Vienna Insurance Group AG · VIE:VIG
Vienna Insurance — FY2015 Earnings Presentation
47 slides from Vienna Insurance's earnings presentation, Apr 7, 2016
Slide 1: Vienna Insurance Group 12M 2015 Results Presentation
Vienna Insurance Group 12M 2015 Results Presentation Vienna, 7 April 2016 Highlights Financials Embedded Value Outlook Main regions Appendix
Slide 2: 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
Slide 3: Results and Embedded Value 2015 conference call
Results and Embedded Value 2015 conference call Presenting team and topics Presenting team: Elisabeth Stadler, CEO Martin Simhandl, CFO Werner Matula, Group Chief Actuary Q&A session: Management Board of VIG is available to take questions Topics: Highlights p. 4 Appendix 1: Main regions p. 24 Financ
Slide 4: New CEO with an expanded management team
New CEO with an expanded management team Stronger focus on individual countries – Change of Cash Generating Units Management Board members and Reporting segments change country responsibilities Elisabeth Stadler, CEO: Until YE 2015 AT, CZ Primary segments according to lines of business: Martin Simha
Slide 5: Continuing on the path of a well-proven strategy with refinements for the future
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 6: Refinement of strategy (I)
Refinement of strategy (I) Increase market share in four focus markets to at least 10% Gaining market shares VIG well positioned to exploit growth potential in CEE VIG aiming to grow mid-term in Croatia, Hungary, Poland and Serbia to at least 10% market share All of these markets show strong economi
Slide 7: Refinement of strategy (II)
Refinement of strategy (II) 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 Use of digital products and services has public health care systems become m
Slide 8: Key facts 2015
Key facts 2015 Strong position & capital base, lower yields, one-off impairments, adapted dividend CEE proportion Solvency 2 S&P rating 50:50 200% A+ stable Roughly 50% of premiums VIG with approved partial S&P confirmed the excellent are earned in CEE. internal model for non-life and capitalisation
Slide 9: Financials and investments
Financials and Highlights Embedded Value investments Appendix 1: Appendix 2: Outlook Main regions Financials Highlights Financials Embedded Value Outlook Main regions Appendix
Slide 10: Financial highlights 2015
Financial highlights 2015 VIG steers through challenging macroeconomic and competitive environment €9.0bn Premium business decrease of 1.4% caused by reduced life single premium GWP Current life premiums up 4.9% but could not compensate for deliberate single premium business reduction of 15.7% Corpo
Slide 11: Premiums overall down 1.4% driven by single premium life business decrease
Premiums overall down 1.4% driven by single premium life business decrease Top-line growth in P&C, health and current premium life business Gross written premiums (€mn; y-o-y chg.) GWP regional split y-o-y chg. -1% Austria 4,056 -1% 9,146 39 12 9,020 Czech Republic 1,555 -8% Health 386 398 -176 716
Slide 12: Declining financial result and impairments lowered profit before taxes to €172mn
Declining financial result and impairments lowered profit before taxes to €172mn Profit before taxes (€mn; y-o-y change) PBT regional split y-o-y chg. -67% Austria 213 25% 518 Health 47 Czech Republic 163 -8% Slovakia 52 -13% Life 162 -351 Poland 43 -21% 172 Romania 6 -7% 1 3 50 Remaining markets 43
Slide 13: Group combined ratio at 97.3%
Group combined ratio at 97.3% Deterioration of 0.6%p y-o-y due to increased claims ratio P&C Combined ratio development P&C CoR 12M y-o-y regional development (net, %) +0.6%p AT 99.9 -2.4%p 96.7 97.3 97.5 CZ 86.2 +4.4%p 90.7 SK 91.3 +4.9%p 12M14 Claims ratio 65.8 66.7 96.2 96.3 12M15 PL +3.0%p 99.3
Slide 14: Unchanged investment strategy
Unchanged investment strategy 12M 2015: Total €31.8bn Bond portfolio by rating1 Other 6% 6% 6.7% 12% 17% BBB 3.2% 0.0% A 38% 31% 9.0% AA 29% 34% 6.3% AAA 15% 11% 4.4% 12M14 12M15 Bond portfolio by issuer 70.4% Corporates 15% 16% Financials 21% 20% Pfandbriefe/ 9% 8% Covered bonds Bonds Loans Deposit
Slide 15: 12M 2015 Financial result
12M 2015 Financial result Financial result decreased by more than €40mn Income P&C Life Health Total in € '000 12M 2015 12M 2014 12M 2015 12M 2014 12M 2015 12M 2014 12M 2015 12M 2014 Current income 278,049 271,935 829,631 858,710 41,799 50,831 1,149,479 1,181,477 Income from appreciations 9,715 62,5
Slide 16: Shareholders' equity decreased by 4.3% impacted by hybrid bond repurchase
12M 2015: Shareholders´ equity decreased by 4.3% impacted by hybrid bond repurchase Strong Solvency 2 ratio in the range of around 200% Change in Group Shareholders’ equity (€mn) -4% 110 8 5,283 -120 37 5,058 -201 -61 Equity as Profit for Currency AFS unrealised Dividend Repurchase Other Equity as o
Slide 17: Embedded Value
Financials and Highlights Embedded Value investments Appendix 1: Appendix 2: Outlook Main regions Financials Highlights Financials Embedded Value Outlook Main regions Appendix
Slide 18: Group Embedded Value 2015 development
Group Embedded Value 2015 development Return on GEV (€mn) 8.1% (+484.5) 757.1 6,455.1 -272.5 6,111.7 38.0 5,970.5 -179.2 2014 reported Dividends FX Effects 2014 adjusted Return in L&H Return in P&C 2015 and others Remarks Positive return on GEV of 8.1% amounting to €484.5mn High L&H growth with retu
Slide 19: EV 2015 – Analysis of Change (Austria / Germany)
EV 2015 – Analysis of Change Life & Health MCEV – Austria / Germany (€mn) +30.0% (+593.5) 288.4 2,572.7 318.9 30.6 1,979.3 28.5 -72.9 2014 adjusted Value of New Roll forward Assumptions Experience and Economic and 2015 Business other operating other non-operating Remarks Operating return of 15.4% in
Slide 20: EV 2015 – Analysis of Change (CEE)
EV 2015 – Analysis of Change Life & Health MCEV – CEE (€mn) 8.9% (+163.6) 24.3 1,998.1 21.7 -1.1 119.9 -1.2 1,834.6 2014 adjusted Value of New Roll forward Assumptions Experience and Economic and 2015 Business other operating other non-operating Remarks High growth with return of 8.9% Profitability
Slide 21: Outlook
Financials and Highlights Embedded Value investments Appendix 1: Appendix 2: Outlook Main regions Financials Highlights Financials Embedded Value Outlook Main regions Appendix
Slide 22: Outlook
Outlook Short-term / medium-term / general Profit before taxes 2016 Despite that it is expected that the current low-interest rate environment will lead to another decline in the ordinary financial result VIG aims to: Outlook At least double the profit before taxes 2015 up to €400mn Mid-term Profita
Slide 23: Appendix 1: Main regions
Financials and Highlights Embedded Value investments Appendix 1: Appendix 2: Outlook Main regions Financials Highlights Financials Embedded Value Outlook Main regions Appendix
Slide 24: Austria: improved CoR in 2015; last year burdened by HETA
Austria: improved CoR in 2015; last year burdened by HETA CoR down to 97.5% from 99.9% last year GWP development (€mn) P&C GWP direct business split1 -0.5% MTPL 4,077 4,056 18% (19%) P&C 1,838 1,830 14% Casco Health 368 381 (14%) 68% Life 1,871 1,844 (67%) Non-motor 12M14 12M15 P&L: P&C business (€m
Slide 25: Czech Republic: lower financial result main driver for decreased PBT
Czech Republic: lower financial result main driver for decreased PBT CoR despite increased claims ratio at excellent level of 90.7% GWP development (€mn) P&C GWP direct business split1 -7.6% 1,683 1,555 MTPL 31% P&C 827 (31%) 838 Non-motor 45% (47%) Life 857 717 23% (22%) 12M14 12M15 Casco P&L: P&C
Slide 26: Slovakia: strong life business sales via Erste Bank
Slovakia: strong life business sales via Erste Bank (up 7.0% y-o-y) P&C acquisition expenses impacted by increased broker sales GWP development (€mn) P&C GWP direct business split1 -1.4% 727 716 Non-motor 32% P&C 331 337 (33%) 40% MTPL (40%) Life 396 380 28% (27%) 12M14 12M15 Casco P&L: P&C business
Slide 27: Poland: pricing pressure in motor and lower financial result
Poland: pricing pressure in motor and lower financial result are main drivers of PBT development CoR increased to 99.3% GWP development (€mn) P&C GWP direct business split1 -18.9% 1,034 MTPL 839 31% P&C 554 Non-motor 42% (32%) 474 (43%) Life 480 364 26% (25%) 12M14 12M15 Casco P&L: P&C business (€mn
Slide 28: Romania: profit before taxes of €5.6mn
Romania: profit before taxes of €5.6mn; decrease in life due to declined financial result Positive CoR development; still to improve GWP development (€mn) P&C GWP direct business split1 +26.2% 429 Non-motor 340 30% (35%) 44% MTPL 346 (38%) P&C 285 Life 82 26% 54 (27%) 12M14 12M15 Casco P&L: P&C busi
Slide 29: Remaining markets: strong premium development
Remaining markets: strong premium development; receivables write-off in Bulgaria burdened PBT in P&C CoR deterioration driven by Turkey and Serbia GWP development (€mn) P&C GWP direct business split1 +12.0% MTPL 1,294 1,156 24% (23%) 650 P&C 606 17 56% Health 18 Non-motor (57%) 20% Life 531 627 (20%
Slide 30: Appendix 2: Financials
Financials and Highlights Embedded Value investments Appendix 1: Appendix 2: Outlook Main regions Financials Highlights Financials Embedded Value Outlook Main regions Appendix
Slide 31: 12M 2015 Key financials
12M 2015 Key financials Overview of KPIs Net Profit after tax and minorities (€mn) Combined Ratio (net, %) 367 100.6 96.7 97.3 234 98 2013 2014 2015 2013 2014 2015 EPS1 (€) ROE before taxes² (%) 2.75 11.0 7.1 1.57 3.7 0.66 2013 2014 2015 2013 2014 2015 1: EPS net of hybrid interest, annualised figur
Slide 32: 12M 2015 Income statement
12M 2015 Income statement IFRS (€mn) €mn 12M 2015 12M 2014 +/-% Gross premiums written 9,019.8 9,145.7 -1.4 Net earned premiums 8,180.5 8,353.7 -2.1 Financial result1 1,074.9 1,116.9 -3.8 Other income 150.2 125.5 19.7 Total income 9,405.6 9,596.1 -2.0 Expenses for claims and insurance benefits -6,74
Slide 33: 12M 2015 Balance sheet
12M 2015 Balance sheet IFRS (€mn) €mn 31.12.2015 31.12.2014 +/-% Intangible assets 2,080 2,370 -12.2 Investments 30,709 30,360 1.2 Unit- and index-linked investments 8,144 7,742 5.2 Reinsurers’ share in underwriting provisions 1,031 1,106 -6.8 Receivables 1,390 1,502 -7.4 Tax receivables and advance
Slide 34: 12M 2015 P&L Property & Casualty
12M 2015 P&L Property & Casualty IFRS (€mn) €mn 12M 2015 12M 2014 +/-% Gross premiums written 4,599.0 4,560.4 0.8 Net earned premiums 3,799.7 3,791.3 0.2 Financial result 152.7 247.5 -38.3 Other income 92.4 79.4 16.5 Total income 4,044.9 4,118.2 -1.8 Expenses for claims and insurance benefits -2,534
Slide 35: 12M 2015 P&L Life
12M 2015 P&L Life IFRS (€mn) €mn 12M 2015 12M 2014 +/-% Gross premiums written 4,022.8 4,199.0 -4.2 Net earned premiums 3,986.1 4,166.2 -4.3 Financial result 886.8 835.8 6.1 Other income 57.5 46.0 25.1 Total income 4,930.4 5,048.0 -2.3 Expenses for claims and insurance benefits -3,887.6 -4,094.4 -5.
Slide 36: 12M 2015 P&L Health
12M 2015 P&L Health IFRS (€mn) €mn 12M 2015 12M 2014 +/-% Gross premiums written 398.0 386.3 3.0 Net earned premiums 394.7 396.2 -0.4 Financial result 35.4 33.5 5.8 Other income 0.3 0.1 >100 Total income 430.4 429.9 0.1 Expenses for claims and insurance benefits -326.7 -330.3 -1.1 Acquisition and ad
Slide 37: 12M 2015 P&L regions (I)
12M 2015 P&L regions (I) IFRS (€mn) Austria Czech Republic Slovakia €mn 12M 2015 12M 2014 +/-% 12M 2015 12M 2014 +/-% 12M 2015 12M 2014 +/-% Gross premiums written 4,055.5 4,077.0 -0.5 1,554.8 1,683.4 -7.6 716.5 727.0 -1.4 Net earned premiums 3,370.0 3,370.8 0.0 1,204.8 1,366.0 -11.8 576.5 597.0 -3.
Slide 38: 12M 2015 P&L regions (II)
12M 2015 P&L regions (II) IFRS (€mn) Poland Romania Remaining €mn 12M 2015 12M 2014 +/-% 12M 2015 12M 2014 +/-% 12M 2015 12M 2014 +/-% Gross premiums written 838.9 1,034.1 -18.9 428.6 339.7 26.2 1,294.2 1,155.6 12.0 Net earned premiums 716.3 852.9 -16.0 265.0 184.5 43.7 981.7 880.1 11.5 Financial re
Slide 39: 12M 2015 P&L regions (III)
12M 2015 P&L regions (III) IFRS (€mn) Central Functions Consolidation TOTAL €mn 12M 2015 12M 2014 +/-% 12M 2015 12M 2014 +/-% 12M 2015 12M 2014 +/-% Gross premiums written 1,248.9 1,289.8 -3.2 -1,117.7 -1,160.9 n.a. 9,019.8 9,145.7 -1.4 Net earned premiums 1,066.8 1,105.5 -3.5 -0.5 -3.2 n.a. 8,180.5
Slide 40: 12M 2015 Results by country (I)
12M 2015 Results by country (I) IFRS (€mn) GWP P&C GWP Life GWP Health GWP Total 12M 12M 12M 12M 12M 12M 12M 12M +/-% +/-% +/-% +/-% 2015 2014 2015 2014 2015 2014 2015 2014 Austria 1,830.4 1,838.1 -0.4% 1,843.9 1,870.7 -1.4% 381.2 368.2 3.5% 4,055.5 4,077.0 -0.5% Czech Rep. 838.1 826.7 1.4% 716.7 85
Slide 41: 12M 2015 Results by country (II)
12M 2015 Results by country (II) IFRS (€mn) Profit before Taxes Net Combined Ratio 12M 2015 12M 2014 +/-% 12M 2015 12M 2014 +/-%p Austria 213.0 169.7 25.5% 97.5% 99.9% -2.4 Czech Rep. 163.0 177.9 -8.4% 90.7% 86.2% 4.4 Slovakia 51.9 59.5 -12.8% 96.2% 91.3% 4.9 Poland 43.4 55.2 -21.3% 99.3% 96.3% 3.0
Slide 42: 12M 2015 P&C claims and cost ratio details
12M 2015 P&C claims and cost ratio details Claims ratio 12M y-o-y regional development (net, %) Remarks for claims incurred 12M14 12M15 Austria and Romania with decreased claims ratios Czech Republic: claims ratio up 5.0%p driven by several -0.8 +5.0 +6.1 -3.1 +4.4 large losses in the general third
Slide 43: 4Q 2015 Income statement
4Q 2015 Income statement IFRS (€mn) €mn 4Q 2015 4Q 2014 +/-% Gross premiums written 2,107.3 2,107.1 0.0 Net earned premiums 2,033.2 2,027.0 0.3 Financial result1 277.6 258.3 7.5 Other income 71.9 43.7 64.7 Total income 2,382.8 2,329.0 2.3 Expenses for claims and insurance benefits -1,727.7 -1,622.5
Slide 44: 12M 2015 Exchange rates
12M 2015 Exchange rates 12M 2015 12M 2014 Balance Sheet Balance Sheet Country Currency P&L EUR P&L EUR EUR EUR Albania EUR/ALL 137.2800 139.7463 140.1400 139.9692 Belarus EUR/BYR 20,300.0000 17,654.5370 14,380.0000 13,578.3288 Bosnia EUR/BAM 1.9558 1.9558 1.9558 1.9558 Bulgaria EUR/BGN 1.9558 1.9558
Slide 45: VIG share (I)
VIG share (I) Current analyst recommendation split Share price development 3M 2016 High EUR 24.790 Sell Low EUR 18.300 Buy Price as of 31 March EUR 18.600 Market cap. EUR 2.4 bn Development YTD % -26.5 Hold VIG compared to ATX and Stoxx Europe 600 Ins. 105 95 85 75 65 Jan-16 Feb-16 Mar-16 VIG ATX SX
Slide 46: 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 47: Contact details
Contact details Investor Relations Financial calendar 2016 Investor Relations Team Date Event Publication: Preliminary Vienna Insurance Group 26 Jan. 2016 unconsolidated premiums 2015 Schottenring 30, 1010 Vienna E-Mail: [email protected] 07 Apr. 2016 Results and Embedded Value 2015 www.vig
Vienna Insurance Group — FY2015 Earnings Presentation on 6ix