FULL YEAR 2017 EARNINGS

Transcription

1 La Mondiale FULL YEAR 2017 EARNINGS APRIL 2018 Ceci est un document exclusivement réservé à l interne qui ne peut engager la responsabilité d AG2R LA MONDIALE

2 Cautionary note Certain statements contained herein may be 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 and can be affected by other factors that could cause actual results and La Mondiale s plan and objectives to differ materially from those expressed or implied in the forward looking statements. Please refer to La Mondiale Rapport Financier 2017 (*) for a description of certain important factors, risks and uncertainties that may affect La Mondiale s business and/or results of operations. La Mondiale 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. Unless otherwise specified, financial statements are calculated in accordance with IFRS as adopted by the European Union. SGAM Solvency 2 figures related to FY 2017 are estimated. (*) availableat the end of May

3 Contents 1. Executive summary 2. Group profile & business activity 3. A strong business model 4. Invested assets 5. Solvency & capital management 6. Appendix

4 Executive summary (SGAM, as of 12/31/2017) Key player in the French Life insurance market #2 in Supplementary pension #3 in Health Insurance #4 in Protection #10 in Savings Rated A- / stable Confirmedby Standard & Poor s in October Product mix (premiums) 63% Savings & Pensions Protection & Health 37% Robust balance sheet and strong solvency 224% S2 RATIO SGAM AG2R LA MONDIALE +11% compared to FY % S2 RATIO LA MONDIALE (solo) debt issuer +21% compared to FY2016 6,1 bn IFRS Equitycapital (part of group) + 0,5bn compared to FY16 +86% on 5 years 2,7 bn Total amountof subordinated debts 76 mn Issuanceof mutual certificates (unrestricted Tier 1) Diversified & strong business model 361 mn Strong FY2017 net income 9,8 bn Controlleddecreaseof premiums on Life General Account 37%/63% Premium UL ** / GA * mix above the market 28%/72% 32%/68% LiabilitiesUL ** / GA * mix above the market 21%/79% Sound asset allocation & risk management 4,33% High level of policyholder of reserves surplus reservewith2,3 bn Less than 20% of investments rated BBB+ or below (lower than the market) SGAM : french prudential insurance group 4 (*): General Account are high capital need products, (**) : Unit Linked are low capital need products

5 Highlights AG2R LA MONDIALE and MATMUT announced on November 28th to enter into exclusive negotiation to study the opportunity to build a new group Rationale of the operation : - Larger and comprehensive group on the French market - Diversification effects - Cross-selling on existing customers Organizational project: La Mondiale has successively issued two subordinated debts in USD Issuanceof tworedeemablesubordinatednotes 30NC10 : - Privateissue of $400 million on December19, 2017, completedin Asia - Public issue of $310 million on January12, 2018, subscribed mainly by European investors Umbrella SGAM SGAPS AG2R LA MONDIALE SGAM LA MONDIALE MATMUT MATMUT and other entities LA MONDIALE and its subsidaries To be approved by the General Meetings of May / June 2018, and in case effective on January 1, 2019 Creation of a dedicated property company - CalledAGLM IMMO - Aimsto consolidatethe real estateinvestmentsof the membersof the Sgam - Should hold after asset transfers more than 4.5bn of assets 5

6 Contents 1. Executive summary 2. Group profile & business activity 3. A strong business model 4. Invested assets 5. Solvency & capital management 6. Appendix

7 AG2R LA MONDIALE organization A Group collecting 29,0bn premium in 2017 SGAM with 6.1bn equity Combination of mutual or non capitalistic entities with specific governance SGAM and SGAPS are specific group structures for mutual and assimilated entities, allowing combination and sharing of resources As of January 1 st 2018, SGAPS has also allowed full prudential recognition SGAM AG2R LA MONDIALE SGAPS AG2R LA MONDIALE LA MONDIALE Mandatory Additional Pension Scheme 2017 premiums: 19.3bn Protection and Health 2017 premiums: 3.6bn Full financial solidarity in proportion of capital surplus Savings and Pensions 2017 premiums: 6.2bn AG2R Retraite Agirc AG2R Retraite Arrco Servicing on behalf of the public pension system for employees AG2R Réunica Prévoyance ViaSanté Mutuelle Réunica Mutuelle Prima AG.Mut La Mondiale: 2.1bn La Mondiale Partenaire: 1.6bn La Mondiale Europartner: 1.7bn Arial CNP assurances: 0.7bn Common sharing of resources and governance 7

8 AG2R LA MONDIALE financial solidarity SGAM AG2R LA MONDIALE 1 rst level of financial solidarity : between all affiliates into SGAPS 2 nd level of financial solidarity : between SGAPS and La Mondiale 60%* Entity i Entity 1 Entity 2 Financial solidarity La Mondiale (debt issuer) 100% Financial solidarity Entity 3 Entity 4 100% Financial solidarity function of solvency ratios Financial solidarity - description SCR ratio or MCR ratio Target 115% Financial solidarity in proportion of capital surplus 125% Trigger 110% 2 levels of financial solidarity: - The 1rst level between the members of SGAPS - The 2 nd levelbetweensgaps and La Mondiale The financialsolidarityprocess isthe samein the 1 rst and the 2 nd level: if an entitysolvencyratio (SCR or MCR) fallsbelow110%, otherentities willprovideextra capital in orderto restore 115% solvencyratio, in proportion of theircapital surplus and within the limits of their own solvency. 8 * consolidated through use of the equity method as of 1 st of April 2016

9 Business activity (La Mondiale) Premiums (in mn) Premiums : -6,1% compared to FY 2016, due to : Total Savings Pension Others Controlled decrease GA exposure and focus on UL Savings:-21,5% voluntary decrease in General Account Pension : +29,2% mainly due to exceptional events on Group Supplementary Pension with no impact on the net inflows FY 2015 FY 2016 FY 2017 G/A 71% 71% 63% UL 29% 29% 37% Lapse : Slight increase of the insurance claims ratio (in line with the French market), after two years at historical low Net inflows : Controlled GA net inflows in a low interest rate environment (-60% on total net inflows compared to FY2016) Net inflows (including arbitrages, in mn) Insurance lapse ratio 6,2% 5,9% 6,8% Unit Linked -98 General Account FY 2015 FY 2016 FY 2017 FY 2015 FY 2016 FY 2017 * France (Source : Fédération Française de l Assurance) 9

10 Core businesses financial structure (La Mondiale) Unit Linked 32% 25.2bn Outstanding liabilities 79,8bn Liabilities: global growth by +5% General account : +2%, compared to less than 1% for the French market * Unit linked : +11%, compared to 10% for the French market * In 2017 UL liabilities represent 32% of total liabilities (compared to 21% for the market*) General account 68% 54.6bn New Business (APE) : decline by -10% compared to FY2016, but limited to -3% taking into account exceptional elements in group pension Liabilities by products 79,8bn New business breakdown (APE) 444mn Individual Pension 14% Protection 1% Retail Savings 6% Individual Pension 21% Protection 1% Retail Savings 2% Group Pension 24% Private Wealth Management 55% Group Pension 10% Private Wealth Management 66% 10 * Source : Fédération Française de l Assurance

11 Contents 1. Executive summary 2. Group profile & business activity 3. A strong business model 4. Invested assets 5. Solvency & capital management 6. Appendix

12 A strong financial performance (LA MONDIALE) Group equity capital (in mn) +10% compared to FY2016 x3 comparedto 10 yearsago 350 Consolidated net results (in mn) 2017 net result : 308mn mn FY 2017 net income Fair value adjustment Mutual certificates Other impacts Return on equity Consolidated Policyholder Surplus Reserves 25,0% 20,0% 19,4% Increase of policyholder surplus reserve by 520 mn 3,09% 3,36% 4,33% 15,0% 10,0% 5,0% 4,7% 12,2% 13,9% 11,1% 8,1% 9,0% 8,4% 9,3% 8,8% 0,58% 0,73% 1,20% 0,95% 0,17 0,23 0,43 0,36 1,75% 1,58% 1,76% 0,71 0,68 0,83 1,54 1,74 2,26 0,0% Profit-sharing reserve ( bn) in % of insurance liabilities 12

13 Continuous decrease of guaranteed rates bn 60 0% guaranteed btw 0% and 1% 2,1% 1,8% 50 btw 1% and 2.5% 1,5% 40 btw 2.5% and 3.5% 1,3% 30 btw 3.5% and 4.5% higher than 4.5% 0,84% 20 0,79% 10 The average guaranteed rate decrease from 0.84% in 2016 to 0.79% in Average guaranteed rate Liabilities with a gross guaranteed rate above 3.5% 35% 9% 13

14 Savings and pensions investment spreads Inforce business New business in bps +179 bps Profit sharing 2.15% net of fees Savingsand Pensions average guaranteedrate (mandatory) Yieldon total Savingsand Pensions assetsbase * Yield on Savings and Pensions fixed income assets Savingsand Pensions average guaranteedrate (1 rst & 2 nd years) Savingsand Pensions average guaranteedrate (after2 nd year) Buffer of 1.3bn above minimum guaranteed rate Average reserves of 54.2bn Below zero long term guaranteed rate, consistent with market conditions * Weighted average based on statutory accounts 14

15 A credited rate in line with the interest rate environment, still above the French market 3,8% 3,6% 3,4% 3,2% 3,0% 2,8% 2,6% 2,4% +29cts 3,69% 3,40% 3,40% 3,25% 3,13% 3,00% 2,91% 2,80% +37cts 2,84% 2,64% 2,54% -44cts 2,20% +31cts -5cts 2,2% 2,0% Rémunération Net averagecredited nette moyenne rate périmètre La Mondiale La Mondiale 2,27% -34cts 2,15% 1,8% 1,6% Rémunération Net averagecredited nette rate des French supports market(ffa) euros marché (FFA) 1,93% -9cts 1,84% 1,4%

16 Contents 1. Executive summary 2. Group profile & business activity 3. A strong business model 4. Invested assets 5. Solvency & capital management 6. Appendix

17 FY 2017 asset allocation Outstanding assets 94bn Assets : global growth by +6.6% Unit linked assets 25,5 bn 27% General account assets 68,5 bn 73% General account : +6.6% Unit linked : + 6.9% Assets under management have grown significantly over the last decade at an average annual growth rate of +10% since 2006 Fixed income represents 83% of General account in 2017 vs 72% in 2006 General account assets allocation 68.5bn Properties (**) 3 bn 4% Equities 5.8 bn 8% Others 0,2 bn 0% Fixed Income (*) 59,6 bn 87% (*)including repo (sale and repurchase agreement) (**) IFRS figures total value : 4.4bn 50 bn 45 bn 40 bn 35 bn 30 bn 25 bn 20 bn 15 bn 10 bn 5 bn 0 bn Property Equity Fixed Income Historical asset allocation General Account

18 FY 2017 fixed income allocation Credit Exposure by Credit Rating BBB 11% BBB+ 11% A- 8% Others 9% AAA 12% AA+ 3% AAA 12% Total fixed income exposure is at 54,4bn (excluding mutual funds and repo) Limited exposure to risky investments with as less than 23% of the investments currently rated BBB+ or below A 29% A 13% A+ 8% AA- 6% AA 30% AA 39% An estimated 15-year liabilities duration, but the liabilities sensitivity is however far lower and on line with the fixed income duration (7.3). This is a key strategic element of our asset management policy. Portfolio by maturity band Credit Exposure by Issuer Type 30,0% 25,0% Other corporates 29% Sovereign 28% 20,0% 15,0% 10,0% 5,0% 0,0% < 1 year > 1 year to 3 years > 3 to 5 years > 5 to 7 years > 7 to 10 years > 10 to 30 years Sub Financials 5% Senior Financials 16% Supra / Agencies Covered 9% bonds 10% Guaranteed government bonds 3% 18

19 FY 2017 fixed income allocation Sovereign exposure Sovereign bond exposure Austria 3% Belgium 9% Peripheral 14% Others 6% France 68% Total Sovereign exposure is at 15.4bn Sovereign exposure is 28% of total fixed income exposure Peripheral countries exposure Italy 459mn 21% Ireland 526mn 24% Portugal 159mn 7% Greece 0mn 0% Spain 1 038mn 48% Total Sovereign on Peripheral countries exposure is at 2.2bn Peripheral countries exposure is 14% of this sovereign bucket, hence only 3.9% of the total investments High level of unrealized gains ( 372mn), that allows credit shock absorption 19

20 FY 2017 equity investment allocation Equity investment performance Total Equities exposure is 5.8bn, including 1.3bn through mutual funds 2017 performance at 12.5%, after 6.5% in An Equity portfolio well diversified by geography and sector A focus on large liquid Equity stocks traded on the main exchange markets Geographical breakdown (excl. mutual funds) Breakdown by sector Switzerland 8% Germany 8% Other 9% France 65% Consumer Goods Financial Instit. Industry Health Oil and Gas Services U.K. 10% Commodities TMT Local Government. Technology La Mondiale Equity DJ Stoxx 50 0% 5% 10% 15% 20% 25% 20

21 FY 2017 property allocation Geographic breakdown (market value) Total Property exposure is at 3,0bn (fair value : 4,4bn) La Mondialeproperty assets represent sq.m. and are mainly offices located in the centerof or in Western Paris, i.e. only Prime Real Estate Good rental market, especially on all recently delivered surfaces, to post a very good vacancy rate below 5% Exceptional IPD index outperformances of 2015 and 2016 explained by the strong value creation on the deliveries of the restructured buildings Annual revenue ( per sq.m) Total performance ,0% ,0% 10,0% La Mondiale Property IPD (french market) ,0% ,0% ,0%

22 Contents 1. Executive summary 2. Group profile & business activity 3. A strong business model 4. Invested assets 5. Solvency & capital management 6. Appendix

23 Solvency 2 SCR coverage ratio In bn La Mondiale solvency ratio Key Sensitivities * 256% 277% Interest rate -50bps -20pts Eligible own funds bn 8,7 SCR bn 3,4 Eligible own funds bn 9,6 SCR bn 3,5 Interest rate +50bps Equity market-15% UL/GA mix (+5% UL, ie38% insteadof 33%) -9bps -9pts +5pts +19pts * Based on HY2017 calculation SGAM solvency ratio 213% 224% The 2017 Solvency 2 ratios increase by more than 20pts for La Mondiale at 277%, and more than 10pts for Sgam at 224%. Eligible own funds bn 10,6 SCR bn 5,0 Eligible own funds bn11,6 SCR bn 5,2 The amount of the transitional measure on technical provision is 3.6bn for La Mondiale and 3.9bn for Sgam (estimated) 23

24 Subordinated redemption profile 1 st call date breakdown (in mn) 5,05% 7,07%* 3,38%* 768 2,56%* 457 6,75% 1,94% ,58%* 256 3,00% 10 * : euro equivalentissuancerate, after hedging BoY2017 Subordinated Financial debts : 2,122mn 457 mnof perpetual debt denominated in USD, with a 1 st call option in 2019, restricted T1 until 2026 Fully hedged until mnof EUR dated debt with a 1st call option in 2024, Tier2 until mnof EUR perpetual debt, with a 1 st call option in 2025, restricted Tier1 until 2026, Tier2 after 207 mn(197+10) of EUR perpetual debts, mostly outstanding amounts remaining from past liability management operations, Restricted Tier1 until mn($ 530 mn) of Reset Subordinated Notes, with a 1 st call option in 2027 EoY2017 and BoY2018 Operations : 596mn Issuance of two redeemable subordinated notes 30NC10 : 340 mn($400 mn) with a 1 st call option in December 2027 and 256 mn($310 mn) with a 1 st call option in January

25 Interest coverage and Leverage Interest coverage SGAM Interest coverage and Leverage remain in a satisfying range. Leverage SGAM The issuance of $710m EoY2017/BoY2018, slightly superior to the debt of 2013, has a slight negative impact on the 2018 ratios. That would disappear from 2019 in case of call exercise of the 2013 debt. NB : IFRS leverage doesn t take into account 146mn of Super Subordinated Debts 25

26 Contents 1. Executive summary 2. Group profile & business activity 3. A strong business model 4. Invested assets 5. Solvency & capital management 6. Appendix

27 Overview of La Mondiale Balance sheet (consolidated, IFRS) m FY 2015 FY 2016 FY 2017 %Change FY 2017/ FY 2016 TOTAL ASSETS ,4% Intangible assets ,4% ow. Goodwill ,1% Insurance investments ,6% Unit Linked investments ,7% Others assets ,9% Cash and cash equivalent ,3% m FY 2015 FY 2016 FY 2017 %Change FY 2017/ FY 2016 TOTAL LIABILITIES ,4% Equity Group Share ,0% Minority Interests ,0% Total Equity ,1% Financing debt ,9% Insurance and financial liabilities ,0% Other liabilities ,9% 27

28 Overview of La Mondiale P&L account (consolidated, IFRS) m FY 2015 FY 2016 FY 2017 %Change FY 2017/ FY 2016 Revenue ,1% Financial Products ,1% Others ,6% Current operating income ,6% Current operating expenses ,6% Operating Income ,7% CONSOLIDATED NET RESULT ,9% o.w Group share ,9% o.w Minority Interest

29 Private wealth and retail savings Premiums (in mn) FY 2015 FY 2016 FY 2017 Private Wealth Management Retail Savings Premiums: drop by -21,5% Private wealth management savings : -22,4% Retail savings : -10,2% Part of UL : 48% (+14% compared to FY2016, +8% for the French market) 63% through domestic partnerships, 20% via international partnerships, 13% via direct distribution channel and 4% via brokers In a low interest rates environment, controlled decrease of premiums especially in private wealth management savings for G/A contracts Liabilities: CAGR** of 6,6% since Liabilities (in mn) La Mondiale premiums growth vs Market Index base 100 = 2008 * France + Luxembourg (Source : Fédération Française de l Assurance and Commissariat aux assurances Luxembourg) ** CAGR : Compound Annual Growth Rate 29

30 Individual retirement plans Premiums (in mn) Premiums: Drop by -2% in 2017 Slight underperformance in Self employed retirement plans -6% Outperformance in Popular retirement savings plan (PERP) +19% Liabilities: Increase by +8,9% in 2017 CAGR of 11,8% since 2007 Market shares : #1 in 2016 (#2 in 2015) FY 2015 FY 2016 FY 2017 Liabilities (in mn) Self employed retirement plans market share in French Market Total estimated premiums : 2.7 bn * France (Source : Fédération Française de l Assurance) 30

31 Group supplementary pension Premiums (in mn) Exceptional 1269 Premiums: Growth by +17,7% in 2017, excluding exceptional elements Growth by +54,8% in 2017, including exceptional elements Liabilities: Increase by +6,7% in 2017 CAGR of 6,6% since 2007 FY 2015 FY 2016 FY 2017 Liabilities (in mn) Group supplementary pension market share in 2015** French Market Total estimated premiums : 5.6bn *** * France (Source : Fédération Française de l Assurance) ** 2016 non available *** without L

32 SGAM AG2R LA MONDIALE long term ratings A-/ stable SGAM AG2R LA MONDIALE and its 2 affiliates La Mondiale and AG2R Réunica Prévoyance have the same rating; AG2R LA MONDIALE (AG2R LM) has a diversified product offer backed by multi-branch approach; La Mondiale (AG2R LM s core entity) has a strong brand and leading positions in highnet-worth individual savings, self-employed, and group pension contract segments; AG2R LM is gradually strengthening its capital in the face of ongoing pressure from low rates through : its results, the successful issuance of a new form of hybrid debt in January 2017, and the gradual increase unit-linked life policies; AG2R LM has carried out the work to become a prudential group within the meaning of Solvency 2, on January 1, The strengthening of financial solidarity among the members of the Group is particularly highlighted; AG2R LM reaffirm its strong competitive position in its markets. Its risk management, management and governance are satisfactory. A-, outlook stable On october5, 2017 Standard & Poor s maintained itslong-term counterparty credit and financial strength ratings on SGAM AG2R LA MONDIALE at A-. The stable outlook on AG2R LA MONDIALE's subgroups(ag2r Réunica Prévoyance and La Mondiale) indicates S&P expectboth entities to become a full prudentially regulated group under Solvency 2 and gradually strengthen its capitalization. 32

33 SCR breakdown and Own funds tiering(la Mondiale) SCR (as of 12/31/2017) Own funds tiering Tier Tier 2 7% Tier 2 19% Tier Tier 1 93% Tier 1 258% 2017 Own Funds (M ) 100% of own funds 277% of SCR Basic Own Funds 3% 15% of diversification benefit (1) Subordinated liabilities (Restricted T1) 17% Reconciliation reserve 81% (1) Diversification benefit = (sum of net SCR excluding Operational risk SCR -net BSCR) / sum of net SCR excluding Operational risk SCR Breakdown of Tier 1 33

34 Contact details André Renaudin Chief Executive Officer David Simon Deputy Chief Executive Officer (Finances, Investments, Risks) Benoit Courmont Chief Financial & Risk Officer Jean-Louis Charles Chief Investment Officer jean-louis.charles@ag2rlamondiale.fr Marie Deboosère Analysis & Financial Information marie.deboosere@ag2rlamondiale.fr Investor Relations - Contact: infosfinancieres@ag2rlamondiale.fr AG2R LA MONDIALE , boulevard Haussmann, Paris - France 34