Property & Casualty: AXA Asia P&C A story of acceleration and value creation

Transcription

1 Investor Day 4 December, 2013 Property & Casualty: AXA Asia P&C A story of acceleration and value creation Gaelle Olivier CEO, AXA Asia P&C

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. D1 - Investor Day - AXA Asia P&C - December 4, 2013

3 Today s key messages Asia P&C a tremendous market potential AXA: #1 International P&C insurer in Asia with a diversified footprint A clear strategy to accelerate and anchor leadership Leveraging further our competitive advantage Conclusion D2 - Investor Day - AXA Asia P&C - December 4, 2013

4 Asia P&C a tremendous market potential Asia: majority of world s population Estimated 2015 population 7 billion Asia 60% Rising middle class % spending of total middle class by region Asia 59% Other 40% Asia 23% Asia 42% 42% Source: United Nations, Department of Economic and Social Affairs, Population Division: World Population Prospects: Total Population 2015 GDP In USD trillion Asian GDP poised to double by 2020 CAGR 2009 USD 21.3 trillion 2020E USD 35.0 trillion 2030E USD 55.7 trillion Source: OECD: The emerging middle class in developing countries, 2010 Under penetrated Asia P&C insurance market 2012 P&C premiums as a % of GDP % 4.5% ~3 X Asia ex Japan Japan US % 3% 2.8% 2.8% 1.6% Europe % FY10 Source: DBS Asian Insights Imagining Asia 2020 FY20E US Europe World Source: Swiss Re, sigma No 3/2013 World Insurance in 2012 Asia D3 - Investor Day - AXA Asia P&C - December 4, 2013

5 Today s key messages Asia P&C a tremendous market potential AXA: #1 International P&C insurer in Asia with a diversified footprint A clear strategy to accelerate and anchor leadership Leveraging further our competitive advantage Conclusion D4 - Investor Day - AXA Asia P&C - December 4, 2013

6 AXA Asia P&C is an integral part of the AXA Asia strategy AXA Asia Regional Office Regional CEO, AXA Asia Mike Bishop Regional shared services: IT, Finance, Human Resources, Marketing, Strategy CEO, L&S ex China Kevin Wright Regional, COO Keith Perkins CEO, P&C Gaelle Olivier Regional, CFO Francois-Valery Lecomte Regional, CHRO Shubhro Mitra Distribution Chief Technical Officer China Hong Kong Singapore Malaysia India Thailand Indonesia AXA Global Direct D5 - Investor Day - AXA Asia P&C - December 4, 2013

7 A solid regional franchise with a strong track record FY12 P&C revenues* in Asia ex Japan AXA Asia P&C AXA Direct Number 1 International P&C Insurer in Asia (ex Japan and Australia) Euro 1.1 billion Hong Kong Singapore Malaysia India China Indonesia Thailand Euro 0.3 billion South Korea Direct Source: Credit Suisse Asia P&C Insurance (2013) Euro 0.6 billion TIAN PING 1 AXA FY07-FY12 gross written premiums CAGR Market 251% Outperforming the market 37% 9% 17% 19% 15% 10% 25% 12% 26% 16% 12% Hong Kong* Singapore* Thailand Malaysia Indonesia India 2 Source: Credit Suisse Asia P&C Insurance (2013) and AXA figures D6 - Investor Day - AXA Asia P&C - December 4, 2013 * FY12 revenues include 12 months of acquired HSBC business Revenues on 100% basis, including non-consolidated entities All other notes on page D26

8 From a regional footprint India AXA Asia P&C Revenues FY10: Euro 570 million China 86m revenues 15m revenues Hong Kong 73m revenues Malaysia Thailand 40m revenues 166m revenues Singapore 170m revenues Indonesia 20m revenues D7 - Investor Day - AXA Asia P&C - December 4, 2013 Revenues on 100% basis, including non-consolidated entities

9 to #1 foreign P&C player in Asia India: #10** 173m revenues Joint Venture with Bharti 26% ownership AXA Asia P&C Revenues FY12*: Euro 1,093 million China: #4** 26m revenues 100% ownership #1 following 50% Tian Ping 1 announced acquisition in 2013 Hong Kong: #1 329m revenues 100% ownership Thailand: #22 61m revenues 99% ownership Malaysia: #7 206m revenues Joint Venture with Affin 42% ownership Singapore: #2 247m revenues 100% ownership AXA FY15E revenues * FY12 includes 12 months of acquired HSBC business **China among foreign players; India among private insurers Indonesia: #28 51m revenues 86% ownership on existing 40% share Joint Venture with Mandiri D8 - Investor Day - AXA Asia P&C - December 4, 2013 Revenues on 100% basis, including non-consolidated entities Rankings sources and notes on page D26

10 Ambition AXA: bold plans for profitable acceleration AXA Asia P&C Revenues FY10 - FY15E AXA Asia P&C Underlying Earnings FY09 - FY15E In Euro billion FY10 - FY15E CAGR Group share In Euro million +24% % % -11 FY10 FY11 FY12* FY15E FY09 FY10 FY11 FY12* *2012 includes 12 months of acquired HSBC business *2012 includes 12 months of acquired HSBC business Reflecting increased expenses to accelerate growth FY15E China (including Tian Ping in FY15E) Developing entities - India, Indonesia and Thailand Established entities - Singapore, Malaysia and Hong Kong D9 - Investor Day - AXA Asia P&C - December 4, 2013 Revenues on 100% basis, including non-consolidated entities All notes on page D26

11 Today s key messages Asia P&C a tremendous market potential AXA: #1 International P&C insurer in Asia with a diversified footprint A clear strategy to accelerate and anchor leadership Leveraging further our competitive advantage Conclusion D10 - Investor Day - AXA Asia P&C - December 4, 2013

12 A story of acceleration and value creation Personal Motor: 31% of revenues Commercial Lines: 37% of revenues Future growth drivers 1/3 Motor 1/3 Health 1/3 Comm. lines Health: 22% of revenues D11 - Investor Day - AXA Asia P&C - December 4, 2013 Lifestyle: 10% of revenues FY12 Revenues of Euro 1.1 billion on Revenues on 100% basis, including non-consolidated entities Revenues include 12 months of acquired HSBC business

13 Personal motor: Capture booming market demand Vehicle ownership Market context 1 out of 2 cars will be sold in Asia 2030 AXA revenues and profitability (only personal motor) Revenues In Euro million 1,500 Key markets Europe Americas Asia Pacific 243M M 301M 359M 537M M Source: Vehicle Ownership and Income Growth, Energy Journal, 2007 Established entities strategy (Singapore, Malaysia, Hong Kong) 1, Combined ratio 204 FY10 Total excl. Tian Ping 245 FY11 CAGR >15% 339 FY12 FY15E 103% 103% 101% 101% Tian Ping 110% Developing entities strategy (India, Indonesia, Thailand, China) #1 #3 Reflecting increased expenses to accelerate growth Improve profitability Cycle management, Segmentation of portfolio, Disciplined claims management Enhance product design Widen products and services to accompany growing customer demand D12 - Investor Day - AXA Asia P&C - December 4, 2013 Revenues on 100% basis, including non-consolidated entities Revenues include 12 months of acquired HSBC business Rankings sources on page D26 Widen distribution reach Strengthen motor retention Increase technical agility

14 on the back of strong technical expertise and customer differentiation Technical expertise Portfolio segmentation Loss ratio improvement Regional Private Motor net current year loss ratio improved by 2.7pts mainly driven by India and Singapore Retention efforts towards targeted profitable segments improved renewal rates by 1.5pts for the region (respective improvements reflecting FY11 to 1H13) Disciplined claims management Fraud detection of 1% of claims paid, targeting 2.5% by 2016 Orientation rate to agreed body shops of 70% in Malaysia, Thailand, Singapore and 90% in Indonesia and reduced average cost of repair Build claims service into a differentiated strategy Customer focus The first private motor claim app in Hong Kong and Singapore Large range of benefits and services to suit all customer needs Leverage regional platform to strengthen offer and distribution reach Ease of doing business: automated customer interaction / claims automation D13 - Investor Day - AXA Asia P&C - December 4, 2013

15 Commercial Lines: Profitable growth driven by economic development Revenues In Euro million AXA historical progression 100 Focus on Retail Focus on Commercial Development of business Lines Commercial Lines 0 FY FY FY FY FY FY FY FY FY FY FY FY13E 2013FY14E 2014 FY15E 2015 Composition of our portfolio AXA revenues and profitability (including commercial motor) GWP Euro m Revenues In Euro million Combined ratio 269 FY FY11 CAGR >10% 402 FY12 Impacted by Thai floods Key Strategy FY15E 103% 110% 104% 99% Key markets #1 Property #2 Cargo #4 Marine Construction 4% Marine 15% Liability 23% Motor 26% Property 31% Acceleration through diversification: leverage opportunities in all business segments and distribution channels Broaden customer base to: SMEs, leveraging bancassurance partnerships and revamped offer Large segment, leveraging AXA Corporate Solutions expertise and regional presence Strengthen technical expertise to secure profitable growth Commercial Lines FY12 revenues: Euro 402 million Benefit from Group reinsurance program to enhance competitiveness Revenues on 100% basis, including non-consolidated entities; Revenues include 12 months of acquired HSBC business D14 - Investor Day - AXA Asia P&C - December 4, 2013 Rankings sources on page D26

16 Health: Well equipped to capture underpenetrated market through differentiated offer In USD billion CAGR estimate +51% 4 Health protection gap 1 : massive growth prospects % 8 +39% +42% Malaysia Indonesia India China Source: Swiss Re Health protection gap in Asia region will hit USD197 billion in 2020 Key Strategy & our differentiation Revenues In Euro million Combined ratio 58 FY10 AXA revenues and profitability 77 FY11 CAGR >35% 245 FY12 FY15E 113% 111% 106% 99% Double Double Ambition Key markets #1 #2 #5 Combine efforts with Life entities to strengthen services, claims management, distribution and infrastructure Enhance product range, building on increasing mobile health requirements and enter Employee Benefits solutions Balanced portfolio split between individual and group business (50:50) 1/3 rd of the health business in FY15E from P&C business Revenues In Euro million Life P&C 248 FY10 X2 2X 550 FY12 X2 2X FY15E Revenues on 100% basis, including non-consolidated entities; Revenues include 12 months of acquired HSBC business D15 - Investor Day - AXA Asia P&C - December 4, 2013 Rankings sources on page D26

17 Growth supported by multi-channel distribution platform Revenues Agency 64% Direct & Other 9% Bancassurance 5% FY11 Broker 22% AXA Asia P&C: multi-channel distribution Agency 51% Direct & Other 9% Bancassurance 22% Broker 18% FY12 Agency 46% Direct & Other 30% Bancassurance 12% Broker 12% FY15E Agency Broker Bancassurance Partners 16,000 strong agency network 30% GWP growth in 2012 Leverage life agency for cross / upselling opportunities Focus on retaining talent, retention rate increased 4pts since FY12 to 83% Strong development with GWP expected to double between FY11 to FY15E Mainly focused on health and commercial lines business Strengthening our position in the international broker space Leveraging Life & Savings bancassurance relationships and experience Positive anti selection D16 - Investor Day - AXA Asia P&C - December 4, 2013 Revenues on 100% basis, including non-consolidated entities; Revenues include 12 months of acquired HSBC business Rankings sources on page D26

18 Bancassurance acceleration supported by strategic alignment and shared economic interest HSBC exclusive distribution agreement Positions AXA as #1 in Hong Kong and #2 in Singapore Access to 6 million customers and 420 branches Strong opportunity given low HSBC client penetration rates of 8% in Hong Kong and 5% in Singapore Joint Venture with Mandiri Building on our successful Life partnership Access to 12 million customers and 1,800 branches Establishing strong motor positioning given expanding customer base and increasing bank car loans Significant upside: current bank car loan penetration rate of 57% for Mandiri clients Accelerate SME offers through micro banking Revenues In Euro million Hong Kong: AXA and HSBC Revenues In Euro million Indonesia: AXA - Mandiri partnership FY11 FY12 FY15E 0 FY11 FY12 FY15E D17 - Investor Day - AXA Asia P&C - December 4, 2013 Revenues on 100% basis, including non-consolidated entities; Revenues include 12 months of acquired HSBC business

19 Today s key messages Asia P&C a tremendous market potential AXA: #1 International P&C insurer in Asia with a diversified footprint A clear strategy to accelerate and anchor leadership Leveraging further our competitive advantage Conclusion D18 - Investor Day - AXA Asia P&C - December 4, 2013

20 Leveraging our competitive advantage to turn challenges into additional opportunities Challenges we face Our responses / Competitive advantage Competition/ Aggressive playing field Composite player offering full-fledged insurance solutions Regulation Global insurance Group with strong local partnerships and a solid regional platform Natural catastrophes Leverage AXA Group technical expertise Talent war Strong brand and willingness to reinvent itself to better differentiate towards customers D19 - Investor Day - AXA Asia P&C - December 4, 2013

21 Underwriting control and Reinsurance are the two main axes of our protection strategy Underwriting Imposing maximum claim limits especially on natural catastrophes Monitoring our nat cat accumulation via a Group geocoding tool (AEGIS) Reinsurance Reinsurance to limit our exposure to individual or catastrophic loss events Risk mitigation and aggregation within the limits set by our risk appetite framework Leveraging scale and diversification to actively monitor and adjust risk appetite Traditional reinsurance market Asia Pool Group Pool Protection 1/200Y event Euro 1.4 million retention Entity A Entity B Entity C AXA Global P&C is our internal reinsurance carrier at global level to optimize group reinsurance protection D20 - Investor Day - AXA Asia P&C - December 4, 2013

22 AXA redefining the standard Asian operating model, providing clients & distributors with best in class regional platform Industry standard operating model Product push Multiple platforms Manual policy processing Time to product launch: 2-3 months Value for Money Single platform across 7 countries for retail and SME Plug and Play platform Straight through processing Time to market delivery: 10 days AXA Asia P&C: New platform rolling out in 2014! D21 - Investor Day - AXA Asia P&C - December 4, 2013

23 Leverage digital opportunity for our customers D22 - Investor Day - AXA Asia P&C - December 4, 2013

24 Today s key messages Asia P&C a tremendous market potential AXA: #1 International P&C insurer in Asia with a diversified footprint A clear strategy to accelerate and anchor leadership Leveraging further our competitive advantage Conclusion D23 - Investor Day - AXA Asia P&C - December 4, 2013

25 Today s conclusion Asia a tremendous market potential Economic development X Insurance penetration X Demographics We are well positioned to meet our Ambition AXA targets Outpacing market growth & Translating growth into earnings AXA key drivers Portfolio diversification X Benefits of being global X People D24 - Investor Day - AXA Asia P&C - December 4, 2013

26 D25 - Investor Day - AXA Asia P&C - December 4, 2013 Q&A

27 Notes Rankings source: General Insurance Association of Singapore 2012, Central Bank of Malaysia BNM (Bank Negara Malaysia) 2012, Hong Kong Office of the Commissioner of Insurance 2012, Indonesia Insurance Regulatory and Development Authority 2012, Company data, AXA estimates Page D6 1. Announced acquisition of 50% of Tian Ping in 2013, transaction pending, subject to customary closing conditions; FY12 revenues pro-forma of Euro 0.6 billion 2. India CAGR reflects Page D8 1. Announced acquisition of 50% of Tian Ping in 2013, transaction pending, subject to customary closing conditions Page D9 1. Tian Ping CAGR reflects FY10-FY15E period; 2010 pro-forma revenues of Euro 348 million Page D14 1. The Health Protection Gap is defined as the difference between the level of healthcare costs which would be required to meet consumer needs, versus the amount that would be available to cover those costs, if society's total healthcare expenditure remained a constant percentage of GDP. D26 - Investor Day - AXA Asia P&C - December 4, 2013

28 IFRS reporting reconciliation 2012 Revenues Commentary in Euro million Total Asia at 100% share Non-consolidated entities Fully consolidated entities (Hong Kong, Singapore, Malaysia) and nonconsolidated (India, Thailand, China, Indonesia) Excluded from IFRS Revenues definition: India, Thailand, China, Indonesia 1, HSBC scope Adjusted for 12 months scope for Singapore and Hong Kong 253 IFRS reported revenues Singapore, Malaysia, Hong Kong at 100% basis including 2 months of HSBC acquired business Underlying Earnings Commentary in Euro million Total Asia at Group share basis Non-consolidated entities HSBC scope Fully consolidated entities (Hong Kong, Singapore, Malaysia) and nonconsolidated (India, Thailand, China, Indonesia) Excluded from reported Underlying Earnings definition (India, Thailand, China, Indonesia) Adjusted for 12 months scope for Singapore and Hong Kong IFRS reported Underlying Earnings Singapore, Malaysia, Hong Kong at group share, including 2 months of HSBC acquired business 23 D27 - Investor Day - AXA Asia P&C - December 4, 2013

29 Appendix Country slides D28 - Investor Day - AXA Asia P&C - December 4, 2013

30 Hong Kong #1 in P&C business with 12% market share* Market Context AXA revenues Penetration 1.4% Premiums/ growth Revenues 100% basis (in Euro million) +287% 329 Total 2012 $5.1bn 5YR CAGR 8.6% 2012 Growth 12.9% % 79 Source: Credit Suisse Asia P&C Insurance (2013) FY10 FY11 FY12 Distribution mix Product mix Agency 34% Bancassurance 57% Retail motor 8% Retail non-motor 20% Other 2% Brokers 7% Health 45% Commercial motor 4% Commercial non-motor 23% Hong Kong 2012 revenues: Euro 329 m Hong Kong 2012 revenues: Euro 329 m 2012 includes 12 months of acquired HSBC business D29 - Investor Day - AXA Asia P&C - December 4, 2013 Change at constant Forex * Market share includes P&C business sold by non-p&c entities and pro forma of acquired HSBC business

31 Singapore #2 in P&C business with 12% market share* Market Context AXA revenues Penetration 3.5% Premiums/ growth Total 2012 $2.7bn Revenues 100% basis (in Euro million) % % 247 5YR CAGR 18.5% 2012 Growth -11.8% Source: GIA, Credit Suisse Asia P&C Insurance (2013) FY10 FY11 FY12 Distribution mix Product mix Other 8% Bancassurance 3% Agency 65% Health 12% Retail motor 42% Brokers 24% Singapore 2012 revenues: Euro 247 m Commercial nonmotor 29% Commercial motor 11% 2012 includes 12 months of acquired HSBC business but excludes HSBC unearned premium reserve D30 - Investor Day - AXA Asia P&C - December 4, 2013 Change at constant Forex * Market share pro forma of acquired HSBC business Singapore 2012 revenues: Euro 247 m Retail non-motor 7%

32 Malaysia #7 in P&C business with 5% market share Market Context AXA revenues Penetration 1.7% Premiums/ growth Total 2012 $4.0bn Revenues 100% basis (in Euro million) 166-3% % 206 5YR CAGR 12.3% 2012 Growth 1.6% Source: Credit Suisse Asia P&C Insurance (2013) FY10 FY11 FY12 Distribution mix Product mix Other 17% Bancassurance 8% Agency 66% Health 9% Retail motor 37% Brokers 9% Malaysia 2012 revenues: Euro 206 m Commercial nonmotor 34% Commercial motor 12% Malaysia 2012 revenues: Euro 206m Retail non-motor 7% D31 - Investor Day - AXA Asia P&C - December 4, 2013 Change at constant Forex

33 India #10 in P&C business with <1% market share Market Context AXA revenues Penetration 0.8% Premiums/ growth Revenues 100% basis (in Euro million) +47% +53% 173 Total 2012 $8.5bn 5YR CAGR 11.6% Growth 24.2% Source: Credit Suisse Asia P&C Insurance (2013) FY10 FY11 FY12 Agency 69% India 2012 revenues: Euro 173 m India ranking among private insurers Distribution mix D32 - Investor Day - AXA Asia P&C - December 4, 2013 Brokers 26% Other 2% Bancassurance 4% Health 18% Change at constant Forex Commercial nonmotor 11% Commercial motor 19% Product mix India 2012 revenues: Euro 173m Retail motor 50% Retail non-motor 2%

34 Thailand #22 in P&C business with 2% market share Market Context AXA revenues Penetration 2.1% Premiums/ growth Total 2012 $4.5bn 5YR CAGR 15.0% Revenues 100% basis (in Euro million) % +16% Growth 21.7% Source: Credit Suisse Asia P&C Insurance (2013) FY10 FY11 FY12 Distribution mix Product mix Other 27% Bancassurance 21% Thailand 2012 revenues: Euro 61m Agency 23% Broker 29% Health 7% Commercial nonmotor 27% Commercial motor 10% Retail non-motor 6% Thailand 2012 revenues: Euro 61m Retail motor 50% D33 - Investor Day - AXA Asia P&C - December 4, 2013 Change at constant Forex

35 China #4 foreign player in P&C business #1 following Tian Ping acquisition in 2013 Market Context AXA revenues Penetration 1.2% Premiums/ growth Total 2012 $90.7bn 5YR CAGR 25.3% Revenues 100% basis (in Euro million) % 21 +8% Growth 16.6% Source: Credit Suisse Asia P&C Insurance (2013) FY10 FY11 FY12 Distribution mix Product mix Other 38% Agency 17% Health 8% Retail nonmotor 10% Broker 45% Commercial nonmotor 82% China 2012 revenues: Euro 26 m China 2012 revenues: Euro 26 m D34 - Investor Day - AXA Asia P&C - December 4, 2013 Change at constant Forex Rankings in China among foreign players

36 Indonesia 2 operations: AGI (86%) & MAGI Joint Venture with Bank Mandiri (40%) AGI - #28 & MAGI - #47 Market Context AXA revenues Penetration 0.5% Premiums/ growth Total 2012 $2.4bn 5YR CAGR 15.9% 2012 Growth 10.3% Revenues 100% basis (in Euro million) % % 51 Source: Credit Suisse Asia P&C Insurance (2013) FY10 FY11 FY12 Distribution mix Product mix Other 11% Bancassurance 31% Agency 22% Health 22% Retail motor 26% Broker 36% Commercial nonmotor 44% Retail non-motor 4% Commercial motor 5% Indonesia 2012 revenues: Euro 51m Indonesia 2012 revenues: Euro 51m D35 - Investor Day - AXA Asia P&C - December 4, 2013 Change at constant Forex

37 Biography Gaëlle Olivier Since April 2011, Gaëlle Olivier has been the CEO of AXA Asia P&C Gaëlle Olivier is a graduate of Ecole Polytechnique, ENSAE and a chartered actuary from the Institut des Actuaires. Gaëlle Olivier joined the AXA Group in She held several positions at AXA Investment Managers and then at AXA s head office, as Supervisory Board and Management Board Secretary. In 2004, she joined AXA Japan, as Head of Investment Operations, before becoming Head of Strategy and Audit. In 2009, she was appointed Head of Group Communication and Corporate Responsibility. D36 - Investor Day - AXA Asia P&C - December 4, 2013