Ageas Sa/nv · EURONEXT:AGS
Ageas Sa/nv — Investor Day (2023)
28 slides from Ageas Sa/nv's investor day presentation, 2023
Slide 1: China - Continued growth potential
China - Continued growth potential Investor Day 2023
Slide 2: Taiping Life Partnership with Ageas since 2001
Taiping Life Partnership with Ageas since 2001 State-owned enterprise, a State Council owned insurance group 24.90% stake in Taiping Life ▪ Number 6 Life insurer in China ▪ 320,000 agents ▪ 75,000 bancassurance outlets ▪ 1,400 branches and sale offices ▪ 15 million customers 2
Slide 3: Update on Taiping Life Commercial performance
Update on Taiping Life Commercial performance 3
Slide 4: Commercial performance
Commercial performance +9% +43% Inflows 102.2 29.5 New Business inflows In RMB bn @100% 93.3 In RMB bn @100% 20.7 6M 2022 6M 2023 6M 2022 6M 2023 +10% +28% Life Liabilities New Business Value In RMB bn @100% In RMB mio @100% 3,646 722.3 796.1 2,838 FY 2022 6M 2023 6M 2022 6M 2023 4
Slide 5: Product mix & re-pricing action
Product mix & re-pricing action Breakdown of FY 2022 Reserves In % Change in Pricing rates From To 14% Participating products Participating products 2.5% 2.5% 59% Non participating 27% products Non-Participating products 3.5% 3.0% Critical Illness 5
Slide 6: Strong top line growth
Strong top line growth Inflows In RMB bn @100% -7% +11% 34.8 32.4 37% 10% 5% 7% 17% 20.9 39% 137.6 16.2 10% 124.1 21% 14.7 15.2 14.2 14.9 12.2 12.4 11.4 10.6 10.7 8.1 7.7 8.9 9.8 6.7 9M 2022 9M 2023 Jan Feb Mar Apr May Jun Jul Aug Sep 2022 2023 6
Slide 7: Driven by high New business volume ahead of regulatory changes in July
Driven by high New business volume ahead of regulatory changes in July New Business In RMB bn @100% -34% +41% 9.9 185% 7.8 76% 96% 6.6 82% 97% 120% 4.6 4.1 4.1 18% -6% 38.5 3.6 2.9 2.6 2.7 2.9 2.7 27.4 1.6 1.8 2.1 1.8 1.9 2.3 9M 2022 9M 2023 Jan Feb Mar Apr May Jun Jul Aug Sep 2022 2023 7
Slide 8: A diversified distribution channel
Through agency, bancassurance and direct sales Breakdown of 6M 2023 New Business Inflows per distribution channel In % 6% Agency A diversified Bancassurance distribution 41% 53% Others, including channel digital 8
Slide 9: Agency : focus on productivity
Agency : focus on productivity Number of agents Number of agents Monthly regular premium with FYRP* over RMB 1 mio per agent In RMB ‘000 -18% +57% +33% 391,069 2,673 182 320,260 137 1,702 6M 2022 6M 2023 6M 2022 6M 2023 6M 2022 6M 2023 * Full year Regular Premium 9
Slide 10: Banca : focus on high-quality development
Banca : focus on high-quality development Regular Premium of Number of banca agents Monthly regular premium Bancassurance with FYRP* over RMB 1 mio per banca agent In RMB 100 mio In RMB ‘000 +88% +83% +81% 180 118.9 4,097 65.5 98 2,183 6M 2022 6M 2023 6M 2022 6M 2023 6M 2022 6M 2023 * Full year Regu
Slide 11: Persistency ratios steadily at the forefront of the industry
And supported by renewals thanks to high persistency 13th month persistency ratios 98.1% 97.0% 96.7% 96.3% Persistency 96.1% ratios steadily at 95.1% 95.0% the forefront of 93.0% the industry 2020 2021 2022 H1 2023 Agency 13th month Banca 13th month 11
Slide 12: Growing liabilities backed by a relatively conservative asset portfolio
Growing liabilities backed by a relatively conservative asset portfolio 82% invested in fixed income Life Liabilities Investment Portfolio ▪ 100% government and corporate bonds domestic – In RMB bn @100% at 30 September 2023, in % 99.6% AAA rated under local rating standards ▪ 25% of investment port
Slide 13: Strong increase in NBV largely driven by higher margins agency
Strong increase in NBV largely driven by higher margins agency +28% -1 pp New Business Value* New Business margin In RMB mio @100% 3,646 13.5% In % of APE 2,838 12.2% 6M 2022 6M 2023 6M 2022 6M 2023 Margin 17.3% 18.6% 6.0% 3.6% +32% New Business Value* New Business Value* 3,023 +8% Agency 2,290 Banc
Slide 14: A CSM value of EUR 6.1 bn @ageas' share
A CSM New business highly positive despite low interest rates A CSM value of EUR 6.1 bn @ageas’share CSM Roll-forward In RMB bn @100% 14
Slide 15: Update on Taiping Life Financial performance
Update on Taiping Life Financial performance 15
Slide 16: Financial performance KPIs
Financial performance KPIs Net Operating Result Comprehensive Solvency In EUR mio @ageas’ share In % 376 383 194% 162% 81 Net Result Net underlying 9M 2023 FY 2022 9M 2023 9M 2022 (IFRS 4) result* 9M 2022 (IFRS 17) * IFRS 4 net result excluding discount rate impact (VIR), capital gains & related cha
Slide 17: Impact of lower interest rates
Impact of lower interest rates IFRS 4 & China Accounting standards China 10-year government bond Net Operating Result In % In EUR mio @ageas’ share ▪ Non-participating liabilities discounted based on the 3.6 750-day average VIR curve ▪ Change reflected in P&L. 3.4 Unwind on discount based on 3.2 750
Slide 18: A solvency above regulatory requirement that can be further strengthened
A solvency above regulatory requirement that can be further strengthened Solvency At 9M 2023 Levers to strengthen the solvency 162% Products optimization ▪ Focus on high-value New business ▪ Reduction of expense overrun 100% ▪ Product re-pricing 81% Capital optimization 50% ▪ Launching a supplementa
Slide 19: C-ROSS Solvency framework
C-ROSS Solvency framework Core vs comprehensive Recognition of future C-ROSS vs Solvency II Solvency profits Both are risk-based models Comprehensive capital Cap lowered from 50% of but with different risk charge = core capital in 2022 to 40% factors Core capital + Taiping Life applies Supplementary
Slide 20: Operational Capital Generation in Asia
Operational Capital Generation in Asia Operational Capital Generation Operational Capital Consumption Operational Free Capital Generation In EUR mio @ageas’ share In EUR mio @ageas’ share In EUR mio @ageas’ share 1,002 849 634 286 348 210 9M 2022 9M 2023 9M 2022 9M 2023 9M 2022 9M 2023 20
Slide 21: Outlook on the Life insurance market in China
Outlook on the Life insurance market in China 21
Slide 22: Drivers of the Life insurance market in China
Drivers of the Life insurance market in China Growth in Life Insurance premium uncorrelated to GDP growth Life premium growth versus real GDP growth in China over 2000 – 2020 In % Life premium growth Real GDP Growth Source: CBIRC 22
Slide 23: A regulatory environment supporting sustainable profitability for the sector
A regulatory environment supporting sustainable profitability for the sector Measures Details Timing Expected impact Lowering pricing Cap on Non-participating pricing July 2023 Support margins over interest rate rate lowered from 3.5% to 3.0% volumes Bancassurance expenses - Consistency between actu
Slide 24: Drivers of the Life insurance market in China: Strong macro drivers
Drivers of the Life insurance market in China Strong macro drivers 1. Emerging middle class 2. High saving rate Share of population with annual disposal income ≥ EUR 6K Household savings In % In RMB tn 86% 76% 73% 2016 2018 2025e 3. Need for alternative wealth management products 4. Low penetration
Slide 25: Drivers of the Pension market in China
Drivers of the Pension market in China AGING POPULATION ONE CHILD POLICY PUBLIC PRIORITY Projection of Chinese population structures in 2030 In % Central financial work conference, Beijing, October 2023 November 2022 Launch of the pilot of China Private pension Source: UN Population Division (UNPD).
Slide 26: Taiping Group's scope of operations
Potential of the pension market Taiping Group’s scope of operations Newly launched Pillar 1 Pillar 2 Pillar 3 Occupational Pension Private Pension Public Pension (Corporate) (Retail) Enterprise Occupational Individual Commercial Annuity Annuity Retirement Pension Voluntary program Mandatory program
Slide 27: Conclusions
Conclusions 27
Slide 28: Conclusions
Conclusions ▪ Excellent top line growth with sound margins ▪ Focus on Quality over Quantity in distribution development ▪ New Business Value and New Business CSM supportive of future profits ▪ High IFRS 17 results and operational capital Sustainable generation reflecting a strong operational operati