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AFTER THE CRISIS. WHAT? Madrid, 8th June 2010 José M. Serra Chairman of Grupo Catalana Occidente

AFTER THE CRISIS. WHAT? Madrid, 8th June 2010 José M. Serra Chairman of Grupo Catalana Occidente. INDEX. Grupo Catalana Occidente. The financial crisis. Lessons from the crisis. After the crisis. 1 .GRUPO CATALANA OCCIDENTE. Premium evolution. Business Portfolio. Profit evolution.

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AFTER THE CRISIS. WHAT? Madrid, 8th June 2010 José M. Serra Chairman of Grupo Catalana Occidente

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  1. AFTER THE CRISIS. WHAT? Madrid, 8th June 2010 José M. Serra Chairman of Grupo Catalana Occidente

  2. INDEX • Grupo Catalana Occidente. • The financial crisis. • Lessons from the crisis. • After the crisis.

  3. 1 .GRUPO CATALANA OCCIDENTE • Premium evolution. • Business Portfolio. • Profit evolution.

  4. 1. GRUPO CATALANA OCCIDENTE Strong volum growth 3,231 3,035 2,036 1,936 1,862 1,730 1,300 1,298 1,117 852 553 12,2% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (figures in million euros) Volume of premiums multiplied by 5.5 with equity PREMIUM EVOLUTION

  5. Motor Life 13.9% 20.9% Other Non-Life 9.4% P. P. and I.F. 2.4% Multirisk 14.7% Credit Insurance 38.9% 1. GRUPO CATALANA OCCIDENTE BUSINESS PORTFOLIO

  6. 291.4 249.5 175.5 127.5 234.7 191.4 76.4 137.6 53.2 41.5 41 104.4 103.6 101.2 33.1 50.1 41.1 39.8 37.9 31.5 30 2.8 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (figures in million euros) Consolidated profit Attributable profit 1 . GRUPO CATALANA OCCIDENTE PROFIT EVOLUTION Profit has been multiplied by 3.2 6

  7. 2 . THE FINANCIAL CRISIS • Banks. • Rating agencies. • Insurance companies.

  8. 2 . THE FINANCIAL CRISIS INSURANCE COMPANIES • Specific problems. Non-insurance activities. • Insurance business: • Less affected. • Certain products more affected. (credit insurance). • Relaxation of technical rules as a result of the long period of prosperity.

  9. 3. LESSONS FROM THE CRISIS • Opportunity to learn from the crisis. • Primarily a banking crisis. • Insurers affected by the perception of investors as a financial institution. • Main insurance principles should not be lost. • Risk in liabilities rather than in assets. • Maintain rigorous technical standards. • Rating agencies. • Less economical growth in the medium term. • Countries should pay the price of the crisis. • Insurance concept has been reinforced. • Uncertainty about economic activity.

  10. 3. LESSONS FROM THE CRISIS • Solvency. • The Insurance Sector did not have a solvency problem. • Higher capital requirements would had not prevented troubles of some insurers. • Regulation. • Crisis could be useful to identify areas of improvement. • Supervision.

  11. 4 . AFTER THE CRISIS • Challenges: • Low economic growth. • Solvency. • Regulation.

  12. 4 . AFTER THE CRISIS LOW ECONOMIC GROWTH • Non life insurance, more affected. • Growth opportunities. • Savings market. • Middle-high class individual market. • Credit insurance.

  13. 4 . AFTER THE CRISIS SOLVENCY II: THE CONCEPT IS GOOD. • Considerations • Higher capital requirements. • Is this the key of the problem?. • Difficulties to obtain more capital. • Increase insurance prices. • Replacement of Solvency I. • It has been efficient for 100 years. • Objective system. • Change to a new model is risky. • Development of internal models. • Those which improve management of the business should be prioritized against those which reduce capital requirements. • Capital requirements. To be refined. • Treatment of insurance groups.

  14. 4 . AFTER THE CRISIS REGULATION • Supervision vs regulation. • Measures to avoid another financial crisis. • Stability within financial markets. • Earn money speculating with short positions? • Investment banks. • Rating agencies.

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