CATTOLICA GROUP Weathering the Storm UBS Conference Piero Gavazzi Chief Financial Officer. UBS The Italian Financial Services Conference 2009

Transcription

1 CATTOLICA GROUP Weathering the Storm UBS Conference Piero Gavazzi Chief Financial Officer UBS The Italian Financial Services Conference 2009 Milan, January

2 New organizational structure and M&A operations 9M 2008 Results 1

3 New organizational structure and M&A operations 9M2008 Results 2

4 Cattolica Group and 2008 market scenario 29 th January 2008 Cattolica Group presents new Strategic Plan xxx Reforms evolution xxx Regulatory evolution with structural impact on insurance companies Competitiveness increase in the market and sharpening economic conditions: life growth rates contraction and non-life business deterioration 2008 Financial Market downfall xxx Downfall of global equity markets Acceleration of credit crisis, and bankrupties of financial institutions Market wide-repricing of risk, especially of credit risk, and declining nongovernment bond prices 2008 Cattolica Group performance xxx First nine months characterized by: Further improvement in technical performance, in line with established targets Stability in volumes Strong commitment to increase operating efficiency and profitability Pressure on net financial income Further rationalization of Group corporate structure 3

5 In 2008 Cattolica Group actions in accordance with Strategic Plan guidelines Strategic guidelines Actions taken in 2008 Improve technical operations by aligning performance with best competitors Cost reduction and rationalization Build up dependable distribution capacity by consolidating agency network and developing new initiatives Developed new, more technical pricing schemes Reinforced underwriting control, thanks to new on-line system Reformed motor portfolio and agency network Restructured claims management processes Modified life and non-life business mix to maximize profitability Rationalization of corporate structure in progress Improvement of Group effectiveness in progress: Introduced New IT platforms Integrated of product factories Rationalised of product range Increased proprietary distribution capacity: Eurizon UBI Assicurazioni multimandate agency network BCC Vita Partnered with Azimut in FAS and Asset Management Proactive, although prudent investment strategy Efficient capital structure and implementation of advanced ERM System 4

6 Progressive simplification of corporate structure Companies involved Old Corporate structure Future Corporate structure Duomo Unione CIRA TUA ABC Lombarda Assicurazioni Cattolica Berica Vita Risparmio Previdenza San Miniato Previdenza Lombarda Vita Cattolica previd. in azienda Vicenza Life Persona Life Cattolica Investimenti SIM Cattolica Immobiliare Cattolica IT Services DICA (claims) Duomo Previdenza 2007 Merge Duomo Previdenza into Cattolica Merge Persona Life into Cattolica 2008 Spinoff CIRA Spinoff Cattolica Previdenza Merge DICA into CITS 2009 Merge Duomo into Cattolica G&A expences reduction EUR Milion 7 CIRA TUA ABC Lombarda Ass. Alternative P&C channel Cattolica Berica Vita Risparmio Previdenza San Miniato previdenza Lombarda Vita Cattolica Previdenza Vicenza Life Bancassurance Cattolica Investimenti SIM Cattolica Immobiliare Asset management 5

7 2008 M&A operations focused on strengthening distribution capacity by preserving a Group sound capital structure INTERNAL RATIONALIZATION CHANNEL STRENGTHENING CHANNEL DIVERSIFICATION Partnership for Cattolica SIM development 3 edged partnership on asset management business Small acquisition of multimandate agents network Bancassurance agreement with cooperative banks federations Acquisition of EurizonVita Life consultants business unit 12 March August April August April 2008 Keep ancillary offering in Financial Advisory for interested agents, in partnership with market leader Develop internal asset management into competitive independent player, in partnership with market leader Accelerate TUA development at low cost Strengthening banking distribution at low cost, with long term partnership opportunities Develop proprietary channels for the distribution of long term life & pension products 6

8 New organizational structure and M&A operations 9M 2008 Results 7

9 9M2008 Shareholders equity million 1,457 (80) ,291 Solvency Margin stable at ,305 (118) (4) (3) Shareholders Equity FY07 Dividend paid in 2008 Change in AFS Reserve 1H08 Net Result Other Shareholders equity 1H08 Change in AFS 1H/9M08 Change Net Result 1H/9M08 Other Shareholders equity 9M08 8

10 9M2008 consolidated net profit million 91 (19) (24) (29) Consolidated net profit, net of financial crisis Impairment on defaulted assets Impairment on other financial assets Realized losses on securities Total Net Profit Shadow Accounting Consolidated net profit 9

11 9M2008 Results at a glance Total premiums* 2,753 2,800 Non-life 1,103 1,072 9M 07/08 % million Market 1H07/08 % Life 1,240 1, ,728 1, , M 07 9M 08 Consolidated net profit Primarily thanks to nonlife technical improvement, but impacted by market turmoil on finance 53 9M M 08 9M 07/08 % Inclusion of negative impact of 53 mn due to financial crisis * Direct business. Life premiums include investment contracts 10

12 9M2008 Results at a glance Non-life consolidated net profit 36 9M 07/08 (x) x 3 Non-life profitability contributes increasingly to Group profit million 12 1, , ,1 9M 07 9M 08 Class C financial result 219 9M 07/08 % , , ,1 9M 07 1H2008 9M 08 In 3Q2008 further worsening of financial crisis 11

13 Investment breakdown as at Investment breakdown (market value mn ) Corporate Bond portfolio quality Real Estate 0.3% 7,583 Strategic shareholdings 3.5% Equity 2.9% Mutual funds with 2.3% some equity content 91% AAA 8.8% AA 57.4% Bonds A 24.2% BBB 5% <BBB and NR 4.6% 9M2008 About 90% of Corporate Bond portfolio rated at or above A No material exposure to : subprime, CLO, RMBS, CMBS, Alt-A, CDO, etc 12

14 9M2008 Results: premiums breakdown million Non life premiums * 9M07/08 % Market 1H07/08 % Non-life business mix 1,103 1,072 Motor decrease primarily due to portfolio cleaning Non motor Motor 1,103 1, , , ,1 9M 07 9M Non Motor Motor 34% 39% 66% 61% 9M 07 9M 08 Life premiums * Life business mix 1,728 9M07/08 % Market 1H07/08 % 1,650 1,728 BPVI contribution starts to be evident 1, Index and Unit Traditional 58% 47% 42% 53% 9M 07 9M08 9M 07 9M 08 * Direct business. Life premiums include investment contracts 13

15 9M2008 Results: non-life technical result Combined Ratio* < 100% (%) Claims ratio * improvement (%) ** Improvement of claims frequency and claims settlement speed Progressive portfolio selection Change in business mix with focus on more profitable businesses FY 07 9M 07 9M 08 FY 07 9M 07 9M 08 Expense ratio * In 9M2008 the non-life technical reserves run-off was neutral G&A Commis - sions FY ** 9M 07 9M 08 * Direct business ** Net of ABC Assicura (non-life jv with BPVI): claims ratio at 72.8% and commissions ratio at 15.7% G&A stability thanks to a progressive strict cost control, in spite of investments in IT infrastructure Commission ratio increase due to nonlife bancassurance contribution 14

16 Life business: new business premiums New Business Premiums (Direct business - Euro bn; Vicenza Life and Berica Vita from September 2007 ) 1,427 1,448 9M07/08 % BPVI 351 premiums +1.5% Market 9M07/08 % -19.9% Growth above market average also thanks to BPVI contribution million 9M2007 9M2008 by type of product by type of channel Index Unit Traditional 1,427 xx 59% 6% 35% 9M2007 1,448 44% 43% 12% 44% 9M2008 Other Banks Agents 1,427 8% 86% 6% 9M2007 1,448 29% Increase due to Vicenza Life contributi on 63% 8% 9M

17 Group mathematical Life Reserves evolution Group technical reserves by financial guarantee (Traditional products) Financial Guarantee ( mln) >= 4% 2.5% < 4% <= 2.5% 5, % 10.2% 74.5% 5, % 9.2% 76.1% M

18 DISCLAIMER This document has been prepared by Cattolica Assicurazioni based on data from internal sources (year-end financial statements, consolidated group financial statements, internal reporting and other company documentation, etc.) for the sole purpose of providing information on the group s results and future operating strategies. Given this, it can in no way be used as a basis for possible investment decisions. It is not a solicitation to buy or sell shares. No part of the document can be taken to be the cause of or reason for agreements or commitments of any type or kind whatsoever, nor can it be relied upon for agreements and commitments.information contained in the document concerning forecasts has been prepared according to various assumptions and/or elements that might ultimately materialise differently to present expectations. Results might therefore change. Cattolica therefore in no way provides any guarantee, either explicit or tacit, as regards the integrity or accuracy of the information or opinions contained in the document, nor can any degree of reliability be attributed to the same, inasmuch as it has not been subjected to independent verification. Responsibility for use of the information and opinions contained in the document lies solely with the user. In any case Cattolica, within legally admissible limits, will not consider itself liable for any damages, direct or indirect, that third parties might claim due to utilisation of incomplete or inaccurate information. For any further information concerning Cattolica Assicurazioni and its related group, reference must be made exclusively to the information given in the annual, quarterly, and interim reports and financial statements. The full versions of these documents, which constitute the factual basis and proof for all legal purposes, are lodged at the company s registered offices and are available to anyone requesting them. Reproduction or full or partial publication and distribution of the information contained herein to third parties is prohibited. Acceptance of the present document automatically signifies recognition of the aforesaid constraints. 17

19 CATTOLICA GROUP 9M2008 Results Piero Gavazzi Chief Financial Officer UBS The Italian Financial Services Conference 2009 Milan, January