Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Austrian Investors Conference, London 2012
56 slides from Vienna Insurance's conference presentation, Feb 2, 2012
Slide 1: VIG – The CEE story lies still ahead
VIG – The CEE story lies still ahead Austrian Investors Conference, London February 2, 2012
Slide 2: Contents
Contents VIG in 2011 (prelim.) VIG in 2011 (preliminary) CEE potential VIG´s performance Summary Appendix 2
Slide 3: Preliminary YE 2011 Highlights
Preliminary YE 2011 Highlights Excellent development (unconsolidated, unaudited) VIG in 2011 (prelim.) Nearly € 560mn PBT, up by about 10% VIG – YE 2011 (unconsolidated) 7.6% premium growth in CEE, mainly from life business in CZ and PL, and Combined ratio (net) at ~97% non-life in PL Overall growth
Slide 4: Preliminary YE 2011 Financial Highlights
Preliminary YE 2011 Financial Highlights Growth of premiums (unconsolidated, unaudited) by 3.4% to € 9.0bn VIG in 2011 (prelim.) Premium Split Non-life/Life (€mn) Premium Split Austria/Other (€mn) 3.4% Non-life Austria 3,881 3,936 Life 4,990 Other 4,695 4,842 5,081 4,028 4,028 YE 2010 YE 2011 YE 201
Slide 5: Preliminary YE 2011 Premium Development
Preliminary YE 2011 Premium Development Based on EUR million (unconsolidated, unaudited) VIG in 2011 (prelim.) €mn GWP Non-Life GWP Life GWP Total YE 2011 YE 2010 YE 2011 YE 2010 YE 2011 YE 2010 Austria 2,087.2 1,894.7 10.2% 1,940.5 2,133.5 -9.0% 4,027.7 4,028.3 0.0% Czech Rep. 1,106.1 1,098.6 0.7%
Slide 6: Achievements in 2011
Achievements in 2011 VIG in 2011 (prelim.) Proof of Right Strategy Best Year in Company History Despite difficult macroeconomic situation VIG delivers excellent results according Best PBT and GWP result in company to its long term strategy history Successful continuation of CEE focus Over 50% of GWP
Slide 7: Preliminary PBT/Dividend
Preliminary PBT/Dividend VIG in 2011 (prelim.) Development of Dividend € 256.0mn € 128.0mn € 115.5mn € 115.2mn VIG‘s Path of Profitability (€mn) € 86.1mn nearly € 1.10 € 0.90 € 0.90 € 1.00 € 540 € 560 € 0.82 € 508 € 437 € 441 € 1.10 YE 2006 YE 2007 YE 2008 YE 2009 YE 2010 * *: One-off bonus dividend
Slide 8: Contents
Contents CEE potential VIG in 2011 (preliminary) CEE potential VIG´s performance Summary Appendix 8
Slide 9: Insurance Density (USD)
VIG – The Basic Concept GDP growth and under-penetration are insurance drivers CEE potential 2,000 Mature Markets 1998 2010 Insurance Density (USD) P E Growth Markets H 1,000 CRO CRO CZ Emerging Markets H CZ SER PL SK SK SER BG PL RO BG UA UA RO TR 0 1,000 10,000 20,000 GDP per Capita (USD) 100,000
Slide 10: CEE Potential (I): Development of Income
CEE Potential (I): Development of Income 5-10 years delay between different countries CEE potential Romania Czech Republic Austria 1 22 24 11 5 1 2 12 4 5 32 4 5 7 6 24 11 15 14 22 21 33 35 67 68 74 41 75 82 70 61 49 32 24 25 18 5 6 2 1 1 0 2000 2005 2010 2000 2005 2010 2000 2005 2010 + 5 Years + 10
Slide 11: CEE Potential (II): Catch-up Potential in CEE
CEE Potential (II): Catch-up Potential in CEE Austrian example to be followed CEE potential Austrian Insurance Market 1 CEE Insurance Markets in 2010 2 Premium Insurance Insurance Year Density (€) GDP/Capita (€) Country Density (€) GDP/Capita (€) Income (€bn) penetration (%) Penetration (%) Ukraine
Slide 12: CEE Potential (III): Motor Insurance
CEE Potential (III): Motor Insurance Motor underpenetration combined with older vehicles CEE potential Comparison of amount of passenger cars in major countries1 Number of registered vehicles per 1000 inhabitants in 20091 600 VIG markets: 500 AT = 2,53 x CEE ~54 mn 400 Potential of additional 300 82
Slide 13: CEE Potential (IV): Life Insurance
CEE Potential (IV): Life Insurance Life is coming in with building of a middle class CEE potential Households’ Wealth Composition1 Break Down of Business Lines2 (%) Health 10% 14% Euro area (% of GDP) 28% 5% 33% 19% Regular Life 19% 115% Single Life 12% 55% 28% Non-motor NL 30% 63% 12% Pension and l
Slide 14: CEE Potential (V): Regulatory Trends
CEE Potential (V): Regulatory Trends Structural changes will allow for new product lines and volumes CEE potential Reform of pension systems: creation of 2nd and 3rd pillar in pension systems Regulatory Market Reform of health insurance with aim to allow private add-ons to changes to public health i
Slide 15: Contents
Contents VIG´s performance VIG in 2011 (preliminary) CEE potential VIG´s performance Summary Appendix 15
Slide 16: VIG Is Well Positioned in its Core Markets
VIG Is Well Positioned in its Core Markets Steady increase of market share within short period VIG´s performance 2004 2010 Group 1 Pop: 24.3mn Number of Countries Group 1 SK 30% CZ GDP/Cap.: $ 27,2021 RO Density: $ 1,3492 4 A Market Share 20% Group 2 BG 1 Pop: 67.1mn Group 2 GDP/Cap.: $ 10,0751 Grou
Slide 17: VIG – Excellent Past Performance (I)
VIG – Excellent Past Performance (I) VIG growth rates outperform market VIG´s performance 12.60% 11.40% 10.50% Non-life 10.00% Life Total 0.00% Reported Growth 2005 - 2010 CAGR VIG showed strong double digit growth in 2005-2010 despite economic crisis and significant negative effects on CEE currenci
Slide 18: VIG – Excellent Past Performance (II)
VIG – Excellent Past Performance (II) GWP in major markets (€mn): companies show steady upward trend VIG´s performance Austria Czech Republic 3,874 4,041 3,695 3,756 3,435 3,171 1,757 1,603 1,420 1,048 1,130 892 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 Steady growth Profitability
Slide 19: VIG – Excellent Past Performance (III)
VIG – Excellent Past Performance (III) PBT trend in major CEE markets from 2002 - 2010 VIG´s performance 200 40 Czech Republic Slovakia 180 35 160 30 140 PBT €mn 25 PBT €mn 120 100 20 80 15 60 10 40 5 20 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 Pr
Slide 20: Peer Group Comparison
Peer Group Comparison Market share and PBT outperformance VIG´s performance Market share development in CEE 20.0% 14.6% 13.9% 13.2% 12.6% 10,2% 10.0% 9,7% 3,6% 0.0% 2007 2008 2009 1-9 2011 Peer 1 Peer 2 Peer 3 VIG PBT (indexed in %) 125 128 117 120 105 100 70 40 36 20 1-9 2007 -30 1-9 2008 1-9 2009
Slide 21: Contents
Contents Summary VIG in 2011 (preliminary) CEE potential VIG´s performance Summary Appendix 21
Slide 22: VIG Keeps Promises
VIG Keeps Promises Strategic and operative progress Summary Undertakings Achievements Strengthening of leading position in Austria VIG reached undisputed no.1 position in AT CEE premium volume doubled Increased franchise through cooperation with Expansion of CEE business through Erste Bank acquisiti
Slide 23: Contents
Contents Appendix VIG in 2011 (preliminary) CEE potential VIG´s performance Summary Appendix 23
Slide 24: Investment Case
Investment Case Management fundamentals Appendix Strong potential still in Long-term earnings place; VIG has ambitious growth retail focus Sound capitalisation Best CEE insurance franchise Broad distribution (incl. Successful M&A track mutual banking record cooperation) 24
Slide 25: Management Focus
Management Focus Remain committed to proven fundamentals Appendix Steering approach Multi-brand Multi-channel <10% Historically multi-brand was Tied agents 11% - 20% best approach to obtain as Brokers 21% - 30% 1 Banks much market share as Other 31% - 40% possible > 41% Adapted multi-brand Austria a
Slide 26: Trends in CEE: VIG actions
Trends in CEE: VIG actions Key components for future performance Appendix Group Issues P&C Focus on earning potentials Focus on commercial business in CEE Investment income from reserves building up as Products in CEE still rather short-tail, long-tail to source of profit come => this will push grow
Slide 27: 9M 2011 Financial Highlights (I)
9M 2011 Financial Highlights (I) PBT increase driven by CEE performance Appendix GWP (€mn) Profit before Tax (€mn) 8.593 +4.0% 541 7.899 8.019 508 +9.6% 6.802 441 6.538 414 6.106 378 341 2008 2009 2010 9M 09 9M 10 9M 11 2008 2009 2010 9M 09 9M 10 9M 11 Net Profit after Tax and Minorities (€mn) Combi
Slide 28: 9M 2011 Financial Highlights (II)
9M 2011 Financial Highlights (II) Appendix EPS (€)1 ROE before Tax (%) 3.32 2.95 2.65 2.72 14.3 2.40 2.49 10.5 10.2 10.6 11.0 10.0 2008 2009 2010 9M 09 9M 10 9M 11 2008 2009 2010 9M 09 9M 10 9M 11 1: anualised values net of hybrid interest 28
Slide 29: 9M 2011 Income Statement
9M 2011 Income Statement IFRS (€mn) Appendix €mn 9M 2011 9M 2010 +/-% 1. Gross premiums written 6,802.1 6,538.3 4.0 2. Net earned premiums 6,077.0 5,919.4 2.7 3. Financial result 1 798.6 895.7 -10.8 4. Other income 73.6 109.0 -32.5 Total income 6,949.1 6,924.1 0.4 6. Expenses for claims and insuranc
Slide 30: 9M 2011 Balance Sheet
9M 2011 Balance Sheet IFRS (€mn) Appendix €mn 30.9. 2011 31.12.2010 +/-% Intangible assets 2,068 2,104 -1.7 Investments 27,815 28,160 -1.2 Unit- and index-linked investments 5,483 5,479 0.1 Reinsurers’ share in underwriting provisions 1,218 1,118 8.9 Receivables 1,705 1,681 1.4 Tax receivables and a
Slide 31: 9M 2011 P&L – Gross Written Premiums
9M 2011 P&L– Gross Written Premiums Growth with different dynamics by lines and markets (€mn) Appendix Austria: motor stabilising, sound non- €mn GWP Non-life GWP Life Total motor growth; weak life single 9M 2011 9M 2010 +/-% 9M 2011 9M 2010 +/-% 9M 2011 9M 2010 +/-% premiums due to new tax regime A
Slide 32: 9M 2011 – Expenses for Claims Incurred
9M 2011 – Expenses for Claims Incurred Loss ratio improving due to absence of NatCat events Appendix % Claims Ratio Group loss ratio (net) down by 0.8% pts 9M 2011 9M 2010 +/- %-pts Austria and Czech Republic recorded loss ratio Austria 66.4 67.6 -1.2 down by 1.2% pts and 2.8% pts as a Czech Rep. 63
Slide 33: 9M 2011 – Acquisition and Administrative Expenses
9M 2011 – Acquisition and Administrative Expenses Cost ratio fairly stable Appendix % Cost Ratio Group cost ratio (net) decreased by 0.2% pts 9M 2011 9M 2010 +/- %-pts Slight reduction of cost ratio in Austria due to Austria 28.2 29.2 -1.0 lower admin expenses Czech Rep. 28.6 28.4 0.2 In the Czech R
Slide 34: 9M 2011 P&L Major Items – Financial Result
9M 2011 P&L Major Items – Financial Result Lower appreciations and income from disposals Appendix Income P&C Life Health Total in € '000 9M 2011 9M 2010 9M 2011 9M 2010 9M 2011 9M 2010 9M 2011 9M 2010 Current income 376,075 272,906 677,095 672,297 26,787 28,292 1,079,957 973,495 Income from apprecia
Slide 35: Preliminary YE 2011 Investment Split
Preliminary YE 2011 Investment Split Appendix Investment portfolio including cash and cash equivalents ~ 5% Deposits and cash ~ 5% ~ 1% Alternatives ~ 1% ~ 3% Affiliated Comp. ~ 3% ~ 12% Loans ~ 12% ~ 14% Real Estate ~ 15% ~ 4% Equities ~ 3% ~ 61% Bonds ~ 61% YE 2010 YE 2011 pre lim . 35
Slide 36: Preliminary YE 2011 Development of Bond Portfolio
Preliminary YE 2011 Development of Bond Portfolio Rating upgrades in CEE improve structure Appendix By Issuer By Rating 3% 4% 8% 8% 10% 10% 27% 30% 31% 49% 11% 11% 33% 17% 51% 54% 21% 22% YE 2010 YE 2011 prelim . YE 2010 YE 2011 prelim . Government 1 Pfandbriefe/Covered Bonds AAA AA A BBB Other Fina
Slide 37: Preliminary YE 2011 Bond Portfolio Split
Preliminary YE 2011 Bond Portfolio Split As of 31/12/2011 (preliminary, unaudited) Appendix Governments and Government Guaranteed Other Austria 20% 20% France 3% 6% Germany 12% Poland 10% 29% Czech Republic Slovakia 37
Slide 38: Preliminary YE 2011 PIIGS – Government Bonds
Preliminary YE 2011 PIIGS – Government Bonds Appendix €mn Portugal - Ireland 1 52 Italy 14 Greece1 10 Spain 8 Total 84 ~70% ~70% Approximately 0.3% of total investments 1: Including impairments of about €45mn for Ireland and Greece 38
Slide 39: 9M 2011 Shareholders’ Equity
9M 2011 Shareholders’ Equity Shareholders’ equity supports strong capitalisation Appendix Change in Group Shareholders’ Equity (€mn) 336.4 -177.3 5,053.6 5,029.6 -21.1 -1.4 -112.6 Increase of 4.8% over YE 2010 Equity as of YE 2010 Currency changes Changes in AFS unrealised gains Profit for the perio
Slide 40: 9M 2011 P&L – Business Segments (P&C)
9M 2011 P&L – Business Segments Property & Casualty, IFRS (€mn) Appendix €mn 9M 2011 9M 2010 +/-% 1. Gross premiums written 3,604.4 3,353.0 7.5 2. Net earned premiums 2,902.3 2,748.4 5.6 3. Financial result 184.4 142.0 29.8 4. Other income 43.1 30.7 40.3 Total income 3,129.8 2,921.2 7.1 6. Expenses
Slide 41: 9M 2011 P&L – Business Segments (Life)
9M 2011 P&L – Business Segments Life, IFRS (€mn) Appendix €mn 9M 2011 9M 2010 +/-% 1. Gross premiums written 2,927.8 2,939.6 -0.4 2. Net earned premiums 2,909.1 2,928.4 -0.7 3. Financial result 590.6 731.1 -19.2 4. Other income 30.4 78.2 -61.1 Total income 3,530.2 3,737.7 -5.6 6. Expenses for claims
Slide 42: 9M 2011 P&L – Business Segments (Health)
9M 2011 P&L – Business Segments Health, IFRS (€mn) Appendix €mn 9M 2011 9M 2010 +/-% 1. Gross premiums written 269.9 245.8 9.8 2. Net earned premiums 265.6 242.6 9.5 3. Financial result 23.6 22.6 4.1 4. Other income 0.0 0.0 n.a. Total income 289.1 265.2 9.0 6. Expenses for claims and insurance benef
Slide 43: 9M 2011 P&L – Split by Regions (I)
9M 2011 P&L – Split by Regions (I) Regional segments, IFRS (€mn) Appendix €mn Austria Czech Republic 9M 2011 9M 2010 +/-% 9M 2011 9M 2010 +/-% 1. Gross premiums written 3,122.6 3,193.5 -2.2 1,404.9 1,290.1 8.9 2. Net earned premiums 2,717.3 2,844.7 -4.5 1,287.9 1,182.9 8.9 3. Financial result 558.4
Slide 44: 9M 2011 P&L – Split by Regions (II)
9M 2011 P&L – Split by Regions (II) Regional segments, IFRS (€mn) Appendix €mn Slovakia Poland Romania 9M 2011 9M 2010 +/-% 9M 2011 9M 2010 +/-% 9M 2011 9M 2010 +/-% 1. Gross premiums written 498.7 478.5 4.2 742.8 534.5 39.0 398.9 396.6 0.6 2. Net earned premiums 452.8 436.1 3.8 683.5 489.4 39.7 382
Slide 45: 9M 2011 P&L – Split by Regions (III)
9M 2011 P&L – Split by Regions (III) Regional segments, IFRS (€mn) Appendix €mn Remaining TOTAL 9M 2011 9M 2010 +/-% 9M 2011 9M 2010 +/-% 1. Gross premiums written 634.2 645.2 -1.7 6,802.1 6,538.3 4.0 2. Net earned premiums 553.2 593.8 -6.8 6,077.0 5,919.4 2.7 3. Financial result 55.8 53.2 4.9 798.6
Slide 46: 9M 2011 Results by Country
9M 2011 Results by Country IFRS (€mn) Appendix €mn GWP Non-Life Life GWP GWP Total Profit before Taxes Net Combined Ratio 9M 2011 9M 2010 9M 2011 9M 2010 9M 2011 9M 2010 9M 2011 9M 2010 9M 2011 9M 2010 Austria 1,661.0 1,524.4 1,461.6 1,669.0 3,122.6 3,193.5 207.3 180.6 94.6% 96.9% Czech Rep. 781.6 7
Slide 47: Change in Group Shareholders’ Equity
Change in Group Shareholders’ Equity IFRS (€ ‘000) Appendix 1.1. - 30.09.2011 1.1. - 30.09.2010 Equity as of 1 January 5,029,647 4,628,573 Exchange rate changes -21,057 34,760 Changes in scope of consolidation -1,432 2,632 Capital increase - - Unrealised gains and losses from -112,631 106,893 financ
Slide 48: Life Insurance Premium Split
Life Insurance Premium Split IFRS (€mn) Appendix Premiums written - direct business 9M 2011 9M 2010 +/- % Regular premiums 1,705.0 1,636.2 4.2% Single premiums 1,212.0 1,291.2 -6.1% Total premiums written - direct business 2,917.0 2,927.4 -0.4% thereof: Policies with profit participation 1,461.5 1,4
Slide 49: Group Embedded Value 2010
Group Embedded Value 2010 Results (€mn) Appendix L&H P&C Total 2010 2009 (*) 2010 2009 (*) 2010 2009 (*) Remarks Austria / Germany Free Surplus 342.8 207.8 All results are based on local GAAP Required Capital 394.1 381.4 GEV reflects the present value of amounts deemed to ANAV 736.9 589.1 -197.4 73.
Slide 50: Group Embedded Value 2010
Group Embedded Value 2010 Return on Adjusted Embedded Value (€mn) Appendix L&H P&C Total Change in Methodology Austria / Germany and Assumptions EV Dec 31, 2010 1,851.6 -197.4 1,654.2 EV Dec 31, 2009 Reported 1,684.2 73.3 1,757.5 The reference rates used for EV Dec 31, 2009 Restated 1,692.4 73.9 1,7
Slide 51: Group Embedded Value 2010
Group Embedded Value 2010 New Business Values (€mn) Appendix Austria / Germany 2010 2009 (*) +/-% NBV 49.8 51.5 - 3.3% Comments APE 216.5 203.8 + 6.3% PVNBP 2,045.1 1,987.5 + 2.9% The NBV represents the value generated by new business sold APE-Ratio 23.0% 25.3% - 9.0% during the reporting period PVN
Slide 52: 9M 2011 Exchange Rates
9M 2011 Exchange Rates National currency unit per EUR Appendix 9M 2011 9M 2010 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 7.4199 7.4995 7.3058 7.2618 Estonia EUR/EEK 1.0000 1.0000 15.6466 15.6466 Liechtenstein EU
Slide 53: Shareholder Structure (I)
Shareholder Structure (I) Total number of shares 128,000,000 Appendix Wiener Städtische Wechselseitiger Versicherungsverein - Vermögensverwaltung – Vienna Insurance Group ~70 % Free Float ~ 30 % 53
Slide 54: Shareholder Structure (II)
Shareholder Structure (II) Free float split Appendix Austria ~22 % Others ~4% North America ~25% Continental Europe ~26% UK & Ireland ~23% 54
Slide 55: VIG Share & Contact Details
VIG Share & Contact Details Investor Relations Appendix VIG 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 Nina Higatzberger (Head of IR) Tel. +43 (0)50 350 - 21920
Slide 56: 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
Vienna Insurance Group — Austrian Investors Conference, London 2012 on 6ix