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Gilles BENOIST President of the Management Board 11 February 2004 Paris PowerPoint Presentation
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Gilles BENOIST President of the Management Board 11 February 2004 Paris
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  1. CNP Assurances Strategy and Outlook Gilles BENOISTPresident of the Management Board11 February 2004Paris

  2. CONTENTS 2003 Business Review 2 • Trends • Highlights for CNP New Pension Products 12 • Time-line • CNP Marketing Strategy Financial Outlook 18 • Targets • Share Performance

  3. THE FRENCH MARKET IN 2003 • 9% market growth (savings and personal insurance market) • Bancassurance products were the main growth driver • Traditional insurers up 5.1% • Bancassureurs up 11.8% • Unit-linked market picked up at the end of the year • Market down 7% overall, but 22% surge in net new money in Q4 compared with Q4 2002 • Transfers from Livret A passbook savings accounts • Around €4bn taken out of Livret A accounts in the second half of 2003, of which at least 30% reinvested in life insurance products

  4. CNP ASSURANCES IN 2003 French market +9% -6% The three reasons behind CNP’s below-market growth • CNP outperformed the market in the previous two years (2001, 2002) • The announcement that the French Treasury would stop distributing CNP products depressed sales via this network • Excluding French Treasury: 7% growth in France (vs. 6.3% reported) • Post Office network got off to a slow start • But very good fourth quarter (up 13.3%) +1% +6.3%* CNP +4.3%* -3.2%* * CNP France

  5. CNP ASSURANCES IN 2003 CNP business trends • Strong recovery in unit-linked sales in the fourth quarter (20% growth) • Total unit-linked sales down 6.5%, in line with the fall in the French market • Unit-linked products represented 14.1% of CNP’s total Savings premium income • But 20% growth in fourth quarter • Post Office and Treasury networks: recovery in unit-linked sales in Q4 • Savings Banks: strong unit-linked sales in 2003 (21.4% of Savings premium income) • Robust growth • Individual personal risk insurance up 14.2% in France • Group pensions business up 17.5% in France

  6. THE FRENCH MARKET IN 2004 Life market Life market set to grow 10% in 2004 (FFSA forecast) • Forecast takes into account: • New pension products (PERP) • Expected strong recovery in unit-linked market • Question mark over actual launch date of new pension products

  7. CONTENTS 2003 Business Review 2 • Trends • Highlights for CNP New Pension Products 12 • Time-line • CNP Marketing Strategy Financial Outlook 18 • Targets • Share Performance

  8. MAY 2003SHAREHOLDERS’ PACT RENEWED Caisses d'Epargne Relations among CNP Assurances’ leading shareholders will continue to be governed by the shareholders’ pact until December 2008 18% La Poste 37% CDC 18% Public 26% French State1%

  9. PARTNERSHIPS • Partnerships in force in 2003 • Agreement with Savings Banks renewed through to December 2008 • Agreement with Post Office in force until December 2009 • Distribution via the French Treasury network discontinued at end December 2003

  10. FRENCH TREASURY NETWORKTRANSITION ARRANGEMENTS • May 2003: announcement that the Treasury network would stop distributing CNP products at the end of the year • Since January 2004: CNP manages relations with policyholders who purchased their policy via the Treasury network • Necessary measures taken to preserve the value of the portfolio for CNP (embedded value and new business) • Concerns 480,000 insured, with top-up premiums representing 60% of total new money • Policyholders served by: • CNP staff transferred from other teams and French Treasury staff taken on by CNP • Team ultimately set to comprise 280 people • Goals: • 2004: new money at least equal to 75% of 2003 figure • 2005: new money back to pre-2003 level

  11. NEW PARTNERSHIPS • FNMF(Federation of mutual insurers) • 10-year framework agreement signed in June 2003 • Target: Premium income of €500m in 2008 • MATMUT • Partnership set up in December 2003 • Individual personal risk insurance

  12. CONTENTS 2003 Business Review 2 • Trends • Hiighlights for CNP New pension products 12 • Time-line • CNP Marketing Strategy Financial Outlook 18 • Targets • Share Performance

  13. TIME-LINE • 2003 • August: Pensions Reform Act voted • December: tax law • 2004 • March/April: draft enabling legislation • Products to be launched once the enabling legislation has been published

  14. NEW PRODUCTS • PERP (Personal pension plan) • Open to everyone • Tunnel effect, annuity formula • Tax deduction • Capped at 10% of net revenue; maximum €23,500 (single person) or €47,000 (couple), minimum €3,000 • Two distribution methods: individual and group contracts • PERCO (Group pension plan) • Replaces the PPESV (Fabius Act) employee savings plan • Contribution period: up to retirement • Annuity and lump sum formulas

  15. DRAFT LEGISLATION • PERP • Several formulas • No cap on management cost loading • Insured has individual transfer right • Strikes the right balance between the insured’s interest and the insurer’s risk • Insurers enjoy freedom of choice and management discretion, subject to supervision by the association that acts as the interface between the insurer and the insured: • GERP : Groupement d’épargne retraite populaire

  16. CNP MARKETING STRATEGY • Personal pension plans • Leverage strategic fit between PERP and life insurance • Tailor the offer and selling materials to each partner network’s marketing approach • Work with clients to switfly identify the best solution to their pension needs • Group pension plans • Focus on large corporates and organisations offering pension cover to all members of a given industry • Develop a comprehensive approach to meeting companies’ needs, making full use of available solutions (art. 83, PERP, PERCO, etc.)

  17. MARKET POTENTIALCNP’s GOAL • Market expected to represent €45bn to €100bn in assets under management in ten years’ time Two major unknown factors: • Value for the insured of the tax incentive vs. exit ban and annuity option • Impact on the life insurance market • Competition will be brutal • A communications war has been underway since the end of 2003 • Écureuil: 200,000 contracts pre-sold • For CNP Assurances • An ambitious goal: hold onto the No.1 spot in the expanded French savings-pensions market (life insurance and pensions)

  18. CONTENTS 2003 Business Review 2 • Trends • Highlights for CNP New Pension Products 12 • Time-Line • CNP Marketing Strategy Financial Outlook 18 • Targets • Share Performance

  19. ADJUSTING POLICYHOLDER DIVIDEND RATES • Profitability is linked to the ability to generate an adequate return on assets to remunerate the company after paying out policyholder dividends How the system works: • The challenges • Lower interest rates, difficulty of realising gains on equities • Policyholder yields declined in 2003 4.1% on front-line products (GMO Poste Avenir, Initiatives Transmission) PSR* Investment income Margin on assets Coupon rate Profit-taking on equities Policyholder dividends * Policyholders’ surplus reserve

  20. EARNINGS TARGETS • 2003 • 10% growth in operating profit; net profit on a par with 2002 • No erosion of margins, but • Higher effective tax rate - due to lower proportion of profit derived from long-term gains on equities taxed at reduced rate • Publication: 9 March 2004 • 2004 • Targets traditionally disclosed at the time of the annual results announcement

  21. COMMENTS ON CNPSHARE PERFORMANCE • Over 2 years • CNP share price gained 36.6%, significantly outperforming the CAC 40 and the industry index • The share price held up extremely well throughout the stock market crisis, reflecting market recognition of CNP’s high quality ALM • Over 1 year • Performance on a par with the French stock market as a whole • Benchmark period: February-March 2003 trough in the DJ Insurance index

  22. SHARE PERFORMANCE OVERLAST TWO YEARS CNP Assurances share price 06 Feb. 2002 = €33.7506 Feb. 2004 = €46.10 Trough CNP Assurances+ 36.6% CAC 40- 15.2% DJ Insurance- 32.1%

  23. SHARE PERFORMANCE OVER THE PAST YEAR CNP Assurances share price 06 Feb. 2003 = €36.3406 Feb. 2004 = €46.10 DJ Insurance+ 37,6 % CAC 40+ 27,8 % CNP Assurances+ 26,9 %

  24. Investor and Analyst RelationsBrigitte MOLKHOUbrigitte.molkhou@cnp.fr+33 1 42 18 77 27CNP Assurances4, place Raoul Dautry75716 Paris Cedex 15infofi@cnp.frwww.cnp.fr Financial informationSign up for the CNP financial newsletter