Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — Zurich Financial Services — UBS Conference Frankfurt 2005
28 slides from Zurich Insurance's conference presentation, Jul 8, 2005
Slide 1: Zurich's approach to the German life market
Zurich’s approach to the German life market UBS Conference Frankfurt - July 8, 2005 Dr. Michael Renz Head of Life Germany
Slide 2: Disclaimer and cautionary statement
Disclaimer and cautionary statement Certain statements in this document are forward-looking statements, including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Forward-looking statements include statements regarding our strategic dire
Slide 3: Agenda
Agenda • German life insurance market potential • Zurich Group Germany – brief history and recent developments • Zurich’s business model and focus in Germany • Current issues and future challenges of German life insurance • Summary © Zurich Financial Services- UBS Conference, July 8, 2005 3
Slide 4: German life market is 3rd largest in Europe and 5th largest world-wide
German life market is 3rd largest in Europe and 5th largest world-wide Life Insurance premium volumes 20041 Rest of World 3.9% Germany 12.2% North America 28.4% France Italy 11.8% 18.5% Europe Netherlands 4.5% 37.6% Belgium 3.5% Asia Switzerland 30.1% 3.5% UK 27.3% Rest of Europe 18.7% World: USD 1,
Slide 5: Steady market development with robust growth
Steady market development with robust growth German primary insurance 80 Special effect from the planned approx. tax for life insurance contracts +2% +5,0% +2,6% Since 1997, life generates +4,4% 65 +4,2% +2,2% largest contribution +11,9% GWP in EUR bn +6,3% +4,0% +6,6% +5,1% 50 Life Non-life 35 Heal
Slide 6: Less saturated than other developed markets ...
Less saturated than other developed markets ... Insurance density 2004 Switzerland United Kingdom Belgium France Netherlands Life Non-life United States Italy Germany Canada Spain 0 1000 2000 3000 4000 5000 6000 7000 Premiums per capita (in USD) Source: Swiss Re, sigma 2/2005 - 10 biggest life insur
Slide 7: ... and with enormous growth potential
... and with enormous growth potential Insurance penetration 2004 United Kingdom Switzerland Belgium France Netherlands Life Non-life Italy United States Germany Canada Spain 0 2 4 6 8 10 12 14 Premiums in % of GDP Source: Swiss Re, sigma 2/2005 - 10 biggest life insurance markets in Europe and Nort
Slide 8: Agenda
Agenda • German life insurance market potential • Zurich Group Germany – brief history and recent developments • Zurich’s business model and focus in Germany • Current issues and future challenges of German life insurance • Summary © Zurich Financial Services- UBS Conference, July 8, 2005 8
Slide 9: History and DNA of Zurich in Germany
History and DNA of Zurich in Germany 1844: Agrippina founded 1875: Zürich Versicherung opens first subsidiary in Germany 1918: Deutscher Herold founded 1995: Merger of Zürich and Agrippina 1998: Zürich Agrippina health insurance founded 2000: Unification of Zürich’s and Agrippina’s brands and distri
Slide 10: Recent corporate actions leading to ...
Recent corporate actions leading to ... 2004 2003 2002 New Zurich Group Germany with a fully integrated life factory Integration of Zurich and Deutscher Herold • Standardized processes • All functions and services in Acquisition of • Life insurers sales support and admini- Deutscher Herold & • Non-l
Slide 11: ... strong top tier positions in the German market
... strong top tier positions in the German market Life Insurance – Percentage of GWP1 General Insurance – Percentage of GWP1,2 1. Allianz 16.0% 1. Allianz 18.3% 2. Generali (AMB) 11.0% 2. Munich Re (Ergo) 5.7% 3. Munich Re (Ergo) 8.8% 3. R+V 5.5% 4. R+V 5.5% 4. Generali (AMB) 5.4% 5. Zurich 5.2% 5.
Slide 12: Agenda
Agenda • German life insurance market potential • Zurich Group Germany – brief history and recent developments • Zurich’s business model and focus in Germany • Current issues and future challenges of German life insurance • Summary © Zurich Financial Services- UBS Conference, July 8, 2005 12
Slide 13: We moved from #21 in 1996 to top 5 in less than 10 years
We moved from # 21 in 1996 to top 5 in less than 10 years Zurich Life Germany – Position by GWP1 in EUR billions ZL + Deutscher Herold Leben (DHL) 3.55 No. 5 overall ZL No. 2 Zürich Leben + Neckura unit-linked (ZL) 1.00 0.64 No. 18 No. 21 1996 2001 2004 1 Gross written premiums, local statutory (HGB
Slide 14: Our distinct multi-channel business model ...
Our distinct multi-channel business model … Customers Mobile sales forces co-operations Distribution Banks/ Multi level networks Strategic partners Financial advisors Brokers agents Sales Tied Life Zürich Deutscher Herold Lebensversicherung Lebensversicherung companies AG AG Service Zurich Zurich Zu
Slide 15: ... captured synergies and increased productivity
... captured synergies and increased productivity FTE development Life Comparison of productivity Life (# of contracts/employee customer service) -23% ZL+DHL 7'500 DHL 6'500 5'500 +77% 3 '3 3 2 ZL 3 '0 1 4 4'500 2 '8 0 9 2 '5 7 1 3'500 2'500 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 DBV DHL
Slide 16: Steady performance improvements since 2002
Steady performance improvements since 2002 New business profit margin New business value and APE1 as % of APE1 in EUR millions APE 630 12.0% 529 2 492 76 7.4% NBV 37 3.4% 2 18 2002 2003 2004 2002 2003 2004 In spite of reduced investment income a NBPM of 12% is achieved in 2004 due to • an increase i
Slide 17: Clear focus on traditional and unit-linked annuities ...
Clear focus on traditional and unit-linked annuities … Share by product line (as % of APE1) 506 529 492 2 6302 (+8%) (+5%) (-7%) (+28%) Unit 19% 22% 30% Linked 42% 44% 42% Annuities 29% 39% Endow- 26% ment 27% 25% 12% Others 15% 10% 11% 7% 2001 2002 2003 2004 1 APE = Annual premiums equivalent 2 Exc
Slide 18: ... with a top quality product approach
... with a top quality product approach Product Rating Unit linked FFF (excellent) (Vorsorge invest) Riester-product FFF (excellent) (Förderrente invest) Annuity (Rente classic) FF+ (very good) Disability insurance FFF (excellent) (BUZ) 5 stars from M&M • Top ratings from the two most important rati
Slide 19: We have a powerful multi-channel distribution ...
We have a powerful multi-channel distribution ... Market management Sales employees, agents & brokers Banks / Strategic partners - DB sales force ~ 10’000 Mobile sales - Tied agents ~ 2’000 organisation - Financial advisors ~ 1’000 - Brokers ~ 4’000 Customers - Multi level networks ~ 1’000 Total ~ 8
Slide 20: ... and 15 years of bancassurance experience
... and 15 years of bancassurance experience GWP (EUR bn) 0.01 1.0 1.9 3.7 1990 1992 1995 2002 1989: Deutsche Deutsche Bank Merger of Zurich acquired Bank established acquired DHL+dbL DH group (incl. co- db Leben (dbL) DH group operation with DB) Success factors of bancassurance • Position products
Slide 21: New business volume up 11% CAGR since 2001
New business volume up 11% CAGR since 2001 New business performance by distribution channel (APE1 in EUR millions) CAGR 6852 (+32%) 11% 529 5182 506 (+8%) (+5%) (-2%) 282 Mobile 299 246 sales 322 forces 403 230 272 Banks 184 2001 2002 2003 2004 1 APE = Annual premiums equivalent 2 Including new busi
Slide 22: Agenda
Agenda • German life insurance market potential • Zurich Group Germany – brief history and recent developments • Zurich’s business model and focus in Germany • Current issues and future challenges of German life insurance • Summary © Zurich Financial Services- UBS Conference, July 8, 2005 22
Slide 23: Current issues and future challenges
Current issues and future challenges Issues & challenges Actions taken or initiated by Zurich Life Germany 1. Longevity 9 Annuity reserves strengthened 9 New mortality tables implemented for new business 9 New bonus system in place without guaranteed interest rates for bonuses 2. Low yield environme
Slide 24: Agenda
Agenda • German life insurance market potential • Zurich Group Germany – brief history and recent developments • Zurich’s business model and focus in Germany • Current issues and future challenges of German life insurance • Summary © Zurich Financial Services- UBS Conference, July 8, 2005 24
Slide 25: Summary
Summary • Zurich is firmly established and well positioned in the top tier of one of the biggest and most promising life insurance markets in Europe • We have made visible progress on all key performance indicators especially in the profitability of new business and are ready to capitalize further o
Slide 26: ZURICH
@ ZURICH OWA
Slide 27: Appendix
@ ZURICH Appendix
Slide 28: Increased tax incentives for old-age provisions provide further growth opportunities in Germany
Increased tax incentives for old-age provisions provide further growth opportunities in Germany Pension & tax reforms reduce state Tax Our solutions with pensions & provide private old-age incentives strong focus on provisions partly with tax benefits UL in all layers 1. Layer: Base coverage • State
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