naar een coherente ontwikkeling van de belgische …...2018/03/09 · › create a positive...
TRANSCRIPT
Periodical Financial Information
3M 2017RESULTS
Introduction to Ageas
2Corporate Presentation I March 2018
A transformation journey
to a solid insurance player in Europe and Asia
> Rename the company
> Simplification legal structure
> Start divestments non-core activities
> Selectively grow the
business organically & via
acquisitions
> Optimising operational
performance
> Address financial legacies
> Introduction
○ Clear financial targets
○ Clear strategic choices
Re g a in ing
c onf i d e n c e f ro m
fin a n c ia l
m a r ke t s
Creat ing an Ageas
iden t i t y
Ag e a s c o n f i r m e d a s a s o l i d
I n s u r a n c e p l a ye r
i n E u r o p e a n d As i a
Stabilizing
the group
Financial
repositioningPrepare for
The future
2009 2012 2015 2018
3Corporate Presentation I March 2018
An international Group with a focus on Europe and Asia
UNITED-KINGDOM
Non-Life
#2 motorcycle insurer
#3 private car insurer
BELGIUM
Life & Non-Life
#1 Life
#2 Non-Life
#1 real estate
CONTINENTAL EUROPE
Life & Non-Life
4 markets
#2 insurer in Portugal
ASIA
Life & Non-Life
6 partnerships in 9 markets
17%
6%
18%59%
GROSS INFLOWS (100%)
2017 TOTAL: EUR 33.8 bn
Belgium United-Kingdom
Continental Europe Asia
46%
3%
20%
30%
1%
INSURANCE NET RESULT
2017 TOTAL: EUR 960 MIO
Belgium United-Kingdom
Continental Europe Asia
Intreas
Breakdown by segment (in EUR bn)
Breakdown by segment (in EUR mio)
4Corporate Presentation I March 2018
A diversified portfolio of productsMarket leader positions in core countries
69%
31%
2017 GROSS INFLOWSBY PRODUCT AT AGEAS’S PART
Life Non Life
LIFE
#1 Belgium
#1 Thailand#2 Luxembourg
#5 Malaysia#1 Portugal
#6 China
GARANTEED UNIT-LINKED67%
33%
Guaranteed Unit-Linked
NON-LIFE
#2 Belgium
#4 Thailand#3 Private car UK #3 Portugal
#4 Turkey #2 Malaysia
MOTORACCIDENT
& HEALTHHOUSEHOLD
OTHER
21%
43%
26%
10%
Accident & Health
Motor
Household
Other Lines
2017 GROSS INFLOWS
NON-LIFE
(consolidated entities)
2017 GROSS INFLOWS
LIFE
(consolidated entities)
Non-Life business mostly driven by Motor & Household
Life business mostly guaranteed rate driven
5Corporate Presentation I March 2018
Multiple distribution channels to reach our clients
BANKS AGENTS BROKERS DIRECT
Proven competency in developing strong, long-term and
dynamic partnerships with companies leader in their
local market
Ageas’s
Insurance knowledge
and expertise
Partner’s
Local knowledge and
distribution capabilities+
6Corporate Presentation I March 2018
Consistent inflow growth
CAGR +12%
Belgium
in EUR bn
UK (excl. UK Life)
Continental Europe
Asia (excl. HK)
6.2 6.9 6.0 5.9 5.7 6.1 5.7
2.0 2.1
2.3 2.4 2.5 2.2 2.0
2.8 4.3 5.0 5.5 5.2 5.4 6.1
5.8
7.4 9.3
11.4
15.9 17.8
20.0
16.8
20.722.6
25.2
29.2
31.5
33.8
2011 2012 2013 2014 2015 2016 2017
All non-consolidated partnerships have been included at 100%
7Corporate Presentation I March 2018
Underlying insurance net profit capacity of EUR 750-850 mio
Belgium
UK
Continental Europe
Asia
Reinsurance
In EUR mio
(327)
324 335 392 384 391 438
86
108 100 117
30
(156)
29
(8)
64 77 56
70 90
193
(64)
128 142 172
272 394
293
(313)
624 654 737 755
721 960
2011 2012 2013 2014 2015 2016 2017
INSURANCE NET PROFIT
As reported
360 324 335 392 384 410 438
91 108 102
99 30
57 75 65 64 77
56
70 99
125 20 95 105
132 218 182
253
536
591 618 679 701
751
899
2011 2012 2013 2014 2015 2016 2017
INSURANCE NET PROFIT
Underlying
2011 Belgium and CEU corrected for Greek impairments
2011-2016 Excl. Net result UK Life / Asia excluding Net result Hong-Kong
2016 Belgium corrected for Terrorism events / UK corrected for closure
Glasgow office, special risks & Ogden rate review / Asia corrected for
capital gains sale of Hong-Kong
2016 CEU corrected for integration costs Ageas Seguros
2017 UK corrected for Ogden / CEU corrected for Cargeas capital gains and
integration costs Ageas Seguros
3
3
88
CAGR +9%
8Corporate Presentation I March 2018
Disciplined cash upstream from operating companies Upstream covering dividend and holding costs
Belgium
in EUR mio
UK
Continental Europe
Asia
2013 Belgium excluding EUR 200 mio capital restructuring
2014 CEU excluding EUR 30 mio France & EUR 61 mio Portugal Capital restructuring and EUR 115 mio Portugal M&A
Belgium268
Belgium168
Belgium294
Belgium333
Belgium391
UK 82
UK 64
UK 50
UK 47 CEU 36
CEU150
CEU 53 CEU 19
CEU 48 Asia 52
Asia106 Asia 43
Asia 89
Asia77
42
438
488
440
487 516
2012 2013 2014 2015 2016 2017
Portugal25
Italy 15
9
Malaysia16
Thailand15
China46
Luxembourg
9Corporate Presentation I March 2018
EXECUTIVE COMMITTEE
Bart De Smet
CEO
Christophe Boizard
CFO
Filip Coremans
CRO
Antonio Cano
COO
MANAGEMENT COMMITTEE
Gary Crist
CEO Asia
Hans De Cuyper
CEO BelgiumAndy Watson
CEO United Kingdom
Steven Braekeveldt
CEO Continental
Europe
Emmanuel
Van Grimbergen
GRO
Four geographic segments supported by a lean corporate Head Office
Management structureA business driven organization
10Corporate Presentation I March 2018
4 REGIONS, 15 COUNTRIES
11Corporate Presentation I March 2018
BelgiumA clear market leader with robust profit levels
#1 Life 28.7% market share
#2 Non-Life 15.6% market share
#1 Real Estate EUR 6.3 bn real estate value
Policyholders
3.7 mio
2017
Gross Inflows
EUR 5.7 bn
2017
Net Result
EUR 438 mio
2017
Combined ratio
91%
BELGIUM INSURANCE NET PROFIT
Non-Life
Life
in EUR mio
(330)
260 274 336
281 288 292
3
65 61
55 103 102
146
(327)
324 335
392 384 391 438
2011 2012 2013 2014 2015 2016 2017
2011 corrected for Greek impairments
2016 corrected for Terrorism events
91 108 102 99
30 57
75
2011 2012 2013 2014 2015 2016 2017
12Corporate Presentation I March 2018
United-KingdomRestructuring to obtain target profit level
#2 Motorcycle
#3 Private car
Staff
3,500
Brokers
2,500
Active customers
5 mio
2%
64%
23%
11%
Accident & Health
Motor
Household
Other Lines
2017 GROSS INFLOWS
(consolidated entities)
UK INSURANCE NET PROFIT
As reported
UK INSURANCE NET PROFIT
Underlying
Excl. Net result UK Life
2014 corrected for capital gain sale of UK Life
2016 corrected for closure Glasgow office, special risks &
Ogden rate review
2017 corrected for Ogden rate review
In EUR mio In EUR mio
91 108 102 120
30
(156)
29
2011 2012 2013 2014 2015 2016 2017
Excl. Net result UK Life
13Corporate Presentation I March 2018
Continental EuropeA diversified portfolio
Staff
2,400
2017 Combined ratio
90.4%
4 markets : Portugal, France, Luxembourg and Turkey (Italy divested in 2017)
#1 in Life and #2 overall insurer in Portugal
#4 Non-Life in Turkey
69%
31%
2017 GROSS INFLOWS(at Ageas’ part)
BY PRODUCT (IN %)
Life Non-Life
47%
14%3%
8%
28%
Portugal France
Italy Turkey
Luxembourg
2017 GROSS INFLOWS
(at Ageas’ part)
BY MARKET
(19)
50 44 45 33 49 62
11
14 32 11 37
41 53
77
(8)
64 77
56 70
90
193
2011 2012 2013 2014 2015 2016 2017
CONTINENTAL EUROPE INSURANCE NET PROFIT
Non-Life
Life
Cap gain from the sale of the Italian entity
In EUR mio
2017 Gross Inflows
(at 100%)
EUR 6.1 bn
2017 Net Result
EUR 193 mioIncluding EUR 77 mio
cap gains from Italy
14Corporate Presentation I March 2018
AsiaA fast growing contribution
Malaysia
Maybank
2001
China
Taiping Life
Thailand
Muang Thai
2004
India
IDBI Federal Life
2008
Hong Kong
AICA*
The Philippines
East West
Ageas Life
Vietnam
Military Bank
20152016
Laos
Cambodia
Muang Thai
EXPANDING OUR REACH THROUGH PARTNERSIPS
75%
17%
7%
1%
China Thailand Malaysia India
2017 GROSS INFLOWS
(at Ageas’part) BY MARKET
96%
4%
2017 GROSS INFLOWS(at Ageas’part) BY PRODUCT
Life Non-Life
*AICA was sold in 2016
2017 Net Result
EUR 293 mio
2017 Combined ratio
87.4%
2017 Gross Inflows
(at 100%)
EUR 20 bn
6.27.9 9.8
11.9
16.518.0
20.0
2011 2012 2013 2014 2015 2016 2017
GROSS INFLOWS MORE THAN TRIPLED IN 6 YEARS (in EUR bn)
6 partnerships in 9 markets :
China, India, Malaysia, Thailand, Vietnam, Philippines, Singapore, Laos, Cambodia
#6 Life in China
#1 General takaful in Malaysia
#1 Life in Thailand
#4 Non-Life in Thailand
X3
15Corporate Presentation I March 2018
OUR STRATEGY
16Corporate Presentation I March 2018
Ambition 2018 : 7 strategic choices
› Be close to our customers by leveraging
technology and acting on improved
customer insights
› Invest in smart synergies to facilitate
innovation and the sharing of knowledge,
data and skills across our businesses
› Focus on our insurance capabilities by
continuing to invest in core insurance skills
› Commit to our partners and their customers
to strengthen relationships for the long term
› Expand in mature and growth markets in
Europe and Asia
› Create a positive customer experience across all
channels through a seamless, integrated and
consistent omni-channel distribution approach
› Have a well-diversified product offering,
targeting growth in Non-Life and core
"protection" products in Life
17Corporate Presentation I March 2018
Ambition 2018 : 5 financial targets2
01
7 F
IGU
RE
S
14.6%Return above the
target (14.4%
excluding Cargeas)
95.2%Non-Life combined
ratio reaching target
despite residual Ogden
impact
93 bps27 bps
Life guaranteed
margin above target
while Unit-Linked
margin is below
target but improving
42%Proposed gross
dividend in line with
promised pay-out ratio
196%Strong Insurance
Solvency IIageas ratio,
comfortably above
target
Reaching all but one target
18Corporate Presentation I March 2018
The challenges we face, the answers we give
Use Solvency IIageas for capital management
and risk appetite
Target insurance Solvency IIageas : 175%
Continue to strengthen our positions
Investing 25% of the Insurance Equity in
growth markets
Decrease dependence on short-term
investment products
Invest in innovation projects
Focus : data analytics, customer loyalty,
healthcare, direct distribution channels
Closer to customer
Add new customer touchpoints within the
existing distribution mix
2017 insurance
Solvency IIageas : 196%
Recent entry in Philippines,
Vietnam, Laos and Cambodia
New products in Belgium,
Portugal and France
Over EUR 300 million in new
technological developments in
2013/2018
Multiple projects: My Global
Benefits (BE), Back Me Up (UK),
Yongo (BE), Elastic (UK), Smile
(Thailand)
OUR APPROACH OUR ANSWERS
19Corporate Presentation I March 2018
Ageas’s answer to the low i-rate environmentMaintaining strong inflows and solid operating margin
Additional yield on equities & real estate estimated at 0.5%
Matched portfolio in Belgium
FY 14 FY 15 FY 16 FY 17
Guaranteed interest rate 2.71% 2.63% 2.49% 2.32%
Fixed income yield 3.84% 3.71% 3.45% 3.34%
Liabilities Guaranteed (EUR bn) 51.8 50.3 52.9 50.4
FY 14 FY 15 FY 16 FY 17
Fixed income yield 2.89% 2.11% 1.71% 1.88%
Reinvested amount (EUR bn) 4.6 4.2 4.5 2.9
Newly invested money mostly government related loans, mortgage loans & infrastructure loans
Guaranteed retail Life:
Yield lowered from 1% to 0.75% as from 1 April 2016
Yield lowered to 0.5% as from 1 August 2016
Yield further lowered to 0.25% as from 1 November 2016
Life
Back book
New money
Life & Non-Life
20Corporate Presentation I March 2018
Ageas’s answer to the low i-rate environmentFull match between assets and liabilities
Stable evolution of the investment margin on back book in Belgium
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
Q1 2014Q2 2014Q3 2014Q3 2014Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017
Guaranteed interest rate Total fixed income yield
3.34%
2.32%
21Corporate Presentation I March 2018
M&A StrategyM&A Criteria
EXISTING MARKET
Priority to strengthen positions in
existing markets
NON-LIFE
Clear preference for Non-Life
FAST GROWING
EMERGING MARKETS
Further expansion in fast growing
emerging markets while respecting
financial targets and continuing to build
on a successful partnership model
BUSINESS GROWTH
OPPORTUNITIES
Flexibility for opportunities where Ageas
believes its expertise can create growth
& improve the business
22Corporate Presentation I March 2018
TOTAL LIQUID ASSETS
Ring-fenced for Settlement
Liquid Assets
Net Cash
in EUR bn
Financing in case of a compelling
M&A transaction can come out of:
• Available Net Cash
• Projected future cash flows
• Debt issuing capacity
M&A StrategyTotal Financing capacity estimated at around EUR 2 bn
0.7
1.2
1.9
1.6
1.3
1.0 0.9
0.3
0.3
0.2
0.80.9
0.7
1.2
1.9 1.9
1.6
1.91.8
2011 2012 2013 2014 2015 2016 2017
23Corporate Presentation I March 2018
M&A StrategyPut option AG Insurance
BNP Paribas Fortis owns 25% + 1 share of AG Insurance and is granted a put option to resell its
stake to Ageas in H1 2018
At 31/12/2017 the liability of the put option was € 1,449 M
AG Insurance and BNP Paribas Fortis also have a distribution agreement
4 POSSIBLE SCENARIOS
Distribution agreement renewed
BNP Paribas
Put option
exercised
YES
YES
NO
NO
Status quo on distribution
Ageas full owner of AG
Insurance
Status quo on distribution
& ownership
Separation
Unlikely since
No strategic logic
24Corporate Presentation I March 2018
INVESTMENT PORTFOLIO
41%
21%
24%
6%8%
Investment officesCar parksInvestment RetailRE DevelopmentInvestment warehouses
14%
1%
7%
13%65%
Loans to banks RE
Infrastructure Mortgages
Other
25Corporate Presentation I March 2018
A solid and diversified investment portfolio
16%
8%
61%
15%
Banking Other financials
Non Financials Governement related
EUR
20.8 BN
65%6%
17%
12%
EquitiesEquity fundsRE fundsMixed funds & others
2017 INVESTMENT PORTFOLIO
47%
26%
12%
6%
6%3%
Soverign bonds Corporate bonds
Loans Equities
Real Estate Cash
2017 SOVEREIGN BOND PORFOLIO
50%
17%
7%
7%
4%3%
3%2%
7%
Belgium France Austria
Portugal Italy Spain
Germany Ireland Other
2017 CORPORATE BOND PORFOLIO
2017 LOAN PORFOLIO 2017 EQUITY PORFOLIO 2017 REAL ESTATE PORFOLIO
EUR
80.6 BN
EUR
37.5 BN
EUR
9.4 BN
EUR
4.9 BN
EUR
5.3 BN
26Corporate Presentation I March 2018
GENERAL ACCOUNT
27Corporate Presentation I March 2018
Decreased volatility from the General Account
General Account activities not related to the core insurance business
Royal Park
Investment
CASHES
RPN(i)Put option on AG
Insurance
Legal
proceedings
CASHES, securities issued by
BNP Paribas Fortis and
convertible into Ageas shares
RPN(i), financial instrument
designed to avoid accounting
volatility in the BNP Paribas
Fortis books from the
CASHES. The corresponding
liability is on Ageas balance
sheet
Out of the 12,000 CASHES issued, only 3,791 remain
outstanding
44.7% investment in RPI, a
structured credit portfolio
from Fortis
The portfolio was sold in
2013, the remaining
activity today is mostly
limited to the management
of legal proceedings in the
US initiated by RPI
BNP Paribas Fortis owns
25% + 1 share of AG
Insurance and is granted a
put option to sell its stake
to Ageas in H1 2018
The put option is fully
provided for at fair value
At 31/12/2017 the liability
of the put option is
EUR 1,449 M
Legal proceedings related
to the former Fortis Group
in 2007 and 2008
Revised Settlement
between Ageas and
claimant organizations
reached in 2017
Amsterdam’s Court of
Appeal’s decision expected
mid 2018
28Corporate Presentation I March 2018
Progress in solving legal legacies
Settlement between Ageas & claimants organisations
Ageas offers to pay EUR 1.2 bn compensation - Cash impact of EUR 1,0 bn
No recognition of any wrongdoing by Ageas
Commitment by eligible shareholders to abandon any ongoing civil proceeding & not to
start any legal proceeding related to the events
Settlement not declared binding in current format
Court’s main objections: unjustified difference between Active and Non-Active Claimants
Court offers opportunity for amendments by 17/10/2017
Court grants extension until 12/12/2017
Ageas announced EUR 100 mio final additional effort
Agreement reached on revised Settlement proposal
First hearing on compensation models of claimants organizations
Second hearing on the merits
Announcement
14/03/2016
Amsterdam Court’s
interim decision
16/06/2017
Extension
16/10/2017
Revised Settlement
12/12/2017
Next steps
16 & 27/03/2018
Court’s decision estimated mid 2018
29Corporate Presentation I March 2018
INVESTMENT CASE
30Corporate Presentation I March 2018
Shareholders returnAgeas returned EUR 4.6 bn since’09, >50% of current market cap
in EUR mio
TOTAL RETURNED TO SHAREHOLDERS
Capital Reduction
Share buy-back executed
Paid Dividend
7 share buy-back programmes
188 197 188 270 309 329 338
419 408
223
188
427
348
637
518
579 582
663 655
230 160
144
209 250 244
244 247
2010 2011 2012 2013 2014 2015 2016 2017 2018
2011 2012 2013 2014 2015 2016 2017 2018
Gross amount/share 0.80 0.80 1.20 1.40 1.55 1.65 1,70
+0.40
2.10
Payout ratio 50% - 43% 47% 45% 45% 59% 42%
Dividend yield 3.7% 4.7% 4.6% 4.4% 5.0% 4.9% 5.3% 5.1%
Target
dividend payout ratio
40-50%
Proposed regular gross
Cash dividend 2018 of
EUR 2.10
up 24%
31Corporate Presentation I March 2018
STRENGTHS
OF THE BUSINESS MODEL
Balanced portfolio
Markets/products/channels
Strong positions in mature
European countries
+
Growth potential in Asian
emerging markets
Proven expertise in growing
through partnerships
FINANCIAL DISCIPLINE AND
PROGRESS ON SOLVING LEGACIES
Strong capital position
(FY2017)
Shareholder’s equity
EUR 9.6 bn
Insurance Solvency IIageas
196%
Group Solvency IIageas
196%
Resolution of a large
number of legacies from
the past
Strong progress on legal issues:
Revised Settlement agreement
reached in 2017 – Court’s
decision expected mid 2018
AMBITION
FOR THE FUTURE
Clear strategic priorities
to prepare the Group for the
future
Innovation
Growth markets
New products
5 financial targets
11%-13% ROE
97% Combined ratio
Life operating margin
85-90 bps guaranteed
40-45 bps unit-linked
40%-50% dividend range
SII ratio 175%
Conclusion
32Corporate Presentation I March 2018
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
materially from those expressed or implied in such statements. Future actual results, performance or events may differ
materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular
economic conditions in 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 purport to be indicative of the results of operations or financial condition that may be
achieved in the future.
Disclaimer
33Corporate Presentation I March 2018
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E-mail:
Website:
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www.ageas.com
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