Bangkok Life Assurance Public Co., Ltd. · SET:BLA
Bangkok Life Assurance Public — FY2019 Earnings Presentation
45 slides from Bangkok Life Assurance Public's earnings presentation, Feb 28, 2020
Slide 1: 2019 Results Presentation
2019 Results Presentation Investors and Analyst update February 28, 2020 © Bangkok Life Assurance
Slide 2: Disclaimer
Disclaimer The information contained in our presentation is intended solely for your personal reference only. In addition, such information contains projections and forward-looking statements that reflect our current views with respect to future events and financial performance. These views are base
Slide 3: Agenda
Agenda 1 2019 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 2/28/2020 © Bangkok Life Assurance 2
Slide 4: Agenda
Agenda 1 2019 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 2/28/2020 © Bangkok Life Assurance 3
Slide 5: Synopsis of performance in 2019
Synopsis of performance in 2019 • 2019 profit: net -12% YoY, core -1% YoY (exc. LAT reversal in 2018) • Good momentum across distribution channels: • Agent: FYP -4% YoY, but +double digit if exclude single payment products. Rider attachment up from 12% to 17%. • Bancassurance: New partnership. • Oth
Slide 6: Agenda
Agenda 1 4Q19 and 2019 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 2/28/2020 © Bangkok Life Assurance 5
Slide 7: FY19: FYP -24%
FY19: FYP -24% FYP from agency channel increases from 25% to 31% in channel mix New Business Renewal Total Premium Premium Premium -24% -10% -13% Unit : Million Baht 8,101 32,791 40,892 29,494 35,692 6,198 69% 68% 60% 39% 55% 61% 56% Bancassurance Agent Channel 60% Others 25% 31% 36% 40% 34% 38% 7%
Slide 8: Banca: FY19 FYP -32%
Banca: FY19 FYP -32% 4Q19 is lower than expected, but still growing from 2Q19 and 3Q19 New Business Premium New Business Premium Product Mix Bancassurance Bancassurance Unit : Million Baht -24% -32% 2% 3% 5,499 4% 8,101 26% Others 6,198 36% Whole Life & Term 70% 3,735 MRTA 68% 25% Endowment 61% 60%
Slide 9: Agent: FY19 FYP -4% (exclude filler +2%)
Agent: FY19 FYP -4% (exclude filler +2%) Some highlights are: Product mix is better, Rider attachment up from 13% to 17% New Business Premium New Business Premium Product Mix Agent Channel Agent Channel -24% -4% Unit : Million Baht 8,101 1% 7% 2008 1923 6,198 55% Filler 52% 70% 68% Whole Life & Term
Slide 10: Other Channels: FY19 FYP is flat comparing to FY18
Other Channels: FY19 FYP is flat comparing to FY18 New Business Premium • Other channels consist of Group, Unit : Million Baht Direct Marketing, Online and -24% Partnership 8,101 • Potential growth from all channels in 6,198 FY20 Bancassurance 70% 68% Agent Channel • FYP from partnership are mostly
Slide 11: Agent Channel
AGENT CHANNEL © Bangkok Life Assurance
Slide 12: Agent Development
Agent Development New licensed agent has decreased 5% from previous year. In the same direction as business. New Licensed Agent Outstanding Agent & FA -5% 2,361 2,253 Number of Agent & FA Person Total Outstanding Agent 17,164 Total Financial Advisor (FA) 1,404 Jan-Dec2018 Jan-Dec 2019 11
Slide 13: Core Strategies and Plans
Core Strategies and Plans • 12 agency teams request to 1. Agency 2. SMART Agent • Opened 6 batches at HO open agency offices. • Number of AO target in Office Program (1st and 3rd batch), Pitsanulok, Chiang Mai, Phetchaboon and 2020 is 23 offices. Expansion Chonburi. • 99 SA in 2019 with 1,307 Full t
Slide 14: Smart Agent Program : Progression
Smart Agent Program : Progression 4 The 4th batch for Yonok 5 Nakorn group at Chiang The 5th batch for Chinnarat Mai. groups at Phetchaboon (Lomsak). Phetchabun 2 The 2nd batch for Chinnarat groups at Phitsanulok. Summary in Yr 2019 Chonburi - 99 SA - 1,307 policies - Sum Assure 474.88 Mb - FYP 24.5
Slide 15: Performance of SA compare with New Agent
Performance of SA compare with New Agent January – December 2019 FYP per agent FYC per agent No. of Policy per Sum Assure per (baht) (baht) agent policy (baht) +47.62% +55.88% +37.20% -0.53% 247,731 62,794 13.20 365,285363,338 167,820 9.62 40,284 New Smart New Smart New Smart New Smart Agent Agent A
Slide 16: Agency Group Restructuring : Progression
Agency Group Restructuring : Progression Year End 2019 campaign and Year Plan 2020 to drive sales volume. Year End 2019 Campaign Year Plan 2020 2/28/2020 © Bangkok Life Assurance 15
Slide 17: Grand Opening New Products : October 9, 2019
Grand Opening New Products : October 9, 2019 16
Slide 18: 2020 FYP Target and Core Strategy
2020 FYP Target and Core Strategy Technology Support 1. BLA Station 2. Fund Connext 3. Smart App/Smart GO FYP 2,512 MB +35% Increase VoNB and Expand Full Time and Worksite Recapture Low risk products Active Agents Marketing (กบข.) • Increase W/L with Riders • Expand SA 22 batches nationwide • Projec
Slide 19: Bancassurance Channel
BANCASSURANCE CHANNEL © Bangkok Life Assurance
Slide 20: Update in Q4/2019
Update in Q4/2019 • Prepare for product replacement for BBL • Prepare for new product launch for TISCO 2/28/2020 © Bangkok Life Assurance 19
Slide 21: Start the year 2020
Start the year 2020 ต่อยอดความมังคั ่ ง่ ต่อยอดความมังคั ่ ง่ ปกป้ อง คุม้ ครองสุขภาพ ความมันคงของคุ ่ ณ คุม้ ครองชีวติ และโรคร้ายแรง 2 product replacement • Gain1st 810 • Gain1st Protection 2/28/2020 © Bangkok Life Assurance 20
Slide 22: Gain 1st 810 highlights
จุดเด่นของ Gain 1st 810 การันตีผลตอบแทน มีเงินคืนทุกปี ไม่ต้องตรวจสุขภาพ จ่ายเบีย้ ประกัน 7 ปี ได้รบั ผลตอบแทนยาว 15 ปี ผลตอบแทนแน่นอน IRR สูงสุด 2%* มีเงินคืนทุกปี 4% - 5% ของจานวนเงินเอาประกันภัย** สมัครง่าย ไม่ตอ้ งตรวจ หรือ ตอบคาถามสุขภาพ รับประกันตัง้ แต่แรกเกิด ถึงอายุ 75 ปี หมายเหตุ: *สาหรับอ
Slide 23: Gain 1st Protection highlights
จุดเด่นของ Gain 1st Protection ิ ธิประโยชน์ทางภาษีก็อยากได้ หล ักประก ันให้คนข้างหล ังก็อยากมี สท จ่ายเบีย้ ประกันเพียง 10 ปี คุม้ ครองยาว 15 ปี คุม้ ครองชีวติ สูงถึง 10 เท่าของเบีย้ ประกันปี แรก กรณีเสียชีวติ ทัวไป ่ เพิม่ ความคุม้ ครองชีวติ เป็ น 2 เท่าของจานวนเงินเอาประกัน กรณีเสียชีวติ เนื่องจาก
Slide 24: Activities with BBL
Activities with BBL 2/28/2020 © Bangkok Life Assurance 23
Slide 25: Activities with TISCO
Activities with TISCO 2/28/2020 © Bangkok Life Assurance 24
Slide 26: Start the year 2020
Start the year 2020 Smart Health Wealthy Plan at TISCO Head office Opening as a Strategic Partner and launch new product TISCO CI Extra Care 2/28/2020 © Bangkok Life Assurance 25
Slide 27: Agenda
Agenda 1 4Q19 and 2019 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 2/28/2020 © Bangkok Life Assurance 26
Slide 28: Investment asset allocation saw minor changes
Investment asset allocation saw minor changes Asset Class 2018 2019 Remark Short-term Investment 4.2% 4.1% Bond 44.0% 42.9% Increase portion of debenture to increase investment yield Debenture & Notes 33.7% 34.4% Total Fixed Income 81.9% 81.3% Equity 8.5% 8.8% Allocation increase mainly from price m
Slide 29: Investment income -0.3% YoY
Investment income -0.3% YoY Investment yield slightly decrease while accounting ROI lower from less realized gain Sources of Investment Income (MB) • Investment income in 4Q19 -6.9% yoy and -24.2% qoq due to timing of realized gain • Investment yield for 2019 came to 4.10% vs 4.12% for 2018 -0.3% yo
Slide 30: CAR RBC1 decreases from 3Q19 to 281% while RBC2 increases to 314%
CAR RBC1 decreases from 3Q19 to 281% while RBC2 increases to 314% CAR (RBC1) CAR (RBC2) Total Capital Required (TCR) 314% 1.6% 308% Operation Risk 289% 281% 281% 270% 16.3% REITs 15.8% REITs 260% 257% 260% 252% 252% 240% 22.8% Equity Risk 33.7% Equity Risk 9.9% Interest Rate Risk 9.8% Interest Rate
Slide 31: Agenda
Agenda 4Q19 and 2019 performance summary 1 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 4 Q&A 2/28/2020 © Bangkok Life Assurance 31
Slide 32: Statement of financial positions
Statement of financial positions 31 Dec 19 31 Dec 18 Inc / Dec MB % MB % MB % Assets Cash and cash equivalents 13,442 4% 9,826 3% 3,616 37% ASSETS Investment assets 310,363 93% 304,221 94% 6,141 2% Total assets slightly Other assets 9,875 3% 10,531 3% (656) -6% increase in 2019 due Total assets 333,
Slide 33: 2019 Financial Summary
2019 Financial Summary Million Baht 4Q/19 % TNP 4Q/18 % TNP %YoY 2019 % TNP 2018 % TNP %YoY Q4’19 First year First year premium 1,528 19% 1,605 21% -5% 6,198 18% 8,101 20% -23% premium decrease Renewal premium 6,683 84% 6,408 83% 4% 29,494 86% 32,791 83% -10% from prior year about 5% and REIN&UPR (2
Slide 34: TFRS 9 Financial Instruments
TFRS 9 Financial Instruments Financial Reporting Standards Effective Jan 2020 • Under TFRS 4, BLA allow to defer the adoption TFRS 9 when TFRS 17 effective. • From 2020 until TFRS 17 effective, BLA select to adopt Thai Accounting Guidance - Financial instruments and disclosures (FI Guidance) for Ins
Slide 35: Impact from adopting Thai Accounting Guidance for Insurance Business
Impact from adopting Thai Accounting Guidance – Financial instruments and disclosures for Insurance Business Classification & Until 31 Dec 2019 From 1 Jan 2020 Measurement Classified as Equity Classified as Equity Or Debt securities per TAS32 Unit Trust FX to OCI FX on equity to OCI FX on debt to PL
Slide 36: Agenda
Agenda 1 4Q19 and 2019 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 2/28/2020 © Bangkok Life Assurance 36
Slide 37: EV & VNB
EV & VNB ACTUARIAL DEPARTMENT © Bangkok Life Assurance
Slide 38: EV Valuation Methodology & Assumptions
EV Valuation Methodology & Assumptions Methodology Assumptions ▪ BLA has adopted a traditional discounted Economic Assumption cash flow methodology to determine the ▪ Risk Discount Rate 8.3% (2018: 9%) components of Embedded Value (EV) ▪ It is a common methodology used by life ▪ Investment Return 3.
Slide 39: EV in 2019 increases slightly from 2018
EV in 2019 increases slightly from 2018 EV (MB) 70,882 62,959 ➢ EV 2019 with GPV75 increases 7,923 MB from 2018 (+12.6%) 50,081 - ANW increases as to MVA increases more than MVL 43,621 when yield drops. - VIF almost stable since lower yield reduces investment income but at the same time increases AN
Slide 40: VNB decreases sharply from 2018
VNB decreases sharply from 2018 FYP (MB) 11,966 1,601 1,396 7,969 6,316 21% 75% 352 2017 2018 2019 2017 2018 2019 Non-Filler Product Filler Product The VNB dropped by 75% from previous year because: 1. Decline in sales volume 2. Lower market environment, thus lower ROI 39
Slide 41: Decrease in VNB margin is resulted mainly from investment return assumption
Decrease in VNB margin is resulted mainly from investment return assumption VNB Margin Movement 0.44% -12.38% +3.5% -5.3% 17.52% 15.6 13.8 % 5.57% % 2018 Product mix Assumption 2019 change change VNB margin drops 11.95% from 2018 due to assumption changes especially the return on investment assumpti
Slide 42: Agenda
Agenda 1 4Q19 and 2019 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 2/28/2020 © Bangkok Life Assurance 41
Slide 43: Outlook by CEO
OUTLOOK BY CEO © Bangkok Life Assurance
Slide 44: Agenda
Agenda 1 4Q19 and 2019 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 2/28/2020 © Bangkok Life Assurance 43
Slide 45: For further information & enquiries, please contact our Investor Relations
For further information & enquiries, please contact our Investor Relations at ir@bangkoklife.com +66 (0) 2777-8846
Bangkok Life Assurance Public — FY2019 Earnings Presentation on 6ix