investor day 2011 - asia: the ageas approach

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The Ageas Approach – Gary Crist | 29/9/11 1 25-9-2011 Ageas in Asia - A decade of value creation 1 25-9-2011 Ageas in Asia - A decade of value creation 1 Asia: The Ageas Approach Gary Crist CEO Asia 29 September 2011 INVESTOR DA Y INVESTOR DA Y

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Gary Christ, CEO Asia, on Ageas's activities in Asia

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Page 1: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/9/11 1125-9-2011 Ageas in Asia - A decade of value

creation125-9-2011 Ageas in Asia - A decade of value

creation1

Asia: The Ageas ApproachGary Crist

CEO Asia29 S

epte

mbe

r 20

1 1 INV

ESTO

R D

AYIN

VES

TOR

DAY

Page 2: Investor Day 2011 - Asia: The Ageas Approach

Res

ourc

es

read

ily a

vaila

ble

2

A view on the growth potential in Asia Growing mortality protection gap

Income to maintain living

standard

Mortality protection

gap

Savings

Life insuranceRes

ourc

es re

quire

d

USD bn 2000 2004 2007 2010 CAGR

China 3,731 6,521 11,162 18,745 18%

Japan 6,204 6,555 6,314 8,445 3%

India 2,045 3,061 4,876 6,676 13%

South Korea

1,759 2,477 3,688 3,615 7%

Australia 550 822 1,027 989 6%

Indonesia 256 443 531 711 11%

Thailand 294 321 465 533 6%

Hong Kong 396 401 425 473 2%

Malaysia 171 224 288 380 8%

Vietnam 99 142 240 365 14%

Singapore 154 170 225 305 7%

Taiwan 103 234 197 175 5%

Total 15,762 21,372 29,437 41,411 10%

40% of respondents to the survey said families would or might struggle financially in the event of an early death to the main breadwinner with 50% of the respondents willing to pay at or above market rates for life insurance.

Study highlights the opportunity for insurers who can move beyond traditional sales channels into broader channels with more direct access to customers combined with the capacity for better analytics and segmentation.

Source: Swiss Re report, September 2011

New Swiss Re study highlights a USD 120 bn sales opportunity for the industry in Asia:

The Ageas Approach – Gary Crist | 29/09/11

Page 3: Investor Day 2011 - Asia: The Ageas Approach

33

A view on the growth potential in Asia (ct’d)Insurance penetration vs. per capita income

Penetration equals Total Premiums / GDPSource: Swiss Re Sigma report, No 2 / 2011

Total (Life & Non-Life) Insurance Pentration 2010

02468

101214161820

0 500 1,000 1,500 2,000 2,500 3,000 3,500

Per Capita Premium (EUR)

Total Insurance Penetration (%)

Hong Kong

Malaysia

IndiaThailand

China

Taiwan

Japan

Australia

Korea

Indonesia, Philippines, Vietnam

The Ageas Approach – Gary Crist | 29/09/11

Page 4: Investor Day 2011 - Asia: The Ageas Approach

4

23

17

14

119 9

7 7

2

-3

6

11

15

7

0

(5)

11

25

877

810

China

Indone

sia

IndiaTaiwanThaila

ndHon

g Kong

Malays

iaSinga

poreVietna

mSou

th KoreaJa

pan

Philippin

es

Real Premium Growth Real GDP Growth

Real total premium growth (%) in 2010*

17.5

10.1

8.0 7.8

6.04.7

3.5 3.1 2.9

0.8 0.71.2

Taiwan

Hong Kong

South K

oreaJa

panSingap

oreIndia

Malaysia

Thailand

ChinaIndones

iaPhilip

pinesVietnam

Premium Income (% of GDP 2010)

A view on the growth potential in Asia (ct’d)Total premium growth and premium vs. GDP, Life only

Source: Real GDP growth Japan – www.oecd.org. For other countries, Asian Development outlook 2011 published by the Asian Development Bank

* Note: For India, Japan and South Korea data are FY 09 based. For the Philippines data shown are 09 basedThe Ageas Approach – Gary Crist | 29/09/11

Page 5: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 5

3,184 3,1242,485

1,376

50 34 13 8116140261

3,191

Hong K

ong

Taiwan

Japa

nSing

apore

South

Korea

Malays

iaTha

iland

China

India

Indon

esia

Philipp

ines

Vietna

m

51 48

36 32 32 30 30 30 27 2616

China

Singap

oreMala

ysia

Indon

esia

Thaila

nd

India

Hong K

ong

South

Korea

Vietna

m

Taiwan

Philipp

ines

Premium per Capita (2010)*

Savings (% of GDP 2009)

A view on the growth potential in Asia (ct’d)Premium per capita and savings rates

Source: Real GDP growth Japan – www.oecd.org. For other countries, Asian Development outlook 2011 published by the Asian Development Bank

*Note: For India, Japan and South Korea the data shown is are FY09 based. For Philippines, the data shown are 09 based

In USD

Page 6: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 6

.

.

2020 : Asian market expected to grow furtherAgeas well placed to strengthen its market position

China: 2010Inhabitants : 1,355 mReal GDP/capita: USD 2,831GWP : USD 215 bnPenetration: 5.6%

India : 2010Inhabitants : 1,217 mReal GDP/capita: USD 1,029GWP: USD 78 bnPenetration: 6.3%

Malaysia: 2010inhabitants : 28 mReal GDP/capita: USD 6,137GWP : USD 12 bnPenetration: 6.9%

Thailand : 2010Inhabitants : 68 mReal GDP/capita: USD 3,081GWP : USD 14 bnPenetration: 6.5%

Hong Kong 2010(100% owned)Inhabitants: 7 mReal GDP/capita: USD 30,369GWP : USD 26 bnPenetration: 11.9%

Source : Sigma 2002 (Swiss Re), Global Insight2020 GWP: USD 896bn

20201,387 m

USD 2,046USD 222 bn

7.8%

20201,386 m

USD 5,956USD 578 bn

7.0%

202033 m

USD 8,192USD 22 bn

8.0%

202072 m

USD 4,512USD 38 bn

11.5%

2020

8 mUSD 42,669USD 36 bn

10.9%

2010 GWP: USD 345bn

Page 7: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 79/25/2011

Profile: Ageas in AsiaA strong base for continued growth

FY 10

Gross inflow * LifeNon-Life

Net profit **

Partnership selection and management Proven skill transfer Bancassurance Multi-Channel distribution Agency management and training Affinity marketing Direct marketing Channel conflict management Product development and Management ALM and Risk management

(9%) Other

(59%) Bancassurance

3,2922,955

337

9

FY 086,0935,578

515

94(32%)

Agents

EUR mio2,8692,570

299

80

FY 07 FY 094,0713,689

382

91

Key financial data

Core skills

China 60%

India (2%)

Malaysia 18%

Thailand (14%)

Hong Kong (6%)

Distribution Mix, December 2010*

Gross Inflow by Country, December 2010*

*Gross inflow based on 100% company revenues** Net profit based on Ageas’ stake

Page 8: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 8

Source: Asian Life Insurance Market update 2011, Towers Watson

Premiums, unweighted for Single Premiums

Premiums on a 100% basis, no adjustments for minority holdings

AXA is post divestment of its financial stake in Taikang Life

22,080

10,994

6,4985,791

5,164

2,759 2,507 2,202 1,972 1,927 1,699 1,577 1,268 1,173

HSBC

Zurich AIG

Pruden

tial (U

K)

Ageas

Allianz

Manulife AXA

Sun Li

fe

ING

BNP Card

if

NYLife

Aviva

Metlife

IndiaHong KongThailandChinaMalaysia

In EUR mio

Asia: Leading international Life insurers premium income 2010Leadership positions in Ageas markets

Page 9: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 99

Source: Asian Life Insurance Market update 2011, Towers Watson

Premiums, unweighted for Single Premiums

Premiums on a 100% basis, no adjustments for minority holdings

AXA is post divestment of its financial stake in Taikang Life

22,942

15,195

12,40111,095

7,114

5,503 5,1644,002 3,564 3,299 2,795

2,248 2,195 2,024

HSBC

AIGPrud

entia

l (UK)

Zurich

Allianz ING

Ageas

BNP Card

if

Manulife

Metlife

AXA

Aviva

Sun Li

fe

NYLife

PhilippinesSingaporeVietnamS. KoreaTaiwanIndonesiaIndiaHong KongThailandChinaMalaysia

In EUR mio

Asia: Leading international Life insurers premium income 2010 Leadership positions in Asia, ex Japan

Page 10: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 10

Ageas’ approach in AsiaThe key to long term success

Recognition that Ageas is a retail insurer where local distribution and expertise are critical success factors

Focus on a limited number of select markets with attractive fundamentals where Ageas’ core skills can enhance returns

Consistent, disciplined approach to investment opportunities

Partner with strong institutions that share common goals and objectives where it is possible to align interests

Combine partner’s skills, knowledge and local presence with Ageas’ insurance expertise

A strategy of focused & controlled growth, based on added value to the partnership, is key to long term success.

The general strategic approach of Ageas in Asia is focused on building market leading insurance businesses with strong distribution partners and leading financial institutions.

Page 11: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 11

Focused commercialactivity reflected in

growth in top-line and VANB

Strong focus on Knowledge Brokersrole, adding value to thepartnerships resulting in

long term profitability

Sustainable growth

Growth by partnership or acquisition

Focus onselected markets

Optimize operatingefficiency

Organic growth

Building a critical talent

pool for business growth

Combine local and partner’s

skills, knowledge and presencewith Ageas’expertise

High standards ofcorporate

governance

High level strategy for the regionBuilding sustainable growth

Page 12: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 1212

Active management participation

Management participation focused on control and risk functions Grooming & delivering quality people Adaptability to changing needs

Active governance participation

Strong formal agreements and documentation on Governance structure Defined terms of reference Defined protections in joint venture agreements

Active, broad and deep participation in governance bodies (board + board committees)

Basis for sustainable value adding partnershipsAgeas’ approach to partnerships is both unique and effective

Active regional support: Knowledge brokers across multiple domains

Distribution: Bancassurance, Agency, Direct Products: Development and Management Risk Management, ALM, Investment Management Corporate Governance

Solid partners

Ageas’ Asian Partnerships have weathered the dual stress test of the global financial crisis and the Fortis meltdown

Rigorous partner selection process, predicated on Common Goals Common Values Alignment of interests

Complimentary Value Added from each partner Serious partners with good reputations

Page 13: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 13

Active governance participationOverview of governance committees in Asian activities

Board Committees in the Various Operating Companies

Risk Management Committee

Investment Committee Audit Committee

Nomination/remuneration

committeeExecutive Committee

(mgt level committees)

Malaysia

China

Thailand (mgt level committee)

Hong Kong (mgt levelcommittee)

NA(100% Ageas subsidiary)

India

Page 14: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 14

Ageas Regional Structure Asia CEO: Gary Crist Asia CFO : Filip Coremans Proportional Board and Committee representation Regional functions:

Knowledge broking Reporting and Control Expansion of the franchise

.

.

Thailand : Chief Actuary Deputy Chief Financial Officer/

Chief Investment Officer Head of Bancassurance Head of Motor Group Adviser to the CEO on Technology

Active management participation with strong governance Supplemented by Ageas secondees in key management positions

Malaysia: Chief Marketing Officer Chief Risk Officer Head of Bancassurance (at Maybank)Note: The current CEO of Mayban Ageas Holdings , Hans De Cuyper, was seconded to Malaysia as CFO from 2007 to March 2011. Hans resigned from Ageas in March, was nominated by Maybank and elected CEO.

India : Chief Financial Officer Chief Operating Officer Chief Actuary/Appointed Actuary

China: Chief Actuary/ Appointed Actuary Chief Risk Officer/ Chief Investment Officer Deputy GM Shared Service Centre Chief Risk Officer Taiping Asset

Management Ageas China representative office

Hong Kong (100% owned) Board: 7 Ageas and 3 independent Directors Management: local talent and 5 Ageas expats

Page 15: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 15

Active regional supportGovernance, risk and commercial development

Risk Management

Alternate &Direct Distribution Agency Distribution

ProductManagement

&Development

Corporate Finance&

InvestmentManagement

Finance&

Reporting

Finance &Risk

CommercialDevelopment

BoardBoard &

ManagementCommittees

SecondeesManagement

Support &Governance

Audit ,Legal & Compliance

Bancassurance

Page 16: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 16

Case study, Etiqa; ten year evolution in value added supportMultiple roles and projects based on strategic needs with support across multiple levels

Major ProjectsGeneral

ManagementRisk &

ReportingProduct

DevelopmentAgency

TransformationBancassurance Alternate

Direct Distribution

IT/

Operations

Major M&A projects

Project management, merging Etiqa and MNI

Embedded Value

Value New Business

IFRS

Risk Mgmt & Governance

Audit & Compliance

Product Management & Positioning

Training Academy

Network re-design

Branch redesign

Customer Segmentation

Model design

DM/TM

Internet

Social Media

Shared services

Redesigning Operations

IT Projects

Motor operations

Ageas Secondees; 22 over 10 years, average tenure – 3 years Deputy CEO

Two to three members of the Senior Management Committee at any given time

AA (2)

Chief Actuary Non-Life

CFO (2)

CRO

CMO (2)

Head of Products

Head of Bancassurance

Head of Distribution Development

Customer Segmentation (2)

Retail Development Project management (2)

COO Head of IT Business

Analyst Head of Motor

Claims Dpty Head

Project Mgmt

Ageas sourced supportRegional Office / Head Office

Regional Office, Head Office

Regional Office, Millennium BCP

Regional Office, AICA

Regional Office / Head Office, AG Insurance, BCP Millennium, MTL

Regional Office, Ageas UK

Regional Office / Head Office, Ageas UK

Page 17: Investor Day 2011 - Asia: The Ageas Approach

The Ageas Approach – Gary Crist | 29/09/11 17

Focus on continuing to build value

ConclusionTransformed from a greenfield to a critical component of Ageas today

Focus on partnerships and skill transfer

Continued significant influence in management and governance of partnerships

Bright future built on strong foundations

Page 18: Investor Day 2011 - Asia: The Ageas Approach

Disclaimer slide

Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materiallyfrom those expressed or implied in such statements. Future actual results, performance or events may differ materially fromthose in such statements due to, without limitation, (i) generaleconomic conditions, including in particular economic conditionsin Ageas’s core markets, (ii) performance of financial markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels, (vii) currency exchange rates, (viii) increasing levels of competition, (ix) changes in laws and regulations, including monetary convergence and the Economic and Monetary Union, (x) changes in the policies of central banks and/or foreign governments and (xi) general competitive factors, in each case on a global, regional and/or national basis.

In addition, the financial information contained in this presentation, including the pro forma information contained herein, is unaudited and is provided for illustrative purposes only. It does not purport to be indicative of what the actual results of operations or financial condition of Ageas and its subsidiaries would have been had these events occurred or transactions been consummated on or as of the dates indicated, nor does it purportto be indicative of the results of operations or financial condition that may be achieved in the future.

The Ageas Approach – Gary Crist | 29/09/11