Ceci est un document exclusivement réservé à l’interne qui ne peut engager la responsabilité d’AG2R LA MONDIALE
La Mondiale
FULL YEAR 2017 EARNINGS
APRIL 2018
FULL YEAR 2017 EARNINGS APRIL 2018 Ceci est un document - - PowerPoint PPT Presentation
La Mondiale FULL YEAR 2017 EARNINGS APRIL 2018 Ceci est un document exclusivement rserv linterne qui ne peut engager la responsabilit dAG2R LA MONDIALE Cautionary note Certain statements contained herein may be forward-looking
Ceci est un document exclusivement réservé à l’interne qui ne peut engager la responsabilité d’AG2R LA MONDIALE
APRIL 2018
2
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
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.
La Mondiale FY 2017 earnings
(*) available at the end of May 2018
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Key player in the French Life insurance market
#2 in Supplementary pension #3 in Health Insurance #4 in Protection #10 in Savings
Robust balance sheet and strong solvency
224% S2 RATIO SGAM AG2R LA MONDIALE
+11% compared to FY2016
277% S2 RATIO LA MONDIALE (solo) – debt issuer
+21% compared to FY2016
€6,1 bn IFRS Equity capital (part of group)
+€0,5bn compared to FY16 +86% on 5 years
€2,7 bn Total amount of subordinated debts €76 mn Issuance of mutual certificates (unrestricted Tier 1)
Rated A- / stable
Confirmed by Standard & Poor’s in October 2017
2017 Product mix (premiums) Diversified & strong business model
€361 mn Strong FY2017 net income €9,8 bn
Controlled decrease of premiums on Life General Account
37%/63% Premium UL** / GA* mix
above the market 28%/72%
32%/68% Liabilities UL** / GA* mix
above the market 21%/79%
Sound asset allocation & risk management
4,33%
High level of policyholder
surplus reserve with 2,3€bn Less than 20% of investments rated BBB+ or below (lower than the market)
SGAM : french prudential insurance group (*) : General Account are high capital need products, (**) : Unit Linked are low capital need products
Protection & Health 37% 63% Savings & Pensions
La Mondiale FY 2017 earnings
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La Mondiale has successively issued two subordinated debts in USD Creation of a dedicated property company AG2R LA MONDIALE and MATMUT announced on November 28th to enter into exclusive negotiation to study the
Rationale of the operation :
market
Organizational project :
Umbrella SGAM
SGAPS AG2R LA MONDIALE SGAM LA MONDIALE MATMUT
MATMUT and
LA MONDIALE and its subsidaries
To be approved by the General Meetings of May / June 2018, and in case effective on January 1, 2019 Issuance of two redeemable subordinated notes 30NC10 :
completed in Asia
subscribed mainly by European investors
the members of the Sgam
La Mondiale FY 2017 earnings
Full financial solidarity in proportion of capital surplus
Savings and Pensions Protection and Health
2017 premiums: €6.2bn 2017 premiums: €3.6bn 2017 premiums: €19.3bn La Mondiale: €2.1bn La Mondiale Partenaire: €1.6bn La Mondiale Europartner: €1.7bn Arial CNP assurances: €0.7bn AG2R Réunica Prévoyance ViaSanté Mutuelle Réunica Mutuelle Prima AG.Mut AG2R Retraite Agirc AG2R Retraite Arrco Servicing on behalf
for employees
LA MONDIALE
Common sharing of resources and governance
premium in 2017
Mandatory Additional Pension Scheme
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SGAPS AG2R LA MONDIALE
capitalistic entities with specific governance
mutual and assimilated entities, allowing combination and sharing of resources
prudential recognition
La Mondiale
(debt issuer) 60%* 100% 100%
Financial solidarity
* consolidated through use of the equity method as of 1st of April 2016 8 SCR ratio
MCR ratio
Target 115% 125%
2 levels of financial solidarity :
The financial solidarity process is the same in the 1rst and the 2nd level : if an entity solvency ratio (SCR or MCR) falls below 110%, other entities will provide extra capital in order to restore 115% solvency ratio, in proportion of their capital surplus and within the limits of their own solvency.
1rst level of financial solidarity : between all affiliates into SGAPS
Entity 1 Entity 2 Entity i Entity 3 … Financial solidarity Entity 4
2nd level of financial solidarity : between SGAPS and La Mondiale
Trigger 110% Financial solidarity in proportion of capital surplus
Financial solidarity function of solvency ratios Financial solidarity - description
La Mondiale FY 2017 earnings
1 285 1 161
1 163 1 038 986 FY 2015 FY 2016 FY 2017
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G/A 71% 71% 63% UL 29% 29% 37%
Insurance lapse ratio Premiums (in € mn) Net inflows (including arbitrages, in € mn)
* France (Source : Fédération Française de l’Assurance)
6,2% 5,9% 6,8%
FY 2015 FY 2016 FY 2017
Premiums : -6,1% compared to FY 2016, due to : 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 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) 6 790 6 611 6 205
4 753 4 497 3 529 1 855 1 960 2 532
182 154 144
FY 2015 FY 2016 FY 2017
Total Savings Pension Others General Account Unit Linked La Mondiale FY 2017 earnings
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Liabilities by products €79,8bn Outstanding liabilities €79,8bn New business breakdown (APE) €444mn
* Source : Fédération Française de l’Assurance
Retail Savings 6% Private Wealth Management 55% Group Pension 24% Individual Pension 14% Protection 1%
General account 68% €54.6bn Unit Linked 32% €25.2bn
Retail Savings 2% Private Wealth Management 66% Group Pension 10% Individual Pension 21% Protection 1%
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*) New Business (APE) : decline by -10% compared to FY2016, but limited to -3% taking into account exceptional elements in group pension
La Mondiale FY 2017 earnings
0,17 0,23 0,43 0,36 0,71 0,68 0,83 1,54 1,74 2,26
0,58% 0,73% 1,20% 0,95% 1,75% 1,58% 1,76% 3,09% 3,36% 4,33%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Profit-sharing reserve (€bn) in % of insurance liabilities 12
Return on equity Consolidated net results (in €mn) Group equity capital (in €mn) 4,7% 12,2% 19,4% 11,1% 13,9% 8,1% 9,0% 8,4% 9,3% 8,8%
0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Consolidated Policyholder Surplus Reserves
+ €355mn
3 508 3 863 +308
+57 +3 2 000 2 500 3 000 3 500 4 000
2016 FY 2017 net income Fair value adjustment Mutual certificates Other impacts 2017
+10% compared to FY2016 x3 compared to 10 years ago 2017 net result : €308mn Increase of policyholder surplus reserve by €520 mn
50 100 150 200 250 300 350 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 La Mondiale FY 2017 earnings
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The average guaranteed rate decrease from 0.84% in 2016 to 0.79% in 2017.
€ bn La Mondiale FY 2017 earnings
2,1% 1,8% 1,5% 1,3% 0,84% 0,79% 10 20 30 40 50 60
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
0% guaranteed btw 0% and 1% btw 1% and 2.5% btw 2.5% and 3.5% btw 3.5% and 4.5% higher than 4.5% Average guaranteed rate
Liabilities with a gross guaranteed rate above 3.5%
35% 35% 9% 9%
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+241 bps +179 bps
Inforce business New business in 2017
Below zero long term guaranteed rate, consistent with market conditions
2.15% net of fees
* Weighted average based on statutory accounts
Yield on total Savings and Pensions assets base*
Savings and Pensions average guaranteed rate (mandatory) Profit sharing
Yield on Savings and Pensions fixed income assets
Savings and Pensions average guaranteed rate (1rst & 2nd years) Savings and Pensions average guaranteed rate (after 2nd year)
La Mondiale FY 2017 earnings
3,69% 3,40% 3,25% 3,13% 2,84% 2,64% 2,20% 2,15% 3,40% 3,00% 2,91% 2,80% 2,54% 2,27% 1,93% 1,84%
1,4% 1,6% 1,8% 2,0% 2,2% 2,4% 2,6% 2,8% 3,0% 3,2% 3,4% 3,6% 3,8%
2010 2011 2012 2013 2014 2015 2016 2017
Rémunération nette moyenne périmètre La Mondiale Rémunération nette des supports euros marché (FFA)
15
+29cts +31cts
+37cts
Net average credited rate La Mondiale Net average credited rate French market (FFA)
La Mondiale FY 2017 earnings
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Assets : global growth by +6.6% 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 Outstanding assets €94bn Historical asset allocation General Account
(*)including repo (sale and repurchase agreement)
Fixed Income (*) € 59,6 bn 87% Equities € 5.8 bn 8% Properties (**) € 3 bn 4% Others € 0,2 bn 0%
General account assets € 68,5 bn 73% Unit linked assets € 25,5 bn 27%
0 bn 5 bn 10 bn 15 bn 20 bn 25 bn 30 bn 35 bn 40 bn 45 bn 50 bn 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Property Equity Fixed Income
La Mondiale FY 2017 earnings
(**) IFRS figures – total value : €4.4bn
AAA 12% AA+ 3% AA 30% AA- 6% A+ 8% A 13% A- 8% BBB+ 11% Others 9%
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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 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.
Credit Exposure by Credit Rating Portfolio by maturity band Credit Exposure by Issuer Type A 29% A 29% BBB 11% BBB 11% AA 39% AA 39% AAA 12% AAA 12%
Sovereign 28% Guaranteed government bonds 3% Supra / Agencies 9% Covered bonds 10% Senior Financials 16% Sub Financials 5% Other corporates 29%
0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% < 1 year > 1 year to 3 years > 3 to 5 years > 5 to 7 years > 7 to 10 years > 10 to 30 years La Mondiale FY 2017 earnings
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Sovereign bond exposure Peripheral countries exposure
Total Sovereign exposure is at €15.4bn Sovereign exposure is 28% of total fixed income exposure
France 68% Peripheral 14% Belgium 9% Austria 3% Others 6%
Spain € 1 038mn 48% Ireland € 526mn 24% Italy € 459mn 21% Portugal € 159mn 7% Greece € 0mn 0%
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
La Mondiale FY 2017 earnings
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Total Equities exposure is €5.8bn, including €1.3bn through mutual funds 2017 performance at 12.5%, after 6.5% in 2016. An Equity portfolio well diversified by geography and sector A focus on large liquid Equity stocks traded on the main exchange markets
Equity investment performance Geographical breakdown (excl. mutual funds) Breakdown by sector
France 65% U.K. 10% Germany 8% Switzerland 8% Other 9%
0% 5% 10% 15% 20% 25% Technology Local Government. TMT Commodities Services Oil and Gas Health Industry Financial Instit. Consumer Goods
La Mondiale Equity DJ Stoxx 50
La Mondiale FY 2017 earnings
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Geographic breakdown (market value) Annual revenue (€ per sq.m) Total performance
0,0% 5,0% 10,0% 15,0% 20,0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 La Mondiale Property IPD (french market) 50 100 150 200 250 300 350 400 450 500 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Total Property exposure is at €3,0bn (fair value : €4,4bn) La Mondiale property assets represent 518 400 sq.m. and are mainly offices located in the center of 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
La Mondiale FY 2017 earnings
La Mondiale solvency ratio SGAM solvency ratio Key Sensitivities *
The 2017 Solvency 2 ratios increase by more than 20pts for La Mondiale at 277%, and more than 10pts for Sgam at 224%. The amount of the transitional measure on technical provision is €3.6bn for La Mondiale and €3.9bn for Sgam.
+19pts
+5pts Interest rate -50bps Interest rate +50bps Equity market -15% UL/GA mix (+5% UL, ie 38% instead of 33%)
In €bn
* Based on HY2017 calculation
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Eligible
funds bn 10,6 €
SCR bn 5,0 € 2016
Eligible
funds
bn 11,6 €
SCR bn 5,2 € 2017 213% 224% Eligible
funds bn 8,7 € SCR bn 3,4 € 2016 Eligible
funds bn 9,6 € SCR bn 3,5 € 2017 277% 256%
(estimated) La Mondiale FY 2017 earnings
457 768 197 10 191 499 340 256 5,05% 2,56%* 6,75% 1,94% 3,00% 3,38%* 7,07%* 2,58%* 24
1st call date breakdown (in €mn)
BoY2017 Subordinated Financial debts : €2,122mn
Fully hedged until 2019
management operations, Restricted Tier1 until 2026
EoY2017 and BoY2018 Operations : €596mn Issuance of two redeemable subordinated notes 30NC10 : € 340 mn ($400 mn) with a 1st call option in December 2027 and € 256 mn ($310 mn) with a 1st call option in January 2028
* : euro equivalent issuance rate, after hedging La Mondiale FY 2017 earnings
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Interest coverage SGAM Leverage SGAM
Interest coverage and Leverage remain in a satisfying range. 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 La Mondiale FY 2017 earnings
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(consolidated, IFRS)
€m TOTAL ASSETS 88 719 94 242 98 357 4,4% Intangible assets 68 63 62
56 54 52
Insurance investments 63 898 68 086 68 495 0,6% Unit Linked investments 21 360 22 829 25 498 11,7% Others assets 3 096 2 801 3 164 12,9% Cash and cash equivalent 298 462 1 138 146,3% FY 2017 %Change FY 2017/ FY 2016 FY 2016 FY 2015 €m TOTAL LIABILITIES 88 719 94 242 98 357 4,4% Equity Group Share 3 104 3 498 3 848 10,0% Minority Interests 9 10 14 50,0% Total Equity 3 114 3 508 3 863 10,1% Financing debt 1 599 1 590 2 304 44,9% Insurance and financial liabilities 77 685 82 224 85 472 4,0% Other liabilities 6 321 6 920 6 717
FY 2015 FY 2017 %Change FY 2017/ FY 2016 FY 2016
La Mondiale FY 2017 earnings
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(consolidated, IFRS)
€m Revenue 6 790 6 611 6 205
Financial Products 3 431 2 381 2 549 7,1% Others 798 839 1 625 93,6% Current operating income 11 018 9 831 10 379 5,6% Current operating expenses
5,6% Operating Income 365 360 380 5,7% CONSOLIDATED NET RESULT 251 288 308 6,9%
251 288 308 6,9%
FY 2015 FY 2016 FY 2017 %Change FY 2017/ FY 2016
La Mondiale FY 2017 earnings
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Premiums (in €mn) Liabilities (in €mn) La Mondiale premiums growth vs Market
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 2007
Index base 100 = 2008
** CAGR : Compound Annual Growth Rate
* France + Luxembourg (Source : Fédération Française de l’Assurance and Commissariat aux assurances Luxembourg)
4 408 4 171 3 237
345 325 292
4 753 4 497 3 529
FY 2015 FY 2016 FY 2017
Private Wealth Management Retail Savings 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 50 000 55 000 20072008200920102011201220132014201520162017 La Mondiale FY 2017 earnings
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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)
Self employed retirement plans market share in 2016
French Market Total estimated premiums : 2.7 €bn
Premiums (in €mn) Liabilities (in €mn)
* France (Source : Fédération Française de l’Assurance)
869 882 864
FY 2015 FY 2016 FY 2017
2 000 4 000 6 000 8 000 10 000 12 000 20072008200920102011201220132014201520162017 La Mondiale FY 2017 earnings
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Group supplementary pension market share in 2015**
French Market Total estimated premiums : €5.6bn
Premiums (in €mn) Liabilities (in €mn)
***
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
* France (Source : Fédération Française de l’Assurance) ** 2016 non available *** without L.441
987 1 078 1 669
FY 2015 FY 2016 FY 2017
4 000 8 000 12 000 16 000 20 000 24 000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 La Mondiale FY 2017 earnings
400 1269
Exceptional
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Prévoyance have the same rating;
approach;
net-worth individual savings, self-employed, and group pension contract segments;
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;
Solvency 2, on January 1, 2018. The strengthening of financial solidarity among the members of the Group is particularly highlighted;
management and governance are satisfactory. On october 5, 2017 Standard & Poor’s maintained its long-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 expect both entities to become a full prudentially regulated group under Solvency 2 and gradually strengthen its capitalization.
A-, outlook stable
La Mondiale FY 2017 earnings
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SCR
(as of 12/31/2017)
15% of diversification benefit (1) 15% of diversification benefit (1)
(1) Diversification benefit = (sum of net SCR excluding Operational risk SCR - net BSCR) / sum of net SCR excluding Operational risk SCR Basic Own Funds 3% Reconciliation reserve 81% Subordinated liabilities (Restricted T1) 17%
Breakdown of Tier 1
Tier 1 8 977 Tier 2 645
2017 Own Funds (M€)
Tier 1 93% Tier 2 7%
100% of own funds
Tier 1 258% Tier 2 19%
277% of SCR Own funds tiering
La Mondiale FY 2017 earnings
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Investor Relations - Contact: infosfinancieres@ag2rlamondiale.fr
AG2R LA MONDIALE 104-110, boulevard Haussmann, 75008 Paris - France http://www.ag2rlamondiale.fr
La Mondiale FY 2017 earnings