VIENNA INSURANCE GROUP
Investor Presentation
July 2024
WE ARE A WELL DIVERSIFIED AND SOLIDLY CAPITALISED INSURANCE GROUP WITH CONTINUOUS DIVIDEND PAYOUTS SINCE 1994
Represented in
30
markets
Around
29,400
employees serve ~32mn customers
Solvency Ratio
269%
as of 31 December 2023
2 STRATEGY
More than
50
insurance companies and pension funds
S&P Rating
A+
with stable outlook
Dividend per share for 2023:
€1.40
Continuous dividend payout since 1994
Insurance service revenue of € 10.9bn
Life1MTPL
14.1%17.4%
Health
6.8%
Motor own
14.7% damage (casco)
47.0%
Other property & casualty
1 Life insurance is divided into life with profit participation (7.8%),
life without profit participation (5.4%) and unit- & index-linked life (0.9%)
VIG VIENNA INSURANCE GROUP
VIG - LEADING INSURANCE GROUP IN CEE
VIG as early mover with excellent market shares
NO
Top 3
Austria
Albania Baltic states Bulgaria Czech Republic Hungary
Country | Market positions | ||
Non-life | Life | Total | |
Austria | 1 | 1 | 1 |
Czech Republic | 1 | 1 | 1 |
Poland | 4 | 4 | 4 |
Slovakia | 2 | 1 | 1 |
Romania | 2 | 2 | 1 |
Hungary | 1 | 1 | 1 |
Bulgaria | 3 | 2 | 3 |
Ukraine | 2 | 6 | 2 |
Total Market Share
22.6%
31.6%
9.4%
29.0%
24.6%
19.6%
13.3%
11.2%
FR
DK
DE
LI
SE
CZ
1
AT
1
SI
North Macedonia
Romania
- Slovakia
2Ukraine
LV | >Top 3 | |
1 | ||
LT | Bosnia & Herzegovina 5 | |
1 | ||
Croatia 4 | ||
Kosovo 7 | ||
BY | Moldova 5 | |
Montenegro 6 | ||
PL | Poland 4 | |
Serbia 4 | ||
Slovenia 10 | ||
UA | ||
SK | 2 | |
1 | ||
MD | Special | |
HU | 1 | |
Markets | ||
RO | ||
1 |
VIG operating in:
20 | + | 10 |
Core Markets | Special Markets |
Source: local authorities; FY 2023 data (Q3 2023: Bulgaria, Serbia, Ukraine)
IT
HR
BA | RS | |
BG | ||
MNE KOS | 3 | |
AL | MK | GE |
2 | 1 | |
TR
3 STRATEGY | VIG |
VIENNA INSURANCE GROUP
20 YEARS OF EU ENLARGEMENT TO THE EAST
VIG markets CZ, EE, HU, LV, LT, PL, SK, SL are becoming EU members as of 1 May 2004
Major developments
- CEE member states of the EU experienced dynamic development since EU accession - within 20 years, GDP per capita grew from as low as 30% of Western European levels to over 70%
- CEE is well-positioned to capitalise on the nearshoring trend - EU to strengthen EU-centric value chains especially in critical/ strategic sectors
- Digital transformation is particularly dynamic in the CEE region
GDP per capita as % of EU15 (in pps)1
80
60
40
20
0
Romania Bulgaria Latvia Lithuania Poland Estonia Croatia Slovakia Hungary Czechia Slovenia
-
Green transition is seen both as an opportunity and a challenge
for the CEE region given its current substantial reliance on non-renewable energy
2004 2022
- EU-CEEeducation spendings increased, creating a well-educated and price-competitivelabour force; promotion of skill development boosts productivity and improves the position of the EU-CEE markets in the global value chains
Source: wiiw Spring Forecast Report, April 2024 | 1 Source: AMECO; wiiw Monthly Report, April 2024 |
4
STRATEGY | VIG |
VIENNA INSURANCE GROUP
IMPROVED MACROECONOMIC OUTLOOK FOR CEE
Eastern Europe recovery remains on track
For most CESEE countries 2024 will be better than 2023
- GDP growth for the EU members in the region is forecasted at average of 2.5%, rising to 3% in 2025 - significantly outperforming the stagnant euro area (0.6%), and still growing next year twice as fast as the euro area (1.6%)
- Romania (3.0%) and Croatia (2.9%) are seen to grow particularly strong in 2024, supported by in-flows from EU funds
- Czech Republic, Poland, Slovakia and Hungary are expected to grow at an average rate of 2.4% this year, rising to 3.0% in 2025
- Inflation in most of VIG markets has slowed significantly on the back of falling food and energy prices, allowing for rapid real wage growth
- Private consumption is driving the growth on the back of rising wages (tight labour markets) and falling inflation
Source: wiiw Spring Forecast Report, April 2024
CESEE - Central, East and Southeast Europe
GDP forecast (real change in % against prev. year)
2024 | 2025 | 2026 | |
Bulgaria | 2,0 ↗ | 2,5 | 3,0 |
Czech Republic | 1,2 ↘ | 2,5 ↗ | 2,7 |
Estonia | 0,4 ↗ | 3,0 ↘ | 3,6 ↗ |
Croatia | 2,9 ↗ | 2,7 | 3,0 |
Hungary | 1,9 ↘ | 2,4 ↘ | 2,9 ↘ |
Lithuania | 1,5 | 2,2 ↗ | 2,6 ↗ |
Latvia | 1,6 | 2,5 ↗ | 2,7 |
Poland | 3,1 ↗ | 3,4 ↘ | 3,3 ↗ |
Romania | 3,0 | 3,3 ↘ | 3,8 ↗ |
Slovenia | 2,5 ↘ | 2,6 ↗ | 2,6 ↘ |
Slovakia | 1,6 | 2,2 | 2,6 |
Albania | 3,6 | 3,7 | 3,4 |
Bosnia-Herzegovina | 2,5 ↗ | 2,9 ↗ | 3,4 ↗ |
Montenegro | 4,2 ↗ | 3,7 ↗ | 3,5 ↗ |
North Macedonia | 2,2 | 2,6 | 3,0 |
Serbia | 3,0 ↗ | 3,3 ↗ | 3,5 ↗ |
Kosovo | 3,5 | 3,7 | 3,6 |
Türkiye | 3,4 ↗ | 4,0 ↗ | 4,5 ↗ |
Belarus | 2,0 | 2,3 ↘ | 2,5 ↘ |
Moldova | 3,5 ↘ | 3,5 ↗ | 4,0 ↗ |
Ukraine | 3,2 | 4,2 ↗ | 4,6 ↘ |
↗↘ change against wiiw Winter Forecast Update, January 2024
5
STRATEGY | VIG |
VIENNA INSURANCE GROUP
OUR SUCCESS IS FOUNDED ON A DIVERSIFIED AND RESILIENT BUSINESS MODEL BASED ON PROVEN MANAGEMENT PRINCIPLES
Local entrepreneurship
- Knowledge of local needs and markets
- Decentralised structures & efficient decision-making procedures
- VIG Holding responsible for steering the Group
Multi-brand policy
- Utilisation of established local brands → Local identification through market-specific brand(s)
- "Vienna Insurance Group" underlines the Group's internationality and strength
Multi-channel distribution
8%
- Various distribution channels
(incl. partnership with Erste | 35% | |||||
Group) | ||||||
▪ | Strongly customer-oriented | 49% | ||||
8% | ||||||
distribution | ||||||
Employed sales forces & tied agents | Brokers & agents | |||||
Banks | Other (incl. online sales) | |||||
6 STRATEGY
Conservative investment and reinsurance policies
▪ | Focus on secure and | |
sustainable investments | ||
€ 35.3bn | ▪ | Spreading risk by means of |
diversification
2023
Investments held at VIG's own risk
VIG VIENNA INSURANCE GROUP
VIG 25 STRATEGIC PROGRAMME SECURES FURTHER DYNAMIC DEVELOPMENT
Initiatives and projects to optimise, enhance and expand VIG's business model
STRATEGIC TRENDS | DEVELOPMENTS |
OBJECTIVES
VIG 25 STRATEGIC
DIRECTIONS & INITIATIVES
OPTIMISE | ENHANCE | EXPAND |
CO³
COUNTRYCOMMUNICATION
PORTFOLIOSCOLLABORATION
COOPERATION
VIG PRINCIPLES
Optimise operational excellence by
- simplification and automation of processes
- exchange and implement best practices
- further optimisation in underwriting and pricing
Enhance customer value and access including partnerships and platforms
- increase visibility and attractiveness of products
- moving towards a hybrid sales model
Expand value chain beyond insurance
- focus on asset management
- become more active in pension fund business
7 STRATEGY | VIG |
VIENNA INSURANCE GROUP
GROUP-WIDE SUSTAINABILITY PROGRAMME COMPLEMENTS VIG 25 STRATEGIC PROGRAMME
Sustainability in VIG means creating economic value today without doing so at the expense of tomorrow
Objectives
- Promote risk literacy
- Grow corporate volunteering
▪ Focus on customer satisfaction
▪ Close the protection gap
- Attractive employer with equal opportunities for all
- Employee focus
Social focus Environmental focus
Objectives
▪ Reduce emissions of investment portfolio to net zero by 2050
▪ Reduce emissions of corporate and | |
SUSTAINABILITY | retail underwriting portfolios to net |
ALONG OUR | zero by 2050 |
BUSINESS MODEL | ▪ |
Increase the share of sustainable |
products
▪ Climate neutral operation of our offices by 2030, net zero by 2050
8
STRATEGY | VIG |
VIENNA INSURANCE GROUP
RISK AWARENESS AND RISK LITERACY IN CEE TO BE IMPROVED
VIG defines risk literacy as the ability to make informed and considerate decisions in relation to risks
Risk literacy in CEE according to a representative study not particularly strong
▪
Around 2/3 of the population have little to no awareness of the health, work, housing, liability, and cyber risks and believe that the public authorities would intervene
7 out of 10 respondents do not believe that the risks are likely to become a reality, despite judging potential loss/damage to be high
1 out of 5 has taken no risk-prevention measures at all
The global protection gap (need in % of economic loss)1
76
57
22
Health Mortality NatCat
Insurance 889 406 368 potential ($ bn)
In addition to GDP growth and increased wealth of the population,
improved risk literacy is an important driver for further developing insurance density,
reaching potential future customers and helping individuals and society to achieve economic resilience (closing the protection gap).
Reference: Representative study by Gallup International | Details: group.vig/everyday-risks-international-study | 1 Source: Insurance Resilience Index of Swiss RE, 2022 |
9
STRATEGY | VIG |
VIENNA INSURANCE GROUP
3M 2024: PREMIUMS & SOLVENCY OVERVIEW
Strong start into the business year 2024
Gross written premiums (IFRS 17) | Solvency ratio | Dividend per share |
€ 4,296.9mn | 262 % | |||
▪ | Double-digit premium growth of 11% | ▪ | Q1 2024 including transitionals | |
▪ | 3M 2023: € 3,871.3mn (IFRS 4) | ▪ | Own funds: € 10,287mn | |
▪ | SCR: € 3,921mn | |||
▪ | 12M 2023: 269% (incl. transitionals) |
- 1.40
- Dividend proposal of € 1.40 per share was approved by the Annual General Meeting
- Based on current dividend policy, € 1.40 is the minimum dividend per share for the business year 2024
- Dividend payment day: 29 May 2024
10
3M 2024 UPDATE | VIG |
VIENNA INSURANCE GROUP
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Vienna Insurance Group AG published this content on 16 July 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 July 2024 14:35:07 UTC.