Earnings Document

Bhavin Rathod

Good afternoon. Thank you for taking my questions, I have

three. The first one would be on the cost ratio in Poland, which

was remarkedly high in the fourth quarter of 2022. Could you

provide any additional colour on what was the driver of this

higher cost ratio in Poland? I appreciate there's some

competition on, but an indication what drove this higher ratio.

Was it higher acquisition cost or claims handling? Any colour

would be really helpful.

The second one would be on Türkiye, if you could provide any

early indication on your exposure to the Turkish earthquake, any

early figures, that would be really helpful.

Lastly, on the claims inflation outlook for 2023, I appreciate the

fact that you're providing inflation is expected to decrease, but

this service, how do you see the P&C prices to evolve in 2023?

Also, I appreciate that you have short-term nature of book in the

CEE market and you're able to reprice it quite quickly, but are

you seeing any pushback from the customers in terms of churn

or moving around or doing some bargain hunting? Or are they

able to take on the higher prices that you are putting through?

Any colours around the pricing part in the CEE market will be

really helpful. Thank you so much.

Peter Höfinger

Good afternoon. Peter Höfinger, thank you for your questions,

they're all on me. I start maybe with the last topic, pricing on

P&C. If you look on our claims ratio which we have presented for

last year, you see that our claims ratio stayed stable, so we could

prove our ability to deal with rising inflations and keeping claims

ratio at the same level, even though the environment is

challenging out of inflation on the one hand's side. This is driven

by certain rate increases, it's also very much driven in talking

with our clients to recheck their sum insured and increasing

sums insured, and respectively having higher premiums.

Thirdly, also on the topic of claims handling, being in an

environment in Central EasteEurope, where inflation has been

there also in the past, some years ago. We have management

resources, which are quite experienced in dealing with this issue,

maybe different to some countries in the Westeworld. Where

management resources never had in their professional career

the challenge of inflation, as we have seen it last year.

Looking to this year, I'm talking on one hand's side, as you also

mentioned, we do have the opportunity for a fast repricing in

Central EasteEurope, as in all business lines, it's basically

one-year contracts. In Austria, where this is a bit different, we do

have various indices, also in our retail products. Indices which

are very much reflected on the business line. Also in the private

property you have a construction price index and not just a

consumer price index. You have in the casco insurance a car

2

repair index and not just the consumer price index, so really

reflecting the underlying inflation for our claims, which is

balancing the increased average claims.

Seeing what happened in the renewal of reinsurance, and I'm

sure you're well aware of the overall significant hardening of

reinsurance which was experienced by the primary insurance,

we also see here in our markets, and this specifically with some

of the more local competitors, that they are pushed by these

higher prices. Therefore, I do not have the feeling that prices go

down in the current environment. With one exception, this is the

question you are posing to me. I hope I could give you some

indication on how we see this.

Bhavin Rathod

That's super helpful.

Peter Höfinger

Cost ratio in Poland, it's a little bit vaguely described in our

material, with increased competition. Yes, this means that in the

end, distribution and marketing costs have increased in relation

to premiums generated. We still feel this pricing competition, but

I do have an indication that hopefully we are on the bottom line,

as there is certain increased pricing on the fleet business. Fleet

business is normally the first indication that maybe the market is

more going back to a risk adequate pricing.

Coming to Türkiye, there are various estimations by modelling

companies, looking at the models of what will be the modelled

insured loss in the region where the earthquake has happened

in Türkiye. This is somewhere between €3.5 to €5 billion as an

estimate. Taking around our market share in non-life, which is

approximately 2.5%, looking at the first claims notification which

we have received, and extrapolating it, it seems that we will be

around €100 million gross.

Bhavin Rathod

Thank you so much.

Operator

The next question is coming from Thomas Unger from Erste

Group. Please go ahead.

Thomas Unger

Good afternoon. Thank you very much. I'd like to follow up on…

Peter Höfinger

Please talk louder.

Thomas Unger

Can you hear me now, is it better now?

Peter Höfinger

Now we can hear you.

Thomas Unger

Sorry about that. If I could follow up on one of the questions that

you had on premiums, especially in Austria, the last 2.5 months

now into 2023, how did clients react to your premium increases?

Probably quite sizeable premium increases now are coming

through. Have you seen any changes in patterns from your

customers? That's the first question.

3

Secondly, I'd like to talk about Aegon. When do you expect to

close the remaining part of the Aegon acquisition? If you could

repeat the profit contribution that you had in 2022 from the new

Aegon CEE assets.

Lastly, I would like to ask on the dividend, what made you decide

for the dividend at €1.3 per share and why did you not opt for a

higher pay-out in light of your strong balance sheet, strong

capital ratios and, also, quite strong results in 2022? Thank you.

Peter Höfinger

Thank you for your questions. Looking specifically to Austria and

customer behaviour due to inflation: There is no significant

increases of cancellations in the life business. Which could be

one of the effects, but this is nothing that seems to be here of

any significance or any correlation to it. The same is true for retail

non-life. We didn't see anything that there is something like mass

cancellations in private property household insurance due to

limited budgets of people. If we come to corporate clients, this is

different. What we see is also we are much more asked in the

area of risk management and risk advice, and also the advice

that the intermediaries are much more asked on this topic.

Corporate clients are evaluating more detailed, what is the risk.

They are willing to think about increasing self-retentions, limiting

certain coverages for ensuring that premium rises are not so

significant. On the corporate side, there is an intensive

discussion how to protect and risk sensitivity and risk

awareness, not only because of inflation, but also due to

geopolitical situation and also due to the COVID topics in the last

years, have in our interactions with clients very much increased.

Which is, on one hand's side also a very positive thing, talking

very intensively about how to protect the risks and not just to

discuss purely premium levels.

Liane Hirner

I'm happy to take the second question regarding Aegon

transaction. We closed Türkiye and Hungary and explained the

effects on the income statement in 2022. What is still open is

Poland and Romania, the closing has not taken place so far. But

from the impact, Hungary and Türkiye are by far the biggest

parts, from the Polish and Romanian entities we expect around

100 million additional premium volume with regards to Aegon.

The last question on the dividend, as I also explained, we are a

little bit cautious when it comes to the outlook due to the

macroeconomic environment, which is still challenging. You see

a small US bank is going bankrupt and the capital markets are

in an international way quite heavily affected, so there's still a lot

of uncertainty and disruptive elements that could take place.

Taking all this into account, we do not give a concrete outlook

for our 2023. When it comes to the dividends, our divided yield

is very attractive with 5.8%, also the dividend is higher than last

4

year. Taking all these aspects into account, our proposed

dividend we think is very attractive.

Thomas Unger

Thank you. Can I ask you again for the pre-tax profit contribution

by the Aegon assets in 2022? I missed that one in the

presentation.

Liane Hirner

From Aegon Hungary and Türkiye we have impact in the

extended CEE segment with a premium increase of more than

€300 million, €310 million. The profit contribution for Hungary is

minus 29 million. This is taking into account the additional tax on

the insurance premium and also the depreciation and the

impairment of the insurance portfolios and customer base

already mentioned. In special markets we have additional

premiums of €130 million. The profit contribution of Aegon

Türkiye insurance company is around €6.3 million. These are the

main effects last year.

Thomas Unger

Thank you very much.

Operator

Ladies and gentlemen, if you would like to ask a question, please

press star followed by one on your telephone. There are no

further questions at this time. I now hand back to Nina for closing

comments.

Nina Higatzberger-Schwarz

Thank you for listening in and for your questions. Our next

scheduled events are the AGM on 26th of May, followed by the

first quarter update on 31st of May 2023. In case of further

questions, the investor relations team is there for you, please

reach out. And, once again, thank you, have a nice day and

goodbye.

Liane Hirner

Bye-bye.

Peter Höfinger

Bye.