Press Conference. VIENNA INSURANCE GROUP 2016 Preliminary Results. Based on preliminary unaudited data. Vienna, 23 March 2017

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2 Press Conference VIENNA INSURANCE GROUP 2016 Preliminary Results Based on preliminary unaudited data Vienna, 23 March 2017

3 Vienna Insurance Group A reliable partner in times of dynamic change HIGHLIGHTS 2016 Premium volume EUR 9.05 billion (+0.3%) Premium increase without single-premium products +4.4% Combined ratio, net Once again clearly below the 100% mark at 97.3% Improved cost ratio from 30.6% at 30.4% Profit before taxes Profit more than doubled to EUR 407 million 2016 targets clearly achieved! 3

4 Premiums Premiums written, by line of business, IFRS, in EUR millions Premiums increased significantly in all lines of business except for single-premium products +4.8% ,580 3, % 2,461 2, % -19.2% 1,173 1, % 959 1,554 1, % Motor third party liability Motor own damage Other property Life regular Life single Health* * Not including health insurance in life insurance 4

5 Life insurance Change in portfolio policies Focus on unit-linked and index-linked life insurance % 2016 Coverage of biometric risks a priority Risk insurance, unitlinked and index-linked insurance 44% Pension ins., endowment ins. and governmentsponsored pension plans 56% Risk insurance, unitlinked and index-linked insurance 55% Pension ins., endowment ins. and governmentsponsored pension plans 45% -11% 5

6 Premiums Premiums written, by segment, IFRS, in EUR millions Not incl. single-premium +0.7% % 4,056 3,941 Not incl. single-premium +6.4% -1.7% 1,555 1,529 Not incl. single-premium +4.1% Around half of all premiums come from the CEE region % % % Consolidation of Baltikums and Compensa in % +9.8% Austria Czech Republic Slovakia Poland Romania The Baltics Hungary 6

7 Premiums written IFRS, in EUR millions Not incl. single-premium +5.8% -13.9% +0.3% 9,051 9,020 Not incl. singlepremium +4.4% % % % Bulgaria Turkey & Georgia Remaining CEE Other Markets VIG Remaining CEE: Albania, Bosnia-Herzegovina, Croatia, Macedonia, Moldova, Serbia, Ukraine; Other Markets: Germany, Liechtenstein 7

8 Improved cost ratio in % Continuous improvement of the cost ratio Cost ratio Claims ratio

9 Financial result IFRS, in EUR millions -7.8% Decrease in the financial result mainly due to lower realised gains on the disposal of assets Even though HETA appreciation included, extraordinary financial result halved 1,

10 Profit before Taxes IFRS, in EUR millions Profit more than doubled 407 to EUR 407 million Target achieved! 138 VIG Adjusted value for

11 Proposed dividend increase Proposed dividend increase to PL EUR 0.80 (+33%) Dividend yield 3.76% Dividend policy: minimum distribution of 30% of net Group profit after minority interests unchanged since

12 Fit for the Future with Agenda 2020

13 Agenda 2020 Strategic directions of impact Optimisation of business model VIG No. 1 in Austria and the CEE region Absicherung der Zukunftsfähigkeit Organisation and Cooperation Safeguard future viability 13

14 Agenda 2020 Optimisation of business model Safeguard future viability Anti-fraud Underwriting Closed File Review Claims management Profit optimisation in motor Shared Services Shared Cost Services advantages / Mergers by economies of scale Digitisation Use of growth potentials Assistance Assistance Intensification of business areas Insurance of the future Organisation & Cooperation 14

15 We are the leading insurer in Austria and Central and Eastern Europe (CEE) Market position 1 st -3 rd quarters 2016 Austria Baltics Macedonia Romania Slovakia Czech Republic Nr Market leader in the Baltic States Albania Bulgaria Georgia Croatia Poland Serbia Ukraine Bosnia- Herzegovina Montenegro Hungary Top 4 Top 10 Turkey Belarus >

16 Growth in selected markets Medium-term targets Increase market share min. 10% Market share increased in all 4 countries target already achieved in Serbia in 2016 by acquisition of AXA insurance companies Poland 6.7% (+0.1%p) Hungary 7.3% (+0.5%p) Croatia 8,5% (+0.4%p) Serbia ~12% 16

17 Economic growth significantly higher in the CEE region than Austria Forecast for economic growth and unemployment Real GDP growth in % p.a. Austria Eurozone Croatia Hungary Czech Rep. Bulgaria Ukraine Turkey Lithuania Poland Serbia Romania Macedonia Source: IMF, World Economic Outlook database, October Slovakia

18 Economic growth will also have a beneficial effect on insurance density in the CEE Region Insurance density 2015, in EUR (premiums per capita) EU-15 2,939.0 Austria 2,034.1 Czech Rep Slovakia Poland Hungary Croatia Lithuania Bulgaria Turkey Romania 98.9 Serbia 94.0 Macedonia 64.8 Ukraine 27.2 Source: insurance density: in-house calculations based on information published by national insurance supervisory authorities and associations, the IMF and Swiss Re (Sigma) 18

19 Health insurance

20 VIG health insurance products Health insurance potential 38 of the 50 VIG Group companies already offer private health insurance Focus on health insurance Countries with health insurance VIG premium volume health insurance at EUR 516 million (+6.6%), good increase in the CEE region (around +20%) Potential for private health insurance is particularly good in the following countries: Poland, Hungary, Romania, Bulgaria and Turkey Poland Hungary Romania Bulgaria Turkey 20

21 Cooperation with Erste Group

22 Key success factor Bankassurance The cooperation with Erste Group 22

23 Expanding the bank insurance business Typically dominated by life insurance at present Joint project with Erste Group: Optimise products, distribution and profits for banks and insurance companies Covers all countries where Erste Group and VIG cooperate Focus on promote health and property insurance Easily understood products Integration into the bank s digitisation initiative Organisational and structural considerations 23

24 VIG RE Reinsurance

25 Reinsurance VIG Re 2016 at a glance Operates in 31 countries 294 direct insurance customers Rating A+ (FSR, stable outlook) Gross premiums of around EUR 370 million in employees Headquarters in Prague

26 VIG RE Development Plan Phase III starting 2017 Phase II Further internationalisation Phase I Focus on Group business Diversified mix of VIG life, health and property and casualty business Focus on internal Group reinsurance business Strict security policy for natural perils Expand third-party business Establish company as one of the leading reinsurers in the CEE region Strengthen acquisitions, underwriting and organisation Develop third-party business into the main source of earnings Take advantage of remaining potential in the Group and in Austria and the CEE region Expand business in Germany Controlled entry into the market in Western Europe (France, Belux, Switzerland)

27 Digitisation

28 Digitisation: Decentral approach with local companies acting as innovation labs Customer behavior and online preferences differ between generations and countries Local companies develop appropriate digital solutions according to customer needs in terms of products, services and distribution in line with possibilities individual markets offer New, disruptive technologies and technical innovations (e.g. Blockchain) to change markets and insurance industry overall -> necessity to examine potential effects and consequences for business model Partnership with Insurance Innovation Lab Agenda 2020: VIG plans to create a hub on VIG level to support and coordinate all activities within the Group 28

29 Innovative examples from Austria Wiener Städtische as first mover Video loss notification revolutionises customer service s Versicherung uses George for digital sales Customers can purchase this accident insurance any time, anywhere in the world using the George online banking platform offered by Erste Bank and the Sparkasse banks Wiener Städtische provides advice by live chat Wiener Städtische is the first Austrian insurance company that can be reached by live chat 29

30 Assistance Roll Out in CEE ( ) Assistance as an integrated part of the insurance products Stronger customer loyalty through high-quality service More than 350,000 assistance cases in the last 3 years Adaptation to changing customer needs through digitisation (Health app, GPS tracking, towing cars) Further assistance rollouts planned in CEE countries Expansion of the existing assistance to the most modern assistance company in Bulgaria Construction of the most modern KFZ assistance in Poland Construction of the most modern KFZ assistance in Slovakia Market leader and the most modern assistance company in the Czech Republic 30

31 Outlook

32 Outlook for the period to 2019 Desired targets in a challenging environment Premium volume Continuous increase to EUR 9.5 bn 9,051 ca. 9, Profit before taxes EUR 450 bis 470 mn in spite of the low interest rate environment % Combined Ratio Medium-term target improvement towards 95% Forecast 95% 32

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34 Disclaimer This press release contains forward-looking statements that concern future developments in Vienna Insurance Group. These statements are based on current assumptions and forecasts by the management of Vienna Insurance Group. Changes in general economic developments, future market conditions, capital markets and other circumstances could result in actual events or results differing significantly from these forward-looking statements. Vienna Insurance Group assumes no obligation to update these forward-looking statements or modify them based on future events or developments. 34

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