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Results Presentation 6M 2015 12 August 2015 Herbert K. Haas, CEO - PowerPoint PPT Presentation

Results Presentation 6M 2015 12 August 2015 Herbert K. Haas, CEO Dr. Immo Querner, CFO Agenda I Group Highlights II Segments III Investments / Capital IV Outlook Appendix Mid-term Target Matrix 6M 2015 Additional Information 2


  1. Results Presentation 6M 2015 12 August 2015 Herbert K. Haas, CEO Dr. Immo Querner, CFO

  2. Agenda I Group Highlights II Segments III Investments / Capital IV Outlook Appendix Mid-term Target Matrix 6M 2015 Additional Information 2 Results Presentation 6M 2015, 12 August 2015

  3. 6M 2015 – Good half-year results I Adjusted for currency effects, GWP increased by 6.2%. All segments contributed to this increase, mainly via organic growth With the realignment of its German Life business, Talanx wrote off the goodwill of €155m attributable to German Life in full. The goodwill impairment burdened the Q2 2015 net income by the same amount Inspite of this extraordinary charge on results, Talanx achieved a Group net income of €311m in 6M 2015 (6M 2014: €381m), benefitting from an improved bottom-line result in all other segments. The EBIT on Group level was slighty ahead of the previous year’s level End of June 2015, shareholders equity stood at €8,022 million or €31.73 per share. Despite the dividend payment of €316m, goodwill impairment and higher interest rates, this is above the FY2014 level of €7,998m (€31.64 per share). FY2015 net income outlook of €600-650m. The board’s dividend proposal will be unaffected by the goodwill impairment and, from today’s perspective, will be based on the adjusted calculation base of €755-805m 3 Results Presentation 6M 2015, 12 August 2015

  4. 6M 2015 results – Key financials I Summary of 6M 2015 Comments €m, IFRS 6M 2015 6M 2014 Change � GWP up by 12.4% y/y, supported by currency effects Gross written premium 16,827 14,975 +12 % (currency-adj.:+6.2%) - all segments contributed to Net premium earned 12,751 11,308 +13 % growth, highest contribution from Non-Life Reinsurance Net underwriting result (851) (775) n/m � Combined ratio stays flat at 96.4% y/y. Slightly higher Net investment income 2,037 1,948 +5 % loss ratio (6M 2015: 69.6%, 6M 2014: 69.3%), Operating result (EBIT) 1,015 1,005 +1 % predominantly due to higher man-made losses in Net income after minorities 311 381 (18) % Industrial Lines and Reinsurance segments, Key ratios 6M 2015 6M 2014 Change compensated by the improved cost ratio (6M 2015: Combined ratio non-life 26.9%; 6M 2014: 27.2%) 96.4% 96.4% 0.0%pts insurance and reinsurance � Ordinary investment result increased by ~€145m, mainly Return on investment 3.8% 4.0% (0.2%pts) due to higher invested assets and currency effects; Balance sheet 6M 2015 FY 2014 Change extraordinary investment result was ~€80m lower Investments under 98,033 96,410 +2 % � Bottom-line was impacted by the goodwill impairment in own management the German Life business (effect on EBIT and net Goodwill 1,065 1,090 (2) % income: €155m), partly compensated by a positive Total assets 154,901 147,298 +5 % currency result in “other income” Technical provisions 107,357 101,109 +6 % � Shareholders‘ equity slightly increased ytd to €8,022m , Total shareholders' equity 12,941 12,900 +0 % or €31.73 per share (FY2014: €31.64) despite the impact Shareholders' equity 8,022 7,998 +0 % from higher interest rates, goodwill impairment and dividend payout (€316m). Q1 2015 was higher at €34.60. Solvency I ratio at 224% (FY2014: 228%) Adjusting for the goodwill impairment, the bottom-line result would have been above the previous year’s level 4 Results Presentation 6M 2015, 12 August 2015

  5. Retail Germany – Measures taken to reduce balance-sheet I risk in Life Effects on Group EBIT in FY2014/Q2 2015 (in €m) Comments � In Q2 2015, Talanx impaired the goodwill of €155m attributable to the German life business in full -145 � With the specific charges taken in FY 2014, the measures to reduce balance- sheet risks from German Life add up to Total ~ €-350m more than €350m � The goodwill impairment has a Q2 2015 -31 bottom-line impact of the same size, namely €155m; last year’s EBIT charges -22 (198m) had a bottom-line effect after taxes and minorities of €128m � Only ~€150m of the remaining PVFPs and DACs in the German Life business -155 for the shareholder are interest-rate- sensitive – so mark the maximum interest-related earnings risk for shareholders from intangible assets PVFP Reserve DAC Goodwill � At current interest rate levels, we do not writedown strengthening revaluation 1 impairment expect further extraordinary write-downs FY2014 Q2 2015 of Life intangibles 1 Booked in Consolidation Line Balance sheet measures have materially reduced risks of future extraordinary charges in German Life 5 Results Presentation 6M 2015, 12 August 2015

  6. Retail Germany – Realignment of German Life business (Overview) I Organisational Balance-sheet Product Costs IT Platform set-up Measures Key measures Separation of life Goodwill of Traditional products to be ~€170m investments to Rolling out of and non-life lines €155m in replaced by capital- reduce cost base performant HDI Life IT German Life fully efficient classical products lastingly by ~€70m p.a., platform in written down in 2016; strengthen focus major part of benefit Bancassurance on biometric and payment expected until 2020 protection insurance Why New management CGU to be split Capital-efficiency of Target to achieve lasting Exploiting synergies of responsibilities; also following the products; providing a competitive advantages scale; making use of preparing for future separation of best-in-class product offer in Life following an best- practise- Solvency II lines for our customers extensive cost experience in the requirements benchmarking Division Impact Reducing Significant Lower capital €70m of extra costs vs. State-of-the art management reduction in consumption (~50%), original budget; long- platform for the whole complexity and balance-sheet higher expected returns term cost savings line; reducing sharpening of risks for policyholders and for expected complexity and operational focus shareholders also due to exploiting cost savings premium guarantees at potential the end of the term Strengthening German Life insurance business to the benefit of policy- and shareholders 6 Results Presentation 6M 2015, 12 August 2015

  7. Large losses 1 in 6M 2015 I Primary � Total large loss €m, net Reinsurance Talanx Group insurance burden of €363m Storm, USA February 2015 0.0 11.6 11.6 (6M 2014: €250m) - below the Group‘s Cyclone „Marcia“, Australia February 2015 0.0 9.0 9.0 6M large loss budget Storm „Niklas“, Germany, March 2015 13.5 35.4 48.9 (€439m) Switzerland, Austria Storm, Australia April 2015 7.1 15.0 22.1 � Industrial Lines is impacted by losses Total Nat Cat 20.6 71.0 91.6 from man-made, Aviation 4.4 35.4 39.8 mainly in Property, and by storms in Liability 11.8 0.0 11.8 Europe („Niklas“) and Australia Transport 0.0 77.6 77.6 Fire / Property 128.6 13.3 141.9 � In Q2 2015, Primary Insurance is slightly Total other large losses 144.9 126.3 271.2 below the pro rata Total large losses 165.4 197.4 362.8 large loss budget Impact on Combined Ratio (incurred) 5.5%pts 5.1%pts 5.2%pts � Reinsurance is well below its large loss Total large losses 6M 2014 145.3 104.7 250.0 budget Impact on Combined Ratio (incurred) 5.2%pts 3.1.%pts 4.1%pts 1 Definition „large loss“: in excess of €10m gross in either Primary Insurance or Reinsurance Note: 6M 2015 Primary Insurance large losses (net) are split as follows: Industrial Lines: €149.0m; Retail Germany: €8.4m; Retail International: €5.9m, Group Functions: €2.2m 7 Results Presentation 6M 2015, 12 August 2015

  8. Combined ratios I Development of net combined ratio 1 Combined ratio by segment/selected carrier 6M 2015 6M 2014 Q2 2015 Q2 2014 100.0% Industrial Lines 98.7% 99.4% 98.6% 108.6% 98.4% 98.5% 96.5% 96.2% 94.3% Retail Germany 101.1% 101.2% 101.8% 102.1% Retail International 95.2% 95.3% 95.7% 95.6% 72.0% 70.8% 72.3% 68.6% HDI Seguros S.A., Brazil 98.3% 97.7% 97.4% 97.9% 70.7% 67.7% HDI Seguros S.A., Mexico 90.8% 91.4% 91.1% 92.6% TUiR Warta S.A., Poland 95.9% 94.8% 97.1% 94.6% TU Europa S.A., Poland 84.4% 81.5% 85.4% 84.0% 28.2% 27.7% 27.8% 26.7% 26.4% 26.0% HDI Sigorta A. Ş ., Turkey 102.7% 104.0% 102.7% 103.7% Q1 Q2 Q3 Q4 Q1 Q2 HDI Assicurazioni S.p.A., 92.7% 95.3% 94.2% 96.0% Italy 2014 2015 Non-Life Reinsurance 95.4% 95.1% 95.0% 95.7% Expense ratio Loss ratio 1 Incl. net interest income on funds withheld and contract deposits Note: numbers adjusted on the basis of IAS8 6M 2015 combined ratios remain well below 100% in most divisions and for most carriers 8 Results Presentation 6M 2015, 12 August 2015

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