Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Non-Deal Roadshow (March 2010)
56 slides from Vienna Insurance's roadshow presentation, Mar 17, 2010
Slide 1: V.I.G. – Getting in shape for economic recovery in CEE
V.I.G. – Getting in shape for economic recovery in CEE The Netherlands Roadshow – 17 – 18 March 2010
Slide 2: Contents
Contents A 2 A V.I.G. – a model expansion B Adopting to a changing environment C Distribution is key in insurance D Exploiting potential going forward E Appendix
Slide 3: V.I.G. in 1990 – The Big Bang
V.I.G. in 1990 – The Big Bang Leading Austrian position as basis for international growth story A 3 1990 – Pioneer in CEE Footprint in 1990 § Early mover advantage due to exploiting opportunities offered by underdeveloped insurance markets in CEE - Gross written premiums: € 0.9bn - Profit before tax
Slide 4: Building a Strong Franchise
Building a Strong Franchise Dynamic yet risk-aware expansion into CEE A 4 1989 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 Group pond” V.I.G. t
Slide 5: V.I.G. Today
V.I.G. Today A leading insurer in CEE A 5 2009 – No. 1 in its Core Markets Footprint in 2009 - Gross written premiums1: € 8.2bn Core Markets - Profit before tax: € 440mn - Employees: ~ 23,500 - Presence in 23 countries - Clear No. 1 position in CEE2: ~15% Total market share 14.7% 11.9% 11.4% 4.2% V.
Slide 6: Contents
Contents B 6 A V.I.G. – a model expansion B Adopting to a changing environment C Distribution is key in insurance D Exploiting potential going forward E Appendix
Slide 7: Focus on Efficiency
Focus on Efficiency Setting the basis for future sustainable profitability B 7 Efficiency Programme Savings of € 100mn by 2010 Streamlining of regional head offices 1 Focus on reduction of administrative tasks >€ 100mn Bundling of operating and service departments 2 Focus on effective service centre
Slide 8: New Governance Structure
New Governance Structure Improving Group transparency by spinning-off WSTV B 8 Details Shareholders § Continuous expansion of V.I.G. resulted in greater group-wide management requirements § Existing governance framework does not reflect increasing scope of management tasks + § Evolving Group archite
Slide 9: Contents
Contents C 9 A V.I.G. – a model expansion B Adopting to a changing environment C Distribution is key in insurance D Exploiting potential going forward E Appendix
Slide 10: Distribution Model (I)
Distribution Model (I) Multi-brand strategy is paramount for distribution C 10 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, customers and distribution networ
Slide 11: Distribution Model (II)
Distribution Model (II) Diversified distribution supports future growth C 11 Comment Multi-Channel Tied agents <10% § V.I.G. has one of the broadest distribution 11% - 20% Brokers Banks networks 21% - 30% Other 31% - 40% § Distribution differs from country to country > 41% according to local market
Slide 12: Contents
Contents D 12 A V.I.G. – a model expansion B Adopting to a changing environment C Distribution is key in insurance D Exploiting potential going forward E Appendix
Slide 13: Development of Insurance Demand
Development of Insurance Demand GDP growth and underpenetration are insurance drivers D 13 2008 Mature Markets Growth Markets Insurance Density (USD) H SK PL 1,000 CZ Emerging Markets Insurance demand RO CRO also strongly driven by UA BG SER catch-up process TR 0 1,000 GDP per Capita (USD) 10,000 10
Slide 14: Low Penetration of Insurance Markets
Low Penetration of Insurance Markets Catch-up potential in CEE in Non-life and Life D 14 Insurance Density 2008 (USD) Proportion of NL & L in CEE Markets 3,727 Non-life Life Non-life 2,866 Life 58% 53% 54% NL 73% 65% 61% 37% 41% 80% L 55% 59% 53% 47% 74% 86% 83% 88% 87% 86% 20% 27% 35% 39% 42% 47% 4
Slide 15: Macro Environment in CEE Countries
Macro Environment in CEE Countries Recovery in CEE region exceeds development of Euro area D 15 GDP Development (real, % change vs. previous year) GDP Development vs. Euro Area (indexed, Euro area = 100) 108 2008 2009f 2010f 2011f CZ SK PL RO 106 Euro area 0.6% -4.0% 0.7% 1.5% Czech Rep. 2.3% -4.0%
Slide 16: V.I.G. – Building its Market Position
V.I.G. – Building its Market Position Expansion focus mainly on Poland and Hungary D 16 Market share Non-life Diversified CEE-Portfolio Market share Life 9% 24% 29% 3% 5% 25% Market share Total § About 50% of V.I.G.-premium volume is generated in CEE, 35% 31%NL L T 26% thus purest CEE insurance 33%
Slide 17: Capitalisation
Capitalisation Strong capitalisation is excellent basis for future expansion D 17 Shareholders‘ Equity Capitalisation Change in Group Shareholders’ Equity (€mn) +13.1% 4,682.9 § Group shareholders’ equity increased by 13.1% to about 4,138.8 € 4.7bn in 9M 2009 § S&P-Rating of A+ (stable outlook) § Co
Slide 18: Summary
Summary V.I.G. to benefit from its strong position D 18 § 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 position sustainable profitability §
Slide 19: Contents
Contents E 19 A V.I.G. – a model expansion B Adopting to a changing environment C Distribution is key in insurance D Exploiting potential going forward E Appendix
Slide 20: YE 2009 Financial Highlights - Preliminary
YE 2009 Financial Highlights - Preliminary Growth of Group premiums1 by 1.2% to € 8.2bn E 20 YE 2009: Total Group Premiums (€mn) YE 2009: Total Group Premiums (€mn) (unconsolidated, unaudited) (unconsolidated, unaudited) 218 211 3,345 3,475 Other L 4,167 4,154 CEE NL Austria 4,782 4,747 3,742 3,857
Slide 21: PBT 2009 – Preliminary / Outlook for 2010
PBT 2009 – Preliminary /Outlook for 2010 Confidence about rising PBT despite economic uncertainity E 21 V.I.G.'s Path of Profitability 2010 CAGR: § Subdued GDP growth outlook for Austria, €540 +16.4% higher unemployment affecting customer confidence €437 ~€440 § CEE core countries slowly regaining G
Slide 22: Dividend
Dividend Consistent long-term dividend policy E 22 Development of Dividend1 Comments Payout volume Dividend/share € 256.0mn Bonus/share § 2005 – 2007 payout ratio ranging from 33-37% § One-off bonus dividend paid-out last year as a reward for shareholder € 115.5mn support during capital increase in
Slide 23: YE 2009 Premium Development
YE 2009 Premium Development Preliminary GWP for YE 2009 (€mn, unconsolidated, unaudited)1 E 23 Note: YE 2008 premium restated for exclusion of Wüstenrot Insurance due to low minority interest Total Non-Life Life YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% Austria 3,856.6 3,741.9 3
Slide 24: YE 2009 Premiums in Local Currency
YE 2009 Premiums in Local Currency Preliminary GWP for YE 2009 (local mn, unconsolidated, unaudited) E 24 Local FX Total Non-life Life YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% Austria 3,856.6 3,741.9 3.1% 1,872.0 1,825.0 2.6% 1,984.6 1,916.9 3.5% Czech Rep. 44,104.4 38,159.2 15
Slide 25: 9M 2009 Financial Highlights
9M 2009 Financial Highlights 9M PBT yoy above level of excellent year 2007 E 25 GWP Profit before Tax 541 1.5% -16.3% 7,899 6,912 437 407 5,882 6,018 6,106 321 324 341 5,032 2006 2007 2008 9M 07 9M 08 9M 09 2006 2007 2008 9M 07 9M 08 9M 09 IFRS IFRS Net Profit after Tax and Minorities Combined Ratio
Slide 26: 9M 2009 Financial Highlights (II)
9M 2009 Financial Highlights (II) E 26 EPS ROE before Tax (%) 3.41* * 18.0 16.6* 3.43 17.6 3.18 2.98 14.8 14.3* 2.74* 2.48 10.2* 2006 2007 2008 9M 07 9M 08 9M 09 2006 2007 2008 9M 07 9M 08 9M 09 * Diluted for SPO 2008 IFRS * Diluted for SPO 2008 IFRS
Slide 27: 9M 2009 Income Statement
9M 2009 Income Statement IFRS (€mn) E 27 9M 2009 9M 2008 +/-% 1. Gross premiums written 6,106.0 6,017.8 1.5 2. Net earned premiums 5,374.3 5,169.1 4.0 3. Financial result 727.2 806.2 -9.8 4. Other income 85.6 42.7 >100 Total income 6,187.0 6,018.0 2.8 6. Expenses for claims and insurance benefits -4
Slide 28: 9M 2009 Balance Sheet
9M 2009 Balance Sheet IFRS (€mn) E 28 9M 2009 YE 2008 +/- % Intangible assets 2,007 1,649 21.7 Investments 26,048 24,548 6.1 Unit- and index-linked investments 4,393 3,602 22.0 Reinsurers’ share in underwriting provisions 1,172 1,222 -4.1 Receivables 1,710 1,500 14.0 Deferred tax assets 148 131 12.6
Slide 29: 9M 2009 P&L Major Items – Gross Written Premiums (I)
9M 2009 P&L Major Items – Gross Written Premiums (I) Premium development affected by weak CEE currencies (€mn) E 29 GWP Non-life GWP Life Total FX development 9M 09 vs 9M 08 (vs. €; average exchange rates) 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% Austria 1,536.4 1,520.8 1.0% 1,
Slide 30: 9M 2009 P&L Major Items – Gross Written Premiums (II)
9M 2009 P&L Major Items – Gross Written Premiums (II) Stable premiums, supported by new consolidations1 E 30 § Group GWP show steady development § Austria: In Life, inclusion of s Versicherung offsets ongoing Development of s Versicherung Group weak single premiums; current premiums flat in Q3; in P
Slide 31: 9M 2009 P&L Major Items – Expenses for Claims Incurred
9M 2009 P&L Major Items – Expenses for Claims Incurred Loss ratio up due to higher claims in CEE and floods in A, CZ E 31 § Group loss ratio (net) at 65.9% (64.2% in 9M § Poland increasing by 6.3% pts to 63.4% due to 2008, 65.1% in HY09) increase of reserves as a consequence of legal § Austrian loss
Slide 32: 9M 2009 P&L Major Items – Operating Expenses
9M 2009 P&L Major Items – Operating Expenses Cost ratio down as a result of savings programmes E 32 § Group cost ratio (net) decreasing by 1.5% pts § Poland showing lower cost ratio at 37.2% to reach 30.4% (9M 08: 41.7%) thanks to lower administration costs as well as abolition of § Cost ratio in Au
Slide 33: 9M 2009 P&L Major Items – Financial Result
9M 2009 P&L Major Items – Financial Result Sound financial result (€’000) E 33 Income P&C Life Health Total in € '000 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 Current income 132,321 136,980 808,070 693,430 28,032 25,623 968,423 856,033 Income from appreciations 8,260 5,592 55,
Slide 34: 9M 2009 P&L – Business Segments (P&C)
9M 2009 P&L – Business Segments Property & Casualty, IFRS (€mn) E 34 9M 2009 9M 2008 +/-% 1. Gross premiums written 3,343.3 3,379.5 -1.1 2. Net earned premiums 2,625.6 2,545.4 3.2 3. Financial result 167.3 234.0 -28.5 4. Other income 53.6 28.1 90.9 Total income 2,846.5 2,807.5 1.4 6. Expenses for cl
Slide 35: 9M 2009 P&L – Business Segments (Life)
9M 2009 P&L – Business Segments Life, IFRS (€mn) E 35 9M 2009 9M 2008 +/-% 1. Gross premiums written 2,521.0 2,401.8 5.0 2. Net earned premiums 2,509.1 2,389.4 5.0 3. Financial result 555.4 564.2 -1.6 4. Other income 31.9 14.6 >100 Total income 3,096.3 2,968.2 4.3 6. Expenses for claims and insuranc
Slide 36: 9M 2009 P&L – Business Segments (Health)
9M 2009 P&L – Business Segments Health, IFRS (€mn) E 36 9M 2009 9M 2008 +/-% 1. Gross premiums written 241.7 236.6 2.2 2. Net earned premiums 239.6 234.2 2.3 3. Financial result 4.6 8.0 -43.0 4. Other income 0.1 0.0 62.5 Total income 244.2 242.3 0.8 6. Expenses for claims and insurance benefits -199
Slide 37: Premium Portfolio
Premium Portfolio Source of business origination substantially widened E 37 GWP by Geography 9M 06 GWP by Geography 9M 09 Other CEE Other 3.7% Other Other CEE Romania 3.5% 2.5% 6.9% 3.9% Poland Romania 5.4% 7.5% Austria Austria Slovakia 59.0% Poland 49.2% 6.6% 6.6% Czech Slovakia Republic 7.7% 17.9%
Slide 38: 9M 2009 P&L - Split by Regions (I)
9M 2009 P&L - Split by Regions (I) Regional segments, IFRS (€mn) E 38 Austria Czech Republic 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% 1. Gross premiums written 3,005.6 2,959.4 1.6 1,198.5 1,006.7 19.1 2. Net earned premiums 2,652.1 2,582.5 2.7 1,026.7 815.1 26.0 3. Financial result 543.7 648.3 -16.
Slide 39: 9M 2009 P&L - Split by Regions (II)
9M 2009 P&L - Split by Regions (II) Regional segments, IFRS (€mn) E 39 Slovakia Poland Romania 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% 1. Gross premiums written 469.4 422.8 11.0 405.8 609.1 -33.4 455.9 494.8 -7.9 2. Net earned premiums 411.8 358.1 15.0 368.7 564.7 -34.7 414.6
Slide 40: 9M 2009 P&L - Split by Regions (III)
9M 2009 P&L - Split by Regions (III) Regional segments, IFRS (€mn) E 40 Other CEE1 Other TOTAL 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% 1. Gross premiums written 418.8 353.9 18.3 152.0 171.0 -11.1 6,106.0 6,017.8 1.5 2. Net earned premiums 350.4 277.9 26.1 149.9 147.5 1.6 5,374
Slide 41: 9M 2009 Results by Country
9M 2009 Results by Country IFRS (€mn) E 41 GWP Non-Life Life GWP GWP Total Profit before Taxes Net Combined Ratio 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 Austria 1,536.4 1,520.8 1,469.2 1,438.6 3,005.6 2,959.4 184.2 241.4 96.3% 93.3% Czech Rep. 782.8 752.0 415
Slide 42: 9M 2009 Shareholders’ Equity
9M 2009 Shareholders’ Equity Shareholders’ equity supports strong capitalisation E 42 Change in Group Shareholders’ Equity (€mn) 280.9 -174.6 4,682.9 170.6 250.0 4,138.8 20.7 -3.5 Increase of 13.1% in 9M 2009 Equity as of YE Currency Changes in Capital increase AFS unrealised Profit for the Dividend
Slide 43: Change in Group Shareholders‘ Equity
Change in Group Shareholders‘ Equity IFRS (€‘000) E 43 1.1. - 30.09.2009 1.1. - 30.09.2008 Equity as of 1 January 4,138,790 2,615,563 Exchange rate changes 20,720 39,237 Changes in scope of consolidation -3,452 42,810 Capital increase 250,000 1,343,078 Unrealised gains and losses from financial 170,
Slide 44: YE 2009 Investment Split
YE 2009 Investment Split V.I.G. follows a consistent investment approach E 44 Portfolio Overview Current Investment Strategy ~ +8% ~ € 27bn ~ 5% Cash & Deposits € 25bn ~ 1% Alternatives ~ 4% Affiliated Companies Backbone of asset allocation is diversified ~ 7% 1 bond portfolio ~ 2% ~ 14% Loans ~ 5%
Slide 45: Development of Bond Portfolio
Development of Bond Portfolio E 45 By Issuer By Rating 6% 2% 3% 7% 7% 9% 36% 45% 49% 48% 13% 16% 21% 21% 44% 33% 21% 19% YE 2008 YE 2009 YE 2008 YE 2009 Government 1 Pfandbriefe/Covered Bonds AAA AA A BBB Other Financials Corporates 1: Government and government guaranteed
Slide 46: Life Insurance Premium Split
Life Insurance Premium Split IFRS (€mn) E 46 Premiums written - direct business 9M 2009 9M 2008 +/- % Regular premiums 1,588.3 1,356.7 17.1% Single premiums 921.2 1,037.7 -11.2% Total premiums written - direct business 2,509.5 2,394.4 4.8% thereof: Policies with profit participation 1,383.1 1,347.1
Slide 47: Q3 2009 Income Statement
Q3 2009 Income Statement IFRS (€mn) E 47 Q3 2009 Q3 2008 +/-% 1. Gross premiums written 1,854.5 1,802.7 2.9 2. Net earned premiums 1,761.2 1,697.8 3.7 3. Financial result 255.6 187.5 36.3 4. Other income 23.6 12.0 96.7 Total income 2,040.4 1,897.3 7.5 6. Expenses for claims and insurance benefits -1
Slide 48: 9M 2009 Exchange Rates
9M 2009 Exchange Rates National currency unit per EUR E 48 9M 2009 9M 2008 Balance Sheet Balance Sheet Country Curr. P & L EUR P & L EUR EUR EUR Bulgaria EUR/BGN 1.9558 1.9558 1.9558 1.9558 Croatia EUR/HRK 7.2580 7.3620 7.2365 7.2556 Estonia EUR/EEK 15.6466 15.6466 - - Liechtenstein EUR/CHF 1.5078 1
Slide 49: Group Embedded Value 2008
Group Embedded Value 2008 Results (€mn) E 49 L&H P&C Total Austria/Germany 2008 2007 2008 2007 2008 2007 Comments Free Surplus 403.6 525.3 Required Capital 320.5 325.9 § Group Embedded Value (GEV) ANAV 724.1 851.2 151.4 426.6 875.5 1,277.8 calculated as Value of In-Force Business PVFP 1,233.9 1,568.
Slide 50: Group Embedded Value 2008 – Return on Adjusted Embedded Value
Group Embedded Value 2008 Return on Adjusted Embedded Value (€mn) E 50 L&H P&C Total Change in Methodology Austria / Germany and Assumptions EV Dec 31, 2008 1,670.3 151.4 1,821.7 EV Dec 31, 2007 Reported 2,012.7 617.5 2,630.2 § Allowance for Cost for Residual EV Dec 31, 2007 Restated 2,037.4 570.7 2
Slide 51: Group Embedded Value 2008 – New Business Values
Group Embedded Value 2008 New Business Values (€mn) E 51 L&H 2008 2007 +/-% Comments Austria / Germany NBV 61.6 76.2 - 19.2% APE 259.1 262.2 § The NBV represents the value generated APE-Ratio 23.8% 29.1% by new business sold during the PVNBP 2,479.2 2,398.6 reporting period. PVNBP-Ratio 2.5% 3.2% §
Slide 52: V.I.G. Has Excellent CEE Market Position
V.I.G. Has Excellent CEE Market Position V.I.G. an early mover in CEE E 52 Overview of Core Markets Details Slovakia Czech Rep. Romania Bulgaria § leading market position in nearly all core markets Pop.: 5.4 mn Pop.: 10.2 mn Pop.: 21.3 mn Pop.: 7.6 mn § strong market positions GDP/Cap.: $ 17 k GDP/C
Slide 53: Shareholder Structure (I)
Shareholder Structure (I) Total number of shares 128,000,000 E 53 Shareholder Structure ~ 30 % Free Float ~70 % Wiener Städtische Wechselseitige Versicherungsanstalt- Vermögensverwaltung
Slide 54: Shareholder Structure (II)
Shareholder Structure (II) Total number of shares 128,000,000 E 54 Free Float Geographical Split ~27 % Austria ~15% Others ~12% North America ~10% UK & Ireland ~36% Continental Europe
Slide 55: V.I.G. Share & Contact Details
V.I.G. Share & Contact Details Investor Relations E 55 V.I.G. Share Investor Relations Vienna Insurance Group § Number of common shares Schottenring 30, 1010 Vienna E-Mail: [email protected] 128mn www.vig.com/ir § ISIN AT0000908504 § Thomas Schmee (Head of IR) § Listing Tel. +43 (0)50 350 -
Slide 56: Disclaimer
Disclaimer E 56 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 sha
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