Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Erste Group Investor Conference 2013
58 slides from Vienna Insurance's conference presentation, Oct 10, 2013
Slide 1: VIG – Top Player in Austria and CEE
VIG – Top Player in Austria and CEE Erste Group Investor Conference Stegersbach, 10 October 2013
Slide 2: Contents
Contents Overview 6M 2013 Regional Segments 6M 2013 Successful Strategy Long-term Potential Financials as of 6M 2013 2
Slide 3: Sound business development in 6M 2013
Sound business development in 6M 2013 Executive summary OVERVIEW Operating result strongly increased by 9.5% to EUR 330.7mn Poland with +46.6% and Remaining markets with +81.2% in profits are the main drivers Turnaround in Turkey and Bulgaria - positive profit contributions compared to last year Pro
Slide 4: Premium development driven by decrease of STEP
Premium development driven by decrease of STEP GWP increased by 2.2%* adjusted for Polish life short-term business OVERVIEW Gross written premiums (€mn) GWP regional split -4.8% Austria 2,374 5,283 +2.2%* Czech Republic 898 5,030 Health 194 375 199 Slovakia Poland 610 Life 2,466 2,213 Romania 196 Re
Slide 5: Increased diversification of premium portfolio
Increased diversification of premium portfolio Major CEE markets with stronger premium shares OVERVIEW Premium diversification 6M 2005 6M 2009 6M 2013 RO Rem. Markets Rem. Markets Rem. Markets PL 8% RO 9% RO 11% SK 7% 1% 7% 4% 2% PL PL 6% 12% 48% AT CZ 17% SK 8% 51% AT 8% 66% SK AT 18% 18% CZ CZ Rem
Slide 6: Operating result up 9.5% to EUR 330.7mn
Operating result up 9.5% to EUR 330.7mn Profit before taxes affected by impairment and precautions OVERVIEW Profit before taxes (€mn) PBT regional split +9.5% -31.9% Austria 112 331* 302 Czech Republic 90 Health 23 25 Slovakia Life 112 206 Poland 33 22 Romania -18 Remaining markets 23 145 P&C 167 Ce
Slide 7: Combined ratio remains below 100%
Combined ratio remains below 100% CoR impacted by precautionary measures and bad weather claims OVERVIEW CoR 6M development (net, %) CoR 6M y-o-y countries development (net, %) +3.3pp 95.0 AT +7.3pp 102.3 96.55 99.83 91.0 CZ +2.8pp 93.7 SK 95.7 -0.5pp 95.2 Claims ratio 65.84 68.85 PL 98.7 -3.2pp 95.
Slide 8: New business margin improved to 4.2% in 6M13
New business margin improved to 4.2% in 6M13 Value of new business at € 82mn up 6.5% y-o-y OVERVIEW Value of new business (€mn) New business margin – PVNBP-Ratio (%) 195 204 77 82 5.5 +13.5% 12M11 12M12 6M12 6M13 4.3 4.2 3.7 PVNBP (€mn) / 4,690 3,541 12M11 12M12 6M12 6M13 2,103 1,945 12M11 12M12 6M1
Slide 9: S&P rating confirmed in July 2013: A+/stable
S&P rating confirmed in July 2013: A+/stable VIG is the best rated company in the ATX RATING Rating score snapshot: A+/Stable/-- Anchor aa- Details: Business Risk Profile Very Strong Very strong capitalization “with capital adequacy exceeding Very Strong the benchmark for the ´AA´ rating” Financial
Slide 10: Contents
Contents Overview 6M 2013 Regional Segments 6M 2013 Successful Strategy Long-term Potential Financials as of 6M 2013 10
Slide 11: Austria shows sound premium development
Austria shows sound premium development REGIONAL Precautionary measures affect PBT in P&C SEGMENTS GWP for 6M 2013 (€mn) P&C GWP direct business split 1 +2.1% 2,325 2,374 MTPL 22% (25%) P&C 1,148 1,146 178 13% Health 174 65% (13%) Casco (62%) Life 1,003 1,050 Other NL 6M12 6M13 P&L: P&C business (€m
Slide 12: Czech profit increase driven by life result
Czech profit increase driven by life result REGIONAL GWPs adjusted for adverse FX effects increased by 1.0% SEGMENTS GWP for 6M 2013 (€mn) P&C GWP direct business split 1 -1.1% 908 898 MTPL 29% P&C 512 484 (29%) 51% Other NL (52%) 20% Life 397 415 (19%) Casco 6M12 6M13 P&L: Non-life business (€mn) P
Slide 13: Slovakian premiums solidly increase
Slovakian premiums solidly increase REGIONAL Combined ratio improved to 95.2% SEGMENTS GWP for 6M 2013 (€mn) P&C GWP direct business split 1 +4.6% 358 375 Other NL 34% P&C 176 179 41% MTPL (30%) (43%) Life 182 196 25% (27%) Casco 6M12 6M13 P&L: Non-life business (€mn) P&L: Life business (€mn) 6M13 Y
Slide 14: Polish total profits jump by 46.6% to €33.2mn
Polish total profits jump by 46.6% to €33.2mn REGIONAL Best half-year result and combined ratio for Poland SEGMENTS GWP for 6M 2013 (€mn) P&C GWP direct business split 1 -36.0% 952 MTPL P&C 302 32% 610 Other NL 42% (37%) (35%) 294 Life 650 316 25% (28%) Casco 6M12 6M13 P&L: Non-life business (€mn) P
Slide 15: Romania is currently the most challenging market
Romania is currently the most challenging market REGIONAL Impairment on goodwill of €75mn and precautions of €15mn in 6M13 SEGMENTS GWP for 6M 2013 (€mn) P&C GWP direct business split 1 -16.8% 236 MTPL 196 29% Other NL 37% (31%) (28%) P&C 184 154 35% Life 52 42 (41%) Casco 6M12 6M13 P&L: Non-life bu
Slide 16: Remaining markets profits are steeply rising
Remaining markets profits are steeply rising REGIONAL Premiums increase by 11.2% and profits rise by 81.2% in 6M13 SEGMENTS GWP for 6M 2013 (€mn) P&C GWP direct business split 1 +11.2% MTPL 531 477 21% (25%) 321 P&C 278 58% 21% Other NL (53%) Health 21 21 (23%) Casco Life 179 189 6M12 6M13 P&L: P&C
Slide 17: Contents
Contents Overview 6M 2013 Regional Segments 6M 2013 Successful Strategy Long-term Potential Financials as of 6M 2013 17
Slide 18: 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 18
Slide 19: 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 20: 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 21: Excellent market positions of VIG
Excellent market positions of VIG VIG No 1 in its core markets with a market share of 19.1% STRATEGY Market Share in % AT 25.5% CZ 33.2% SK 34.3% PL 8.6% RO 21.0% BG 14.3% HR 7.3% RS 8.3% UA 2.7% HU 5.9% Source: local insurance authorities; Data as of 2Q13 except RO as of 1Q13 21
Slide 22: VIG clearly outperforms market
VIG clearly outperforms market VIG ahead in 2012 and in 5-years-comparison1 STRATEGY 10% 8% 7.7% VIG consistently 6% outpaces competitors – even in times of crises 4% Market 2.0% 2% 1.0% German Italian Austrian competitor competitor competitor VIG -0.9% -0.9% -2% -1.6% -2.0% -2.3% -3.0% -4% -3.3% Cu
Slide 23: Contents
Contents Overview 6M 2013 Regional Segments 6M 2013 Successful Strategy Long-term Potential Financials as of 6M 2013 23
Slide 24: 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 25: 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) 3 60 50,9 2,5 2,7 50 49,8 2 2,2 40 2,0 1,5 1,7 1,6 30 1,6 1,4 1,3 19,5 18,7 1 20 13,7 19,2 18,1
Slide 26: 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 27: 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 28: Contents
Contents Overview 6M 2013 Regional Segments 6M 2013 Successful Strategy Long-term Potential Financials as of 6M 2013 28
Slide 29: 6M 2013 – Income statement
6M 2013 – Income statement P&L AND BALANCE IFRS (€mn) SHEET OVERVIEW €mn 6M 2013 6M 2012 +/-% Gross premiums written 5,029.7 5,282.9 -4.8 Net earned premiums 4,407.8 4,656.4 -5.3 Financial result 1 593.0 581.9 1.9 Other income 82.0 53.0 54.7 Total income 5,082.8 5,291.3 -3.9 Expenses for claims and
Slide 30: 6M 2013 – Balance sheet
6M 2013 – Balance sheet P&L AND BALANCE IFRS (€mn) SHEET OVERVIEW €mn 30.06.2013 31.12.2012 +/-% Intangible assets 2,356 2,410 -2.2 Investments 28,833 29,463 -2.1 Unit- and index-linked investments 6,420 6,444 -0.4 Reinsurers’ share in underwriting provisions 1,238 1,034 19.7 Receivables 1,672 1,657
Slide 31: 6M 2013 – Financial result increased by 1.9%
6M 2013 – Financial result increased by 1.9% Net realised gains of less than EUR 10mn on same level as last year INVESTMENTS Income P&C Life Health Total in € '000 6M 2013 6M 2012 6M 2013 6M 2012 6M 2013 6M 2012 6M 2013 6M 2012 Current income 186,102 202,383 448,101 445,796 20,462 20,886 654,665 669
Slide 32: 6M 2013 – Investment split
6M 2013 – Investment split Real estate decrease driven by housing societies INVESTMENTS 12M 2012: Total € 30.2bn 6M 2013: Total € 29.4bn Rounding differences may occur when rounded amounts or percentages are added up. 32
Slide 33: 6M 2013 - Real estate portfolio details
6M 2013 - Real estate portfolio details Key driver of portfolio decrease is the change of consolidation1 INVESTMENTS Real estate portfolio development (€m) -23% 3,220 102 -4 2,494 ~9% -780 -44 Book Value Additions Disposals Change in scope Scheduled Book value as as of 1/1/2013 of consolidation Depr
Slide 34: 6M 2013 – Structure of bond portfolio
6M 2013 – Structure of bond portfolio INVESTMENTS By issuer By rating1 Other 4% 5% Corporates 9% 11% BBB 13% 13% Financials 26% 25% A 37% 37% Pfandbriefe/ 10% 10% Covered bonds AA 28% 27% 2 Government 55% 54% AAA 18% 18% YE 2012 6M 2013 YE 2012 6M 2013 1: Based on second best rating 2: Government an
Slide 35: 6M 2013 – Shareholders’ equity
6M 2013 – Shareholders’ equity IAS 19 impact on equity YE 2012 of minus EUR 40mn EQUITY Change in Group shareholders’ equity (€mn) -8.2% 146 5,712 -41 -118 5,241 -254 -203 Equity as Profit for the period Currency changes AFS unrealised Changes in Dividend payment Equity as of YE 2012 gains and losse
Slide 36: 6M 2013 - Solvency I ratio of 244%
6M 2013 - Solvency I ratio of 244% Strong equity position is basis for more than solid S1 ratio EQUITY Available capital compared to required capital Equity 5,755 Non-controlling interests 15 Subordinated liabilities 533 Intangible assets -2,356 Admitted hidden reserves 301 in real estates1 Non-cons
Slide 37: 6M 2013 Key financials
6M 2013 Key financials Overview APPENDIX Net profit after tax and minorities (€mn) Combined ratio (net, %) 446 98.4 96.8 96.7 97.1 96.6 99.8 407 380 215 232 141 2010 2011 2012 6M11 6M12 6M13 2010 2011 2012 6M11 6M12 6M13 EPS1 (€) ROE before taxes (%) 3.17 3.31 11.8 3.05 11.1 10.9 11.2 2.87 10.5 2.65
Slide 38: 6M 2013 P&L – Property & Casualty
6M 2013 P&L – Property & Casualty IFRS (€mn) APPENDIX €mn 6M 2013 6M 2012 +/-% Gross premiums written 2,617.9 2,622.4 -0.2 Net earned premiums 2,022.2 2,027.1 -0.2 Financial result 119.2 108.5 9.8 Other income 48.6 33.1 47.0 Total income 2,190.0 2,168.7 1.0 Expenses for claims and insurance benefits
Slide 39: 6M 2013 P&L – Life
6M 2013 P&L – Life IFRS (€mn) APPENDIX €mn 6M 2013 6M 2012 +/-% Gross premiums written 2,212.6 2,466.2 -10.3 Net earned premiums 2,188.3 2,443.8 -10.5 Financial result 459.2 460.3 -0.2 Other income 33.3 18.7 77.9 Total income 2,680.7 2,922.8 -8.3 Expenses for claims and insurance benefits -2,175.6 -
Slide 40: 6M 2013 P&L – Health
6M 2013 P&L – Health IFRS (€mn) APPENDIX €mn 6M 2013 6M 2012 +/-% Gross premiums written 199.1 194.2 2.5 Net earned premiums 197.4 185.5 6.4 Financial result 14.6 13.0 12.2 Other income 0.1 1.2 -94.5 Total income 212.1 199.7 6.2 Expenses for claims and insurance benefits -166.8 -154.5 7.9 Acquisitio
Slide 41: 6M 2013 – Gross written premiums by region
6M 2013 – Gross written premiums by region Premium decrease of 4.8% APPENDIX €mn GWP Non-Life GWP Life GWP Total 6M 2013 6M 2012 +/-% 6M 2013 6M 2012 +/-% 6M 2013 6M 2012 +/-% Austria 1,323.8 1,321.7 0.2% 1,049.9 1,002.9 4.7% 2,373.7 2,324.6 2.1% Czech Rep. 483.9 511.5 -5.4% 414.6 396.7 4.5% 898.4 9
Slide 42: 6M 2013 P&L – Split by regions (I)
6M 2013 P&L – Split by regions (I) Regional segments, IFRS (€mn) APPENDIX €mn Austria Czech Republic Slovakia 6M 2013 6M 2012 +/-% 6M 2013 6M 2012 +/-% 6M 2013 6M 2012 +/-% Gross premiums written 2,373.7 2,324.6 2.1 898.4 908.3 -1.1 375.0 358.4 4.6 Net earned premiums 1,810.4 1,733.4 4.4 706.6 708.3
Slide 43: 6M 2013 P&L – Split by regions (II)
6M 2013 P&L – Split by regions (II) Regional segments, IFRS (€mn) APPENDIX €mn Poland Romania Remaining 6M 2013 6M 2012 +/-% 6M 2013 6M 2012 +/-% 6M 2013 6M 2012 +/-% Gross premiums written 609.7 952.2 -36.0 196.3 235.9 -16.8 530.9 477.3 11.2 Net earned premiums 486.5 854.9 -43.1 158.3 191.0 -17.1 3
Slide 44: 6M 2013 P&L – Split by regions (III)
6M 2013 P&L – Split by regions (III) Regional segments, IFRS (€mn) APPENDIX €mn Central Functions Consolidation TOTAL 6M 2013 6M 2012 +/-% 6M 2013 6M 2012 +/-% 6M 2013 6M 2012 +/-% Gross premiums written 677.5 595.9 13.7 -632.0 -569.7 10.9 5,029.7 5,282.9 -4.8 Net earned premiums 568.1 542.7 4.7 1.6
Slide 45: 6M 2013 – Results by country (I)
6M 2013 – Results by country (I) IFRS (€mn) APPENDIX €mn GWP Non-Life GWP Life GWP Total 6M 2013 6M 2012 +/-% 6M 2013 6M 2012 +/-% 6M 2013 6M 2012 +/-% Austria 1,323.8 1,321.7 0.2% 1,049.9 1,002.9 4.7% 2,373.7 2,324.6 2.1% Czech Rep. 483.9 511.5 -5.4% 414.6 396.7 4.5% 898.4 908.3 -1.1% Slovakia 178.
Slide 46: 6M 2013 – Results by country (II)
6M 2013 – Results by country (II) IFRS (€mn) APPENDIX €mn Profit before Taxes Net Combined Ratio 6M 2013 6M 2012 +/-% 6M 2013 6M 2012 +/-pp Austria 112.3 135.9 -17.4% 102.3% 95.0% 7.3 Czech Rep. 90.2 88.5 2.0% 93.7% 91.0% 2.8 Slovakia 24.6 28.0 -12.0% 95.2% 95.7% -0.5 Poland 33.2 22.7 46.6% 95.5% 98
Slide 47: Claims and cost ratio details
Claims and cost ratio details P&C administrative expenses down by 10.1% in 6M 2013 APPENDIX Claims ratio 6M y-o-y regional development (net, %) Remarks for claims incurred 6M12 6M13 Austria: claims ratio up 4.3% driven by branch office business in -1.5 Italy +4.3 +2.5 Czech Republic: increase of 2.5
Slide 48: 6M 2013 – Life insurance premium split
6M 2013 – Life insurance premium split IFRS (€mn) APPENDIX Premiums written - direct business 6M 2013 6M 2012 +/- % Regular premiums 1,186 1,172 1.2% Single premiums 1,019 1,286 -20.7% Total premiums written - direct business 2,206 2,458 -10.3% thereof: Policies with profit participation 1,050 1,479
Slide 49: Q2 2013 – Income statement
Q2 2013 – Income statement IFRS (€mn) APPENDIX €mn Q2 2013 Q2 2012 +/-% Gross premiums written 2,324.4 2,536.4 -8.4 Net earned premiums 2,209.0 2,425.6 -8.9 Financial result 322.8 304.9 5.9 Other income 39.7 26.8 48.0 Total income 2,571.5 2,757.3 -6.7 Expenses for claims and insurance benefits -1,91
Slide 50: 6M 2013 – Exchange rates
6M 2013 – Exchange rates APPENDIX 6M 2013 6M 2012 Balance Balance Country Curr. P & L EUR P & L EUR Sheet EUR Sheet EUR Albania EUR/ALL 140.9600 140.2023 138.1700 139.2678 Belarus EUR/BYR 11,460.0000 11,360.1105 10,470.0000 10,665.9890 Bosnia EUR/BAM 1.9558 1.9558 1.9558 1.9558 Bulgaria EUR/BGN 1.95
Slide 51: Group Embedded Value 2012
Group Embedded Value 2012 Results (€mn) EV Remarks Group Embedded Value (GEV) reflects the present value of amounts deemed to be distributable to shareholders Market Consistent Embedded Value©1 (MCEV) principles applied The MCEV allows for management actions (e.g. in respect of profit participation
Slide 52: Group Embedded Value 2012
Group Embedded Value 2012 Value of new business (€mn) EV Comments The VNB represents the value generated by new business sold during the reporting period Strong increase of life insurance business in CEE Stable profit margins in AT/GER Profitability in CEE remains on high level More than 80% of VNB
Slide 53: Group Embedded Value 2012
Group Embedded Value 2012 Return on embedded value (€mn) EV Summary: GEV of € 5,867.6 mn (+12.4%) High Return on GEV of 14.4% amounting to € 736.4 mn Strong Value of New Business performance at € 203.5 mn (+4.2%) PVNBP increases by 7.3% in Austria / Germany and surges by 55.5% in CEE MCEV growth in
Slide 54: VIG Share (I)
VIG Share (I) APPENDIX Analyst recommendation split Share price performance 1H 2013 Sell Buy 4 4 High EUR 41.22 Low EUR 34.26 Price as of 28 June EUR 35.69 Average daily volume EUR 2.9 mn Market cap. EUR 4.6 bn Hold Performance % -11.60 12 VIG compared to ATX and MSCI Europe Insurance Indexed (Basis
Slide 55: 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 56: Contact details
Contact details Investor Relations APPENDIX Financial calendar 2013/2014 Investor Relations Team Date Event Vienna Insurance Group Schottenring 30, 1010 Vienna 28 Nov. 2013 Results for the first three quarters E-Mail: [email protected] 2013 www.vig.com/ir 29 Jan. 2014 Preliminary unconsolid
Slide 57: Welcome to the family of Vienna Insurance Group AG
Welcome to the family of VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe VIG* VIENNA INSURANCE GROUP Wiener Versicherung Gruppe Sc co oNk WIENER STADTISCHE VIENNA INSURANCE GROUP @lonau VIENNA INSURANCE GROUP WENN INSURANCE GROUP ‘as WIENERGS STADTISCHE VIENNA INSURANCE GROUP @lonav VIENNA INSU
Slide 58: 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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