Investor Day 2011 - Asia: The Ageas Approach
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Investor Day 2011 - Asia: The Ageas Approach

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Gary Christ, CEO Asia, on Ageas's activities in Asia

Gary Christ, CEO Asia, on Ageas's activities in Asia

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Investor Day 2011 - Asia: The Ageas Approach Investor Day 2011 - Asia: The Ageas Approach Presentation Transcript

  • INVESTOR DA Y 29 September 2011 Asia: The Ageas Approach 25-9-2011 The Ageas Approach – Gary Crist | 29/9/11 Gary Crist Ageas in Asia - A decade of value creation CEO Asia 1 1
  • A view on the growth potential in Asia Growing mortality protection gap New Swiss Re study highlights a USD 120 bn sales opportunity for the industry in Asia: Life insurance  Study highlights the opportunity for insurers who can move beyond traditional sales channels into broader channels with more direct access to customers combined with the capacity for better analytics and segmentation. Source: Swiss Re report, September 2011 The Ageas Approach – Gary Crist | 29/09/11 2010 3,731 6,521 11,162 18,745 18% Japan  40% of respondents to the survey said families would or might struggle financially in the event of an early death to the main breadwinner with 50% of the respondents willing to pay at or above market rates for life insurance. 2007 China Resources readily available Savings 2004 6,204 6,555 6,314 8,445 3% India 2,045 3,061 4,876 6,676 13% South Korea 1,759 2,477 3,688 3,615 7% Australia 550 822 1,027 989 6% 256 443 531 711 11% Thailand Income to maintain living standard Mortality protection gap 2000 Indonesia Resources required USD bn 294 321 465 533 6% Hong Kong 396 401 425 473 2% Malaysia 171 224 288 380 8% Vietnam 99 142 240 365 14% Singapore 154 170 225 305 7% Taiwan 103 234 197 175 5% 15,762 21,372 29,437 41,411 10% Total CAGR 2
  • A view on the growth potential in Asia (ct’d) Insurance penetration vs. per capita income Total Insurance Penetration (%) Total (Life & Non-Life) Insurance Pentration 2010 20 18 Taiwan 16 14 12 10 8 6 4 Hong Kong Korea Japan Australia India Thailand Malaysia China 2 0 Indonesia, Philippines, Vietnam 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Per Capita Premium (EUR) Penetration equals Total Premiums / GDP Source: Swiss Re Sigma report, No 2 / 2011 The Ageas Approach – Gary Crist | 29/09/11 3
  • A view on the growth potential in Asia (ct’d) Total premium growth and premium vs. GDP, Life only Real total premium growth (%) in 2010* Premium Income (% of GDP 2010) 25 17.5 23 17 15 14 10.1 8.0 11 11 10 8 8 6 9 9 7 7 7 6.0 7 7 4.7 3.5 Real Premium Growth 3.1 2.9 1.2 Ph i lip (5) -3 0.8 0.7 Ta iw an on g Ko So ng ut h K or ea Ja pa Si n ng ap or e In di M a al ay si Th a ai la nd C hi n In do a n Ph es ia il i pp in es Vi et na m 1 H 1 Ja pa n an Th ai la nd H on g Ko ng M al ay si a Si ng ap or e Vi et na So m ut h Ko re a Ta iw In di a hi na In do ne si a 0 pi ne s 2 C 7.8 Real GDP Growth Source: Real GDP growth Japan – www.oecd.org. For other countries, Asian Development outlook 2011 published by the Asian Development Bank * Note: For India, Japan and South Korea data are FY 09 based. For the Philippines data shown are 09 based The Ageas Approach – Gary Crist | 29/09/11 4
  • A view on the growth potential in Asia (ct’d) Premium per capita and savings rates Premium per Capita (2010)* In USD 3,191 3,184 3,124 2,485 1,376 es ia Ph ilip In do n C 13 8 s Vi et na m 34 In di a hi na Si ng ap or So e ut h Ko re a M al ay sia Th ai la nd 50 pi ne 116 140 Ja pa n H on g Ta iw Ko n g an 261 Savings (% of GDP 2009) 51 48 36 32 32 30 30 30 27 26 The Ageas Approach – Gary Crist | 29/09/11 s pi ne Ph ilip an Ta iw Vi et na m Ko re a g Ko n So ut h H on g In di a C hi na Si ng ap or e M al ay sia In do ne si a Th ai la nd 16 Source: Real GDP growth Japan – www.oecd.org. For other countries, Asian Development outlook 2011 published by the Asian Development Bank *Note: For India, Japan and South Korea the data shown is are FY09 based. For Philippines, the data shown are 09 based 5
  • 2020 : Asian market expected to grow further Ageas well placed to strengthen its market position India : 2020 2010 Inhabitants : 1,217 m Real GDP/capita: USD 1,029 GWP: USD 78 bn Penetration: 6.3% 1,387 m USD 2,046 USD 222 bn 7.8% . . Hong Kong (100% owned) 2010 Inhabitants: 7m Real GDP/capita: USD 30,369 GWP : USD 26 bn Penetration: 11.9% Thailand : 2010 Inhabitants : 68 m Real GDP/capita: USD 3,081 GWP : USD 14 bn Penetration: 6.5% China: 8m USD 42,669 USD 36 bn 10.9% 2020 72 m USD 4,512 USD 38 bn 11.5% 2020 2010 Inhabitants : 1,355 m Real GDP/capita: USD 2,831 GWP : USD 215 bn Penetration: 5.6% 2020 1,386 m USD 5,956 USD 578 bn 7.0% 2010 GWP: USD 345bn Source : Sigma 2002 (Swiss Re), Global Insight The Ageas Approach – Gary Crist | 29/09/11 Malaysia: 2010 inhabitants : 28 m Real GDP/capita: USD 6,137 GWP : USD 12 bn Penetration: 6.9% 2020 33 m USD 8,192 USD 22 bn 8.0% 2020 GWP: USD 896bn 6
  • Profile: Ageas in Asia A strong base for continued growth Distribution Mix, December 2010* Key financial data EUR mio FY 07 FY 08 FY 09 FY 10 Gross inflow * Life Non-Life 2,869 2,570 299 3,292 2,955 337 4,071 3,689 382 6,093 5,578 515 80 9 91 94 Net profit ** (9%) Other (32%) Agents Core skills     Partnership selection and management Proven skill transfer Bancassurance Multi-Channel distribution  Agency management and training  Affinity marketing  Direct marketing  Channel conflict management  Product development and Management  ALM and Risk management (59%) Bancassurance Gross Inflow by Country, December 2010* Hong Kong (6%) India (2%) Thailand (14%) Malaysia 18% China 60% *Gross inflow based on 100% company revenues ** Net profit based on Ageas’ stake The Ageas Approach – Gary Crist | 29/09/11 9/25/2011 7
  • Asia: Leading international Life insurers premium income 2010 Leadership positions in Ageas markets In EUR mio India Hong Kong 22,080 Thailand China Malaysia 10,994 5,164 1,268 et lif e a 1,173 M C 1,577 NY Li fe ar di f 1,699 Av iv 1,927 IN G 1,972 BN P M 2,202 Li fe 2,507 an ul if e nz lia Al Ag ea s AI Pr G ud en t ia l( UK ) h Zu r ic HS B C 2,759 Su n 5,791 AX A 6,498 Source: Asian Life Insurance Market update 2011, Towers Watson Premiums, unweighted for Single Premiums Premiums on a 100% basis, no adjustments for minority holdings AXA is post divestment of its financial stake in Taikang Life The Ageas Approach – Gary Crist | 29/09/11 8
  • Asia: Leading international Life insurers premium income 2010 Leadership positions in Asia, ex Japan In EUR mio Philippines 22,942 Singapore Vietnam S. Korea Taiwan Indonesia 15,195 India Hong Kong 12,401 Thailand 11,095 China Malaysia 7,114 5,164 2,024 NY Li fe Li fe 2,195 Su n a 2,248 Av iv 2,795 AX A e 3,299 et lif an ul if e 3,564 M ar di f C BN P Ag ea s IN G nz lia Al h Zu r ic AI G Pr ud en t ia l( UK ) HS B C 4,002 M 5,503 Source: Asian Life Insurance Market update 2011, Towers Watson Premiums, unweighted for Single Premiums Premiums on a 100% basis, no adjustments for minority holdings AXA is post divestment of its financial stake in Taikang Life The Ageas Approach – Gary Crist | 29/09/11 9
  • Ageas’ approach in Asia The key to long term success The general strategic approach of Ageas in Asia is focused on building market leading insurance businesses with strong distribution partners and leading financial institutions.  Recognition that Ageas is a retail insurer where local distribution and expertise are critical success factors  Focus on a limited number of select markets with attractive fundamentals where Ageas’ core skills can enhance returns  Consistent, disciplined approach to investment opportunities  Partner with strong institutions that share common goals and objectives where it is possible to align interests  Combine partner’s skills, knowledge and local presence with Ageas’ insurance expertise A strategy of focused & controlled growth, based on added value to the partnership, is key to long term success. The Ageas Approach – Gary Crist | 29/09/11 10
  • High level strategy for the region Building sustainable growth Growth by partnership or acquisition Focus on selected markets Organic growth Focused commercial activity reflected in growth in top-line and VANB Building a critical talent pool for business growth Sustainable growth Strong focus on Knowledge Brokers role, adding value to the partnerships resulting in long term profitability Optimize operating efficiency Combine local and partner’s skills, knowledge and presence with Ageas’ expertise High standards of corporate governance The Ageas Approach – Gary Crist | 29/09/11 11
  • Basis for sustainable value adding partnerships Ageas’ approach to partnerships is both unique and effective  Solid partners   Rigorous partner selection process, predicated on  Common Goals  Common Values  Alignment of interests Complimentary Value Added from each partner Serious partners with good reputations Ageas’ Asian Partnerships have weathered the dual stress test of the global financial crisis and the Fortis meltdown  Active governance participation  Strong formal agreements and documentation on  Governance structure  Defined terms of reference  Defined protections in joint venture agreements Active, broad and deep participation in governance bodies (board + board committees) Active management participation    Management participation focused on control and risk functions Grooming & delivering quality people Adaptability to changing needs Active regional support: Knowledge brokers across multiple domains     Distribution: Bancassurance, Agency, Direct Products: Development and Management Risk Management, ALM, Investment Management Corporate Governance The Ageas Approach – Gary Crist | 29/09/11 12
  • Active governance participation Overview of governance committees in Asian activities Board Committees in the Various Operating Companies Risk Management Committee Investment Committee Audit Committee Nomination/ remuneration committee Executive Committee Malaysia      China      Thailand      Hong Kong  NA  India  The Ageas Approach – Gary Crist | 29/09/11 (mgt level committee)  (mgt levelcommittee)    (100% Ageas subsidiary)  (mgt level committees)  13
  • Active management participation with strong governance Supplemented by Ageas secondees in key management positions Ageas Regional Structure  Asia CEO: Gary Crist  Asia CFO : Filip Coremans  Proportional Board and Committee representation  Regional functions: Hong Kong (100% owned)  Knowledge broking  Reporting and Control  Expansion of the franchise .   Board: 7 Ageas and 3 independent Directors Management: local talent and 5 Ageas expats . India : Thailand :   Chief Financial Officer  Chief Operating Officer  Chief Actuary/Appointed Actuary Chief Actuary Deputy Chief Financial Officer/ Chief Investment Officer  Head of Bancassurance  Head of Motor Group  Adviser to the CEO on Technology  China:      Chief Actuary/ Appointed Actuary Chief Risk Officer/ Chief Investment Officer Deputy GM Shared Service Centre Chief Risk Officer Taiping Asset Management Ageas China representative office The Ageas Approach – Gary Crist | 29/09/11 Malaysia:  Chief Marketing Officer  Chief Risk Officer  Head of Bancassurance (at Maybank) Note: The current CEO of Mayban Ageas Holdings , Hans De  Cuyper, was seconded to Malaysia as CFO from 2007 to March  2011. Hans resigned from Ageas in March, was nominated by  Maybank and elected CEO. 14
  • Active regional support Governance, risk and commercial development Management Support & Governance Board Board & Management Committees Secondees Finance & Risk Risk Management Corporate Finance & Investment Management Finance & Reporting Audit , Legal & Compliance Commercial Development Product Management & Development Alternate & Direct Distribution Agency Distribution Bancassurance The Ageas Approach – Gary Crist | 29/09/11 15
  • Case study, Etiqa; ten year evolution in value added support Multiple roles and projects based on strategic needs with support across multiple levels Major Projects General Management  Major M&A projects  Project management, merging Etiqa and MNI Risk & Reporting  Embedded Value  Product Development Value New Business  Alternate Direct Distribution IT/ Operations Training Academy  Network redesign Shared services  Redesigning Operations  IT Projects Motor operations Head of Distribution Development  COO  Head of IT Customer Segmentation (2)  Business Analyst      Product Management & Positioning Retail Development Project management (2) Head of Motor Claims  Dpty Head Project Mgmt  Branch redesign  DM/TM  Customer Segmentation  Internet  Social Media Model design Risk Mgmt & Governance  Bancassurance   IFRS  Agency Transformation Audit & Compliance  Ageas Secondees; 22 over 10 years, average tenure – 3 years  Deputy CEO  AA (2)  CMO (2)  Two to three members of the Senior Management Committee at any given time  Chief Actuary Non-Life  Head of Products    Head of Bancassurance  CFO (2) CRO Ageas sourced support Regional Office / Head Office Regional Office, Head Office The Ageas Approach – Gary Crist | 29/09/11 Regional Office, Millennium BCP Regional Office, AICA Regional Office / Head Office, AG Insurance, BCP Millennium, MTL Regional Office, Ageas UK Regional Office / Head Office, Ageas UK 16
  • Conclusion Transformed from a greenfield to a critical component of Ageas today  Focus on continuing to build value  Focus on partnerships and skill transfer  Continued significant influence in management and governance of partnerships  Bright future built on strong foundations The Ageas Approach – Gary Crist | 29/09/11 17
  • Disclaimer slide Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Future actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in Ageas’s core markets, (ii) performance of financial markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels, (vii) currency exchange rates, (viii) increasing levels of competition, (ix) changes in laws and regulations, including monetary convergence and the Economic and Monetary Union, (x) changes in the policies of central banks and/or foreign governments and (xi) general competitive factors, in each case on a global, regional and/or national basis. In addition, the financial information contained in this presentation, including the pro forma information contained herein, is unaudited and is provided for illustrative purposes only. It does not purport to be indicative of what the actual results of operations or financial condition of Ageas and its subsidiaries would have been had these events occurred or transactions been consummated on or as of the dates indicated, nor does it purport to be indicative of the results of operations or financial condition that may be achieved in the future. The Ageas Approach – Gary Crist | 29/09/11