Axa Sa · EURONEXT:CS
Axa Sa — Axa Sa Ord — H1 2020 Earnings Presentation
35 slides from Axa Sa's earnings presentation, Aug 6, 2020
Slide 1: Half Year 2020 Earnings presentation
Half Year 2020 Earnings presentation August 6, 2020
Slide 2: Important legal information and cautionary statements
IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS AND THE USE OF NON-GAAP FINANCIAL MEASURES Certain statements contained herein may be forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, tr
Slide 3: Table of contents
Table of contents 1. 1H20 Highlights A.4 Thomas Buberl, Group CEO 2. 1H20 Financial Performance A.12 Etienne Bouas-Laurent, Group CFO A3 Half Year 2020 Earnings | August 6, 2020
Slide 4: 1H20 Highlights
1H20 Earnings August 6, 2020 1 1H20 Highlights Thomas Buberl, Group CEO
Slide 5: Half Year 2020 | Key highlights
Half Year 2020 | Key highlights ▶ Business profile well positioned for current market dynamics ▪ Hardening pricing cycle in P&C Commercial lines, growing Health business ▪ Revenues at €52bn (-2%), Strong 1Q growth, 2Q impacted by Covid-19 ▶ Earnings impact from Covid-19 in line with June 3rd guidanc
Slide 6: Revenues | Strong 1Q growth, 2Q impacted by Covid-19
Revenues | Strong 1Q growth, 2Q impacted by Covid-19 P&C Health L&S Euro 52 billion -1% +9% -8% 1H20 Gross revenues +8% +10% -2% +3% +4% -8% -21% 1Q20 2Q20 A6 Half Year 2020 Earnings | August 6, 2020 Back to agenda Change on a comparable basis
Slide 7: Underlying earnings | Covid-19 impacts in line with published guidance
Underlying earnings | Covid-19 impacts in line with published guidance Underlying earnings 1 In Euro billion -48% 3.6 -0.3 ▶ +1% UE ex Covid-19 claims and EQH, demonstrating -1.5 resilience in adverse financial market conditions 1.9 ▶ €1.5bn estimated net Covid-19 impacts related to P&C and solidari
Slide 8: Underlying earnings | Covid-19 mostly impacting Commercial lines
Underlying earnings | Covid-19 mostly impacting Commercial lines In Euro billion Underlying earnings | €1.9bn in 1H20 1H19 1H20 1.3 1.3 0.9 0.9 0.9 ▶ Covid-19 predominantly impacted 0.8 0.5 Commercial lines, notably at AXA XL ▶ Resilience in other geographies, benefiting from lower frequency in -0.2
Slide 9: AXA XL | Transformation progressing well in a hardening cycle
AXA XL | Transformation progressing well in a hardening cycle Pricing actions Underwriting actions Operating performance (ex Covid-192) Insurance Reinsurance ✓ Reduced Property Cat +14.3% +7.5% Revenues exposure and line-sizing in Casualty +9% excl. Covid-19 exposure adjustments3 19% 12% ✓ Adjusting
Slide 10: Balance sheet | Proving its resilience
Balance sheet | Proving its resilience 1H20 Solvency II ratio1 Covid-19 dividend implications 180% ▶ Dividend of €0.73 per share paid in July 2020 ▶ Following discussions with the ACPR and with expected upsides in 2H20 reinforced communication from various European regulators, including the ACPR on
Slide 11: Looking forward | Well positioned for current market dynamics
Looking forward | Well positioned for current market dynamics Hardening pricing cycle in P&C Commercial lines +14% pricing in Insurance at AXA XL in 1H20 Continuing to grow in profitable Health business +9% revenues, +7% earnings in 1H20 Business profile adapted to low interest rate context 74% reve
Slide 12: Financial performance
1H20 Earnings August 6, 2020 2 Financial performance Etienne Bouas-Laurent, Group CFO
Slide 13: Revenues and Earnings
Revenues and Earnings Balance sheet A13 Half Year 2020 Earnings | August 6, 2020
Slide 14: Underlying earnings
Underlying earnings In Euro billion Underlying earnings by business line2 -48% +1% 3.6 ex Covid-19 claims1 1H19 1H20 Change -0.3 and EQH Property & Casualty 1,981 544 -72% -1.5 Life & Savings 1,261 1,165 -9% 1.9 Health 355 388 +7% Asset Management 123 130 +5% Banking & Holdings -383 -341 +11% Equita
Slide 15: Property & Casualty | Revenues
Property & Casualty | Revenues In Euro billion Gross revenues -1% 28.0 28.1 Revenues by quarter Price increases 1Q20 5% 4% Commercial 0% 2Q20 -10% 9% 1Q20 -1% 1% Personal -2% 2Q20 -4% 0% 1H19 1H20 A15 Half Year 2020 Earnings | August 6, 2020 Back to agenda Change on a comparable basis
Slide 16: Property & Casualty | Profitability and Underlying earnings
Property & Casualty | Profitability and Underlying earnings Combined ratio Underlying earnings In Euro billion +0.6% -0.5% 101.7% -72% +3% -0.2% ex Covid-19 2.0 +6.6% ex net Covid-19 impacts1 6.5% claims1 95.1% 95.1% 3.4% -1.5 0.5 -2.3% All year Covid-19 Nat Cat PYD Expenses All year 1H19 Covid-19 1
Slide 17: Property & Casualty | Covid-19 impacts and earnings ex Covid-19
Property & Casualty | Covid-19 impacts and earnings ex Covid-19 In Euro billion Post tax and net of reinsurance 1H20 Covid-19 impacts | -1.5bn 1H20 P&C UE ex Covid-19 claims2 | +3% +0.4 0.8 FR/EU 0.5 FR AXA XL 0.4 AXA XL AXA XL -0.2 -0.3 0.2 FR/EU -0.5 +9% +4% +1% +11% 0.0 -0.8 Business Event Motor
Slide 18: Life & Savings | Revenues and net flows
Life & Savings | Revenues and net flows In Euro billion Gross revenues -8% 21.3 Net flows 15.6 +1.4 ▶ Protection (+1%) +2.4 ▶ Unit-Linked (+1%) +1.1 ▶ G/A Savings (-25%) -2.1 1H19 1H20 A18 Half Year 2020 Earnings | August 6, 2020 Back to agenda Change on a comparable basis
Slide 19: Life & Savings | Underlying earnings
Life & Savings | Underlying earnings In Euro million Underlying earnings -9% 1,261 70 1,165 55 ▶ Lower technical margin including extended disability covers, lower -211 -9 annuities discount rate and lower surrender benefits ▶ Investment margin (-1bp to 69bps) with lower yields mostly offset by lowe
Slide 20: Health | Revenues and Underlying earnings
Health | Revenues and Underlying earnings Gross revenues Combined ratio Underlying earnings in Euro billion in Euro million +9% +0.2pt +7% 7.9 93.9% 94.0% 388 7.2 355 +7% +0.4pt +11% -0.2pt 1H19 1H20 1H19 1H20 1H19 1H20 (excl. EQH) (excl. EQH) Individual / Group Loss ratio1 / Expense ratio1 A20 Half
Slide 21: Asset management | Revenues and Underlying earnings
Asset management | Revenues and Underlying earnings In Euro million +10% average AUM €16 billion (€815 billion closing AUM) 1H20 Net inflows Gross revenues Cost income ratio Underlying earnings +3% -0.3pt +5% 587 606 71.3% 71.0% 130 123 1H19 1H20 1H19 1H20 1H19 1H20 (excl. EQH) (excl. EQH) (excl. EQ
Slide 22: Net income
Net income In Euro million Details of 1H20 net income -39% 2,333 Underlying earnings 1,885 Net realized capital gains 98 1 Gains/losses on economic hedges 425 1,429 Change in fair value of AFS P&L assets -594 Exceptional and discontinued operations -169 Integration and restructuring costs -123 Goodw
Slide 23: Balance sheet
Revenues and Earnings Balance sheet A23 Half Year 2020 Earnings | August 6, 2020
Slide 24: Shareholders' equity and adjusted ROE
Shareholders’ equity and adjusted ROE In Euro billion 69.9 70.1 FY19 Shareholders' equity 69.9 1 Change in net unrealized capital gains +1.0 Net income for the period +1.4 2 Dividend (paid in July 2020) -1.7 Change in pension benefits +0.4 Forex and other -0.9 FY19 1H20 1H20 Shareholders' equity 70.
Slide 25: Solvency II ratio at 180%
Solvency II ratio at 180% 1H20: Solvency II ratio1 roll-forward Key sensitivities Ratio as of June 30, 2020 180% 1Q20 2Q20 Interest rate +50bps +10 pts Start of period 198% 182% Interest rate -50bps -14 pts Corporate spreads +50bps 0 pt Operating return +5 pts +1 pt Euro Sovereign spreads +50bps3 -1
Slide 26: Assets | Portfolio management during the crisis
Assets | Portfolio management during the crisis Pre-emptive €1bn divestment Zero defaults1 and Resilient 1H20 actions from vulnerable sectors average ratings maintained reinvestment yield from (ca. 90% of par) across corporate bond portfolio capturing market opportunities BIG (3%) 14%BBB- (4%) AAA 1
Slide 27: P&C Reserves
P&C Reserves Reserving ratio IFRS reserves in excess (Net technical reserve / Net earned premiums) of undiscounted SII BEL (in Euro billion) 239% 6.8 6.6 227% Reduction of excess at AXA XL (€-0.3bn), partly offset by Europe (€+0.1bn) FY19 1H20 FY19 1H20 A27 Half Year 2020 Earnings | August 6, 2020 B
Slide 28: Cash at Holding and Group Debt Gearing
Cash at Holding and Group Debt Gearing In Euro billion Cash at Holding1 Group Debt Gearing2 7.2 July 2020 -1.2pt 1.7 dividend payment 28.8% 27.6% 3.0 25% - 28% 5.5 target by 2020 FY19 1H20 FY19 1H20 A28 Half Year 2020 Earnings | August 6, 2020 All notes are on pages 33, 34 and 35 Back to agenda
Slide 29: Q&A
1H20 Earnings August 6, 2020 Q&A
Slide 30: AXA Investor Relations | Keep in touch
AXA Investor Relations | Keep in touch Meet our management Call us Investor Relations +33 1 40 75 48 42 Early September Virtual European and US roadshows Calls Andrew Wallace-Barnett +33 1 40 75 46 85 Head of Investor Relations September 14 Barclays Global Financial Services Conference New York (Vir
Slide 31: Thank you
1H20 Earnings August 6, 2020 Thank you
Slide 32: Scope
Scope ▪ France: includes insurance activities, banking activities and holdings in France. ▪ Europe: includes Switzerland (insurance activities), Germany (insurance and banking activities, and holdings), Belgium (insurance activities and holdings), United Kingdom and Ireland (insurance activities and
Slide 33: Notes (1/3)
Notes (1/3) Page A5 1. As mentioned in AXA Group’s Press release dated June 3, 2020. Management’s best estimates at that time of the impact on 2020 underlying earnings for the Group from Covid-19 related claims were Euro 1.2 billion post-tax and net of reinsurance for overall P&C claims and Euro 0.3
Slide 34: Notes (2/3)
Notes (2/3) Page A10 1. The Solvency II ratio is estimated primarily using AXA’s internal model calibrated based on an adverse 1/200 years shock. It also reflects the release of the provision for the 4Q20 exceptional distribution of reserves of €0.70 per share and includes a theoretical amount for d
Slide 35: Notes (3/3)
Notes (3/3) Page A20 1. Excluding the impact from a reclassification from expenses to claims handling costs in France. Page A22 1. Includes the change in fair value of interest rate, equity and foreign exchange economic hedges not eligible for hedge accounting under IAS 39. Page A24 1. Includes impa