Vienna Insurance Grp Ord

Ladies and gentlemen, welcome to the VIG update for the first three quarters 2024 conference call and live webcast. I'm Sandra, the course call operator. I would like to remind you that all participants are being listened only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit their questions in writing by their Latif field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Nina of Investor Relations. Please go ahead.

Thank you, Sandra, and welcome to today's Vienna Insurance Group conference call. Liane Hirner, our CFO, will guide you through the presentation. After the presentation, Peter Höfinger, our Deputy CEO, and Liane Hirner will be happy to answer your questions regarding the nine-month 2024 update. Liane, please go ahead.

A warm welcome also from my side to our update of the first nine months of this year. In today's presentation, we will share in addition to the gross written premiums and solvency ratio, also the IFRS 79 KPIs, insurance service revenue, profit before taxes, and net P&C combined ratio. Overall, the three quarters of this year were characterized by the strong operational performances of our group companies. With cross-written premiums up by 8% in nine months 2024 and insurance service revenue increasing by 9.3%, we continue to deliver growth not only in the top line. Profit before taxes growing by 8.5% as well. Despite the impact of Boris, the CE nut-cut storm flood event in September underpins our strength and resilience. VRG's group reinsurance program limits the estimated gross losses of approximately Euro 600 million from Boris to Euro 70 million net. Most affected markets are Austria, the Czech Republic, and Poland. Speaking of Poland, I will come to the successful merger in Poland on the next slide. But let me first mention North Macedonia, where we as a group are the number one insurer. we have merged two companies in North Macedonia. Winner Non-Life and Macedonia Insurance will operate together under the brand name Macedonia Osigurovanie, taking care of the non-life business, while Winner Life will continue to operate independently and offer life insurance. Last week, our main shareholder celebrated the group's 200th anniversary. For VIG, as listed group holding, the IPO on 17th November 1994 was a major milestone, which we highlighted with a special website and a separate LinkedIn campaign. Compared with the group's long history, our stock market history is relatively short, but we are determined to make it as successful and as long-lasting as the group itself. Turning to slide four, constantly working on growth and efficiency and supporting the development of our group companies and the markets they are active in is part of the success story of VIG. The completion of the announced mergers in Poland is one example how we are achieving this. In view of the specific market situation in Poland, where PZU is the number one insurer with a market share of roughly 35%, and is more than twice as big as the number two insurer on the Polish market. The three VIG companies, currently number four in Poland, with a combined market share of 9.4%, are set to improve sales and to expand the market position after merger. Looking now at the macroeconomic outlook, that we show on slide 5, Poland's expected GDP growth rate of 3.7% in 2025 and 3.3% in 2026 shows a positive economic environment that we want to take advantage of. In general, the CE markets are expected to perform well. Despite the downward drag from Germany, based on strong private consumption and supported by foreign direct investments, especially in the Western Balkans. This can be seen in light of nearshoring trends following the supply chain issues experienced in many industries. On the right-hand side of the slide, we show the average annual real GDP growth for the period 2024 to 2028 from the Institute of Advanced Studies in Vienna, which also expects Romania, Poland, and Hungary to grow at average rates above or around plus 3%. All this, combined with falling inflation and real wage increases, underpins the attractiveness of the region and confirms our commitment to CEE. Now let's move on, the next slide, to the details of our first to third quarter results 2024. demonstrating again the strong development of VIG. Insurance service revenue of €9 billion up by 9.3%. Profit before taxes of €666.5 million increased by 8.5%. The segments extended CE, here especially the markets Romania, Bulgaria and Slovakia, Poland, and Austria mainly contributed to the profit growth. Despite the impact of CE flood bories, VIG's P&C net combined ratio remained at 94.3% at the previous year's level, with this counting effect about 3.4%. Due to an increased solvency capital requirement due to the increased business volume of 4.1 billion euro, the solvency ratio including transitional amounted to 259%. Solvency ratio excluding transitional measures was at excellent 237% as of September 24th. Now, over the page, we show the growth rate in premium developments by segment. Overall, premiums increased by 8% to an amount of 11.5 billion euros, strongly supported by double-digit growth rates in the segments, extended CEE, and special markets. Again, it's Romania, Bulgaria, but also the Baltics, Slovakia, and Hungary, pushing the premium volume in the extended CE segment. In the special market segment, it's mainly Turkey driving the premium growth to over 1 billion euros after nine months. As shown on slide eight, also Austria, Poland, and the Czech Republic recorded sound premium growth, which translates to positive insurance service revenues presented on the next page. Overall insurance service revenue increased by 9.3% to €9 billion. Double-digit growth rates were recorded in Poland at 13.6%, the extended CE with 13.8%, and the special market segment with 20.7%. Other property business and either motor or health, as stated on slide 9, are the driving the favorable development. Please note that the extended CE segment contributes the same level of revenues as Austria, our most developed market, which means further diversifying our top line. Now, on the next slide, with regards to the solvency ratio development, you can find the details on slide 10. The solvency ratio of 259% as of third quarter includes transitional measures. The SCR increased to €4.1 billion due to a reduction of the loss-absorbing capacity of the technical provisions caused by the downward shift of the interest rate curve in the main VIG markets, which is euro, Polish zloty, Czech crowns, and Romanian ron. The own funds of the VIG group increased slightly. As a result, the regulatory solvency ratio of the VIG group with incorporation of transitional measures of technical provisions came in at 259%, staying on a very strong level, well above 200%. For the calculation without transitional measures on technical provisions, a similar development has been observed. In this case, the solvency ratio of the VIG group amounted to excellent 237%. Now this brings me to our last slide of today's presentation. As the presented figures clearly show, VIG is well on track to reach its 2024 target. We therefore confirm our guidance to profit before taxes on the upper end of the target range of 825 to 875 million Euro for 2024. Our responsible and conservative corporate and reinsurance policy limited the impact of for-risk as expected and modeled by our risk managers. We will stick to our reinsurance approach and make sure that VIG is protected against severe nut-cut events also in the future. We are confident that we will achieve our goals based on the strong capitalization of VIG, the solid performance of our segments Austria, Czech Republic, and Poland, the continuously growing extended CE segment, and last but not least, based on the positive macroeconomic environment for the CE region. With this, I have to the end of my presentation, and Peter and myself are happy to answer your questions.