Growing the Value Maximising the Pensions Opportunity

Transcription

1 Growing the Value Maximising the Pensions Opportunity Donal Casey, CEO Irish Life Corporate Business Goldman Sachs European Financials Conference Lisbon, June 2007

2 Irish Life & Permanent the Pensions Opportunity Growing Market Share in a Rapidly Growing Market at Stable Margins 2

3 Irish Pensions Market National Consensus on Pensions Most Favourable Demographics in Europe Significant Private Pension Incentivisation National Pension Reserve Fund 3

4 Pensions Growth: (1) bn Total Value of Irish Pension Fund Assets Source: IAPF Asset Allocation Survey

5 Pensions Growth: (2) m New Business* - Insured Market *APE basis Source: IIF New Business Statistics

6 Pensions Savings Growth Forecast to 2020 Forecast growth is 20% p.a. Income elasticity of demand estimated at 2.9 Table 23 Annual % Charge Pension Fund Meals Away From Home 3.8 Hotels & Expenditure Abroad 3.5 Computer Equipment & Software Education & Training -0.6 Entertainment 0.9 Domestic Services 5.5 Traveling Expenses Mortgage Repayments & Home Insurance 2.9 Vehicles 5.1 Private Health Insurance 7.0 Clothing & Footwear Other Insurance 4.5 Audio/Video Appliances 3.3 Medical 2.0 Alcohol Rent & Other Charges 2.4 Furniture, Floor covering etc. 1.1 Electrical & Gas Appliances Other Household Durables 2.2 Food 3.0 Repair, Decoration & Maintenance 2.7 Tobacco Household Non-Durable Goods Telecommunications Fuel & Light Personal Service Total Household Expenditure Simulation of Growth in Household Spending by Category Source: NCB 2020 Vision 6

7 DC Pensions - Growth Drivers Membership growth Age related impact Salary growth Employment growth Increased pensions coverage Shift from DB to DC Increase in discretionary incomes 7

8 DC Pensions Membership 000 s Public Sector DB Pensions DC Pensions DC Pension membership is growing at 10% p.a. 8 Sources: CSO Pension Coverage Survey / Pension Board Registered Pension Members

9 DC Pensions Aging Impact Maximum Contribution Rates Age Source: Irish Life Group DC Portfolio 9

10 DC Pensions 20%+ Growth Growing Membership % p.a. Age Related Impact % p.a. Salary Growth % p.a. Increasing Discretionary Incomes % p.a. = +20% p.a. DC Pensions savings will become the biggest single component of Irish Financial Services over the next 10 / 12 years. 10

11 Post Retirement Savings m ARF* New Business Introduced in 1999 Becoming more popular Drawdown s lower than anticipated Forced annuitisation being debated at present Significantly lower risk than annuities *Approved Retirement Fund 11

12 Compulsory Annuitisation at 65 Funds under Mgmt bn Term 12

13 Switch to 5% p.a. Funds under Mgmt bn ARF Impact Term 13

14 Irish Life & Permanent the Pensions Opportunity Growing Market Share in a Rapidly Growing Market at Stable Margins 14

15 Increased Pensions Market Share m 30% % 25% 27% 28% Irish Life - New Business* 24% * Retail & Corporate Life - APE basis Source: Source IIF New Business statistics

16 Market Share Prospects Distribution Management Service Management Investment Management Key competencies are platform for continued growth in share 16

17 Broad & Efficient Distribution Retail Life Corporate Life Salesforce, branches, brokers Most efficient bancassurer Mass affluent opportunity Group model highly efficient Public sector franchise Open admin. platform 17

18 Quality Service Delivery % Corporate Life Customer Service Index (CSI) 18

19 ILIM - Active Credentials Manager 3yrs % p.a Rank 5yrs % p.arank Axa Rosenberg Barclays BIAM Capital International Eagle Star Fidelity International Irish Life Investment Managers JP Morgan MFS Investment Management Newton Investment Management RCM Robeco UBS Global Asset Management Wellington Management Average Median FTSC World MSCI World Source: Pooled Funds Global Equity Survey Versus 27 Global managers competing for Irish pension clients 19

20 ILIM - Passive Credentials At 30 April Year 3 Years 5 Years 10 Years % % p.a % p.a % p.a j Irish Life Consensus Manager Average Out performance j Indexed products doing what they say on the tin ILIM shop window Consensus Fund is the largest investment fund in market at 6.4bn with top quartile performance 20

21 Market Recognition Distribution Drivers Management Financial KPMG Needs Award 2007 Demand Service Management IBA Award 2007 Investment Management KPMG Award

22 Life Productivity Unit Cost Per Member 22

23 Life New Business Contribution* * Gross 23

24 Irish Life & Permanent The Pensions Opportunity Growing Market Share in a Rapidly Growing Market at Stable Margins 24

25 Irish Life & Permanent The Pensions Opportunity m Targeting 500m of pension sales* in 2009 *Retail & Corporate Life - APE basis 25

26 Growing the Value Maximising the Pensions Opportunity Donal Casey, CEO Irish Life Corporate Business Goldman Sachs European Financials Conference Lisbon, June