Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — 9M 2016 Earnings Presentation
61 slides from Vienna Insurance's earnings presentation, Nov 24, 2016
Slide 1: Investor Presentation: Results for the first three quarters 2016
Vienna Insurance Group Investor Presentation Results for the first three quarters 2016 9M 2016 Strategy Potential Segments Appendix
Slide 2: Development 9M 2016
Development 9M 2016 Successful strategy Long-term potential Segments Appendix 9M 2016 Strategy Potential Segments Appendix
Slide 3: Overview of solid 9M 2016 results
Overview of solid 9M 2016 results VIG on track to achieve target for 2016 €7.0bn Total premium volume increased by 0.7% Premium increases in all lines of business y-o-y except for life single GWP premium business Low interest rate environment results in further targeted reduction of life single prem
Slide 4: Stable premium development despite life single premium reduction
Stable premium development despite life single premium reduction Overview of premiums by segments (I) Gross written premiums (€mn; y-o-y chg.) 9M15 9M16 -1.5% 3,154.2 3,107.4 -3.1% 1,193.2 1,156.7 -0.7% -3.0% +30.3% 551.8 547.9 635.3 616.5 300.6 391.8 Austria Czech Republic Slovakia Poland Romania A
Slide 5: Strong GWP growth in CEE region
Strong GWP growth in CEE region Overview of premiums by segments (II) Gross written premiums (€mn; y-o-y chg.) 9M15 9M16 -10.0% +4.6% 299.3 269.4 +14.2% +15.6% 229.9 240.4 +140.8% +6.1% 162.0 160.7 141.9 139.1 104.5 101.7 107.8 43.4 The Baltic Hungary Bulgaria Turkey/ Remaining CEE Other markets Geo
Slide 6: Favourable premium development in all lines of business
Favourable premium development in all lines of business Gross written premiums (€mn; y-o-y chg.) MTPL Casco Other property Total premiums +13.9% +7.4% +4.4% +0.7% 1,002 721 2,834 2,957 6,912 6,962 671 880 MTPL 880 1,002 Casco 671 721 9M15 9M16 9M15 9M16 9M15 9M16 Other Property 2,834 2,957 Life regu
Slide 7: Group PBT of €301.3mn up by 88.4%
Group PBT of €301.3mn up by 88.4%; PBT 2015 impacted by IT impairment Overview of profits by segments (I) Profit before taxes (€mn; y-o-y change) -9.3% 9M15 9M16 -11.5% 125.9 116.9 114.1 103.4 -1.9% -50.3% 40.4 39.6 34.8 +16.6% 17.3 5.5 6.4 Austria Czech Republic Slovakia Poland Romania In Austria a
Slide 8: Overview of profits by segments (II)
Overview of profits by segments (II) Profit before taxes (€mn; y-o-y change) +10.3% 9M15 9M16 -23.2% 16.7 15.1 15.1 +80.4% +4.4% 11.6 +41.6% n.a. 6.9 5.1 5.3 2.8 3.8 1.7 2.0 -7.8 The Baltic Hungary Bulgaria Turkey/ Remaining CEE Other markets Georgia Start-up costs and non-life portfolio transfer im
Slide 9: Combined ratio (P&C) at 97.9% due to increased claims ratio
Combined ratio (P&C) at 97.9% due to increased claims ratio P&C Combined ratio development P&C CoR 9M y-o-y regional development (net, %) +1%p 98.6 AT +0.7%p 97.9 99.3 96.9 89.4 30.5 CZ +3.5%p Cost ratio 30.5 92.9 96.6 SK -1.4%p 95.3 Claims ratio 66.4 67.4 97.2 PL +3.4%p 100.7 102.2 RO -0.6%p 9M15 9
Slide 10: Equity as of 9M 2016 includes non-controlling interests of housing societies
Equity as of 9M 2016 includes non-controlling interests of fully consolidated housing societies 12M 2015 restated for changed valuation of non-profit housing societies Change in Group Shareholders’ Equity (€mn) +31% 1,012 5,884 249 231 -2 4,490 -95 Equity restated Profit for the period Currency chan
Slide 11: Outlook unchanged
Outlook unchanged Short-term / medium-term Profit before taxes 2016 VIG aims to at least double the 2015 PBT up to €400mn Outlook Profitable growth – either organic or via acquisitions Mid-term Retaining market leadership positions in AT, CZ and SK goals Market share of at least 10% in HR, HU, PL, R
Slide 12: Successful strategy
Development 9M 2016 Successful strategy Long-term potential Segments Appendix 9M 2016 Strategy Potential Segments Appendix
Slide 13: Dynamic expansion into CEE out of Austria
Dynamic expansion into CEE out of Austria VIG with the most diversified network throughout the region 1990: 3 Markets Today: 25 Markets Client/talent base: 24mn people Client/talent base: 180mn people 1990 1996 1999 2001/2002 2004 2006 2007 2008 2010 2011 2014 CZ, SK HU, PL, IT, LI, HR RO, BY SI GE
Slide 14: Focus on insurance business
Focus on insurance business Successful banc-assurance in Austria and CEE Insurance business is core business of VIG Today around 50 insurance companies are part of VIG Nearly all lines of retail and commercial business covered – pension fund business being not core Focus on technical results (COR be
Slide 15: Local entrepreneurship as basis for success
Local entrepreneurship as basis for success Clear commitment to local management Insurance business is local business Local management with best understanding of their markets and customer needs Members of the management board of VIG all have different country responsibilities and are members in the
Slide 16: Unique market approach with long-term focus
Unique market approach with long-term focus Multi-brand and multi-channel provide best access to customers Multi-brand Multi-channel Local brands with good customer recognition Austria are retained Different brands target different client groups Czech Rep. Multi-brand allows for internal benchmarkin
Slide 17: Continuing on the path of a well-proven strategy with refinements
Continuing on the path of a well-proven strategy with refinements for the future Strategy confirmed, refinements Continuation of proven strategy Focus on Conservative Strategy refinement for the future Austria and Local investments and CEE entrepreneurship reinsurance Gain market shares with growth
Slide 18: VIG strengthening its growth platform in CEE
VIG strengthening its growth platform in CEE VIG is aiming to grow its market share in Croatia, Hungary, Poland and Serbia to at least 10% in the mid-term Croatia: With total GWP up 6.8% in 9M 2016, VIG Croatia is growing above market; driven by double-digit growth rates in motor casco and other pro
Slide 19: Refinement of strategy
Refinement of strategy Focus on health insurance and digitalisation in the area of products and services Stronger focus on health insurance Digitalisation under way In many countries: discussions about affordability of public health Use of digital products and care systems services has become more p
Slide 20: Excellent market positions of VIG
Excellent market positions of VIG VIG is the clear No 1 in its major CEE markets Market positions Country Total market share Total N-life Life Austria 1 1 1 25.0% Czech Republic 1 1 1 33.5% Slovakia 1 2 1 33.2% Poland 4 5 4 6.8% Romania 1 1 2 26.5% Bulgaria 1 1 2 14.5% Croatia 4 6 3 8.6% Serbia 4 4
Slide 21: Long-term potential
Development 6M 2016 Successful strategy Long-term potential Segments Appendix 9M 2016 Strategy Potential Segments Appendix
Slide 22: Insurance growth is a catching-up process
Insurance growth is a catching-up process Model of insurance demand development still valid 2 500 Insurance density in EUR GDP growth and catch- up process are AT 2 000 insurance drivers 1 500 AT 1 000 500 CZ PL SK HU CZ 2000 2015 PLHU SK RO 0 RO 1 000,0 6 000,0 36 000,0 GDP per capita in EUR Source
Slide 23: Striking under-penetration shows potential
Striking under-penetration shows potential Annual premiums per capita (insurance density), in EUR 2,939 12x Long-term growth potential 2,034 in CEE still lies ahead Life Non-life 516 408 345 285 271 171 140 99 94 27 Ø EU-15 AT øCEE CZ SK PL HU HR BG RO RS UA VIG Source: Local insurance authorities;
Slide 24: CEE grows faster than the EU-15
CEE grows faster than the EU-15 Forecast of economic growth in CEE vs. EU-15 GDP growth in 2017*: 12% CEE: 5.1% and EU-15: 3.6% 10% 8% 6% 4% 2% 0% -2% -4% -6% 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 CEE EU 15 Source: IMF; October 2016; CEE = VIG markets without Austria, Italy, Liechtenstei
Slide 25: Segments
Development 9M 2016 Successful strategy Long-term potential Segments Appendix 9M 2016 Strategy Potential Segments Appendix
Slide 26: Austria: Premium development driven by single life business
Austria: Premium development driven by single life business; PBT impacted by lower financial result CoR impact due to changed personnel provisions at half-year GWP development (€mn) P&L: P&C business (€mn) -1.5% 9M16 Y-o-Y 3,154 3,107 Underwriting and financial result 38.8 -42.5% MTPL 260 254 Other
Slide 27: Czech Republic: lower financial result main driver for decreased PBT
Czech Republic: lower financial result main driver for decreased PBT Despite cost ratio increase still excellent CoR of 92.9% GWP development (€mn) P&L: P&C business (€mn) -3.1% 9M16 Y-o-Y 1,193 Underwriting and financial result 49.0 -29.3% 1,157 Other non-technical result -2.3 -73.3% MTPL 193 200 R
Slide 28: Slovakia: Premium decrease driven by reduced life single premium
Slovakia: Premium decrease driven by reduced life single premium Stable development in all other lines of business GWP development (€mn) P&L: P&C business (€mn) -0.7% 9M16 Y-o-Y 552 548 Underwriting and financial result 18.6 4.1% Other non-technical result -1.1 n.a. MTPL 97 101 Result (pre tax) 17.5
Slide 29: Poland: lower financial result and motor claims drive PBT decrease
Poland: lower financial result and claims development in motor are main drivers for PBT decrease Premium decrease impacted by foreign exchange effects GWP development (€mn) P&L: P&C business (€mn) -3.0% 9M16 Y-o-Y 635 617 Underwriting and financial result 14.1 -54.4% MTPL 115 108 Other non-technical
Slide 30: Romania: strong premium increase and overall PBT up 16.6%
Romania: strong premium increase and overall PBT up 16.6% GWP development (€mn) P&L: P&C business (€mn) +30.3% 9M16 Y-o-Y 392 Underwriting and financial result 1.9 62.1% Other non-technical result 0.0 -98.6% 301 Result (pre tax) 1.9 >100% 190 Claims ratio 65.9% 0.5%p MTPL 103 Cost ratio 35.7% -1.1%p
Slide 31: Premium development of new segments (I)
Premium development of new segments (I) The Baltic GWP development (€mn) Hungary GWP development (€mn) +140.8% +14.2% 105 162 MTPL MTPL 142 11 24 9 12 Casco Casco 11 11 42 12 Other Property Other Property 39 4 43 13 3 Health Health 6 59 31 Life regular Life regular 57 27 Life single Life single 34 1
Slide 32: Premium development of new segments (II)
Premium development of new segments (II) Remaining CEE GWP development (€mn) Other markets GWP development (€mn) +4.6% -10.0% 230 240 299 269 MTPL 63 Other Property 75 63 Casco 81 30 29 Life regular 53 Other Property 55 64 70 Health Life regular 6 6 Life single 171 46 45 134 Life single 22 28 9M15 9
Slide 33: Appendix
Development 9M 2016 Successful strategy Long-term potential Segments Appendix 9M 2016 Strategy Potential Segments Appendix
Slide 34: 9M 2016 Key financials
9M 2016 Key financials Overview of KPIs Net Profit after tax and minorities (€mn) Combined Ratio (net, %) 367 97.9 97.3 96.7 96.9 220 131 98 2014 2015 9M15 9M16 2014 2015 9M15 9M16 EPS1 (€) ROE after tax and minorities (%) 2.75 7.9 7.3 2.17 4.3 1.23 0.66 1.7 2014 2015 9M15 9M16 2014 2015 9M15 9M16 1
Slide 35: 9M 2016 Income statement
9M 2016 Income statement IFRS (€mn) / 9M 2015 restated €mn 9M 2016 9M 2015 +/-% Gross premiums written 6,961.8 6,912.4 0.7 Net earned premiums 6,158.9 6,147.3 0.2 Financial result1 703.2 781.7 -10.0 Other income 122.8 78.3 56.8 Total income 6,984.9 7,007.3 -0.3 Expenses for claims and insurance bene
Slide 36: 9M 2016 Balance sheet
9M 2016 Balance sheet IFRS (€mn) / YE 2015 restated €mn 30.09.2016 31.12.2015 +/-% Intangible assets 2,051 2,080 -1.4 Investments 34,992 30,142 16.1 Unit- and index-linked investments 8,483 8,144 4.2 Reinsurers’ share in underwriting provisions 1,063 1,031 3.1 Receivables 1,472 1,392 5.7 Tax receiva
Slide 37: Investment split and bond portfolio overview
Investment split and bond portfolio overview Full consolidation of non-profit housing societies and rating change of CZ 9M 2016: Total €36.5bn Bond portfolio by rating1 Other 6% 6% 6.1% 17% 18% 1.5% BBB 0.0% 7.5% A 31% 41% 5.8% Real Estate total AA 34% 15.4% 25% AAA 11% 11% 9.6% 12M15 9M16 3.9% 65.5
Slide 38: Financial result decreased by 10%
Financial result decreased by 10% Financial result incl. at equity consolidated companies Income in € '000 9M 2016 9M 2015 +/-% Current income 848,225 842,195 0.7 Income from appreciations 14,626 13,184 10.9 Overall financial result down by Income from the disposal of investments 94,561 153,099 -38.
Slide 39: 9M 2016 P&L by segment (I)
9M 2016 P&L by segment (I) IFRS (€mn) / 9M 2015 restated Austria Czech Republic Slovakia €mn 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% Gross premiums written 3,107.4 3,154.2 -1.5 1,156.7 1,193.2 -3.1 547.9 551.8 -0.7 Net earned premiums 2,481.3 2,520.0 -1.5 861.5 927.1 -7.1 444.
Slide 40: 9M 2016 P&L by segment (II)
9M 2016 P&L by segment (II) IFRS (€mn) / 9M 2015 restated Poland Romania The Baltic €mn 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% Gross premiums written 616.5 635.3 -3.0 391.8 300.6 30.3 104.5 43.4 >100 Net earned premiums 502.7 545.4 -7.8 253.4 192.3 31.8 80.8 42.3 91.2 Financi
Slide 41: 9M 2016 P&L by segment (III)
9M 2016 P&L by segment (III) IFRS (€mn) / 9M 2015 restated Hungary Bulgaria Turkey/Georgia €mn 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% Gross premiums written 162.0 141.9 14.2 107.8 101.7 6.1 160.7 139.1 15.6 Net earned premiums 117.3 102.7 14.2 73.8 67.5 9.2 75.8 67.9 11.7 Fin
Slide 42: 9M 2016 P&L by segment (IV)
9M 2016 P&L by segment (IV) IFRS (€mn) / 9M 2015 restated Remaining CEE Other markets €mn 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% Gross premiums written 240.4 229.9 4.6 269.4 299.3 -10.0 Net earned premiums 166.3 156.9 6.0 239.0 269.9 -11.5 Financial result1 26.2 26.9 -2.5 13.6 13.5 0.8 Other inco
Slide 43: 9M 2016 P&L by segment (V)
9M 2016 P&L by segment (V) IFRS (€mn) / 9M 2015 restated Central Functions Consolidation TOTAL €mn 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% Gross premiums written 1,019.0 968.6 5.2 -922.5 -846.4 n.a. 6,961.8 6,912.4 0.7 Net earned premiums 855.3 805.8 6.2 7.3 -0.3 n.a. 6,158.9
Slide 44: 9M 2016 Financial result by segment (I)
9M 2016 Financial result by segment (I) IFRS (€ '000) / 9M 2015 restated Income Austria Czech Republic Slovakia Poland in € '000 9M 2016 9M 2015 9M 2016 9M 2015 9M 2016 9M 2015 9M 2016 9M 2015 Current income 610,886 615,118 76,992 84,161 32,879 33,804 23,455 28,790 Income from appreciations 3,859 4,
Slide 45: 9M 2016 Financial result by segment (II)
9M 2016 Financial result by segment (II) IFRS (€ '000) / 9M 2015 restated Income Romania The Baltic Hungary Bulgaria in € '000 9M 2016 9M 2015 9M 2016 9M 2015 9M 2016 9M 2015 9M 2016 9M 2015 Current income 10,777 9,624 3,831 2,589 6,413 7,014 16,790 16,329 Income from appreciations 1,309 147 478 487
Slide 46: 9M 2016 Financial result by segment (III)
9M 2016 Financial result by segment (III) IFRS (€ '000) / 9M 2015 restated Income Turkey/Georgia Remaining CEE Other markets in € '000 9M 2016 9M 2015 9M 2016 9M 2015 9M 2016 9M 2015 Current income 6,556 5,735 28,246 27,775 15,390 15,030 Income from appreciations 1,642 1,737 149 307 3 31 of which re
Slide 47: 9M 2016 Financial result by segment (IV)
9M 2016 Financial result by segment (IV) IFRS (€ '000) / 9M 2015 restated Income Central Functions Consolidation Total in € '000 9M 2016 9M 2015 9M 2016 9M 2015 9M 2016 9M 2015 Current income 91,906 73,177 -43,659 -46,645 880,462 872,501 Income from appreciations 32 0 0 0 14,625 13,184 of which redu
Slide 48: 9M 2016 Premiums by business lines and country (I)
9M 2016 Premiums by business lines and country (I) IFRS (€mn) GWP MTPL GWP Casco GWP Other property 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% Austria 253.6 259.8 -2.4% 210.9 205.5 2.7% 1,035.8 1,028.2 0.7% Czech Republic 199.7 192.5 3.7% 156.6 141.4 10.8% 317.5 293.6 8.1% Slovak
Slide 49: 9M 2016 Premiums by business lines and country (II)
9M 2016 Premiums by business lines and country (II) IFRS (€mn) GWP Life regular GWP Life single GWP Health 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% Austria 936.7 938.0 -0.1% 376.4 438.9 -14.2% 294.0 283.8 3.6% Czech Republic 395.5 374.4 5.6% 77.3 181.1 -57.3% 10.1 10.2 -0.6% Sl
Slide 50: 9M 2016 Country overview GWP / PBT / CoR
9M 2016 Country overview GWP / PBT / CoR IFRS (€mn) GWP Total Profit before taxes Combined Ratio net 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-% 9M 2016 9M 2015 +/-pp Austria 3,107.4 3,154.2 -1.5% 103.4 116.9 -11.5% 99.3% 98.6% 0.7 Czech Republic 1,156.7 1,193.2 -3.1% 114.1 125.9 -9.3% 92.9% 89.4% 3.5
Slide 51: 9M 2016 P&C business according to VAG
9M 2016 development for P&C business according to VAG (Austrian Insurance Supervision Act) IFRS (€ '000) / 9M 2015 restated 9M 2016 9M 2015 +/-% Overall result for direct business Gross direct premiums written 3,716.36 3,482.93 6.7 Gross direct 345.08 422.81 -18.4 Underwriting result 301.77 312.55 -
Slide 52: 9M 2016 life business according to VAG
9M 2016 development for life business according to VAG (Austrian Insurance Supervision Act) IFRS (€ '000) / 9M 2015 restated 9M 2016 9M 2015 +/-% Overall result for direct business Gross direct premiums written 2,818.47 3,007.34 -6.3 Gross direct 222.37 226.45 -1.8 Underwriting result 0.00 0.00 0.00
Slide 53: 9M 2016 health business according to VAG
9M 2016 development for health business according to VAG (Austrian Insurance Supervision Act) IFRS (€ '000) / 9M 2015 restated 9M 2016 9M 2015 +/-% Overall result for direct business Gross direct premiums written 309.29 299.35 3.3 Gross direct 35.30 41.79 -15.5 Underwriting result 0.00 0.00 0.00 Fin
Slide 54: 9M 2016 P&C claims and cost ratio details
9M 2016 P&C claims and cost ratio details Claims ratio 9M y-o-y regional development (net, %pts) Remarks for claims incurred 9M15 9M16 Slovakia: claims ratio development distorted by non- recurring positive effect last year 0.0 +7.4 +0.5 -0.1 +4.6 Poland: substantial increase due to challenging moto
Slide 55: 9M 2016 – Exchange rates
9M 2016 – Exchange rates 9M 2016 9M 2015 Balance Sheet Balance Sheet Country Currency P & L EUR P & L EUR EUR EUR Albania EUR/ALL 137.3300 137.7784 139.3900 140.2398 Belarus EUR/BYN 2.1610 2.2360 19,908.0000 17,027.4249 Bosnia EUR/BAM 1.9558 1.9558 1.9558 1.9558 Bulgaria EUR/BGN 1.9558 1.9558 1.9558
Slide 56: S&P rating confirmed in July 2016: A+/stable
S&P rating confirmed in July 2016: A+/stable/-- VIG remains the best rated company in the ATX Anchor: Business Risk Profile: Strong a+ „Strong competitive position, based on leading market positions in Austria and CEE“ „Sound diversification by business line and a well-established multichannel distr
Slide 57: VIG share (I)
VIG share (I) Current analyst recommendation split Share price development 9M 2016 Buy High EUR 24.790 Sell Low EUR 16.095 Price as of 30 Sept. EUR 18.070 Market cap. EUR 2.3bn Development YTD % -28.55 Hold VIG compared to ATX and Stoxx Europe 600 Ins. 115 105 95 85 75 65 55 Jan-16 Feb-16 Mar-16 Apr
Slide 58: VIG share (II)
VIG share (II) General information Shareholder structure Number of common shares: 128mn ISIN: AT0000908504 ~30% Wiener Städtische Free Float Listings: Wechselseitiger Versicherungsverein - Vienna – since 17 Oct. 1994 Vermögensverwaltung – Vienna Insurance Group ~70% Prague – since 5 Feb. 2008 Ticker
Slide 59: Contact details
Contact details Investor Relations Financial calendar 2017 Investor Relations Team Date Event 19 Apr. 2017 Results and Embedded Value 2016 Vienna Insurance Group Schottenring 30, 1010 Vienna 02 May 2017 Record date Annual General E-Mail: [email protected] Meeting www.vig.com/ir 12 May 2017
Slide 60: 9M 2016 Strategy Potential
9M 2016 Strategy Potential Segments Appendix
Slide 61: 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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