Q1-2018 RESULTS PRESENTATION TO FINANCIAL ANALYSTS APRIL 24 TH , - PowerPoint PPT Presentation

Q1-2018 RESULTS PRESENTATION TO FINANCIAL ANALYSTS APRIL 24 TH , 2018

Q1-2018 Results: Net income at € 35.5m; RoATE stands at 8.8% 1 2 3 4 Q1-2018 Q1-2018 KEY TAKE AWAYS APPENDICES HIGHLIGHTS RESULTS & OUTLOOK 2 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018

PART 1 Q1-2018 HIGHLIGHTS

Fit to Win execution drives profitability in a supportive economic environment Turnover reached € 344m y-t-d, up 2.1% at constant FX and perimeter − Both mature and emerging markets growing driven by client activity − Client retention climbs further in competitive pricing environment Q1-2018 net loss ratio down by (18.3) ppts. at 39.8%; Net combined ratio at 72.5% − Continuing favourable trend in losses driven by Asia and North America; mature markets stable − Favourable past claims management and recoveries continue in a supportive economic environment − Net cost ratio at 32.7% vs. 33.9% in Q1-2017; driven by strict cost control and higher reinsurance commissions − Business investments fully funded by cost savings Net income (group share) at € 35.5 m RoATE at 8.8% Fit to Win execution continues: − Continuing to drive deep cultural, process and systems transformation − Achieved € 9m y-t-d ( € 6m additional cost savings vs. Q1-2017), confirming € 30m 2018 annualised target − Disciplined investment of € 8m ( € 6m additional) into growth, risk management, compliance and process transformation 4 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018

PART 2 Q1-2018 RESULTS

Turnover growth at 2.1% driven by client activity (1.2)% 2.1% Total revenue up 2.1% vs. Q1 2017 at constant FX 348 In € m 344 ► Growth mainly driven by client activity (better volume effect) and higher retention rate Gross Earned Premiums (GEP) 282 278 ► Improved economic environment continues to drive pricing pressure ► Other revenue (Factoring and Services) down by (4.9)% Insurance related fees 37 39 vs. 2017 due to lower factoring revenues in Germany 29 27 Other revenue Q1-2017 Q1-2018 13.8% 13.3% Fees / GEP ratio ► Fees / GEP higher by 0.5ppt on information sales Q1-2017 Q1-2018 V% V% ex. FX 6 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018

Fit to Win growth strategies starting to deliver Western Europe Northern Europe Central Europe Mediterranean & Africa 2.2% 3.6% (1.1)% (1.1)% 5.3% 5.2% 5.8% 7.1% 92 87 80 79 75 73 34 32 Q1-17 Q1-18 Q1-17 Q1-18 Q1-17 Q1-18 Q1-17 Q1-18 Lower factoring Record retention and Positive net production and Insurance and factoring growing growing client activity client activity and stable insurance revenues North America Asia Pacific Latin America (14.8)% (2.2)% (9.0)% 2.7% (23.4)% (10.8)% 32 27 23 21 21 16 Q1-17 Q1-18 Q1-17 Q1-18 Q1-17 Q1-18 Stabilised portfolio Delayed large contract bookings and Growing new business and client activity higher premium refunds (better losses) and higher premium refunds V% V% ex. FX Total revenue by region, in € m 7 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018

Supportive client activity and record retention New production 1 49 45 43 Slow start in new production though 33 noticeable improvement in Asia Q1-15 Q1-16 Q1-17 Q1-18 93.9% Retention rate 1 91.3% 90.9% 89.0% Record/high level of retention across all regions Q1-15 Q1-16 Q1-17 Q1-18 Price effect 1 Controlled price decrease reflecting (1.6)% good loss experience (1.9)% (2.3)% (2.8)% Q1-15 Q1-16 Q1-17 Q1-18 Volume effect 1 2.0% Client activity rebounding in all markets 1.1% 0.2% 0.2% confirming Q4-17 performance Q1-15 Q1-16 Q1-17 Q1-18 1 Portfolio as of March 31 2018; and at constant FX and perimeter New Production: in m € 8 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018

Gross Loss ratio at record low driven by underwriting focus and good economy Loss ratio before reinsurance and including claims handling expenses, in % ► Gross loss ratio at record low levels in line with recent quarters 57.8 54.2 50,3 ► Strong momentum supported by positive economic 43.0 39.7 9.7 environment and favourable prior periods underwriting development 40.6 ► Full effect of action plans now visible Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q4-2017 negatively impacted (+9.7ppts.) by facultative business (very high cession rate) Loss ratio before reinsurance and excluding claims handling expenses, in % (15.8) (20.0) (25.2) (35.0) ► No change in reserving policy 72.6 72.4 71.5 71.3 ► Prior years boni well above 55.6 51.5 47.4 historical average 37.4 Current underwriting year All underwriting years Prior underwriting years 9 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018

Continued improvement driven by Asia and North America Loss ratio before reinsurance, including claims handling expenses – in % 8%* 6%* 5%* Group North America Asia Pacific Latin America 146.8 113.4 100.6 85.0 56.3 63.3 53.8 49.0 60.2 51.4 51.0 39.7 35.9 31.1 -2.9 -6.4 FY-15 FY-16 FY-17 Q1-18 FY-15 FY-16 FY-17 Q1-18 FY-15 FY-16 FY-17 Q1-18 FY-15 FY-16 FY-17 Q1-18 10%* 22%* 23%* 27%* Central Europe Western Europe Northern Europe Mediterranean & Africa 57.4 49.6 52.3 58.5 50.3 57.2 54.8 54.0 49.8 48.4 52.1 39.8 42.3 38.5 32.6 33.2 FY-15 FY-16 FY-17 Q1-18 FY-15 FY-16 FY-17 Q1-18 FY-15 FY-16 FY-17 Q1-18 FY-15 FY-16 FY-17 Q1-18 * % of Total revenue by region 10 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018

Continued tight cost controls (0.8)% 2.8% Internal costs In € m In € m 176 172 171 167 168 External acquisition 37 131 131 40 (4) 41 4 39 40 costs (commissions) 6 (6) Internal costs 139 131 131 128 127 Q1-2017 FX Cost Investments Inflation Q1-2018 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 savings V% V% ex. FX ► Achieved € 9m y-t-d ( € 6m additional cost savings vs Cost ratio before reinsurance, in % Q1-2017), confirming € 30m annualised 2018 target ► Invested € 8m ( € 6m additional) into growth, risk 38.0 37.4 35.7 34.7 34.8 management, compliance and process transformation ► Cost base impacted by 2.9% inflation ► Q1-2018 gross cost ratio at 34.8% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 11 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018

Reinsurance result impacted by record low loss ratios and growing accounting cession rate Q1-17 Q1-18 Gross earned premiums 282.2 278.4 ► Higher premium cession rate (underwriting years 2017 and Net earned premiums 207.9 198.6 2018) materialising in accounting numbers 28.7% 26.3% Premium cession rate (+2.4ppts in Q1-18) Gross claims expenses (163.2) (110.4) ► Claims cession rate in line with premium cession Net claims expenses (120.9) (79.1) 28.4% 25.9% Claims cession rate Q1-17 Q1-18 V% Underwriting income before reinsurance 19.1 68.9 +261% (4.6) Reinsurance result N.S. (16.5) Underwriting income after reinsurance 14.5 52.4 +261% 12 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018

Net combined ratio at 72.5% driven by lower loss ratio (19.5)ppts. Net combined ratio improved to 72.5% ► In % (vs. 76.4% in Q4-17) 95.4 Net combined ratio 92.0 81.7 76.4 72.5 Investments fully financed by cost savings ► Net cost ratio 37.1 33.9 35.4 34.6 32.7 Full year net combined ratio down by (19.5)ppts. ► mainly driven by lower losses and improved 58.2 58.4 46.3 41.8 reinsurance commissions 39.8 Net loss ratio Loss ratio well below through the cycle average ► Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 1 13 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018

Financial portfolio: slight increase of investment income Keeping a diversified investment strategy €m Q1-17 Q1-18 Investment Real Estate Income from investment portfolio 2 13.7 12.3 7% Income from investment portfolio without gains on sales 9.8 10.0 Equities 8% Bonds o/w gains on sales 3.9 2.3 62% Investment management costs (0.8) (0.9) FX effect (8.8) (2.4) Total Other 1.5 (0.6) Loans, Deposit & € 2.75bn 1 other financial 22% 8.3 5.6 Net investment income Accounting yield 0.5% 0.4% on average investment portfolio Accounting yield 0.4% 0.4% on average investment portfolio excl. gains on sales 1 Excludes investments in non-consolidated subsidiaries 2 Excludes investments in non-consolidated subsidiaries, FX and investment management costs 14 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018

Q1-2018 net income at € 35.5m Q1-17 Q1-18 Income statement items - in €m Current operating income 20.1 60.7 Fit to Win investments & restructuring expenses (0.6) (2.2) Other operating income and expenses (0.4) (0.2) ► Operating income multiplied by 3 at € 58.4m, in line with more recent quarters Operating income 19.2 58.4 Finance costs (4.4) (4.4) Share in net income of associates 0.3 0.6 ► Tax rate keeps improving to 35% (7.7) (19.0) Income tax Tax rate 52% 35% Non-controlling interests (0.1) 0.1 Net income (group share) 7.3 35.5 15 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018