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Ageas Corporate Presentation

The corporate presentation of our company

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Ageas Corporate Presentation

  1. 1. Our history Our company now Company profile Our key financials Our share Our future - Vision 2015 Selected topics 4 insurance segments Investment portfolio Legacy issues A developing company Partnerships 1
  2. 2. Corporate Presentation I March 2014 2 1824: Creation of AG Life in Belgium 1830: Creation of AG Fire 1919: AG introduces Group policies 1969: The different AG companies become AG 1824 1990:Creation of Fortis, a Belgo-Dutch insurance group out of AMEV/ VSB + AG 1993: Fortis acquires a majority interest in ASLK-CGER and lays the foundations of the bancassurance model 1998-2000: Fortis acquires the Generale Bank and becomes a solid bancassurer 2001: Fortis starts insurance activities in Asia 2007: Fortis acquires selected ABN AMRO-activities 2008: Fortis sells its banking activities and becomes a pure insurance player September 2009: the insurer reveals its new strategy A long history starting in 1824
  3. 3. Corporate Presentation I March 2014 3 Fortis becomes Ageas in April 2010 Aiming to become the insurance partner by excellence in Europe & Asia
  4. 4. Ageas presents its vision for the years to come - Sept. 2012 Vision 2015 is all about …. Corporate Presentation I March 2014 4
  5. 5. Some milestones for Ageas over the past few years Growing our Business inflows: EUR 15.8 bn in 2009  EUR 23.2 bn in 2013 net profit Insurance: EUR 456 mio in 2009  EUR 654 mio in 2013 capital increase to support growth Taiping Life (China) leading market positions in: Takaful (Islamic Insurance - Malaysia) Health Insurance (Médis – Portugal) acquisition Groupama UK  n°2 position in UK Private Motor appointment COO to support business development & realization Vision 2015 from scratch in 2000 to n°5* foreign insurer in 2012 in Asia (excl. Japan) partnership with Aksigorta in Turkey Non-Life entrance in Non-Life Italy streamlining & selective strengthening insurance * Based on 100% premium levels acquisition Kwik Fit Insurance Services in UK Non-Life Corporate Presentation I March 2014 5
  6. 6. Some milestones for Ageas over the past few years Solving legacies call/tender financial instruments – Hybrone, Nitsh I, Nitsh II in 2013 deal Dutch State & ABN AMRO settling all related outstanding legal disputes in 2012 deal on RPI & BNPP call option in 2013 legal simplification & reverse stock split in 2012 agreement BNP Paribas on Tier 1 financial instrument & CASHES / RPN(i) in 2012 various judgments received - legal legacies managed in interest of shareholders final judgments starting to come in: annulment AFM fine re subprime 2007, confirmation AFM fine on misleading communication in June 2008 Corporate Presentation I March 2014 6
  7. 7. strong cash buffer ≈ EUR 2 bn successful debt issue for AICA & AG Insurance in 2013 Solvency Insurance consistently >200% recurrent cash dividend despite turbulent market conditions EUR 0.80 per share in 2009  EUR 1.40 in 2013 share price strongly outperforming the market market cap: ≈ EUR 2 bn Jan. 2009  > EUR 7 bn Some milestones for Ageas over the past few years Financial achievements 2 completed share buy backs (EUR 450 mio) 3rd buy-back of EUR 200 mio ongoing capital reduction of EUR 1.00 per share approved – paid out in December 2013 changing shareholdership towards long term shareholders Corporate Presentation I March 2014 7
  8. 8. successful 3rd Partnership days in June 2013 high reputation among brokers in UK & BE outperforming industry & competitors standards extensive coverage >20 sell-side analysts 26 awards in 2012 including Award Best Financial Information in Belgium recognized consumer brand awareness HK retail investor brand awareness BE continued improved financials disclosures since 2009 Some milestones for Ageas over the past few years Appreciation from the outside world Corporate Presentation I March 2014 8
  9. 9. Our history Our company now Company profile Our key financials Our share Our future - Vision 2015 Selected topics 4 insurance segments Investment portfolio Legacy issues A developing company Partnerships
  10. 10. Corporate Presentation I March 2014 10 Company profile Active in 12 countries in Europe & Asia Portugal - 51% Life: € 1,486 mio Non-Life: € 251 mio UK – 100% Life: € 108 mio Non-Life: € 2,176 mio France - 100% Life: € 351 mio Italy - 25% Non-Life: € 211 mio India - 26% Life: € 108 mio Thailand Life – 31%: € 1,476 mio Non-Life– 15%: € 214 mio China - 25% Life: € 6,397 mio Malaysia - 31% Life: € 594 mio Non-Life: € 552 mio Belgium - 75% Life € 4,101 mio Non-Life: € 1,855 mio Hong Kong - 100 % Life: € 485 mio Luxembourg- 33% Life: € 2,252 mio * Inflow included non-consolidated partnerships @ 100% Turkey - 36% Non-Life: € 602 mio Situation on 31 December 2013
  11. 11. Corporate Presentation I March 2014 11 Active under many local brands with solid market positions Italy UK Portugal Malaysia China # 7 Life > 100,000 agents India Belgium # 1 Life 27% # 2 Non-Life 16% Portugal # 1 Life Italy # 1 Bancassurance Non-Life Malaysia #2 #1 in Islamic insurance Thailand # 2 in Life (#1 New Business), # 7 in Non-Life Turkey # 4 Non-Life * Partners Distributioncompanies UK - # 2 Motor 3.6 million Motor policies Largest Belgian Real Estate Group EUR 6.1 billion Situation on 31 December 2013
  12. 12. Corporate Presentation I March 2014 Life: leading position in Belgium, Portugal & Luxembourg AXA Belgium: n°1 in % technical liabilities Lombard Int Sogelife Other Cali Europe Cardif Lux Int Source : FSA data - 2012 (27%) AG Insurance Ethias KBC Dexia Others AXA EthiasKBC P&V Others AG Insurance (16%) Company profile We have strong market positions in Europe… Luxembourg: n°2 in % technical liabilities Non-Life: leading position in Belgium & UK, growing in Italy, Turkey & Portugal Belgium: Solid n°2 in % GWP UK: 2nd largest car insurer in # vehicles insured Source: Assuralia – 2012 market shares InMiocarsinsured 0 1 2 3 4 5 6 DLG Ageas LV Aviva AXA esure RSA Co-op NFU Allianz 12
  13. 13. Corporate Presentation I March 2014 13 Company profile …While significant growth potential in Asia Hong Kong Malaysia India Thailand China
  14. 14. Corporate Presentation I March 2014 14 Company profile - Legal structure simplified Insurance clustered around 4 segments, General Account manages legacies AG Insurance SA/NV Ageas UK Ltd Various legal enitities part of Ageas Asia Various legal entities part of Cont. Europe Ageas Insurance International N.V. ageas SA/NV Royal Park Investments Dutch permanent establishment Ageas Hybrid Financing S.A Ageasfinlux S.A. Ageas Finance N.V. Ageas B.V.
  15. 15. Corporate Presentation I March 2014 15 Company profile The organization reflects the business structure and emphasis on insurance Executive Committee Emmanuel Van Grimbergen GRO Antonio Cano CEO Belgium Andy Watson CEO UK Gary Crist CEO Asia Steven Braekeveldt CEO CEU Management Committee Board Bart De Smet CEO Barry Smith COO Kurt De Schepper Filip Coremans CRO CROChristophe Boizard CFO current function: CFO/CRO Asia change as from 1 July 2014
  16. 16. Our history Our company now Company profile Our key financials Our share Our future - Vision 2015 Selected topics 4 insurance segments Investment portfolio Legacy issues A developing company Partnerships
  17. 17. Solid full year Insurance performance – weaker Non-Life Q4 Group net result driven by Insurance – Q4 impacted by RPN(i) Balance sheet remains strong Proposed 2013 gross dividend Progress in legal legacies  Insurance net profit of EUR 654 mio (+5%) - Q4 EUR 157 mio  Inflow @ 100% of EUR 23.2 bn (+9%) - Q4 EUR 5.5 bn  Group combined ratio at 98.6% (vs.99.1%)  Life Technical Liabilities at EUR 69.2 bn* (stable)  Group net profit of EUR 570 mio (-23%) - Q4 EUR 57 mio, incl. RPN(i)  General Account net result of EUR (85) mio  Shareholders’ equity at EUR 8.5 bn or EUR 37.65 per share  Insurance solvency at 207%, Group solvency at 214%  Net cash position General Account at EUR 1.9 bn  Cash EUR 1.40 per share (+17%)  AFM fine II re communication on subprime exposure annulled (14/02/14) Main messages Ageas reports solid FY 13 results & proposes 17% dividend increase Corporate Presentation I March 2014 17 * Consolidated entities only
  18. 18. Corporate Presentation I March 2014 18 What we said at Investors Update 2013 Realizing ROE target based on 2 tracks & combining a series of small steps Numerator 1. Consolidated Life operating margin 2. Consolidated Non-Life combined ratio 3. Focus on higher ROE activities & product lines 4. Gradually increase profits from fast growing emerging market activities Denominator 1. Capital efficiency is an operational day-to-day concern 2. Capital allocation of means is a strategic choice
  19. 19. Actions to improve ROE - numerator Progress made with respect to most operating objectives Corporate Presentation I March 2014 19 Operating margin Guaranteed: above target range of 85-90 bps In % avg technical liabilities Gradually move towards higher ROE products in Life 0.99% 0.96% FY 12 FY 13 99.1% 98.6% FY 12 FY 13 125 153 FY 12 FY 13 83% 74% 17% 26% FY 12 FY 13 Unit-linked Guaranteed In EUR mio Non-Life combined ratio: all segments below 100% - objective of 97% in current low interest rate environment In % NEP Increased profit from non-consolidated partnerships
  20. 20. Corporate Presentation I March 2014 20 New strategy announced at Investors Update 2013 Partly on-lend FRESH capital to operating companies* via internal SII compliant hybrid loans against upstream of around EUR 400 mio capital Optimizing capital structure improves Insurance ROE - Liquidity neutral for holding * only consolidated entities In EUR mio Actions to improve ROE - denominator Increase leverage in Insurance Opco’s 1° realization Belgium near optimal leverage Subordinated liabilities Subordinated liabilities  AG Insurance issued EUR 450 mio Subordinated Note @ 5.25% rate  EUR 150 mio to replace existing loan & EUR 300 mio to increase leverage  EUR 350 mio subscribed by Ageas & EUR 100 mio by BNP P 50% RMM 2,044 50% RMM 1,225 6M 13 1,945 6M 13 899 FY 13 2,012 FY 13 1,177 Ageas Belgium
  21. 21. Corporate Presentation I March 2014 21 Actions to improve ROE - denominator Upstream of dividend from operating companies more than EUR 600 mio Significant upstream from Insurance companies 243 225 82 Portugal 20 France 5 Turkey 6 Luxembourg 5 Malaysia 11 Thailand 5 Hong Kong 36 36 52 Belgium ordinary Belgium extra UK Continental Europe Asia  All segments contributing  Upstream more than covering dividend & holding costs  Extra-ordinary dividend in Belgium as part of active capital management  Upstream with respect of local solvency requirements & Ageas 200% IFRS solvency ratio target In EUR mio
  22. 22. Corporate Presentation I March 2014 22 Status on Vision 2015 targets FY 13 at 67/33 (vs. 67/33) Steady growth Non-Life – target cannot be reached with organic growth alone Calculation based on Inflows @ Ageas’s part FY 13 at 98.6% (vs. 99.1%) Improving in UK & CEU, Belgium impacted by governmental measures Calculation based on Non-Life Net Underwriting result in % Net earned premiums FY 13 at 12.6% (vs. 12.1%) Capital increase & retained earnings in Asia, high upstream in Belgium Equity of Turkey, China, Malaysia, Thailand & India as % total Insurance equity FY 13 at 8.3% (vs. 8.7%) ROE excl. UGL FY 13 at 10.4% (vs. 10.7%) Higher net profit not compensating for higher average shareholder’s equity - higher UGL, retained earnings & acquisition Groupama Insurance result in % average Insurance equity (Beginning of period + End of period)/2
  23. 23. Corporate Presentation I March 2014 23 What we said at Investors Update 2013 Net cash General Account allocation priorities Disciplined cash management Use funds in priority to invest in business & return to shareholders 1. Disciplined M&A approach along precise criteria 2. Existing dividend policy reconfirmed 3. Intention to return cash to shareholders if no adequate M&A opportunities 4. Continued active capital management
  24. 24. Ageas proposes a gross cash dividend of EUR 1.40 per share In line with dividend policy, 17% up on 2012 Proposed gross dividend in cash 456 391 (313) 624 624 654 188 197 188 270 493 310 2009 2010 2011 2012 2012 dividend + cap reduction 2013 Insurance result Dividend To be approved at AGM gross amount / share 0.80 0.80 0.80 1.20 2.20 1.40 pay-out ratio 41% 50% - 43% - 47% dividend yield* 4.2% 4.6% 6.3% 4.7% - 4.5% In EUR mio  EUR 1.40 per share - up 17% on 2012  In line with 40%-50% pay-out ratio of Insurance result set out in dividend policy  AGM: 30 April Brussels  Ex-dividend date: 5 May – Record date : 12 May  Payment dividend : 13 May Dividend payments in line with announced policy * calculation based on day before ex-dividend date closing price – 2013 yield based on 31/12/2013 share price Corporate Presentation I March 2014 24
  25. 25. Simple shareholder return*  Since end ‘08: 243%  Since end ’10: 86%  Since end ’12: 43% € 7.53 € 31.88 12/08 04/09 08/09 12/09 04/10 08/10 12/10 04/11 08/11 12/11 04/12 08/12 12/12 04/13 08/13 12/13 Total shareholder return* outperformance vs. Stoxx Insurance 600  Since end ‘08: 321% +221% vs Stoxx Insurance 600  Since end ’10: 122% +61%  Since end ’12: 55% +26% ≈ EUR 1.4 bn dividends & capital reduction ≈ EUR 850 mio dividend over 09, 10, 11 & 12 EUR 222 mio capital reduction paid in 2013 ≈ EUR 310 mio proposed dividend over 2013 EUR 650 mio share buy-backs EUR 450 mio share buy-backs finalized early 12 & 13 EUR 200 mio ongoing share buy-back launched 12/08/13 Use of net cash General Account: Return to shareholders Ageas substantially outperformed Stoxx Insurance 600 since 2009 * calculation ended 31/01/2014 – external source Ageas share price evolution Corporate Presentation I March 2014 25
  26. 26. 12 FY 12 FY 13 Other Life Non-Life 1 79 30 Q4 12 Q4 13 5.7 5.9 FY 12 FY 13 Non-Life Life 4.5 4.1 1.3 1.4 5.8 5.5 Q4 12 Q4 13 FY 12 FY 13 Non-conso Conso 9M 13 FY 13 FY 12 FY 13 Q4 12 Q4 13 FY 12 FY 13 Q4 12 Q4 13 FY 12 FY 13 Q4 12 Q4 13 Net result: Strong Q4 in Asia, lower in UK & Belgium In EUR mio In EUR bn Non-Life combined ratio: improving CY claims ratio Inflow*: strong growth in Asia & CEU In EUR bn Total Insurance: Headlines Solid FY performance, Q4 impacted by weaker Non-Life results Corporate Presentation I March 2014 26 Life Technical liabilities: stable in consolidated, up in non-consolidated Operating margin Guaranteed: above target range due to one-offs in Asia Operating margin Unit-Linked: out of target range due to one-offs in Asia In % avg technical liabilities In % avg technical liabilities 430 438 137 126 223 204 624 654 175 157 15.6 17.4 21.3 23.2 68.8 69.2 36.5 40.9 105.3 110.2 99.1% 98.6% 102.3% 101.5% 0.99% 0.96% 1.37% 1.23% 0.48% 0.28% 0.28% (0.28%) (28) (41) 69.0 69.2 39.9 40.9 108.9 110.2 * incl. non-consolidated partnerships @ 100% In % NEP
  27. 27. Belgium UK CEU Asia Total Ageas Life Non-Life Life Non-Life Life Non-Life Life Non-Life Life Non-Life Inflow @ Ageas’s part Strong growth in emerging markets, Guaranteed Life sales down in Belgium In EUR mio 3,845 3,076 86 108 1,397 1,862 2,233 2,745 7,561 7,791 1,319 1,391 1,780 1,916 381 398 203 203 3,684 3,907 (13%) 8% 27% 21% 4% 5,164 4,467 1,865 2,024 1,779 2,260 2,436 2,947 11,245 11,698 FY 12 FY 13 FY 12 FY 13 FY 12 FY 13 FY 12 FY 13 FY 12 FY 13 Corporate Presentation I March 2014 27
  28. 28. Insurance net result Further up despite negative FX impact, all segments up except UK Belgium UK CEU Asia Total Ageas Life Non-Life Life Non-Life Other Life Non-Life Life Non-Life Life Non-Life Other 260 274 (0) (2) 50 44 121 122 430 438 65 61 137 90 13 32 8 21 223 204 (28) 12 (28) 12 324 335 108 100 64 77 129 142 624 654 FY 12 FY 13 FY 12 FY 13 FY 12 FY 13 FY 12 FY 13 FY 12 FY 13 In EUR mio Corporate Presentation I March 2014 28
  29. 29. 10/03/2010 I page 29 Overview impairments & net capital gains on investments Impairments substantially lower vs. FY 12 * EUR mio FY 12 FY13 FY 12 FY13 FY 12 FY13 Life 115 89 (71) (25) 44 64 Non-Life 22 15 (4) (4) 18 11 Total Belgium 137 104 (75) (29) 62 75 Life Non-Life 20 11 (6) 14 11 Other Total UK 20 11 (6) 14 11 Life 4 15 (1) (13) 4 2 Non-Life 0 0 0 0 Total CEU 5 15 (1) (13) 4 3 Life 31 36 (16) (7) 15 29 Non-Life 2 4 (0) (0) 2 4 Total Asia 33 40 (16) (7) 17 33 Life 150 140 (88) (44) 63 95 Non-Life 44 30 (10) (4) 34 26 Other Total Ageas 195 170 (98) (48) 97 122 Capital gains/losses Impairments & Profit sharing Net impact Corporate Presentation I March 2014 29
  30. 30. Inflow @ 100% Growth driven by China, Portugal & Thailand * Ageas holds a 50% stake in Tesco Underwriting EUR mio FY12 FY13 FY12 FY13 FY12 FY13 Belgium 75% 5,127 4,101 1,759 1,855 6,886 5,956 United Kingdom 100%* 86 108 2,143 2,176 2,229 2,2840 0 Continental Europe 3,246 4,092 1,026 1,064 4,272 5,156 Consolidated entities 1,034 1,840 459 462 1,493 2,302 Portugal 51% 763 1,486 240 251 1,003 1,737 France 100% 271 354 271 354 Italy 25% 219 211 219 211 Non-consolidated JV's 2,213 2,252 567 602 2,779 2,854 Turkey (Aksigorta) 36% 567 602 567 602 Luxembourg (Cardif Lux Vie) 33% 2,213 2,252 2,213 2,252 Asia 7,131 9,058 751 766 7,882 9,824 Consolidated entities 447 485 447 485 Hong Kong 100% 447 485 447 485 Non-consolidated JV's 6,684 8,574 751 766 7,436 9,340 Malaysia 31% 786 594 570 552 1,357 1,145 Thailand 15%/31% 1,224 1,476 181 214 1,405 1,690 China 25% 4,565 6,397 4,565 6,397 India 26% 109 108 109 1080 0 Total 15,590 17,359 5,680 5,861 21,269 23,2200 0 Consolidated entities 6,693 6,534 4,362 4,493 11,054 11,027 Non-consolidated partnerships 8,897 10,826 1,318 1,368 10,215 12,194 Life Non-Life Total Corporate Presentation I March 2014 30
  31. 31. Corporate Presentation I March 2014 31 Shareholders’ equity roll forward Net profit offset by lower unrealized gains, return to shareholders & put option In EUR mio 5,510 6,206 6,333 430 1,939 1,2801,742 1,655 912 654 49 (85) (720) (149) (270) (223) (357) (175) EUR 42.27 EUR 37.65 7,683 9,799 8,525 FY 11 FY 12 Net result Insurance Net result Gen Acc Change UG/L Treasury Shares Dividend Capital reduction Reval put option Forex Other FY 13 Insurance UG/L Insurance UG/L FY 12 FY 13 FY 12 FY 13 Belgium 3,974 ► 3,676 Asia 1,837 ► 1,592 UK 1,149 ► 1,121 Insurance 8,145 ► 7,613 Continental Europe 1,185 ► 1,224 General Account 1,655 ► 912 Shareholders’ equity per segment Shareholders’ equity per share 2013 return to shareholders
  32. 32. Corporate Presentation I March 2014 32 Insurance Solvency up on Net result & capital injection China Group Solvency down on returns to shareholders, revaluation put option & RPN(i) 2.4 2.5 0.5 0.5 0.6 0.6 0.5 0.6 4.0 4.1 4.0 4.1 1.7 2.0 0.6 0.6 0.8 1.0 0.9 0.7 4.1 4.4 1.0 0.3 5.1 4.7 4.1 4.5 1.1 1.0 1.4 1.6 1.4 1.3 8.1 8.5 9.1 8.8 FY 12 FY 13 FY 12 FY 13 FY 12 FY 13 FY 12 FY 13 FY 12 FY 13 FY 12 FY 13 FY 12 FY 13 Belgium UK CEU Asia Total Ageas General Account RMC Excess Capital RMC Excess Capital RMC Excess Capital RMC Excess Capital RMC Excess Capital Available Capital In EUR bn 173% 183% 220% 223% 243% 271% 268% 221% 204% 207% 229% 214%Solvency ratio
  33. 33. Our history Our company now Company profile Our key financials Our share Our future - Vision 2015 Selected topics 4 insurance segments Investment portfolio Legacy issues A developing company Partnerships
  34. 34. situation 31/12/2012 situation 31/12/2013 Total Issued Shares 243,121,272 233,486,113 Shares not entitled to dividend and voting right 15,886,832 11,648,176 1. TREASURYSHARES Share buy-back 7,056,442 2,489,921 FRESH 3,968,254 3,968,254 Other treasury shares 218,232 546,097 2. CASHES 4,643,904 4,643,904 Shares entitled to dividend and voting rights 227,234,440 221,837,937 Cancellation bought back shares + new buy back Corporate Presentation I March 2014 34 Total number of outstanding shares 4% of outstanding shares (9.6 mio) cancelled during 2013
  35. 35. Corporate Presentation I March 2014 35 Shareholders structure Based on number of shares as at 31 December 2013 Ageas 3.02% Ping An 5.18% BlackRock, Inc. 5.02% Franklin Mutual Advisers 2.97% Norges Bank BNPP & Fortis Bank Identified retail investors 16% Identified institutional investors 39% Other investors 23% Ageas Based upon press release 6 January 2014 Ping An Based upon the number of shares mentioned in the notification received 6 May 2013 Franklin Mutual Advisers Based upon the number of shares mentioned in the notification received 22 August 2013 BlackRock, Inc. Based upon the number of shares mentioned in the notification received 22 July 2013 Norges Bank Based upon the number of shares mentioned in the notification received 20 August 2012 BNP P & Fortis Bank Based upon BNP Paribas notification 01 October 2012 Identified retail investors Estimate by Identified institutional investors Estimate by
  36. 36. Corporate Presentation I March 2014 36 Sell-side analyst coverage overview for Ageas Country Company Analyst Autonomous Farquhar Murray Bank of America Merrill Lynch Michael Van Wegen Citi Group Farooq Hanif Credit Suisse Chris Esson UK Goldman Sachs William Elderkin HSBC Steven Haywood Mediobanca Maarten Altena JP Morgan Cazenove Ashik Musaddi KBW Will Hawkins Morgan Stanley David Andrich Nomura Fahad Changazi Société Générale Jason Kalamboussis Bank Degroof Dirk Peeters Belgium KBC Securities Matthias De Wit Petercam Tom Van Kempen The Netherlands ING Albert Ploegh Kepler Chevreux Benoit Pétrarque Rabo Securities Cor Kluis Oddo Securities Maxime Dupuis France Alpha Value Jérôme Cassagne Exane BNP Paribas François Boissin
  37. 37. Corporate Presentation I March 2014 37 Financial calendar 2014 19 February Annual results 2013 14 May 3M 2014 results 30 April Ordinary & Extraordinary shareholders’ meeting - Brussels 5 May Ex date 19 March Annual report 2013 13 May Payment 2013 dividend 6 August 6M 2014 results 5 November 9M 2014 results 12 May Record date
  38. 38. Our history Our company now Company profile Our key financials Our share Our future - Vision 2015 Selected topics 4 insurance segments Investment portfolio Legacy issues A developing company Partnerships
  39. 39. Corporate Presentation I March 2014 39 Challenges & opportunities in the Insurance sector No easy ride for insurers “ Apart from low interest rates, peripheral sovereigns, corporate downgrades, lack of growth, bank competition, too much capital in reinsurance, poor equity markets, volatility, austerity, de-leveraging, Solvency II, bank competition, lack of distribution, poor product design, claims inflation, increasing severity and frequency of large losses, opacity, poor cost efficiency (maybe improving), longevity, persistency and spread risk, what's the problem with insurance....?" Chris Hartwell, RBC Capital Markets, 2 February 2012
  40. 40. Corporate Presentation I March 2014 40 Challenges & opportunities in Insurance sector Largely unchanged since 2012  Continued low i-rate environment  Spread sovereigns & corporates  Big impact monetary authorities on financial markets  Forex volatility  Low Economic growth  Position of banks: need to improve capital ratios & adjust funding structure  Change in distribution trends – aggregators, direct  Solvency II  Basel III  Distribution & transparency (e.g. MIFID)  More rigid regulatory environment  Tax treatment of products Economic environment Customers Distribution Regulation  More demanding & better informed  Risk aversity: strong preference guaranteed products  Local influence important  Use multiple channels at each step of the process
  41. 41. Corporate Presentation I March 2014 41 Vision 2015 Outcome of the exercise  not a complete new strategy  but with much more focus on the internal embedding  through full involvement of 13000+ motivated employees  Vision 2015 does not represent a radical strategic shift from where we are today  what we have done & learned in the past 3 years  an improved understanding of where our customers and distribution partners are heading  where we believe we, as a company, can have most impact Based on Shows continuity
  42. 42. Corporate Presentation I March 2014 42 Vision 2015 Outcome of the exercise
  43. 43. Corporate Presentation I March 2014 43 Vision 2015 5 strategic choices To have a diversified product offering To capture growth in mature and emerging markets in Europe and Asia To commit to our partners and their customers To be where our customers want us to be To focus on our insurance capabilities
  44. 44. Corporate Presentation I March 2014 44 Five strategic choices 1. Focus on our Insurance capabilities Increasing demand from customers and partners for top products and insurance related services Developments Strategy  Exclusively focus on insurance capabilities  Invest in skills and capabilities  Primary objective to ensure that our partners and customers benefit from our insurance skills and experience  Improve knowledge sharing
  45. 45. Corporate Presentation I March 2014 45 Five strategic choices 2. To be where our customers want us to be  Customer decides what, where, when and how he wants to buy insurance  Increase of hybrid customer  Rise in aggregators and price comparison sites  Increased influence social media  Remain a diversified multi-channel distributor  Invest in new channels  Knowledge sharing in distribution Developments Strategy
  46. 46. Corporate Presentation I March 2014 46 Five strategic choices 3. To commit to our partners and their customers  JV structures may change: Change in regulation may result in (bank) partners to focus on distribution  Non financial groups are looking for new sources of revenues by leveraging their client base  Relying on strong and dynamic partnerships that are well embedded in their markets is a corner stone of our strategy  Partnership is in our DNA  We continue to invest our expertise in partnerships with top distributors  Existing partnerships may provide entry to new markets and geographies Developments Strategy
  47. 47. Corporate Presentation I March 2014 47 Five strategic choices 4. To have a diversified product offering StrategyDevelopments  Volatile financial markets and ultra low interest rates may persist for a number of years  Increased competition with Banks for deposits due to new regulations likely to remain in place  Focus on products and competences that results in insurance/risk income to reduce dependence of investment income and financial markets  Manage the balance between Life and Non-Life portfolio  Increase proportion of fee income Target  To balance our portfolio between Life and Non-Life toward 60%/40% of gross inflows
  48. 48. Corporate Presentation I March 2014 48 Five strategic choices 5. Capturing growth in emerging markets in Europe & Asia  Volume growth is levelling off in mature markets and margins are under pressure  Emerging markets with low insurance penetration show robust growth on the back of an emerging middle class  Further grow the relative proportion of emerging markets in Ageas market portfolio  Profit streams in mature markets can be used to finance growth in emerging markets and fund the dividend to our shareholders  We stick to Europe and Asia Target  Grow the amount of capital invested in emerging markets in Europe and Asia outside HK to 25% StrategyDevelopments
  49. 49. Corporate Presentation I March 2014 49 Our four targets are clear And status @ 31 December 2013 To balance our portfolio between Life and Non-Life towards 60/40 in terms of inflows @ Ageas part (67/33) To be efficient in Non-Life with a combined ratio structurally below 100% (98.6%) To increase our Return On Equity in Insurance to a minimum of 11% (8.3%) To deploy at least 25% of our capital in emerging markets in Europe and Asia (12.6%)
  50. 50. Corporate Presentation I March 2014 50 Six important values
  51. 51. Corporate Presentation I March 2014 51 Vision 2015 The way forward to 2015 Our project to reshape Ageas started in 2009 In 2012, the work is not finished but foundations are strong to unlock the full potential of Ageas by 2015  Clear strategic choices & Financial targets  People make the difference  Organization build on local empowerment & knowledge transfer  Enhanced financial communication
  52. 52. Our history Our company now Company profile Our key financials Our share Our future - Vision 2015 Selected topics 4 insurance segments Investment portfolio Legacy issues A developing company Partnerships
  53. 53. Ageas @ Mercurius I March 2014 53 Belgium Full product range for individuals & SME through multi channel distribution
  54. 54. Corporate Presentation I March 2014 54 * Figures after minority interest as consequence of the divestiture of the 25% stake in AG Insurance to BNP Paribas Fortis Key financial data Mission The general objective of AG Insurance is:  To be a leading and profitable multi-distribution service provider of insurance products  To strengthen its market leadership position in three main market segments: Individual Life, Group Life and Non-Life By focusing on the following strategic levers:  Multi-channel distribution  Product and service innovation  Operational excellence Market Position/ Key competences Business mix  Market leader in Belgium  # 1 in Life FuM (excl. 1st pillar): 27.4%  # 2 in Non-Life inflow: 16.0%  Multi-channel operating model (Brokers, Bancassurance, Assurfinance and B2B)  Full product range, covering the needs of all market segments (69%) Life (31%) Non-Life By Product (GWP) By Distribution (GWP) (44%) Bank (23%) Employee Benefits (33%) Broker EUR mio FY 12 FY 13 Gross inflow 6,886 5,956 Life 5,127 4,101 Non-Life 1,759 1,855 Net profit* 324 335 Life 260 274 Non-Life 65 61 Life FUM (EUR bn) 52.7 53.2 Combined ratio (%) 99.5% 99.9% Belgium Full product range for individuals & SME through multi channel distribution
  55. 55. FY 12 FY 13FY 12 FY 13 Corporate Presentation I March 2014 55 Net result: solid YTD performance In EUR mio In EUR bn Operating margin Guaranteed: at high end of target range Non-Life combined ratio: solid full year, despite weaker Q4 Inflow*: Individual Guaranteed Life down, Unit-linked & Non-Life up Life Technical liabilities stable In EUR bn Belgium : 2013 headlines Strong FY Life operating margin & Non-Life combined ratio ** Operating margin Unit-Linked: Satisfactory YTD margin In % avg technical liabilities In % avg technical liabilities FY 12 FY 13 Life Non-Life 95 84 13 4 88 Q4 12 Q4 13 5.1 4.1 1.8 1.9 6.9 6.0 FY 12 FY 13 Life Non-Life 1.5 1.1 0.4 0.4 1.8 1.5 Q4 12 Q4 13 Q4 12 Q4 13 In % NEP Q4 12 Q4 13FY 12 FY 13Q4 12 Q4 13 99.5% 99.9% 101.5% 106.3% 0.34% 0.42%0.41%0.47% 1.03%1.45%0.89%0.96% 260 274 65 61 324 335 FY 12 FY 13 9M 13 FY 13 52.7 53.2 52.9 53.2 108 * incl. non-consolidated partnerships @ 100%
  56. 56. Ageas @ Mercurius I March 2014 56 UK Non-Life insurance for individuals & SME through multi channel distribution
  57. 57. Corporate Presentation I March 2014 57 * Not including commission & fees from Retail distribution ** Includes net profit other distribution channels Key financial data Mission  To be the natural choice for insurance, in whatever way the consumer decides to purchase their insurance  Delivering on its promises through its dynamic and responsive team dedicated to customer satisfaction This vision has to be achieved through the continued pursuit of the existing 3-axes for growth strategy: 1. Manufacturing a wider range of products 2. Distribution through owned and 3rd party routes to market 3. Leveraging the combined capability of Ageas UK to deliver cost effective solutions Market Position/ Key competences Business mix Strong foothold in Personal Lines market  # 2 Private car insurer (# cars insured)*  # 4 Personal Lines intermediary*  The acquisition of Groupama UK will impact these positions (see later: A developing company) A number of core strengths including  Customer focused credentials  High levels of efficiency, with low unit costs of production  Multi-channel capabilities (to client and consumer) (87%) Personal Lines (5%) Protection By Product (GWP) By Distribution (GWP) (34%) Direct (9%) Partners (44%) Brokers *Based on AM Best analysis of 2012 FSA data (9%) Commercial Lines EUR mio FY 12 FY 13 Gross inflow* 2,229 2,284 Life 86 108 Non-Life 2,143 2,176 Net profit** 108 100 Life 0 (2) Non-Life 137 90 Other (26) 12 Combined ratio (%) 99.8% 98.4% Segment UK Non-Life insurance for individuals & SME through multi channel distribution (8%) Agents (4%) IFA’s
  58. 58. Better Non-Life operating result offset by Retail & FX impact In EUR mio United Kingdom: 2013 headlines Stable inflow, strong contribution from acquired Groupama activities Corporate Presentation I March 2014 58 Non-Life combined ratio: improved underwriting mainly in Household 12(0) (2) 90 FY 12 FY 13 Other Non-Life Total 1 (1) (0) 64 13 22 14 Q4 12 Q4 13 FY 12 FY 13 Q4 12 Q4 13 99.8% 98.4% 102.8% 99.2% 137 108 100 (28) (41) (12) (15) 28 24 16 9 FY 12 FY 13 Holding costs Retail In EUR mio 2012 adjusted from EUR (28) mio to EUR 16 mio for : • impairment charge • accel. amortisation • GICL acquisition costs 2013 adjusted for EUR 4 mio deferred tax benefit 87 90 FY 12 FY 13 2012 adjusted from EUR 137 mio to EUR 87 mio: • badwill on GICL • reorganisation costs Non-Life adjusted result: 2012 impacted by exceptionals In EUR mio In % NEP In EUR bn Inflow* up 2% after negative FX of 5% Other Income further down in a competitive market In EUR mio 0.1 0.1 2.1 2.2 2.2 2.3 FY 12 FY 13 Life Non-Life 0.0 0.0 0.5 0.5 0.5 0.5 Q4 12 Q4 13 FY 12 FY 13 64 54 Q4 12 Q4 13 276 235 Other adjusted result: 2012 & 2013 impacted by exceptionals * incl. non-consolidated partnerships @ 100%
  59. 59. Ageas @ Mercurius I March 2014 59 Continental Europe 5 different countries, Life & Non-Life, mix between mature & emerging
  60. 60. Corporate Presentation I March 2014 60 Key financial data Mission  Continental Europe wants to be the preferred insurance partner for leading distributors in Non-Life & Life protection  Our value proposition to these partners is  Ensuring operational excellence  A market-adapted product offering  Focused on risk activities in Non-Life and Life Market Position/ Key competences Business mix Mix of leading and challenger positions in Europe:  Portugal: # 1 Life insurer  Luxembourg: #2 FOS market  Italy: # 1 Non-Life bancassurer  Small position in France  Turkey: #4 Non-Life insurer Key competences include :  Joint venture & partnership management  Bancassurance  Multi-channel distribution (78%) Life (22%) Non-Life By Product (GWP) By Region (GWP) EUR mio FY 12 FY 13 Gross inflow * 4,272 5,156 Life 3,246 4,092 Non-Life 1,026 1,064 Net profit** 64 77 Life 50 44 Non-Life 14 32 Life FUM (EUR bn) 28.1 28.9 Combined ratio (%) 93.4% 93.7% France (7%) Italy (4%) * Gross inflow and FUM based on 100% of company revenues ** Net profit based on Ageas’ stake and including allocated Insurance International holding costs (44%) Luxembourg Portugal (34%) Turkey (12%) Continental Europe 5 different countries, Life & Non-Life, mix between mature & emerging
  61. 61. Net profit increase driven by EUR 9 mio one-off in Turkey In EUR mio In EUR bn Non-Life combined ratio still good despite adverse weather in Portugal 227% 210% 207% Inflow* boosted by strong sales, especially in Portugal & Turkey In EUR bn Continental Europe: 2013 headlines Excellent top line performance & increased Non-Life net profit including positive one-off ** Operating margin Guaranteed: lower risk margin vs. excellent 2012 Corporate Presentation I March 2014 61 Life Technical liabilities stable In % avg technical liabilities Operating margin Unit-Linked: FY margin in line with objective In % avg technical liabilities 50 44 13 32 64 77 FY 12 FY 13 Life Non-Life 14 8 1 6 15 14 Q4 12 Q4 13 3.2 4.1 1.0 1.14.3 5.2 FY 12 FY 13 Life Non-Life 1.1 1.2 0.3 0.3 1.4 1.5 Q4 12 Q4 13 FY 12 FY 13 Non-conso Conso 9M 13 FY 13 FY 12 FY 13 Q4 12 Q4 13 FY 12 FY 13 Q4 12 Q4 13 FY 12 FY 13 Q4 12 Q4 13 93.4% 93.7% 102.8% 91.4% 1.02% 0.91% 1.02% 0.94% 0.44% 0.47% 0.23% 0.20% 14.0 15.0 14.4 15.0 14.1 13.9 14.0 13.9 28.1 28.9 28.4 28.9 In % NEP * incl. non-consolidated partnerships @ 100%
  62. 62. Ageas @ Mercurius I March 2014 62 Asia Strong growth mainly in Life for individuals
  63. 63. Corporate Presentation I March 2014 63 (8%) Non-Life Key financial data Mission Achieve strong growth in shareholder value through  the application of Ageas’ core capabilities in selected high growth Asian markets.  the identification of emerging Asian trends (multi- channel distribution, increasing need for higher skill levels in risk management, distribution, product development) Market Position/ Key competences Business mix*  China: # 7 Life insurer  Thailand: #2 Life, #5 Non-Life insurer  Malaysia: # 1 Life, #2 Non-Life insurer  Hong Kong: #5 agency force  Small presence in India  Joint venture and partnership management  Bancassurance  Multi-Channel distribution  Agency management and training  Affinity marketing including direct marketing  Channel conflict management  Product development  ALM and Risk management By Product (GWP) By Region (GWP) * Gross inflow and FUM based on 100% of company revenues // **Net profit based on Ageas’ stake & including allocated Insurance International holding costs (92%) Life EUR mio FY 12 FY 13 Gross inflow * 7,882 9,824 Life 7,131 9,058 Non-Life 751 766 Net profit** 128 142 Life 121 122 Non-Life 8 21 Life FUM (EUR bn)* 24.4 27.9 Combined ratio (%) 99.3% 95.4% Hong Kong (5%) India (1%) Thailand (17%) Malaysia (12%) (67%) China Asia Strong growth mainly in Life for individuals
  64. 64. Net result: Excluding one-offs, strong growth of underlying profit In EUR mio In EUR bn Non-Life combined ratio improved over 2013 Inflow growth fuelled by China & Thailand Life Technical liabilities up across all entities In EUR bn Asia: 2013 headlines New business boost & underlying profit growth Life / Strong Non-Life underwriting result Corporate Presentation I March 2014 64 ** In % avg technical liabilities In EUR mio Life operating margin Hong Kong: Q4 13 margin impacted by one-off Result non-conso partnerships: excluding one-offs up almost 20% 8 21 FY 12 FY 13 Life Non-Life 28 35 2 6 30 41 Q4 12 Q4 13 7.1 9.1 0.8 0.87.9 9.8 FY 12 FY 13 Life Non-Life 1.9 1.7 0.2 0.2 2.1 1.9 Q4 12 Q4 13 1.9 2.0 FY 12 FY 13 Non-conso Conso 2.0 2.0 9M 13 FY 13 24 21 2 6 26 28 Q4 12 Q4 13 8 21 FY 12 FY 13 Life Non-Life Q4 12 Q4 13FY 12 FY 13Q4 12 Q4 13FY 12 FY 13 99.3% 95.4% 94.5% 97.4% 1.98% 1.95% 1.75% 3.59% 22.5 25.9 25.8 25.9 24.4 27.9 27.8 27.9 121 122 129 142 101 100 109 120 In % NEP * incl. non-consolidated partnerships @ 100%
  65. 65. Our history Our company now Company profile Our key financials Our share Our future - Vision 2015 Selected topics 4 insurance segments Investment portfolio Legacy issues A developing company Partnerships
  66. 66. In EUR bn * All assets at fair value except the ‘Held to Maturity’ assets; loans & real estate which are valued at amortized costs Asset mix  Asset mix relatively stable  Increased positions in equities & customer loans at the expense of cash continued Gross unrealized gains/losses on Available for Sale  Total portfolio: down to EUR 4.0 bn (EUR 5.4 bn FY 12); exclusively down in fixed income  Fixed income: at EUR 3.5 bn (EUR 5.2 bn FY 12) Sovereigns at EUR 2.3 bn (vs. EUR 3.3 bn) Corporates at EUR 1.2 bn (vs. EUR 1.8 bn)  Equities: up to EUR 0.5 bn (vs. EUR 0.2 bn) Gross UG/L on Real Estate: stable at EUR 1.3 bn - not reflected in shareholders’ equity EUR 0.9 bn unrealized gains/losses on Held to Maturity - not reflected in shareholders’ equity Sovereign bonds 34.7 Sovereign bonds 34.5 Corporate bonds 25.1 Corporate bonds 24.5 Structured 0.3 Structured 0.4 Loans 6.3 Loans 5.7 Equities 2.4 Equities 3.2 Real Estate 4.7 Real Estate 4.6 Cash 2.4 Cash 2.2 75.9 75.1 FY 12 FY 13 Investment portfolio UG/L fixed income down, increased allocation equities & customer loans Corporate Presentation I March 2014 66
  67. 67. Belgium 18.4 Belgium 18.3 France 4.8 France 5.1 3.3 3.4 Austria 2.9 Austria 2.6 1.4 1.1 0.7 0.6 Others 2.8 Others 3.3 34.7 34.5 FY 12 FY 13 In EUR bn  Gross UG/L at EUR 2.3 bn (vs. EUR 3.3 bn)  95% investment grade; 88% rated A or higher  Maturity sovereign bond portfolio unchanged & close to maturity liabilities , limited interest rate sensitivity Sovereign bond portfolio* Sovereign & Corporate bond portfolio Value fixed income portfolio impacted by evolution unrealized gains  Gross UG/L at EUR 1.2 bn (vs. EUR 1.8 bn)  Priority to investment grade industrials has led to increased share within corporate bond portfolio of 42% (vs. 37% FY 12)  Credit quality remains very good with 94% investment grade; 72% rated A or higher Corporate bond portfolio* Banking 6.1 Banking 5.4 Other financials 1.9 Other financials 1.8 Non Financials 9.3 Non Financials 10.3 Government related 7.9 Government related 7.0 25.1 24.5 FY 12 FY 13 * All assets at fair value except the ‘Held to Maturity’ assets; loans & real estate which are valued at amortized costs The Netherlands The Netherlands Germany Germany Southern EuropeSouthern Europe Corporate Presentation I March 2014 67
  68. 68. In EUR bn Loan portfolio (customers + banks)* Loan & Equity portfolio More loans with guarantee Loans to banks 2.6 Loans to banks 1.6 RE 0.1 RE 0.2 Infrastructure 0.1 Infrastructure 0.1 Mortgages 1.5 Mortgages 1.5 Other 2.0 Other 2.3 6.3 5.7 FY 12 FY 13  Increase in other: long term lending to social housing agencies in Belgium, benefiting from explicit guarantee by the region  Loans to banks – mainly short term bank deposits - down: priority to long-term secured loans Equity portfolio*  Gross UG/L increased up to EUR 0.5 bn (vs. EUR 0.2 bn)  Increase in equity portfolio supported by investments & strong equity markets Equities 1.2 Equities 1.6 Equity funds 0.1 Equity funds 0.1 RE funds 0.7 RE funds 0.7 Mixed funds & others 0.4 Mixed funds & others 0.7 2.4 3.2 FY 12 FY 13 * All assets at fair value except the ‘Held to Maturity’ assets; loans & real estate which are valued at amortized costs Corporate Presentation I March 2014 68
  69. 69. Real estate portfolio  Gross UG/L stable at EUR 1.3 bn (not reflected in shareholders’ equity but contributing to available capital for solvency calculation)  Real Estate exposure mainly in Belgium (+/- 70%) Investment Offices 1.5 Investment Offices 1.5 Car Parks 1.1 Car Parks 1.0 Investment Retail 1.3 Investment Retail 1.4 0.6 0.4 0.3 0.3 4.7 4.6 FY 12 FY 13 In EUR bn Real Estate portfolio* * All assets at fair value except the ‘Held to Maturity’ assets, loans & real estate which are valued at amortized costs Investment Warehouses RE Development Investment Warehouses RE Development Corporate Presentation I March 2014 69
  70. 70. Our history Our company now Company profile Our key financials Our share Our future - Vision 2015 Selected topics 4 insurance segments Investment portfolio Legacy issues A developing company Partnerships
  71. 71. (5) Q4 12 Q4 13 Q4 12 Q4 13 FY 12 FY 13 Net result driven by Q1 transactions & revaluation RPN(i) In EUR mio Accounting value of remaining legacies: General Account: Headlines Impacted by revaluation RPN(i) liability Net cash position: increase driven by settlement RPI & Call option In EUR bnIn EUR mio FY 12 FY 13 1.2 2.0 1.9 FY 12 9M 13 FY 13 119 (85) 50 (100) RPN(i) impact on P&L RPI & Call Option impact on P&L Staff & Operating expenses down FY 12 FY 13 Call Option RPI (273) (205) (91) In EUR mio In EUR mio In EUR mio (165) (279) (370) 234 872 242 37 FY 12 9M 13 FY 13 RPN(i) Call Option RPI 104 276 (161) (90) 60 14 1 Q4 12 Q4 13 17 18 33 27 50 45 FY 12 FY 13 Staff Operating 5 5 8 7 13 12 Q4 12 Q4 13 (57) 186 Corporate Presentation I March 2014 71
  72. 72. General Account: components of Net result Result driven by transactions on legacies & valuation methodology RPN(i) * Including Interest Margin, Other Expenses & Other Losses (Realised/Unrealised) (132) (161) (2) (17) (33) (41) 400 104 119 (90) (205) (18) (27) (21) (85) 276 Agreement with ABN AMRO & Dutch State Agreement with BNP on CASHES & Tier 1 RPI Call Option Reval RPN(i) Staff expenses Other operating expenses other* Net result Net result 2012 driven by agreements on legacy items In EUR mio Net result 2013 driven by agreements on legacy items & non-cash volatility RPN(i) legacy items solved over 2012 & 2013 RPN(i) causing non-cash volatility Corporate Presentation I March 2014 72
  73. 73. 688 1,216 1,913 (270) (222) (144) (205) (99) (125) 1,176 462 FY 11 FY 12 paid dividend capital reduction share buy-back RPI & call option upstream & capital restructuring capital injections other FY 13 Net cash position General Account at EUR 1.9 bn Incoming cash partly returned to shareholders, partly invested in business  EUR 1,176 mio cash received from transactions RPI & BNPP Call option  EUR 1.2 per share 2012 dividend paid out in May, upstream from operating companies more than compensating 2012 dividend & 2012 corporate centre costs  EUR 1.0 per share capital reduction paid out in December  EUR 75 mio of 2013 share buy-back already executed at YE – EUR 100 mio as per 14/02/2014  EUR 205 mio capital injections in China over 2013 expected cash-out for share buy-back In EUR mio ≈ Corporate Presentation I March 2014 73
  74. 74. Only 2 alternative uses for General Account net cash withheld About EUR 700 mio returned to shareholders in 2013 1. Invest in Businesses  Organic growth  Selective acquisitions  Create new partnerships 2. Return to shareholders  Dividend payment  Share buy-back ≈ EUR 1.8 bn  ≈ EUR 600 mio cash dividend over ‘09, ’10 & ‘11  EUR 450 mio share buy-backs finalized early ‘12 & ’13  EUR 270 mio cash dividend over 2012  EUR 200 mio share buy-back launched 12/08/13  EUR 222 mio capital reduction from proceeds of BNPP Call Option & RPI ≈ EUR 1.1 bn from net cash on top of retained earnings  ≈ EUR 600 mio UK (Tesco, KFIS, Castle Cover, Groupama)  ≈ EUR 200 mio CE (Italy, Turkey)  ≈ EUR 100 mio Asia (India, HK, China)  ≈ EUR 220 mio Asia (TPL) Corporate Presentation I March 2014 74
  75. 75. Status on various legal procedures Timing & (financial) outcome remains hard to estimate H1 2014 expected next steps  Amsterdam Court of Appeal in Stichting FortisEffect case - first instance in favour of Ageas  Brussels Commercial Court re alleged miscommunication 2007-08 (Deminor) -interim judgment on procedural matters  Brussels Commercial Court re Sep/Oct 2008 transactions (Modrikamen) – pleadings ongoing February 11 Claim re FRESH hybrid instrument dismissed by Brussels Court Sep- Dec 10 Ageas starts legal procedure against Dutch State & ABN AMRO to obtain compensation in return for conversion MCS (Mandatory Convertible Securities) into Ageas’ shares May 11 - Claim VEB/Deminor & FortisEffect dismissed by Amsterdam Court - Rotterdam court confirmed fine AFM I, appeal filed AgeasinitiatorAgainstAgeas February 12 BNP P tender for CASHES & subsequent conversion into Ageas shares – partial settlement of RPN/RPN(I) – call Fortis Bank Tier 1 Debt Securities February 12 Rotterdam court confirmed fine AFM II, appeal filed Utrecht court re communication Q2 2008 in favour of plaintiffs, appeal filed March 12 Brussels Commercial Court rules in favour of Ageas in MCS-case, appeal filed 2011 20122010 ... December 13 Supreme Court rejects appeal against judgement Ondernemingskamer re mismanagement mainly in favour of plaintiffs June 12 Agreement with ABN AMRO to settle legal proceedings concerning FCC & MCS, closing all outstanding disputes with Dutch State 2013 June 13 Fine imposed by FSMA, appeal filed February 14 Trade & Industry Appeals Tribunal renders final judgment on AFM II in favour of Ageas 2014 Corporate Presentation I March 2014 75 March 14 Trade & Industry Appeals Tribunal upholds AFM I fine
  76. 76. Legal proceedings Managed in interest of shareholders Administrative proceedings  AFM fine imposed 05/02/10 re price sensitive info June 08  AFM 2nd fine imposed 19/08/10 re price sensitive information Sep 07  Final judgement 04/03/14, fine upheld  Final judgement 14/02/2014 in favour of Ageas  FSMA re communication in Q2 2008  Appeal filed before Court of Appeal Criminal procedure  Public prosecutor requests referral of 7 individuals Enterprise Court (Ondernemingskamer)  At request of VEB re 2007-2008  Final judgement 06/12/13 re mismanagement, mainly in favour plaintiffs. Civil Lawsuits  Amsterdam - VEB re alleged miscommunication 2007-08 against Ageas, former directors/executives & banks  Amsterdam - Stichting FortisEffect, re sale of Dutch activities against Dutch State & Ageas  Proceedings ongoing  Judgement in appeal expected early March 2014  Utrecht - Stichting Investor Claims Against Fortis re alleged miscommunication 2007-08 against Ageas & 2 financial institutions  Utrecht - 2nd case by Stichting on behalf of certain shareholders for damages from same defendants & certain former directors/executives  Proceedings ongoing  Proceedings initiated in August 2012 ; at present unclear whether both actions will be joined  Arnhem - Mr.Bos, re alleged miscommunication May June 2008  Appeal filed before Arnhem Court of Appeal  Brussels - Modrikamen, re Sep/Oct 2008 transactions  Brussels – Various lawsuits initiated by shareholders re alleged miscommunication 2007 - 08  Pleadings on the merits scheduled H1 2014  Proceedings ongoing Financial instruments  Brussels Court of Appeal - MCS-holders contesting validity of conversion  Judgment Brussels court 23/03/12 in favour of Ageas; Appeal by certain MCS-holders; no judgment before 2015 Situation 19 February 2014 Corporate Presentation I March 2014 76
  77. 77. Main characteristics Hybrids General Account Hybrone partly tendered, NITSH I & II reimbursed, no intention to buy back FRESH In EUR mio Ageas Ageasfinlux Fresh Ageas Hybrid Financing Hybrone Direct issue FBB, 2004 CASHES % 3m EUR + 135 bps 5.125% 4.625% 3m EUR +200 bps Amount outstanding 1,250 336 1,000 1,110 ISIN XS0147484074 XS0257650019 BE0119806116 BE0933899800 Call date Undated exchange, strike 315.0, mandatory 472.5 Jun/2016 Step up to 3M Euribor +200 bps Oct/2014 Step up to 3M Euribor+170 bps Undated exchange, strike 239.4, mandatory 359.1 ACSM YES YES YES YES Dividend pusher YES YES YES NO Dividend stopper NO YES YES YES Trigger < 0.5% dividend trigger Liabilities > asset <8% CAD <0.5% Dividend Other on lent to AG Insurance No stock settlement feature Coupon served by FBB, trigger ACSM linked to Ageas dividend Market Price (31/12/13) 57.61 101.56 101.06 67.88 Fortis Bank (now BNP Paribas) Corporate Presentation I March 2014 77
  78. 78. Optimization capital structure at AG Insurance Successful debt placement of USD 550 mio & EUR 450 mio December 2013: Successful placement Subordinated Note of EUR 450 mio  5.25% rate, payable annually in June  first call date June 2024  after call date: 3m EUR + 4.316%, payable quarterly  Subscribed by shareholders: Ageas (EUR 350 mio) & BNP Paribas Fortis (EUR 100 mio)  Proceeds used to redeem outstanding internal loan & improve cost of capital  probable to qualify as Tier 2 capital under Solvency II March 2013: Successful placement Subordinated Note of USD 550 mio  6.75% rate, perpetual, payable semi-annually, reset in year 6  Subscribers: key institutional investors & global private banks in Asia & Europe  mix of stable, long-term support & on-going retail buying interest  Proceeds used to redeem Nitsh II on loan & EUR 163.6 mio nominal of Hybrone on-loan  EUR 7 mio capital gains tender offer Hybrone on-loan  Guarantees granted on AHF hybrid debt reduce significantly: lower financing costs, increased transparency, new capital more likely to be Solvency II compliant Corporate Presentation I March 2014 78
  79. 79. Changes in debt composition in Hong Kong Successful debt placement for total amount of USD 250 mio in March-April 13 Successful placement debt by Hong Kong entity  10-year senior debt of USD 250 mio  4.215% rate  issued early April 2013  Subscribers: Key institutional investors & global private banks in Asia & Europe  mix of stable, long-term support & on-going retail buying interest  Proceeds used for refinancing & general corporate purposes Corporate Presentation I March 2014 79
  80. 80. Our history Our company now Company profile Our key financials Our share Our future - Vision 2015 Selected topics 4 insurance segments Investment portfolio Legacy issues A developing company Partnerships
  81. 81. Corporate Presentation I March 2014 81 First priority: Invest in business Optimize performance and stimulate growth Streamline the portfolio of insurance activities  Russia, Luxembourg Non-Life, Ukraine Life, Turkey Life, Germany Optimize the operational performance  Restructuring investments, Non-Life measures , Life guaranteed rate,... Develop greenfield operations Acquire new businesses in attractive markets by building on partnerships expertise  UBI, Aksigorta Grow core entities organically & through add-on acquisitions  Tesco, Kwik Fit Services, Castle Cover, Groupama UK
  82. 82. Corporate Presentation I March 2014 82 1. Streamline the portfolio of insurance activities Pass the test on 3 key criteria Critical size  The local presence should be such that every entity can compete effectively in its market or niche  Critical size will ensure that each activity is able to comply with Ageas’s quality standards Meaningful contribution  Each activity should make a meaningful contribution to insurance earnings  The contribution to the insurance earnings should be significant enough to justify management time Return in excess of cost of equity  The return of a business will have to exceed the cost of equity, which is estimated to be around 11%, while taking into account the specificities of the business  The return of a growth business will also take into consideration the expected value creation Streamline the portfolio of insurance activities Going forward all our insurance activities have to meet 3 key criteria
  83. 83. Corporate Presentation I March 2014 83 1. Substantial progress made in streamlining insurance portfolio Combined with selective expansion & strengthening partnerships CEU : 18/02/11 : Ageas enters Turkish Non-Life market; acquisition 31% in AKSigorta / stake increased to 33% GA : 23/06/11 : Transfer reinsurance liabilities Intreinco to Swiss Re UK: 24/03/11 : Acquisition Castle Cover, strenghtening market position in over 50s market Asia : 09/11/09 : Ageas, KasikornBank & Muang Thai forge stronger ties (Thailand) CEU : 28/10/09 : Discontinuation Russian Insurance activities CEU : 16/09/10 :Sale Ukrainian Life Insurance activities announced CEU : 06/10/09 : Sale Luxembourg Non-Life to La Bâloise CEU : 08/06/11 : Ageas, BNP Paribas Cardif & BGL BNP Paribas conclude Luxembourg Life partnership CEU : 17/09/09 : Ageas & BNP Paribas Assurance into a Non-Life strategic partnership in Italy; acquisition majority stake in UBI Assicurazioni UK : 11/09/09 : Tesco & Fortis announce Non-Life partnership UK : 02/07/10 : Acquisition Kwik Fit Insurance Services, consolidating Personal Lines intermediary market position S T R E A M L I N E S T R E N G H T E N CEU : 26/07/10 : Sale Turkish Life Insurance activities announced CEU : 03/10/11 : Sale German Life Insurance activities announced 201120102009 UK: 20/09/12 : Acquisition Groupama UK, strenghtening market position in broker segment & entering new product lines 2012
  84. 84. Our history Our company now Company profile Our key financials Our share Our future - Vision 2015 Selected topics 4 insurance segments Investment portfolio Legacy issues A developing company Partnerships
  85. 85. Corporate Presentation I March 2014 85 Partnerships are in our DNA Ageas co-operates with many different partners Thailand Belgium Italy UK Malaysia China India Belgium United Kingdom Portugal Italy Malaysia Turkey Luxembourg France
  86. 86. Corporate Presentation I March 2014 86 Partnerships are in our DNA In all our partnerships we strive to… … select the right partners“understanding partner needs and whether we have the right solution is more productive in the short and long term … focus on the strategic, not the tactical rationale “ we focus on alignment of core competencies … base cooperation on customer need, not short term product sales “ quick returns and inflated commissions are unstable. Creating the platform for a wider deeper relationship results in the partner having no reason to go elsewhere for their insurance needs … build on long term loyalty, not on financial return only “ a pure financial motivation will never result in long term partnership that is mutually rewarding. Ability to evolve and be flexible creates more value
  87. 87. Corporate Presentation I March 2014 Partnerships are in our DNA Importance of partnerships for Ageas  Out of Ageas’ 12 operating companies, 9 are joint venture partnerships  Not one size fits all, but adaptive to the local situation  The partnerships vary widely in terms of size of stake, products sold, degree of integration with distribution partner and market they are active in  In Life and Non-Life  We are flexible and practical in close cooperation with our business partners  We bring expertise via our people  Distribution relations and joint ventures (as both majority and minority shareholder)  Partnership with strong distributors are at the heart of Ageas strategy  In China we are 24.9% owner of Taiping Life, which has distribution agreements with all major banks. In the rest of Asia, all our JV partners are banks distributing our insurance products  In the UK, we have distribution partnerships with a.o. Tesco, Age UK, Toyota and John Lewis  The recent entry in the Turkish market is also a joint venture, with Sabanci Holding 87
  88. 88. Corporate Presentation I March 2014 88 For more information on Ageas …see our renewed website (www.ageas.com)
  89. 89. Corporate Presentation I March 2014 89 Your Ageas’s contacts Investor Relations + 32 2 557 57 33 e-mail:ir@ageas.com Media + 32 2 557 57 37 e-mail:press@ageas.com Website:www.ageas.com

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