AXA and BMPS join forces in the Italian bancassurance and pensions market March 23, 2007

Transcription

1 AXA and BMPS join forces in the Italian bancassurance and pensions market March 23, 2007 pag. 1

2 AXA and BMPS join forces to create a new Italian leader Worldwide leader in Leading Italian banking financial protection group, with strong customer Strong expertise in life & franchise savings, P&C and asset Successful bancassurer management To build a leader in life and non-life bancassurance and pensions in Italy through a unique, exclusive and global long-term partnership pag. 2

3 Main terms of the transaction Perimeter of the transaction AXA acquires: 50% of MPS Vita and MPS Danni 50% of BMPS open pension funds business Management of insurance companies assets ( 13bn¹) and open pension funds ( 0.3bn¹) assets The new partnership to enter a long-term exclusive distribution agreement with all banks of MPS Group (including BAM²) for the sale of life, non-life and pensions products 10 years, automatically renewable for additional 10 years MPS Vita will become the sole manufacturer of open pension funds for both AXA and BMPS clients in Italy BMPS to transfer its existing open pension fund business to MPS Vita Insurbanking for AXA s clients in Italy MPS Vita to acquire 100% of Quadrifoglio Vita for embedded value before the end of 2007 following the unwinding of the JV between BMPS and Unipol Structure of the partnership 50% + Mgmt control 50% Including BMPS open pension funds MPS Vita 100% MPS Life 100% to be acquired by end of 2007 MPS Danni Quadrifoglio Vita Key financial terms Price of 1,150 million Exit price at full Appraisal Value Commission structure unchanged with 55%/45% profit split bank/insurer for life products Embedded value (deterministic) of MPS Vita (including MPS life) and MPS Danni as of June 30, 2006 equal to approx. 900 million New business value (deterministic) of MPS Vita (including MPS Life and excluding Quadrifoglio Vita) of 22 million in the first half of 2006 Governance highlights AXA acquires management control of MPS Vita and MPS Danni with veto rights for BMPS on significant strategic decisions Equal representation of AXA and BMPS on BoD with BMPS appointing the Chairman and AXA appointing the CEO Mr. Giuseppe Mussari (Chairman of BMPS) to join AXA S.A. Supervisory Board³ and one BMPS representative on AXA Assicurazioni BoD ¹ As of year end 2006, for insurance companies the figure refers to technical reserves excluding index-linked ² Currently distributing Quadrifoglio Vita products ³ Subject to shareholders approval pag. 3

4 Unique, exclusive and global long-term partnership Consolidate and further strengthen BMPS leadership in life and non-life bancassurance Leverage upon AXA specific know-how to capture the growth and profitability potential and develop a leading position in the Italian pensions market Benefit from AXA s global leadership and best practice Full exploitation of potential offered by BMPS franchise Improvement of product and service offer Higher efficiency and commercial effectiveness True long-term strategic partnership Partnership to become the sole platform for expansion of AXA and BMPS in the Italian bancassurance and pensions market through any new distribution channel except for AXA agents and brokers network Commitment to develop also the non-captive business in Italy for bancassurance and pensions through new distribution agreements BMPS to distribute on an exclusive basis its banking products to AXA s 1.6 million clients in Italy AXA and BMPS to explore jointly further areas of cooperation outside Italy pag. 4

5 Contribution of BMPS to the partnership 3 rd largest Italian banking group (total assets of 159bn as of YE2006 growing at a 8% CAGR since 2000) with a highly recognised brand name 4.5 million clients served through over 1,900 branches and 700 promotori 6 th largest player in Italian life insurance market with a market share of 6.6% 4 th largest life bancassurance player with a 10.4% market share Leading player in non-life bancassurance with a market share in excess of 10% and with a strong combined ratio (70% in 2006) Top-10 life insurers by GWP ( bn) and market share (%)¹, ² Top-10 life bancassurers by GWP ( bn) and market share (%)¹, ³ Generali % Allianz % Eurizon % Unipol (ex. QV) % Poste Vita % MPS Vita +QV % Fondiaria-SAI Cattolica Aviva % 4.6% 4.3% CNP Capitalia % Eurizon % Intesa Vita % Poste Vita % MPS Vita + QV % CreditRas % Aviva % BNL Vita CNP Capitalia % 5.4% Anton. Vita % AXA % Lombarda Vita % Note: figures pro-forma for Toro acquisition by Generali and Bipiemme Vita acquisition by Fondiaria-SAI ¹ Source: ANIA 2005, including Irish life businesses of Italian insurers (es. MPS Life, Sanpaolo Life, CNP Capitalia Life and Mediolanum Life) ² Market shares in total life GWP ³ Market shares in GWP distributed by banks and postal offices pag. 5

6 Contribution of AXA to the partnership Financial protection expertise Existing Italian market knowledge via AXA Italy Innovation in life products (e.g. Accumulator) & non-life (segmented approach) Successful pensions experience (product development, financial advice and financial planning tools) in the US, Europe and Australia Advanced ALM capabilities Global asset management capabilities with over 1 trillion of assets under management Market knowledge and expertise Award winning product innovation Strong P&C product and claims management capabilities Global presence Worldwide best practices Capacity to roll out successful local products in other countries Distribution management experience 50% of revenues in non proprietary distribution Bank networks already an important distribution channel for AXA in the US, Europe and Asia pag. 6

7 The common project Life: Focus on product innovation and increased yield Rebalance business mix towards high value added unitlinked products (only 12% of technical reserves and 8% of GWP for MPS Vita in 2006) Introduce successful higher margin AXA Accumulator product into BMPS branches (high potential for at retirement products in Italy) Use sophisticated ALM techniques to improve policyholder returns Non life: Using AXA expertise to increase penetration Increase penetration of bundled products to market levels Launch motor products via BMPS branches Targeted approach to SME clients of BMPS Focus on service and claims management Management of insurance & pensions assets: Optimise yields Increase asset diversification to increase returns (current asset allocation of MPS insurance companies: 97% fixed income) Pensions: Joining forces to address new market opportunities Partnership as the sole platform for the manufacturing of open pensions funds distributed to both BMPS and AXA clients in Italy Leverage BMPS s customer base to expand open pensions funds business Target individuals, SMEs and large corporates Foreign markets: Evaluate areas of potential cooperation Facilitate BMPS international expansion Expand bancassurance partnership to other countries which BMPS could enter Exploit all cross-selling opportunities Other Italian developments: Develop further distribution & customer opportunities Develop insurbanking in Italy Develop the non-captive business for bancassurance and pensions through new distribution agreements Primary platform to develop new distribution channels pag. 7

8 Italy: a large and attractive market 4 th largest insurance market in Europe with 119bn GWP in 2005 Strong growth achieved in life volumes to date, expected to continue due to low penetration compared to other European markets (life technical reserves as % of GDP equal to 25% vs. 42% European average¹) Bancassurance channel remains key for life distribution with 61% of the total volumes in 2005 Low penetration of bancassurance in P&C (1.5% vs. 7.8% European average) provides for significant growth potential Significant opportunity in group and individual defined contribution pensions deriving from new pensions reform and pensions gap of Italian families 1 Source: ANIA 2005 pag. 8

9 High profitability prospects for the dominant channel in the Italian life market 2005 GWP by distribution channel 1 1% 1% 1% 1% 1% 11% 14% 11% 10% 8% 9% 9% 11% 13% 12% 18% 20% 18% 19% 18% Bancassurance market share by product 1 Unit and index linked 77% Human life 58% 61% 56% 59% 59% 61% Capitalisation 39% Banks Agents Salaried salesforce Financial advisors Brokers Individual pension plans Pensions funds 6% 18% Average 61% Penetration of life bancassurance 2 Product mix (2005) 1 62% 61% Italian life market GWP MPS Vita + MPS Life GWP 24% 20% Traditional: 63% Other: 1% Unit/index linked: 36% Unit linked: 5% Index linked: 22% 8% Traditional: 73% France Italy UK Germany Switzerland Attractive opportunity arising from the switch from traditional and index-linked products towards high value added unit-linked products 1 Source: ANIA Life GWP distributed by banks on total life GWP figures for Germany. Source: ANIA, FFSE, ABI, SSV, Datamonitor, CEA European insurance in figures June 2006 pag. 9

10 Emerging role of bancassurance in the P&C market 2005 GWP by distribution channel 1 Bancassurance market share by product 1 87% 86% 85% 85% 84% Motor 1.1% Average 1.5% 12% 13% 14% 14% 14% 0.9% 1.0% 1.2% 1.0% 1.5% Banks Other² Agents Non-motor 2.1% Penetration of P&C bancassurance % 11.0% 9.0% 7.0% 6.5% 6.1% 5.7% 1.5% Netherlands Portugal France UK Germany Spain Belgium Italy Strong growth potential in P&C bancassurance to move from 1.5% share of distribution to average European share of 7.8% 3 1 Source: ANIA 2005, including Post Offices channel 2 Includes brokers, direct channel (internet and telephone) and financial advisors 3 P&C GWP distributed by banks on total P&C GWP. Source CEA- European insurance in figures June 2006 pag. 10

11 Strong potential of the pensions market following reform Size of pension funds relative to GDP 1 2.3% Italy 2.8% 3.4% Germany 3.9% 5.5% Belgium 4.2% 3.9% France 5.8% AuM ( bn) Evolution of individual pension plans and open pension funds 2 CAGR = 77.7% Individual pension plans Open pension funds Spain UK Switzerland Netherlands 5.8% 9.1% 72.5% 70.1% % 117.4% 102.6% 124.9% Customers (mm) CAGR = 52.1% Individual pension plans Open pension funds Demographic trends, low penetration and new reform (starting January 2007) creating a strong backdrop for the future growth of the pensions market in Italy 1 Source: OECD GLOBAL Pensions Statistics, Mefop for Italy 2 Source: COVIP, ANIA pag. 11

12 A broad partnership with profitable growth prospects This is a true long-term partnership leveraging the clear strengths of both parties to the benefit of our clients, companies and shareholders High growth market with potential in unit-linked in life, higher bancassurance penetration in P&C, favourable new pensions regulations and more diversified asset classes in asset management A committed management and a strong cultural fit To become a leading and highly profitable bancassurer and pensions player in Italy pag. 12

13 Key figures of BMPS insurance activity MPS Vita + MPS Life IFRS consolidated financials ( mm) MPS Danni Italian GAAP financials ( mm) 2004² GWP¹ 3,570 4,465 2,997 Investment income GWP Technical result Net income (including 100% of MPS Life) Net income Investments 16,390 18,786 18,476 Net technical reserves 16,090 11,803 11,412 Investments Net technical reserves Unit and index linked reserves N/A 6,377 6,098 Combined ratio 79.6% 72.2% 69.6% RoE 11.4% 12.0% 16.2% RoE 18.9% 23.9% 24.5% For reference Quadrifoglio Vita GWP Include unit and index linked GWP (accounted as financial products under IFRS) figures are under Italian GAAP pag. 13

14 IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predications 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, including the risk that the proposed transaction may not be consummated. Please refer to BMPS's Annual Report for the year ended December 31, 2005, for a description of certain important factors, risks and uncertainties that may affect BMPS business. BMPS 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. Please refer to AXA's Annual Report on Form 20-F and AXA s Document de Référence for the year ended December 31, 2005, 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. This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. pag. 14