VIENNA INSURANCE GROUP Investor Presentation Preliminary full year - PowerPoint PPT Presentation

VIENNA INSURANCE GROUP Investor Presentation Preliminary full year results 2018

VIG – THE LEADING INSURANCE GROUP IN AUSTRIA & CEE Close to Around Represented in 200 50 25 years of experience Group companies markets More than More than Solvency Ratio 50% 25,000 239% of premiums and profits coming employees based on Partial Internal Model from CEE Since Current market capitalization S&P Rating ~ € 2.9 1994 A+ continous payout of dividends billion with stable outlook VIG 2 STRATEGY & OUTLOOK VIENNA INSURANCE GROUP

MANAGEMENT PRINCIPLES 1 Local entrepreneurship  Knowledge of local needs and markets  Decentralised structures and efficient decision-making procedures 2 Multi-brand strategy  Around 50 brands in 25 countries  Utilisation of established local brands 3 Multi-channel distribution  Various distribution channels, including partnership with Erste Group  Strongly customer-oriented distribution CORE BUSINESS 4 Conservative investment and reinsurance policy  Quality, peace of mind and sustainability are our priorities INSURANCE  Spreading risk by means of diversification VIG 3 STRATEGY & OUTLOOK VIENNA INSURANCE GROUP

VIG IS BEST POSITIONED TO LEVERAGE ON THE POSITIVE MARKET DEVELOPMENT IN CEE Excellent market shares throughout the region 1 2018: 25 markets Client/talent base: Country Market position Market share total 180mn people Austria 1 1 1 22.7% 10 Czech Rep. 1 2 1 31.6% 4 Slovakia 1 2 1 32.8% 1 Poland 4 4 5 6.1% 2 1 Romania 1 1 2 23.8% 1 3 6 The Baltic 1 1 3 23.5% 1 4 Hungary 6 7 4 8.1% 5 4 1 Bulgaria 1 2 1 7 13.5% 2 1 2 total non-life life 18 Market position total Source: local authorities - data as of YE 2018; GE, RS and UA as of Q3 2018; HU as of YE 2017 VIG 4 STRATEGY & OUTLOOK VIENNA INSURANCE GROUP

CEE REGION GROWING STRONGER THAN EU-15 Promising GDP per capita growth 2019 - 2023 Gap in GDP growth in purchasing parities CEE vs. EU-15 Forecast CAGR 8% 2019-2023 real GDP 6% 2.7% (CEE) vs. 1.5% (EU-15) 4% 2% 0% 2000 2003 2006 2009 2012 2015 2018 2021 -2% -4% real GDP growth PPP (USD) CEE real GDP growth PPP (USD) EU15 -6% Change in GDP per capita by purchasing power parities in % (CAGR 19-23) 4.4 4.1 3.4 3.4 3.2 2.9 2.4 0.9 AT CZ SK PL RO BG RS BA Source: IMF World Economic Outlook Database, October 2018 VIG 5 STRATEGY & OUTLOOK VIENNA INSURANCE GROUP

POSITIVE ECONOMIC ENVIRONMENT AND STRONG GROWTH POTENTIAL GOING FORWARD Annual insurance spending shows significant growth potential in the CEE region Real GDP growth p.a. 2019-2023 Insurance density 2017, in EUR (premiums per capita) Austria 1.5 Austria 1,948.5 Croatia 2.3 Croatia 289.7 Hungary 2.3 Hungary 315.3 Lithuania 2.3 Lithuania 274.0 Turkey 2.4 Turkey 129.5 Czech Republic 2.5 Czech Republic 523.7 Ø EU-15 Bulgaria 2.8 Bulgaria 157.1 € 2,726 Poland 2.9 Poland 371.1 Ø CEE-VIG Macedonia 3.1 Macedonia 70.1 € 174 Romania 3.2 Romania 108.0 Ukraine 3.2 Ukraine 32.0 Slovakia 3.6 Slovakia 397.3 Serbia 4.0 Serbia 108.7 EU-15 +1.5% Source: Axco Global Statistics, BMI Fitch 9.10.2018 Source: IMF World Economic Outlook Database, October 2018 (Note: Data not directly comparable to previous presentations) VIG 6 STRATEGY & OUTLOOK VIENNA INSURANCE GROUP

AGENDA 2020 CREATING ADDED VALUE AND CONTRIBUTION TO FUTURE SUCCESS Optimisation of business model Ensuring future growth  Shared Services  Use of growth potentials Intensify selected business areas  e.g. health Creating cost benefits by merging back-office functions and companies insurance, reinsurance, cooperation with Erste Group  Profit optimisation in motor  Digitisation Development of targeted measures focusing on Development of a digital hub to support and coordinate underwriting and risk selection activities within the Group  Anti-fraud  Insurance of the future Trends, innovation, technical developments  medium Group-wide initiative on fraud management supported by specialised VIG team to long-term adaptation of business model  Closed File Review  Assistance Group-wide procedure for identifying and avoiding Assistance services companies already active in CZ, SK, PL, BG and RO  creating additional value excessive claims payments Organisation and Cooperation VIG 7 STRATEGY & OUTLOOK VIENNA INSURANCE GROUP

AGENDA 2020 Review after half time Ensuring future growth Optimisation of business model Anti-Fraud-Management Use of growth potentials Digitalisation Health insurance  Roll-out in 13 companies in 10 countries  >150 ongoing digitalisation projects 58% premium increase in the 5 key countries of BG,  70% coverage in these companies at the  ~ € 200mn investment in digitalisation in the PL, RO, TR and HU in 2018 end of 2018 context of the Agenda 2020 Bancassurance  VIG internal innovation competition, VIG 14% group-wide premium growth and 20% premium Xelerate, held for the second time growth in CEE in the non-life segment in 2018 Closed-File Review (CFR) 27% portfolio premiums increase in health insurance in Austria in 2018  Performed in 9 companies in 5 countries Assistance Reinsurance Since start of Agenda 2020, 17% premium growth for  >500,000 assistance cases since the start VIG Re, 2 new branches established in Frankfurt and of Agenda 2020 Shared services and mergers Paris  80% already handled by VIG's own  11 companies merged since the start of Insurance of the future companies Agenda 2020  5 assistance companies in 7 CEE countries viesure (CZ, SK, BG, PL, RO, RS, MK) Start-up established beginning of 2019 VIG 8 STRATEGY & OUTLOOK VIENNA INSURANCE GROUP

ATTRACTIVE DIVIDEND POLICY WITH NEWLY DEFINED PAYOUT RANGE Payout ratio increased consistently to 47.6% by 2018 2017 2018 2016 Earnings per share NEW DIVIDEND POLICY 2.16 2.23 2.04 ( € ) Dividend Payout Ratio in a range of per share 0.80 0.90 1.00* 30 – 50% of Group profits after ( € ) taxes and non-controlling interests Payout 35.6% 38.7% 47.6% ratio Dividend per share remains to be aligned with Group performance Dividend 3.8% 3.5% 4.9% yield * Management proposal; subject to approval of the AGM VIG 9 STRATEGY & OUTLOOK VIENNA INSURANCE GROUP

NEW TARGETS FOR 2019 AND UPDATED OUTLOOK FOR 2020 Strategy of profitable growth with higher targets against tightening economic cycle Gross written Profit before Combined premium taxes Ratio Based on progress made VIG continuously strives through Agenda 2020 and € 9.9bn € 500mn - € 520mn 2019 to improve both, the ongoing strong economic claims and cost ratio growth in CEE, VIG targets stable development and continuous improvement sustainable CoR at € 10.2bn € 530mn - € 550mn 2020 ~95% VIG 10 STRATEGY & OUTLOOK VIENNA INSURANCE GROUP

STRATEGY & OUTLOOK RESULTS 2018 SEGMENTS APPENDIX Please note: All information for the financial year 2018 is based on preliminary unaudited data. VIG 11 VIENNA INSURANCE GROUP

HIGHLIGHTS 2018 Results ahead of targets set for 2018 Gross written premium Profit before taxes Combined Ratio € 9,657.3mn € 485.4mn 96.0% GWP up by 2.9% compared to 2017 PBT increased by 9.7% Down from 96.7% in 2017  Current premium business: +5.2%  After adjusting for goodwill impairments in  Claims ratio improved to 64.7%  CEE premium growth: +3.7%  Cost ratio slightly up to 31.3% Romania and Turkey, CEE profit growth  CEE share in premiums of 56% even above premium development in CEE  CEE share in profits of 53% Dividend 1 Solvency ratio New business margin 239% 4.4% € 1.00 Own funds: € 7,734mn / SCR: € 3,241mn Consistent dividend increase Stable overall Group development  Mainly driven by changes in the Solvency  Up 11.1% y-o-y implying a pay-out ratio of  Positive return on life & health embedded value of 5.1% amounting to € 199mn Capital Requirement (SCR) 47.6% of Group profits after taxes and non-controlling interests 1: Management proposal; subject to approval of the Annual General Meeting VIG 12 HIGHLIGHTS VIENNA INSURANCE GROUP