Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Investor Day (January 2014)
47 slides from Vienna Insurance's investor day presentation, Jan 30, 2014
Slide 1: VIG – Top Player in Austria and CEE
VIG – Top Player in Austria and CEE Austrian Investor Day London, 30 January 2014
Slide 2: Contents
Contents Preliminary Development 2013 Successful Strategy Long-term Potential Financials as of 9M 2013
Slide 3: Preliminary YE 2013 highlights
Preliminary YE 2013 (unconsolidated, unaudited) Premium growth of 2.2% excl. extraordinary effects HIGHLIGHTS Premiums of EUR 9.4bn down by 4.9% y-o-y Estimated profit before taxes of about EUR 350mn Estimated operating performance of about EUR 580mn Continuation of dividend policy: Proposed dividen
Slide 4: Preliminary YE 2013 premium developments
Preliminary YE 2013 premium developments PREMIUM Direct premiums (unconsolidated, unaudited) of EUR 9.4bn DEVELOPMENT Premium split Life/Non-life (€mn; y-o-y change) Premium split regional (€mn) -4.9% y-o-y chg. 9,870 Austria 4,068 -1.2% -431 9,387 -52 Czech Republic 1,919 0.0% Non-life 5,232 Slovak
Slide 5: Preliminary YE 2013 premium split
Preliminary YE 2013 premium split PREMIUM Direct premiums (unconsolidated, unaudited) in CEE of EUR 5.0bn DEVELOPMENT Premium split CEE/Non-CEE (€mn; y-o-y change) Total premiums split by regions -4.9% Sundry 9,870 -485 9,387 2 RO 12.0% Non-CEE 4,377 4.0% 4,379 PL 12.3% AT 43.3% CEE 5,493 5,009 8.0%
Slide 6: Remaining markets segment
Remaining markets segment PREMIUM Preliminary premiums exceeding one-billion-euro threshold DEVELOPMENT Premium development of Remaining markets (€mn) Growth drivers in Remaining markets (y-o-y chg; %) CAGR The Baltics 35.8 +10% 1,079 985 887 Serbia 18.3 Hungary 14.8 Turkey 6.4 2011 2012 2013 Ukrain
Slide 7: Positive developments in non-life lines of business
Positive developments in non-life lines of business PREMIUM Increasing non-motor premiums DEVELOPMENT Direct non-motor non-life premiums (unconsolidated, unaudited) (y-o-y chg; %) Poland: +14% Belarus: +32% Ukraine: +19% Austria: +3% Romania: +6% Hungary: +59% Serbia: +15% Turkey: +9% Bulgaria: +8%
Slide 8: Preliminary YE 2013 premiums per country
Preliminary YE 2013 premiums per country PREMIUM Direct premiums (unconsolidated, unaudited) in EURmn DEVELOPMENT €mn GWP Non-Life GWP Life GWP Total YE 2013 YE 2012 +/- % YE 2013 YE 2012 +/- % YE 2013 YE 2012 +/- % Austria 2,224.1 2,238.7 -0.7 1,844.3 1,877.7 -1.8 4,068.4 4,116.4 -1.2 Czech Rep. 1,
Slide 9: M&A activities of Vienna Insurance Group in 2013
M&A activities of Vienna Insurance Group in 2013 VIG with acquisitions1 in its core markets Poland and Hungary M&A VIG in Poland and acquisition of life insurer Skandia VIG Poland: Skandia PL: 6 companies with premiums2 of € 1,150mn Premiums: € 95mn (12M13) Market rank: #3 Portfolio: primarily unit-
Slide 10: Estimated, unaudited YE 2013 profit before taxes
Estimated, unaudited YE 2013 profit before taxes Estimated operating performance of roughly EUR 580mn PROFIT Estimated PBT and operating performance (€mn) Remarks 580 350 Estimated, unaudited profit before taxes of EUR 350 heavily impacted by Romania and Italy Estimated operating performance of abou
Slide 11: Dividend proposal of EUR 1.30 per share
Dividend proposal of EUR 1.30 per share1 Increase of 8.3% compared to last year DIVIDEND Dividend per share (EUR) +8.3% 1.30 1.20 1.10 1.00 2010 2011 2012 2013p Dividend policy Dividend policy with a pay-out ratio of minimum 30% of Group net profit remains unchanged Based on solid operating performa
Slide 12: Contents
Contents Preliminary Development 2013 Successful Strategy Long-term Potential Financials as of 9M 2013
Slide 13: Well-proven business model of VIG to continue
Well-proven business model of VIG to continue Strategic cornerstones of VIG STRATEGY Focus on insurance Concentration on business Austria and CEE Multi-brand policy as distribution catalyst Local Strategic partnership entrepreneurship with Erste Group Bank 13
Slide 14: Successful Track Record
Dynamic expansion into CEE Focus on Austria and CEE STRATEGY VIG 1990: 3 markets VIG today: 24 markets Successful Track Record Client/talent base: 24mn people Client/talent base: >175mn people = VIG core markets (Austria, Czech Republic, Slovakia, Poland, Romania, Croatia, Serbia, Bulgaria, Hungary
Slide 15: Unique market approach with long-term focus
Unique market approach with long-term focus Management remains committed to proven fundamentals STRATEGY Multi-brand Multi-channel Erste Group Cooperation 1 Brokers/Agents <10% Best approach Strong partner 11% - 20% Tied agents for broad client access in 10 common markets 21% - 30% Other 2 Banks 31%
Slide 16: Excellent market positions of VIG
Excellent market positions of VIG VIG the clear No 1 in its core markets STRATEGY Market Share in % AT 24.6% CZ 33.0% SK 34.1% PL 8.2% RO 19.8% BG 14.0% HR 7.6% RS 8.9% UA 2.9% HU 5.8% Source: local insurance authorities; data as of 3Q13 16
Slide 17: VIG strengthens its market position
VIG strengthens its market position Very strong market share of 18.2% in its core markets STRATEGY VIG No.1 Italian competitor Austrian competitor German competitor VIG almost twice as big as peers in its core markets Source: local market reports; market shares according to current composition of in
Slide 18: Contents
Contents Preliminary Development 2013 Successful Strategy Long-term Potential Financials as of 9M 2013
Slide 19: Insurance Density
The basic concept Model of insurance demand development still valid POTENTIAL 2001 2011 1,000 Insurance density Insurance Density CZ in USD (USD) Growth Markets Austria 2,680 EU-15 3,650 SK PL 500 HU Emerging Markets CZ SK PL RO HU RO 0 1,000 10,000 GDP per Capita (USD) 100,000 GDP growth and catch-
Slide 20: Striking under-penetration shows potential
Striking under-penetration shows potential Annual premiums per capita (insurance density), in EUR POTENTIAL 2.657 1.921 563 389 385 213 273 267 113 87 72 45 Long-term growth potential in CEE still lies ahead Source: Local insurance authorities; CEE: weighted average of CEE core markets; Data as of y
Slide 21: CEE offers access to long-term growth potential
CEE offers access to long-term growth potential Presence in more mature markets as well as in high growth countries POTENTIAL Core region Growth region Population ~ 34 mn Population ~ 120 mn Ø-premium per capita 785 EUR Ø-premium per capita 175 EUR Ø-premium per capita in AT 1,921 EUR Contribution t
Slide 22: Fundamental indicators for motor business in CEE
Fundamental indicators for motor business in CEE Number of registered cars in CEE shows motor under-penetration POTENTIAL Age of registered cars in VIG countries1 Number of registered cars per 1000 inhabitants2 2% 4% 4% 7% 8% 4% 7% 7% 6% 7% 9% 14% 11% 13% 18% 17% 18% 19% 17% 19% 23% 22% 20% 28% 26%
Slide 23: CEE to grow faster than the EU in coming years
CEE to grow faster than the EU in coming years Macroeconomic data indicates future potential POTENTIAL Real GDP growth (const. prices, nat. currency, in %) GDP per capita (current prices, in thousand USD) 2,5 60 51,6 2 2,3 2,4 2,2 50 2,0 49,3 1,5 1,6 40 1,5 1,3 1 30 0,5 0,8 0,4 19,2 18,9 20 14,1 0 -
Slide 24: Contents
Contents Preliminary Development 2013 Successful Strategy Long-term Potential Financials as of 9M 2013
Slide 25: 9M 2013 Key financials
9M 2013 Key financials Overview FINANCIALS Net Profit after tax and minorities (€mn) Combined Ratio (net, %) 446 98.4 100.6 407 96.8 96.7 97.2 96.9 380 342 313 218 2010 2011 2012 9M11 9M12 9M13 2010 2011 2012 9M11 9M12 9M13 EPS1 (€) ROE before Taxes (%) 3.17 3.25 11.1 10.9 11.0 11.2 2.95 10.5 2.87 2
Slide 26: 9M 2013 – Income statement
9M 2013 – Income statement P&L AND BALANCE IFRS (€mn) SHEET OVERVIEW €mn 9M 2013 9M 2012 +/-% Gross premiums written 7,050.1 7,425.5 -5.1 Net earned premiums 6,364.3 6,744.5 -5.6 1 Financial result 892.1 900.7 -1.0 Other income 96.9 85.6 13.3 Total income 7,353.4 7,730.7 -4.9 Expenses for claims and
Slide 27: 9M 2013 – Balance sheet
9M 2013 – Balance sheet P&L AND BALANCE IFRS (€mn) SHEET OVERVIEW €mn 30.09.2013 31.12.2012 +/-% Intangible assets 2,379 2,410 -1.3 Investments 28,901 29,463 -1.9 Unit- and index-linked investments 6,551 6,444 1.7 Reinsurers’ share in underwriting provisions 1,119 1,034 8.2 Receivables 1,628 1,657 -
Slide 28: 9M 2013 – Stable financial result
9M 2013 – Stable financial result Net realised gains of less than EUR 50mn - same level as last year INVESTMENTS Income P&C Life Health Total in € '000 9M 2013 9M 2012 9M 2013 9M 2012 9M 2013 9M 2012 9M 2013 9M 2012 Current income 261,588 299,471 665,688 677,090 30,114 31,693 957,390 1,008,254 Incom
Slide 29: 9M 2013 – Investment split
9M 2013 – Investment split Real estate decrease driven by housing societies INVESTMENTS 12M 2012: Total € 30.2bn 9M 2013: Total € 29.5bn Rounding differences may occur when rounded amounts or percentages are added up. 29
Slide 30: 9M 2013 – Structure of bond portfolio
9M 2013 – Structure of bond portfolio INVESTMENTS By Issuer By Rating1 Other 4% 6% Corporates 9% 12% BBB 13% 11% Financials 26% 23% A 37% 37% Pfandbriefe/ 10% 9% Covered bonds AA 28% 28% 2 Government 55% 56% AAA 18% 18% YE 2012 9M 2013 YE 2012 9M 2013 1: Based on second best rating 2: Government and
Slide 31: 9M 2013 – Shareholders’ equity
9M 2013 – Shareholders’ equity Impacted by repurchase of hybrid capital and consolidation changes EQUITY Change in Group Shareholders’ Equity (€mn) -10% 232 5,712 -34 -80 5,143 -234 -203 -250 Equity as Profit for Currency AFS unrealised Changes in Dividend payment Repurchase of Equity as of YE 2012
Slide 32: 9M 2013 P&L – Property & Casualty
9M 2013 P&L – Property & Casualty IFRS (€mn) APPENDIX €mn 9M 2013 9M 2012 +/-% Gross premiums written 3,617.0 3,686.9 -1.9 Net earned premiums 2,956.0 3,042.8 -2.9 Financial result 173.3 171.0 1.3 Other income 57.0 57.0 0.1 Total income 3,186.3 3,270.8 -2.6 Expenses for claims and insurance benefits
Slide 33: 9M 2013 P&L – Life
9M 2013 P&L – Life IFRS (€mn) APPENDIX €mn 9M 2013 9M 2012 +/-% Gross premiums written 3,129.4 3,440.4 -9.0 Net earned premiums 3,110.9 3,421.1 -9.1 Financial result 711.2 707.0 0.6 Other income 39.8 27.3 45.8 Total income 3,861.9 4,155.4 -7.1 Expenses for claims and insurance benefits -3,076.9 -3,4
Slide 34: 9M 2013 P&L – Health
9M 2013 P&L – Health IFRS (€mn) APPENDIX €mn 9M 2013 9M 2012 +/-% Gross premiums written 303.7 298.2 1.8 Net earned premiums 297.4 280.6 6.0 Financial result 7.6 22.7 -66.4 Other income 0.1 1.3 -93.7 Total income 305.1 304.6 0.2 Expenses for claims and insurance benefits -243.3 -232.6 4.6 Acquisitio
Slide 35: 9M 2013 P&L – Split by regions (I)
9M 2013 P&L – Split by regions (I) Regional segments, IFRS (€mn) APPENDIX €mn Austria Czech Republic Slovakia 9M 2013 9M 2012 +/-% 9M 2013 9M 2012 +/-% 9M 2013 9M 2012 +/-% Gross premiums written 3,229.3 3,216.6 0.4 1,318.0 1,350.1 -2.4 548.3 514.4 6.6 Net earned premiums 2,577.5 2,521.9 2.2 1,059.5
Slide 36: 9M 2013 P&L – Split by regions (II)
9M 2013 P&L – Split by regions (II) Regional segments, IFRS (€mn) APPENDIX €mn Poland Romania Remaining 9M 2013 9M 2012 +/-% 9M 2013 9M 2012 +/-% 9M 2013 9M 2012 +/-% Gross premiums written 840.8 1,229.7 -31.6 274.6 340.2 -19.3 781.5 721.5 8.3 Net earned premiums 681.6 1,004.6 -32.2 142.2 273.3 -48.
Slide 37: 9M 2013 P&L – Split by regions (III)
9M 2013 P&L – Split by regions (III) Regional segments, IFRS (€mn) APPENDIX €mn Central Functions Consolidation TOTAL 9M 2013 9M 2012 +/-% 9M 2013 9M 2012 +/-% 9M 2013 9M 2012 +/-% Gross premiums written 996.7 960.8 3.7 -939.1 -907.8 3.5 7,050.1 7,425.5 -5.1 Net earned premiums 875.4 911.4 -3.9 3.7
Slide 38: 9M 2013 – Results by country (I)
9M 2013 – Results by country (I) IFRS (€mn) APPENDIX €mn GWP Non-Life GWP Life GWP Total 9M 2013 9M 2012 +/-% 9M 2013 9M 2012 +/-% 9M 2013 9M 2012 +/-% Austria 1,791.0 1,796.2 -0.3% 1,438.3 1,420.4 1.3% 3,229.3 3,216.6 0.4% Czech Rep. 689.4 734.3 -6.1% 628.6 615.8 2.1% 1,318.0 1,350.1 -2.4% Slovakia
Slide 39: 9M 2013 – Results by country (II)
9M 2013 – Results by country (II) IFRS (€mn) APPENDIX €mn Profit before Taxes Net Combined Ratio 9M 2013 9M 2012 +/-% 9M 2013 9M 2012 +/-pp Austria 136.7 194.3 -29.6% 103.2% 96.1% 7.1 Czech Rep. 144.9 140.4 3.2% 93.8% 89.4% 4.4 Slovakia 42.8 39.4 8.6% 93.5% 95.1% -1.6 Poland 48.6 31.5 54.3% 95.0% 10
Slide 40: Claims and cost ratio details
Claims and cost ratio details P&C administrative expenses down by 13.1% in 9M 2013 APPENDIX Claims ratio 9M y-o-y regional development (net, %) Remarks for claims incurred 9M12 9M13 Austria: claims ratio up 5.1pp driven by branch office business in +15.9 Italy +5.1 Czech Republic: increase of 7.3pp
Slide 41: Q3 2013 – Income Statement
Q3 2013 – Income Statement IFRS (€mn) APPENDIX €mn Q3 2013 Q3 2012 +/-% Gross premiums written 2,020.4 2,142.6 -5.7 Net earned premiums 1,956.5 2,088.1 -6.3 Financial result 299.1 318.8 -6.2 Other income 15.0 32.6 -54.1 Total income 2,270.6 2,439.5 -6.9 Expenses for claims and insurance benefits -1,
Slide 42: 9M 2013 – Exchange rates
9M 2013 – Exchange rates APPENDIX 9M 2013 9M 2012 Balance Balance Country Curr. P & L EUR P & L EUR Sheet EUR Sheet EUR Albania EUR/ALL 141.3700 140.2293 140.1900 138.9994 Belarus EUR/BYR 12,250.0000 11,517.2161 10,990.0000 10,595.4380 Bosnia EUR/BAM 1.9558 1.9558 1.9558 1.9558 Bulgaria EUR/BGN 1.95
Slide 43: VIG Share (I)
VIG Share (I) APPENDIX Current analyst recommendation split Share price development 2013 Sell Buy High EUR 42.81 Low EUR 34.26 Price as of 30 Dec EUR 36.225 Average daily volume EUR 3.0 mn Market cap. EUR 4.6 bn Development % -10.3 Hold VIG compared to ATX and MSCI Europe Insurance 130 125 120 115 1
Slide 44: VIG Share (II)
VIG Share (II) APPENDIX General information Shareholder structure Number of common shares: 128mn Wiener Städtische Wechselseitiger ISIN: AT0000908504 Versicherungsverein - Listings: Vermögensverwaltung – Vienna Insurance Group Free Float Vienna – since 17 Oct. 1994 ~70 % ~30 % Prague – since 5 Feb.
Slide 45: Contact details
Contact details Investor Relations APPENDIX Financial calendar 2014 Investor Relations Team Date Event Vienna Insurance Group Schottenring 30, 1010 Vienna Preliminary unconsolidated E-Mail: [email protected] 29 Jan. 2014 premiums 2013 www.vig.com/ir 10 April 2014 Results and EV for the year
Slide 46: Welcome to the family of brands
Welcome to Ss SS the family of WIENERG® — Kooperatva =o mistran )«6©6 KHADKAW = AM sicorra mu 7) V | E N N A | N S U RA N C E STADTISCHE VIENNA INSURANCE GROUP VIENNA INSURANCE GROUP VIENNA INSURANCE GROUP VIENNA INSURANCE GROUP VIENNA INSURANCE GROUP VIENNA INSURANCE GROUP elonw ee ana @? Life tmos
Slide 47: 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