UNIQA Insurance Group AG - krakauer.at€¦ · Economic Capital Ratio (%) Operating Return on...

Investor Presentation

UNIQA Insurance Group AG

9M17 Results

1. Highlights

2. Economic Capital and Embedded Value 2016

3. Strategic initiatives

4. 9M17 results

5. Appendix

UNIQA Investor Relations 2

UNIQA at a glance

Key financials EURm

Diversification by regions and products (GWP(b)(c) FY16)

UNIQA’s geographical footprint

2012(a) 2013 2014 2015 2016(e)

Gross written premiums(b) 5,543 5,886 6,064 6,325 5,048

Premiums earned

(retained)(b) 5,274 5,641 5,839 6,102 4,443

Profit on ordinary activities

(adjusted for one-off

items)(a)

204 308 378 423 225

Consolidated net profit 127 285 290 331 148

Combined ratio (net) (P&C) 101.3% 99.8% 99.6% 97.8% 98.1%

Return on Equity(d) 8.7% 11.9% 9.9% 10.9% 4.7%

UNIQA Austria

UNIQA International

28%

72% 20%

50%

Life

P&C

Health

30%

(a) Excluding Mannheimer Group in 2012 (b) Including savings portion of premiums from unit- and index-linked life insurance,

(c) Excluding consolidation and UNIQA Reinsurance, (d) adjusted, annualized, (e) UNIQA signed contract to sell Italian operations on Dec 2, therefore FY16 IFRS figures excluding Italy


0.98

0.61

0.79

0.48

0.37

9M13 9M14 9M15 9M16 9M17

161%150%

182%

215% 214%

FY13 FY14 FY15 FY16 6M17

14.6%15.6%

17.2%

10.0% 9.4%

FY13 FY14 FY15 FY16 9M17

8.98

10.0010.20 10.34

10.12

FY13 FY14 FY15 FY16 9M17

Key Financial Indicators

UNIQA Investor Relations

Earnings per share (EUR)

Economic Capital Ratio (%)

Operating Return on Equity (%) Book value per share (EUR)

4

Grafik aus Excel Sheet „Share Charts“

EPS: Net Income / 308.2 SI: von Zottl per Mail

RoE von Stefan BvPS: Shareholder‘s equity

/ 308.2

b) Operating ROE = (EBT excl. goodwill amortisation)/(own funds excl. revaluation reserve)

Market leading

position in

Austria

Strategic

bancassurance

partnership

with Raiffeisen

Growth

potential in

CEE

Dividend

capacity

Clearly defined

strategy

UNIQA is very well positioned


€

Market leading position in Austria

Market shares in Austria(a) Austria GWP(b) by distribution channel

17.6%

20.9%

Overall

47.0% Health

Life

22.3%

P&C 2

1

2

2

Relatively concentrated insurance market; Top 4 players with almost 70% market share overall; Stable market structure

Positive long-term growth trend for Health; Growing demand for private health care insurance

Strong macroeconomic fundaments; High GDP per capita; Solid public finance

(a) Source: Austrian Insurance Association – based on GWP b) FY 2016 GWP including savings portion from unit- and index-linked life

insurance, excluding single premiums


Bank

20%

Direct and others 4%

Brokers and multi agencies

26%

Own employees

and exclusive agencies 50%

~1,700 Own sales force

~ 910 Exclusive agents

Strategic partnership with Raiffeisen banking

group in AT & CEE

Business model based on products tailored to banking requirements, excellent process quality and high

level sales support including sustainable incentive schemes, sales support/training and POS-tools

Austria

Distribution via local Raiffeisen banks through the brand Raiffeisen Versicherung Austria based on new

cooperation agreements since January 2013, recently extended until 2022 with automatic renewal

Highest customer reach through leading retail network with c.2,000 outlets and c.2.8m customers

Raiffeisen Versicherung is an integral part of the Raiffeisen banking group‘s online strategy

CEE

Distribution via Raiffeisen Bank International based on strengthened strategic preferred partnership for

CEE countries since June 2013

Raiffeisen Bank International with ~2,700 outlets and c.14.5m customers in CEE. Top 5 market position in

10 countries


Secular and profitable growth opportunity in CEE

Broad CEE platform with 15 core markets

Central Europe (CE)

Clients: 3.0m

GWP: EUR 866m

Share of GWP: 63.5%

Eastern Europe (EE)

Clients: 0.8m

GWP: EUR 165m

Share of GWP: 12.1%

South Eastern Europe (SEE)

Clients: 2.0m

GWP: EUR 275m

Share of GWP: 20.2%

Russia

Clients: 0.2m

GWP: EUR 58m

Share of GWP: 4.2%

Source: Company information

Austria in 1955 – 1972

Austria in

1977 – 1984

Insurance density

8

461414

338300276

1461291111031019469463928

DE HR BG ME

2.174

1.955

HU AT

6.640

CH IT

2.581

2.371

EU CZ SK PL RU RO RS BA MK KS AL UA

Annual insurance spending p.c. in EURO, Bosnia excluding Republika Srpska EU, DE, IT, CH: figures FY 2015;: HU, BG, RS, MK, UA, RO: figures FC from Q3 2016

Source: Regional Supervisory Authorities & Associations


Free surplus generation covering progressive

dividend policy


23 13 93

191 128

-9 35

46

63

43

14 48

139

254

171

-100

0

100

200

300

400

2012 2013 2014 2015 2016

Health & Life P&C

Less capital intensive new

business in life (reduction of

guarantees)

Reduction in one-off

commission payments

In-force measures to push

transfer from VIF

Improving combined ratio will

contribute higher free surplus

generation from P&C business

in the future

Life and health free surplus generation

Surplus in €M

Dividend payment

In €M

110 120 130 140 150

0

50

100

150

200

2012 2013 2014 2015 2016

Strategy


Targeted financial results

UNIQA will be able to ensure attractive

financial results


“Each year

increasing

DPS” in 2016–2020

<95% in 2020

COR

>170% from 2016

ECR

2% p.a.

GWP

<24% in 2020

NCR2

Net cost reduction and Combined Ratio improvement will provide attractive returns

on key initiatives

13.5%

operating ROE1

average in 2017–2020

Key initiatives 2016–2020 Operating KPIs

1: Operating ROE = (EBT excl. goodwill amortisation)/(own funds excl. revaluation reserve); 2: Net cost ratio – changed target after

sale of Italian operations


Investments assigned to initiatives

Significant investments to advance UNIQA’s

business model started in 2016

56% 23%

21%

Core IT

Digitisation

Operational

Excellence

Investments 2016-2020

Σ € 330M

2016–2020 2021–2025

Total

Investment Thereof

Expensed

Total

Investment Thereof

Expensed

Operational

Excellence € 70M € 60M - -

Digitisation € 75M € 65M - -

Core IT € 185M € 115M € 150M–

200M € 100M–

115M

Sum total € 330M € 240M € 150M–

200M

€ 100M–

115M

First year of capital expenditure program 2016: EUR 55m through P&L

Capital expenditure program in 9M17: EUR 25m through P&L

1. Highlights



4. 9M17 results

5. Appendix


Very solid capital position as strong basement

14

2017 Q2

2,640

5,658

2017 Q1

2,575

5,596

Economic Capital Requirement Own Funds

In EUR mn

ECR-ratio 217% 214%

Economic capital position

2017 Q2

2,608

5,575

2017 Q1

2,658

5,439 In EUR mn

SCR-ratio 205% 214%

Regulatory SII capital position

Solvency Capital Requirement Own Funds

ECR SCR

Internal Model Yes, P&C business No

Sovereign Risk charge Yes (full loading) No

Volatility Adjustments Yes (static) Yes (static)

Transitionals1 No No

Matching Adjustment No No

Measures used

1 Applies to major transitionals on interest rate or technical provision

100

110

120

130

140

150

160

170

180

190

200

210

220215%

150%

Q2 2017

214%

214%

Q1 2017

205%

217%

2016 2014

202%

182%

2015

155%

161% 153%

2013

194%

2012

103%

Development of ECR-ratio

SCR ratio

ECR ratio

Diverging movements between regulatory SCR and ECR comes from

first time exclusion of Italian business units in the regulatory SCR

calculation (ECR already recognised the sale since Q4/2016)


Group ECR Results Details on Economic Capital Ratio

31%

25%

44% 8%

77%

2% 8%

5% 13%

12%

7% 64%

4%

Non-Life

Health SLT

Life

CEE

WEM

AT

EEM

SEM Non-Life underwriting

Life underwriting

Default risk

Market risk

Health SLT / CAT

15

5.382

Tier 1 unrestr.

82,7%

Tier 2

17,3%

Tier 3

0,1%

ECR

2.509

OpRisk

162

Tax Adj.

462

Basic

ECR

2.809

Diversi-

fication

856

Counter-

party

default

258

Health

CAT

& SLT

153

Non-life

under-

writing

(PIM)

471

Life

under-

writing

448

Market

risk

2.335

+115%

Own

funds

177

-348

-32

32

-349

59

-40

17

-33 -12

-340

ECR strongly reduced

Reduction in almost all risk modules,

driven by sale of Italian business

Strongest reduction in Market Risk

due to risk charge on government

bonds

Improved diversification effect

Eligible own funds further increased

Strong operating earnings in Life and

Health more than compensate for

reduction of EUR 250mn in Tier1

restricted capital and negative

economic variance from lower interest

rates

ECR split by LoB ECR split by Region1 ECR split by Risk Module

Change vs. 2015

1 Region WEM includes internal risk transfer to UNIQA Re and business in Liechtenstein

ECR development by Risk Module In EUR mn


16

Management Summary Free Surplus (MCEV) and Capital (ECR) Generation 2016

57

23

36

5776

86

33

5252

59

NB-Strain

56

Release of

Required Capital

58

1

Transfer from

VIF to FS

143

Net FS

Generation,

after AT merger

/ IT sale

128

AT merger

/ IT sale

19

Net FS

Generation,

before AT

merger / IT sale

109

NB-RC

36

0

MCEV Free Surplus Generation 2016 in EUR mn

FS Generation

Lower Free Surplus

Generation in 2016 than in

prior year due to lower

release of required capital

Transfer from VIF improved

(2015: EUR 134mn)

Capital Generation

Overall Capital generation

amounts to EUR 578mn,

strongly driven by operating

earnings

Negative economic earnings

driven by lower interest rates,

almost compensated by

positive performance on non-

fixed income instruments

Additional free surplus

generated by ECR reduction

of EUR 348mn mainly driven

by sales of Italian business

Life

Health

ECR Capital Generation 2016 in EUR mn

578151

250

5,382

Own Funds 2016 Capital Generation Own Funds 2015

5,205

Foreseeable Dividend Payback Tier

1 restricted


Moderate sensitivities despite no dynamic VA

17

Impact of sensitivities on ECR-ratio

215% 135%

203% No VA

UFR -100bps 200%

Credit spread +100bps

Earth quake 213%

Equity -30%

176%

FX -10% 209%

FX +10% 220%

206%

Interest rates -50 bps 198%

Interest rates +50 bps 230%

Base Value 215%

Change in ECR-ratio

∆ to base

value

+15%-p

-16%-p

-8%-p

+5%-p

-5%-p

-39%-p

-2%-p

-15%-p

-12%-p

Interest rate sensitivities: stress applied to non negative, liquid part of the curve only, extrapolation to UFR 4.2%

Equity sensitivity: a general decrease of 30% in the value of all equities.

Currency sensitivities: a rise/fall of exchange rates by 10% uniformly across all currencies.

Credit spread sensitivity: a widening of credit spreads by 100bps, no dynamic increase of volatility adjustment assumed.

Nat-Cat sensitivity: assumed earthquake with epicentre in Austria and return period of 250 years.

UFR sensitivity: UFR set to 3.2%. Estimated impact on ECR quota with UFR set to 4.05%: -2%-p and with UFR set to 3.65%: -8%-p

No VA sensitivity: yield curve without volatility adjustment.


UNIQA follows a clear steering approach


Execute re-capitalisation

if required

Solvency steering rules

Consider returning capital

to shareholders

Min.

Max.

ECR

100%

135%

155%

170%

190%

Solid capital base as

prerequisite in current

market – ECR target set

at 170%

Clearly defined risk

ambition and shareholder

promise

Strict management of

capital adequacy across

all levels of the

organisation

Regulatory

Plan

Recovery

Opportunity

Consider/apply measures

to de-risk Caution

Target

Group Embedded Value Results

GEV changed by +7.3% to EUR 5,068mn

Value increase mainly driven by increases in the value of in-force business

Lower Life & Health MCEV due to the sale of the Italian business and the reallocation of participations from covered to non-covered

business in Austria

Increase in VIF is mainly driven by development in Austria due to lower mortality assumptions for the Term life business as well as

lower claims ratio and updated lapse assumptions for the health business

Return on GEV amounts to EUR 441mn or 9.6%

19

941

Group

Embeded

Value

5,068

P&C ANAV

1,993

Life & Health

MCEV

3,075

Value of

in-force

2,107

Adjusted Net

Asset Value

27

(456)

539260 343

(197)

Group Embedded Value 2016

+7.3%

MCEV Performance

194

214

441

128

Life&Health

Free Surplus Generation

Return on GEV

2016 2015

In EUR mn

5.3%

9.6%

Change vs 2015 ** As % of adjusted opening GEV or opening L&H MCEV

as a %*

8.1%

4.3%

In EUR mn


Group Embedded Value New Business Value

Positive development in Austria from lower mortality assumptions for the Term life business and further development of the capital

efficient product approach

Lower PVNBP compared to 2015 due to sale of the Italian business

20

New Business Value Present Value of NB Premiums

2016 2,156

2015 3,032

Single Premium Recurring Premium

2,018

1,139

137

1,893

93

73

2016

2015

In EUR mn In EUR mn

Split by region

+2.4%

+4.3%

NBM NBV

PVNBP split by LoB

41%

12% 3%

17%

26%

Unit linked Health

Term

Guaranteed savings & annuities

Capital efficient products

** Excludes Italy

* *

New Business Margin As a % of PVNBP

2016 2015

Austria CEE Total Austria CEE Italy Total

NBV 75 17 93 38 16 19 73

PVNBP 1,834 322 2,156 1,825 272 936 3,032

% of

PVNBP 4.1% 5.4% 4.3% 2.1% 6.0% 2.0% 2.4%

In EUR mn


1. Highlights


3. 9M17 results

4. Appendix


Strategic initiatives


First success reflected in reduced loss ratio in 2016

23

4% p.a. GWP

growth in 2016–

2020 ~2% GWP growth

in Austria

Portfolio

management

Claims

management

Pricing

retail/SME

Corporate

business

Product

innovation

Anti

fraud

<95% COR

6-7% GWP growth

in CEE

~28% NCR

P&C 2016–2020

“Further increase P&C profitability

and ensure differentiated growth”

Targets 2020


97.1%

31.2%

3.7%

6.3%

9M17

5.7%

New traditional product reduces capital intensity


Modular product incl. biometric options

Higher flexibility for customers (e.g.

surrender values)

Clear and transparent in the interest of

consumer protection

Our new traditional product Product details

Customer

Benefit

Based on a traditional concept

Guarantee on savings portion of the

premium, 0% interest rate guarantee

Reduced cost base incl. commission

Terminal bonus distributed at maturity

of the contract

Technical

Details

Guarantees in portfolio will decrease significantly


Austria: Actuarial reserve fund by guarantees Development until 2020

Reserve fund in €BN

2.6

2.4

2.2

2.0

12

8

4

0

2020 2019 2018 2017 2016 2015 2014

1.00–1.50% 2.25–2.5%

2.75–3.00% 0% 1.75–2.00%

>3.00%

Average guarantee

Av. guarantee in % Reduction of actuarial

reserve funds from

€ 10.9BN to € 8.6BN

mainly due to

‒ Stop of prolongations

‒ Product strategy shift

Maturing1 of 38% of

reserves with ≥3%

guaranteed interest

Average guarantees to

drop to 2.20% in 2020

1: Or other forms of termination

Successful new business will be visible in NBV


€ 30M–35M p.a. new business value

Targets 2020

Management

rules

Inforce

business

New

business

50–70 bps margin on reserves1

€ 2.6BN2 GWP

16%2 NCR

Life 2016–2020

“Reduce capital requirements

and increase profitability”

1: Definition of margin on reserves: annualised operating result divided by average technical reserves 2: Still including Italy

9M17

€ 1.2BN

28bps

20.0%

Profitable growth demonstrated over the last decade


1,000

500

CAGR +2.8%

998 878 846 820

961 938 909 832 799 781 765 742 717

2011 2007 2005 2003 2009 2015 2013

Profitable growth (Group figures)

0

5

103

2

1

2.8 2.7 2.6 2.5 3.0 2.8 2.6 2.5 2.3 2.2 2.1

1.5

2011

1.4

2007 2013 2015 2009 2005 2003

GWP in €M

Tech. reserves in €BN Margin on

reserves in %

Long-term profitability

supported by Austrian

market specifics:

Ability to adjust

premiums based

on cost

development

Agreed prices for

health services

through joint nego-

tiations with health-

care providers

Continuously low

lapse rate

Stable cash contri-

butor to the Group

3.8 4.0 4.1 4.6 3.3 3.3 3.2 3.1 3.2 3.1 3.0 2.9 3.1

0

3

6

2007

2013 2015

2009

2003 2005

2011

Lapse rate in %

1

1: Accounting change regarding Swiss Group contract with CERN (TPA)

Sustainable earnings and cash flow contribution

expected to continue


Brand Sales

Value proposition Health value chain

integration

2.5–3% p.a. GWP growth 2016–2020

350–450 bps margin on reserves1

€ 25M–30M new business value

14% NCR

Targets 2020

Health 2016–2020

“Remain market leader in profitable

health business”

“Sustainable cash flow generation”

1: Definition of margin on reserves: annualised operating result divided by average technical reserves

9M17

3.7%

397bps

15.2%

Standardization of products and

processes

Centralization of back office

functions: Planned reduction in AT

from 2,800 to 2,500 until 2020

Near shoring in Nitra (SK)

As a result, sales functions are

able to increase their focus on

client coverage and servicing

Group architecture for products

and processes enables efficient IT

core implementation


Schematic TOM target picture

OE

1

OE

2

Products Processes IT System


Gro

up Products Processes IT System

As-I

s

TOM (UAT): Improve efficiency relentlessly


Ta

rge

t

Group

Standard

OE 1 specific

OE 2 specific

Group

Standard

OE 1

specific

OE 2

specific

OE 1 specific

OE 2 specific

Group

Layer

Core

30

Functional scope of UIP

Core IT: Modernization of core and cross systems

Regional scope of UIP

• All Core Systems are in scope

• All relevant cross systems in scope (Partner

Management, Commission, Collection and

Disbursement)

• All big UNIQA countries are covered

• Focus on countries with high need for action

• Further rollouts to other countries possible

• Currently not in scope Further

countries

• Starting with unit-linked life

product for Bancassurance in AT

• Stepwise implementation for rest

of Life, P&C, Health insurance

• Interim solution for big markets

• Migration to UIP Platform after AT

has finished

• Earlier Migration in case of urgent

business need

PL

RO

HU

CZ

SK

AT


31

Roadmap to new UNIQA Insurance Platform

Platform for further development of core

business

Modern product portfolio

Next level of efficiency

Seize market trends

Changed customer expectations

New distribution models

Digitalization

Data analytics

(1) Replacement of end-of-life systems

e.g. systems which require skills no longer

available on the job market

(2) Getting again in control of the overly

complex system landscape

16 programming languages

Variety and quality of applications

(3) Strengthening security in operations

Roadmap and major milestones of UIP

Start rollout in

remaining UI

countries

P&C in

2 countries

Start

Implemen-

tation

Go-live

Life AT Finalization UI

2029 2026 2022 2021 2018 2018

Finalization AT


UNIQA strives to become one of the leading digital

insurers in Austria and CEE


Sa

les

incre

ase

E

xte

rna

l fo

cu

s

Digital

Customer

Digital

Insurer

Dig

ital

Op

era

tions

Internal focus Cost

reduction

Digitise

customer

experience

Digitise

operations

Our digital path1

Foster UNIQA’s innovation culture

Sequentially build up capabilities to

digitise

‒ Customer experience

‒ Operations

Enhancement of analytical abilities as a

foundation

Accompanied by conscious investments

in “digital bets”

Ambition reflected in new organisational

set-up

Enhance digital

capabilities

and analytics

!

32

Investments of € 75M agreed for UNIQA’s digital transformation until 2020

1: Based on Accenture’s digital framework

1. Highlights



4. 9M17 results

5. Appendix


EURm 9M16 9M17 %

Gross premiums written(a) 3,812.3 4,043.9 6.1%

Premiums earned (retained) 3,332.4 3,473.0 4.2%

Net investment income 419.4 393.6 -6.2%

Insurance benefits 2,582.1 2,659.0 3.0%

Operating expenses (net) 934.5 942.7 0.9%

thereof admin costs 290.1 297.2 2.4%

Insurance technical result 57.8 97.9 69.4%

Earnings before taxes 148.9 181.4 21.8%

Consolidated profit 148.8 114.4 -23.1%

Cost ratio group (net) 26.0% 24.5% -1.5pp

Combined ratio P&C (net) 98.3% 97.1% -1.2pp

Investment yield(b) 2.7% 2.6% -0.1pp

Snapshot 9M17


(a) Including savings portion of premiums from unit- and index-linked life insurance

(b) Definition investment yield: annualized investment result divided by average total investments excluding self-used land and buildings.

34

Growth above expectations in

CEE (P&C and single-Life) and AT

(P&C and Health)

Despite increasing local NatCats

EBT increased on improved

insurance technical result &

reduced financing costs despite

lower investment result

Improved COR despite weather

related losses

Impairment on fixed income

securities and FX losses only

partially compensated by

harvesting

Costs well under control

Grafik aus Excel Sheet „Overview“

1,938 2,048

755784

1,0031,005

1172073,812

4,044

6.1%

9M16 9M17

2,419 2,419 2,439 2,518

903 926 964 1,004

1,559 1,405 1,367 1,357

241 275 441 169

5,122 5,0265,211

5,048

-3.1%

2013 2014 2015 2016

Continued growth above expectations

in all business lines


Gross written premium(a) per business line EURm

(a) Including savings portion of premiums from unit- and index-linked life insurance 35

Offen?

583 581

816

626 607

250 248

270

253 261

315 354

361

331 313

4052

65

77 641,188

1,236

1,512

1,2871,245

4.8%

3Q16 4Q16 1Q17 2Q17 3Q17

P&C Health Life - recurring Life - single

Robust growth of P&C business (+5.7%) driven by motor and other P&C in AT, corporate business/fronting in Ukraine and

motor in CEE (total P&C AT +3.7%, CEE +6.3%)

Health business continued solid growth (+3.7%)

Life grew 8.3% in 9M17: Strong unit linked single premium business in PL overcompensating expected reduction of

traditional life business in AT

Grafik aus Excel Sheet „Charts “

(Erklärung für dieses Sheet in eigener Doku)

FÜR 2Q16: Jahre raus und

dafür 8 Quartale links rollierend hineinstellen

Cost Ratio decreased to 24.5%


160 162 176159 158

4963

5453 45

95

127 100102

94

304

352

331315

297

-2.2%

25.4%28.4%

25.9% 24.1% 23.6%

3Q16 4Q16 1Q17 2Q17 3Q17

Acquisition related expenses Other operating expenses

479493

165 152

290 297

935 943

0.9%

26.0%24.5%

9M16 9M17

Cost ratio

625 614 632 642

221 226 212 228

448361 346

417

1,294

1,200 1,190

1,286

8.1%

26.4%24.8% 23.7%

26.6%

2013 2014 2015 2016

Net commissions (a)

Cost ratio (net) (%), Costs (EURm)

Net commissions and admin expenses increased ytd, but at clearly slower pace than premium volume

Acquisition related expenses further reduced in 3Q17; Mid-term downward trend reflecting strict cost control

Investments of EUR 24.6m in 9M17 (Investments 9M16: EUR 29.6m)

(a) Including changes in DAC (Deferred Acquisition Costs)



FÜR 2Q16: Jahre raus und

dafür 8 Quartale links rollierend hineinstellen

Kostenquote in rot?

71.1%62.2% 65.9% 64.4% 67.4%

29.7%

35.2% 31.8% 31.5%30.3%

100.8%97.4% 97.7% 95.9% 97.8%

-3.0

3Q16 4Q16 1Q17 2Q17 3Q17

Loss Ratio Expense Ratio

P&C: Underwriting improved –

COR decreased to 97.1%


In 3Q17 increased loss ratio due to increased seasonal weather related losses in AT; 9M17 loss ratio decrerased as a

result of portfolio sanitation both in AT and CEE

Investments decreased slightly to EUR 8.6m in 9M17 (EUR 9.6m in 9M16)

P&C cost ratio flattish compared to 9M16

37

66.9% 65.9%

31.4% 31.2%

98.3% 97.1%

-1.2

9M16 9M17

66.8% 69.0% 67.5% 65.7%

33.6% 30.6% 30.4% 32.4%

100.3% 99.5% 97.9% 98.1%

2013 2014 2015 2016

Combined ratio (net) (%)



pp pp

28

-8

27

20

16

-44.7%

3Q16 4Q16 1Q17 2Q17 3Q17

599

594

611

643

630

5.1%

3Q16 4Q16 1Q17 2Q17 3Q17

56

2426

29

22

-61.4%

3Q16 4Q16 1Q17 2Q17 3Q17

P&C: EBT slightly decreased ytd due to one-

off gain on disposal in 3Q16


Strong growth in CEE: Driven by motor business in CZ, SK, HU and non-motor business in UA, RO and CE

Net investment result lower q-o-q due to one-off gain on disposal of Niederösterreichische Versicherung (EUR 37.2m) in

3Q16

Financing costs decreased due to call of subordinated bonds in the amount of EUR 250m at YE16

Insurance technical result increased on better COR in 9M17

Earnings before tax of EUR 62.6m in 9M17; Ytd -4.9% due to one-off gain in 3Q16

Net premiums earned EURm Investment result EURm Earnings before taxes EURm

38



Health: Strong EBT contribution on improved

underwriting and solid investment result in 3Q17


Cost – benefit ratio (%) Investment result EURm Earnings before taxes EURm

39

85% 81% 83% 87% 82%

15% 20% 18% 15%14%

100% 101% 101% 101%95%

3Q16 4Q16 1Q17 2Q17 3Q17

Benefit Ratio Cost Ratio

23

51

-1

45

36

55.2%

3Q16 4Q16 1Q17 2Q17 3Q17

23

47

-1

4247

102.0%

3Q16 4Q16 1Q17 2Q17 3Q17

Long term growth trend continued; GWP up 3.7% ytd

Improved insurance technical result of EUR 31.6m: Seasonal low in benefits in 3Q17

Investments of EUR 6.4m in 9M17 (EUR 8.4m in 9M16)

Solid investment result and underwriting result above longer term average led to another strong EBT contribution from

Health business of EUR 46.6m in 3Q17



20,312

16,224 15,97015,803

15,775

31

48

19

11

28

3Q16 4Q16 1Q17 2Q17 3Q17

Margin on Reserves (a)

Life: Decreased earnings before tax reflecting

lower net investment result in 9M17


Reserves of traditional life business in AT on declining trend in line with expectations

Growing top line (+8.3%) driven by single unit-linked business in Poland (EUR 126.3m in 9M17)

Cost ratio improved on growing top-line; Investments of EUR 11.6m in 9M17 (EUR 9.6m in 9M16)

Technical result stable, but lower net investment result led to slightly lower ytd EBT contribution

Reserve (net) EURbn Investment result EURm Earnings before taxes EURm

40

8894

51

84

102

16.5%

3Q16 4Q16 1Q17 2Q17 3Q17

11

37

7

0

24

117.2%

3Q16 4Q16 1Q17 2Q17 3Q17



(a) Definition margin on reserves: Annualized operating result divided by average technical reserves (b) Excluding Italy

82.1%

6.6%

5.5%

2.1% 3.7%

Bonds Real estate Cash Equities & Alternatives Participations

135

191209

281

218

142

190 182

108

145167 170

76

158 161

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17


Investment Activity

Note: Excluding unit-linked investment income Quarterly figures excluding Italy

Investment income EUR

Investment allocation by asset class

41

Grafik aus Excel Sheet „Investment“


Net investment result of EUR 393.6m in 9M17

(EUR 419.4m in 9M16)

Current income of EUR 377.7m in 9M17 (EUR

391.2m in 9M16)

Contribution from participation in STRABAG:

EUR +15.0m in 9M17 (EUR +3.6m in 9M16)

Realized and unrealized gains of EUR 15.9m in 9M17

(EUR 28.2m in 9M16); Impairments and FX losses

(USD) mitigated by realized and unrealized gains on

equities and fixed income securities

Total assets under management (excluding unit-and

index linked) slightly down compared to YE16

reflecting decreasing traditional life back book in

Austria

Real estate at amortized costs in IFRS balance sheet;

Market value according to external appraisals

significantly above book value

EUR 20.6bn

Dec 16

EUR 20.4bn

Sep 17

80.1%

6.2%

6.5%

3.3%

4.0%

Outlook


Overall growth of ~4% in GWP expected for FY17:

P&C growth above 4% driven by both Austria and CEE

Health growth on long term trend of around 3%

Life: Recurring premium business forecasted to slightly decrease in AT.

In CEE UNIQA expects significant growth in life insurance in FY17, driven by the

single premium business in Poland.

Combined Ratio to improve compared to 98.1% in FY16

Net investment result will decrease compared to FY16

Earnings before tax will slightly increase compared to FY16

In line with progressive dividend policy DPS shall increase in FY17

Economic capital ratio will stay above 190% (upper bound of target range)

The outlook assumes that there will not be any extraordinary negative developments and that

major losses caused by natural disasters will remain within the average range in 2017

1. Highlights



4. 9M17 results

5. Appendix


UNIQA International – country deep dive


Grafik aus Excel Sheet „UI Countries “


in EURm

9M17 % to PY 9M17 % to PY 9M17 % to PY 9M17 % to PY FX adjusted

Western Europe (WE) (b) 25.1 44% 10.2 19% 0.0 35.3 36% 36%

Western Europe (WE) 25.1 44% 10.2 19% 0.0 35.3 36% 36%

Czech Republic 145.2 10% 7.1 8% 32.0 0% 184.3 8% 6%

Hungary 90.0 15% 3.5 21% 63.2 5% 156.8 11% 9%

Poland 194.5 3% 0.4 N/A 149.8 353% 344.7 55% 52%

Slovakia 71.7 10% 0.4 27% 24.4 2% 96.5 8% 8%

Central Europe (CE) 501.4 8% 11.4 17% 269.5 80% 782.3 25% 24%

Romania 66.7 -15% 0.1 -41% 9.1 9% 75.8 -13% -12%

Ukraine 36.8 67% 5.6 15% 11.0 63% 53.4 59% 66%

Eastern Europe (EE) 103.5 3% 5.7 14% 20.1 33% 129.2 7% 9%

Albania 21.3 12% 1.5 -9% 4.2 30% 26.9 13% 10%

Bosnia-Herzegovina 9.8 -2% 0.0 12.0 -1% 21.7 -2% -2%

Bulgaria 21.2 6% 3.5 24.0 8% 48.8 16% 15%

Croatia 30.2 1% 5.8 51% 19.4 -18% 55.4 -4% -5%

Montenegro 7.0 -5% 0.5 -15% 1.4 5% 8.8 -4% -4%

Macedonia 8.6 -3% 0.2 -1% 0.9 16% 9.7 -1% -1%

Serbia 19.2 6% 3.2 -1% 10.4 -4% 32.8 2% 1%

Kosovo 5.8 -9% 1.5 -32% 0.5 -17% 7.8 -15% -15%

Southeastern E. (SEE) 123.0 3% 16.2 39% 72.7 -3% 212.0 3% 2%

Russia 0.5 1690% 2.5 117% 55.9 41% 58.9 45% 26%

Russia (RU) 0.5 1690% 2.5 117% 55.9 41% 58.9 45% 26%

0.0 0.0 0.0 0.0

UNIQA International 753.5 7% 46.0 27% 418.2 50% 1,217.7 20% 18%

GWP(a) Non-life GWP(a) Health GWP(a) Life GWP(a) Total


(b) As of 2017 Switzerland is presented as a banch of Liechtenstein and will not be presented separately in the future

UNIQA International – country deep dive


(b)

Grafik aus Excel Sheet „UI Countries “


in EURm

9M17 9M16 9M17 9M16 9M17 9M16 9M17 9M16 9M17 9M16

Western Europe (WE) (b) 11.3 10.1 -0.6 0.2 135.7% 93.0% 24.2% 26.5% 0.2 1.3

Western Europe (WE) 11.3 10.1 -0.6 0.2 135.7% 93.0% 24.2% 26.5% 0.2 1.3

Czech Republic 121.1 114.1 5.3 5.7 96.0% 97.4% 30.5% 33.8% 10.8 8.3

Hungary 104.1 96.0 3.0 2.9 83.1% 89.1% 23.5% 30.5% 2.1 -0.7

Poland 254.1 127.1 9.1 11.0 97.7% 109.4% 17.7% 33.3% 8.3 6.6

Slovakia 65.6 62.6 3.7 3.0 96.9% 97.2% 36.7% 36.6% 4.6 4.9

Central Europe (CE) 544.9 399.8 21.1 22.6 95.0% 100.9% 23.9% 33.3% 25.8 19.1

Romania 48.7 46.0 2.9 1.9 102.5% 88.3% 46.8% 31.7% -2.6 -2.8

Ukraine 35.3 27.7 3.2 6.3 95.9% 101.5% 53.1% 66.5% 3.7 6.2

Eastern Europe (EE) 84.1 73.8 6.2 8.2 100.3% 92.3% 49.4% 44.8% 1.2 3.3

Albania 22.6 20.6 0.5 0.6 80.8% 62.1% 49.9% 41.7% 1.8 3.9

Bosnia-Herzegovina 19.3 19.1 1.8 1.9 97.2% 100.5% 36.7% 33.4% 0.7 0.5

Bulgaria 37.6 33.1 0.7 1.1 98.4% 115.6% 31.3% 29.1% 1.1 0.5

Croatia 39.1 41.0 10.0 8.3 95.2% 102.9% 38.5% 38.3% 3.4 5.0

Montenegro 7.7 7.5 0.5 0.5 96.4% 101.3% 45.9% 48.7% 0.1 -0.1

Macedonia 8.3 8.1 0.3 0.3 102.9% 99.9% 57.9% 50.0% 0.3 0.5

Serbia 26.6 30.9 0.8 3.7 92.1% 85.8% 37.7% 37.4% 1.0 1.1

Kosovo 7.3 8.2 0.1 0.0 81.0% 102.3% 45.5% 49.7% 0.8 -0.8

Southeastern E. (SEE) 168.4 168.4 14.7 16.4 92.1% 92.8% 39.7% 37.8% 9.2 10.7

Russia 55.7 39.8 8.5 -1.9 16.5% 20.6% 7.2 3.9

Russia (RU) 55.7 39.8 8.5 -1.9 59.0% 24.6% 16.5% 20.6% 7.2 3.9

UI Administration 0.0 0.0 -2.0 -0.2 -13.3 -11.8

UNIQA International 864.3 691.9 47.9 45.2 96.3% 99.2% 30.1% 36.5% 30.3 26.4

Premiums earned (a) Net investment income Combined ratio P&C Cost ratio Earnings before taxes


(b) As of 2017 Switzerland is presented as a banch of Liechtenstein and will not be presented separately in the future

UNIQA International with a strong footprint

to leverage potential in CEE

Insurance penetration

2015(b)

UNIQA GWP CAGR(d)

(2006–15)

UNIQA GWP

(FY2015, EURm)

Austria

Poland

Czech Republic

Hungary

Slovakia

Romania

Ukraine

Croatia

Bulgaria

Serbia

Albania

Bosnia-Herzegovina

Kosovo

Montenegro

Macedonia

Russia

(a) Market position life insurance

(b) Defined as country premiums over GDP

(c) Russia: GWP CAGR 2009-2015

(d) Local currency; local GAAP

Source: UNIQA GWP based on Company information; other based on Supervisory Authorities / Countries, Business Monitor

UNIQA

market share

UNIQA

Rank

189

27

49

12

12

13

32

49

57

88

52

92

113

213

274

3.919

148.5%(c)

13.1%

80.8%

9.7%

10.8%

15.0%

29.0%

3.5%

22.3%

23.9%

5.2%

7.9%

0.9%

7.0%

4.5%

1.5%

7(a)

5

2

1

3

5

8

6

11

2

2

10

5

8

1

5

22.24%

2.92%

8.93%

16.14%

16.45%

12.76%

31.42%

7.42%

5.97%

7.68%

4.57%

4.69%

5.21%

6.72%

4.33%

2.10%

1.3%

2.1%

1.6%

1.5%

2.3%

1.0%

2.0%

2.3%

2.6%

1.1%

1.2%

2.9%

2.7%

3.0%

3.1%

5.7%

46 UNIQA Investor Relations

http://en.wikipedia.org/wiki/File:Flag_of_Austria.svg

Change vs. 2015

Group ECR Results UNIQA Group market risk profile

47

349

1,250

Property risk

598

Equity risk

405

Interest

rate risk

Conc. risk

108

Curreny risk

349

Spread risk

2,335

Diversific. ECR market

risk total

-724

-400

59 3

-218

37

-340

230

-46

ECR market risk profile and development

Market risk declined substantially

Risk reduction was driven by the sale of the Italian insurance business, which had a particularly strong effect on spread and concentration risks,

declining to 41% and 4% respectively as percentages of the overall market risk share.

Italian government bonds were the main driver of concentration risk in 2015 (2016: Austrian government bonds).

Equity risk increased primarily due to the strong share price performance of Strabag.

Apart from the sale of the Italian companies, the call of two long dated callable bonds was also a significant factor in reducing spread risk

(roughly a EUR 150mn risk reduction).

9%

10%

11%

45%

41%

15%

20%

10%13%

11% 11%

4%Concentration risk

Currency risk

Spread risk

Property risk

Equity risk

Interest rate risk

2016

2,335

2015

2,674

In EUR mn


IFRS reconciliation to own funds

IFRS reconciliation

Goodwill, value of business in force, deferred acquisition costs and intangible assets are valued at zero according to Solvency II.

Other revalued assets include property (appraisal value instead of amortized cost), participations (market value instead of IFRS book value) and loans.

Gross technical provisions and the reinsurer’s share of the technical provisions are revalued to discounted best estimate reserves.

Subordinated liabilities are subject to eligibility restrictions, depending on their quality (“Tiering”). All of UNIQA‘s subordinated liabilities are included in eligible

own funds.

Foreseeable dividends have to be subtracted from eligible own funds according to Solvency II.

IFRS reconciliation (EUR mn)

48

Position 2016 2015

IFRS total equity 3,213 3,175

- Goodwill -295 -429

- Intangible assets and VBI -62 -63

- Deferred acquisition costs (DAC) -1,135 -980

+ Revaluation (after deferred taxes) 2,919 2,566

Revaluation of assets 1,266 851

Revaluation of technical provisions 1,653 1,714

+ Subordinated liabilities 929 1,096

- Foreseeable dividends -151 -145

- Capping of minority interests -36 -14

Economic own funds to cover ECR 5,382 5,205


Group Embedded Value Life & health analysis of change

Restatement and opening adjustments

include:

Capital and dividend flows (EUR

-128mn)

Foreign exchange variance (EUR 6mn)

Merger of Austrian business (EUR -5mn)

Ongoing positive development of operating

earnings resulted in an increase of EUR

387mn

Lower Term mortality assumptions for

life Austria

Lower claims ratio and updated lapse

assumptions for health Austria

Negative economic variance due to lower

interest rates in Eurozone

Closing adjustments include:

the sale of the Italian business

the reallocation of Austrian participations

from covered to non-covered business

49

316

255

113126

Economic

Variance

Other Operating

Earnings

387

280

Assumptions

and Variance

107 Rollforward

New Business

Value

MCEV as at

31-12-2015,

restated &

adjusted

3,145

Restatement

& Adjustments

MCEV as at

31-12-2015

reported

3,272

3,075

MCEV as at

31-12-2016

Other non

operating variance

and closing

Adjustments

Free surplus 494 -99 394 -92 968 -223 -106 941

Required capital 931 -25 906 36 -933 184 -165 27

Value of in-force business 1,847 -2 1,845 169 352 -215 -45 2,107

GEV / MCEV 3,272 -126 3,145 113 387 -255 -316 3,075


Group Embedded Value Life & health sensitivities

in EUR mn Change in Embedded Value Change in New Business Value

2016 * 2015 2016 * 2015

Base value 3,075 100% 3,272 100% 93 100% 73 100%

EV change by economic factors

Risk free yield curve -100bp -317 -10% -316 -10% -4 -4% -7 -9%

Risk free yield curve -50bp -89 -3% -134 -4% n/a n/a -4 -5%

Risk free yield curve +50bp 32 1% 92 3% n/a n/a -1 -2%

Risk free yield curve +100bp 90 3% 141 4% -15 -16% -6 -9%

Equity and property market values -10% -124 -4% -129 -4% 0 0% 0 0%

Equity and property implied volatilities +25% -11 0% -2 0% -1 -1% 0 0%

Swaption implied volatilities +25% -33 -1% -105 -3% -4 -4% -15 -21%

EV change by non-economic factors

Maintenance expenses -10% 58 2% 70 2% 6 7% 7 10%

Lapse rates -10% 67 2% 74 2% 13 14% 13 18%

Mortality for assurances -5% 40 1% 65 2% 3 4% 5 6%

Mortality for annuities -5% -10 0% -6 0% 0 0% 0 0%

Additional sensitivity

Removal of liquidity premium -84 -3% -151 -5% n/a n/a -2 -2%

UFR = 3.2% -175 -6% -176 -5% -10 -11% -14 -19%

50

Interest rate sensitivity

similar to prior year

Estimated impact on EV

from UFR down to

4.05%: -26mn

Estimated impact on EV

from UFR down to

3.65%: -96mn

Non-economic

sensitivities remain at

less material level

compared to changes in

economic factors

** Excludes Italy UNIQA Investor Relations

22%

15%63%

P&C

Health

Life

46%

19%

13%

12%

8%

2%Governent Bonds EU

Covered Bonds

Corporates

Government Bonds Non-EU

Financials

Other

46%

18%

11%

11%

11%

2% Governent Bonds EU

Covered Bonds

Corporates

Government Bonds Non-EU

Financials

Other


Fixed income portfolio

Overall composition Rating distribution

Dec16

EUR 16.5bn

Sep 17

EUR 16.1bn

By segment

51

20%

30%

24%

14%

7%4%

19%

32%

23%

14%

8%

3%

AAA AA A BBB <BBB Not rated

June 17 Dec 16

Grafik aus Excel Sheet „MRM Data “


19%

11%

70%

P&C

Health

Life



Government and government related

Overall composition EUR 9.4bn Rating distribution

By segment

52

10.6%

39.7%

27.6%

12.9%

9.0%

0.2%

AAA AA A BBB NonInvestment

grade

Not rated

33%

13%

9%

8%

7%

7%

6%

4%4%

4% 2%Rest of Europe

Austria

Poland

Europe

France

Belgium

Rest of World

Ireland

Slovakia

Supranational Organisations

Italy





Corporates including financials


By segment

66%

14%

20%

53

22%

12%

17%10%

9%

7%

10%

6%

4% 2% United States of America

Austria

Rest of Europe

France

United Kingdom

Rest of World

Germany

World

Netherlands

Italy

34%

20%

46% P&C

Health

Life

2.8%

12.2%

31.9%

29.7%

9.1%

14.2%


grade

Not rated





Corporate thereof financials


By segment

54

22%

29%14%

7%

6%

7%

6%

4% 4% Austria

United States of America

France

Rest of World

United Kingdom

Netherlands

Germany

Italy

Rest of Europe

29%

14%

57%

P&C

Health

Life

6.1%

16.4%

36.5%

18.1%

11.4% 11.5%


grade

Not rated





Covered bonds

Overall composition EUR 3.1bn

Rating distribution

By segment

55

17%

17%

10%

10%9%

9%

7%

8%

6%

4%3% Austria

France

Germany

Rest of Europe

United Kingdom

Netherlands

Rest of World

Australia

Belgium

Spain

Italy

18%

19%

63%

P&C

Health

Life

68.1%

23.7%

5.3%

1.1% 0.0%1.9%


grade

Not rated



This presentation (the "Presentation"), and the information contained therein, is not directed to, or intended for viewing, release, distribution, publication or use by (directly or indirectly, in whole or in part), any person or entity that is a citizen of, or resident or located in, the United States, Australia, Canada or Japan or any jurisdiction where applicable laws prohibit its viewing, release, distribution, publication or use.

This Presentation is being provided for information purposes to selected recipients only and does not constitute or form part of, and should not be construed as an offer or invitation or recommendation to, purchase or sell or subscribe for, or any solicitation of any offer to purchase or subscribe for any securities in UNIQA Insurance Group AG, a stock corporation organised under Austrian law (the "Company"), in any jurisdiction. Neither the Presentation, nor any part of it nor anything contained or referred to in it, nor the fact of its distribution, should form the basis of or be relied on, in connection with, or act as an inducement in relation to, a decision to purchase or subscribe for or enter into any contract or make any other commitment whatsoever in relation to any such securities.

The contents of this Presentation and any information relating to the Company received (whether in written or oral form) are confidential and may not be copied, distributed, published or reproduced, directly or indirectly, in whole or in part, or disclosed or distributed by recipients to any other person.

The information contained in this Presentation has been provided by the Company and has not been verified independently. Unless otherwise stated, the Company is the source of information.

No reliance may be placed for any purpose whatsoever on the information or opinions contained in the Presentation or on its completeness, accuracy of fairness. No representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its respective directors, officers, employees, agents or advisers as to the accuracy, completeness or fairness of the information or opinions contained in the Presentation and no responsibility or liability is accepted by any of them for any such information or opinions. In particular, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on any projections, targets, estimates or forecasts contained in this Presentation and nothing in this Presentation is or should be relied on as a promise or representation as to the future.

This Presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Company, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of the Company, or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements.

All features in this Presentation are current at the time of publication but may be subject to change in the future. The Company disclaims any obligation to update or revise any statements, in particular forward-looking statements, to reflect future events or developments.

Statements contained in this Presentation regarding past events or performance should not be taken as a guarantee of future events or performance.

Prospective recipients should not treat the contents of this Presentation as advice relating to legal, taxation or investment matters, and are to make their own assessments concerning such matters and other consequences of a potential investment in the Company and its securities, including the merits of investing and related risks.

In receiving any information relating to the Company (whether in written or oral form), including information in this Presentation, you will be deemed to have represented and agreed for the benefit of the Company (i) that you will only use such information for the purposes of discussions with the Company, (ii) to hold such information in strict confidence and not to disclose it (or any discussions with the Company) to any person, except as may be required by law, regulation or court order, (iii) not to reproduce or distribute (in whole or in part, directly or indirectly) any such information, (iv) that you are permitted, in accordance with all applicable laws, to receive such information, and (v) that you are solely responsible for your own assessment of the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company's business.

Disclaimer


UNIQA Insurance Group AG - krakauer.at€¦ · Economic Capital Ratio (%) Operating Return on...

Documents

Transcript of UNIQA Insurance Group AG - krakauer.at€¦ · Economic Capital Ratio (%) Operating Return on...