share (I)
VIG share (I) Current analyst recommendation split Share price development 12M 2016 Sell Buy High EUR 24.790 Low EUR 16.095 Price as of 30 Dec. EUR 21.300 Market cap. EUR 2.73bn Development YTD % -15.80 Hold VIG vs ATX and Stoxx Europe 600 Insurance 115 105 95 85 75 65 55 Jan-16 Feb-16 Mar-16 Apr-16
Slide 51: 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 52: Contact details
Contact details Investor Relations Financial calendar 2017 Investor Relations Team Date Event 23 Mar. 2017 Preliminary results for the financial Vienna Insurance Group year 2016 Schottenring 30, 1010 Vienna E-Mail: investor.relations@vig.com 20 Apr. 2017 Annual Report, Embedded www.vig.com/ir Value
Slide 53: 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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