Vienna Insurance Group AG · VIE:VIG

Vienna Insurance — Non-Deal Roadshow (January 2010)

53 slides from Vienna Insurance's roadshow presentation, Jan 28, 2010

  1. Slide 1: Building its Market Position and Financial Strength

    V.I.G. Building its Market Position and Financial Strength London/Dublin, 28 – 29 January 2010

  2. Slide 2: Contents

    Contents A 2 A Investment proposition B Growth potential in CEE and Austria C Recent developments D YE 2009 financial highlights1 E Appendix 1: preliminary, unaudited, unconsolidated

  3. Slide 3: Investment Proposition at a Glance

    Investment Proposition at a Glance V.I.G. set two strategic milestones A 3 Footprint Milestone 1 § V.I.G. - Pioneer in CEE; start of expansion in 1990 - “Big fish in a small pond” - Going east immediately after the fall of the iron curtain due to potential of emerging markets and geographic proximit

  4. Slide 4: V.I.G. – Leading Insurer in CEE

    V.I.G. – Leading Insurer in CEE Market strategy proves effective A 4 2005 2009 § Gross written premiums: € 5.0bn § Gross written premiums2: € 8.2bn § Profit before tax: € 240mn § Profit before tax: ~€ 440mn § Presence in 15 countries § Presence in 23 countries § No. 2 in CEE1 § No. 1 in CEE1 Strateg

  5. Slide 5: Contents

    Contents B 5 A Investment proposition B Growth potential in CEE and Austria C Recent developments D YE 2009 financial highlights1 E Appendix 1: preliminary, unaudited, unconsolidated

  6. Slide 6: V.I.G. Business Model Still in Place (I)

    V.I.G. Business Model Still in Place (I) GDP growth and underpenetration are insurance drivers B 6 1998 Growth Markets Mature Markets Insurance Density (USD) 1,000 CRO Emerging Markets PL H RO Insurance demand BG SK CZ also strongly driven by UA SER TR catch-up process 0 1,000 10,000 GDP per Capita

  7. Slide 7: V.I.G. Business Model Still in Place (II)

    V.I.G. Business Model Still in Place (II) Catch-up potential in CEE in Non-life and Life B 7 Insurance Density 2008 (USD) Proportion of NL & L in CEE Markets 3,727 Life Non-life 2,866 Non-life 58% 53% 54% NL 73% 65% 61% Life 37% 80% L 41% 55% 59% 53% 47% 74% 86% 83% 88% 87% 86% 20% 27% 35% 39% 42% 4

  8. Slide 8: Management Approach (I)

    Management Approach (I) Multi-brand strategy is paramount for distribution B 8 Multi-Brand Features § Strong brand awareness in local markets § Entrepreneurship of management build up well established local brands thus retain loyalty of employees and management, customers and distribution networks §

  9. Slide 9: Management Approach (II)

    Management Approach (II) Strength of distribution supports future growth B 9 Comment Multi-Channel Tied agents <10% § V.I.G. has one of the broadest distribution 11% - 20% Brokers Banks networks 21% - 30% Other 31% - 40% § Distribution differs from country to country > 41% according to local market

  10. Slide 10: Contents

    Contents C 10 A Investment proposition B Growth potential in CEE and Austria C Recent developments D YE 2009 financial highlights1 E Appendix 1: preliminary, unaudited, unconsolidated

  11. Slide 11: Financial Control and Business Initiatives

    Financial Control and Business Initiatives Setting the basis for future performance C 11 Cost savings Annual cost savings target of at least € 100mn, to be >€ 100mn >€ 100mn reached by end of 2010 Scale-based § Streamlining of regional head offices ~€ 60mn § Bundling of operating and service departm

  12. Slide 12: New Governance Structure (I)

    New Governance Structure (I) Current situation C 12 Existing Group Architecture Details Shareholders § Continuous expansion of V.I.G. resulted in more across-group management requirements § Existing governance framework does not reflect rising management + requirements § Increasing overlap of Group

  13. Slide 13: New Governance Structure (II)

    New Governance Structure (II) Future organisation C 13 New Group Architecture Details § Shareholders remain § WSTV operations to be § Clear corporate governance invested in future spun off into new legal holding company entity - Local companies manage operating retail and SME business - Holding will

  14. Slide 14: Capitalisation

    Capitalisation Strong capitalisation is excellent basis for future expansion C 14 Shareholders‘ Equity Capitalisation Change in Group Shareholders’ Equity (€mn) +13.1% 4,682.9 § Group shareholders’ equity increased by 13.1% to about 4,138.8 € 4.7bn in 9M 2009 § Comfortable solvency ratio of above 18

  15. Slide 15: Contents

    Contents D 15 A Investment proposition B Growth potential in CEE and Austria C Recent developments D YE 2009 financial highlights1 E Appendix 1: preliminary, unaudited, unconsolidated

  16. Slide 16: YE 2009 Financial Highlights

    YE 2009 Financial Highlights Growth of Group premiums1 by 1.2% to € 8.2bn D 16 YE 2009: Total Group Premiums (€mn) YE 2009: Total Group Premiums (€mn) (unconsolidated, unaudited) (unconsolidated, unaudited) 218 211 3,345 3,475 Other L 4,167 4,154 CEE NL Austria 4,782 4,747 3,742 3,857 2008 2009 YE 2

  17. Slide 17: PBT 2009/Outlook for 2010

    PBT 2009/Outlook for 2010 Confidence about rising PBT despite economic uncertainity D 17 V.I.G.'s Path of Profitability 2010 CAGR: § Subdued GDP growth outlook for Austria, €540 +16.4% higher unemployment affecting customer confidence €437 ~€440 § CEE core countries slowly regaining GDP €321 growth

  18. Slide 18: Dividend

    Dividend Consistent long-term dividend policy D 18 Development of Dividend1 Comments Payout volume Dividend/share € 256.0mn Bonus/share § 2005 – 2007 payout ratio ranging from 33-37% § One-off bonus dividend paid-out last year as a reward for shareholder € 115.5mn support during capital increase in

  19. Slide 19: Contents

    Contents E 19 A Investment proposition B Growth potential in CEE and Austria C Recent developments D YE 2009 financial highlights1 E Appendix 1: preliminary, unaudited, unconsolidated

  20. Slide 20: YE 2009 Premium Development

    YE 2009 Premium Development Preliminary GWP for YE 2009 (€mn, unconsolidated, unaudited)1 E 20 Note: YE 2008 premium restated for exclusion of Wüstenrot Insurance due to low minority interest Total Non-Life Life YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% Austria 3,856.6 3,741.9 3

  21. Slide 21: YE 2009 Premiums in Local Currency

    YE 2009 Premiums in Local Currency Preliminary GWP for YE 2009 (local mn, unconsolidated, unaudited) E 21 Local FX Total Non-life Life YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% YE 2009 YE 2008 +/-% Austria 3,856.6 3,741.9 3.1% 1,872.0 1,825.0 2.6% 1,984.6 1,916.9 3.5% Czech Rep. 44,104.4 38,159.2 15

  22. Slide 22: 9M 2009 Financial Highlights

    9M 2009 Financial Highlights 9M PBT yoy above level of excellent year 2007 E 22 GWP Profit before Tax 541 1.5% -16.3% 7,899 6,912 437 407 5,882 6,018 6,106 321 324 341 5,032 2006 2007 2008 9M 07 9M 08 9M 09 2006 2007 2008 9M 07 9M 08 9M 09 IFRS IFRS Net Profit after Tax and Minorities Combined Ratio

  23. Slide 23: 9M 2009 Financial Highlights (II)

    9M 2009 Financial Highlights (II) E 23 EPS ROE before Tax (%) 3.41* * 18.0 16.6* 3.43 17.6 3.18 2.98 14.8 14.3* 2.74* 2.48 10.2* 2006 2007 2008 9M 07 9M 08 9M 09 2006 2007 2008 9M 07 9M 08 9M 09 * Diluted for SPO 2008 IFRS * Diluted for SPO 2008 IFRS

  24. Slide 24: 9M 2009 Income Statement

    9M 2009 Income Statement IFRS (€mn) E 24 9M 2009 9M 2008 +/-% 1. Gross premiums written 6,106.0 6,017.8 1.5 2. Net earned premiums 5,374.3 5,169.1 4.0 3. Financial result 727.2 806.2 -9.8 4. Other income 85.6 42.7 >100 Total income 6,187.0 6,018.0 2.8 6. Expenses for claims and insurance benefits -4

  25. Slide 25: 9M 2009 Balance Sheet

    9M 2009 Balance Sheet IFRS (€mn) E 25 9M 2009 YE 2008 +/- % Intangible assets 2,007 1,649 21.7 Investments 26,048 24,548 6.1 Unit- and index-linked investments 4,393 3,602 22.0 Reinsurers’ share in underwriting provisions 1,172 1,222 -4.1 Receivables 1,710 1,500 14.0 Deferred tax assets 148 131 12.6

  26. Slide 26: 9M 2009 P&L Major Items – Gross Written Premiums (I)

    9M 2009 P&L Major Items – Gross Written Premiums (I) Premium development affected by weak CEE currencies (€mn) E 26 GWP Non-life GWP Life Total FX development 9M 09 vs 9M 08 (vs. €; average exchange rates) 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% Austria 1,536.4 1,520.8 1.0% 1,

  27. Slide 27: 9M 2009 P&L Major Items – Gross Written Premiums (II)

    9M 2009 P&L Major Items – Gross Written Premiums (II) Stable premiums, supported by new consolidations1 E 27 § Group GWP show steady development § Austria: In Life, inclusion of s Versicherung offsets ongoing Development of s Versicherung Group weak single premiums; current premiums flat in Q3; in P

  28. Slide 28: 9M 2009 P&L Major Items – Expenses for Claims Incurred

    9M 2009 P&L Major Items – Expenses for Claims Incurred Loss ratio up due to higher claims in CEE and floods in A, CZ E 28 § Group loss ratio (net) at 65.9% (64.2% in 9M § Poland increasing by 6.3% pts to 63.4% due to 2008, 65.1% in HY09) increase of reserves as a consequence of legal § Austrian loss

  29. Slide 29: 9M 2009 P&L Major Items – Operating Expenses

    9M 2009 P&L Major Items – Operating Expenses Cost ratio down as a result of savings programmes E 29 § Group cost ratio (net) decreasing by 1.5% pts § Poland showing lower cost ratio at 37.2% to reach 30.4% (9M 08: 41.7%) thanks to lower administration costs as well as abolition of § Cost ratio in Au

  30. Slide 30: 9M 2009 P&L Major Items – Financial Result

    9M 2009 P&L Major Items – Financial Result Sound financial result (€’000) E 30 Income P&C Life Health Total in € '000 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 Current income 132,321 136,980 808,070 693,430 28,032 25,623 968,423 856,033 Income from appreciations 8,260 5,592 55,

  31. Slide 31: 9M 2009 P&L – Business Segments (P&C)

    9M 2009 P&L – Business Segments Property & Casualty, IFRS (€mn) E 31 9M 2009 9M 2008 +/-% 1. Gross premiums written 3,343.3 3,379.5 -1.1 2. Net earned premiums 2,625.6 2,545.4 3.2 3. Financial result 167.3 234.0 -28.5 4. Other income 53.6 28.1 90.9 Total income 2,846.5 2,807.5 1.4 6. Expenses for cl

  32. Slide 32: 9M 2009 P&L – Business Segments (Life)

    9M 2009 P&L – Business Segments Life, IFRS (€mn) E 32 9M 2009 9M 2008 +/-% 1. Gross premiums written 2,521.0 2,401.8 5.0 2. Net earned premiums 2,509.1 2,389.4 5.0 3. Financial result 555.4 564.2 -1.6 4. Other income 31.9 14.6 >100 Total income 3,096.3 2,968.2 4.3 6. Expenses for claims and insuranc

  33. Slide 33: 9M 2009 P&L – Business Segments (Health)

    9M 2009 P&L – Business Segments Health, IFRS (€mn) E 33 9M 2009 9M 2008 +/-% 1. Gross premiums written 241.7 236.6 2.2 2. Net earned premiums 239.6 234.2 2.3 3. Financial result 4.6 8.0 -43.0 4. Other income 0.1 0.0 62.5 Total income 244.2 242.3 0.8 6. Expenses for claims and insurance benefits -199

  34. Slide 34: Premium Portfolio

    Premium Portfolio Source of business origination substantially widened E 34 GWP by Geography 9M 06 GWP by Geography 9M 09 Other CEE Other 3.7% Other Other CEE Romania 3.5% 2.5% 6.9% 3.9% Poland Romania 5.4% 7.5% Austria Austria Slovakia 59.0% Poland 49.2% 6.6% 6.6% Czech Slovakia Republic 7.7% 17.9%

  35. Slide 35: 9M 2009 P&L - Split by Regions (I)

    9M 2009 P&L - Split by Regions (I) Regional segments, IFRS (€mn) E 35 Austria Czech Republic 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% 1. Gross premiums written 3,005.6 2,959.4 1.6 1,198.5 1,006.7 19.1 2. Net earned premiums 2,652.1 2,582.5 2.7 1,026.7 815.1 26.0 3. Financial result 543.7 648.3 -16.

  36. Slide 36: 9M 2009 P&L - Split by Regions (II)

    9M 2009 P&L - Split by Regions (II) Regional segments, IFRS (€mn) E 36 Slovakia Poland Romania 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% 1. Gross premiums written 469.4 422.8 11.0 405.8 609.1 -33.4 455.9 494.8 -7.9 2. Net earned premiums 411.8 358.1 15.0 368.7 564.7 -34.7 414.6

  37. Slide 37: 9M 2009 P&L - Split by Regions (III)

    9M 2009 P&L - Split by Regions (III) Regional segments, IFRS (€mn) E 37 Other CEE1 Other TOTAL 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% 9M 2009 9M 2008 +/-% 1. Gross premiums written 418.8 353.9 18.3 152.0 171.0 -11.1 6,106.0 6,017.8 1.5 2. Net earned premiums 350.4 277.9 26.1 149.9 147.5 1.6 5,374

  38. Slide 38: 9M 2009 Results by Country

    9M 2009 Results by Country IFRS (€mn) E 38 GWP Non-Life Life GWP GWP Total Profit before Taxes Net Combined Ratio 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 Austria 1,536.4 1,520.8 1,469.2 1,438.6 3,005.6 2,959.4 184.2 241.4 96.3% 93.3% Czech Rep. 782.8 752.0 415

  39. Slide 39: 9M 2009 Shareholders’ Equity

    9M 2009 Shareholders’ Equity Shareholders’ equity supports strong capitalisation E 39 Change in Group Shareholders’ Equity (€mn) 280.9 -174.6 4,682.9 170.6 250.0 4,138.8 20.7 -3.5 Increase of 13.1% in 9M 2009 Equity as of YE Currency Changes in Capital increase AFS unrealised Profit for the Dividend

  40. Slide 40: Change in Group Shareholders‘ Equity

    Change in Group Shareholders‘ Equity IFRS (€‘000) E 40 1.1. - 30.09.2009 1.1. - 30.09.2008 Equity as of 1 January 4,138,790 2,615,563 Exchange rate changes 20,720 39,237 Changes in scope of consolidation -3,452 42,810 Capital increase 250,000 1,343,078 Unrealised gains and losses from financial 170,

  41. Slide 41: YE 2009 Investment Split

    YE 2009 Investment Split V.I.G. follows a consistent investment approach E 41 Portfolio Overview Current Investment Strategy ~ +8% ~ € 27bn ~ 5% Cash & Deposits € 25bn ~ 1% Alternatives ~ 4% Affiliated Companies Backbone of asset allocation is diversified ~ 7% 1 bond portfolio ~ 2% ~ 14% Loans ~ 5%

  42. Slide 42: Development of Bond Portfolio

    Development of Bond Portfolio E 42 By Issuer By Rating 6% 2% 3% 7% 7% 9% 36% 45% 49% 48% 13% 16% 21% 21% 44% 33% 21% 19% YE 2008 YE 2009 YE 2008 YE 2009 Government 1 Pfandbriefe/Covered Bonds AAA AA A BBB Other Financials Corporates 1: Government and government guaranteed

  43. Slide 43: Life Insurance Premium Split

    Life Insurance Premium Split IFRS (€mn) E 43 Premiums written - direct business 9M 2009 9M 2008 +/- % Regular premiums 1,588.3 1,356.7 17.1% Single premiums 921.2 1,037.7 -11.2% Total premiums written - direct business 2,509.5 2,394.4 4.8% thereof: Policies with profit participation 1,383.1 1,347.1

  44. Slide 44: Q3 2009 Income Statement

    Q3 2009 Income Statement IFRS (€mn) E 44 Q3 2009 Q3 2008 +/-% 1. Gross premiums written 1,854.5 1,802.7 2.9 2. Net earned premiums 1,761.2 1,697.8 3.7 3. Financial result 255.6 187.5 36.3 4. Other income 23.6 12.0 96.7 Total income 2,040.4 1,897.3 7.5 6. Expenses for claims and insurance benefits -1

  45. Slide 45: 9M 2009 Exchange Rates

    9M 2009 Exchange Rates National currency unit per EUR E 45 9M 2009 9M 2008 Balance Sheet Balance Sheet Country Curr. P & L EUR P & L EUR EUR EUR Bulgaria EUR/BGN 1.9558 1.9558 1.9558 1.9558 Croatia EUR/HRK 7.2580 7.3620 7.2365 7.2556 Estonia EUR/EEK 15.6466 15.6466 - - Liechtenstein EUR/CHF 1.5078 1

  46. Slide 46: Group Embedded Value 2008

    Group Embedded Value 2008 Results (€mn) E 46 L&H P&C Total Austria/Germany 2008 2007 2008 2007 2008 2007 Comments Free Surplus 403.6 525.3 Required Capital 320.5 325.9 § Group Embedded Value (GEV) ANAV 724.1 851.2 151.4 426.6 875.5 1,277.8 calculated as Value of In-Force Business PVFP 1,233.9 1,568.

  47. Slide 47: Group Embedded Value 2008: Return on Adjusted Embedded Value

    Group Embedded Value 2008 Return on Adjusted Embedded Value (€mn) E 47 L&H P&C Total Change in Methodology Austria / Germany and Assumptions EV Dec 31, 2008 1,670.3 151.4 1,821.7 EV Dec 31, 2007 Reported 2,012.7 617.5 2,630.2 § Allowance for Cost for Residual EV Dec 31, 2007 Restated 2,037.4 570.7 2

  48. Slide 48: Group Embedded Value 2008: New Business Values

    Group Embedded Value 2008 New Business Values (€mn) E 48 L&H 2008 2007 +/-% Comments Austria / Germany NBV 61.6 76.2 - 19.2% APE 259.1 262.2 § The NBV represents the value generated APE-Ratio 23.8% 29.1% by new business sold during the PVNBP 2,479.2 2,398.6 reporting period. PVNBP-Ratio 2.5% 3.2% §

  49. Slide 49: V.I.G. Has Excellent CEE Market Position

    V.I.G. Has Excellent CEE Market Position V.I.G. an early mover in CEE E 49 Overview of Core Markets Details Slovakia Czech Rep. Romania Bulgaria § leading market position in nearly all core markets Pop.: 5.4 mn Pop.: 10.2 mn Pop.: 21.3 mn Pop.: 7.6 mn § strong market positions GDP/Cap.: $ 17 k GDP/C

  50. Slide 50: Shareholder Structure (I)

    Shareholder Structure (I) Total number of shares 128,000,000 E 50 Shareholder Structure ~ 30 % Free Float ~70 % Wiener Städtische Wechselseitige Versicherungsanstalt- Vermögensverwaltung

  51. Slide 51: Shareholder Structure (II)

    Shareholder Structure (II) Total number of shares 128,000,000 E 51 Free Float Geographical Split ~27 % Austria ~15% Others ~12% North America ~10% UK & Ireland ~36% Continental Europe

  52. Slide 52: V.I.G. Share & Contact Details

    V.I.G. Share & Contact Details Investor Relations E 52 V.I.G. Share Investor Relations Vienna Insurance Group § Number of common shares Schottenring 30, 1010 Vienna E-Mail: [email protected] 128mn www.vig.com/ir § ISIN AT0000908504 § Thomas Schmee § Listing Tel. +43 (0)50 350 - 21900 E-Mail

  53. Slide 53: Disclaimer

    Disclaimer E 53 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 sha

Vienna Insurance Group — Non-Deal Roadshow (January 2010) on 6ix