Axa Sa · EURONEXT:CS
Axa Sa — H1 2012 Earnings Presentation
57 slides from Axa Sa's earnings presentation, Aug 3, 2012
Slide 1: Half Year 2012 Earnings Appendices
Half Year 2012 Earnings August 3, 2012 Appendices
Slide 2: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B2 – AXA 1H12 Earnings – August 3, 2012
Slide 3: Life & Savings – Scope overview
Life & Savings – Scope overview Global footprint Well balanced business mix 1H12 APE by geography 1H12 APE by business G/A Protection Unit-Linked & Health 31% 41% Asia-Pacific (incl. Japan) 21% France Mutual Funds 21% & other 11% G/A Savings 17% MedLA Total: Euro 3,075 million NORCEE 6% 23% Strong p
Slide 4: Property & Casualty – Scope overview
Property & Casualty – Scope overview Global footprint Unique proprietary network 1H12 Revenues by geography 1H12 Revenues by channel Agents 41% Asia 2% Other1 Direct2 Brokers – IFAs & 1% 10% Direct business other unit 46% France Partnerships 7% 19% 4% Switzerland Total: Euro 16.2 billion 15% UK & St
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 growth equities, value Product • Expertise in fixed income, equities, equities, blend strategies, fixed quantitative equities income offer • F
Slide 6: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B6 – AXA 1H12 Earnings – August 3, 2012
Slide 7: Revenues
Revenues Revenues by segment Reported Comparable In Euro million 1H11 1H12 basis basis Life & Savings 27,841 28,607 +3% +1% Property & Casualty 15,350 16,173 +5% +4% Asset Management 1,658 1,575 -5% -10% International Insurance 1,739 1,825 +5% +2% Banking & Holdings 248 226 -9% -8% Revenues 46,836 4
Slide 8: Underlying Earnings by region
Underlying Earnings by region Underlying Earnings In Euro million Change at Reported 1H11 1H12 change constant Forex Life & Savings 1,316 1,411 +7% +3% United States 375 237 -37% -42% France 374 375 0% 0% NORCEE1 297 320 +8% +5% UK -8 -13 n.a. n.a. Asia-Pacific (incl. Japan) 226 434 +92% +61% MedLA
Slide 9: From Underlying Earnings to Net Income
From Underlying Earnings to Net Income Net realized capital gains/losses Key drivers of change in Net income In Euro million 1H11 1H12 In Euro million 1H11 1H12 Underlying Earnings 2,228 2,305 Adjusted Earnings 2,402 2,427 Net realized capital Change in fair value 168 291 gains/(losses) 174 123 Of w
Slide 10: 1H12 sensitivities
1H12 sensitivities P&L Balance sheet In Euro billion o/w Unrealized Net Income Impairments Capital Gains net of hedges and Losses • -25% -0.2 -0.2 -1.1 Equities • +25% -0.2 -0.3 +1.6 • -100 bps +1.0 +8.0 Interest rates • +100 bps -0.6 -7.2 • -75 bps +0.2 +1.7 Corporate spreads • +75 bps -0.2 -1.6 B1
Slide 11: Voluntary change in accounting policy on deferred acquisition costs
Voluntary change in accounting policy on deferred acquisition costs (DAC) from January 1, 2012 Voluntary change in accounting policy on DAC adopted as of January 1, 2012 reflects lower deferral of acquisition expenses Impacts by country 1H11 FY11 DAC (gross DAC (Group Underlying Underlying In Euro m
Slide 12: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B12 – AXA 1H12 Earnings – August 3, 2012
Slide 13: Life & Savings
Life & Savings 1 Revenues, new business volumes and profitability page 14 2 Underlying earnings margin analysis page 15 3 Underlying earnings margin analysis by product page 21 B13 – AXA 1H12 Earnings – August 3, 2012
Slide 14: L&S – Revenues and net inflows
1 L&S – Revenues and net inflows 1H12 L&S revenues by region L&S Net inflows In Euro billion MedLA France In Euro billion 1H11 1H12 -3% 2.3 -5% G/A Protection & Health +3.6 +3.7 6.7 G/A Savings -1.1 -2.6 Unit-Linked +1.1 +1.3 NORCEE 9.6 Mutual funds & other +0.1 +0.1 +1% Total +3.6 +2.6 UK United St
Slide 15: L&S – Underlying earnings margin analysis
2 L&S – Underlying earnings margin analysis Gross Margin Expenses Comp. Comp. In Euro million 1H12 In Euro million 1H12 Change1 Change1 Margin on revenues2 2,440 +3% Acquisition expenses -1,609 +20% Margin on assets 2,417 -2% Admin. Expenses -1,393 +7% Technical margin 16 -93% VBI amortization -37 +
Slide 16: L&S – Margin analysis
L&S – Margin analysis 2 Details of margin on revenues Margin on revenues Average margin on L&S revenues1 8.5% +2% +2% business mix Detail by product +1% country mix G/A Protection & Health: 13.0% G/A Savings: 3.5% Unit-Linked: 4.0% Mutual funds & other: 9.2% Margin on revenues1 x Euro 2,440
Slide 17: L&S – Margin analysis
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) 74 bps 149 bps annualized +2% Unit-Linked +4% business mix management fees -3% country mix x Euro 1,020 million -3% Margin on assets1 + Unit-Link
Slide 18: L&S – Margin analysis
2 L&S – Margin analysis Details of margin on General Account assets Investment margin Unit-Linked management fees Euro 1,020 million -3% Margin on assets1 + Euro 2,417 million -2% Average management fees on general account reserves 1. Including other fees (mainly mutual fund and brokers fees)
Slide 19: L&S – Margin analysis
2 L&S – Margin analysis Details of technical margin Technical margin & other Mortality & morbidity margin and other1 Euro 756 million -2% Technical margin + Euro 16 million -93% (vs. Euro +645 million in 1H11) GMxB Variable Annuity margin Euro -740 million n.a. In Euro million Basis -54 Vola
Slide 20: L&S – Margin analysis
2 L&S – Margin analysis Focus on gross technical margin Gross mortality, morbidity & surrender margin (pre-tax) In Euro million 737 756 1H12 mortality, morbidity & surrender margin evolution mainly explained by: • Euro +80 million in Japan, mainly driven by the non-repeat of the 2011 Great East Japa
Slide 21: L&S – 1H12 Underlying Earnings by business
3 L&S – 1H12 Underlying Earnings by business Euro million 1H12 Pre-tax UE % change G/A Protection & Health 1,196 +9% G/A Savings 387 +3% Unit-Linked1 286 -31% Mutual funds & Other -10 n.a. Pre-tax Underlying Earnings 1,860 -3% Tax and minority interest -449 Underlying Earnings 1,411 +3% Changes are
Slide 22: L&S – 1H12 Margin analysis by business
3 L&S – 1H12 Margin analysis by business G/A Protection Mutual Funds & G/A Savings Unit-Linked & Health Other Margin on 9% 1,867 209 296 revenues % of GWP 72 bps* Investment margin 369 783 62 of avge G/A reserves Management 149 bps* fees 1,020 of avge UL reserves Technical margin & Oth. 684 21 -662
Slide 23: L&S – Margin analysis by business
3 L&S –Margin analysis by business G/A Protection & Health Technical result Net investment margin Comp. Comp. In Euro million 1H12 In Euro million 1H12 change change Protection & Health Protection & Health GWP 14,326 +1% 155,138 +1% Average reserves x x Protection & Health Protection & Health 94.2%
Slide 24: L&S – Margin analysis by business
3 L&S – Margin analysis by business G/A Savings In Euro million Comp. Comp. 1H12 1H12 change change G/A Savings G/A Savings 6,027 -13% 188,694 +4% Gross revenues average reserves x x Margin on G/A Savings 3.5% +1.2 pts 83 bps* -8 bps* G/A Savings revenues Investment spread Comp. 1H12 change Technica
Slide 25: L&S – Margin analysis by business
3 L&S – Margin analysis by business Unit-Linked Comp. Comp. In Euro million 1H12 1H12 change change Unit-Linked Unit-Linked 7,454 +14% 137,372 -4% Gross revenues Average reserve x x Average margin on Unit-Linked average 4.0% -0.1 pt 149 bps* +2%* Unit-Linked revenues Management fees Comp. 1H12 chang
Slide 26: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B26 – AXA 1H12 Earnings – August 3, 2012
Slide 27: P&C – Revenues and net new contracts
P&C – Revenues and net new contracts 1H12 P&C revenues by region P&C personal net new contracts In Euro billion In thousands More than 70% of net new contracts Direct in high growth markets & Direct -1% Asia France +14% +3% 0.3 1.1 3.1 +771 +637 MedLA 3.5 High +6% UK & Ireland 2.1 growth +6% markets
Slide 28: P&C – Underlying Earnings analysis
P&C – Underlying Earnings analysis Net technical result Net investment income Comp. Comp. In Euro million 1H12 In Euro million 1H12 Change Change Revenues 16,173 +4% Average P&C assets 55,213 0% x x Combined ratio1 (in %) 96.4% -0.8 pt Average asset yield3 3.7% 0% 1. Combined ratio calculated based
Slide 29: P&C – Details on Combined Ratio
P&C – Details on Combined Ratio Loss Ratio (%) -0.3 pt Combined Ratio 70.4% +0.4 pt 70.1% 97.2% 96.4% -0.1 pt -0.6 pt 1 1H11 Current Nat cat Prior year 1H12 Loss 70.4% accident reserve Ratio year dev. 70.1% -0.3 pt change on a comparable basis Expense Ratio (%) -0.5 pt Expense Ratio 26.8% 26.3% 26
Slide 30: P&C – Focus on reserve developments
P&C – Focus on reserve developments Prior year reserve development level (in % of gross earned premiums) Reserving ratio (Net technical reserves/Net earned premiums) Note: FY04 to FY09 figures do not exclude Canadian operations B30 – AXA 1H12 Earnings – August 3, 2012
Slide 31: P&C – Details on current year loss ratios
P&C – Details on current year loss ratios Personal Motor Personal non motor Driven by Household in the UK and France, due 76.6% +0.4 pt to climatic events +1.0 pt 75.4% +3.2 pts -0.4 pt 65.2% -1.5 pts 64.4% +0.4 pt -1.1 pts -2.5 pts 1 1H11 Current Nat cat Price effect Frequency & Other 1H12 Current
Slide 32: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B32 – AXA 1H12 Earnings – August 3, 2012
Slide 33: AM - Underlying Earnings
AM - Underlying Earnings Details of Asset Management margin analysis Margin Expenses Comp. Comp. In Euro million 1H12 In Euro million 1H12 Change Change Asset Management Asset Management fees 1,341 -11% -1,064 -13%1 expenses Distribution revenues 234 -2% Investment result 41 +77%1 Distribution expen
Slide 34: AM – Underlying Earnings
AM – Underlying Earnings Details on Asset Management revenues Average Asset Management fees on Assets under Management 31 bps -8% Asset Management fees x Euro 1,341 million -11% Average Assets under o/w performance fees (Euro 23 million, -51%) o/w research fees (Euro 161 million, -8%) Management
Slide 35: Table of content
Table of content Business overview Group Life & Savings Property & Casualty Asset Management Balance sheet B35 – AXA 1H12 Earnings – August 3, 2012
Slide 36: Balance sheet
Balance sheet 1 General accounts invested assets Page 37 1.1 Government bonds & related page 38 1.2 Corporate bonds page 39 1.3 CDS page 42 1.4 ABS page 43 1.5 Equity page 47 1.6 Real Estate page 49 1.7 Hedge Funds page 50 1.8 Private Equity page 51 1.9 Mortgage loans page 52 2 Solvency Page 53 3 Ne
Slide 37: General Account invested assets
General Account invested assets Invested assets (100%) FY11 % 1H12 % In Euro billion Changes in asset allocation Fixed income 384 82% 395 82% • Net inflows, investment income and maturities: invested mainly in corporate o/w Govies and related 207 44% 208 43% bonds o/w Corporate bonds 148 32% 155 32%
Slide 38: 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% 3% Austria 3% Spain L&S 3% France ~87% 25% US 6% 1 Switzerland Gross unrealized capital 7% gains and losses Japan In Euro billion 14% 15.1 Italy 7%
Slide 39: 1.2 Corporate bonds
1.2 Corporate bonds Breakdown by industry Single A range AAA Other ~8% ~12% AA Technology Basic materials BBB 2% ~13% 5% Other ~26% A Energy 2% ~41% 5% Consumer cyclical Breakdown by segment 6% Other2 Industrial 6% ~2% P&C Banks 35% ~14% Utilities 9% L&S Communications ~84% 9% 1 Gross unrealized cap
Slide 40: 1.2 Focus on banking corporate bonds
1.2 Focus on banking corporate bonds As of June 30, 2012 Gross market Senior debt Sub debt value Non Lower Upper Total in Euro billion Secured Tier 1 Preferred secured Tier 2 Tier 2 US 0.3 7.7 2.0 0.0 0.2 0.0 10.1 France 2.6 3.0 1.2 0.0 0.0 0.0 6.8 UK 1.5 3.4 1.0 0.0 0.2 0.0 6.2 Netherlands 3.3 0.5
Slide 41: Corporate bonds breakdown by country
1.2 Corporate bonds breakdown by country (including CDS) P = Participating NP = Non-participating Euro billion As of June 30, 2012 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 3 1 2 1 3 1 0 0 8 4 AA 1 2 0 4 2 0 3 0 3 1 2 1 11 9 A 3 9 1 9 5 1 6 1
Slide 42: 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 June 30, 2012 As of Dec 31, 2011 AAA 115 87 AA 1,125 737 A 3,653 3,584 BBB 1,662 1,565 Below invest. g
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 As of June 30, 2012 Total ABS = Euro 8.5 billion Mortgage-backed Other asset-backed NR/Equity AAA 8% 42% US Subprime, Alt-A & NC RMBS High Yield CLO 20% € 0.8 billion € 3.7 billion BBB 8% Prime Resid
Slide 44: 1.4 Credit risk management: ABS investments
1.4 Credit risk management: ABS investments Group ABS exposure increased mainly driven by: • Net flows of 0.2 billion euros, comprised of 1.1 billion euros of purchases mainly on high quality CLO, offset partially by 0.9 billion euros of sales and redemptions • Market increase of 0.2 billion euros m
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, 2012 Commercial MBS UK & NC RMBS US Alt-A RMBS MBS RMBS (unless indicated) % of par @ 31/12/09 89% 75% 59% 42% 14% % of par @ 31/12/10 87% 69% 65% 51% 21% % of par @ 31/12/11 80% 59% 57% 45% 27% % of pa
Slide 46: 1.4 Focus on CDO
1.4 Focus on CDO Euro million Investment High Structured Other Total As of June 30, 2012 grade Yield Finance CDOs AAA 912 - - 22 934 AA 16 - 3 24 43 A 4 6 - 6 16 BBB 10 14 - 3 28 Below invst. grade 259 10 9 7 285 Equity / Non rated 69 17 6 149 241 Value 1,269 47 17 212 1,546 Shareholder Exposure 41%
Slide 47: 1.5 Equity portfolio overview
1.5 Equity portfolio overview Breakdown by geography Breakdown by segment Other1 ~3% P&C Rest of the World ~23% 10% BNP Paribas Other Eurozone countries 16% L&S 10% ~74% Switzerland 4% UK 2 4% France Gross unrealized capital excl. BNP gains and losses Belgium Paribas 5% 22% In Euro billion Germany 1
Slide 48: 1.5 Shareholders' exposure to equity
1.5 Shareholders’ exposure to equity Estimated shareholders’ exposure as of June 30, 2012 In Euro billion FY11 1H12 14 14 6 4 Gross Group share net Gross Group share net nominal of hedge, tax & nominal of hedge, tax & 100% PB 100% PB B48 – AXA 1H12 Earnings – August 3, 2012
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 1H12 market value by Split by type (in Euro billion) country France Switz. Belgium Germany France 221 36% Office ~45% ~45% ~75% ~70% Residential ~13% ~50% ~0% ~10% Other 5% US Commerc
Slide 50: 1.7 Hedge Fund investments
1.7 Hedge Fund investments Stable performance Key indicators Market value Exposure and concentration risk (in Euro billion) • Mostly management of funds of hedge funds 5 • Top 10 fund managers represent ~32% of portfolio market value • Comprised of 10 strategic categories, with the largest strategy
Slide 51: 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 2012 Awards (in Euro billion) Infrastructure Venture • “Best French LBO team” – Magazine Other 8 Asia 7% 8% 7% des Affaires 3% Mezzanine • “Deal of t
Slide 52: 1.9 Mortgage loans & other
1.9 Mortgage loans & other Low risk mortgage loan portfolio Key indicators Belgium 1H12 market value by country Very secured Market value portfolio: (in Euro billion) Other Germany 43% Residential 100% Residential 6% 211, 2 6% 1H12 default rate 26% 57% Commerical 0.07% 1H12 loan to value 74% Residen
Slide 53: Solvency I
2 Solvency I Solvency I ratio at 207% +15 pts 207% +9 pts -5 pts 188% 171% 182% 127% Of which +12 pts on fixed income assets FY08 FY09 FY10 FY11 Underlying URGL FX & Other 1H12 Earnings Solvency I Sensitivities In Euro billion Ratio as of June 30, 2012 207% 50 44 Interest rate +100bps 155% Surplus 2
Slide 54: Solvency I reconciliation to shareholders' equity
Solvency I reconciliation to shareholders’ 2 equity Available financial resources(1) In Euro billion SH equity 100% 51 Intangibles(2) - 27 Admitted sub debt(3) +4 Locally admitted assets +3 Dividend to be paid 0 Real estate(4) +7 Pension benefit +4 Other(5) +8 Available capital 50 (1): AXA is not a
Slide 55: Economic solvency rollforward with US equivalence
Economic solvency rollforward with US 2 equivalence In Euro billion +2.9 -1.6 183%* -1.3 174%* +0.4 -0.2 Available 39.9 40.1 capital Does not include the industry package on countercyclical measures: • Extended matching adjustment • Fully predictable countercyclical premium 21.8 23.1 Required +0.2 c
Slide 56: Economic capital model without US equivalence
2 Economic capital model without US equivalence Coverage ratio 1H12 Economic capital by geography Holdings & other 13% UK 5% 20% France Asia Pacific 12% 148% 20% NORCEE 136% United States 22% 8% MedLA 100% basis, before diversification 1H12 Economic capital by risk Operational 6% P&C risks 15% FY11
Slide 57: Net financial debt
3 Net financial debt Long-term maturities Total net debt Contractual maturity breakdown In Euro billion In Euro billion • Undrawn credit lines Euro 12 billion 13.4 13.2 • Cash & cash equivalent Euro 29 billion 6.3 Undated subordinated 7.8 7.9 2.0 0.2 debt 1.9 2.7 1.6 0.9 0.8 1.0 0.2 0.3 0.4 2012 201