AXA. Henri de Castries. Chairman & CEO. London - October 2, Sanford C. Bernstein Strategic Decisions Conference

Transcription

1 AXA Henri de Castries Chairman & CEO London - October 2, 2013 Sanford C. Bernstein Strategic Decisions Conference

2 Cautionary note concerning forward-looking statements Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Please refer to the section Cautionary statements in page 2 of AXA s Document de Référence for the year ended December 31, 2012, for a description of certain important factors, risks and uncertainties that may affect AXA s business. AXA undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise. 2 Strategic Decisions Conference October 2, 2013

3 Today s key messages AXA - Diversified business model generating a sustainable base of earnings Ambition AXA - Our strategic plan to steer us in the right direction Ambition AXA - Examples of well identified growth drivers 3 Strategic Decisions Conference October 2, 2013

4 Today s key messages AXA - Diversified business model generating a sustainable base of earnings Ambition AXA - Our strategic plan to steer us in the right direction Ambition AXA - Examples of well identified growth drivers 4 Strategic Decisions Conference October 2, 2013

5 Well diversified insurance Group with three core businesses Property & Casualty and International 41% Asset Management 4 11% Business diversification pre-tax Underlying Earnings 1 Underlying Earnings 5 Protection & Health 2 Savings 3 23% Life & Savings High growth markets 7 12% 25% France 24% Japan 11% US 12% Geographical diversification Other 1% UK & Ireland 4% Rest of mature Europe 6 36% 102m clients worldwide* Euro 90.1bn revenues* Euro 4.3bn Underlying Earnings* 160,000 employees* #1 Global Insurance Brand for 5 years running 5 Strategic Decisions Conference October 2, 2013 All notes are on page 29 of this document * As reported in FY12

6 Property & Casualty - Large footprint with a track record of profitable growth Revenues Commercial non- Motor 33% Commercial Motor 9% Personal non-motor 23% Revenues in Euro billion Business diversification Profitable growth 26.0 FY10* 27.0 FY FY12 Personal Motor 35% : Revenues of Euro 16.5 bn 33% of Group #1 Asia 2 3% UK & Ireland 12% MedLa 1 23% One of the largest global Direct players operating in 9 countries #1 international P&C insurer in Asia Leading market positions in mature markets 16.5 Combined ratio 99.5% 97.9% 97.6% 95.7% Revenues Switzerland, Ireland, Belgium, Turkey, Mexico, Hong Kong #2 France, Singapore #3 #4 UK, Germany, Spain Direct 3 7% France 19% NORCEE 36% Geographical diversification Top positions across markets 4 Portugal, Morocco * Restated for the sale of Canadian operations 6 Strategic Decisions Conference October 2, 2013 All notes are on page 29 of this document

7 Life & Savings Well balanced between Protection & Health and Savings businesses pre-tax Underlying Earnings Unit Linked, Mutual funds & other 26% G/A Savings 21% Business diversification Protection & Health 53% L&S pre-tax Underlying Earnings: Euro 2.1 bn in Operations in over 30 countries #1 #3 Strong footprint in fast growing Asian Switzerland France, Belgium #6 #2 Italy, Germany Indonesia #4 Hong Kong Top positions across markets 1 Protection & Health countries Largest Life book of business amongst Savings international players G/A Savings In Euro million APE 1,802 FY10 2,184 FY11 2,445 FY12 1,341 Growing business with combined ratio consistently at ca. 95% since 2007 Comprehensive product range catering to growing clients needs Average savings reserves: Euro 342 billion 55% 45% Spread business Notably in France, Germany, the US and Switzerland Unit-Linked Fee based business Mostly in the US, France and UK 7 Strategic Decisions Conference October 2, 2013 All notes are on page 29 of this document

8 Asset Management Strong product portfolio and distribution channels Complementary business models Product offer Multi-expert model: structured by Expertise Expertise in fixed income, equities, quantitative equities Focus on alternative investments (structured finance, private equity, real estate, funds of hedge funds) Structured by Investment Style Focus on fixed income, growth equities, value equities, blend strategies New developments in alternative investments Institutional research services Distribution Separate distribution platforms for third parties & AXA insurance companies Integrated distribution platforms Footprint Mainly Europe Mainly the US and Asia AuM Euro 568 billion as at 30/06/2013 Euro 354 billion as at 30/06/ Strategic Decisions Conference October 2, 2013

9 Resilient set of earnings with resumed growth in 2012 Consistent dividend payout policy over time In Euro billion 4.0 Underlying Earnings As reported In Euro billion FY FY09 FY10 FY11 Adjusted Earnings FY Realized capital gains guidance: Euro million per year Adverse environment Dividend payout ratio Dividend amount (in Euro) FY08 FY09 FY10 9 Strategic Decisions Conference October 2, 2013 FY11 FY12 25% 40% 40% 49% 40% Dividend policy: payout ratio of 40-50% of Adjusted Earnings net of undated debt interest charges

10 Today s key messages AXA - Diversified business model generating a sustainable base of earnings Ambition AXA - Our strategic plan to steer us in the right direction Ambition AXA - Examples of well identified growth drivers 10 Strategic Decisions Conference October 2, 2013

11 Long term forces driving the insurance industry Ageing population and withdrawal of States Wealth and growth mismatch between geographies Changing consumer behaviors Technology and Connectivity 11 Strategic Decisions Conference October 2, 2013

12 Ambition AXA Our strategic plan to steer us in the right direction Our 5-year plan for the period 2010 to 2015 Ambition AXA Mature markets Sustainable growth in earnings & operating Free Cash Flows High growth markets Double our size Selectivity Acceleration Supported by: Strong balance sheet and capital position Diversified and secure investment portfolio Efficiency Everywhere with a focus on mature markets Focus on delivery of Ambition AXA whilst shaping AXA for the future 12 Strategic Decisions Conference October 2, 2013

13 Selectivity Repositioning towards more profitable business lines In Euro million 2,986 13% Life & Savings: resuming APE growth whilst increasing margins APE by product 2,948 10% 3,064 11% 3,310 12% NBV margin 3% in Euro million P&C: continuing to grow the business while improving profitability 14,691 Gross revenues 15,350 16,173 16,497 30% 32% 31% 34% 27% 26% 19% 17% 13% 10% 1H10 1H11 1H12 Combined ratio 31% 1H10 published 38% 1H11 published 41% 1H12 41% 54% 98.6% 97.2% 96.5% 95.7% 21% Mutual funds & other Unit-Linked 24% 29% 33% G/A Savings Protection & Health NBV margin* 1H10 published 1H11 published 1H12** 13 Strategic Decisions Conference October 2, 2013 * Updated for actuarial and financial assumptions as of year end of respective accounting periods. will be updated at FY13 ** Retrospectively restated for the amendments to IAS 19.

14 Selectivity while building on a solid base of earnings Sustainable contribution from businesses less sensitive to financial markets Pre-tax Underlying Earnings In Euro billion With upside potential from businesses more sensitive to financial markets Pre-tax Underlying Earnings In Euro billion Protection & Health and P&C 1 Savings 2 and Asset Management FY10 FY11 FY12 FY10 FY11 FY12 ca. 70% of earnings 4 coming from businesses less sensitive to financial markets 14 Strategic Decisions Conference October 2, 2013 All notes are on page 29 of this document

15 Acceleration Pursuing an active capital management Investments in high growth markets 3.2 bn 0.5 bn over 5 years 0.4 bn 0.5bn upfront + ca. 0.3bn over 3 years bn 0.9 bn 1.3 bn 2.0 bn 0.2 bn 0.8 bn 15 Strategic Decisions Conference October 2, 2013 Disposals of mature entities and non-strategic partnerships * Transaction pending, subject to customary closing conditions, including obtaining regulatory approvals

16 Acceleration Increasing footprint in emerging markets in Euro million Life & Savings APE in high growth markets in Euro million P&C revenues in high growth markets ,417 1,564 1,829 2,272 1H10 1H11 1H12 Contribution 9% to Group 16% Life & Savings APE 1H10 1H11 1H12 Contribution 10% to Group 14% P&C revenues Top class partners 16 Strategic Decisions Conference October 2, 2013 APE and revenues are as reported

17 Efficiency On track to deliver our 2015 productivity gains Euro 0.9 billion savings achieved since 2011 In Euro billion ~ Ambition AXA efficiency program in mature markets Euro 0.6 billion from acquisition costs 0.7 P&C Life & Savings ~0.5 ~ Euro 0.4 bn ~ Euro 0.2 bn Euro 1.1 billion from maintaining L&S and P&C administrative and claims handling costs Operations ~ Euro 0.6 bn Procurement ~ Euro 0.3 bn IT ~ Euro 0.2 bn FY11 FY12 2H13E - FY15E FY11 - FY15E P&C Life & Savings 17 Strategic Decisions Conference October 2, 2013

18 Strong balance sheet and capital position Regulatory solvency 127% 188% 233% 218% FY08 FY11 FY12 Economic solvency* n.a. 183% 206% 204% or 208% including proceeds from closed MONY portfolio FY08 FY11 FY12 Debt gearing & Interest coverage 35% FY08 9x 27% 26% 26% FY11** FY12 9.1x 9.3x 11.6x or 25% including proceeds from closed MONY portfolio 18 Strategic Decisions Conference October 2, 2013 * Including US equivalence ** Restated for the change in DAC accounting methodology adopted retrospectively as at January 1, 2012

19 with a diversified and secure investment portfolio Investment portfolio overview Diversification towards new asset classes Real Estate 5% Listed equities 4% Cash 5% Other fixed income 2 7% Alternative investments 1 3% Policy loans 1% Govies and related 45% Investments in higher yielding less liquid fixed income asset classes: Alternative credit funds Pan-European mid-cap corporate loans Corporate bonds 31% Infrastructure debt Commercial real estate loans total General Account invested assets 3 : Euro 476 bn 19 Strategic Decisions Conference October 2, 2013 All notes are on page 29 of this document

20 On track to deliver on our Ambition AXA financial objectives In Euro per share Underlying Earnings per share Group operating free cash flows Ambition AXA CAGR +5% to +10% in line with Ambition AXA plan Ambition AXA cumulative Euro 24 billion 1H10 published 1H11 published 1H12 published Adjusted return on equity 2 Average adjusted shareholders equity 3 (in Euro billion) % 13.5% 13.8% % 13% to 15% 29% 28% Debt gearing 27% 26% 25% 1H10 published 1H11 published 1H12 published Ambition AXA H10 published 1H11 published 1H12 published 20 Strategic Decisions Conference October 2, 2013 All notes are on page 29 of this document

21 Today s key messages AXA - Diversified business model generating a sustainable base of earnings Ambition AXA - Our strategic plan to steer us in the right direction Ambition AXA - Examples of well identified growth drivers 21 Strategic Decisions Conference October 2, 2013

22 Ambition AXA - Examples of well identified growth drivers China Property & Casualty Direct business South-East Asia Property & Casualty Commercial lines 22 Strategic Decisions Conference October 2, 2013

23 Property & Casualty We will actively grow our large and diversified Commercial Lines business Large and diversified Commercial Lines franchise Strategy: actively grow Commercial Lines 4 th largest player worldwide Asia 2% MedLa high growth 2 15% MedLa Mature 3 7% UK & Ireland 14% Total FY12 revenues: Euro 13.3 bn +3.1% revenue growth in 2012 ca. Euro 1bn Underlying Earnings per year NORCEE 1 28% AXA Corporate Solutions 18% France 16% Strong underwriting capabilities delivering steady performance Increase our footprint Accelerate commercial distribution Leveraging tied agents, Direct capabilities and global relationships with brokers Leverage regional hubs and global business units in high growth markets 23 Strategic Decisions Conference October 2, 2013 Source for ranking: company estimates All notes are on page 29 of this document

24 Property & Casualty Our Direct business is ready for take-off Unique Direct franchise Expanding the footprint Building core capabilities Accelerating profitable growth 106% Combined ratio (current year) 101% <97% FY10 FY12 FY15E #1 #1 #1 #2 #2 #2 #1 #6 #7 One of the largest global Direct players Global integrated low cost platform, with presence in 9 countries More than 5 million policies sold in 2012 Targeting the most price sensitive clients, relying on converging IT solutions 63% of new business through internet 1.8 FY10-52 FY10 Revenues (in Euro billion) 2.2 FY12 Underlying Earnings (in Euro million) 54 FY FY15E 150 FY15E 24 Strategic Decisions Conference October 2, 2013 Source for rankings: company estimates, McKinsey, Redburn

25 We will leverage our Asian platform South-East Asia acceleration engine Strong P&C regional franchise Strong growth in L&S #1 #7 #2 #11 #21 #29 1 st international P&C insurer in Asia 1 (excluding Japan) revenues 2 : 438m Underlying Earnings 2 : 31m APE 3 In Euro million %* FY11 FY12 1H12 Underlying Earnings 3 In Euro million +15%** FY11 FY12 1H12 In Euro million Revenues +10%* Combined ratio Hong Kong: strong cash generation with upstreamed dividends of Euro 635 million over FY FY H % FY11 96% FY12 95% 1H12 93% Top class bancassurance partners #2 #5 #1 bancassurer 25 Strategic Decisions Conference October 2, 2013 * Change is at constant forex and comparable scope ** Change is at constant forex All notes are on page 29 of this document

26 We will leverage our Asian platform China is the new frontier Acquisition of 50% of Tian Ping* Extensive geographical footprint with licenses covering most Chinese provinces ICBC-AXA Life on track to create a leading franchise July 2012: launch of the new joint-venture ** Successful growth and profitability track record in the Chinese motor insurance market APE 100% share In Euro million Direct channel at the heart of the company s strategy with ca. 20% of premium in 2011 and expected to be ca. 80% by Ca. Euro 300m to be invested in the next three years Jan.-June 2011 Jul.-Dec Jan.-June 2012 Jul.-Dec Jan.-Jun Strategic Decisions Conference October 2, 2013 * Transaction pending, subject to customary closing conditions, including obtaining regulatory approvals ** AXA Group share decreased from 51% to 27.5% in July 2012

27 Continuing to deliver on Ambition AXA objectives whilst shaping AXA for the future Ambition AXA Ambition AXA continues to stretch our teams to outperform Selectivity Acceleration Efficiency Preparing for the world of tomorrow Supplement Ambition AXA with: Strategic thinking to address long term mega trends Acceleration of digital investments and leverage of technology to: Further sharpen our risk know-how Connect more effectively with our clients 27 Strategic Decisions Conference October 2, 2013

28 Q&A session Q&A session 28 Strategic Decisions Conference October 2, 2013

29 Notes Page 5 1. Excluding holding companies 2. G/A Protection & Health 3. Savings includes G/A Savings, Unit-Linked, Mutual Funds & other 4. Including Banking 5. Life & Savings and Property & Casualty 6. Rest of mature Europe includes Germany, Belgium, Switzerland, Italy, Spain, Portugal, Greece and Luxembourg 7. In Life & Savings, high growth markets are: Hong Kong, Central & Eastern Europe (Poland, Czech Republic, Slovakia and Hungary), South-East Asia (Singapore, Indonesia, Philippines and Thailand), China, India, Morocco, Mexico and Turkey In Property & Casualty, high growth markets are: Morocco, Mexico, Turkey, Gulf region, Hong Kong, Singapore, Malaysia, India, Thailand, Lebanon, Russia, Ukraine and Poland (excl. Direct) Page 6 1. Mediterranean and Latin American Region: Italy, Spain, Portugal, Turkey, Mexico, Morocco, Greece, Lebanon and Gulf region 2. Hong Kong, Malaysia and Singapore, on a 100% share basis 3. Direct P&C operations in UK, France, Belgium, Spain, Portugal, Italy, Poland, South Korea and Japan 4. Rankings source: AXA 2012 Activity Report (Hong Kong rankings are pro-forma of HSBC transaction) Page 7 1. Rankings source: AXA 2012 Activity Report Page Including International Insurance 2. Savings includes G/A Savings, Unit-Linked, Mutual Funds & other 3. Including Banking 4. Excluding holding companies Page Mainly Private Equity and Hedge Funds 2. Mortgage loans & other include residential loans (Euro 12 billion), commercial & agricultural loans (Euro 10 billion) and agency pools (Euro 2 billion) 3. invested assets referenced in page 57 of the financial supplement are Euro 664 billion, which include notably Euro 155 billion of Unit-Linked contracts and Euro 36 billion related to the banking segment, and exclude Euro 5 billion of assets related to the closed MONY portfolio which is accounted for as held for sale Page Compound annual growth rate 2. Adjusted ROE: Return corresponds to adjusted earnings net of interest charges on undated debt. Equity corresponds to average shareholders equity excluding undated debt and reserves related to change in fair value 3. Average shareholders equity excluding undated debt and reserves related to change in fair value 4. Northern, Central & Eastern Europe: Germany, Belgium, Switzerland, Central and Eastern Europe, Luxembourg and Russia (Property & Casualty only) Page Northern, Central & Eastern Europe: Germany, Belgium, Switzerland, Central and Eastern Europe, Luxembourg and Russia (Property & Casualty only) 2. Turkey, Mexico, Morocco, Lebanon and Gulf region 3. Italy, Spain, Portugal and Greece Page Based on GWP International insurers in Asia (excl. Japan). Source: AXCO, AXA estimates. AXA is pro-forma of the HSBC transaction, including non-consolidated entities, including South Korea Direct business 2. Hong Kong, Singapore and Malaysia 3. Hong Kong, Singapore, Indonesia, Philippines, Thailand and India 29 Strategic Decisions Conference October 2, 2013