Axa Sa · EURONEXT:CS
Axa Sa — H1 2013 Earnings Presentation
61 slides from Axa Sa's earnings presentation, Aug 2, 2013
Slide 1: Half Year 2013 Earnings Appendices
Half Year 2013 Earnings August 2, 2013 Appendices
Slide 2: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B2 – AXA 1H13 Earnings – August 2, 2013
Slide 3: Life & Savings – Scope overview
Life & Savings – Scope overview Global footprint Well balanced business mix 1H13 APE by business 1H13 APE by geography Unit-Linked G/A Protection & 34% MedLA Health 7% 41% NORCEE 20% France Mutual Funds & 21% other G/A Savings 12% Total: Euro 3,310 million 13% Strong proprietary network 1H13 APE by
Slide 4: Property & Casualty – Scope overview
Property & Casualty – Scope overview Global footprint Strong presence in Motor 1H13 Revenues by business 1H13 Revenues by geography Construction Other 2% Asia 8% 3% Liability Motor Other1 7% 44% Direct Business Unit 1% 7% Property 23% France Workers’ 19% Compensation Health Switzerland 4% 15% Total:
Slide 5: Asset Management – Scope overview
Asset Management – Scope overview Complementary business models • Multi-expert model: structured by • Structured by “Investment Style” “Expertise” • Focus on fixed income, growth Product • Expertise in fixed income, equities, equities, value equities, blend quantitative equities strategies offer • F
Slide 6: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B6 – AXA 1H13 Earnings – August 2, 2013
Slide 7: Revenues
Revenues Revenues by segment Reported Comparable in Euro million 1H12 1H13 basis basis Life & Savings 28,607 29,603 +3% +5% Property & Casualty 16,173 16,497 +2% +2% Asset Management 1,575 1,741 +11% +12% International Insurance 1,825 1,909 +5% +3% Banking & Holdings 226 294 +30% +30% Revenues 48,40
Slide 8: Underlying Earnings by geography
Underlying Earnings by geography Underlying Earnings In Euro million Change at constant 1H121 1H13 Reported change Forex Life & Savings 1,396 1,534 +10% +12% United States 222 311 +40% +42% France 376 353 -6% -6% NORCEE2 318 328 +3% +4% United Kingdom -13 -9 -31% -29% Asia-Pacific (incl. Japan) 434
Slide 9: Retrospective restatements for the amendments to IAS 19
Retrospective restatements for the amendments to IAS 19 from January 1, 2013 The amendment to IAS 19 – Employee Benefits, published on June 16, 2011, became effective since January 1, 2013, and the comparative information in respect of 2012, has been restated (referred as “restated” in the table bel
Slide 10: 1H13 key sensitivities
1H13 key sensitivities P&L Balance sheet In Euro billion Change in Net o/w Unrealized Net Income Impairments Capital Gains net of hedges and Losses • -25% -0.9 -0.7 -0.8 Equities • +25% +0.3 0.0 +1.6 • -100 bps +0.4 +7.9 Interest rates • +100 bps -0.2 -7.4 • -75 bps +0.2 +1.5 Corporate spreads • +75
Slide 11: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B11 – AXA 1H13 Earnings – August 2, 2013
Slide 12: Life & Savings
Life & Savings 1 Revenues, new business volumes and profitability page B13 2 Underlying earnings margin analysis page B14 3 Underlying earnings margin analysis by product page B20 B12 – AXA 1H13 Earnings – August 2, 2013
Slide 13: L&S – Revenues and net inflows
1 L&S – Revenues and net inflows 1H13 L&S revenues by region L&S Net inflows Net flows by country/region In Euro billion In Euro billion 1H12 1H13 France 0.0 +0.8 NORCEE +2.3 +2.4 MedLA France +33% +7% United States -0.1 -0.3 3.0 United Kingdom +0.1 +0.9 7.2 Asia Pacific (incl. Japan) +1.4 +1.1 NORC
Slide 14: L&S – Underlying earnings margin analysis
2 L&S – Underlying earnings margin analysis Gross Margin Expenses Comp. Comp. In Euro million 1H13 In Euro million 1H13 Change1 Change1 Margin on revenues2 2,500 +5% Acquisition expenses 2,047 +28% Margin on assets 2,580 +9% Admin. Expenses 1,380 +1% Technical margin 419 n.m. VBI amortization 49 +37
Slide 15: L&S – Margin analysis
L&S – Margin analysis 2 Details of margin on revenues Margin on revenues Average margin on L&S revenues1 8.4% +0 pt +2 pts business mix Detail by product -2 pts country mix G/A Protection & Health: 12.8% G/A Savings: 2.9% Unit-Linked: 4.4% Mutual funds & other: 7.7% Margin on revenues1 x Euro 2,
Slide 16: 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 71 bps -3 bps 143 bps annualized Unit-Linked -3 bps business mix management fees 0 bp country mix x Euro 1,101 million +10% Margin on assets1 Unit-Linked av
Slide 17: 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 Euro 1,101 million +10% Margin on assets1 + Euro 2,580 million +9% Average management fees on general account reserves 1. Including other fees (mainly mutual funds and broker fees) o
Slide 18: L&S – Margin analysis: technical margin
2 L&S – Margin analysis Details of technical margin Technical margin Mortality & morbidity margin and other1 Euro 602 million -20% Technical margin + Euro 419 million n.m. GMxB Variable Annuity margin (vs. Euro 16 million in 1H12) Euro -183 million n.m. (vs. Euro -740 million in 1H12) o/w basi
Slide 19: L&S – Margin analysis: gross technical margin
2 L&S – Margin analysis Focus on gross technical margin Gross mortality, morbidity & surrender margin (pre-tax) In Euro million 756 1H13 mortality, morbidity & surrender margin evolution mainly 602 explained by: • Euro -0.1 billion in G/A Protection & Health, from less favorable claims development,
Slide 20: L&S – Underlying Earnings by business
3 L&S – Underlying Earnings by business Euro million 1H12* 1H13 % change on comp. basis G/A Protection & Health 1,187 1,086 -6% G/A Savings 387 440 +15% Unit-Linked 272 533 +101% Mutual funds & Other -10 8 n.a. Pre-tax Underlying Earnings 1,836 2,067 +15% Tax and minority interest -441 -533 Underlyi
Slide 21: L&S – 1H13 Margin analysis by business
3 L&S – 1H13 Margin analysis by business G/A Protection Mutual Funds & In Euro million G/A Savings Unit-Linked & Health Other Margin on 8% revenues 1,902 151 389 % of GWP 77 bps* Investment margin 397 781 125 of avge G/A reserves Management 143 bps* fees 1,101 of avge UL reserves Technical margin &
Slide 22: L&S – Margin analysis by business: 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 1H13 In Euro million 1H13 change change Protection & Health Protection & Health GWP 14,817 +5% 157,339 +3% Average reserves x x Protection & Health Protection & Health 25 bps
Slide 23: L&S – Margin analysis by business: G/A Savings
3 L&S – Margin analysis by business G/A Savings In Euro million Comp. Comp. 1H13 1H13 change change G/A Savings G/A Savings 5,243 -12% 187,731 0% Gross revenues average reserves x x Margin on G/A Savings 42 bps 2.9% -0.6 pt 0 bp G/A Savings revenues Investment spread 83 bps annualized Comp. 1H13 cha
Slide 24: L&S – Margin analysis by business: Unit-Linked
3 L&S – Margin analysis by business Unit-Linked In Euro million Comp. Comp. 1H13 1H13 change change Unit-Linked Unit-Linked 8,784 +19% 154,120 +14% Gross revenues Average reserve x x Average margin on Unit-Linked average 71 bps 4.4% +0.5 pt 143 bps -3 bps Unit-Linked revenues Management fees annuali
Slide 25: Focus on the US
Focus on the US Significant progress in de-risking and stabilizing Variable Annuity book US contribution to AXA Group Earnings GMxB Net Amount at Risk1 In USD billion, GMDB GMIB net of external 12% 20% reinsurance 10 17 16 of AXA Underlying Earnings: of AXA Life & Savings Underlying 42 Euro 2.6 bill
Slide 26: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B26 – AXA 1H13 Earnings – August 2, 2013
Slide 27: P&C – Revenues and net new contracts
P&C – Revenues and net new contracts 1H13 P&C revenues by region P&C personal net new contracts In Euro billion In thousands Mature markets: loss of contracts in the UK following the exit from partnerships and in Germany following tariff increases Direct +7% France +637 +1% Asia High 1.2 +10% 0.4 3.
Slide 28: P&C – Underlying Earnings analysis
P&C – Underlying Earnings analysis Net technical result Net investment income Comp. Comp. In Euro million 1H13 In Euro million 1H13 Change Change Revenues 16,497 +2% Average P&C assets 55,957 +2% x x Combined ratio1 (in %) 95.7% -0.8 pt Average asset yield3 3.6% -4% 1. Combined ratio calculated base
Slide 29: P&C – Details on Combined Ratio
P&C – Details on Combined Ratio Expense ratio rollforward Combined ratio 26.4% +0.1pt 96.5% 95.7% 26.2% -0.2pt Expense 26.4% 26.2% Ratio 1H12 Acquisition Administrative 1H13 expenses expenses -0.2 pt change on a comparable basis Loss Loss ratio rollforward 70.1% 69.5% Ratio 70.1% 26.8% +0.3pt 26.3%6
Slide 30: 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% 3.1% 2.0% 1.7% 2.1% 1.8% 1.4% 1.2% 0.9% 0.3% FY04 FY05 FY06 FY07 FY08 1H09 FY09 1H10 FY10 1H11 FY11 1H12 FY12 1H13 Reserving ratio (Net technical reserves/Net earned prem
Slide 31: P&C – Details on current year loss ratios
P&C – Details on current year loss ratios Personal Motor Personal non motor Mainly due to changes 75.4% in business mix 64.9% 0.0pt +1.6pts 74.4% 0.0pt +0.8pt 63.3% -1.6pts -1.9pts -1.0pt -0.6pt 1 1 1H12 Nat Cat Price effect Frequency & Other 1H13 1H12 Nat Cat Price effect Frequency & Other 1H13 Cur
Slide 32: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B32 – AXA 1H13 Earnings – August 2, 2013
Slide 33: AM – Underlying Earnings
AM - Underlying Earnings Details of Asset Management margin analysis Margin Expenses Comp. Comp. In Euro million 1H13 In Euro million 1H13 Change Change Asset Management Asset Management fees 1,466 +10% 1,101 +4%1 expenses Distribution revenues 275 +20% Investment result 30 +17%1 Distribution expens
Slide 34: AM – Details on Asset Management revenues
AM – Underlying Earnings Details on Asset Management revenues Asset Management fees on Average Assets under Management +1 bp* 33 bps* Asset Management fees x Euro 1,466 million +10% o/w performance fees (Euro 37 million, +59%) Average Assets under Management o/w research fees (Euro 171 million,
Slide 35: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B35 – AXA 1H13 Earnings – August 2, 2013
Slide 36: Balance sheet
Balance sheet 1 General accounts invested assets Page B37 1.1 Government bonds & related page B38 1.2 Corporate bonds page B39 1.3 CDS page B42 1.4 ABS page B43 1.5 Equity page B47 1.6 Real Estate page B49 1.7 Hedge Funds page B50 1.8 Private Equity page B51 1.9 Mortgage loans page B52 2 Solvency Pa
Slide 37: General Account invested assets
General Account invested assets Invested assets (100%) FY12 % 1H13 % In Euro billion Changes in asset allocation Fixed income 404 82% 394 83% • Net inflows, investment income and o/w Govies and related 219 45% 213 45% maturities: invested mainly in corporate o/w Corporate bonds 151 31% 148 31% and g
Slide 38: 1.1 Government bonds and related
1.1 Government bonds and related Breakdown by geography Breakdown by segment Other2 Ireland 2% P&C 2% The Netherlands 11% 2% Other 8% Supranational Institutions 3% L&S Austria France 87% 3% 21% Spain 5% 1 US Gross unrealized capital 6% gains and losses In Euro billion Switzerland Germany 14% 25.3 6%
Slide 39: 1.2 Corporate bonds
1.2 Corporate bonds Breakdown by industry Breakdown by segment Other2 Technology 2% 2% Basic materials P&C 5% Other 14% 2% Energy 5% L&S Consumer 84% cyclical 6% Banks 32% Industrial 1 7% Gross unrealized capital Utilities gains and losses 8% In Euro billion Communications 9% 9.2 Consumer non-cyclic
Slide 40: 1.2 Focus on banking corporate bonds
1.2 Focus on banking corporate bonds As of June 30, 2013 Gross market Senior debt Subordinated debt value Total Non Lower Upper in Euro billion Secured Tier 1 Preferred secured Tier 2 Tier 2 United States 0.2 6.2 1.7 0.0 0.4 0.0 8.5 France 3.2 2.8 0.9 0.0 0.0 0.0 6.9 Netherlands 2.2 2.5 0.2 0.0 0.0
Slide 41: 1.2 Corporate bonds breakdown by country
1.2 Corporate bonds breakdown by country (including CDS) P = Participating NP = Non-participating in Euro billion France US Belgium Germany Switzerland Japan Other1 Total As of June 30, 2013 P NP P NP P NP P NP P NP NP P NP P NP AAA 2.7 1.2 0.1 0.7 0.1 0.1 3.7 0.7 1.4 0.4 0.6 0.2 0.3 8.2 4.1 AA 3.0
Slide 42: 1.3 Corporate bonds: focus on CDS
1.3 Corporate bonds: focus on CDS • CDS mainly used as alternative to investment grade corporate bonds • Net CDS exposure excluding NBT strategy mainly corresponds to an “overlay” strategy (synthetically replicate corporate bonds by selling CDS on top of government bonds to enhance return) • NBT str
Slide 43: 1.4 Asset Backed Securities by underlying type of asset
1.4 Asset Backed Securities by underlying type of asset Breakdown by asset type1 Breakdown by rating Mortgage-backed Other asset-backed US Subprime, Alt-A & NC RMBS € 0.9 billion Prime Residential NR/Equity AAA € 0.4 billion 7% 46% Commercial MBS High Yield € 1.2 billion 19% CLO BBB € 5.0 billion 8%
Slide 44: 1.4 Credit risk management: ABS investments
1.4 Credit risk management: ABS investments Group ABS exposure increased mainly driven by: • Positive market effect of Euro 0.2 billion mainly driven by performance of CLOs and US Subprime RMBS • Net inflows of Euro 0.2 billion, comprised of Euro 1.7 billion of purchases, mainly on CLOs, and Euro 1.
Slide 45: 1.4 Focus on Mortgage-Backed Securities
1.4 Focus on Mortgage-Backed Securities Euro million Prime Residential US Subprime As of June 30, 2013 Commercial MBS UK & NC RMBS US Alt-A RMBS MBS RMBS (unless indicated) % of par @ 31/12/10 87% 69% 65% 51% 21% % of par @ 31/12/11 80% 59% 57% 45% 27% % of par @ 31/12/12 88% 61% 71% 52% 52% % of pa
Slide 46: 1.4 Focus on CDO
1.4 Focus on CDO Euro million High Other Investment grade Structured Finance Total As of June 30, 2013 Yield CDOs AAA 1,064 - 16 3 1,083 AA - - - 1 1 A 11 8 - 2 21 BBB 13 15 - 4 32 Below investment grade 425 12 18 8 463 Equity / Non rated 122 14 22 126 284 Total exposure 1,636 49 56 144 1,885 Shareh
Slide 47: 1.5 Equity portfolio overview
1.5 Equity portfolio overview Breakdown by geography Breakdown by segment Other2 3% Rest of the World P&C 11% BNP Paribas 24% 10% L&S Other Eurozone countries 73% 11% France excl. BNP Paribas UK 20% 1 4% Gross unrealized capital Belgium gains and losses 4% In Euro billion 2.5 Switzerland 2.3 6% Japa
Slide 48: 1.5 Shareholders' exposure to equity
1.5 Shareholders’ exposure to equity Estimated shareholders’ exposure to equity In Euro billion FY12 1H13 17 15 6 4 Gross Group share, Gross Group share, nominal 100% net of hedges, nominal 100% net of hedges, tax and PB tax and PB B48 – AXA 1H13 Earnings – August 2, 2013
Slide 49: 1.6 Real Estate investments
1.6 Real Estate investments Defensive portfolio with good performance over the long term Key indicators Market value 1H13 market value by Split by type (in Euro billion) country Other France France Switz. Belgium Germany 10% 241 30% Office 46% 44% 78% 66% US Residential 11% 43% 0% 8% 6% Germany Comm
Slide 50: 1.7 Hedge Fund investments
1.7 Hedge Fund investments Diversified portfolio of hedge funds Key indicators Market value Exposure and concentration risk (in Euro billion) • Mostly management of diversified funds of hedge funds 3 • Top 10 fund managers represent ~40% of portfolio market value • Comprised of 10 strategic categori
Slide 51: 1.8 Private Equity investments
1.8 Private Equity investments Diversified portfolio built over the long run Key indicators Breakdown by geography Breakdown by expertise Market value (in Euro billion) Japan Other Infrastructure Venture 4% 3% 9% 7% 8 Mezzanine 13% US Europe Buy-out 35% 58% 71% 1H13 Environment AXA portfolio return
Slide 52: 1.9 Mortgage loans & other
1.9 Mortgage loans & other Low risk mortgage loan portfolio Key indicators 1H13 market value by country2 Belgium Very secured Market value portfolio: (in Euro billion) Other Germany 33% Residential 8% 100% Residential 221, 2 7% 27% 1H13 default rate 67% Commercial 0.36% 1H13 loan to value 81% Reside
Slide 53: Focus on net unrealized capital gains
Focus on net unrealized capital gains Balance sheet net unrealized Off balance sheet net In Euro billion capital gains1 In Euro billion unrealized capital gains 11.2 1.5 Equities3 Real Estate and loans2 8.3 Corporate bonds 2.8 1.4 Government bonds 1.7 3.5 3.3 6.8 5.3 FY12 1H13 FY12 1H13 Net unrealiz
Slide 54: Focus on exposure to Eurozone peripheral countries government bonds
Focus on exposure to Eurozone peripheral countries government bonds Exposure by issuer AFS OCI Gross book value Gross book value Gross book value Gross market value in Euro billion June 30, 2012 December 31, 2012 June 30, 2013 June 30, 2013 Italy 14.7 16.4 18.2 18.5 Spain 7.7 7.6 9.6 9.6 Ireland 1.0
Slide 55: Asset & Liability Management
Asset & Liability Management Life & Savings investment spreads for main entities Inforce New business 4.0% 310bps 3.2% 320bps • G/A reserves: Euro 96 billion France 0.9% • G/A Savings new business sales with 0.0% long term guarantees stopped in 1998 1H13 1H13 60bps 120bps 4.0% 3.0% • G/A reserves: E
Slide 56: Solvency I
2 Solvency I Solvency I ratio at 233% 233% -20 pts 218% +11 pts -6 pts 182% 188% 171% Of which -15 pts on fixed income assets FY09 FY10 FY11 FY12 Underlying URGL FX & other 1H13 Earnings Solvency I Sensitivities In Euro billion 56 53 Ratio as of June 30, 2013 218% Interest rate +100bps 160% Surplus
Slide 57: Solvency I reconciliation to shareholders' equity
Solvency I reconciliation to shareholders’ 2 equity Available financial resources(1) In Euro billion Shareholders equity 54 100% Intangibles - 26 Admitted sub debt (2) +4 Locally admitted assets +2 Dividend to be paid 0 Real estate(3) +7 Pension benefit +3 Other(4) +8 Available capital 53 (1): AXA i
Slide 58: Economic solvency rollforward
2 Economic solvency rollforward Economic solvency ratio* of which US statutory interest rate -4 pts FY12 206% mismatch 1H13 operating return +13 pts Overall improvement in FY12 dividend payment -8 pts market conditions +2 pts outside the US Market impact net of liquidity -9 pts premium** Increased m
Slide 59: Economic capital model
2 Economic capital model Coverage ratio* 1H13 Economic capital* by geography Holdings & other 15% 23% France UK 206% 204% 5% Asia Pacific 12% NORCEE United States 7% 28% MedLA 9% 100% basis, before diversification 1H13 Economic capital* by risk Operational 5% 6% P&C risks 19% 49% 43% Market FY12 1H1
Slide 60: Net financial debt
3 Net financial debt Long-term maturities Total net debt Contractual maturity breakdown In Euro billion In Euro billion 13.0 12.9 • Undrawn credit lines Euro 13 billion 6.1 • Cash & cash equivalent Euro 24 billion 7.8 7.9 2.1 1.8 0.2 2.3 1.9 1.4 0.8 1.0 0.2 0.3 2H13 2014 2015 2016-2020 2021-2025 202
Slide 61: Notes
Notes Notes related to page B25: 1. GMDB net amount at risk in the event of death is the amount by which the GMDB benefits exceed related account values. GMIB net amount at risk is the amount the company would have to pay if all policyholders annuitize today. Calculated as the amount that the presen