Vienna Insurance Group AG · VIE:VIG

Vienna Insurance — Non-Deal Roadshow (June 2010)

54 slides from Vienna Insurance's roadshow presentation, Jun 23, 2010

  1. Slide 1: Getting in shape for economic recovery in CEE

    Getting in shape for economic recovery in CEE Roadshow Edinburgh 23 June 2010

  2. Slide 2: Contents

    Contents V.I.G. – a model expansion V.I.G. – a model expansion Adopting to a changing environment Distribution is key in insurance Exploiting potential going forward Appendix 2

  3. Slide 3: V.I.G. in 1990 – The Big Bang

    V.I.G. in 1990 – The Big Bang V.I.G. – a model Leading Austrian position as basis for international growth story expansion 1990 – Pioneer in CEE Footprint in 1990  Early mover advantage due to exploiting opportunities offered by underdeveloped insurance markets in CEE  Gross written premiums: € 1.

  4. Slide 4: Building a Strong Franchise

    Building a Strong Franchise V.I.G. – a model Dynamic yet risk-aware expansion into CEE expansion 1990 1996-1998 2000-2002 2004-2008 2009/2010 Pioneer in CEE Cautious steps Demonopolisation Market split-up Reorganisation “Big fish in a small In a 2nd wave Demonopolisation Strong upturn of New Gr

  5. Slide 5: V.I.G. Today

    V.I.G. Today V.I.G. – a model A leading insurer in CEE expansion 2009 – No. 1 in its Core Markets Footprint in 2009  Gross written premiums: € 8.0bn  Profit before tax: € 441mn  Employees: ~ 24,000  Presence in 23 countries  Clear No. 1 position in CEE1 core markets: ~15% Total Market Share1 14

  6. Slide 6: Contents

    Contents Adopting to a changing environment V.I.G. – a model expansion Adopting to a changing environment Distribution is key in insurance Exploiting potential going forward Appendix 6

  7. Slide 7: Focus on Efficiency

    Focus on Efficiency Adopting to a Setting the basis for future sustainable profitability changing environment Efficiency Programme Savings of € 100mn by 2010 >€ 100mn Streamlining of regional head offices in A 1 Focus on reduction of administrative tasks ~€ 60mn Accelerated implementation of shared

  8. Slide 8: New Governance Structure

    New Governance Structure Adopting to a Improving Group transparency by spinning-off WSTV changing environment Structure Details  Continuous expansion of V.I.G. resulted in greater Group-wide management requirements +  Existing governance framework does not reflect increasing scope of management ta

  9. Slide 9: Contents

    Contents Distribution is key in insurance V.I.G. – a model expansion Adopting to a changing environment Distribution is key in insurance Exploiting potential going forward Appendix 9

  10. Slide 10: Distribution Model (I)

    Distribution Model (I) Distribution is key in Multi-brand strategy is paramount for distribution insurance Multi-brand Features  Strong brand awareness in local markets  Entrepreneurship of management builds up well established local brands thus retaining loyalty of employees and management, custo

  11. Slide 11: Distribution Model (II)

    Distribution Model (II) Distribution is key in Diversified distribution supports future growth insurance Comment Multi-channel <10% Tied agents 11% - 20% Brokers 21% - 30% Banks  V.I.G. has one of the broadest distribution Other 31% - 40% networks > 41%  Distribution differs from country to countr

  12. Slide 12: Contents

    Contents Exploiting potential going forward V.I.G. – a model expansion Adopting to a changing environment Distribution is key in insurance Exploiting potential going forward Appendix 12

  13. Slide 13: Development of Insurance Demand

    Development of Insurance Demand Exploiting potential GDP growth and underpenetration are insurance drivers going forward 2,000 2008 Mature Markets Growth Markets Insurance Density (USD) H PL SK 1,000 CZ Emeging Markets TR BG Insurance demand UA CRO also strongly driven by SER RO catch-up process 0 1

  14. Slide 14: Low Penetration of Insurance Markets

    Low Penetration of Insurance Markets Exploiting potential Catch-up potential in CEE in Non-life and Life going forward Insurance Density 2008 (USD) Proportion of NL & L in CEE Markets 3,727 Life Non-life Life Non-life 2,866 37% 41% 55% 59% 53% 47% 74% 86% 83% 88% 87% 86% 804 64% 59% 643 549 502 431

  15. Slide 15: Macro Environment in CEE Countries

    Macro Environment in CEE Countries Exploiting potential Recovery in CEE region exceeds development of Euro area going forward GDP Development (real, % change vs. previous year) GDP Development vs. Euro Area (indexed, Euro area = 0) 8 Czech. Rep. Slovakia Poland Romania 2008 2009 2010f 2011f 6 Euro a

  16. Slide 16: V.I.G. – Building its Market Position (I)

    V.I.G. – Building its Market Position (I) Exploiting potential Expansion focus mainly on Poland and Hungary going forward Diversified CEE-Portfolio Market share Non-life 9 29%2 5  About 50% of V.I.G.-premium 24% 25% Market share Life volume is generated in CEE, NL L T Market share Total 37 thus pur

  17. Slide 17: Continued Business Expansion

    Continued Business Expansion Exploiting potential V.I.G. now also no. 1 in Life in core CEE markets going forward Banking distribution supports life growth Market Share Life1 Life distribution via banking channel shows significant growth rates in CEE, in particular in 10.6 10.4 CZ and RO, making V.

  18. Slide 18: Capitalisation

    Capitalisation Exploiting potential Strong capitalisation is excellent basis for future expansion going forward Shareholders‘ Equity Capitalisation Change in Group Shareholders’ Equity (€mn) +4.8%  Group shareholders’ equity 4,852.4 increased by 4.8% to about € 4.9bn in 3M 2010 4,628.6  S&P- Ratin

  19. Slide 19: Summary

    Summary Exploiting potential V.I.G. to benefit from its strong position going forward  20 years of experience in CEE insurance markets  Current management drive for  Multi-brand and multi-channel more efficiency and strategy is paramount for streamlining build the basis for leading market positio

  20. Slide 20: Contents

    Contents Exploiting potential going forward V.I.G. – a model expansion Adopting to a changing environment Distribution is key in insurance Exploiting potential going forward Appendix 20

  21. Slide 21: Outlook for 2010

    Outlook for 2010 Confidence about rising PBT despite economic uncertainty APPENDIX V.I.G.'s Path of Profitability (€mn) 2010 CAGR: +16.4%  Subdued GDP growth outlook for Austria, higher unemployment rates expected  CEE core countries slowly regaining GDP € 540 growth € 437 € 441 € 321 € 240 2005 2

  22. Slide 22: Dividend

    Dividend Consistent long-term dividend policy APPENDIX Development of Dividend Comments  2005 – 2007 payout ratio € 256.0mn ranging from 33-37%  One-off bonus dividend paid- out last year as a reward for shareholder support during capital increase in 2008 € 115.5mn € 115.2mn € 86.1mn  V.I.G. keep

  23. Slide 23: 3M 2010 Highlights

    3M 2010 Highlights V.I.G. beating strong Q1 of last year APPENDIX EUR 133.4mn PBT, up by 10.4% - best 1st quarter ever Combined ratio (net) up at GWP up by 7.9% - different 97.5% due to higher net V.I.G. – Q1 dynamics in various markets retentions combined with Nat Cat events Substantial life gr

  24. Slide 24: 3M 2010 Financial Highlights (I)

    3M 2010 Financial Highlights (I) APPENDIX GWP Profit before Tax 7,899 8,019 541 6,912 437 441 +7.9% +10.4% 2,345 2,531 2,018 133 125 121 2007 2008 2009 3M 08 3M 09 3M 10 2007 2008 2009 3M 08 3M 09 3M 10 Net Profit after Tax and Minorities Combined Ratio (net) 409 313 340 97.5 +6.8% 96.4 96.3 96.4 95

  25. Slide 25: 3M 2010 Financial Highlights (II)

    3M 2010 Financial Highlights (II) APPENDIX EPS ROE before Tax (%) 3.41 3.48 18.9 3.16 18.0 2.98 2.96 2.66 14.3 11.6 11.3 10.0 2007 2008 2009 3M 08 3M 09 3M 10 2007 2008 2009 3M 08 3M 09 3M 10 25

  26. Slide 26: 3M 2010 Income Statement

    3M 2010 Income Statement IFRS (€mn) APPENDIX €mn 3M 2010 3M 2009 +/-% 1. Gross premiums written 2,531.0 2,345.4 7.9 2. Net earned premiums 2,047.2 1,798.2 13.8 3. Financial result 310.4 238.2 30.3 4. Other income 32.4 41.2 -21.3 Total income 2,389.9 2,077.6 15.0 6. Expenses for claims and insurance

  27. Slide 27: 3M 2010 Balance Sheet

    3M 2010 Balance Sheet IFRS (€mn) APPENDIX €mn 3M 2010 YE 2009 +/-% Intangible assets 1,993 1,975 0.9 Investments 26,850 25,894 3.7 Unit- and index-linked investments 5,017 4,628 8.4 Reinsurers’ share in underwriting provisions 1,205 1,117 7.9 Receivables 1,760 1,563 12.6 Tax receivables and advance

  28. Slide 28: P&L – Gross Written Premiums

    3M 2010 P&L– Gross Written Premiums Growth with different dynamics in various markets (€mn) APPENDIX €mn GWP Non-life GWP Life Total  Austria: competitive motor 3M 2010 3M 2009 +/-% 3M 2010 3M 2009 +/-% 3M 2010 3M 2009 +/-% market, but stable non-motor Austria 698.8 698.3 0.1 602.3 546.4 10.2 1,301

  29. Slide 29: Premium Portfolio

    Premium Portfolio Basis of business origination substantially widened APPENDIX GWP by Geography 3M 07 GWP by Geography 3M 10 Other CEE Other Other CEE Other 4.4% Romania 3.5% 3.5% Romania 6.0% 5.3% 5.8% Poland 6.0% Poland Austria 7.0% Austria Slovakia 51.4% 7.0% 59.3% Slovakia 7.2% Czech Republic 15

  30. Slide 30: 3M 2010 – Expenses for Claims Incurred

    3M 2010 – Expenses for Claims Incurred Loss ratio better despite weather induced damage in CEE APPENDIX Group loss ratio (net) at 65.3% (66.0% in 3M Poland increasing by 7.7% pts to 72.4% due to 2009) exceptional claims frequency from severe winter Austrian loss ratio saw slight decrease by 0.3%

  31. Slide 31: 3M 2010 – Operating Expenses

    3M 2010 – Operating Expenses Cost ratio up due to higher net retentions and FX effects APPENDIX Group cost ratio (net) increasing by 1.7% pts to Poland showing stable cost ratio of 35.1% reach 32.2% Romania recording increase of 15.4% pts to Cost ratio in Austria slightly increasing by 0.8% 34.8

  32. Slide 32: P&L Major Items – Financial Result

    3M 2010 P&L Major Items – Financial Result Sound financial result APPENDIX Income P&C Life Health Total in € '000 3M 2010 3M 2009 3M 2010 3M 2009 3M 2010 3M 2009 3M 2010 3M 2009 Current income 41,258 42,076 249,920 269,588 9,634 9,317 300,812 320,981 Income from appreciations 6,207 2,299 25,383 22,6

  33. Slide 33: Investment Split

    3M 2010 Investment Split V.I.G. follows a consistent investment approach APPENDIX +3.7% € 25.9bn € 24.5bn € 26.9bn € 25.9bn Cash & Deposits ~ 5% ~ 4% ~ 1% Alternatives ~ 1% ~ 3% Affiliated Companies ~ 3% ~ 14% Loans ~ 15% ~ 12% Real Estate ~ 13% ~ 3% Equities ~ 3% ~ 62% ~ 63% Bonds YE 2009 3M 2010 3

  34. Slide 34: Development of Bond Portfolio

    Development of Bond Portfolio APPENDIX By Issuer By Rating 7% 7% 3% 3% 9% 11% 36% 35% 48% 46% 12% 13% 21% 21% 44% 46% 19% 19% YE 2009 3M 2010 YE 2009 3M 2010 Government 1 Pfandbriefe/Covered Bonds AAA AA A BBB Other Financials Corporates 1: Government and government guaranteed 34

  35. Slide 35: Composition of Real Estate

    Composition of Real Estate APPENDIX By Issuer Real Estate (€mn) ~6% ~9%  More than 60% of real estate with regulated Austrian housing societies  Entities are governed by a specific legal ~32% ~30% framework  Rents are subsidised by government => low vacancies  Residents are V.I.G. insurance clie

  36. Slide 36: P&L – Business Segments (Property & Casualty)

    3M 2010 P&L – Business Segments Property & Casualty, IFRS (€mn) APPENDIX €mn 3M 2010 3M 2009 +/-% 1. Gross premiums written 1,384.1 1,372.3 0.9 2. Net earned premiums 918.4 848.2 8.3 3. Financial result 67.6 53.0 27.4 4. Other income 8.6 26.0 -66.9 Total income 994.6 927.3 7.3 6. Expenses for claims

  37. Slide 37: P&L – Business Segments (Life)

    3M 2010 P&L – Business Segments Life, IFRS (€mn) APPENDIX €mn 3M 2010 3M 2009 +/-% 1. Gross premiums written 1,062.1 889.3 19.4 2. Net earned premiums 1,047.4 869.7 20.4 3. Financial result 238.1 186.5 27.6 4. Other income 23.8 15.2 56.8 Total income 1,309.3 1,071.4 22.2 6. Expenses for claims and i

  38. Slide 38: P&L – Business Segments (Health)

    3M 2010 P&L – Business Segments Health, IFRS (€mn) APPENDIX €mn 3M 2010 3M 2009 +/-% 1. Gross premiums written 84.8 83.9 1.0 2. Net earned premiums 81.3 80.3 1.3 3. Financial result 4.7 -1.4 n/a 4. Other income 0.0 0.0 n/a Total income 86.0 78.9 9.1 6. Expenses for claims and insurance benefits -67.

  39. Slide 39: P&L – Split by Regions (I)

    3M 2010 P&L – Split by Regions (I) Regional segments, IFRS (€mn) APPENDIX €mn Austria Czech Republic 3M 2010 3M 2009 +/-% 3M 2010 3M 2009 +/-% 1. Gross premiums written 1,301.1 1,244.6 4.5 454.5 404.5 12.4 2. Net earned premiums 980.7 934.1 5.0 392.6 320.6 22.5 3. Financial result 232.6 167.5 38.9 2

  40. Slide 40: P&L – Split by Regions (II)

    3M 2010 P&L – Split by Regions (II) Regional segments, IFRS (€mn) APPENDIX €mn Slovakia Poland Romania 3M 2010 3M 2009 +/-% 3M 2010 3M 2009 +/-% 3M 2010 3M 2009 +/-% 1. Gross premiums written 181.8 186.2 -2.4 176.7 143.1 23.5 147.4 167.8 -12.2 2. Net earned premiums 147.7 139.6 5.8 157.1 131.9 19.1

  41. Slide 41: P&L – Split by Regions (III)

    3M 2010 P&L – Split by Regions (III) Regional segments, IFRS (€mn) APPENDIX €mn Other CEE Other TOTAL 3M 2010 3M 2009 +/-% 3M 2010 3M 2009 +/-% 3M 2010 3M 2009 +/-% 1. Gross premiums written 151.3 157.2 -3.8 118.2 42.0 >100 2,531.0 2,345.4 7.9 2. Net earned premiums 119.3 111.0 7.5 114.7 31.9 >100 2

  42. Slide 42: Results by Country

    3M 2010 Results by Country IFRS (€mn) APPENDIX €mn GWP Non-Life Life GWP GWP Total Profit before Taxes Net Combined Ratio 3M 2010 3M 2009 3M 2010 3M 2009 3M 2010 3M 2009 3M 2010 3M 2009 3M 2010 3M 2009 Austria 698.8 698.3 602.3 546.4 1,301.1 1,244.6 70.3 77.3 94.3% 93.8% Czech Rep. 285.1 273.5 169.4

  43. Slide 43: Shareholders’ Equity

    3M 2010 Shareholders’ Equity Shareholders’ equity supports strong capitalisation APPENDIX Change in Group Shareholders’ Equity (€mn) 109.3 -0.7 4.852.4 84.3 36.7 -5.9 4.628.6 Increase of 4.8% over YE 2009 Equity as of YE 2009 Currency changes Changes in AFS unrealised gains Profit for the period Div

  44. Slide 44: Change in Group Shareholders’ Equity

    Change in Group Shareholders’ Equity IFRS (€ ‘000) APPENDIX 1.1. - 31.03.2010 1.1. - 31.03.2009 Equity as of 1 January 4,628,573 4,138,790 Exchange rate changes 36,714 -40,170 Changes in scope of consolidation -5,879 7,780 Capital increase - - Unrealised gains and losses from 84,339 -29,085 financia

  45. Slide 45: Life Insurance Premium Split

    Life Insurance Premium Split IFRS (€mn) APPENDIX Premiums written - direct business 3M 2010 3M 2009 +/- % Regular premiums 566.6 571.3 -0.8% Single premiums 491.3 317.9 54.5% Total premiums written - direct business 1,057.9 889.2 19.0% thereof: Policies with profit participation 549.5 471.9 16.4% Po

  46. Slide 46: Exchange Rates

    3M 2010 Exchange Rates National currency unit per EUR APPENDIX 3M 2010 3M 2009 Balance Balance Country Curr. P & L EUR P & L EUR Sheet EUR Sheet EUR Bulgaria EUR/BGN 1.9558 1.9558 1.9558 1.9558 Croatia EUR/HRK 7.2638 7.2849 7.4769 7.4116 Estonia EUR/EEK 15.6466 15.6466 15.6466 15.6466 Liechtenstein

  47. Slide 47: Group Embedded Value 2009

    Group Embedded Value 2009 Results (€mn) APPENDIX L&H P&C Total 2009 2008(*) 2009 2008(*) 2009 2008(*) Comments Austria / Germany Free Surplus 227.6 351.0  All results based on local GAAP Required Capital 356.7 320.5 ANAV 584.2 671.4 73.3 164.4 657.6 835.8  GEV reflects amounts deemed to be PVFP 1,

  48. Slide 48: Group Embedded Value 2009

    Group Embedded Value 2009 Return on Adjusted Embedded Value (€mn) APPENDIX Change in Methodology L&H P&C Total and Assumptions Austria / Germany EV Dec 31, 2009 1,684.2 73.3 1,757.5 EV Dec 31, 2008 Reported 1,670.3 151.4 1,821.7  The reference interest rates EV Dec 31, 2008 Restated 1,658.9 164.4 1

  49. Slide 49: Group Embedded Value 2009

    Group Embedded Value 2009 New Business Values (€mn) APPENDIX L&H Comments 2009 2008(*) +/-% Austria / Germany NBV 51.0 62.8 -18.8%  The NBV represents the value generated APE 203.8 259.1 by new business sold during the reporting APE-Ratio 25.0% 24.2% 3.2% period. PVNBP 1,991.1 2,529.8  The NBV has

  50. Slide 50: V.I.G. Has Excellent CEE Market Position

    V.I.G. Has Excellent CEE Market Position V.I.G. an early mover in CEE APPENDIX Overview of Core Markets Details Czech Rep. Slovakia Romania Bulgaria  leading market position Pop.: 10.2 mn Pop.: 5.4 mn Pop.: 21.3 mn Pop.: 7.6 mn in nearly all core markets GDP/Cap.: $ 23 k GDP/Cap.: $ 17 k GDP/Cap.:

  51. Slide 51: Shareholder Structure (I)

    Shareholder Structure (I) Total number of shares 128,000,000 APPENDIX Wiener Städtische Wechselseitige Versicherungsanstalt- Vermögensverwaltung ~70 % Free Float ~ 30 % 51

  52. Slide 52: Shareholder Structure (II)

    Shareholder Structure (II) Free float split APPENDIX Austria ~26 % Others North America ~3% ~14% UK & Ireland Continental Europe ~24% ~33% 52

  53. Slide 53: V.I.G. Share & Contact Details

    V.I.G. Share & Contact Details Investor Relations APPENDIX V.I.G. Share Investor Relations  Number of common shares Vienna Insurance Group 128mn Schottenring 30, 1010 Vienna E-Mail: [email protected]  ISIN AT0000908504 www.vig.com/ir  Listing  Thomas Schmee (Head of IR) Vienna – since 1

  54. Slide 54: Disclaimer

    Disclaimer APPENDIX 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

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