Debt Investor Presentation FY 2018
Executive summary Ageas group International insurance group with focus on Europe & Asia Diversified product portfolio with focus on individuals & SME Solid & diversified investment portfolio Robust solvency & capital generation providing strong mitigation against market or other external evolutions Strong capitalization with EUR 0.8 bn regulatory Tier 2 headroom Clear strategic priorities & ambitious financial targets - set as part of Connect 21 strategic plan Reinsurance activities transforming holding into operating company Ageas SA/NV Diversified sources of income A/stable rating * Based on indicative per share compensation & per 12/02/2019 2 Debt Investor Presentation I FY 2018
1. ageas group 2. ageas SA/NV 3. appendix
International insurance group with focus on Europe & Asia Leading market positions in most countries ASIA AGEAS SA/NV BELGIUM GROSS INFLOWS @ageas share Life & Non-Life 2018 TOTAL: EUR 14.5 bn Internal Reinsurance with Life & Non-Life 6 partnerships in 9 markets Life & Non-Life license #1 Life #5 Life in China #2 Non-Life #1 General takaful in Malaysia #1 real estate #3 Life & #4 Non-Life in 32% Thailand 38% 11% 19% Belgium United-Kingdom Continental Europe Asia INSURANCE NET RESULT 2018 TOTAL: EUR 797 Mio 1% 21% CONTINENTAL 52% UNITED-KINGDOM 15% EUROPE Non-Life 11% Life & Non-Life #4 motorcycle insurer 3 markets #3 private car insurer Belgium United-Kingdom #2 insurer in Portugal Continental Europe Asia Reinsurance Debt Investor Presentation I FY 2018 4
Diversified product portfolio Focus on individuals & SME LIFE 2018 GROSS INFLOWS LIFE GROSS INFLOWS @ageas share (consolidated entities) 2018 TOTAL: EUR 14.5 bn mostly guaranteed business 29% 24% GUARANTEED UNIT-LINKED 71% 76% Life Non Life Guaranteed Unit-Linked NON-LIFE 2018 GROSS INFLOWS NON-LIFE INSURANCE NET RESULT (consolidated entities) TOTAL: EUR 797 Mio mostly driven by Motor & Household 10% HOUSEHOLD MOTOR 22% 36% 26% 64% 42% ACCIDENT Accident & Health & HEALTH OTHER Motor Life Non Life Household Other Lines Internal reinsurance with Life & Non-life license Debt Investor Presentation I FY 2018 5
Ageas group Key financials & operational elements Insurance Net result Inflows @ageas share Ageas net result In EUR bn In EUR mio In EUR mio 960 77 797 721 15 14.5 14.4 14.1 260 289 199 4.2 4.4 4.4 18 809 623 623 505 493 10.3 10.0 9.7 27 FY 16 FY 17 FY 18 FY 16 FY 17 FY 18 FY 16 FY 17 FY 18 Life Non-Life divestments Life Non-Life Non-Life combined ratio Operating margin Guaranteed Operating margin Unit-Linked In % NEP In bps avg technical liabilities In bps avg technical liabilities 101.1 95.2 94.3 93 93 88 27 25 25 FY 16 FY 17 FY 18 FY 16 FY 17 FY 18 FY 16 FY 17 FY 18 Debt Investor Presentation I FY 2018 6
Solid & diversified investment portfolio Stable asset mix & high quality investments Sovereign bond portfolio: over 99% Corporate bond portfolio: over 91% Total investment portfolio investment grade – EUR 4.6 bn UG/L investment grade – EUR 1.0 bn UG/L 3%2% 7% 7% 4% 16% 17% 6% 5% 3% 9% 7% 12% EUR 36.9 bn EUR 79.6 bn 49% EUR 19.9 bn 46% 7% 25% 17% 58% Belgium France Austria Sovereign bonds Corporate bonds Banking Other financials Loans Equities Portugal Italy Spain Real Estate Cash Non Financials Government related Germany Ireland Other Loan portfolio Equity portfolio: EUR 0.4 bn UG/L Real Estate portfolio: EUR 1.8 bn UG/L not reflected in equity 10% 7% 5% 1% 24% 9% 43% 49% EUR 9.8 bn EUR 5.6 bn 23% EUR 4.5 bn 12% 68% 20% 22% 7% Loans to banks RE Investment offices Car parks Infrastructure Mortgages Equities Equity funds Investment Retail RE Development Other Investment warehouses RE funds Mixed funds & others Debt Investor Presentation I FY 2018 7
Solvency II ageas Group up to 215% Proposed dividend already deducted In EUR bn 8.1 7.9 8.0 7.5 7.7 7.4 6.9 6.9 6.4 Own Funds 4.3 4.0 4.2 1.2 1.4 1.0 3.7 3.9 SCR 2.9 3.7 2.8 2.7 0.7 0.8 0.8 0.7 0.6 0.2 0.1 0.1 0.1 0.9 0.7 0.7 0.6 0.5 0.5 (0.3)(0.2) (0.2) 0.1 0.1 0.1 0.0 0.0 0.1 (1.0) (1.4) (1.5) FY 16 FY 17 FY 18 FY 16 FY 17 FY 18 FY 16 FY 17 FY 18 FY 16 FY 17 FY 18 FY 16 FY 17 FY 18 FY 16 FY 17 FY 18 FY 16 FY 17 FY 18 FY 16 FY 17 FY 18 Belgium UK CEU Reins. Insurance GA Group Diversification Non-transferable Solvency II ageas 244% 237% 235% 100% 147% 167% 127% 207% 178% 278% 243% 196% 179% 196% 202% 191% 196% 215% in % Based on local solvency requirements non EU non-controlled participations @241% at the end of 2018 Debt Investor Presentation I FY 2018 8
Group Free Capital Generation Operational FCG in line with FY guidance - more than covering dividend accrual & SBB In EUR mio 629 99 (216) 45 530 (407) 2,557 213 (23) (112) expected 414 Free Capital dividend 489 1,940 Generation expected Based on 175% of 407 dividend SCR ageas 2,143 1,532 FY 17 Put option & Capital Model Market Operational Ogden Capital Paid FY 18 Luxembourg fungibility refinements impact adjustment transactions dividend Operational impact includes EUR 99 mio dividend upstream Non-European NCP’s FY guidance of EUR 500 – 540 mio for Solvency II scope Market: driven by spread movements & lower equity markets Impact adjustment of Ogden rate @ 0% best estimate - no impact on IFRS result Capital transactions = SBB + injection in Asia FCG Non-European NCP’s of EUR 146 mio over 9M 2018 of which EUR 372 mio operational, not included in EUR 629 mio Debt Investor Presentation I FY 2018 9
Insurance Solvency II sensitivities High Solvency ratio providing resilience against market or other external evolutions As per 31/12/17 Based on Solvency II ageas SCR OF Solvency Base case 3,934 7,713 196% Beforestress Yield curve down 4,088 7,623 186% Down 50 bps Yield curve up 3,812 7,764 204% Up 50 bps Equity 3,935 7,414 188% Down 25% Property 3,995 7,284 182% Down 15% Spread* 3,910 7,395 189% Spreads on corporate & government bonds up 50 bps Corporate spread up 50 bps 3,941 7,664 194% 3,912 7,449 Sovereign spread up 50 bps 190% UFR – base case 4.20% 195% Down to 4.05% (already included in 3M ’18 results) Down to 3.65% 3,949 7,703 193% 3,962 7,659 (further down from 4.05%) * Spread sensitivity doesn’t take into account any credit rating movement Debt Investor Presentation I FY 2018 10
Risk Appetite & Capital management Target level linked to Risk appetite Target Capital Free 175% SCR ageas Capital Free Funds • Limited to 40% Group Own Funds Remember: Risk Expected dividend already • Measured under 1/30 loss event appetite deducted from Solvency II ageas • Local risk profile & local risk appetite Own Funds SCR ageas I 11 I Debt Investor Presentation I FY 2018
Solvency II guidance Coupon servicing continues even if below 140% Solvency II ageas Available for strategic investments Dividend policy applied 175% SBB if no sizeable M&A Dividend policy still applied Ongoing SBB maintained - no new SBB 157% Risk reducing and/or capital strengthening measures Reduced dividend Ongoing SBB maintained - no new SBB 140% Materially reduced dividend Ongoing SBB suspended Risk reducing and/or capital strengthening measures Coupon servicing continues I 12 I Debt Investor Presentation I FY 2018
Main characteristics Hybrids Currently debt issued both at holding & at AG Insurance level AG Insurance Ageas In EUR mio (Belgium) Ageasfinlux Fixed-to-Floating Fixed Rate Reset Fixed Rate Reset Fresh* Rate Callable Perpetual Dated Subordinated Subordinated Loans Notes Tier 1 Tier 2 Tier 1 Tier 2 % 3m EUR + 135 bps 5.25% 6.75% 3.5% Amount 1,250 450 550 USD 400 outstanding ISIN XS0147484074 BE6261254013 BE6251340780 BE6277215545 Undated, Jun 2024 Mar 2019 June 2027 Call date strike 315.0 Step up to 3M Step up to 6yr USD Step up after 12 mandatory 472.5 Euribor +413 bps swap + 533 bps years of 100bps Subscribed by Other Ageas & BNP Public issue Public issue Paribas Fortis Market Price 51.74 114.02 100.09 98.27 (31/12/18) * FRESH has de facto become a perpetual instrument with no call date Debt Investor Presentation I FY 2018 13
Strong capitalization of the group Financial leverage @ 20.2% - Debt servicing capacity solid Capital quality – SCR PIM coverage 3% 26% • Tier 1 capacity fully used • Tier 2 additional regulatory headroom of EUR 0.8 bn 38% • after call by AG Insurance of 550 USD – 6.75%, 216% headroom increased to EUR 1.2 bn 151% Unrestricted Tier 1 Restricted Tier 1 Tier 2 Tier 3 Capital structure • 20.2% financial debt leverage on net tangible equity @FY18 83 952 calculated as (subordinated debt + senior debt)/(net tangible equity + subordinated debt + senior debt) • after call by AG Insurance of 550 mio USD – 6.75%, EUR 1,405 8,059 MIO leverage decreased to 16.7% • x11.7 debt servicing capacity 5,619 • after call by AG Insurance of 550 mio USD – 6.75%, Unrestricted Tier 1 Restricted Tier 1 debt servicing capacity increased to x21.6 Tier 2 Tier 3 Debt Investor Presentation I FY 2018 14
Connect 21 A reflection of Group’s Strategy, Values and KPI’s Debt Investor Presentation I FY 2018 15
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