Axa Sa · EURONEXT:CS
Axa Sa — FY2016 Earnings Presentation
122 slides from Axa Sa's earnings presentation, Feb 23, 2017
Slide 1: AXA Full Year 2016 Earnings Presentation
AXA FULL YEAR 2016 EARNINGS Presentation February 23, 2017
Slide 2: Forward-looking statements
Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and
Slide 3: Table of Contents
TABLE OF CONTENTS INTRODUCTION & HIGHLIGHTS PAGE A4 Thomas Buberl, Group CEO FY16 FINANCIAL PERFORMANCE PAGE A15 Gérald Harlin, Group CFO CONCLUDING REMARKS PAGE A42 Thomas Buberl, Group CEO A3 | Full Year 2016 Earnings | Presentation | February 23, 2017
Slide 4: Introduction & highlights
Introduction & highlights Thomas Buberl, Group CEO
Slide 5: FY16 Earnings – Key Takeaways
FY16 EARNINGS – KEY TAKEAWAYS Earnings growth delivery with strong second half Increased dividend supported by earnings growth Business growth across all lines Our Ambition: Innovation leader in insurance A5 | Full Year 2016 Earnings | Presentation | February 23, 2017
Slide 6: Earnings growth delivery with strong second half
EARNINGS GROWTH DELIVERY WITH STRONG SECOND HALF Underlying earnings Adjusted earnings In Euro billion In Euro billion +3% vs. -2% at 1H16 +3% vs. 6.1 0% at 1H16 5.9 5.7 5.5 FY15 FY16 FY15 FY16 restated restated Changes are in constant Forex A6 | Full Year 2016 Earnings | Presentation | February 23,
Slide 7: Increased dividend supported by earnings growth
INCREASED DIVIDEND SUPPORTED BY EARNINGS GROWTH Underlying earnings per share Dividend per share In Euro per share In Euro per share +4% +5% 2.16 2.24 1.16 1.10 FY15 FY16 Adjusted earnings per share In Euro per share +3% FY15 FY16 2.34 2.41 47% 48% Payout ratio guidance 45%-55% of adjusted earnings
Slide 8: L&S – Improved growth with sustained profitability
L&S – IMPROVED GROWTH WITH SUSTAINED PROFITABILITY FY16 APE Growth FY16 NBV Growth +2.1% +5% (vs. -1.9% at 1H16) ( 40% FY16 NBV margin) Acceleration in Asia1 Focused Net Flows Key inforce actions In Euro billion Protection & Health +5.1 Belgian buyout +16% G/A Capital Light2 G/A -6.6 +3.6 Euro 1.5 b
Slide 9: P&C – Continued growth and underwriting discipline
P&C – CONTINUED GROWTH AND UNDERWRITING DISCIPLINE Gross revenues P&C CY Loss ratio -0.5 pt +3.4% 71.9% 70.8% FY16 growth +3% Mature markets1 FY15 FY16 restated +7% Emerging markets1 94-95% AY CoR by 2020 Target now includes International Insurance Changes are on a comparable basis for revenues and
Slide 10: Health – Improved growth and profitability
HEALTH – IMPROVED GROWTH AND PROFITABILITY Gross revenues1 Health1 Combined ratio -0.2 pt +4.3% 95.1% 94.9% FY16 GR growth (vs. +3.4% at 1H16) Euro 12 billion FY16 Gross Revenues FY15 FY16 restated Changes are on a comparable basis A10 | Full Year 2016 Earnings | Presentation | February 23, 2017 All
Slide 11: Cost savings underway towards Ambition 2020
COST SAVINGS UNDERWAY TOWARDS AMBITION 2020 Cost savings In Euro billion 2.1 Administrative expenses Claims handling costs Acquisition expenses 0.3 +3% UEPS CAGR* FY16 Ambition 2020 achievement Target 2015 – 2020E * Contribution to Ambition 2020 UEPS CAGR target from cost savings per 2016 Investor D
Slide 12: In line with Ambition 2020 targets
IN LINE WITH AMBITION 2020 TARGETS Underlying earnings per share Group operating free cash flow +4% FY16 vs. FY15 Euro 6.2FY16 billion Target 3%-7% Target Euro 28-32 bn CAGR 2015-2020E Cumulative 2016E-2020E Adjusted return on equity1 Solvency II ratio2 13.5% FY16 197% FY16 Target 12% - 14% 170% - 2
Slide 13: Investing for a responsible future
INVESTING FOR A RESPONSIBLE FUTURE Launch of additional Euro 150 million AXA divested from the Fund of Funds in Jan 2017 Tobacco Industry NeXT Building the next insurance business Innovation and model Responsibility Certification Insurtech start-up studio for Gender Diversity A13 | Full Year 2016 Ea
Slide 14: Our ambition: innovation leader in insurance
OUR AMBITION: INNOVATION LEADER IN INSURANCE 7 contacts A Prevention: per week from each active user Chat-bot technology 20/80 robot/human interactions in Asia moving to 50/50 in 2017 40 seconds average response time 30% of registered users are active Innovative 22% of users B have used the clinical
Slide 15: FY16 Financial performance
FY16 Financial performance Gérald Harlin, Group CFO
Slide 16: FY16 Financial performance
FY16 FINANCIAL PERFORMANCE Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A16 | Full Year 2016 Earnings | Presentation | February 23, 2017
Slide 17: Underlying earnings
UNDERLYING EARNINGS UNDERLYING EARNINGS UNDERLYING EARNINGS BY SEGMENT In Euro million +3% FY15 In Euro million FY16 Change restated 5,507 5,688 Life & Savings 3,375 3,507 +2% Property & Casualty 2,482 2,514 +2% Asset Management 458 416 -8% Banking 97 78 -19% Holdings -906 -827 +9% Underlying Earnin
Slide 18: Adjusted earnings
ADJUSTED EARNINGS ADJUSTED EARNINGS DETAILS OF ADJUSTED EARNINGS In Euro million +3% FY15 5,940 6,103 In Euro million restated FY16 Underlying Earnings 5,507 5,688 Net realized capital gains/losses 433 415 o/w realized capital gains 725 880 o/w net impairments -278 -395 o/w hedging of equity portfol
Slide 19: Net income
NET INCOME NET INCOME DETAILS OF NET INCOME In Euro million +2% FY15 5,829 In Euro million FY16 5,617 restated Adjusted earnings 5,940 6,103 Change in fair value & Forex -231 -118 o/w gains (losses) on economic hedges 1 -19 -158 o/w change in fair value of assets accounted for as fair value option -
Slide 20: FY16 Financial performance
FY16 FINANCIAL PERFORMANCE Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A20 | Full Year 2016 Earnings | Presentation | February 23, 2017
Slide 21: L&S – New business sales and margins by market
L&S – NEW BUSINESS SALES AND MARGINS BY MARKET In Euro million Mature markets Emerging markets Total Total +2% -1% o/w SEA & China +19% 6,464 6,600 o/w Hong Kong +12% 5,163 5,194 New business +14% sales (APE) + 1,301 1,406 = FY15 FY16 FY15 FY16 FY15 FY16 restated restated restated New business 35% 3
Slide 22: L&S – New business sales and margins by business
L&S – NEW BUSINESS SALES AND MARGINS BY BUSINESS APE NBV Net Flows (Euro million) margin (Euro billion) FY15 Business line FY16 change FY16 FY16 restated Protection & Health 2,949 +2% 61% +6.0 +5.1 o/w Euro -1.5 G/A Savings 1,438 +15% 18% -3.42 -3.0 billion Belgium buyout of which G/A capital light1
Slide 23: L&S – Underlying earnings by business
L&S – UNDERLYING EARNINGS BY BUSINESS TOTAL PROTECTION & G/A SAVINGS UNIT-LINKED LIFE LIFE & & SAVINGS SAVINGS1 HEALTH (pre-tax) (pre-tax) (post-tax) (pre-tax) In Euro million In Euro million In Euro million In Euro million -5% +4% 2,496 +2% 2,415 1,915 1,835 3,507 3,375 -2% +2% 998 986 822 848 FY15
Slide 24: L&S – Underlying earnings drivers
L&S – UNDERLYING EARNINGS DRIVERS TOTAL LIFE LIFE & & SAVINGS SAVINGS1 In Euro million (post-tax) Includes: In Euro million • Lower pre-tax earnings impact • Lower corporate tax rate in France 107 110 +4% +2% 1,915 124 15 35 3,507 1,835 3,507 131 3,375 -131 3,375 -259 • Lower prior year reserve deve
Slide 25: FY16 Financial performance
FY16 FINANCIAL PERFORMANCE Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A25 | Full Year 2016 Earnings | Presentation | February 23, 2017
Slide 26: P&C – Revenues by segment
P&C – REVENUES BY SEGMENT TOTAL PERSONAL LINES In Euro million In Euro million +4% +3% 18,057 18,105 34,831 35,604 • Average price effect of +3.8% • Motor revenues up 4% • Non-motor revenues up 4% FY15 FY16 restated COMMERCIAL LINES In Euro million +2% 16,631 17,217 FY15 FY16 • Average price effect
Slide 27: P&C – Price effect by country and segment
P&C – PRICE EFFECT BY COUNTRY AND SEGMENT Personal Lines Commercial Lines FY16 Price Revenues Price Revenues effect growth effect growth 2017 Market pricing trends Slight increase in prices expected in Personal lines. France +0.4% +1.7% +1.6% -3.2% Increased pressure on prices in Commercial lines. P
Slide 28: P&C – Revenues and margins by market
P&C – REVENUES AND MARGINS BY MARKET Emerging Mature markets Direct Total markets In Euro million +3% +2% 34,831 35,604 27,606 +9% on an economic 26,940 gross revenues basis1 Revenues + 5,159 +7% 5,134 + 2,732 +7% 2,864 = FY15 FY16 FY15 FY16 FY15 FY16 FY15 FY16 restated restated restated restated +0
Slide 29: P&C – Underlying earnings
P&C – UNDERLYING EARNINGS P&C UNDERLYING EARNINGS COMBINED RATIO In Euro million Current year Prior year reserve All-year combined ratio + developments combined ratio + Lower loss ratio - Higher acquisition costs +2% 2,514 97.7% 97.7% 2,482 96.2% 96.5% 0.7% 0.5% -1.4% -1.2% FY15 FY16 FY15 FY16 FY15
Slide 30: FY16 Financial performance
FY16 FINANCIAL PERFORMANCE Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A30 | Full Year 2016 Earnings | Presentation | February 23, 2017
Slide 31: AM – Assets under management
AM – ASSETS UNDER MANAGEMENT Average AUM and net flows in Euro billion Revenues in Euro million Net flows Average AUM Revenues (incl. Joint Ventures)1 (excl. Joint Ventures) (excl. Joint Ventures) +1% excl. Friends Life -3% -3% impact 618 595 1,242 1,180 +56 +42 FY15 FY16 FY15 FY16 FY15 FY16 Euro 38
Slide 32: AM – Underlying earnings
AM – UNDERLYING EARNINGS ASSET MANAGEMENT In Euro million In Euro million -1% -8% 234 225 458 416 FY15 FY16 In Euro million -16% +6% excl. Tax one-off 224 FY15 FY16 191 Including a negative tax one-off of Euro 50 million in FY16 at AB. FY15 FY16 Changes are in constant Forex Full detail in appendix
Slide 33: FY16 Financial performance
FY16 FINANCIAL PERFORMANCE Group earnings Life & Savings Property & Casualty Asset Management Balance sheet A33 | Full Year 2016 Earnings | Presentation | February 23, 2017
Slide 34: Asset & liability management (1/4)
ASSET & LIABILITY MANAGEMENT (1/4) Diversified and resilient investment portfolio FY16 Total General Account Limited yield dilution invested assets 83% in Fixed income Fixed income Assets duration as at December 31, 2016 Life & Savings 8.3 years Alternative investments1 Property & Casualty 5.6 years
Slide 35: Asset & liability management (2/4)
ASSET & LIABILITY MANAGEMENT (2/4) Diversified and resilient investment portfolio Government and related bonds rating Corporate bonds rating1 40% of total General Account invested assets in FY16 35% of total General Account invested assets in FY16 AA 38% AA 13% 32% A AAA 27% Euro 236 Euro 202 AAA 11
Slide 36: Asset & liability management (3/4)
ASSET & LIABILITY MANAGEMENT (3/4) Well diversified and high quality new investments New fixed income investments in FY16 Resilient new investment yield Investment Grade Government bonds credit & related Average rating: A Average rating: AA Yield on new investments in fixed income assets ~52% for Li
Slide 37: Asset & liability management (4/4)
ASSET & LIABILITY MANAGEMENT (4/4) Life & Savings General Account investment spreads and margin Inforce business New business Spread above Resilient investment Spread above guaranteed rates margin1 guaranteed rate +140 bps 79 bps 73 bps Guidance: 3.3% 65-75 bps +140 bps 1.8% 1.9% 0.4% FY16 FY15 FY16
Slide 38: Shareholders' equity
SHAREHOLDERS’ EQUITY Shareholders’ equity Key drivers of change In Euro billion In Euro billion 70.6 68.5 FY16 vs. FY15 + Net income for the period +5.8 + Change in net unrealized capital gains +1.7 - Dividends -2.7 - Subordinated debt -1.5 - Change in pension benefits -0.6 - Forex and other -0.7 FY
Slide 39: Debt & ratings
DEBT & RATINGS Financial debt Debt ratios In Euro billion Euro 3 billion debt FY15 FY16 issued in FY16 to 18.3 refinance in 17.0 advance part of outstanding debt Debt 26% 26% Gearing2 8.1 Interest 10.7x 15.7x 9.5 Cover3 Ratings 9.1 AA- as of 27/10/2016 6.9 stable 1.1 Aa3 as of 09/09/2016 0.6 stable
Slide 40: Solvency II ratio
SOLVENCY II RATIO Solvency II ratio1 Key sensitivities In Euro billion Ratio as of December 31, 2016 197% 205% 197% Solvency II ratio Interest rate +50bps 200% +3 pts 59.2 57.9 -9 pts Interest rate -50bps 188% 28.8 29.4 Corporate spreads +75bps 196% -1 pt Available capital Required capital Equity ma
Slide 41: Strong cash flow generation & remittance
STRONG CASH FLOW GENERATION & REMITTANCE In Euro billion Operating Free Cash Flows FY16 vs. FY15 growth 0% +7% Cash remitted from entities 6.2 6.2 5.4 5.1 Increased remittance ratio from entities in FY16 FY15 restated FY16 Remittance 81% 88% ratio Changes are on a comparable basis A41 | Full Year 20
Slide 42: Concluding remarks
Concluding remarks Thomas Buberl, Group CEO
Slide 43: AXA = Consistent Delivery
FY16 EARNINGS – KEY TAKEAWAYS AXA = Consistent Delivery Top line growth (+3%) Earnings (+4% UEPS) Dividend (+5% DPS) ROE (13.5%) Financial Strength (197% SII ratio) A43 | Full Year 2016 Earnings | Presentation | February 23, 2017
Slide 44: Q&A Full Year 2016 Earnings
Q&A FULL YEAR 2016 EARNINGS
Slide 45: Notes (1/2)
NOTES (1/2) In this document, “restated” stands for the retroactive restatements mainly for the sale of the UK Life & Savings and reclassification of the International Insurance segment split into L&S and P&C and some Protection products with Unit-Linked features which were previously classified und
Slide 46: Notes (2/2)
NOTES (2/2) Page A31: 1. AXA IM’s joint ventures in Asia (China, Korea and India) are included at 100% in net flows, opening and closing assets under management but are excluded from revenues and average assets under management as they are not fully consolidated. Page A34: 1. Mainly Private Equity a
Slide 47: Definitions
DEFINITIONS AXA’s FY16 financial statements are subject to a completion of limited review by AXA’s independent auditors. AXA's FY16 results have been prepared in accordance with IFRS and interpretations applicable and endorsed by the European Commission as of December 31, 2016. Underlying Earnings,
Slide 48: Appendices
AXA FULL YEAR 2016 EARNINGS Appendices February 23, 2017
Slide 49: Forward-looking statements
Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and
Slide 50: Table of Content
TABLE OF CONTENT BUSINESS OVERVIEW B04 GROUP B12 LIFE & SAVINGS B16 PROPERTY & CASUALTY B33 HEALTH B39 ASSET MANAGEMENT B41 BALANCE SHEET B44 CORPORATE RESPONSIBILITY B73 B3 | Full Year 2016 Earnings | Appendices | February 23, 2017
Slide 51: Business overview
Business overview
Slide 52: Group revenues and underlying earnings
GROUP REVENUES AND UNDERLYING EARNINGS Revenues by geography1 Underlying earnings by geography1,2 Other3 Other3 5% 4% Asset management Asset management 4% 6% EMEA-LATAM4 France EMEA-LATAM4 France 6% 24% 3% 21% Asia (incl. Japan) Asia (incl. Japan) 11% Euro 100 billion 17% Euro 7 billion Europe Unite
Slide 53: Life & Savings | Scope overview
LIFE & SAVINGS | Scope overview Global footprint Well balanced business mix FY16 APE by geography FY16 APE by business Mutual Funds & other EMEA-LATAM1 Other3 10% 2% 0% G/A Savings 22% Europe (excl. France)2 Total APE Protection & France Euro 6,600 million Health 17% 28% 45% Unit-Linked 23% US Asia
Slide 54: Property & Casualty | Scope overview
PROPERTY & CASUALTY | Scope overview Global footprint Strong presence in Motor FY16 revenues by geography1 FY16 revenues by business Other3 Construction 15% AXA Assistance 2% 4% Workers’ Other2 AXA Corporate 0% compensation 4% Motor Solutions Total 39% 7% Euro 35.6 billion France Liability Asia 21%
Slide 55: AXA's footprint in emerging markets
AXA’S FOOTPRINT IN EMERGING MARKETS Life & Savings Property & Casualty FY16 APE by geography FY16 revenues by geography Czech Republic Singapore Poland 3% 5% Thailand 2% 2% Philippines 3% Mexico Brazil Morocco 2% 2% Other1 5% 3% Singapore Malaysia 7% Hong Kong 6% Mexico 38% Colombia 28% Indonesia 9%
Slide 56: L&S economic gross revenues
L&S ECONOMIC GROSS REVENUES Economic gross revenues1 FY15 Change on IFRS2 change on FY16 In Euro million restated comparable basis comparable basis Life & Savings United States 13,628 14,303 +4% +4% France 16,266 17,206 +5% +6% Germany 6,650 6,662 0% 0% Switzerland 7,170 7,044 -1% -1% Belgium 1,715
Slide 57: P&C economic gross revenues
P&C ECONOMIC GROSS REVENUES Economic gross revenues1 FY15 Change on IFRS2 change on FY16 In Euro million restated comparable basis comparable basis Property & Casualty France 6,014 6,736 0% 0% United Kingdom & Ireland 4,792 4,657 +8% +8% Germany 3,909 4,016 +3% +3% Switzerland 3,069 3,056 +1% +1% Be
Slide 58: Asset Management | Scope overview
ASSET MANAGEMENT| Scope overview Complementary business models • Multi-expert model: structured by • Risk-reducing, return-seeking, diversifying “Expertise” strategies and customized solutions • Expertise in fixed income, equities, • Expertise in actively managed equity and fixed PRODUCT quantitativ
Slide 59: Group
Group
Slide 60: Revenues
REVENUES Revenues by segment FY15 Reported Comparable In Euro million FY16 restated change change 1 Life & Savings 58,862 60,282 +2% +2% Property & Casualty 34,831 35,604 +2% +3% Asset Management 3,822 3,710 -3% -3% Banking 621 596 -4% -4% Revenues 98,136 100,193 +2% +2% 1. Restated to exclude UK Li
Slide 61: Underlying earnings by geography
UNDERLYING EARNINGS BY GEOGRAPHY Underlying Earnings In Euro million FY15 Reported Change at FY16 restated change constant Forex 1 Life & Savings 3,375 3,507 +4% +2% United Sates 834 905 +9% +7% France 825 774 -6% -8% Japan 412 480 +17% +5% Germany 165 223 +36% +36% Switzerland 328 287 -12% -11% Bel
Slide 62: FY16 key sensitivities
FY16 KEY SENSITIVITIES P&L Balance Sheet 1 In Euro billion Impairments net of Change in fair value Total impact in Net Net unrealized capital hedges through and Forex through income (incl. Impact gains through through Adjusted Adjusted Earnings Net Income earnings) Shareholders' Equity -25% -0.5 -0.
Slide 63: Life & Savings
Life & Savings
Slide 64: Life & Savings contents
LIFE & SAVINGS 1 REVENUES, NEW BUSINESS VOLUMES AND PROFITABILITY Page B18 2 UNDERLYING EARNINGS MARGIN ANALYSIS Page B19 3 UNDERLYING EARNINGS MARGIN ANALYSIS BY BUSINESS Page B25 4 FOCUS ON THE US Page B31 B17 | Full Year 2016 Earnings | Appendices | February 23, 2017
Slide 65: L&S | Revenues and net inflows
1 L&S | Revenues and net inflows FY16 L&S revenues by region L&S net inflows In Euro billion Net flows by country/region FY15 In Euro billion FY16 restated France +3.1 +3.5 EMEA-LATAM and other1 Europe (excl. France) +0.6 -2.9 -8% United States 0.0 +0.1 1.3 Asia (incl. Japan) +2.6 +3.4 Asia (incl. J
Slide 66: L&S | Underlying earnings margin analysis
2 L&S | Underlying Earnings margin analysis Gross Margin Expenses In Euro million Comp. In Euro million Comp. FY16 1 FY16 1 Change Change 2 Margin on revenues 4,989 -2% Acquisition expenses 4,745 +16% Margin on assets 5,689 -4% Admin. Expenses 3,052 +1% Technical margin 1,498 +167% VBI amortization
Slide 67: L&S | Margin on revenues
2 L&S | Margin Analysis Margin on revenues Details of margin on revenues 1 Average margin on L&S revenues 8.3% -0.1 pt -0.3 pt business mix Detail by product +0.3 pt country mix Protection & Health: 14.2% G/A Savings: 2.0% Unit-Linked: 2.6% Mutual funds & other: 3.2% 1 Margin on revenues x Euro 4,
Slide 68: L&S | Unit-Linked management fees
2 L&S | Margin Analysis Unit‐Linked management fees Details of margin on Unit-Linked assets Average management fees on Unit-Linked reserves 160 bps -6 bps -4 bps business mix Unit-Linked management fees -2 bps country mix x Euro 2,604 million -3% Margin on assets1 Unit-Linked average reserves +
Slide 69: L&S | Investment margin
2 L&S | Margin Analysis Investment margin Details of margin on General Account assets Unit-Linked management fees Euro 2,604 million -3% Average management fees on general Margin on assets1 + account reserves Euro 5,689 million -4% 73 bps -5 bps 1. Including other fees (mainly -5 bps business
Slide 70: L&S | Technical margin
2 L&S | Margin Analysis Technical margin Details of technical margin 1 Mortality & morbidity margin and other Euro 1,684 million -10% Technical margin + * Euro 1,498 million +108% * Or +167% on a constant forex basis which includes a reclassification from margin on revenues to technical margin,
Slide 71: L&S | Focus on gross technical margin
2 L&S | Margin Analysis Focus on gross technical margin Gross mortality, morbidity & surrender margin (pre-tax) In Euro million -10% FY16 mortality, morbidity and surrender margin evolution 1,609 1,684 mainly explained by: • Lower prior year reserve development and non-repeat of assumptions change i
Slide 72: L&S | Underlying earnings by business
3 L&S | Underlying Earnings by business FY15 Euro million FY16 % change restated Protection & Health 2,496 2,415 -5% G/A Savings 822 848 +2% Unit-Linked 998 986 -2% Mutual funds & Other 98 139 +3% Pre-tax Underlying Earnings 4,413 4,388 -2% Tax and Minority interest -1,038 -881 Underlying Earnings 3
Slide 73: L&S | FY16 margin analysis by business
3 L&S | FY16 Margin analysis by business Protection & Mutual Funds In Euro million G/A savings Unit-Linked Health & Other Margin on 8% 4,264 262 373 90 revenues of GWP Investment 73 bps 901 1,543 157 68 margin of avg. G/A reserves Management 160 bps 189 2,415 fees of avg. UL reserves Technical 1,590
Slide 74: L&S | Protection & Health
3 L&S | Margin Analysis by business Protection & Health1 Technical result Unit-Linked management fees Net investment margin In Euro million Comp. Comp. Comp. FY16 FY16 FY16 Change Change Change Protection & Health Protection & Health Protection & Health 29,966 +3% 15,529 -1% 175,141 +3% GWP average
Slide 75: L&S | Protection & Health combined ratio
3 L&S | Margin Analysis by business Protection & Health – Details on Combined Ratio Combined ratio Expense ratio1 -0.5 pt excluding exceptionals Expense ratio deteriorated by 0.2 point: on French Protection +0.4 pt - Higher DAC amortization in the US (partly offset 95.9% 96.1% in fees and revenues)
Slide 76: L&S | G/A Savings
3 L&S | Margin Analysis by business G/A Savings In Euro million Comp. Comp. FY16 FY16 Change Change G/A Savings G/A Savings Average 13,096 +6% 188,347 +2% Gross revenues reserves x x Margin on G/A Savings Investment 2.0% -0.7 pt 82 bps -4 bps G/A Savings revenues spread Comp. FY16 Change Technical m
Slide 77: L&S | Unit-Linked
3 L&S | Margin Analysis by business Unit-Linked In Euro million Comp. Comp. FY16 FY16 change change Unit-Linked Gross Unit-Linked 14,549 -9% 147,198 +1% revenues Average reserves x x Average margin on UL average 2.6% -0.5 pt 164 bps -6 bps Unit-Linked revenues Management fees Comp. FY16 change Unit-
Slide 78: L&S | Focus on the US
4 L&S | Focus on the US US Variable Annuity GMxB Underlying Earnings In Euro million, net of DAC and tax1 FY13 FY14 FY15 FY16 Total Variable Annuity base fees & other, less 338 2962 381 329 expenses GMxB hedge margin -50 -74 -13 23 Positive GMxB o/w Basis -1 -26 -12 -4 hedge margin o/w Volatility -1
Slide 79: Reclassification of Unit-Linked Protection with Savings
L&S | Reclassification of Unit-Linked Protection with Savings to Protection & Health Unit-Linked Key performance indicator 1 Protection with FY15 FY15 (in Euro million, unless other specified) Savings restated products Protection & Health 2,645 380 3,025 APE Unit-Linked 2,217 -380 1,837 Protection &
Slide 80: Property & Casualty
Property & Casualty
Slide 81: P&C | Revenues and net new contracts
P&C | Revenues and net new contracts FY16 P&C revenues by markets FY16 P&C personal net new contracts In thousands Direct Of which: +82 in Direct 8% +76 in Mature +212 +54 in Emerging Emerging markets 14% Of which: +366 in Direct -392 in Mature Mature markets -508 in Emerging 78% -534 FY15 FY16 Posi
Slide 82: P&C | Underlying earnings analysis
P&C | Underlying Earnings analysis Net technical result Net investment income In Euro million In Euro million FY16 Change FY16 Change Revenues 35,604 +3% Average P&C assets 72,615 +6% x x Combined ratio1 (in %) 96.5% +0.5 pt Average Asset Yield3 3.0% -0.2 pt Net technical result2 1,230 -10% Net inve
Slide 83: P&C | Details on combined ratio
P&C | Details on Combined Ratio Combined ratio Expense ratio roll-forward +0.6 pt 25.7% 26.9% +0.5 pt 8.9% Administrative 8.7% + 0.1 pt 96.2% 96.5% Acquisition 17.0% +0.5 pt 18.1% Expense 25.7% 26.9% Ratio FY15 restated FY16 Loss ratio roll-forward Loss 70.5% 69.6% Ratio -0.1 pt 70.5% +0.3 pt 69.6%
Slide 84: P&C | Current year loss ratios
P&C | Details on current year loss ratios Personal Motor Personal non Motor 75.9% 0.0pt +1.3pts 75.0% +1.9pts 62.1% +1.5pts +0.3pt 62.6% -4.1pts -0.1pt -1.2pts o/w Turkey o/w Turkey -2.3 pts +1.6 pts FY15 CY Nat Cat Price effect Frequency Other1 FY16 CY FY15 CY Nat Cat Price effect Frequency Other1
Slide 85: 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% 3.1% 2.7% 2.0% 2.1% 2.1% 1.7% 1.8% 1.8% 1.4% 1.2% 1.2% 1.3% 1.4% 1.2% 0.9% 0.6% FY05 FY06 FY07 FY08 1H09 FY09 1H10 FY10 1H11 FY11 1H12 FY12 1H13 FY13 1H14 FY14 1H15 FY15* 1H16
Slide 86: Health
Health
Slide 87: Health | Revenues
Health | Revenues FY16 Health revenues FY16 Health revenues by country In Euro million In Euro billion +4% 12,010 11,959 Others1 5% Asia 6% France FY15 restated FY16 EMEA-LATAM 28% 9% Combined ratio Japan Euro 12% 12.0 billion -0.2pt Germany 95.1% 94.9% UK 24% 15% FY15 restated FY16 Changes are on a
Slide 88: Asset Management
Asset Management
Slide 89: Asset Management | Underlying earnings
ASSET MANAGEMENT | Underlying Earnings Details of Asset Management margin analysis Margin1 Expenses1 In Euro million In Euro million FY16 Change2 FY16 Change2 3 Asset Management Asset Management fees 3,501 -1% 2,547 -1% expenses Distribution revenues 686 -10% Investment result -22 +78% Distribution
Slide 90: Asset Management | Revenues and AUM
ASSET MANAGEMENT | Underlying Earnings Details on Asset Management revenues Average management fees on Average Assets under Management 31 bps 0 bps Assets Management fees x Euro 3,261 million -2% o/w performance fees Euro 78 million (11%) 1 Average Assets under Management 1 o/w research services fee
Slide 91: Balance Sheet
Balance Sheet
Slide 92: Balance sheet contents
BALANCE SHEET 1 GENERAL ACCOUNT INVESTED ASSETS B45 1.1 Government bonds and related B46 1.2 Corporate bonds B49 1.3 Asset backed securities B53 1.4 Equity B54 1.5 Real estate B56 1.6 Hedge Funds B57 1.7 Private Equity B58 1.8 Mortgage loans B59 2 FOCUS ON NET UNREALIZED CAPITAL GAINS B60 3 ASSET LI
Slide 93: General account invested assets
1 GENERAL ACCOUNT INVESTED ASSETS Invested assets (100% ) FY15 % FY16 % in Euro billion Published Changes in Fixed income 457 83% 485 83% asset mix o/w Govies and related 225 41% 236 40% Yields: positive impact o/w Corporate bonds 190 34% 202 35% linked to decrease in interest rates on fixed o/w Ass
Slide 94: Government bonds and related
1.1 GOVERNMENT BONDS AND RELATED Breakdown by geography Breakdown by segment Austria Netherlands 3% 2% P&C 10% Supranational Institutions Ireland 4% 1% Spain France L&S 6% 20% 90% Switzerland 6% Other 7% Euro 236 billion Gross1 unrealized capital gains and losses Japan 13% In Euro billion Belgium 8%
Slide 95: Exposure to Eurozone peripheral countries
1.1 GOVERNMENT BONDS AND RELATED FOCUS ON EXPOSURE TO EUROZONE PERIPHERAL COUNTRIES Exposure by issuer Gross book value Gross market value Gross book value Gross market value in Euro billion December 31, 2015 December 31, 2015 December 31, 2016 December 31, 2016 Italy 18.5 22.6 20.6 23.0 Spain 12.1
Slide 96: Corporate bonds
1.2 CORPORATE BONDS Breakdown by industry Breakdown by segment P&C Basic materials Other 4% 5% 17% Financials 5% L&S Consumer cyclical 83% 6% Banks 37% Energy 6% Euro 202 billion Gross1 unrealized capital gains and losses Communications 8% In Euro billion 7.8 8.0 Industrials 8% Consumer non-cyclical
Slide 97: Corporate bonds breakdown by entity and rating
1.2 CORPORATE BONDS BREAKDOWN BY ENTITY AND RATING (including CDS) P = Participating NP = Non-participating 1 In Euro billion France US Belgium Germany Switzerland Japan Other Total As of December 31, 2016 P NP P NP P NP P NP P NP P NP P NP P NP AAA 2.5 1.1 0.0 0.3 0.1 0.1 8.4 1.1 6.4 1.0 - 0.8 0.2
Slide 98: Focus on banking corporate bonds
1.2 FOCUS ON BANKING CORPORATE BONDS As of December 31, 2016 Gross market value Senior Debt Subordinated Debt Total in Euro billion Secured Non secured Lower Tier 2 Upper Tier 2 Tier 1 Preferred By rating: AAA 20.9 0.7 0.0 0.0 0.0 0.0 21.6 AA 6.7 7.8 0.2 0.0 0.0 0.0 14.7 A 3.2 19.8 2.0 0.0 0.0 0.0 2
Slide 99: Focus on CDS
1.2 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 strategy: buy credit d
Slide 100: Asset backed securities
1.3 ASSET BACKED SECURITIES Breakdown by asset type1 Breakdown by rating Other asset-backed Mortgage-backed CLO 86% Below investment US Subprime, Alt-A grade & NC RMBS Non rated/Equity 5% 6% 3% BBB 2% Commercial MBS 4% A Euro 13 billion Prime Residential 10% AAA 3% 56% Consumer ABS2 AA 1% 23% CDO 1%
Slide 101: Listed equity portfolio overview
1.4 LISTED EQUITY PORTFOLIO OVERVIEW Breakdown by geography Breakdown by segment Holdings 1% P&C 22% Rest of the World 15% US L&S Other Eurozone 23% countries 78% 9% UK Euro 19 billion Gross1 unrealized capital 4% gains and losses Switzerland France 5% 22% In Euro billion Belgium 3.4 3.5 6% Japan Ge
Slide 102: Shareholders' exposure to listed equity
1.4 SHAREHOLDERS’ EXPOSURE TO LISTED EQUITY Estimated shareholders’ exposure to listed equity (in Euro billion) FY15 FY16 20 19 8 7 Gross Group share Gross Group share nominal 100% net of hedge, nominal 100% net of hedge, tax & PB tax & PB B55 | Full Year 2016 Earnings | Appendices | February 23, 20
Slide 103: Real estate investments
1.5 REAL ESTATE INVESTMENTS Defensive portfolio with good performance over the long term Breakdown by geography Breakdown by segment US UK 2% P&C 6% 19% Japan Other Eurozone 1% countries 7% Switzerland L&S 37% 81% Germany 9% Market value1,2 Euro 30 billion Belgium 10% Breakdown by type and geography
Slide 104: Hedge fund investments
1.6 HEDGE FUND INVESTMENTS Diversified portfolio of hedge funds AXA portfolio return drivers Well diversified exposure Alternative Credit : 9 managers Relative value credit 17% Alternative Credit Multi-Strategy program program Market value 67% Short dated carry 33% Deep value credit Euro 6 billion 5
Slide 105: Private equity investments
1.7 PRIVATE EQUITY INVESTMENTS Diversified portfolio built over the long run Breakdown by geography Breakdown by expertise 4% Venture Japan 16% Other 2% Infrastructure 6% 12% Private debt 68% Buy-out Market value Diversified portfolio US Euro 9 billion 31% Europe 61% 44% Direct 56% As of December 31
Slide 106: Mortgage loans & other
1.8 MORTGAGE LOANS & OTHER Low risk mortgage loan portfolio FY16 market value by entity1 35% 21% Switzerland Germany Other 7% 49% Residential 87% Residential 51% Commercial 13% Commercial France 9% Switzerland 28% 9% 35% United States France 5% Residential 26% Agricultural Market value2 Euro 33 bill
Slide 107: Focus on net unrealized capital gains
2 FOCUS ON NET UNREALIZED CAPITAL GAINS Balance sheet net unrealized Off balance sheet net unrealized capital gains capital gains In Euro billion In Euro billion 14.6 12.8 1.6 5.3 1.7 2.0 4.2 Equities & Other 1 1.6 Corporate bonds Government bonds and related 11.2 9.5 FY15 FY16 FY15 FY16 Net unreali
Slide 108: Asset & liability management (1/2)
3 ASSET & LIABILITY MANAGEMENT (1/2) Life & Savings General Account investment spreads and margin Inforce business New business Spread above Resilient investment Spread above guaranteed rates margin1 guaranteed rate +140 bps 79 bps 73 bps Guidance: 3.3% 65-75 bps +140bps 1.8% 1.9% 0.4% FY16 FY15 FY1
Slide 109: Asset & liability management (2/2)
3 ASSET & LIABILITY MANAGEMENT (2/2) L&S General Account investment spreads for main entities Inforce New business 3.8% 310bps 1.9% 190bps • Average G/A reserves: Euro 105 billion • G/A Savings new business sales with France 0.7% 0.0% long term guarantees stopped in 1998 FY16 FY16 4bps 110bps • Aver
Slide 110: Net financial debt - long-term maturities
4 NET FINANCIAL DEBT - LONG-TERM MATURITIES Net financial debt Contractual maturity breakdown In Euro billion In Euro billion Debt 26% 26% 3.4 gearing 3.0 18.3 0.8 17.0 5.1 0.1 0.3 3.3 1.8 0.4 8.1 2017 2018 2019 2020 2021-2025 2026-2040 Undated 9.5 Economic maturity breakdown In Euro billion 0.8 9.1
Slide 111: Adjusted ROE
4 ADJUSTED ROE FY15 FY16 In Euro million published Adjusted earnings 6,008 6,103 Interest charges on undated debt -305 -267 Average adjusted shareholders’ equity 40,303 43,352 Adjusted ROE 14.1% 13.5% B64 | Full Year 2016 Earnings | Appendices | February 23, 2017
Slide 112: Solvency II ratio
5 SOLVENCY II RATIO Solvency II ratio Key sensitivities In Euro billion Ratio as of December 31, 2016 197% 205% 197% Solvency II ratio Interest rate +50bps 200% +3 pts 59.2 57.9 -9 pts Interest rate -50bps 188% 28.8 29.4 Corporate spreads +75bps 196% -1 pt Available capital Equity markets +25% 203%
Slide 113: Solvency II required capital
5 SOLVENCY II REQUIRED CAPITAL SPLIT BY RISK. GEOGRAPHY & BUSINESS Required capital by risk Required capital by business Operational Asset Management & Banking Counterparty 5% Holdings & Other 4% 8% 16% Market 41% P&C 20% 54% 26% 25% Property & Life & Savings Life Casualty Required capital by geogra
Slide 114: Shareholders' equity to Solvency II AFR
5 SHAREHOLDERS’ EQUITY TO SOLVENCY II AFR In Euro billion IFRS Shareholders’ Equity1 71 Move to full market value of assets Full market value +4 • Real estate (Euro +3.7 billion) of assets • Loans (Euro +0.2 billion) • Other (Euro -0.3 billion) Remove intangible assets Intangible assets -33 • Goodwi
Slide 115: L&S AFR and NBV key sensitivities
6 L&S AFR AND NBV- KEY SENSITIVITIES L&S AFR sensitivities L&S New Business Value (NBV) sensitivities In Euro billion In Euro million Insurance AFR 45.1 L&S NBV as at Dec 31, 2016 2,623 Interest rate +50 bps 45.3 +0.2 | 0% Interest rate +50 bps 2,664 +41 | +2% Interest rate -50 bps 44.2 -0.9 | -2% I
Slide 116: Life & Savings IRR by country
7 LIFE & SAVINGS INTERNAL RATE OF RETURN (IRR) BY COUNTRY FY15 restated FY16 In Euro million APE NB IRR APE NB IRR France 1,760 18.4% 1,824 20.2% 1,760 18.4% 1,767 18.4% US 1,656 17.3% 1,732 15.7% 1,656 17.3% 1,656 17.3% Japan 418 12.9% 499 13.4% Germany 373 20.0% 4.7% 382 935 4.7% 20.4% 418 Switzer
Slide 117: Operating free cash flow by segment
7 OPERATING FREE CASH FLOW BY SEGMENT Operating Free Cash Flows FY16 Life & Savings FCF 0% 2,956 -11 6.2 6.2 2,945 Expected Expected Operating Life & Savings 3.1 2.9 statutory change in Free Cash earnings required capital Flow FY16 Property & Casualty FCF Property & Casualty 2.6 2.7 2,874 -140 2,734
Slide 118: L&S operating free cash flow by country
7 LIFE & SAVINGS OPERATING FREE CASH FLOW BY COUNTRY FY15 In Euro million restated FY16 France 864 918 US 657 614 Japan 257 234 Germany 174 140 Switzerland 328 362 Belgium 211 137 Italy 117 168 Spain 56 108 EMEA-LATAM 80 48 Asia excl. Japan 280 216 Other 36 1 Total 3,060 2,945 1. L&S Operating Free
Slide 119: L&S free cash flow emergence
7 LIFE & SAVINGS FREE CASH FLOW EMERGENCE FROM INFORCE AND NEW BUSINESS Expected undiscounted cash Expected undiscounted cash flows flows from 2016 inforce1 business from 2016 New Business In Euro billion In Euro billion 25 2.5 2.0 20 1.5 15 1.0 0.5 2016 10 0.0 1-5 6-10 11-15 16-20 21-25 26-30 31-35
Slide 120: Corporate Responsibility
Corporate Responsibility
Slide 121: Main SRI ratings
MAIN SRI RATINGS 12th overall / worldwide and 1st insurer by number of SRI funds in its capital (Ipreo, Q2 2016) 2016 Sector leader, Ranked “A+” in the 2016 N°2 out of 150 Included in “Assessment Report” insurance companies Vigeo Euronext indices (Responsible Investment Score: 87/100 strategy) Score
Slide 122: Responsible investments strategy
RESPONSIBLE INVESTMENTS STRATEGY “ESG + CARBON” SECTOR GUIDELINES INTEGRATION & EXCLUSIONS IMPACT INVESTING Long-term ESG integration process: ESG Footprint Committee: ad-hoc Two “impact investment” funds gradual and systematic integration of exclusions and/or engagement for tangible ESG factors in