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

1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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