Bangkok Life Assurance Public Co., Ltd. · SET:BLA

Bangkok Life Assurance Public — Bangkok Life Assurance — FY2020 Earnings Presentation

29 slides from Bangkok Life Assurance Public's earnings presentation, Feb 25, 2021

  1. Slide 1: 2020 Results Presentation

    2020 Results Presentation Investors and Analyst update 25 Feb 2021 © Bangkok Life Assurance

  2. Slide 2: Agenda

    Agenda 1 2020 performance summary 2 Key Highlights 2.1 Premiums and Business & Operation 2.2 Investments 2.3 P&L and Key accounting change 2.4 EV & VNB 3 Outlook 4 Q&A © Bangkok Life Assurance 2

  3. Slide 3: Synopsis of performance in 4Q20

    Synopsis of performance in 4Q20 • 4Q20 profit: Net profit -75% YoY mainly due lower investment income and ECL/impairment. • Overview of the performance: FYP -22%. By distribution channel: • Bancassurance: FYP -45% YoY as the focus shifted to planning for 2021 • Agent: FYP +6% YoY from recapturing an

  4. Slide 4: Synopsis of performance in 2020

    Synopsis of performance in 2020 • 2020 profit: Net profit -63% YoY mainly due to extra PAD reserve (one-time item). Other contributing factors include lower RYP and investment income. • FYP +6% vs. industry -11%. Exclude SP BLA +29%, industry -7% • Bancassurance: FYP +13% vs. industry -9% due to tac

  5. Slide 5: Agenda

    Agenda 1 4Q20 and 2020 performance summary 2 Key Highlights 2.1 Premiums and Business & Operation 2.2 Investments 2.3 P&L and Key accounting change 2.4 EV & VNB 3 Outlook by CEO 4 Q&A © Bangkok Life Assurance 5

  6. Slide 6: 4Q20: FYP -22% (mainly from banc), RYP +3%

    4Q20: FYP -22% (mainly from banc), RYP +3% FYP RYP TYP -22% +3% -2% Unit : Million Baht 6,851 8,210 8,045 1,528 6,682 1,194 69% 43% 39% 45% 45% 45% Bancassurance 58% 40% Agent Channel Others 54% 50% 50% 52% 31% 42% 11% 18% 3% 3% 5% 5% 4Q19 4Q20 4Q19 4Q20 4Q19 4Q20 3% 5% 6% Market Shares Industry Gro

  7. Slide 7: 2020: FYP +6% (driven by banc) vs. industry -11%

    2020: FYP +6% (driven by banc) vs. industry -11% RYP -4% from fully-paid as expected FYP RYP TYP +6% -4% -3% Unit : Million Baht 6,550 35,693 34,745 6,198 29,495 28,195 69% 55% 39% 53% 56% 55% Bancassurance 60% 65% Agent Channel Others 31% 26% 40% 42% 38% 39% 9% 9% 5% 5% 6% 6% 2019 2020 2019 2020 20

  8. Slide 8: Banca: 4Q20 FYP -45%

    Banca: 4Q20 FYP -45% New Par Product is 43% of total FYP New Business New Business Product Mix Premium Premium Bancassurance Bancassurance Unit : Million Baht -22% -45% 8% 2% 879 1,528 Other 40% 1,194 40% MRTA PAR 57% 40% 482 Endowment 43% 52% 31% 42% 18% 15% 12% 4Q2019 4Q2020 4Q2019 4Q2020 4Q2019 4

  9. Slide 9: Banca: 2020 FYP +13% mainly from Gain 1st

    Banca: 2020 FYP +13% mainly from Gain 1st 550 tailored to recapture existing Banc customers New Business New Business Product Mix Premium Premium Bancassurance Bancassurance Unit : Million Baht +6% +13% 4,228 6% 1% 6,550 6,198 19% Other 37% MRTA PAR 60% 65% 56% Endowment 3,735 57% 31% 26% 24% 9% 9%

  10. Slide 10: Agent: 4Q20 FYP +6% mainly from recapture and PAR product campaign

    Agent: 4Q20 FYP +6% mainly from recapture and PAR product campaign New Business New Business Product Mix Premium Premium Agent Channel Agent Channel -22% Unit : Million Baht +6% 1,528 6% 6% 1,194 467 498 Pension & Others 47% 57% 40% 63% Whole Life & Term Par(SP) 3% Par Endowment 22% 31% 42% 31% 18%

  11. Slide 11: Agent: 2020 FYP -11% due to lock-down period

    Agent: 2020 FYP -11% due to lock-down period Better product mix & increasing riders attachment ratio New Business New Business Product Mix Premium Premium Agent Channel Agent Channel Unit : Million Baht +6% -11% 6,550 6,198 1,923 1,699 4% 3% Pension & Others Whole Life & Term 60% 65% 55% 58% Par(SP)

  12. Slide 12: Other: All alternative channels showed positive growth

    Other: All alternative channels showed positive growth 2020 FYP from Group channel is flat vs. 2020 FYP from Direct Marketing growth +16% YoY industry negative growth impacted by Covid-19 2020 FYP from Online growth +65% YoY 2020 FYP from Partnership below expectation © Bangkok Life Assurance 12

  13. Slide 13: Agenda

    Agenda 1 2020 performance summary 2 Key Highlights 2.1 Premiums and Business & Operation 2.2 Investments 2.3 P&L and Key accounting change 2.4 EV & VNB 3 Outlook 4 Q&A © Bangkok Life Assurance 27

  14. Slide 14: 2020 investment asset +2%. Fixed income c. was up

    2020 investment asset +2%. Fixed income c. was up Fixed income tilted towards safer bond. Equity allocation up in 4Q20 as market rallied Asset Class 4Q19 4Q20 Remark Cash reduced from 6.4% in 2Q20 and 4.8% in 3Q20 as Short-term Investment 4.0% 3.5% benefits payment were made in 4Q20 (in line with pl

  15. Slide 15: FY 2020 investment income -3.1% YoY

    FY 2020 investment income -3.1% YoY Investment yield decline from lower fixed income yield & dividend income. INVESTMENT INCOME • 4Q20 -13.0% YoY and -3.5% QoQ • The YoY drop was from a combination of lower realized gain, Investment income (unit: MB) dividend income and interest income. • The QoQ dr

  16. Slide 16: CAR increased from 263% in the previous quarter to 274%

    CAR increased from 263% in the previous quarter to 274% CAR (RBC) 350% Total Capital Required (TCR) 314% 300% 266% 275% 263% 274% Risk charged by type to TCR 250% 1.6% 200% Operation Risk 150% 12.3% REITs Risk 100% 50% 35.3% Equity Risk 0% 4Q19 1Q20 2Q20 3Q20 4Q20 7.7% Interest Rate Risk LI Company

  17. Slide 17: Agenda

    Agenda 1 2020 performance summary 2 Key Highlights 2.1 Premiums and Business & Operation 2.2 Investments 2.3 P&L and Key accounting change 2.4 EV & VNB 3 Outlook 4 Q&A © Bangkok Life Assurance 31

  18. Slide 18: Statement of financial positions

    Statement of financial positions 31 Dec 20 31 Dec 19 Inc / Dec MB % MB % MB % Assets ASSETS +6,098 MB Cash and cash equivalents 8,072 2% 13,442 4% (5,370) -40% Investment assets 322,141 95% 311,375 93% 10,766 3% The increase in asset in 2020 was led Other assets 9,565 3% 8,863 3% 702 8% by an increa

  19. Slide 19: 2020 Financial Summary

    2020 Financial Summary Unit: Bt m. Common size 4Q20 4Q19 YoY 2020 2019 YoY 4Q20 4Q19 2020 2019 4Q20 FYP 1,194 1,528 -22% 6,550 6,198 6% 15% 19% 20% 18% RYP 6,851 6,683 3% 28,195 29,494 -4% 88% 84% 84% 86% Net income -75% from Rein & UPR (280) (242) 16% (1,348) (1,385) -3% -4% -3% -4% -4% • Lower inv

  20. Slide 20: Agenda

    Agenda 1 2020 performance summary Key Highlights 2 2.1 Premiums and Business & Operation 2.2 Investments 2.3 P&L and Key accounting change 2.4 EV & VNB 3 Outlook by CEO 4 Q&A © Bangkok Life Assurance 20

  21. Slide 21: EV valuation methodology & assumptions are the same

    EV valuation methodology & assumptions are the same With the key change being ROI downward revision from 3.5% to 3.0% Methodology Assumptions • BLA has adopted a traditional discounted cash Economic Assumption flow methodology to determine the components of Embedded Value (EV) • Risk Discount Rate 8

  22. Slide 22: EV decreased by 5% in 2020

    EV decreased by 5% in 2020 VIF +12% while ANW -12% EV (MB)  EV decreased by 5% or 3,379 MB in 2020 70,882 • VIF increased by 12% 67,502 62,959 • However, this was more than offset by a 12% decline in ANW 50,081 44,119  VIF +Bt2.6 bn (+12% YoY) 43,621 • Increase led by • A decrease in yield curve •

  23. Slide 23: FYP +6% YoY, VNB +227% YoY driven by improvement in VNB margin

    FYP +6% YoY, VNB +227% YoY driven by improvement in VNB margin FYP (Bt m.) VNB (Bt m.) +6% YoY +227% YoY 8,101 1,791 6,196 +6% 6,550 1,399 1,151 +227% 352 2018 2019 2020 2020 (2019 2018 2019 2020 assumption) 23

  24. Slide 24: VNB margin saw significant improvement from 5.6% in 2019 to 17.4% in 2020

    VNB margin saw significant improvement from 5.6% in 2019 to 17.4% in 2020 VNB Movement 9.53% 21.39% +3.5% -5.3% 17.43% 5.57% 15.6 13.8 2019 % Portfolio Assumption Change % 2020 Improvement • VNB Margin increased significantly due to portfolio improvement • Product re-pricing • Introduction of PAR pr

  25. Slide 25: Outlook by CEO

    OUTLOOK BY CEO © Bangkok Life Assurance

  26. Slide 26: Agenda

    Agenda 1 3Q20 performance summary Key Highlights 2 2.1 Premiums and Business & Operation 2.2 Investments 2.3 P&L and Key accounting change 2.4 EV & VNB 3 Outlook by CEO 4 Q&A © Bangkok Life Assurance 26

  27. Slide 27: Carry forward and strengthen our achievements

    Carry forward and strengthen our achievements What we did well What we are going to do in 2020 in 2021 FYP growth outpaced industry Double digit FYP growth performance Launched PAR products Efficient cost control to deliver best & better claim ratio products pricing Offer customer-centric products a

  28. Slide 28: Awards assuring our strengths

    Awards assuring our strengths 3/18/2021 © Bangkok Life Assurance 38

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