2018 Insurance Market Briefing - France

Transcription

1 Hôtel Napoléon 2018 Insurance Market Briefing - France 3 April 2018

2 2018 Insurance Market Briefing - France Welcome Nick Charteris-Black Managing Director, Market Development EMEA William Mills Director, Market Development 2018 Insurance Market Briefing - France 3 April

3 Agenda 14:10 Keynote Speech: New Battles for Insurers Xavier Ducurtil, Directeur Marketing Stratégique du groupe Covéa 14:50 Thematic Session: European Insurance Market Segment Outlooks: What to Expect in 2018 Alex Rafferty, Senior Financial Analyst 15:40 Thematic Session: Stormy Year, Placid Market? A Review of the Reinsurance Sector Ghislain Le Cam, Director, Analytics 16:10 Best s Credit Rating Methodology (BCRM): Benchmark Analysis 6 Months On Charlotte Vigier, Senior Financial Analyst 15:20 17: Insurance Market Briefing - France 3 April

4 Disclaimer AM Best Company (AMB) and/or its licensors and affiliates. All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT AMB s PRIOR WRITTEN CONSENT. All information contained herein is obtained by AMB from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided AS IS without warranty of any kind. Under no circumstances shall AMB have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of AMB or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if AMB is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities, insurance policies, contracts or any other financial obligations, nor does it address the suitability of any particular financial obligation for a specific purpose or purchaser. Credit risk is the risk that an entity may not meet its contractual, financial obligations as they come due. Credit ratings do not address any other risk, including but not limited to, liquidity risk, market value risk or price volatility of rated securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY AMB IN ANY FORM OR MANNER WHATSOEVER. Each credit rating or other opinion must be weighed solely as one factor in any investment or purchasing decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security or other financial obligation and of each issuer and guarantor of, and each provider of credit support for, each security or other financial obligation that it may consider purchasing, holding or selling Insurance Market Briefing - France 3 April

5 Disclaimer US Securities Laws explicitly prohibit the issuance or maintenance of a credit rating where a person involved in the sales or marketing of a product or service of the CRA also participates in determining or monitoring the credit rating, or developing or approving procedures or methodologies used for determining the credit rating. No part of this presentation amounts to sales / marketing activity and A.M. Best s Rating Division employees are prohibited from participating in commercial discussions. Any queries of a commercial nature should be directed to A.M. Best s Market Development function Insurance Market Briefing - France 3 April

6 2018 Insurance Market Briefing - France Thematic Session: European Insurance Market Segment Outlooks: What to Expect in 2018 Alex Rafferty Senior Financial Analyst 2018 Insurance Market Briefing - France 3 April

7 Discussion Outline What is a Segment Outlook? A Challenging Operating Environment for European Insurers European Segment Outlooks Looking Forward 2018 Insurance Market Briefing - France 3 April

8 What is a Segment Outlook? 2018 Insurance Market Briefing - France 3 April

9 Market Segment Outlooks Examine the current trends in particular segments of the insurance industry over the next 12 months Typical factors considered include current and forecast economic conditions; the regulatory environment and potential changes; emerging product developments; and competitive issues that could impact the success of the companies operating in the segment A Best s Market Segment Outlook, like a Best s Credit Rating Outlook for a company, can be positive, negative, or stable Many segments covered internationally 2018 Insurance Market Briefing - France 3 April

10 European Segment Outlooks France Non-Life A.M. Best has a Stable Outlook Spain Non-Life A.M. Best has a Stable Outlook UK Non-Life A.M. Best has a Negative Outlook Italy Non-Life A.M. Best has a Stable Outlook Germany Non-Life A.M. Best has a Stable Outlook 2018 Insurance Market Briefing - France 3 April

11 A Challenging Operating Environment for European Insurers 2018 Insurance Market Briefing - France 3 April

12 European Overview Operating environment has proved challenging with limited growth prospects and low investment returns Insurers have maintained strong balance sheets, with resilient operating performance, and appropriate enterprise risk management (ERM) Persisting headwinds Regulatory risks Political risks Historically low interest rates and encouraging signs: Improving economic outlook Indications of modest interest rate rises 2018 Insurance Market Briefing - France 3 April

13 A Context of Economic Recovery Period of economic recovery, expected to moderate 4% 3% 2% 1% 0% -1% GDP Growth e 2017e 2018p 2019p France UK Spain Italy Germany Eurozone -2% -3% e = estimate p = projection Source: International Monetary Fund 2018 Insurance Market Briefing - France 3 April

14 A Context of Economic Recovery Increased economic activity with lower unemployment Unemployment, Selected Countries % 16.3% 5.2% 3.6% 7.6% 4.3% 12.0% 10.3% 8.6% 9.0% 12.1% 11.1% Germany* UK** Eurozone* France* Italy* Spain* Note: *Data as at January 2018, **Data as at November 2017 Source: Europa.eu 2018 Insurance Market Briefing - France 3 April

15 Challenging Interest Rate Environment Historical low interest rate environment persists 8 7 European Union - Yields of Government Bonds With Maturities Close to 10 Years ( ) France UK Spain Italy Germany 6 5 % Jan 2010Jul 2011Jan 2011Jul 2012Jan 2012Jul 2013Jan 2013Jul 2014Jan 2014Jul 2015Jan 2015Jul 2016Jan 2016Jul 2017Jan 2017Jul 2018Jan Notes: Percentages per annum; period averages Source: European Central Bank Long Term Interest Rate for Convergence Purposes 2018 Insurance Market Briefing - France 3 April

16 Rising Political Uncertainty Increased uncertainty in political landscape French Elections German Elections Italian Elections Populist Rise US Elections Catalonia Referendum Brexit 2018 Insurance Market Briefing - France 3 April

17 European Segment Outlooks 2018 Insurance Market Briefing - France 3 April

18 European Segment Outlooks France Non-Life A.M. Best has a Stable Outlook Spain Non-Life A.M. Best has a Stable Outlook UK Non-Life A.M. Best has a Negative Outlook Italy Non-Life A.M. Best has a Stable Outlook Germany Non-Life A.M. Best has a Stable Outlook 2018 Insurance Market Briefing - France 3 April

19 France Non-Life Outlook Non-Life Combined Ratio 110% 105% 100% 99% 98% 95% Non-life market Property - Individual Property - Commercial Motor A.M. Best Has A Stable Outlook Resilient performance driven by generally good diversification of business profiles in the face of intense competition and challenging market conditions 90% Headwinds Tailwinds Ongoing intense competition Weak technical equilibrium Inflationary claims trends in motor Favourable pricing indicators Business mix generally well balanced Source: FFA; Les Echos 2018 Insurance Market Briefing - France 3 April

20 Germany Non-Life Outlook 120% 115% 110% 105% 100% 95% 90% % Non-Life Combined Ratio SCR 95% Source: Best s Statement File Global, A.M. Best data and research; GDV. Non-life market Property Motor Liablity 287% 286% A.M. Best Has A Stable Outlook Sector exhibits solid technical profitability, underpinned by good underwriting discipline and sustainable rate adjustments, and very strong balance sheets Headwinds Increasingly competitive market conditions Protectionist tendencies could adversely impact Germany s export driven economy Tailwinds Solid technical profitability, with good underwriting discipline Solid economic fundamentals Sustainable rate increases 2018 Insurance Market Briefing - France 3 April

21 Spain Non-Life Outlook 104% 102% 100% 98% 96% 94% 92% 90% Selected Countries Non-Life Combined Ratio 94% 93% France Spain Italy Germany A.M. Best Has A Stable Outlook Insurers demonstrate solid technical fundamentals, with good performance and strong balance sheets, although sustained political instability could test the sector Headwinds Political instability following Catalonia independence referendum Adapting to regulatory reforms Tailwinds Sustained strong technical performance Economic recovery to support premium growth Strengthened ERM Source: El Mundo; FFA; GDV; A.M. Best calculations on ANIA data; ANIA; DGSFP 2018 Insurance Market Briefing - France 3 April

22 Italy Non-Life Outlook 104% 102% 100% 98% 96% 94% 92% 90% 25,000 20,000 15,000 10,000 5,000-96% Selected Countries Non-Life Combined Ratio % Motor Gross Written Premium and Combined Ratio 20,224 18,676 17,598 16,674 16, Motor GWP Motor Combined Ratio Source: A.M. Best calculations on ANIA data; ANIA; GDV, FFA; DGSFP France Spain Italy Germany 100% 95% 90% 85% A.M. Best Has A Stable Outlook The stable outlook reflects the sector s ability to maintain strong technical profitability in spite of competitive pressures and political uncertainty Headwinds Strong competition putting pressure on rates for motor (50% of non-life market) Political instability Economic fundamentals Tailwinds Strong technical profitability Underwriting discipline supported by increased use of telematics 2018 Insurance Market Briefing - France 3 April

23 UK Non-Life Outlook 135% 125% 115% 105% 95% 113% 110% 102% Accident Year Combined Ratio (Selected Lines) Property Motor Liability 112% 104% 98% A.M. Best Has A Negative Outlook Competitive conditions, legislative uncertainty and the potential impact of Brexit on the UK economy weigh on the segment Headwinds Economic uncertainty Tailwinds Intense competition; weak technical margins Volatility in prior year reserve development Implementation of Civil Liability Bill, with potential whiplash and personal injury claims reform Note: Accident Year Combined Ratios Source: Best s Statement File Global, A.M. Best Data and Research; Insurance Times Legislative uncertainty 2018 Insurance Market Briefing - France 3 April

24 Looking Forward 2018 Insurance Market Briefing - France 3 April

25 Key things to watch Competition to continue to strain technical margins, pricing Ongoing focus on cost management, as insurers aim to preserve bottom lines in highly competitive markets and low investment return environment Economic environment will present some opportunities for insurers, although dramatic growth not anticipated 2018 Insurance Market Briefing - France 3 April

26 Key things to watch Increasing focus on, and investment in, innovation and customer experience 2018 Insurance Market Briefing - France 3 April

27 Key things to watch External challenges persist Political Uncertainty Distribution Directive GDPR Legislative Reforms Brexit IFRS Insurance Market Briefing - France 3 April

28 2018 Insurance Market Briefing - France Thematic Session: Stormy Year, Placid Market? A Review of the Reinsurance Sector Ghislain Le Cam Director, Analytics 2018 Insurance Market Briefing - France 3 April

29 Discussion Outline Global Reinsurance Results and Trends Market Capacity Global Market Developments & Evolution Reinsurance Sector Outlook 2018 Insurance Market Briefing - France 3 April

30 Plus ça change plus c est la même chose Negative interest rates The United States, the world s largest economy, has debt/gdp over 100% The United Kingdom voted to leave the European Union Terrorism seems to be rampant around the world Housing bubbles in many parts of the world Stock Markets are hovering near all-time highs 2018 Insurance Market Briefing - France 3 April

31 Global Reinsurance Results and Trends 2018 Insurance Market Briefing - France 3 April

32 Global Combined Ratio 120% 100% 80% 60% 40% 20% 0% 33.7% 31.6% 34.7% 33.6% 31.9% 33.6% 34.3% 76.1% 60.1% 55.9% 56.2% 56.0% 60.5% 61.0% 6.3% 5.7% 5.4% 6.0% 5.8% 5.4% 4.2% yr Avg Source: A.M. Best data and research, preliminary numbers 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Expense Ratio Loss Ratio Loss Reserve Development 2018 Insurance Market Briefing - France 3 April

33 Combined Ratio by Reinsurance Sector European Big Four U.S. & Bermuda Lloyd s 120% 100% 91% 89% 92% 92% 96% 109% 93% 87% 87% 91% 92% 108% 91% 87% 88% 90% 98% 114% 80% 60% 40% 20% 0% Loss Ratio Expense Ratio Source: A.M. Best data and research, preliminary numbers 2018 Insurance Market Briefing - France 3 April

34 Global Return on Equity 14% 12% 10% 8% 6% 4% 2% 0% -2% 12.4% 13.0% 11.6% 9.8% 8.4% -0.1% Return on Equity Five-Year Average Source: A.M. Best data and research, preliminary numbers 2018 Insurance Market Briefing - France 3 April

35 Return on Equity by Reinsurance Sector European Big Four U.S. & Bermuda Lloyd s 20% 15% 13.0% 13.1% 11.4% 10% 11.0% 11.5% 9.7% 10.4% 10.8% 8.0% 7.0% 15.1% 16.2% 14.7% 8.9% 8.1% 5% 2.7% 0% % Source: A.M. Best data and research, preliminary numbers Five-Year Average -7.3% 2018 Insurance Market Briefing - France 3 April

36 Global Return on Equity Five Year Average at Year End % 8% 7% 6% 5% 4% 3% 2% 1% 0% Source: A.M. Best data and research, preliminary numbers 8.5% Five -Year Average Return on Equity 2018 Insurance Market Briefing - France 3 April % Five -Year Average Return on Equity Excluding Loss Reserve Development

37 Global Operating Cash Flow (% of equity) 16% 14% 12% 10% 8% 6% 4% 2% 0% 14.9% 13.4% 12.5% 12.6% 10.1% 5.7% Source: A.M. Best data and research, preliminary numbers 2018 Insurance Market Briefing - France 3 April

38 Market Capacity 2018 Insurance Market Briefing - France 3 April

39 Top Reinsurance Groups Top 10 Global Reinsurance Groups Non-Life Top 10 Global Reinsurance Groups Life Swiss Re Ltd. Munich Reinsurance Company Lloyd's Hannover Ruck SE Berkshire Hathaway Inc. SCOR S.E. Transatlantic Holdings, Inc Everest Re Group Ltd. PartnerRe Ltd. XL Group plc Munich Reinsurance Company Swiss Re Ltd. Reinsurance Group of America Inc. SCOR S.E. Hannover Ruck SE Great West Lifeco Berkshire Hathaway Inc. Pacific LifeCorp PartnerRe Ltd. Assicurazioni Generali SpA Source: A.M. Best data and research. Ranked by unaffiliated gross premium written in Insurance Market Briefing - France 3 April

40 Life and Non-Life Reinsurance GPW Distribution by Ranking Rank % Rank % Rank % Rank % Rank % Source: A.M. Best data and research. Ranked by unaffiliated gross premium written in Insurance Market Briefing - France 3 April

41 Estimate for Total Dedicated Reinsurance Capacity (USD billions) Convergence Capacity Traditional Capacity Source: A.M. Best data and research and Guy Carpenter 2018 Insurance Market Briefing - France 3 April

42 Convergence Capacity Convergence Capacity (USD billions) Catastrophe Bonds Issued USD billions Number of Deals E* ILW Collateralized Re Catastrophe Bonds 0 CAT Bonds Issued Number of Deals 0 Source: A.M. Best data and research and Guy Carpenter Source: A.M. Best data and research and Artemis 2018 Insurance Market Briefing - France 3 April

43 Total Economic and Insured Losses Source: Swiss Re Institute Annual Change (%) 10-Year Average % of 10-Year Average Economic Losses Economic Losses (USD billions) Natural Catastrophe Man-made Economic Losses - Total Insured Losses (USD billions) Natural Catastrophe Man-made Insured Losses - Total Insurance Market Briefing - France 3 April

44 Rate increases have remained moderate and account specific 400% Andrew (92) 350% 300% 250% 200% 9/11 Attacks (01) KRW* (05) IKE (08) Japan EQ (11) Sandy (12) HIM** (17) 150% 100% 50% 0% US Asia - Pacific UK Europe Global Source: A.M. Best data and research, Guy Carpenter & Co LLC * Katrina, Rita, Wilma ** Harvey, Irma, Maria 2018 Insurance Market Briefing - France 3 April

45 Global Market Developments 2018 Insurance Market Briefing - France 3 April

46 London Market UK ILS Reform Mergers & Acquisitions Brexit Plans 2018 Insurance Market Briefing - France 3 April

47 Main M&A Deals Date Announced Acquirer Acquiree Price ($Mil) Price to BV Premium to last close Jun-14 Validus Western World Insurance $ x N/A Aug-14 Allied World Hong Kong operation of RSA $215 N/A N/A Nov-14 RenRe Platinum Underwriters $1, x 24% Jan-15 XL Group Catlin Group Limited $4, x 24% Feb-15 Fairfax Brit $1, x 11% Mar-15 Endurance Montpelier Re $1, x 19% May-15 Fosun International Ltd Ironshore $2,304 N/A N/A Aug-15 EXOR PartnerRe $6, x 20% Sep-15 Mitsui Sumitomo Amlin $5, x 36% Oct-16 Sompo Endurance $6, x 43% Dec-16 Fairfax Allied World $4, x 18% Dec-16 Liberty Mutual Ironshore $3, x N/A Jan-18 AIG Validus $5, x 46% Mar-18 Axa XL Catlin $15, x 33% 2018 Insurance Market Briefing - France 3 April

48 Brexit Plans Insurers Unveil Choices for European Offices Source: A.M. Best data and research 2018 Insurance Market Briefing - France 3 April

49 Regulatory Changes Covered agreement U.S. tax reform Has regulation peaked? 2018 Insurance Market Briefing - France 3 April

50 Market Evolution In A.M. Best s opinion The market will continue to become more efficient as all players strive to become closer to the client Client Primary Insurance Company Agent & Broker Reinsurance Broker Reinsurance Company Convergence Capital 2018 Insurance Market Briefing - France 3 April

51 Evolving strategies Traditional Dual Platform Alternative Capital Platform Mergers & Acquisitions Control the client Manage or have a relationship with alternative capital Relevance and size Build primary business Build fee income stream Ability to be small and nimble with parental protection 2018 Insurance Market Briefing - France 3 April

52 Potential Opportunities Cyber Insurance Flood Mortgage Terrorism InsurTech 2018 Insurance Market Briefing - France 3 April

53 Reinsurance Outlook 2018 Insurance Market Briefing - France 3 April

54 Negative Outlook Remains Although capitalisation remains strong and rate deterioration halted, pressure on margins continues Over the intermediate term, returns for some reinsurers will fall short on a risk-adjusted basis A.M. Best Maintains Negative Outlook Headwinds Intense competition Increasing interest from third party capital Earnings under pressure Excess capacity hinders improvement Potential for increased inflation Tailwinds Cession rates increasing Cat losses temporarily stabilise rates Favourable reserve development Strong risk-adjusted capital Increase in interest rates M&A 2018 Insurance Market Briefing - France 3 April

55 2018 Insurance Market Briefing - France Best s Credit Rating Methodology (BCRM): Benchmark Analysis Six Months On Charlotte Vigier Senior Financial Analyst 2018 Insurance Market Briefing - France 3 April

56 Interactive Rating Process Source: Best s Credit Rating Methodology 2018 Insurance Market Briefing - France 3 April

57 BCRM Building Blocks Source: Best s Credit Rating Methodology 2018 Insurance Market Briefing - France 3 April

58 BCRM Building Blocks Assessment Assessment Assessment Assessment Strongest Very Strong +2 Very Favorable +2 Very Strong +1 Very Strong Strong +1 Favorable +1 Appropriate 0 Strong Adequate 0 Neutral 0 Marginal -1 Adequate Weak Marginal -1 Weak -2 Limited -1 Weak -2 Very Weak Very Weak -3 Very Limited -2 Very Weak -3/ Insurance Market Briefing - France 3 April

59 BCRM Building Blocks Balance sheet Strength Assessment Strongest Very Strong Strong Adequate Weak Very Weak 2018 Insurance Market Briefing - France 3 April

60 Mature European Companies Balance Sheet Strength Best s Capital Adequacy Ratio (BCAR) is one of the elements considered in the balance sheet strength assessment Mature European Companies Median BCAR Score by Balance Sheet Strength as at Oct 2017 VaR Confidence Level (%) BCAR BCAR Assessment 99.6 >25 at 99.6 Strongest 99.6 > 10 at 99.6 & 25 at 99.6 Very Strong 99.5 > 0 at 99.5 & 10 at 99.6 Strong 99 > 0 at 99 & 0 at 99.5 Adequate 95 > 0 at 95 & 0 at 99 Weak 95 0 at 95 Very Weak Notes: Data comprise testing conducted on lead rating units before the introduction of the new BCRM on Oct. 13, Median BCAR Score VaR 95% VaR 99% VaR 99.5% VaR 99.6% VaR 99.8% Strongest Very Strong Strong Adequate 2018 Insurance Market Briefing - France 3 April

61 Mature European Companies Balance Sheet Strength European Companies Balance Sheet Strength Distribution European Companies Balance Sheet Strength by Long- Term Issuer Credit Rating Adequate 5% Strongest 10% Strong 14% (%) Very Strong 71% Notes: Data comprise both preliminary testing conducted on lead rating units before introduction of the new BCRM (Oct. 13, 2017) and actual rating committee outcomes to mid-march, Source: A.M. Best data and research aa+ aa aa- a+ a a- bbb+ bbb bbb- bb+ Strongest Very Strong Strong Adequate 2018 Insurance Market Briefing - France 3 April

62 BCRM Building Blocks Operating performance Assessment Very Strong +2 Strong +1 Adequate 0 Marginal -1 Weak -2 Very Weak Insurance Market Briefing - France 3 April

63 Mature European Companies Operating Performance European Companies Operating Performance Notch Distribution European Companies Operating Performance Notch by Long-Term Issuer Credit Rating Marginal -1 6% 100 Strong +1 Adequate 0 Marginal -1 Strong +1 37% Adequate 0 57% (%) Notes: Data comprise both preliminary testing conducted on lead rating units before introduction of the new BCRM (Oct. 13, 2017) and actual rating committee outcomes to mid-march, Source: A.M. Best data and research aa+ aa aa- a+ a a- bbb+ bbb bbb- bb Insurance Market Briefing - France 3 April

64 Mature European Companies Operating Performance European Companies 5-Year Average Combined Ratio by Operating Performance Notch European Companies 5-Year Average ROE by Operating Performance Notch Median 5-Yr. Avg. Combined Ratio (%) Median 5-Yr. Avg. ROE (%) Strong Adequate Marginal Strong Adequate Marginal Notes: Data comprise testing conducted on lead rating units before introduction of new BCRM (Oct. 13, 2017). Source: A.M. Best data and research 2018 Insurance Market Briefing - France 3 April

65 BCRM Building Blocks Business Profile Assessment Very Favorable +2 Favorable +1 Neutral 0 Limited -1 Very Limited Insurance Market Briefing - France 3 April

66 Mature European Companies Business Profile European Companies Business Profile Notch Distribution European Companies Business Profile Notch by Long-Term Issuer Credit Rating Limited -1 20% Neutral 0 50% Very Favorable +2 11% Favorable +1 19% Notes: Data comprise both preliminary testing conducted on lead rating units before introduction of the new BCRM (Oct. 13, 2017) and actual rating committee outcomes to mid-march, Source: A.M. Best data and research (%) Insurance Market Briefing - France 3 April aa+ aa aa- a+ a a- bbb+ bbb bbb- bb+ Very Favorable +2 Favorable +1 Neutral 0 Limited -1 Very Limited

67 Mature European Companies Business Profile 2018 Insurance Market Briefing - France 3 April

68 BCRM Building Blocks Enterprise Risk Management Assessment Very Strong +1 Appropriate 0 Marginal -1 Weak -2 Very Weak -3/ Insurance Market Briefing - France 3 April

69 Mature European Companies Enterprise Risk Management European Companies Enterprise Risk Management Notch Distribution European Companies Enterprise Risk Management Notch by Long-Term Issuer Credit Rating Marginal -1 1% Appropriate 0 89% Very Strong +1 10% Notes: Data comprise both preliminary testing conducted on lead rating units before introduction of the new BCRM (Oct. 13, 2017) and actual rating committee outcomes to mid-march, Source: A.M. Best data and research (%) aa+ aa aa- a+ a a- bbb+ bbb bbb- bb+ Very Strong +1 Appropriate 0 Marginal Insurance Market Briefing - France 3 April

70 Mature European Companies ICR Distribution (%) aaa aa+ aa aa- a+ a a- bbb+ bbb bbb- Rating distribution as at 30 September, 2017 Rating distribution as at 28 February, 2018 Source: Best s Credit Rating Monitor 2018 Insurance Market Briefing - France 3 April

71 Mature European Companies Rating Outlook Distribution (28 February, 2018) Rating Actions Outlook Summary 2% 94% 6% 84% 7% 7% Affirm Upgrade Developing Negative Positive Stable Source: Best s Credit Rating Monitor March Insurance Market Briefing - France 3 April

72 Hôtel Napoléon 2018 Insurance Market Briefing - France 3 April 2018