Vienna Insurance Grp Ord

Ladies and gentlemen, welcome to the VIG preliminary result for the financial year 2024 conference call and live webcast. I am Yousef, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and that 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 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Hartwig Löger, CEO of VIG. Please go ahead.

Thank you very much. A warm welcome also from our side from Ringturm in Vienna, and we are pleased to welcome you to our telephone conference. Starting with the results of 2024, I just also want to remind everyone that 2024 was a special year. We celebrated 200 years of existence of the roots of our group. So I think long-term sustainability is fixed in this way and also 30 years of listing on Vienna Stock Exchange, which might also show our resilient development also in this case. Coming maybe on the first slide from my side, taking an overview about the key PIs of last year's development. We see all over strong full-year performance from VIG, especially with very strong growth on gross written premium. We reached more than 15 billion of premium, which is by 15.2%. billion, more than 10% up on the results of last year. Changing to IFRS 17, we see that insurance service revenue also increased by 11% up to 12 billion. And the most important for us that profit before tax is increased by 14.1% up to 881.8 billion. What we see also is that P&C net combined ratio is also up 0.8 points to 93.4. We will come back to that in detail. It is also, of course, influenced by the big storm Boris, which took part in summer last year. And earnings per share increased to 4.98 euros. And up to that, also a positive impact we have on the operating return on equity, which also increased and improved by 1.3 points to 16.4%. So all over, very positive performance and very positive also development in the main key figures. On the next slide, we'll go on with, I think, one of the most important factors of our development over the last years and also for the future. This gives a strong basis for good performance over the next years. It is the diversification, and we show here in the two pictures the gross written premiums, diversification by segments, Here we see that Austria all over is about 26%, and that also extended CEE already in premium is balancing the Austrian book, Czech and Poland, with 14% and 10% quite strong, and also special markets coming up with around 9%. In this case, going to the right part of the results, we see results before taxes. Still, Austria is even higher in the level of results, even also Czech. But what we see is that there is already a quite good balance situation coming from extended CE and special markets. And this also we see in the perspective for the future that the potential we have is that especially Central Eastern Europe will improve also in the balancing of the result before taxes. And what is most important, and Liana Hina will come back to that, that we have not only the growth of premium but also the results before taxes in a very balanced situation in between the segments, in between the business lines, and the diversification all over is stabilizing also the results. Next slide, the dividend proposal. The board members will propose up by 10.7% to last year. We want to increase the dividends to 1.55 per share, which gives an attractive dividend yield of 5.1%. You see also in the chart the dynamic increase in the payout of dividends, which is also important to be seen on the basis of our dividend policy. which we defined last year already. So there you are fixed that there is the minimum dividend paying now in the proposal for 24 is, again, the minimum for the dividend increase of the next years, which will also depend on the operating earnings situation, and I will come back to that later. with also the outlook for 25, so that we can expect here also a dynamic perspective and a dynamic development for the next years. Saying this, I will hand over to Liane Hirner to go deeper into the financials.

Thank you, Hartwig, and also from my side, a warm welcome to everybody in the call. Let's have a closer look at the group income statement, which we show on slide seven. Apart from the already mentioned positive development of insurance service revenue, which is up by 1.2 billion euros, mainly driven by the E&C business, I would also like to highlight the increased total capital investment results. This was mainly the result of a higher interest revenue from the bond portfolio, supported by the market interest rates development. The presented strong result before taxes of 881.8 million euros includes a goodwill impairment of 116.3 million euros made in Hungary. As a result of the repeated prolongation of the additional insurance tax by the Hungarian government, scenario analysis has been performed to further expenses arising from this tax beyond the current statutory period. This resulted in a significant reduction of the cash flow projections and led to the impairment of goodwill. The tax ratio with 24.4% is one percentage point below last year's 25.4%. A tax ratio in this range is also to be expected for 2025. On slide 8, on the next page, we show the insurance service revenue by segments. Double-digit growth rates were recorded in Poland, the extended CE, and the special market segment. The strongest contribution to the revenue growth is more than 450 million euros derived from the extended CE segment, where Romania, Slovakia, and the Baltics, as well as Hungary and Bulgaria, showed solid growth in the motor and other property lines of business. These lines of business are also the reason for the dynamic development in Czechia, being the main driver for additional €367 million insurance service revenue in the special market segment. Austria follows with an increase of €236 million in revenue, mainly coming from non-life. On slide 9, the strength of the non-life and health business is also reflected. in the insurance service revenue development by lines of business. With the exception of live business with profit participation, all lines of business were growing double digits. Other property was the main contributor with an increase of more than 670 million euros, followed by motor, third-party liability, and cut costs, motor-owned damage, each with an increase of more than 220 million euros. and health with an increase of 108 million euros. Let's move on to slide 10 in the details of the result before taxes development. Despite the already mentioned goodwill impairment in Hungary, the extended CE segment with a plus of 85.7 million euros contributed to more than 50% of the overall profit growth of 109 million euros. Poland, which result before taxes last year, was burdened by the restructuring measures taken with regards to the effective mergers, was able to increase its profit by 35.7 million euros. Together with the 24.4 million euro increase in the special market segment, the positive developments in these three segments outweighed the result before taxes declines in Austria and Czech Republic. This shows one of the advantages of the broad diversification of VIG. Increased combined ratios due to weather-related claims and the decreased capital investments result in Austria were the main reasons for the profit decreases in these two segments. That did not harm VIG's overall strong profit growth of 14.1%. As I have mentioned, the combined ratio increased in Austria and the Czech Republic Let's have a look at the combined ratio on page 11. Overall, VIG's net combined ratio remained on a sound level of 93.4%, slightly up by 0.8 percentage points. The discounting impact on the claims ratio was 3.4% in last year. There has been no material change in the figures relating to Winter Storm Boris that we announced in our conference call in November already. Gross losses from this exceptional nut-cut event amounted to 617 million euros last year. Thanks to VIG's comprehensive free insurance program, the impact was limited to a net figure of 70 million euros, demonstrating VIG's conservative approach. On slide 12, we show the CSM roll-forward for the life and health business. The overall decrease of 4.7% was mainly driven by the changes in the variable fee approach. Lower interest rates compared to the previous year cost a minus of 286 million euros. Worth mentioning for 2024 is the relation between new business of 480 million euros and the CSM release of 513 million euros. The sustainability index of 93.6% was also impacted by the profitable new business volume from Turkey that supported the further increase of the new business margin to 10% after 8.9% in 2023. With this, let's move to the investment portfolio. On slide 13, we present the details of the already mentioned increased total capital investment results. Main driver for this development was the increased interest revenue from the bond portfolio. The investment volume in bonds decreased by more than 400, increased by more than 450 million euros in 2024. Total investments amounted to 36.5 billion euros, up 3.4% compared to the previous year. The next page, slide 14, shows the usual breakdown of investments. Compared to 2023, the proportion invested in bonds decreased slightly from 75.3 to 73.8%. The proportion invested in property remained stable, whereas the proportion in cash and deposits increased from 7.8 to 9.5%. The total average new investment yield in 2024 was kept at a favorable 5.3%, only slightly down from 5.5% at year-end 2023. As the bond portfolio split by rating and issuer is rather unchanged compared to the previous year, I would like to move on to slide 15. Out of diversification across markets, lines of businesses and distribution channels strongly supports our resilient business performance. On the right-hand side of this slide, we are pleased to share our government bond portfolio by country, which also shows a very diversified picture. The Czech Republic and Poland are represented with a share of around 14%, followed by Austria with 9.2%, and a share of 9.7% for supranationals. Romania, Turkey, and Slovakia have each a share above 5%. The remaining government bond portfolio consists of more than 20 countries with less than 5% exposure. With this, I come to my last slide before I hand back to Hartwig for the outlook. The excellent capitalization of VIG is reflected in the strong solvency ratios, both with and without transitional measures shown on slide 16. The solvency ratio including transitionals at year-end 2024 was 261% after 269% at year-end 2023. While own funds only slightly increased year-on-year by 56 million euros, the SCR increased significantly by 142 million euros driven by strong business growth. The solvency ratio excluding transitionals also slightly decreased from 243% to 238% at year-end 2024. Given the ongoing challenging geopolitical environment and all the uncertainties it brings, we are comfortable with the solvency ratio of 238%, which remains above our target range of 150% to 200%. With that, I would like to hand back over to Hartwig for the outlook.