Grupo SURA Corporate Presentation Q4-2018
Disclaimer The forward- looking statements contained herein are based on Management’s current forecasts and outlook. For better illustration and decision-making, figures for Suramericana, SURA Asset Management and its subsidiaries are administrative rather than accounting, and therefore may differ from those presented to official entities. Thus, Grupo de Inversiones Suramericana assumes no obligation to update or correct the information contained in this presentation. Figures from income statement are converted to USD with an exchange rate of 2,956 COP/USD (average exchange rate for 2018), other financial figures are converted to USD with an exchange rate of 3,250 COP/USD (rate for year-end 2018) only for re-expression purposes. 2
Leading Financial Services Group in Latam #1 PENSION FUND #1 INSURANCE #1 COLOMBIAN RELEVANT MANAGER COMPANY BANK CLIENT BASE in Latam, with a in Colombia, with an with a leading in attractive markets growing voluntary established growth presence in Central savings business platform in Latam America USD USD USD ~51 million 129 bn 53.5 bn clients 5.1 bn in our financial services in AUM by SURA AM in Gross Written in loans by companies Bancolombia Premiums by Suramericana Outstanding brand recognition ~60% brand awareness A S S E T S M A N A G E D B Y O U R M A R K E T C A P C O U N T R I E S * I N V E S T M E N T G R A D E : E M P L O Y E E S * 11 USD 5.7 bn 59,000 S T R A T E G I C I N V E S T M E N T S * FITCH BBB S&P BBB- USD 211 bn D e c e m b e r 3 1 , 2 0 1 8 3
Diversified Investment Portfolio and other investments Insurance, trends Cement, energy and risk management and infrastructure 0.7% 81.1% STAKE 35.5% STAKE* 12.1% 21.9% 11.8% USD 9.9 b n Processed food 35.2% STAKE 22.3% Pensions, asset and 31.3% wealth management 83.6% STAKE Universal banking 46.1% STAKE* 75% 46% Note: *SURA AM valued at the last transaction (CDPQ), in financial in publicly Suramericana at 1.8x BV and companies listed at market services listed companies value at the end of the quarter. 4 *Stakes in common shares
History & Growth Stages INSURANCE INTERNATIONAL LEADERSHIP EXPANSION in Colombia Multi Latin, financial services group 1 9 4 4 / 1 9 9 0 2 0 0 7 / 2 0 1 6 2 0 1 7 - 1 9 9 0 / 2 0 0 7 FOOTPRINT FINANCIAL OPTIMIZATION SERVICES divestment of annuities leader in Colombia business (Chile and Peru) 5
Building a Regional Platform with a Long Term View BECOMING THE CREATING LONG AND THE 4TH WITH A FOCUS ON TERM RELATIONS LARGEST PENSION FUND LARGEST LATAM FINANCIAL STRENGTH MANAGER IN LATAM WITH OUR CLIENTS INSURANCE GROUP # of clients AUM Dividends Gross from pension received from written premiums management our portfolio business 14 51 USD 10 bn USD 129 bn USD 90 USD 260 USD 1.2 bn USD 5.1 bn MILLION MILLION MILLION MILLION 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 0 SUCCESSFUL % Dividends & Net Income from Colombia # of countries DIVERSIFICATION 3 100% 45% FROM COLOMBIA 11 6 2 0 1 8 2 0 1 8 2 0 1 0 2 0 1 0
Geographic Footprint P O P U L AT I O N C L I E N T S F I N A N C I A L S E R V I C E S 520 MM 51 MM + 1 . 1 % C A G R ( 2 0 0 0 - 2 0 1 8 ) I N 11 C O U N T R I E S P E N E T R AT I O N * I N S U R A N C E P E N S I O N B A N K I N G 3.1% vs . 7.8% 31% vs . >80% ~ 4 8 % vs . > 150% f o r a d v a n c e d c o u n t r i e s f o r U S a n d U K f o r U S a n d E U D R I V E R S ECONOMIC MIDDLE UNDER FORMALIZATION DEMOGRAPHICS CLASS PENETRATED GROWTH OF THE FORMATION SECTORS ECONOMY 7 *Penetration as measured by Premiums/GDP of the countries were Suramericana has presence, AUM/GDP in the countries were SURA AM has presence and loans/GDP in Colombia.
Corporate Strategy Purpose: Create well-being and sustainable development for people, organizations and society . Aspiration : to become a referent Latin American Group in the financial services sector, thanks to our ability to evolve and provide superior added value to shareholders and society. ALIGNING OUR BUSINESSES WITH METRICS AND GOALS C O N T R I B U T I O N T O S O C I E T Y • T R U S T • S U S T A I N A B I L I T Y V A L U E C R E A T I O N • • Brand and Market development, externalities ROE Dow Jones reputation and contribution to SDG EVA Sustainability Index positioning 8
Portfolio Management Strategy SH AREHOLDER VALUE R ETU RN ON C APITAL GR OW TH S YS TEMATIC C A PITAL MAN AGEMENT AT STRATEGIC PR OACTIVE C OR PORATE A D D IN G AC QUISITIONS D IVESTITURES VALUE TO U N ITS ALLOCATION A GR ANULAR LEVEL BE A BETTER OWNER BE IN GOOD BUSINESSES • • • • • Focus on value After an intensive Understanding of Review capital Position ourselves creation, granular expansion phase, competitive exposure and for future profitable analysis for whole focus on profitability advantages and allocation process growth. portfolio. and organic growth. value creation levers criteria. of each operation. 9 * Source: McKinsey
Grupo SURA’s Financials Evolution CONSOLIDATED REVENUES HOLDING COMPANY RECEIVED DIVIDENDS 324 309 ~3x 12.0% -0.8% 283 261 2010 Dividends 250 31.2% 6,921 6,921 6,867 6,867 6,182 6,182 185 Bancolombia 169 4,712 SURA AM 4,712 137 Grupo Argos 93 Grupo Nutresa 91 Protección Suramericana Other 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2019E 2010 2011 2012 2013 2014 2015 2016 2017 2018 T o t a l r e v e n u e s CONSOLIDATED NET INCOME HOLDING COMPANY CASH FLOW (2019E) -13.0% 26.3% -7.7% 35 333 492 565 298 98 565 492 454 448 199 454 448 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 OPERATING INTEREST CASH AVAILABLE DIVIDENDS AND OPERATING CASH FLOW OTHER INCOME EXPENSES & N e t i n c o m e 10 TAXES Figures in USD million
Grupo SURA Individual Debt D E B T 550 M AT U R I T Y P R O F I L E » C R E D I T R AT I O S » N E T D E B T / 300 D I V I D E N D S ( F T M ) 220 4.7x 141 91 77 55 52 31 31 Max. 5x - - - 2018 2019 2020 2021 2022 2023 2024 2026 . 2029 2030 . 2049 I N T E R N A T I O N A L B A N K S L O C A L B O N D S R E P O S L I Q U I D I T Y B O N D S 1.1x USD 1.55 bn » F I N A N C I A L D E B T: Min. 1.2x 18 % 24 % L O A N T O VA L U E B A N K S U S D 14.1% CURRENCY TYPE OF B O N D S C O P EXPOSURE* DEBT Max. range 25-30% 76 % 82 % 11 Figures in USD million
Suramericana DIVERSIFIED #4 LATAM MULTICHANNEL BUSINESS MODEL INSURANCE APPROACH GROUP developing new Geography with an established channels throughout 32% growth platform in 9 the region of GWP outside countries Colombia 22,100 #1 INSURANCE Business lines 43% COMPANY agents 20,400 P&C in Colombia with top 5 employees 32% Life positions in 5 Latam 17.2 million countries 25% Mandatory health clients Auto 19% 68% Colombia Fire 6% Chile 7% Mandatory car 3% Argentina 10% USD Transport 2% Brazil 3% 4.3 bn R E T A I N E D P R E M I U M S 2 0 1 8 » BY TYPE OF Other non-life 12% Mexico 4% INSURANCE (Includes Revenues from Mandatory Health) 5% Individual life (+2.9%) Panama 3% Group life 7% El Salvador 2% Health 7% Uruguay 2% ARL (worker’s comp) 11% Dominican Rep. 1% 12 Other life 3% Mandatory health 25%
Corporate Strategy Provide well-being, Human talent Increase current clients’ Sustainable ROE loyalty, to drive attraction and competitiveness and and Trends & Risks above cost of equity sustainability to people Management growth of new clients and businesses E N V I R O N M E N T E M E R G I N G R I S K S C O N S U M E R A N D B U S I N E S S T R E N D S 13
Competitive Strategy WE COMPETE IN WE MANAGE + VALUE OPERATIONAL HUMAN ALLIANCES REGULATION TECHNOLOGY CAPITAL PROPOSITION MODEL TALENT SUSTAINABILITY OPERATING EFFICIENCY LONG-TERM RELATIONS VALUE CREATION 14
Being Relevant to Clients RELEVANT SOLUTIONS Introducing life solutions to CHANNELS other countries › Develop SME segment 17 % Multichannel approach › Multidimensional segmentation › Direct 35 % › Develop solutions for emerging risks: › Digital 19 % › Affinity • CYBER RISK › Sustainable Brokers 29 % • AGRICULTURE • INNOVATION OPERATIONAL MODEL U N D E R W R I T I N G : C L A I M S : 50% 80% 80% Automation of processes that don’t add value to clients in 2 years in Colombia 15
Suramericana’s Financials Evolution CLAIMS AND EXPENSE RATIO OPERATING REVENUES 5,127 3.6% 94.6% 94.5% 4,950 93.3% 92.3% 22.4% 4,043 1,080 884 55.2% 60.4% 59.4% 59.4% 739 4,066 4,047 54.8% 2,605 3,304 615 16.6% 15.6% 15.5% 15.5% 1,990 2 0 1 7 2 0 1 8 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 5 2 0 1 6 R e t a i n e d c l a i m s r a t i o I n s u r a n c e G W P M a n d a t o r y h e a l t h c o s t r a t i o M a n d a t o r y h e a l t h r e v e n u e s E x p e n s e r a t i o INVESTMENT INCOME NET INCOME 355 329 335 178 171 176 136 9.3% 116 8.7% 7.9% 6.3% 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 I n v e s t m e n t i n c o m e 16 Y i e l d Figures in USD million
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