Vienna Insurance Grp Ord

Thank you very much. Warm welcome and best regards from Ringturm from Vienna. We have been glad to present today the 2025 preliminary results of Vienna Insurance Group and I will do this together with our CFO Liane Hirner and also for the Q&A on our side is our Deputy CEO Peter Höfinger. So from my side I would start with maybe also the key proposition we have and our positioning, which is quite strong, as you know. And I think on the slide number two, give just a flavor about the main topics we have on our side. So market leader in Central Eastern Europe, still with growth prospects. As you know, we have high diversification in sales and all over the regions of Central Eastern Europe. we are quite strong also for the next years in targeting the growth. We have clear decentralized business models, so our understanding is being a group. The picture to that we need is the fleet with strong ships, with also responsible captains on the boats, and they are the backbone and the basis for our strong development in the current situation, but also, as we will see, in the strategic planning for the next years, also for the future. Financial strength, it will be touched deeply by Liane Hirner, so we have a stable and strong basis, not only in solvents ratios, but also on the current basis all over. And we are also focusing in a responsible way to the future, which means that we are also very active in the programming about sustainability. Let's go on with the highlights we can present for the year 2025, which really was an exceptional year in the results we will present today. So very strong top line and also earnings growth overall. which is, I would say, high above peers, and this also remarks that we are on the strong way in the focus of our business, especially in our core markets in Central Eastern Europe. The profit before taxes first time reached the billion mark, and out of that it's also, I would say, an important year which we could fulfill in our targets 25th. As you know, we already presented in the Q3 session that we were successful in the public purchase offer for Nürnberger. So out of that, we already secured 99.2% of Nürnberger share capital. And out of that, we are now in the phase that we I expect the closing, which will take on maybe some months, but to the beginning of the second half of 26, we think it will be solved out of that. The new group strategy, Wolf 28, of course to mention today, but I also remark that we did a broad presentation during the Q3 session, but we will come back today about the targets which are following this program in the midterm, also perspective and outlook till 28. Standard & Poor's also gave a highlight in 25, so our rating with A plus was raised in the outlook from stable to positive, so also a strong signal from Standard & Poor's confirming our financial strength and also our potential of growth for the future. And I think the most important, also the share price performance was top performing the Austrian ATX. We had an increase of 121.4% with a closing price of 67.6%. 20 euro at year end, 25, and this is all-time high in this way till now. So, out of that, we will go on in the fulfillment of our outlooks. On the next slide, number five, you see the key figures of the full year. The main KPIs I will touch, and Liane Hirner will go deeper then. So gross written premium, we reached 16.3 billion euro. That's an increase by 7.1% up on the year 24. The insurance service revenue from IFRS basis increased by 8.7%, up to 13.2 billion. which is for us, yes, the highlight is the increase more than 30% of the profit before taxes up to 1.16 billion. As I said, it's, yes, I would say a new mark also on the way of our success. The KPIs on the quality of business P&C, net combined ratio, we have an improvement by 3.3 percentage points down to 90.1%. Also, this will be deepened by Eliane over the regions. The solvency ratio on a higher level now up to 296%. This is also our strong basis for investments, not only in the payment for Nürnberger, what is expected, as I said, but also for the acquisition possibilities in Central Eastern Europe for new growth, also in strengthening our position. Operating return on equity, 18.7%, also a very strong remark with an upgrade from 2.5%. five percentage points to last year. The strength of our group already mentioned diversification. You see on slide number six that it is not only a good balanced situation in between the markets. The gross written premiums, as you can see, Austria still on a high level with 30%, but already extended CEE with 31% now in the lead. We see that also beside Czech and Poland, also special markets with 10%. We will see later on that Nuremberg will go up in this way if it works as it is expected. Insurance service revenue nearly on the same base. And you see on the right side the results before taxes also well balanced. Here Austria is still in lead, followed by Czech. but we see a strong improvement also in extended CE and Poland, and also Liane will give you details about that. Out of these very positive results and KPIs, we also, as the management board, will give the proposal for the dividend payments, and the proposal to the general meeting will be 1.73 euro per share, which is important because, as you know, our dividend policy is formed in the way that this dividend yearly gives automatically the base also for the next year. So we increase up from 1.55 to 1.73 by about 12%, which gives a new earning per share of 6.46 euro. And out of that, we are a reliant and continuous dividend payer as we started in 1994 on the stock exchange Vienna. So this is our policy where we, with also our shareholders, agree on a stable long-term development. Now I will hand over to Liane. And please go forward, Liane, to deepen. in detail about the KPIs.

Thank you, Hartwig. Now, I'm very pleased to present our strong preliminary full-year results, 25, in more detail to you. Let's start on page 9, where you can see the breakdown of gross written premiums per segment. Overall premiums increased by more than $1 billion, with all market segments contributing to the growth. Markets in the extended CE added an additional 409 million in premiums, with more than 50% of this growth coming from our countries Romania, Slovakia, and the Baltics. Austria and the Czech Republic are the second and third largest contributing segments, with additional premiums of 209 million and 194 million, respectively. In terms of premiums, we recorded growth also in each line of business, with double-digit percentage increases in the life business without profit participation, the unit and index-linked life, as well as the health business. With this, I move to our IFRS 79 reporting tables. On slide 10, we show the group income statement. I will go into the details of the relevant positions in the following pages. Here I would just like to explicitly mention the adjustments totaling 96.3 million, preliminary arising from the entire goodwill impairment of 72.6 million in Hungary. This compares to 116 million goodwill impairment taken for Hungary already in 2024. In 2025, there were also smaller impairments of customer portfolios in Poland and of software in special markets. Regarding the tax ratio of 26.1% in 2025, one quick comment here. We expect this to decrease further and consider a tax ratio of around 25% to be a fair estimate for 2026. Of course, currently without the standard position of Nuremberger. With this, let's move to the next slide, page 11, and the insurance service revenue. Here, overall insurance service revenue increased by 8.7% to 13.2 billion euros. Given the different growth patterns, it's visible that diversification over markets, lines of business, and sales channels again pays off. Standard CE was the biggest contributor of this growth, generating an additional 308.5 million, almost two-thirds of which came from our countries Romania, Slovakia and the Baltics. The strong performance of the special market segment up by 26.6% was driven by Turquia and increased volumes there in the motor business and the life insurance business. These lines of business are also the basis for the solid growth in both Austria and the Czech Republic, each adding more than 200 million in insurance service revenue. Worth mentioning are also the double-digit percentage growth rates in health, not only in Austria and the Czech Republic, but also in extended CE. Now let's move on to slide 12. Here you can see the insurance service revenue development by lines of business. Health is up by 15.5% and for the first time exceeds the 1 billion, followed by a combined growth of 12.5% across all three lifelines of business. In absolute terms, the other property business recorded the strongest growth with an additional 291 million of insurance service revenue, followed by the motor third-party liability insurance with an additional 242 million. Moving to the profit development on slide 13, the bottom line growth was even stronger than the top line increases, so we have profitable growth. Result before taxes is up by 31.7% or roughly €380 million. Yes, this substantial improvement is supported by a more favorable claims experience with significantly lower weather-related claims compared to the previous year. However, it also demonstrates the positive impact of economies of scale and sound insurance technical results, particularly in many extended CEX. Following Austria, which contributed 98 million to the profit increase based on an improved combined ratio, the extended CE segment added 77 million. I would like also to highlight Poland. Thanks to our group companies' concentrated market presence, they have lived up to the ambition of accelerated growth in both life and non-life business. Despite the impairment of customer portfolios mentioned before, profit before taxes increased by 62.4% to 106 million euros, a plus of 40.6 million euros. Also, we are not currently among the top players, top three players in Poland as a group. This demonstrates our strength and profitable setup in this country. Details of the net combined ratio improvements for the group and the market segments are shown on slide 14. VIG's net combined ratio of 90.1% is based on a clearly improvement claims ratio of below 59.7% and also a slightly better cost ratio of 30.4%. The discounting impact of the claims ratio was 4.2% in 2025 after 3.4% in 2024. Czech Republic and the special markets recorded the most substantial combined ratio improvements. Apart from the positive weather-related claims effect, the drivers in Czech Republic were a favorable motor development and an increased profitability in the household insurance. Whereas the better net combined ratio in the special markets is based on positive motor developments in Czechia. Now let's have a look at the profitability KPIs on the live site. On slide 15, the CSM roll forward of the life and health business is presented, and I'm pleased about the ongoing strong CSM new business margin of 9.8%, only slightly below the 10% which we recorded last year. The increase of 12.9% in the CSM roll forward was mainly driven by the changes in VFA, reflecting the positive impact of the rise in long-term interest rate curves. New business of 528 million in relation to a CSM release of 568 million led to a sustainability ratio of 92.9%, which is again only slightly below the exceptional ratio of 93.6% in 2024 and supported by the new business volume from Türkiye. Table from the total capital investment result is shown on slide 16. Here, higher interest income and volume from the bond portfolio has driven the increase of 12.3% to 489.3 million. The increased volume of the bond portfolio is also reflected in the investment splits, which is shown on the next slide 17. Compared to 36.5 billion in 2024, capital investments held at own risk increased by 4.3 to 38 billion euros. The proportion of the bond portfolio increased from 73.8% to 74.6%, reflecting additional bond investments totaling around euro 1.5 billion. Regarding the rating, split upgrades from BBB plus to A minus increased the proportion of A investments, while downgrades of France and the European Financial Stability Facility affected the proportion of AA investments. Further information on the bond portfolio and the rating breakdown of various bond issuers are shown on the next slide 18. DIG's well-known conservative approach is also reflected in the rating distribution of the bond portfolio shown on the left-hand side. Compared to last year, the ratings of governments covered and financial bonds improved. The country split on the right reflects VIG's focus on diversification. Poland and the Czech Republic are represented with a share of 13.9 percent and 13.4 percent respectively, followed by Austria with 10.6 percent and a share of 8.6 percent of supranationals, very similar to what we have presented to you already last year. Now let's have a look at the solvency ratio for 2025 on slide 19. Our solvency ratio, including transitional measures, after 261% in 2024, was 296% at year-end 2025. This reflects substantially increased own funds of around 12 billion, mainly based on the profitable business performance and positive capital markets developments, in relation to an only slightly higher STR of around 4.1 billion euros. The solvent evasion excluding transitionals shows an equal robust trend rising from 238% in 2024 to 276% by the end of 2025. Please here bear in mind that the purchase price becomes due upon the completion of the planned acquisition of Nürnberger Group. However, VRG will remain a solidly capitalized group ready to take advantage of any opportunities offered by our region and well-prepared to handle the ongoing geopolitical challenges. Being active in the CE region, which we know extremely well and where we can rely on the expertise of our local management teams, is a huge advantage in this respect. With this, I will now hand over to Hartwig for his closing remarks and the outlook.

Okay, thank you, Liane. And before I go on with the outlook 26 and also the midterm outlook in the targets of program Evolve 28, I just want to focus on slide 21 about the favorable situation we have with our core market Central Eastern Europe. As you can see on this slide, the mid-term also growth forecasts in the region where we see clearly nearly doubled or even more in the area of the European Union CE markets and also on the Western Balkans, which we also worked out here. You see that starting with 26, it's on the European Union level 1.4. and GDP growth we have in the countries on the European Union level CE 2.6 and even 3.1 which is still going up on the way to 3.5 and 3.7 and even also the EU markets from Central Eastern Europe up from 2.6 to 2.7. So this is really a the right positioning we have in our group and out of that we also can expect that this will also support our growth perspectives and the targets we still are in mind are important for development for our group. On the next slide, the outlook 26 in detail, so the guidance I think shortly just mentioned as Liane already did on the capital basis. We are strongly capitalized in the way of solvency as we have seen even with the upcoming investment to Nuremberg. We are ready to invest also in the growth parts of Central Eastern Europe. The strong broad diversification already mentioned by myself and by Liane which also gives the resilience beside the, of course, influence of geopolitical and macroeconomic conditions. But we, over the last years, were ready also to fulfill our targets beside that. And so the impact out of what is going on also now in the area of the Arabic countries We expect not directly but indirect consequences, but we are on strong base. And out of that, as you can read and see on this slide, the management board is also clear in the targeting for this year. So we achieve the profit before taxes in the targeting with a range of 1.25 to 1.25%. 3 billion for the financial year 26, excluding Nürnberger, when what I mentioned already in the starting part that the closing is expected till mid of the year. And out of that, we will come back to you in the time when it is possible after closing also to include the targeting for Nürnberger. But beside that, with the exceptional result of 25, which was already mentioned, with all-time high of 1.16 billion, we are still ambitious in the outlook and targeting for 26. And on the next slide, as I said, we touched the strategic program for the next three years, the midterm program, and out of that, We have clear, detailed financial targets for 28. We already mentioned them and presented during the Q3 session. But just to repeat and to remind you on that, so gross written premiums up to more than 20 billion. Profit before taxes in an ambition development up to 1.5 billion in 28 combined ratio. Even this year we have exceptional results on that. Also regarding to the lucky situation in combination to the weather related claims, but we are targeting ambitiously to 91% in 28 and operating ROE more than 17% and all together keeping the range of 150 to 200 in mind and as we mentioned we have the power out of our capitalization not only to directly finance the plans taking over of Nuremberg but we are ready also to invest further on but still being and keeping a stable position for VIG. the part of presentation and now we are happy to get your questions and we'll answer immediately. Thank you very much.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the telephone. You are here at home to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Auguste Marcon from UBS. Please go ahead.

Hi, good afternoon. Thanks for taking my questions. I have three, if that's okay. First one's on the combined ratio. Could you please help us with a bit more details on the underlying drivers of the combined ratio, particularly how much was the NatCat impact in 2025? I think at nine months you gave a number which was, I think, 170 million, correct me if I'm wrong. What was that number for full year and what is kind of the normalized level of NatCats that you take into account when you're planning? Second one on the dividend. I appreciate you grew the dividend 12%. However, your earnings grew 30% and your payout now is one of the lowest in the sector below 30%. Did you maybe consider stepping up dividend as a one-off step up to use as a new base? And if not, I'm just curious as to your thoughts in that segment. And then finally, on slide 35, the solvency walk that you give is very helpful. Could you just give a bit more detail on the 580 million other changes? What were they and how should we think about them going forward? Should they trend around zero in the long term or should they be positive in the long term? Thank you.

Thank you for your questions. I will answer the first one, the combined ratio topic. If you look on the drivers of the combined ratio, there are various drivers. One of it is inflation. We have been quite successful over the last years to increase rates according to inflation. What we have seen in last year is that there was a slowing down of the dynamic of the inflation, which was supporting us in claims costs. Nevertheless, we had before that, and we are still able to increase certain rates, which was positive to our margin. On the motorbook, we have been specifically successful. We have new pricing tools in many of our markets, and we were able with a more precise segmentation to increase the profitability in our motorbook. And yes, we have been also supported by the nut-cut activity. The difference of the nut-cut topic to our combined ratio from the year 24 and the year 25 is 1.1 percentage points. There is one topic which is slightly seen than in the overall result, which is on the cost ratio. In more and more markets, we are reaching economies of scale. which is then allowing us, and also for the years to come, to see a continuous decrease of our cost ratio. I hope this is answering your question.

I'm happy to take your questions, the next two questions. The first was regarding the dividend policy. We have decided to have dividends as at least the basis for the last year. So there will be an increase, or at least a stable dividend, but we expect an increase as the business volume and the results are increasing also in the next years. There are no plans to change the dividend policy currently. And the increase of 12% in our view is also a positive sign. On the other hand, the group is growing very strongly, and also new acquisitions regarding Nuremberger is financed by our own funds. So this year, the payout ratio was some percentages below 30%, but I expect that this will increase again in the upcoming years. To the 508 million other changes in the on funds development table. These other changes are the valuation differences or the change of the valuation differences between especially Solvency II best estimated IFRS 17 reserves and also a main portion of these differences is default taxes. are supported by the positive interest rate development of the last year, so the valuation difference is further increased for the next upcoming quarters. I would rather expect a stable development here, as I do not really expect big changes in the interest rate curve. I hope this answers your question.

Thank you.

The next question comes from the line of Yudish Shikure from Autonomous Research. Please go ahead.

Good afternoon, everyone. Thank you for taking my question. So I'll ask three questions as well, if possible. The first one is on your guidance. As you said, 2025 was an exceptional year, and your guidance basically implies you're looking for growth of around 8% to 12%, So maybe if you could just comment on how you see the various moving parts that could drive this growth in terms of top line life, life, non-life, and whether you expect the combined ratio to improve further. So if you could just talk around that, that'd be helpful. Secondly, on the combined ratio improvement year on year, I think for a few countries, especially Czech Republic, Turkey, you talk about favorable motor, a transient motor. Could you expand on that, whether you're seeing better frequency, better severity, a combination of both, and whether you think it's sustainable? And then finally, on the CSM, I mean, obviously there was a big help from, I can link you a slide, higher interest rates that gave a boost of 15%. But looking at interest rate changes, I think they moved around 50 to 65 basis points. So I was wondering, is that the kind of sensitivity we should expect in UCSM? I mean, you know, roughly 50 basis points can produce an uplift of roughly 10%. Thank you.

Thank you. I will start with your second question, which is about combined ratio. There are two different effects in Czech Republic and in Turkey. In Czech Republic, it is on one hand side a lower frequency, but at the same time a very disciplined claims management, which enabled us to keep the average claim flat, even a bit reduced last year, which is supporting the results in Czech Republic. In Turkey, we are more and more stronger in the segmentation and are able to get the right segments which we are desiring and this is shown also by the results. Nevertheless, one has to say in Turkey we do have here the challenges of inflation and the devaluation of the currency, having in mind that some of the spare parts are still in Euro equivalent. But the segmentation, obviously, we have been successful here in Turkey.

I'm happy to take your answer to your question to the CSM developments. You are right. There was quite a positive impact in the VFA business, which relates to the changes in the variable fee and the increase of something. This was mainly driven by the interest rates, but please bear in mind that also the interest rate structure of the interest rate curve here plays an important role because in 2024 we had an inverse interest rate curve and in 2025 this disappeared and especially the interest rates in the mid-term or longer term period increased. Not so much in the first years but from the fourth year onwards interest rate curve increased substantially.

Okay, so I will go on with your first question, Judith. Thanks for that. You mentioned the guidance I gave for 26 and mid-term also out of Evolve 28 till 28. So from the growth perspective, what we see is that we expect also following what I mentioned the dynamic growth situation in the Central Eastern European countries where we are strong located there is still the potential also on organic growth we have the diversification we showed on the slide of regions and business lines also in sales and there we see that also on the one side with our strong partners the group there is potential in the existing countries, AERSTA is also expanding on central eastern rural part, and we see here also the potential for higher growth out of that. Beside that, there are many countries where AERSTA is not located, where we are active and we already have, but with a strategic group program on that will also come in, especially in life business, where we see also the possibility being a strong part of the growth in this all-over targeting. I hope this answers your questions.

Thank you very much. Can I ask a follow-up question on the second topic, actually? Because I think you mentioned a couple of times that you're using new pricing tools for more precise segmentation, and that's improving margins in some countries. To what extent have these newer tools, more sophisticated tools been rolled out across all your markets? What is the potential for further improvements coming from these new techniques?

I cannot now really quantify the further improvements of this topic because it always has to do on one hand side with the size of our portfolio which we have in the respective market. and also with our market share, which, depending on the market share, it's a different room of maneuver, which we have with our pricing tools. But I think it shows that it is successful, and we're looking forward to see further improvements on it.

All right. Okay. Thank you. Thank you very much.

We now have a question. As a reminder, if you wish to register for a question, please press star and one on your telephone. We now have a question from a line of work, Steve rich from auto BHF. Please go ahead.

Hi, good afternoon. Thank you for the presentation and opportunity to ask questions. Um, I will have actually two questions. The first one is related to combined ratio. And you mentioned before the, the Delta, uh, arising from net cats on 25, 24. Um, I was just wondering if there is like a number or a budget that you have in mind, uh, going forward, uh, what percentage do you allocate, uh, to net cat events, uh, for example, in your strategic plan? Um, and the second question is related to, um, the U S Israel, Iran conflict. And, uh, you, you elaborated before that you have like limited direct exposure, um, fully understand that, but I was thinking more in the direction of other adverse effects. For example, if some missiles or drones are being shot down over the area of Turkey, which is one of your very promising markets. My question here is, is there like a cap to claims that you would expect coming from these kind of events? Thank you.

Thank you for your questions. I start with the second one. I hope that I understood it fully. Principally, for claims which are done out of a war activity, there is no coverage. Therefore, we are not expecting out of war activity to have here any claims. We are not really... in the international marine business. So this area which potentially could be affected is not something which should affect our book here. So it will be more secondary effects on one hand side which is stock markets and increasing of inflation which will challenge us in managing our claims costs. On the other hand side, what we also have seen in the past, rising petrol prices also do have a certain effect on our frequency, a more positive one. So there will be different effects on it, but there is not really a direct effect out of it. Your first question, which is combined ratio, yes, we do have a budget. you have to differentiate. So first of all, due to our structure which we have and our planning logic which we have, there is a budget for each and every company, and there we differentiate between nut-cut events and weather-related claims. Nut-cut events, as we have proved and seen previously, Two years ago when we had the big flood events, even if there is a very big event, we are buying in quite a resilient coverage with a low retention. So also big events in the end do not have a major impact overall. It is more the frequency. And the same is true for weather-related claims. But this is very much budgeted on a local level, and I cannot tell you here now the exact

Okay, yeah, thank you very much. All clear.

We have a follow-up question from the line of August Marcon from UBS. Please go ahead.

Hi, thanks for taking my follow-ups. Just two quick ones. One is on the Solency 2 review in EU. Do you have any estimates on potential impact for VIG? And then the second one is just on the adjustments we had from... from mostly Hungary with about 100 million last year, about 100 million this year as well. Do you think it's all done now or do you expect this number to still be a bit of a drag? And if so, where do you think that would come from? Thank you.

I'm happy to take two questions regarding the goodwill in Hungary. The write-down of the goodwill this year was the entire write-down, so there is nothing left. for the upcoming year. So we have no goodwill anymore in our books regarding Hungary. Regarding the Solvency II review, this has different impacts depending on the portfolios of the companies. So it very much depends on if you have a live portfolio or a non-live portfolio, long-term or short-term. Overall, for the group, I would not expect a big difference, so rather stable development with positive or no big negative effect. That's due to our diversification. I hope this answers your question.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Nina Hilgertsberger-Schwarz, Head of Investor Relations, for any closing remarks.

Thank you for your participation and for listening in. The 2025 Group Annual Report will be published on 28 April. If you require specific information for your models or analysis, please get in touch with Investor Relations. We are happy to help. And up to now, thanks and goodbye.