Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — Investor Presentation (April 2015)
62 slides from Vienna Insurance's investor presentation, April 2015
Slide 1: Vienna Insurance Group Investor Presentation
Vienna Insurance Group Investor Presentation April 2015 12M 2014 Strategy Potential Main regions Appendix
Slide 2: 12M 2014 Successful strategy Long-term potential
Development 12M 2014 Successful strategy Long-term potential Main regions Appendix 12M 2014 Strategy Potential Main regions Appendix
Slide 3: Consistent focus on profitability
Consistent focus on profitability 5 consecutive years of dividend growth Strong increase of profit before taxes to €518.4mn (+46.0%) +46.0% Profit in CEE of €331.3mn contributing 64% to Group PBT Czech Republic contributing more than Austria for the first time Record results in Slovakia, Poland and
Slide 4: Business highlights 2014
Business highlights 2014 Main markets overview of VIG VIG #1 in Austria with overall market share of ~24% Solid premium development for an established market; PBT 2014 impacted by HETA (former HAA) VIG #1 in the Czech Republic with ~34% market share Czech Republic contributing more than Austria to G
Slide 5: Solid premium development in challenging environment
Solid premium development in challenging environment CEE Remaining markets premiums based on local currencies up by 9.1% Gross written premiums (€mn; y-o-y chg.) GWP regional split y-o-y chg. -1% Austria 4,077 0% 9,219 9,146 Czech Republic 1,683 -4% Health 398 386 -58 -3 -12 Slovakia 727 -2% Life 4,
Slide 6: Strong PBT growth driven by improved P&C segment
Strong PBT growth driven by improved P&C segment Czech Republic for the first time biggest contributor to PBT Profit before taxes (€mn; y-o-y change) PBT regional split y-o-y chg. +46% Austria 170 -28% 256 Czech Republic 178 -10% 12 518 47 Slovakia 59 8% -104 355 Poland 55 10% 162 Health 36 Romania
Slide 7: Significantly improved combined ratios
Significantly improved combined ratios Group combined ratio decreased to solid 96.7% P&C Combined ratio development P&C CoR 12M y-o-y regional development (net, %) -3.9%p AT 101.4 -1.4%p 100.6 96.7 99.9 CZ 91.5 -5.3%p 86.2 SK 93.6 -2.3%p 12M13 Claims ratio 69.4 65.8 91.3 96.2 12M14 PL +0.1%p 96.3 RO
Slide 8: Maintaining steady dividends – DPS of €1.40
Maintaining steady dividends – DPS1 of €1.40 Dividend yield amounting to 3.8%2 for 2014 Dividend per share1 (€) Dividend pay-out (€mn) 8% CAGR 9% 1.40 179.2 1.30 166.4 1.20 153.6 1.10 140.8 1.00 128.0 2010 2011 2012 2013 2014p 2010 2011 2012 2013 2014p Dividend policy Unchanged dividend policy with
Slide 9: 2015 and onwards – Management assessment
2015 and onwards – Management assessment VIG sticks to its conservative roots VIG is mid-term committed to: Growth above market and to consolidate market leader position with unique strategy In non-life insurance further optimisation and increased profitability -> CoR below 96% Return on equity (RoE
Slide 10: Successful strategy
Development 12M 2014 Successful strategy Long-term potential Main regions Appendix 12M 2014 Strategy Potential Main regions Appendix
Slide 11: Adaptive growth policy (I)
Adaptive growth policy (I) CEE growth potentials develop in a step function Market growth Recovery stage VIG Strategy Growth stage Elevate potential in changing market phases through adaptive growth policy Time Accelerated Differentiated growth growth - Accelerate growth in all - Consolidation of hi
Slide 12: Adaptive growth policy (II)
Adaptive growth policy (II) Elevate growth potentials correspondingly VIG Strategy Market growth Recovery stage Elevate potential also during recovery phases through differentiated growth policies Consolidation of high margin Growth stage business SME Push non-motor business Unit-linked life insuran
Slide 13: Clear strategy focusing on Austria and the CEE region
Clear strategy focusing on Austria and the CEE region Strategic cornerstones of VIG Local entrepreneurship Multi-brand strategy Multi-channel distribution Conservative investments 12M 2014 Strategy Potential Main regions Appendix 13
Slide 14: 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 VIG Core markets 1990 1996 1999 2001/2002 2004 2006 2007 2008 2010 2011 2014 CZ, SK HU, PL, IT, LI,
Slide 15: 25 years in Central and Eastern Europe (CEE)
25 years in Central and Eastern Europe (CEE) VIG - Value Inspired Growth Geographical distribution VIG – established confidence for the future GWP CEE First-mover advantage in the region with GWP 51% subsequent outperformance of the market 51% CEE From <5 to ~50 insurance companies 100% Footprint co
Slide 16: Focus on insurance business
Focus on insurance business Successful banc-assurance in Austria and CEE Insurance business is core business of VIG Business mix Today around 50 insurance companies are Health part of VIG 4% Nearly all lines of retail and commercial business covered – pension fund business 46% Life being not core P&
Slide 17: 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 18: 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-brand Local brands with good customer recognition Austria are retained Different brands target different client groups Czech Rep. Multi-brand allows for internal benchmarking
Slide 19: Excellent market positions of VIG
Excellent market positions of VIG VIG is the clear No 1 in its core markets Market positions Country Total market share Total N-life Life Austria 1 1 1 23.8% Czech Republic 1 2 1 33.7% Slovakia 1 2 1 33.6% Poland 4 4 4 8.3% Romania 1 1 2 19.5% Bulgaria 2 2 2 13.7% Croatia 4 5 2 8.4% Serbia 4 5 2 9.7
Slide 20: VIG strengthens its market position
VIG strengthens its market position Very strong market share of 19% in its core markets 20% VIG Nr.1 18% 16% 14% 12% Italian competitor Austrian competitor 10% German competitor 8% 6% 2009 2010 2011 2012 2013 Q3 2014 VIG almost twice as big as peers in its core markets Source: local market reports;
Slide 21: Long-term potential
Development 12M 2014 Successful strategy Long-term potential Main regions Appendix 12M 2014 Strategy Potential Main regions 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 2,000 insurance drivers AT 1,500 AT 1,000 500 CZ PL SK HU CZ 2000 2013 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 2,713 9x Long-term growth potential 1,954 Life in CEE still lies ahead 548 Non-life 399 351 272 275 212 123 88 75 59 Ø EU-15 AT Ø CEE CZ SK PL HR HU BG RO SR UA Source: Local insurance authorities; IMF;
Slide 24: 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 Growth region Core region Countries EE, LV, LT, PL, Population ~ 34 mn UA, RO, BG Countries AT, CZ, SK, HU Population ~ 119 mn Ø-premium per capita 794 EUR Premium per cap. 171 EUR Ø-p
Slide 25: Fundamental indicators for motor business in CEE
Fundamental indicators for motor business in CEE Number of registered cars in CEE shows motor under-penetration Age of registered cars in VIG countries1 Number of registered cars per 1000 inhabitants2 2% 4% 4% 7% 8% 4% 7% 7% 14% 6% 7% 9% 11% 13% 18% 17% 18% 19% 17% 19% 23% 22% 20% 28% 26% 32% 31% 73
Slide 26: Macroeconomic upswing in VIG markets
Macroeconomic upswing in VIG markets Promising macro data for the years to come Improving macro data of regions where VIG operates in Positive AT CZ SK PL RO Remains constant Negative 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 GDP Inflation Unemployment GDP per capita
Slide 27: Main regions
Development 12M 2014 Successful strategy Long-term potential Main regions Appendix 12M 2014 Strategy Potential Main regions Appendix
Slide 28: Austria - burdened by Italy and HETA impairments
Austria - burdened by Italy and HETA impairments Premiums in P&C up 3.6% excl. Italian business of Donau GWP development (€mn) P&C GWP direct business split1 +0.1% MTPL 4,074 4,077 19% (23%) P&C 1,872 1,838 14% Health 357 368 (14%) Casco 67% Life 1,845 1,871 (63%) Non-motor 12M 13 12M 14 P&L: P&C bu
Slide 29: Czech Republic – excellent combined ratio of 86.2%
Czech Republic – excellent combined ratio of 86.2% GWPs adjusted for negative FX effects increased by 1.3% GWP development (€mn) P&C GWP direct business split1 -4.5% 1,762 1,683 MTPL 31% P&C 892 827 (29%) Non-motor 47% (51%) Life 870 857 22% (21%) 12M 13 12M 14 Casco P&L: P&C business (€mn) P&L: Lif
Slide 30: Slovakia – Profit growth of 7.6% to record result
Slovakia – Profit growth of overall 7.6% to record result of €59.5mn Development in life impacted by less single premium business GWP development (€mn) P&C GWP direct business split1 -2.4% 745 727 Non-motor 33% P&C 326 331 (32%) 40% MTPL (41%) Life 419 396 27% (27%) 12M 13 12M 14 Casco P&L: P&C busi
Slide 31: Poland – Overall record result despite fierce competition in motor
Poland – Overall record result of €55.2mn despite fierce competition in motor Reduction of STEP in life ongoing GWP development (€mn) P&C GWP direct business split1 -9.5% 1,142 1,034 MTPL 32% P&C 560 Non-motor 43% (33%) 554 (41%) Life 582 480 25% (26%) 12M 13 12M 14 Casco P&L: P&C business (€mn) P&L
Slide 32: Romania – going according to script for improvement
Romania – going according to script for improvement, currently supported by better market environment Restructuring efforts will be maintained GWP development (€mn) P&C GWP direct business split1 -6.1% 362 340 Non-motor 35% 38% MTPL (38%) (29%) P&C 300 285 Life 62 27% 54 (33%) 12M 13 12M 14 Casco P&
Slide 33: Remaining markets – premiums excl. FX up 14.5%
Remaining markets – premiums excl. FX up 14.5% Increased profit contribution; overall PBT up 5.4% GWP development (€mn) P&C GWP direct business split1 +8.9% MTPL 1,156 1,062 23% (20%) 606 P&C 607 18 57% Health 40 Non-motor (58%) 20% 531 (22%) Life 414 Casco 12M 13 12M 14 P&L: P&C business (€mn) P&L:
Slide 34: Appendix
Development 12M 2014 Successful strategy Long-term potential Main regions Appendix Please note: The figures for 2013 have been restated due to changes in the scope of consolidation. 12M 2014 Strategy Potential Main regions Appendix
Slide 35: 12M 2014 Key financials
12M 2014 Key financials Overview of KPIs Net Profit after tax and minorities (€mn) Combined Ratio (net, %) 426 96.7 100.6 96.7 367 234 2012 2013 2014 2012 2013 2014 EPS1 (€) ROE before Taxes (%) 3.01 10.5 10.1 2.75 6.7 1.57 2012 2013 2014 2012 2013 2014 1: EPS net of hybrid interest, annualised figu
Slide 36: 12M 2014 – Income statement
12M 2014 – Income statement IFRS (€mn) €mn 12M 2014 12M 2013 +/-% Gross premiums written 9,145.7 9,218.6 -0.8 Net earned premiums 8,353.7 8,479.1 -1.5 Financial result1 1,116.9 1,226.9 -9.0 Other income 125.5 143.9 -12.8 Total income 9,596.1 9,849.8 -2.6 Expenses for claims and insurance benefits -6
Slide 37: 12M 2014 – Balance sheet
12M 2014 – Balance sheet IFRS (€mn) €mn 31.12.2014 31.12.2013 +/-% Intangible assets 2,370 2,318 2.3 Investments 30,360 29,094 4.4 Unit- and index-linked investments 7,742 6,707 15.4 Reinsurers’ share in underwriting provisions 1,106 1,028 7.5 Receivables 1,502 1,562 -3.8 Tax receivables and advance
Slide 38: 12M 2014 – Strong equity and solvency position
12M 2014 – Strong equity and solvency position Shareholders’ equity Change in Group Shareholders’ Equity (€mn) +6% 213 391 5,283 -52 -201 -34 4,967 Equity restated Profit for Currency AFS unrealised Dividend payment Other Equity as as of YE 2013 the period changes gains and losses of YE 2014 Strong
Slide 39: Solvency 2 under way – VIG well prepared
Solvency 2 under way – VIG well prepared VIG working on partial internal model for non-life and real estate EIOPA Stress Test 2014 under standard formula Status quo of preparation for Solvency 2 VIG being part of the exercise VIG steering process out of Austria Excluding internal model VIG is in the
Slide 40: 12M 2014 – Financial result (I)
12M 2014 – Financial result (I) Net realised gains of less than €50mn Income P&C Life Health Total in € '000 12M 2014 12M 2013 12M 2014 12M 2013 12M 2014 12M 2013 12M 2014 12M 2013 Current income 271,935 368,767 858,710 893,016 50,831 42,484 1,181,477 1,304,267 Income from appreciations 62,595 22,00
Slide 41: 12M 2014 – Financial result (II)
12M 2014 – Financial result (II) Impacted by low yield environment and HETA impairments Financial result (€mn) Remarks -9% An enduring low yield environment will impact 1,227 the financial result in 2015 and going forward -20 which will highly likely not be fully compensated by improved technical 14
Slide 42: Conservative investments with a well diversified bond portfolio
Conservative investments with a well diversified bond portfolio Biggest part invested in fixed income assets 12M 2014: Total €31.1bn Bond portfolio by rating1 Other 6% 6% 6.0% 12% 12% 3.1% BBB 0.0% A 38% 38% 10.0% AA 28% 29% 6.3% AAA 16% 15% 3.6% 12M 2013 12M 2014 Bond portfolio by issuer 71.0% Corp
Slide 43: Further investment diversification towards real estates
Further investment diversification towards real estates Increased investments in real estates to mitigate low yield environment Real estates portfolio development (€bn) Housing Societies effect on real estates -43% Gradual change of consolidation method 3.2 2.7 1.9 from full to at equity leading to
Slide 44: Impacts on VIG of HETA (former Hypo Alpe Adria)
Impacts on VIG of HETA (former Hypo Alpe Adria) Write-downs of ~€79mn of investments VIG bond exposure to HETA – nominal values Subordinated with guarantee of Carinthia Senior with guarantee of Carinthia ~50% -50% 55 50 28 25 0 12M 2013 6M 2014 12M 2014 12M 2013 12M 2014 Remarks As of 6M 2014 about
Slide 45: 12M 2014 P&L – Property & Casualty
12M 2014 P&L – Property & Casualty IFRS (€mn) €mn 12M 2014 12M 2013 +/-% Gross premiums written 4,560.4 4,618.4 -1.3 Net earned premiums 3,791.3 3,910.0 -3.0 Financial result 247.5 267.5 -7.5 Other income 79.4 85.2 -6.9 Total income 4,118.2 4,262.8 -3.4 Expenses for claims and insurance benefits -2,
Slide 46: 12M 2014 P&L – Life
12M 2014 P&L – Life IFRS (€mn) €mn 12M 2014 12M 2013 +/-% Gross premiums written 4,199.0 4,202.4 -0.1 Net earned premiums 4,166.2 4,168.6 -0.1 Financial result 835.8 940.1 -11.1 Other income 46.0 58.5 -21.4 Total income 5,048.0 5,167.2 -2.3 Expenses for claims and insurance benefits -4,094.4 -4,162.
Slide 47: 12M 2014 P&L – Health
12M 2014 P&L – Health IFRS (€mn) €mn 12M 2014 12M 2013 +/-% Gross premiums written 386.3 397.8 -2.9 Net earned premiums 396.2 400.4 -1.0 Financial result 33.5 19.3 74.0 Other income 0.1 0.2 -26.7 Total income 429.9 419.8 2.4 Expenses for claims and insurance benefits -330.3 -333.6 -1.0 Acquisition a
Slide 48: 12M 2014 P&L – Split by regions (I)
12M 2014 P&L – Split by regions (I) IFRS (€mn) Austria Czech Republic Slovakia €mn 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-% Gross premiums written 4,077.0 4,073.9 0.1 1,683.4 1,762.1 -4.5 727.0 744.7 -2.4 Net earned premiums 3,370.8 3,348.5 0.7 1,366.0 1,429.6 -4.4 597.0
Slide 49: 12M 2014 P&L – Split by regions (II)
12M 2014 P&L – Split by regions (II) IFRS (€mn) Poland Romania Remaining €mn 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-% Gross premiums written 1,034.1 1,142.3 -9.5 339.7 361.8 -6.1 1,155.6 1,061.6 8.9 Net earned premiums 852.9 939.7 -9.2 184.5 171.0 7.9 880.1 809.3 8.8 Fina
Slide 50: 12M 2014 P&L – Split by regions (III)
12M 2014 P&L – Split by regions (III) IFRS (€mn) Central Functions Consolidation TOTAL €mn 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-% Gross premiums written 1,289.8 1,303.9 -1.1 -1,160.9 -1,231.6 n.a. 9,145.7 9,218.6 -0.8 Net earned premiums 1,105.5 1,160.1 -4.7 -3.2 5.8 n.
Slide 51: 12M 2014 – Results by country (I)
12M 2014 – Results by country (I) IFRS (€mn) GWP P&C GWP Life GWP Health GWP Total 12M 12M 12M 12M 12M 12M 12M 12M +/-% +/-% +/-% +/-% 2014 2013 2014 2013 2014 2013 2014 2013 Austria 1,838.1 1,871.9 -1.8% 1,870.7 1,844.5 1.4% 368.2 357.4 3.0% 4,077.0 4,073.9 0.1% Czech Rep. 826.7 892.0 -7.3% 856.8 8
Slide 52: 12M 2014 – Results by country (II)
12M 2014 – Results by country (II) IFRS (€mn) Profit before Taxes Net Combined Ratio 12M 2014 12M 2013 +/-% 12M 2014 12M 2013 +/-%p Austria 169.7 235.1 -27.8% 99.9% 101.4% -1.4 Czech Rep. 177.9 197.8 -10.1% 86.2% 91.5% -5.3 Slovakia 59.5 55.3 7.6% 91.3% 93.6% -2.3 Poland 55.2 50.2 9.8% 96.3% 96.2% 0
Slide 53: 12M 2014 – P&C Claims and cost ratio details
12M 2014 – P&C Claims and cost ratio details Overall claims ratio decreased by 3.6%p and cost ratio down by 0.3%p Claims ratio 12M y-o-y regional development (net, %) Remarks for claims incurred Austria: claims ratio down 1.2%p driven by development of Donau 12M13 12M14 -46.4 Versicherung (less busi
Slide 54: 12M 2014 – Exchange rates
12M 2014 – Exchange rates 12M 2014 12M 2013 Balance Sheet Balance Sheet Country Currency P & L EUR P & L EUR EUR EUR Albania EUR/ALL 140.1400 139.9692 140.2000 140.2723 Belarus EUR/BYR 14,380.0000 13,578.3288 13,080.0000 11,799.1233 Bosnia EUR/BAM 1.9558 1.9558 1.9558 1.9558 Bulgaria EUR/BGN 1.9558
Slide 55: Group Embedded Value 2014 development
Group Embedded Value 2014 development Return on GEV (€mn) 2.0% 6,152.7 (+118.5) 203.6 6,111.7 6.9 5,993.2 -166.4 -85.1 2013 reported Dividends FX Effects 2013 adjusted Return in L&H Return in P&C 2014 and others Remarks High P&C growth with return of 10.1% Positive Return on GEV of 2.0% amounting to
Slide 56: EV 2014 – Analysis of Change (Austria/Germany)
EV 2014 – Analysis of Change Life & Health MCEV – Austria / Germany (€mn) -13.8% (-324.7) 112.4 31.3 22.8 2,356.9 -24.0 2,032.2 -467.2 2013 adjusted Value of New Roll forward Assumptions Experience and Economic and 2014 Business other operating other non-operating Remarks Operating return of 6.0% Ne
Slide 57: EV 2014 – Analysis of Change (CEE)
EV 2014 – Analysis of Change Life & Health MCEV – CEE (€mn) 14.7% (+239.6) 48.5 1,865.6 51.7 20.9 126.7 -8.3 1,625.9 2013 adjusted Value of New Roll forward Assumptions Experience and Economic and 2014 Business other operating other non-operating Remarks High growth with return of 15% Profitability
Slide 58: VIG share (I)
VIG share (I) Current analyst recommendation split Share price development 3M 2015 Sell Buy High EUR 42.550 Low EUR 35.825 Price as of 31 Mar. EUR 41.200 Average daily volume EUR 4.1 mn Market cap. EUR 5.3 bn Development YTD % 11.1 Hold VIG compared to ATX and Stoxx Europe 600 Ins. 125 120 115 110 1
Slide 59: 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 60: Contact details
Contact details Investor Relations Financial calendar 2015 Investor Relations Team Date Event Vienna Insurance Group Schottenring 30, 1010 Vienna Publication: Preliminary E-Mail: [email protected] 27 Jan. 2015 unconsolidated premiums 2014 www.vig.com/ir Nina Higatzberger (Head of IR) 14 Apr
Slide 61: 12M 2014 Strategy Potential
12M 2014 Strategy Potential Main regions Appendix 61
Slide 62: 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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