Axa Sa · EURONEXT:CS
Axa Sa — H1 2011 Earnings Presentation
47 slides from Axa Sa's earnings presentation, Aug 4, 2011
Slide 1: Half Year 2011 Earnings Appendices
Half Year 2011 Earnings August 4, 2011 Appendices
Slide 2: Table of content
Table of content Group Life & Savings Property & Casualty Asset Management Balance sheet 2 – AXA HY11 Earnings – August 4, 2011
Slide 3: Revenues by segment
Revenues Revenues by segment Reported Comparable In Euro million 1H10 1H11 basis basis Life & Savings 30,812 27,841 -10% -7% Property & Casualty 14,691 15,350 +4% +3% Asset Management 1,670 1,658 -1% +3% International Insurance 1,762 1,739 -1% +1% Banking & Holdings 218 248 +14% +13% Revenues 49,153
Slide 4: Underlying Earnings by region
Underlying Earnings by region In Euro million Underlying Earnings 1H10 1H11 % Reported % constant FX Life & Savings 1,320 1,310 -1% -1% North America 229 345 +50% +59% France 345 379 +10% +10% (1) NORCEE 301 300 0% -5% UK & Ireland 119 -8 -107% -107% Asia-Pacific 268 252 -6% -11% MedLA 67 56 -16% -1
Slide 5: From Underlying Earnings to Net Income
From Underlying Earnings to Net Income Net realized capital gains/losses Key drivers of change in Net income In Euro million 1H10 1H11 In Euro million 1H10 1H11 Underlying Earnings 1,997 2,222 Adjusted Earnings 2,187 2,393 Net realized capital Change in fair value 213 162 gains/(losses) 190 171 Of w
Slide 6: HY11 sensitivities
HY11 sensitivities Impairments Net Income In Euro billion OCI net of hedges (including impairments) § -25% -0.5 -0.7 -1.6 Equities § +25% 0.0 +0.5 +2.2 § -100 bps n.a. +0.4 +6.4 Interest rates § +100 bps n.a. -0.1 -5.9 § -75 bps n.a. +0.2 +1.4 Corporate spreads § +75 bps n.a. -0.2 -1.4 6 – AXA HY11
Slide 7: Table of content
Table of content Group Life & Savings Property & Casualty Asset Management Balance sheet 7 – AXA HY11 Earnings – August 4, 2011
Slide 8: Life & Savings
Life & Savings 1 Revenues, new business volumes and profitability page 9 2 Underlying earnings margin analysis page 11 3 Underlying earnings margin analysis by product page 17 8 – AXA HY11 Earnings – August 4, 2011
Slide 9: L&S – Revenues and net inflows
1 L&S – Revenues and net inflows L&S revenues by region In Euro billion Mediterranean France & LA region L&S Net inflows æ -3% In Euro billion 2.3 æ -45% 7.1 +6.0 United High +0.9 NORCEE +3.6 9.3 States growth æ +0% 4.8 +1.0 æ +7% +5.2 Mature +2.6 4.0 0.3 Asia-Pacific HY10 HY11 UK &Ireland (incl. Ja
Slide 10: L&S – Underlying earnings margin analysis
2 L&S – Underlying earnings margin analysis Gross Margin Expenses Comp. Comp. In Euro million 1H11 In Euro million 1H11 Change(1) Change(1) Margin on revenues(2) 2,378 +2% Acquisition expenses 1,934 +20% Margin on assets 2,545 +9% Admin. Expenses 1,703 +1% Technical margin 645 +38% VBI amortization
Slide 11: L&S – Margin analysis: margin on revenues
2 L&S – Margin analysis Details of margin on revenues Margin on revenues Average margin on L&S revenues(1) è è 8.5% +10% +8% business mix Margin on revenues(1) +2% country mix x Euro 2,378 million +2% è è Life & Savings revenues Euro 27,841 million -7% è è æ Changes are on a comparable basis (1) Lif
Slide 12: L&S – Margin analysis: unit-linked assets
2 L&S – Margin analysis Details of margin on unit-linked assets Unit-linked management fees Average management fees on unit-linked reserves (in bps) 71 bps è 142 bps annualized +5% Unit-linked +3% business mix management fees +2% country mix x Euro 1,015 million +14% è è Margin on assets(1) + Unit-l
Slide 13: L&S – Margin analysis: General Account assets
2 L&S – Margin analysis Details of margin on General Account assets Investment margin Unit-linked management fees è Euro 1,015 million +14% Margin on assets(1) + Average management fees on +9% è è Euro 2,545 million general account reserves (1) Including other fees (mainly mutual fund 38 bps è è and
Slide 14: L&S – Margin analysis: technical margin
2 L&S – Margin analysis Details of technical margin Technical margin & other Mortality & morbidity margin & other(1) Euro 737 million -13% è Technical margin + See next page +38% è è Euro 645 million VA hedge margin +76% è Euro -92 million In Euro million Basis -41 Volatility (equity and interest ra
Slide 15: L&S – Focus on gross technical margin
2 L&S – Margin analysis Focus on gross technical margin Gross mortality, morbidity & surrender margin (pre-tax) In Euro million § Euro -70 million from earthquake in Japan 903 737 § Euro -63 million in France mainly following regulatory changes on “CMU” levy and the new pensions law § Euro -15 milli
Slide 16: L&S – 1H11 Underlying Earnings by business
3 L&S –1H11 Underlying Earnings by business Strong contribution of Protection & Health business Euro million 1H11 Pre-tax UE Comparable change G/A Protection & Health 1,094 +1% G/A Savings 392 +11% Unit-Linked 358 +52% Mutual funds & Other 23 +2% Pre-tax underlying earnings 1,867 +10% Tax and minori
Slide 17: L&S – 1H11 Margin analysis by business
3 L&S – 1H11 Margin analysis by business G/A Protection Mutual Funds & G/A savings Unit-linked & Health Other Margin on 8.5% 1,861 173 276 premiums % of GWP 75 bps Investment 362 819 53 margin of avge G/A reserves Management 142 bps fees 1,015 of avge UL reserves Technical margin & Oth. 596 49 7 Gro
Slide 18: L&S – G/A Protection & Health
3 L&S –Margin analysis by business G/A Protection & Health Technical result Net investment margin Comp. Comp. In Euro million 1H11 In Euro million 1H11 change change Protection & Health Protection & Health GWP 13,768 +3% 152,500 +3% Average reserves x x Protection & Health Protection & Health 94.8%
Slide 19: L&S – G/A Savings
3 L&S – Margin analysis by business G/A Savings In Euro million Comp. Comp. 1H11 1H11 change change G/A Savings G/A Savings 6,866 -28% 176,023 +4% Gross revenues average reserves x x Average margin on G/A Savings average 2.5% +0.3 pt 93 bps* +4 bps* G/A Savings revenues Investment spread Comp. 1H11
Slide 20: L&S – Unit-Linked
3 L&S – Margin analysis by business Unit-Linked Comp. Comp. In Euro million 1H11 1H11 change change Unit-linked Unit-linked 6,310 +5% 142,674 +9% Gross revenues Average reserve x x Average margin on Unit-linked average 4.4% +0.7 pt 142 bps* +4 bps* Unit-linked revenues Management fees Comp. 1H11 cha
Slide 21: Table of content
Table of content Group Life & Savings Property & Casualty Asset Management Balance sheet 21 – AXA HY11 Earnings – August 4, 2011
Slide 22: P&C – Revenues and net new contracts
P&C – Revenues and net new contracts P&C revenues by region P&C personal net new contracts Direct In thousands In Euro billion æ +9% +771 France +639 Asia High +415 1.1 æ +2% Growth +368 æ -2% 0.2 3.0 Direct +127 Mature +281 +229 Mediterranean 3.4 Region 1.9 UK &Ireland -10 1H10 1H11 æ +3% æ +2% 5.8
Slide 23: P&C – Underlying Earnings analysis
P&C – Underlying Earnings analysis Net technical result Net investment income Comp. Comp. In Euro million 1H11 In Euro million 1H11 Change Change Revenues 15,350 +2.7% Average P&C assets 55,012 -1% x x Combined ratio(1) (in %) 97.2% -1.3 pts Average asset yield(3) 3.7% +1% (1) Combined ratio calcula
Slide 24: P&C – Details on Combined Ratio
P&C – Details on Combined Ratio Loss Ratio (%) -0.6 pt Combined Ratio è 71.1% +2.5 pts 70.4% 98.6% 97.2% -1.6 pts -1.5 pts HY10 Current Nat cat(1) Prior year HY11 Loss 71.1% accident reserve Ratio year Dev. 70.4% -0.5 pt change on a comparable basis Expense Ratio (%) -0.7 pt Of which -0.2 pt Expense
Slide 25: P&C – Focus on reserve developments
P&C – Focus on reserve developments Prior year reserve development level (in % of gross earned premiums) 6.0% 5.4% 5.4% 4.5% 2.7% 3.3% 0.9% 1.4% 2.0% 0.3% 2004 2005 2006 2007 2008 HY09 2009 HY10 2010 HY11 Reserving ratio (Net technical reserves/Net earned premiums) 193% 193% 194% 198% 199% 196% 186%
Slide 26: P&C – Details on current year loss ratios
P&C – Details on current year loss ratios Personal Motor Personal non motor 79.7% 69.3% -0.3 pt +1.4 pts 76.6% -3.4 pts +0.8 pt 64.4% -0.7 pt +1.6 pts -4.7 pts -2.6 pts (1) HY10 Current Nat cat Price eff ect Frequency & Others (1) HY 11 Current HY10 Current Nat cat Price eff ect Frequence & Others H
Slide 27: Table of content
Table of content Group Life & Savings Property & Casualty Asset Management Balance sheet 27 – AXA HY11 Earnings – August 4, 2011
Slide 28: AM – Underlying Earnings margin analysis
AM - Underlying Earnings Details of Asset Management margin analysis Margin Expenses Comp. Comp. In Euro million 1H11 In Euro million 1H11 Change Change Asset Management Asset Management fees 1,457 +2% 1,169 +2%(1) expenses Distribution revenues 201 +9% Investment result 43 -41%(1) Distribution expe
Slide 29: AM – Asset Management revenues
AM – Underlying Earnings Details on Asset Management revenues Average Asset Management fees on Assets under Management 17 bps è è (34 bps on a annualized basis) +2% Asset Management fees x è Euro 1,457 million +2% è Average Assets under o/w performance fees (Euro 46 million, +64%) o/w research fees
Slide 30: Table of content
Table of content Group Life & Savings Property & Casualty Asset Management Balance sheet 30 – AXA HY11 Earnings – August 4, 2011
Slide 31: Balance sheet
Balance sheet 1 General accounts invested assets Page 32 1.1 Government bonds & related page 33 1.2 Corporate bonds page 34 1.3 CDS page 36 1.4 ABS page 37 1.5 Equity page 39 1.6 Real Estate page 40 1.7 Hedge Funds page 41 1.8 Private Equity page 42 1.9 Mortgage loans page 43 2 Solvency Page 44 3 Ne
Slide 32: General Account invested assets
1 General Account invested assets Invested assets (100%) In Euro billion FY10 % 1H11 % Changes in asset allocation Fixed income 365 83% 356 82% § Scope effect: Euro -3 billion related to the announced sale of Canadian operations, o/w Govies and related 188 42% 187 43% mainly govies and corporate bon
Slide 33: 1.1 Government bonds and related at market value
1.1 Government bonds and related at market value Government bonds and related gross portfolio by country (Euro 187 billion gross) US 5% Asia 13% Other 5% Italy 9% Spain 5% Portugal 0.8% France 23% Greece 0.4% Ireland 0.4% NORCEE(1) 37% (1) AXA NORCEE + Austria & Netherlands Government bonds and rela
Slide 34: 1.2 Corporate bonds
1.2 Corporate bonds Corporate bonds portfolio by industry A average rating (Euro 142 billion gross) Other 11% Basic Materials BBB AAA Energy 4% 20% 10% 5% Others Consumer 3% Cyclical AA 5% 19% A Industrial 40% 6% Financials 49% Utilities § Preferred shares: Euro 0.2(1) billion 8% § Tier 1 debt: Euro
Slide 35: Corporate bonds breakdown by country
1.2 Corporate bonds breakdown by country (including CDS) P = Participating NP = Non-participating Euro billion As of June 30, 2011 US UK Japan Germany Switzerland France Other(1) Total P NP NP NP P NP P NP P NP P NP P NP AAA 0 0 1 2 0 3 1 4 2 1 1 10 5 AA 2 0 5 2 0 3 1 6 2 4 2 15 12 A 10 1 6 5 1 6 1
Slide 36: 1.3 Corporate bonds: focus on CDS overlay strategy
1.3 Corporate bonds: focus on CDS overlay strategy § CDS overlay Investment Strategy: CDS are used as an alternative to investment grade corporate bonds Net Net Euro million Notional Notional As of Dec 31, 2010 As of June 30, 2011 AAA 126 119 AA 667 954 A 4,265 3,830 BBB 1,418 1,433 Below invst. gra
Slide 37: 1.4 Asset Backed Securities by underlying type of asset
1.4 Asset Backed Securities by underlying type of asset Economic breakdown of ABS by asset type(1) Ca. 55% AAA & AA As of June 30, 2011 Total ABS = Euro 8.1 billion(3) Mortgage-backed Other asset-backed AAA AA 33% 22% NC RMBS A € 0.1 billion NR/Equity 7% CLO 8% US Subprime & Alt-A BBB € 2.9 billion
Slide 38: 1.4 Credit risk management: ABS investments
1.4 Credit risk management: ABS investments Group ABS exposure decreased mainly driven by: • change in scope (announced sale of Canada for Euro 0.2bn) • net sales and maturities for Euro 0.7bn, mainly Prime RMBS and CMBS • forex effect for Euro -0.2bn • prices remained overall stable Group ABS Expos
Slide 39: 1.5 Update on equity hedges
1.5 Update on equity hedges Euro 8 billion net equity exposure Estimated shareholders’ exposure as of June 30, 2011 In Euro billion FY10 1H11 (excluding Australia/NZ assets that (excluding disconstinued Canadian are accounted as held for sale) assets) 18 18 9 8 Gross Group share net Gross Group shar
Slide 40: 1.6 Real Estate investments
1.6 Real Estate investments Defensive portfolio with good performance over the long term Key indicators Market value 1H11 market value by Split by type (in Euro billion) country France Switz. Belgium Germany France 23(1) Office ~50% ~45% ~75% ~70% 37% Residential ~10% ~50% ~0% ~5% Other 5% Commercia
Slide 41: 1.7 Hedge Fund investments
1.7 Hedge Fund investments Stable performance Key indicators Market value (in Euro billion) Exposure and concentration risk • Mostly management of funds of hedge funds 5 • Stable exposures throughout 1H11 • Top 10 fund managers represent ~30% of portfolio market value • Broad strategy diversificatio
Slide 42: 1.8 Private Equity investments
1.8 Private Equity investments Diversified portfolio built over the long run Key indicators Market value Breakdown by geography Breakdown by expertise Performance (in Euro billion) 7 Europe AXA Private Equity voted 57% Others ~69% Buyout “French Private Equity Infras- 3% Firm of the Year” and Asia 3
Slide 43: 1.9 Mortgage loans & other
1.9 Mortgage loans & other Low risk mortgage loan portfolio Key indicators 1H11 market value by country Market value (in Euro billion) Other Germany 100% Residential 18 8% HY11 default rate 29% Switzerland 0.14% HY11 loan to value 39% 100% Residential 23% 75% Commercial 60% United Agricultural 25% S
Slide 44: Continued increase in Solvency I ratio
2 Continued increase in Solvency I ratio Solvency I ratio at 186% +10 pts 186% 186% 182% 25% 171% -6 pts 18% 27% 154% Negative impact from 127% higher interest rates partly offset by Forex FY06 FY07 FY08 FY09 FY10 Market 1H11 Underlying effects Earnings UCG on fixed income assets & Other 44 – AXA HY
Slide 45: Solvency I reconciliation to shareholders' equity & sensitivities
Solvency I reconciliation to shareholders’ 2 equity & sensitivities Available financial resources(1) Solvency I In Euro billion In Euro billion SH equity 100% 49 42 Intangibles(2) - 28 Surplus 19 Admitted sub debt(3) +4 Locally admitted assets +3 Requirement 23 Dividend to be paid 0 Real estate(4) +
Slide 46: Economic solvency model
2 Economic solvency model Coverage ratio 1H11 Economic capital by geography Holdings & other UK 12% France 8% 184% 5% 22% Asia 10% 23% 178% 11% Pacific 10% 167% 18% 23% US & 22% NORCEE 21% Canada 8% 7% MedLA 100% basis, before diversification 1H11 Economic capital by risk Operational P&C risks 7% FY
Slide 47: Net financial debt and long-term maturities
3 Net financial debt Long-term maturities Total net debt Contractual maturity breakdown In Euro billion In Euro billion ¾ Undrawn credit lines Euro 12 billion ¾ Cash & cash equivalent Euro 23 billion 15.2 14.4 13.5 7.7 7.4 7.4 Economic maturity breakdown In Euro billion 6.7 6.5(1) 6.0 0.2 0.9 0.5(2)