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Periodical Financial Information

3M 2017RESULTS

Introduction to Ageas

2Corporate Presentation I March 2018

A transformation journey

to a solid insurance player in Europe and Asia

> Rename the company

> Simplification legal structure

> Start divestments non-core activities

> Selectively grow the

business organically & via

acquisitions

> Optimising operational

performance

> Address financial legacies

> Introduction

○ Clear financial targets

○ Clear strategic choices

Re g a in ing

c onf i d e n c e f ro m

fin a n c ia l

m a r ke t s

Creat ing an Ageas

iden t i t y

Ag e a s c o n f i r m e d a s a s o l i d

I n s u r a n c e p l a ye r

i n E u r o p e a n d As i a

Stabilizing

the group

Financial

repositioningPrepare for

The future

2009 2012 2015 2018


An international Group with a focus on Europe and Asia

UNITED-KINGDOM

Non-Life

#2 motorcycle insurer

#3 private car insurer

BELGIUM

Life & Non-Life

#1 Life

#2 Non-Life

#1 real estate

CONTINENTAL EUROPE

Life & Non-Life

4 markets

#2 insurer in Portugal

ASIA

Life & Non-Life

6 partnerships in 9 markets

17%

6%

18%59%

GROSS INFLOWS (100%)

2017 TOTAL: EUR 33.8 bn

Belgium United-Kingdom

Continental Europe Asia

46%

3%

20%

30%

1%

INSURANCE NET RESULT

2017 TOTAL: EUR 960 MIO

Belgium United-Kingdom

Continental Europe Asia

Intreas

Breakdown by segment (in EUR bn)

Breakdown by segment (in EUR mio)

http://www.google.be/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiL8dvY9NPTAhWCPhQKHXnLC6QQjRwIBw&url=http://jeanneboden.typepad.com/jeanneboden/2010/03/taiping-logo.html&psig=AFQjCNHeimVCZs5s3hpJAQvZfXWfwe1yyQ&ust=1493907340365669

http://www.google.be/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiL8dvY9NPTAhWCPhQKHXnLC6QQjRwIBw&url=http://jeanneboden.typepad.com/jeanneboden/2010/03/taiping-logo.html&psig=AFQjCNHeimVCZs5s3hpJAQvZfXWfwe1yyQ&ust=1493907340365669


A diversified portfolio of productsMarket leader positions in core countries

69%

31%

2017 GROSS INFLOWSBY PRODUCT AT AGEAS’S PART

Life Non Life

LIFE

#1 Belgium

#1 Thailand#2 Luxembourg

#5 Malaysia#1 Portugal

#6 China

GARANTEED UNIT-LINKED67%

33%

Guaranteed Unit-Linked

NON-LIFE

#2 Belgium

#4 Thailand#3 Private car UK #3 Portugal

#4 Turkey #2 Malaysia

MOTORACCIDENT

& HEALTHHOUSEHOLD

OTHER

21%

43%

26%

10%

Accident & Health

Motor

Household

Other Lines

2017 GROSS INFLOWS

NON-LIFE

(consolidated entities)

2017 GROSS INFLOWS

LIFE


Non-Life business mostly driven by Motor & Household

Life business mostly guaranteed rate driven


Multiple distribution channels to reach our clients

BANKS AGENTS BROKERS DIRECT

Proven competency in developing strong, long-term and

dynamic partnerships with companies leader in their

local market

Ageas’s

Insurance knowledge

and expertise

Partner’s

Local knowledge and

distribution capabilities+


Consistent inflow growth

CAGR +12%

Belgium

in EUR bn

UK (excl. UK Life)

Continental Europe

Asia (excl. HK)

6.2 6.9 6.0 5.9 5.7 6.1 5.7

2.0 2.1

2.3 2.4 2.5 2.2 2.0

2.8 4.3 5.0 5.5 5.2 5.4 6.1

5.8

7.4 9.3

11.4

15.9 17.8

20.0

16.8

20.722.6

25.2

29.2

31.5

33.8

2011 2012 2013 2014 2015 2016 2017

All non-consolidated partnerships have been included at 100%


Underlying insurance net profit capacity of EUR 750-850 mio

Belgium

UK

Continental Europe

Asia

Reinsurance

In EUR mio

(327)

324 335 392 384 391 438

86

108 100 117

30

(156)

29

(8)

64 77 56

70 90

193

(64)

128 142 172

272 394

293

(313)

624 654 737 755

721 960

2011 2012 2013 2014 2015 2016 2017

INSURANCE NET PROFIT

As reported

360 324 335 392 384 410 438

91 108 102

99 30

57 75 65 64 77

56

70 99

125 20 95 105

132 218 182

253

536

591 618 679 701

751

899

2011 2012 2013 2014 2015 2016 2017

INSURANCE NET PROFIT

Underlying

2011 Belgium and CEU corrected for Greek impairments

2011-2016 Excl. Net result UK Life / Asia excluding Net result Hong-Kong

2016 Belgium corrected for Terrorism events / UK corrected for closure

Glasgow office, special risks & Ogden rate review / Asia corrected for

capital gains sale of Hong-Kong

2016 CEU corrected for integration costs Ageas Seguros

2017 UK corrected for Ogden / CEU corrected for Cargeas capital gains and

integration costs Ageas Seguros

3

3

88

CAGR +9%


Disciplined cash upstream from operating companies Upstream covering dividend and holding costs

Belgium

in EUR mio

UK

Continental Europe

Asia

2013 Belgium excluding EUR 200 mio capital restructuring

2014 CEU excluding EUR 30 mio France & EUR 61 mio Portugal Capital restructuring and EUR 115 mio Portugal M&A

Belgium268

Belgium168

Belgium294

Belgium333

Belgium391

UK 82

UK 64

UK 50

UK 47 CEU 36

CEU150

CEU 53 CEU 19

CEU 48 Asia 52

Asia106 Asia 43

Asia 89

Asia77

42

438

488

440

487 516

2012 2013 2014 2015 2016 2017

Portugal25

Italy 15

9

Malaysia16

Thailand15

China46

Luxembourg


EXECUTIVE COMMITTEE

Bart De Smet

CEO

Christophe Boizard

CFO

Filip Coremans

CRO

Antonio Cano

COO

MANAGEMENT COMMITTEE

Gary Crist

CEO Asia

Hans De Cuyper

CEO BelgiumAndy Watson

CEO United Kingdom

Steven Braekeveldt

CEO Continental

Europe

Emmanuel

Van Grimbergen

GRO

Four geographic segments supported by a lean corporate Head Office

Management structureA business driven organization


4 REGIONS, 15 COUNTRIES


BelgiumA clear market leader with robust profit levels

#1 Life 28.7% market share

#2 Non-Life 15.6% market share

#1 Real Estate EUR 6.3 bn real estate value

Policyholders

3.7 mio

2017

Gross Inflows

EUR 5.7 bn

2017

Net Result

EUR 438 mio

2017

Combined ratio

91%

BELGIUM INSURANCE NET PROFIT

Non-Life

Life

in EUR mio

(330)

260 274 336

281 288 292

3

65 61

55 103 102

146

(327)

324 335

392 384 391 438

2011 2012 2013 2014 2015 2016 2017

2011 corrected for Greek impairments

2016 corrected for Terrorism events

91 108 102 99

30 57

75

2011 2012 2013 2014 2015 2016 2017


United-KingdomRestructuring to obtain target profit level

#2 Motorcycle

#3 Private car

Staff

3,500

Brokers

2,500

Active customers

5 mio

2%

64%

23%

11%

Accident & Health

Motor

Household

Other Lines

2017 GROSS INFLOWS


UK INSURANCE NET PROFIT

As reported

UK INSURANCE NET PROFIT

Underlying

Excl. Net result UK Life

2014 corrected for capital gain sale of UK Life

2016 corrected for closure Glasgow office, special risks &

Ogden rate review

2017 corrected for Ogden rate review

In EUR mio In EUR mio

91 108 102 120

30

(156)

29

2011 2012 2013 2014 2015 2016 2017

Excl. Net result UK Life


Continental EuropeA diversified portfolio

Staff

2,400

2017 Combined ratio

90.4%

4 markets : Portugal, France, Luxembourg and Turkey (Italy divested in 2017)

#1 in Life and #2 overall insurer in Portugal

#4 Non-Life in Turkey

69%

31%

2017 GROSS INFLOWS(at Ageas’ part)

BY PRODUCT (IN %)

Life Non-Life

47%

14%3%

8%

28%

Portugal France

Italy Turkey

Luxembourg

2017 GROSS INFLOWS

(at Ageas’ part)

BY MARKET

(19)

50 44 45 33 49 62

11

14 32 11 37

41 53

77

(8)

64 77

56 70

90

193

2011 2012 2013 2014 2015 2016 2017

CONTINENTAL EUROPE INSURANCE NET PROFIT

Non-Life

Life

Cap gain from the sale of the Italian entity

In EUR mio

2017 Gross Inflows

(at 100%)

EUR 6.1 bn

2017 Net Result

EUR 193 mioIncluding EUR 77 mio

cap gains from Italy


AsiaA fast growing contribution

Malaysia

Maybank

2001

China

Taiping Life

Thailand

Muang Thai

2004

India

IDBI Federal Life

2008

Hong Kong

AICA*

The Philippines

East West

Ageas Life

Vietnam

Military Bank

20152016

Laos

Cambodia

Muang Thai

EXPANDING OUR REACH THROUGH PARTNERSIPS

75%

17%

7%

1%

China Thailand Malaysia India

2017 GROSS INFLOWS

(at Ageas’part) BY MARKET

96%

4%

2017 GROSS INFLOWS(at Ageas’part) BY PRODUCT

Life Non-Life

*AICA was sold in 2016

2017 Net Result

EUR 293 mio

2017 Combined ratio

87.4%

2017 Gross Inflows

(at 100%)

EUR 20 bn

6.27.9 9.8

11.9

16.518.0

20.0

2011 2012 2013 2014 2015 2016 2017

GROSS INFLOWS MORE THAN TRIPLED IN 6 YEARS (in EUR bn)

6 partnerships in 9 markets :

China, India, Malaysia, Thailand, Vietnam, Philippines, Singapore, Laos, Cambodia

#6 Life in China

#1 General takaful in Malaysia

#1 Life in Thailand

#4 Non-Life in Thailand

X3


OUR STRATEGY


Ambition 2018 : 7 strategic choices

› Be close to our customers by leveraging

technology and acting on improved

customer insights

› Invest in smart synergies to facilitate

innovation and the sharing of knowledge,

data and skills across our businesses

› Focus on our insurance capabilities by

continuing to invest in core insurance skills

› Commit to our partners and their customers

to strengthen relationships for the long term

› Expand in mature and growth markets in

Europe and Asia

› Create a positive customer experience across all

channels through a seamless, integrated and

consistent omni-channel distribution approach

› Have a well-diversified product offering,

targeting growth in Non-Life and core

"protection" products in Life


Ambition 2018 : 5 financial targets2

01

7 F

IGU

RE

S

14.6%Return above the

target (14.4%

excluding Cargeas)

95.2%Non-Life combined

ratio reaching target

despite residual Ogden

impact

93 bps27 bps

Life guaranteed

margin above target

while Unit-Linked

margin is below

target but improving

42%Proposed gross

dividend in line with

promised pay-out ratio

196%Strong Insurance

Solvency IIageas ratio,

comfortably above

target

Reaching all but one target


The challenges we face, the answers we give

Use Solvency IIageas for capital management

and risk appetite

Target insurance Solvency IIageas : 175%

Continue to strengthen our positions

Investing 25% of the Insurance Equity in

growth markets

Decrease dependence on short-term

investment products

Invest in innovation projects

Focus : data analytics, customer loyalty,

healthcare, direct distribution channels

Closer to customer

Add new customer touchpoints within the

existing distribution mix

2017 insurance

Solvency IIageas : 196%

Recent entry in Philippines,

Vietnam, Laos and Cambodia

New products in Belgium,

Portugal and France

Over EUR 300 million in new

technological developments in

2013/2018

Multiple projects: My Global

Benefits (BE), Back Me Up (UK),

Yongo (BE), Elastic (UK), Smile

(Thailand)

OUR APPROACH OUR ANSWERS


Ageas’s answer to the low i-rate environmentMaintaining strong inflows and solid operating margin

Additional yield on equities & real estate estimated at 0.5%

Matched portfolio in Belgium

FY 14 FY 15 FY 16 FY 17

Guaranteed interest rate 2.71% 2.63% 2.49% 2.32%

Fixed income yield 3.84% 3.71% 3.45% 3.34%

Liabilities Guaranteed (EUR bn) 51.8 50.3 52.9 50.4

FY 14 FY 15 FY 16 FY 17

Fixed income yield 2.89% 2.11% 1.71% 1.88%

Reinvested amount (EUR bn) 4.6 4.2 4.5 2.9

Newly invested money mostly government related loans, mortgage loans & infrastructure loans

Guaranteed retail Life:

Yield lowered from 1% to 0.75% as from 1 April 2016

Yield lowered to 0.5% as from 1 August 2016

Yield further lowered to 0.25% as from 1 November 2016

Life

Back book

New money

Life & Non-Life


Ageas’s answer to the low i-rate environmentFull match between assets and liabilities

Stable evolution of the investment margin on back book in Belgium

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

Q1 2014Q2 2014Q3 2014Q3 2014Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017

Guaranteed interest rate Total fixed income yield

3.34%

2.32%


M&A StrategyM&A Criteria

EXISTING MARKET

Priority to strengthen positions in

existing markets

NON-LIFE

Clear preference for Non-Life

FAST GROWING

EMERGING MARKETS

Further expansion in fast growing

emerging markets while respecting

financial targets and continuing to build

on a successful partnership model

BUSINESS GROWTH

OPPORTUNITIES

Flexibility for opportunities where Ageas

believes its expertise can create growth

& improve the business


TOTAL LIQUID ASSETS

Ring-fenced for Settlement

Liquid Assets

Net Cash

in EUR bn

Financing in case of a compelling

M&A transaction can come out of:

• Available Net Cash

• Projected future cash flows

• Debt issuing capacity

M&A StrategyTotal Financing capacity estimated at around EUR 2 bn

0.7

1.2

1.9

1.6

1.3

1.0 0.9

0.3

0.3

0.2

0.80.9

0.7

1.2

1.9 1.9

1.6

1.91.8

2011 2012 2013 2014 2015 2016 2017


M&A StrategyPut option AG Insurance

BNP Paribas Fortis owns 25% + 1 share of AG Insurance and is granted a put option to resell its

stake to Ageas in H1 2018

At 31/12/2017 the liability of the put option was € 1,449 M

AG Insurance and BNP Paribas Fortis also have a distribution agreement

4 POSSIBLE SCENARIOS

Distribution agreement renewed

BNP Paribas

Put option

exercised

YES

YES

NO

NO

Status quo on distribution

Ageas full owner of AG

Insurance

Status quo on distribution

& ownership

Separation

Unlikely since

No strategic logic


INVESTMENT PORTFOLIO

41%

21%

24%

6%8%

Investment officesCar parksInvestment RetailRE DevelopmentInvestment warehouses

14%

1%

7%

13%65%

Loans to banks RE

Infrastructure Mortgages

Other


A solid and diversified investment portfolio

16%

8%

61%

15%

Banking Other financials

Non Financials Governement related

EUR

20.8 BN

65%6%

17%

12%

EquitiesEquity fundsRE fundsMixed funds & others

2017 INVESTMENT PORTFOLIO

47%

26%

12%

6%

6%3%

Soverign bonds Corporate bonds

Loans Equities

Real Estate Cash

2017 SOVEREIGN BOND PORFOLIO

50%

17%

7%

7%

4%3%

3%2%

7%

Belgium France Austria

Portugal Italy Spain

Germany Ireland Other

2017 CORPORATE BOND PORFOLIO

2017 LOAN PORFOLIO 2017 EQUITY PORFOLIO 2017 REAL ESTATE PORFOLIO

EUR

80.6 BN

EUR

37.5 BN

EUR

9.4 BN

EUR

4.9 BN

EUR

5.3 BN


GENERAL ACCOUNT


Decreased volatility from the General Account

General Account activities not related to the core insurance business

Royal Park

Investment

CASHES

RPN(i)Put option on AG

Insurance

Legal

proceedings

CASHES, securities issued by

BNP Paribas Fortis and

convertible into Ageas shares

RPN(i), financial instrument

designed to avoid accounting

volatility in the BNP Paribas

Fortis books from the

CASHES. The corresponding

liability is on Ageas balance

sheet

Out of the 12,000 CASHES issued, only 3,791 remain

outstanding

44.7% investment in RPI, a

structured credit portfolio

from Fortis

The portfolio was sold in

2013, the remaining

activity today is mostly

limited to the management

of legal proceedings in the

US initiated by RPI

BNP Paribas Fortis owns

25% + 1 share of AG

Insurance and is granted a

put option to sell its stake

to Ageas in H1 2018

The put option is fully

provided for at fair value

At 31/12/2017 the liability

of the put option is

EUR 1,449 M

Legal proceedings related

to the former Fortis Group

in 2007 and 2008

Revised Settlement

between Ageas and

claimant organizations

reached in 2017

Amsterdam’s Court of

Appeal’s decision expected

mid 2018


Progress in solving legal legacies

Settlement between Ageas & claimants organisations

Ageas offers to pay EUR 1.2 bn compensation - Cash impact of EUR 1,0 bn

No recognition of any wrongdoing by Ageas

Commitment by eligible shareholders to abandon any ongoing civil proceeding & not to

start any legal proceeding related to the events

Settlement not declared binding in current format

Court’s main objections: unjustified difference between Active and Non-Active Claimants

Court offers opportunity for amendments by 17/10/2017

Court grants extension until 12/12/2017

Ageas announced EUR 100 mio final additional effort

Agreement reached on revised Settlement proposal

First hearing on compensation models of claimants organizations

Second hearing on the merits

Announcement

14/03/2016

Amsterdam Court’s

interim decision

16/06/2017

Extension

16/10/2017

Revised Settlement

12/12/2017

Next steps

16 & 27/03/2018

Court’s decision estimated mid 2018


INVESTMENT CASE


Shareholders returnAgeas returned EUR 4.6 bn since’09, >50% of current market cap

in EUR mio

TOTAL RETURNED TO SHAREHOLDERS

Capital Reduction

Share buy-back executed

Paid Dividend

7 share buy-back programmes

188 197 188 270 309 329 338

419 408

223

188

427

348

637

518

579 582

663 655

230 160

144

209 250 244

244 247

2010 2011 2012 2013 2014 2015 2016 2017 2018

2011 2012 2013 2014 2015 2016 2017 2018

Gross amount/share 0.80 0.80 1.20 1.40 1.55 1.65 1,70

+0.40

2.10

Payout ratio 50% - 43% 47% 45% 45% 59% 42%

Dividend yield 3.7% 4.7% 4.6% 4.4% 5.0% 4.9% 5.3% 5.1%

Target

dividend payout ratio

40-50%

Proposed regular gross

Cash dividend 2018 of

EUR 2.10

up 24%


STRENGTHS

OF THE BUSINESS MODEL

Balanced portfolio

Markets/products/channels

Strong positions in mature

European countries

+

Growth potential in Asian

emerging markets

Proven expertise in growing

through partnerships

FINANCIAL DISCIPLINE AND

PROGRESS ON SOLVING LEGACIES

Strong capital position

(FY2017)

Shareholder’s equity

EUR 9.6 bn

Insurance Solvency IIageas

196%

Group Solvency IIageas

196%

Resolution of a large

number of legacies from

the past

Strong progress on legal issues:

Revised Settlement agreement

reached in 2017 – Court’s

decision expected mid 2018

AMBITION

FOR THE FUTURE

Clear strategic priorities

to prepare the Group for the

future

Innovation

Growth markets

New products

5 financial targets

11%-13% ROE

97% Combined ratio

Life operating margin

85-90 bps guaranteed

40-45 bps unit-linked

40%-50% dividend range

SII ratio 175%

Conclusion


Certain of the statements contained herein are statements of

future expectations and other forward-looking statements that are based on management's current views and assumptions

and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ

materially from those expressed or implied in such statements. Future actual results, performance or events may differ

materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular

economic conditions in Ageas’s core markets, (ii) performance of financial markets, (iii) the frequency and severity of

insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels, (vii)

currency exchange rates, (viii) increasing levels of competition, (ix) changes in laws and regulations, including monetary

convergence and the Economic and Monetary Union, (x) changes in the policies of central banks and/or foreign

governments and (xi) general competitive factors, in each case on a global, regional and/or national basis. In addition, the

financial information contained in this presentation, including the pro forma information contained herein, is unaudited and is

provided for illustrative purposes only. It does not purport to be indicative of what the actual results of operations or financial

condition of Ageas and its subsidiaries would have been had these events occurred or transactions been consummated on

or as of the dates indicated, nor does it purport to be indicative of the results of operations or financial condition that may be

achieved in the future.

Disclaimer


Tel:

E-mail:

Website:

+ 32 2 557 57 35

[email protected]

www.ageas.com

Investor Relations

Naar een coherente ontwikkeling van de Belgische …...2018/03/09 · › Create a positive...

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