Axa Sa · EURONEXT:CS
Axa Sa — FY2011 Earnings Presentation
55 slides from Axa Sa's earnings presentation, Feb 16, 2012
Slide 1: Full Year 2011 Earnings Appendices
Full Year 2011 Earnings February 16, 2012 Appendices
Slide 2: Life & Savings – Scope overview
Life & Savings – Scope overview Global footprint Well balanced business mix FY11 APE by business G/A Protection Unit-Linked & Health FY11 APE by geography 32% 38% Asia-Pacific (incl. Japan) 20% France Mutual Funds 23% & other 10% G/A Savings 20% MedLA Total: Euro 5,733 million NORCEE 8% 22% Strong p
Slide 3: Property & Casualty – Scope overview
Property & Casualty – Scope overview Global footprint Unique proprietary network FY11 Revenues by channel Agents 39% FY11 Revenues by geography Asia Other1 Direct Brokers – IFAs & 2% 1% 11% other Direct 45% France Partnerships 8% 21% 4% Switzerland Total: Euro 27.0 billion 10% UK & Strong presence i
Slide 4: Asset Management – Scope overview
Asset Management – Scope overview Complementary business models • Multi-expert model: structured by • Structured by “Investment Style” “Expertise” • Focus on growth equities, value Product • Expertise in fixed income, equities, equities, blend strategies, fixed quantitative equities income offer • F
Slide 5: Table of content
Table of content Group Life & Savings Property & Casualty Asset Management Balance sheet Embedded value and cash flows 5 – AXA FY11 Earnings – February 16, 2012
Slide 6: Revenues
Revenues Revenues by segment Reported Comparable In Euro million FY10 FY11 basis basis Life & Savings 56,792 52,431 -8% -4% Property & Casualty 25,986 27,046 +4% +3% Asset Management 3,328 3,269 -2% 0% International Insurance 2,847 2,876 +1% +1% Banking & Holdings 459 485 +6% +5% Revenues 89,412 86,
Slide 7: Underlying Earnings by region
Underlying Earnings by region Underlying Earnings In Euro million Change at Reported FY10 FY11 change constant Forex Life & Savings 2,445 2,267 -7% -9% United States 478 312 -35% -32% France 607 632 +4% +4% NORCEE1 570 653 +15% +9% UK 134 -6 n.a. n.a. Asia-Pacific (incl. Japan) 562 608 +8% +6% MedLA
Slide 8: FY11 sensitivities
FY11 sensitivities P&L Balance sheet In Euro billion o/w Unrealized Net Income Impairments Capital Gains net of hedges and Losses • -25% -0.7 -0.7 -0.5 Equities • +25% 0.0 0.0 +1.6 • -100 bps +0.7 +7.8 Interest rates • +100 bps -0.3 -7.2 • -75 bps +0.2 +1.5 Corporate spreads • +75 bps -0.2 -1.5 8 –
Slide 9: Table of content
Table of content Group Life & Savings Property & Casualty Asset Management Balance sheet Embedded value and cash flows 9 – AXA FY11 Earnings – February 16, 2012
Slide 10: Life & Savings
Life & Savings 1 Revenues, new business volumes and profitability page 9 2 Underlying earnings margin analysis page 12 3 Underlying earnings margin analysis by product page 18 10 – AXA FY11 Earnings – February 16, 2012
Slide 11: L&S – Revenues and net inflows
1 L&S – Revenues and net inflows FY11 L&S revenues by region L&S Net inflows In Euro billion In Euro billion MedLA France -31% 4.8 -6% +8.4 High 13.6 growth +1.9 markets NORCEE 15.9 +1% UK United States 9.7 +22% +6% 0.7 7.8 +3.3 Asia Pacific (incl. Japan) Mature +6.5 0% markets +1.8 Total: Euro 52.4
Slide 12: L&S – Underlying earnings margin analysis
2 L&S – Underlying earnings margin analysis Gross Margin Expenses Comp. Comp. In Euro million FY11 In Euro million FY11 Change1 Change1 Margin on revenues2 4,742 +4% Acquisition expenses 3,221 -5% Margin on assets 4,845 +4% Admin. Expenses 3,015 -5% Technical margin -205 n.a. VBI amortization 239 -1
Slide 13: L&S – Margin analysis: margin on revenues
2 L&S – Margin analysis Details of margin on revenues Margin on revenues Average margin on L&S revenues1 è è 9.0% +9% +8% business mix Margin on revenues1 +1% country mix x Euro 4,742 million +4% è è Life & Savings revenues Euro 52,431 million -4% è è æ Changes are on a comparable basis 1. Life & Sa
Slide 14: 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 (in bps) è 147 bps +6% Unit-Linked +6% business mix management fees -0% country mix x +7% è è Euro 1,998 million Margin on assets1 + Unit-Linked average reserve
Slide 15: 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 è Euro 1,998 million +9% Margin on assets1 + +4% è è Euro 4,845 million Average management fees on general account reserves 1. Including other fees (mainly mutual fund and brokers fees)
Slide 16: L&S – Margin analysis: technical margin
2 L&S – Margin analysis Details of technical margin Technical margin & other Mortality & morbidity margin and other1 Euro 1,452 million -6% è Technical margin + Euro -205 million n.a. è è (vs. Euro +751 million in FY10) VA hedging margin Euro -1,657 million n.a. è In Euro million Basis -237 Volatili
Slide 17: L&S – Focus on gross technical margin
2 L&S – Margin analysis Focus on gross technical margin Gross mortality, morbidity & surrender margin (pre-tax) FY11 mortality, morbidity & surrender margin evolution In Euro million mainly explained by: 1,569 • €-0.1 billion in France, mainly following a change in “CMU” 1,452 levy regulation (offse
Slide 18: L&S – FY11 Underlying Earnings by business
3 L&S – FY11 Underlying Earnings by business Euro million FY11 Pre-tax UE % change G/A Protection & Health 2,240 +8% G/A Savings 581 +18% Unit-Linked 120 -81% Mutual funds & Other 10 -69% Pre-tax Underlying Earnings 2,951 -9% Tax and minority interest -684 Underlying Earnings 2,267 -2% Changes are o
Slide 19: L&S – FY11 Margin analysis by business
3 L&S – FY11 Margin analysis by business G/A Protection Mutual Funds & G/A Savings Unit-Linked & Health Other Margin on 9% 3,722 353 532 revenues % of GWP 73 bps Investment 753 1,486 150 margin of avge G/A reserves Management 147 bps 1,998 fees of avge UL reserves Technical margin & Oth. 1,222 52 -1
Slide 20: L&S – G/A Protection & Health margin analysis
3 L&S –Margin analysis by business G/A Protection & Health Technical result Net investment margin Comp. Comp. In Euro million FY11 In Euro million FY11 change change Protection & Health Protection & Health GWP 24,497 +2% 150,846 +3% Average reserves x x Protection & Health Protection & Health 94.0%
Slide 21: L&S – G/A Savings margin analysis
3 L&S – Margin analysis by business G/A Savings In Euro million Comp. Comp. FY11 FY11 change change G/A Savings G/A Savings 13,404 -25% 183,715 +4% Gross revenues average reserves x x Margin on G/A Savings 2.6% +0.7 pt 81 bps -3 bps G/A Savings revenues Investment spread Comp. FY11 change Technical
Slide 22: L&S – Unit-Linked margin analysis
3 L&S – Margin analysis by business Unit-Linked Comp. Comp. In Euro million FY11 FY11 change change Unit-Linked Unit-Linked 16,708 -8% 136,262 +2% Gross revenues Average reserve x x Average margin on Unit-Linked average 4.2% +0.7 pt 147 bps +6% Unit-Linked revenues Management fees Comp. FY11 change
Slide 23: Table of content
Table of content Group Life & Savings Property & Casualty Asset Management Balance sheet Embedded value and cash flows 23 – AXA FY11 Earnings – February 16, 2012
Slide 24: P&C – Revenues and net new contracts
P&C – Revenues and net new contracts FY11 P&C revenues by region P&C personal net new contracts In Euro billion In thousands More than 77% of net new contracts Direct in high growth markets & Direct +8% Asia France +1,522 +2% +1% 0.4 2.1 +1,341 5.6 MedLA 6.8 High +910 +5% UK & Ireland 3.7 growth +83
Slide 25: P&C – Underlying Earnings analysis
P&C – Underlying Earnings analysis Net technical result Net investment income Comp. Comp. In Euro million FY11 In Euro million FY11 Change Change Revenues 27,046 +3.5% Average P&C assets 54,947 +1% x x Combined ratio1 (in %) 97.9% -1.4 pt Average asset yield3 3.7% -2% 1. Combined ratio calculated ba
Slide 26: P&C – Details on Combined Ratio
P&C – Details on Combined Ratio Loss Ratio (%) -0.8 pt Combined Ratio è 71.7% +1.5 pt 70.9% 99.5% 97.9% -1.1 pt -1.0 pt FY10 Current Nat cat 1 Prior year FY11 Loss 71.7% accident reserve Ratio year Dev. 70.9% -0.6 pt change on a comparable basis Expense Ratio (%) -0.8 pt Expense æ Ratio 27.8% 27.0%
Slide 27: P&C – Focus on reserve developments
P&C – Focus on reserve developments Prior year reserve development level (in % of gross earned premiums) 5.4% 5.4% 2.7% 3.1% 1.4% 1.7% 0.9% 0.3% FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Reserving ratio (Net technical reserves/Net earned premiums) 193% 193% 194% 186% 187% 187% 186% 187% FY04 FY05 FY06
Slide 28: P&C – Details on current year loss ratios
P&C – Details on current year loss ratios Personal Motor Personal non motor 79.3% +0.2 pt 69.5% +0.1 pt +0.5 pt 77.1% -3.1 pts +1.6 pts +0.1 pt 64.8% -3.7 pts -2.8 pts FY10 Current Nat cat Price effect Frequency & Other 1 FY11 Current FY10 Current Nat cat Price effect Frequence & Other 1 FY11 Curren
Slide 29: Table of content
Table of content Group Life & Savings Property & Casualty Asset Management Balance sheet Embedded value and cash flows Other 29 – AXA FY11 Earnings – February 16, 2012
Slide 30: AM – Underlying Earnings
AM - Underlying Earnings Details of Asset Management margin analysis Margin Expenses Comp. Comp. In Euro million FY11 In Euro million FY11 Change Change Asset Management Asset Management fees 2,827 0% 2,331 -7%1 expenses 0% excluding FY10 Distribution revenues 442 +1% provision for AXA Rosenberg cod
Slide 31: AM – Underlying Earnings: revenues
AM – Underlying Earnings Details on Asset Management revenues Average Asset Management fees on Assets under Management è è 34 bps +2% Asset Management fees x Euro 2,827 million 0% èè Average Assets under o/w performance fees (Euro 66 million, -19%) o/w research fees (Euro 315 million, +2%) Managemen
Slide 32: Table of content
Table of content Group Life & Savings Property & Casualty Asset Management Balance sheet Embedded value and cash flows 32 – AXA FY11 Earnings – February 16, 2012
Slide 33: Balance sheet
Balance sheet 1 General accounts invested assets Page 34 1.1 Government bonds & related page 35 1.2 Corporate bonds page 36 1.3 CDS page 39 1.4 ABS page 40 1.5 Equity page 44 1.6 Real Estate page 46 1.7 Hedge Funds page 47 1.8 Private Equity page 48 1.9 Mortgage loans page 49 2 Solvency Page 50 3 Ne
Slide 34: General Account invested assets
General Account invested assets Invested assets (100%) FY10 % FY11 % In Euro billion Changes in asset allocation Fixed income 365 83% 384 82% • Net inflows and investment income: invested mainly in fixed income o/w Govies and related 188 42% 207 44% o/w Corporate bonds 150 34% 148 32% • Mark to mark
Slide 35: 1.1 Government bonds and related
1.1 Government bonds and related Breakdown by geography Breakdown by segment Other2 The Netherlands Other 2% ~2% ~6% P&C Supranational institutions ~11% 2% Austria 3% Spain L&S 4% France ~87% 26% US 6% 1 Switzerland Gross unrealized capital 7% gains and losses Japan In Euro billion 14% 10.2 Italy 7%
Slide 36: 1.2 Corporate bonds
1.2 Corporate bonds Breakdown by industry Single A range AAA Other ~9% ~11% Basic materials AA 4% BBB ~15% Other ~22% A Energy 3% 5% ~43% Consumer cyclical Breakdown by segment 5% Other2 Industrial 6% ~2% P&C Banks 37% ~14% Utilities 9% L&S Communications ~84% 9% 1 Gross unrealized capital gains and
Slide 37: 1.2 Focus on banking corporate bonds
1.2 Focus on banking corporate bonds As of December 31, 2011 Gross market Senior debt Sub debt value Non Lower Upper Total in Euro billion Secured Tier 1 Preferred secured Tier 2 Tier 2 US 0.4 7.6 2.1 0.0 0.2 0.0 10.3 France 2.3 3.0 1.6 0.0 0.1 0.0 6.9 UK 1.5 3.1 0.9 0.0 0.3 0.0 5.8 Germany 3.3 0.3
Slide 38: Corporate bonds breakdown by country
1.2 Corporate bonds breakdown by country (including CDS) P = Participating NP = Non-participating Euro billion As of December 31, 2011 US UK Japan Germany Switzerland France Other1 Total P NP NP NP P NP P NP P NP P NP P NP AAA 0 0 0 1 2 0 3 1 3 2 1 1 9 5 AA 1 2 0 5 2 0 3 1 4 2 2 1 11 10 A 3 9 1 7 6
Slide 39: 1.3 Corporate bonds: focus on CDS overlay strategy
1.3 Corporate bonds: focus on CDS overlay strategy • CDS overlay Investment Strategy: CDS are used as an alternative to investment grade corporate bonds Net Net Euro million Notional Notional As of Dec 31, 2010 As of Dec 31, 2011 AAA 126 87 AA 667 737 A 4,265 3,584 BBB 1,418 1,565 Below invest. grad
Slide 40: 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 As of December 31, 2011 Total ABS = Euro 8.1 billion Mortgage-backed Other asset-backed NR/Equity AAA 9% 36% US Subprime, Alt-A & NC RMBS High Yield CLO 20% € 0.8 billion € 3.2 billion BBB 8% Prime R
Slide 41: 1.4 Credit risk management: ABS investments
1.4 Credit risk management: ABS investments Group ABS exposure decreased mainly driven by: • net sales and maturities for Euro 0.9 billion, of which Euro 0.7 billion mainly Prime RMBS and CMBS, in 1H11 • Forex effect for Euro +0.2bn • change in scope (sale of Canada) for Euro 0.2 billion • market ef
Slide 42: 1.4 Focus on Mortgage-Backed Securities
1.4 Focus on Mortgage-Backed Securities Euro million Prime Residential US Subprime As of December 31, 2011 Commercial MBS UK & NC RMBS US Alt-A RMBS MBS RMBS (unless indicated) % of par @ 31/12/08 91% 77% 59% 45% 14% % of par @ 31/12/09 89% 75% 59% 42% 14% % of par @ 31/12/10 87% 69% 65% 51% 21% % o
Slide 43: 1.4 Focus on CDO
1.4 Focus on CDO Euro million Investment High Structured Other Total As of December 31, 2011 grade Yield Finance CDOs AAA 767 0 8 3 778 AA 11 0 0 0 11 A 3 0 0 4 7 BBB 5 20 0 10 35 Below invst. grade 219 12 12 26 270 Equity / Non rated 66 31 5 123 225 Value 1,070 63 25 167 1,325 Shareholder Exposure
Slide 44: 1.5 Equity portfolio overview
1.5 Equity portfolio overview Breakdown by geography Breakdown by segment Other1 ~2% P&C Rest of the World ~21% 10% BNP Paribas Other Eurozone countries 16% L&S 9% ~77% Switzerland 3% UK 2 4% France Gross unrealized capital excl. BNP gains and losses Belgium Paribas 5% 23% In Euro billion Germany 4.
Slide 45: 1.5 Shareholders' exposure to equity
1.5 Shareholders’ exposure to equity Estimated shareholders’ exposure as of December 31, 2011 In Euro billion FY10 FY11 (excluding Australia/NZ assets that are accounted as held for sale) 18 14 9 6 Gross Group share net Gross Group share net nominal of hedge, tax & nominal of hedge, tax & 100% PB 10
Slide 46: 1.6 Real Estate investments
1.6 Real Estate investments Defensive portfolio with good performance over the long term Key indicators Market value FY11 market value by Split by type (in Euro billion) country France Switz. Belgium Germany France Office ~45% ~45% ~75% ~70% 221 36% Residential ~13% ~50% ~0% ~10% Other 5% US 5% Comm
Slide 47: 1.7 Hedge Fund investments
1.7 Hedge Fund investments Stable performance Key indicators Market value (in Euro billion) Exposure and concentration risk • Mostly management of funds of hedge funds 5 • Broadly stable exposures throughout 2011 • Top 10 fund managers represent ~30% of portfolio market value • Broad strategy divers
Slide 48: 1.8 Private Equity investments
1.8 Private Equity investments Diversified portfolio built over the long run Key indicators Market value Breakdown by geography Breakdown by expertise Performance (in Euro billion) AXA Private Equity voted 8 Europe 55% Infras- “Private Equity Firm of the Other 3% tructure 8% 71%Buyout Year” by the F
Slide 49: 1.9 Mortgage loans & other
1.9 Mortgage loans & other Low risk mortgage loan portfolio Key indicators FY11 market value by country Very secured Market value portfolio: (in Euro billion) Other Germany 10% 100% Residential 191 FY11 default rate 27% Switzerland 0.14% FY11 loan to value 100% Residential 40% 74% Commercial 57% 23%
Slide 50: Economic capital model
2 Economic capital model Coverage ratio FY11 Economic capital by geography Holdings & other 10% UK 5% 21% France Asia Pacific 13% 178% 21% NORCEE 148% United States 22% 8% MedLA 100% basis, before diversification FY11 Economic capital by risk Operational 6% P&C risks 15% FY10 FY11 44% Market Life ri
Slide 51: Net financial debt
3 Net financial debt Long-term maturities Total net debt Contractual maturity breakdown In Euro billion In Euro billion 15.2 13.4 • Undrawn credit lines Euro 12 billion • Cash & cash equivalent Euro 30 billion 6.2 7.7 7.8 1.9 0.2 2.6 1.9 0.3 1.6 0.9 0.8 1.0 0.3 0.4 2012 2013 2014 2015 2016-2020 2021
Slide 52: L&S Embedded Value decreased by Euro 2.3 billion
L&S Embedded Value decreased by Euro 2.3 billion Euro million +11%1 4,757 964 40,476 781 230 38,154 (7,361) (1,694) FY10 L&S EV Scope changes Operating Investment FX impacts Internal capital Other FY11 L&S EV & opening return experience and flows (offset in adjustments assumptions Other than Life se
Slide 53: L&S Embedded Value key sensitivities
L&S Embedded Value key sensitivities Impact on L&S Impact on L&S NBV EEV Key sensitivities Euro Euro % % million million Sensitivity to equity markets 10% increase +54 +4% +959 +3% 10% decrease -59 -4% -1,031 -3% Sensitivity to interest rates Upward 100bps parallel shift -17 -1% +1,231 +3% Downward
Slide 54: L&S – IRR and new business investments
L&S – IRR and new business investments FY10 FY11 New business New business Euro million APE NB IRR1 APE NB IRR1 investments2 investments2 France 1,384 8.4% (623) 1,340 8.7% (592) US 986 9.8% (311) 1,018 10.7% (291) UK 545 8.4% (122) 535 7.7% (146) Japan 465 11.8% (199) 463 11.7% (242) NORCEE 1,239 9
Slide 55: L&S – operating Free Cash Flows
L&S – operating Free Cash Flows FY10 FY11 In Euro million Expected L&S Expected L&S New business New business inforce surplus operating free inforce surplus operating free investments 1 investments 1 generation cash flows generation cash flows France 873 (623) 250 1,067 (592) 475 US 862 (311) 551 72