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Ras Group 2004 Full Year Results and 3-year progress

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  1. Ras Group 2004 Full Year Results and 3-year progress Mario Greco March 10th, 2005

  2. 3-year plan progress Group Action taken in first year of plan brought better than expected results ... … and positioned Ras one year ahead of schedule in achieving its 3-year plan targets 1

  3. 2004 results vs 3-year plan goals Group 2003 2004 growth 2006E Premiums 16,569 16,123 -2.7% 19,300 RasBank gross ordinary result 70 88 +26% 170 (2) (1) Life NBV 161 182 +13% 205 P+C combined ratio (%) 100.8 98.9 -190bp 98.0 Group net income 554 691 +25% 820 ROE (%) 12.9 15.2 +230bp 16.5 RORAC (%) 15.7 20.2 +450bp 17.5 0.60 0.80 +33% CAGR>20% Dividends (PS) 2 (1) Excluding BNLi in 2004; (2)120 mln excluding Life, Personal Financial Services only

  4. Value creation plan progress 3

  5. 2004 FY results Group Strong Premiums growth in high value proprietary channels (Agents and FAs) countered by weak performance of bancassurance channel in Life Improvement in Group Net Income driven by a strong technical result in both Life and P+C First time disclosure of Group Shareholder Value and Value Added, with strong growth on all indicators First Italian insurance company to disclose European Embedded Value, in compliance with CFO forum principles 4

  6. Gross premiums written Group Mln euro - Direct and Indirect Business P+C GPW YoY growth Life GPW YoY growth + 3.9% - 7.5% 9,552 7,290 8,833 7,017 1,906 +3.7% - 3.0% 3,342 1,850 Abroad 3,223 Italy 3,794 3,948 7,646 6,984 +4.1% - 8.7% 2003 2004 2003 2004 5

  7. Net income growth Group Mln euro FY net income YoY growth 4Q net income YoY growth +25% +34% 691 554 121 90 2003 2003 2004 2004 Full Year 4th Quarter 6

  8. FY04 results: statutory accounts Group Mln euro The new DAC accounting policy had an impact of 91 mln euro on the technical result (before minorities and tax) YoY growth 2003 2004 P+C -68 55 107 258 Life Technical Result N.s. 39 313 Ordinary financial income 634 532 The decrease in financial income due mainly to the cancellation of dividend tax credit (101 mln euro) was offset by a correspond- ing decrease in tax, giving a neutral final effect Realised gains and write-down(1) 264 234 Ordinary Result 937 1,079 +15% 36% 30% Tax rate 554 691 Net Income +25% 7 (1) including other non-technical items

  9. Shareholder Value: brief description Group Group Shareholder Value is the sum of Life and PFS Embedded Value, plus P+C Net Asset Value Annual Value Added is calculated as the sum of EV-earnings for Life and PFS, plus net income adjusted for change in unrealised capital gains and others for P+C Italian In-force Value is net of cost of time value of financial options and guarantees Tillinghast has provided an independent opinion on and review of the EEV and Shareholder Value PFS P+C Life Shareholders equity + NAV adjustments + Total Net Asset Value = In-force Value + Shareholder Value = New segment introduced 8

  10. Shareholder Value movements Group • Group Shareholder Value increased despite high dividend distribution during 2004: • Life and PFS: Shareholder equity growth is driven by net income; Net asset value reduction is due to real estate transfer from Life to P+C at book value, goodwill write-off (BNLI acquisitions) and DAC write-off; Strong growth in Italian In-force Value is partially offset by Switzerland In-force value reduction (due to a review of EV analysis) • P+C:Shareholder equity growth is driven by net income; Net asset value increase is due to real estate transfer from Life to P+C at book value, growth of real estate portfolio value and strong increase of Italian bond portfolio, where duration is equal to 4 years 9

  11. Total Shareholder Value Group Mln euro - net of minority interests, taxes and cost of capital Life and PFS Embedded Value P+CNet Asset Value Total Shareholder Value +6.3% 7,381 3,849 3,825 3,532 6,940 3,115 1,869 (1) 1,869 …. …. 663 In-force Value 1,745 1,745 332 2,868 2,783 807 Net Adjustments 143 (1) 473 805 1,837 1,607 4,705 4,391 Shareholders equity 2003 2004 2003 2003 2004 2004 (2) (2) (1) Transfer of 128 mln euro of Real Estate from Life to P+C (2) Total BNLI/BNLVita acquisitions impact: 54 mln euro: increase of In-force 95 mln; decrease of Adjustments 117; Reduction of Shareholder equity 32 10

  12. 2004 Value added Group • Annual Value Added is increasing driven by achieved net income and growing new business value: • Life and PFS: Net Income increase is due to a strong technical and financial result in all countries; Delta Adjustments to Net asset gave negative contribution mainly due to DAC write-off, and realised capital gain (like Mediobanca); Delta In-force Value recorded a strong increase in Italy, and a decline in Switzerland • P+C: Net Income growth driven by a better technical development in all countries; Delta Adjustments to Net asset had positive growth both for real estate and Bond portfolio unrealised capital gain increase 11

  13. Life and PFS value added Group Mln euro - net of minority interests, taxes and cost of capital 348 Country Value added ROEV 298 …. Delta In-force 137 12% 307 Italy 30 -16% Switz. -89 Delta Adjustments 6 353 28% 36 Austria Net Income 204 16% 21 Spain -86 2003 2004 (1) (2) (1) Excluding Participation Exemption for 126 mln euro, (2) Excluding BNLI integration effect for -54 Mln euro; Net Income including BNLI integration cost would have been 321 12

  14. P+C value added Group Mln euro - net of minority interests, taxes and cost of capital Return on NAV Country Value added 573 18% 332 Italy 203 439 14% 73 Switz. Delta Adjustments 89 14% 27 Austria 370 Net Income 350 50% 105 Spain 2003 2004 (1) (2) (1) Excluding Participation Exemption for 136 mln euro, (2) Delta adjustments includes real estate unrealized capital gain increase for 52 Mln euro 13

  15. Value added by line of business Group Mln euro - net of minority interests, taxes and cost of capital ROEV % 11.2 12.9 9.6 8.5 12.9 18.4 871 573 786 348 439 298 2003 2004 2003 2004 2003 2004 (1) (2) (1) (1) (2) Total value added Total Life and PFS Total P+C (1) Excluding Participation exemption effects for 262 mln euro. Of which 126 in Life and 136 in P+C (2) Excluding BNLI impact for -54 mln euro 14

  16. Life Business development 15

  17. Life 2004 FY results Group Increasing market share for proprietary channels in Italy, driven by strong internal growth in new business volumes Continuation of agency reorganisation, with strong growth by top agencies and high-potential agencies Significant results recorded by FAs in terms of volumes and quality mix Weak bancassurance performance,with a recovery in the last quarter Strong increase in New Business Value. Higher incidence of proprietary channels. Improvement of global margins in Italy 16

  18. Life new business volumes Italy Mln euro - Individual policies Growth % Mkt share % Ras Mkt (1) 2003 2004 2003 420 +23 +15 6.2 6.6 Agents 517 2004 FAs 2003 252 +30 -17 4.9 7.8 327 2004 2003 5,221 -16 +2 15.1 12.4 Banks 4,368 2004 17 (1) Source: ANIA new business premium

  19. Agents: new business premiums Italy Mln euro - Individual business Life NB Premiums +23% +18% 227 517 192 Top Agencies (25% of total agencies) (1) 17% 128 420 109 Recurrent Premium 389 +40% 25% 114 High potential (30% of total agencies) (1) 311 Single Premium 82 2003 2004 2003 2004 (1) Ras spa - 850 agencies 18

  20. RasBank FAs: new business premiums Italy Mln euro - Individual business - excluding 35 mln euro of group policies for 2004 Life Premium mix by type of product - individual business Life NB Premiums +30% 100% 100% 327 57 67 42% 52 Unit Linked 252 275 37 Recurrent Premium 31 Index Linked 28% (1) 7 Single Premium 215 Traditional 26 12 2003 2004 RasBank FAs Mkt 19 Mkt data source: Ania statistics as of Dec. 2004, (1) Issued by ex-BNLI FAs

  21. Bancassurance new business volumes Italy Mln euro - individual business FY04 volumes 4.37 bn euro -16% 4Q04 volumes 1.27 bn euro +19% Monthly new business premiums 711 593 551 538 513 469 447 423 510 412 400 402 402 360 363 341 313 298 241 263 213 210 209 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 2003 2004 20

  22. Life Embedded Value Group Mln euro - net of minority interests, taxes and cost of capital, Embedded Value earnings analysis may not be completely consistent, as 2003 has not been restated for cost of options Discount rates • 2003: 7% for all Italian businesses, and 6.25% for Switzerland • 2004: 6.30% for Italian traditional products, 6.55% for Italian unit-linked, 6.1% for Switzerland • 2004 data are net of cost of time value of financial option and guarantees for Italy 3,409 Change in EV (73) 3,336 Dividends and capital movements 329 256 EV Earnings 7.5% ROEV 2003 2004 (1) (1) Last year reported EV was 3,073, the new methodology calculates EV starting from consolidated figures 21

  23. Life In-force Value Group Mln euro - net of minority interests, taxes and cost of capital Life In-force Value YoY growth +4% 2003 2004 1,575 Italy 1,126 1,289 1,530 (1) Foreign countries 404 286 2003 2004 22 (1) Including BNL Life portfolio acquisition, with an impact of 35 mln euro

  24. Switzerland In-force Value Group Mln euro - net of minority interests, taxes and cost of capital Due to recent Mgmt changes, 2004 has been an year of review for EV analysis: In-force value • Lower persistency ratio in the Group Business, consistent with the underway portfolio reform, caused by the introduction of new profit test process • Combined effects of a reduction in financial returns (-50 bp) and a new min. guaranteed in the Group business to 2.50% (+25 bp) • Improvement of cost ratio due to the decrease of the cost base by 12% • Stronger focus on Unit Linked in new business value (+57% vs. 2003) Discount Rate 162 2004 6.10% 2003 6.25% 303 236 2002 5.00% 23

  25. Life Embedded Value earnings Group Mln euro - net of minority interests, taxes and cost of capital Change in assumption: mainly driven by Switzerland (-180 mln); no significant from other countries Variance from assumption: Positive impact from Austria (investment variance), Spain (higher laps margins), Portugal (better mortality experience for risk products), partially offset by Italy (due to higher lapse rate for Unit Linked) 256 198 182 160 36 Embedded Value Earnings Variance from Assumptions Expected Profit Change in Assumptions New Business Value 24 (1) all assumptions are detailed in the EV disclosure document available on the Ras web site

  26. Life New Business Value by country Group Mln euro - net of minority interests, taxes and cost of capital NBV 2004 YoY growth +13% +12% NBValue 2003 2004 161 182 5 8 Switzerland 5 5 Austria 4 5 Spain 21 3 3 Portugal Foreign business NBV Italy 25

  27. Life New Business margins on APE Italy Mln euro - net of minorities, taxes and cost of capital at year-end Life NBV YoY growth +12% NBV/APE (1) 2003 2004 144 161 27.4% 28.5% 19% 11.0% 9.1% Banks -14% 24% 26% 30% FAs 67.8% 65.4% +32% 51% 48.3% 51.6% Agents +14% 50% 2004 2003 2004 YoY growth 26 (1) 100% recurring premiums + 10% single premiums, Individual policies only for 2003, including group polices for 2004

  28. RasBank FAs performance 27

  29. RasBank 2004 FY results Italy Fastest growing FAs network in terms of assets under administration, in part thanks to recent acquisitions Further enhancement of average FAs profile through selective recruitment Positive net inflows with significant growth in value products Strong progress in gross operating result, thanks to gross margin increase and cost containment Boost in Embedded Value and New Business Value for both Life and Asset Mgmt 28

  30. FAs assets under administration Italy YoY growth rate (1) Assets Under Administration Market comparison -bn euro Assets Under Administration -mln euro +37% YoY growth 20,715 Fideuram +2% 58.9 15,132 4,400 +9% 20.8 Mediolanum 3,084 Life +37% 20.7 RasBank 2,835 2,182 Banking +6% 15.4 B. Generali +23% Xelion 12.1 9,867 13,480 AuM +22% Azimut 8.4 2003 2004 (1) Assoreti data as of December 2004 29

  31. RasBank: high-profile FAs network Italy Assets under administration per FA - mln euro YoY growth (1) • RasBank FAs at the end of 2004 totalled 2,928, with a net increase of 556 people • The BNLI merger brought in more than 700 FAs, after a reorganisation to remove small and unproductive FAs (total asset retention 95%) • The lower-end network reorganisation involved the entire RasBank structure, with no impact on total assets but strong increase of AuM per FA +7% 13.8 Fideuram 9.5 +8% Azimut RasBank excl.BNLI (2) +20% 8.9 +18% 6.4 Generali Former BNLI 5.8 +43% +34% 5.8 Xelion +9% 5.1 Mediolanum (1) 2004 Assoreti data, (2) excluding FAs working in agencies for RasBank 30

  32. 2004 Inflows development Italy Mln euro - YoY growth rate (1) Net Inflows focused on high value products... …while asset mgmt gross inflows grew sharply 1,233 5,973 Life 940 252 981 362 3,584 578 Banking 624 388 AuM 357 190 FY03 FY03 FY04 FY04 -24% +67% 31 (1) Net Inflows: Assets under Management and banking assets

  33. RasBank FAs results Italy Mln euro - RasBank PFS and Life sold through FAs - Excl. BNLI merger FY gross operating result YoY growth (1) Main trends +26% • Net income reached 64 mln euro (+43%) excl. BNLI merger • Including BNLI merger, net income amounted to 33 mln euro • G&A cost ratio decreased from 55% to 52% 88 70 49 39 2003 2004 PFS only Including Life (1) Including RasBank, RAM, Investitori Sgr, Rasfin, RBVita, Darta Savings - Excluding BNLI Merger 32

  34. RasBank FAs results by LoB Italy Mln euro - Including Life business through FAs and before BNLI merger 2003 2004 YoY growth Asset mgmt commission margin 16% 115 133 of which performance fees -28% 13 9 Banking margin 7% 43 46 Life technical margin 11% 53 59 Gross margin 210 238 13% General expenses -115 -125 8% Sales & marketing expenses and others -1% -25 -25 Gross operating result 70 88 26% 43% Net income 45 65 33

  35. RasBank FAs Embedded Value Italy Mln euro - Life FAs EV already included in Life Embedded Value as disclosed in EV section - net of minorities, taxes and cost of capital at year-end Embedded Value Life through FAs and Asset Mgmt +13% In-force Value ‘04 NBV ‘04 growth growth 993 811 480 +34% +32% 304 49 Life FAs 395 (1) +37% +75% 294 28 Asset Mgmt 513 416 2003 2004 34 (1) Excluding BNLI switches

  36. RasBank FAs EV-earnings Italy Mln euro - net of minority interests, taxes and cost of capital Change 2004/2003 2004 Change in EV 182 Dividends and capital movements Expected profit 47 -142 EV earnings incl. BNLI acquisition Variance from assumptions 40 -21 BNLI acquisition one off impact Change in assumptions 54 -7 94 EV Earnings NBV 77 12% ROEV 35

  37. P+C Business development 36

  38. P+C 2004 FY results Group Continuous improvement in combined ratio in all countries, in presence of a stable reserve ratio Italian P+C premiums growth driven by increase in retail and SME segments Combined ratio improvement in Italy driven by both motor and general liability Genialloyd reported strong growth, to enhance positioning and benefit from economies of scale 37

  39. P+C profitability improvement Group % (1) Combined ratio Combined ratio by country (%) 2003 2004 100.8% 99.5 99.1 Italy 98.9% 105.9 101.4 Switzerland 104.8 100.0 Austria 96.2 92.6 Spain 2003 2004 Reserve Ratio 162.3 162.1 (2) (1) On NEP including “other technical items” excluding equalisation reserves (2) Net Technical Reserves/Net Premiums 38

  40. P+C GPW Italy Mln euro - direct business P+C GPW YoY growth By client segment +4.2% 2004 growth 3,920 Retail 3,095 +4.1% 3,763 +3.6% 2,448 SMEs 187 +8.7% Motor 2,362 Commercial lines 359 +4.4% 1,472 Large Corporate 156 -1.9% +5.1% Non Motor 1,401 Public entities 124 +7.8% 2003 2004 39

  41. P+C combined ratio by Lob Italy Combined ratio in % Focus by Lob (%) 2003 2004 99.5 Motor 97.7 97.1 99.1 103.3 99.8 Non motor Of which General liability 127.3 114.8 2003 2004 Reserve Ratio 159.0 157.9 40

  42. Genialloyd performance Italy Mln euro - Direct Business Technical results GPW YoY growth +19% 2003 2004 Number of clients 320,000 366,000 203 Combined ratio 101.5% 96.5% 170 Expense ratio 19.0% 17.0% Net income 3.5 12.0 2003 2004 41

  43. Return on invested capital 42

  44. Capital Management Group Slight increase in risk capital on Life and PFS mainly due to business growth Reduction in P+C risk capital thanks to a new Cat-coverage reinsurance contract Strong improvement in RORAC and ROE due in part to greater capital efficiency High dividend policy in order to limit capital retention 43

  45. Capital Requirement Group Mln euro 2003 2004 3,984 104 185 PFS 3,441 1,450 3,386 Other Countries Life 547 706 1,051 1,104 P+C 1,379 1,340 Strategic Inv. 855 653 2,534 2,390 Italy 2,282 (603) (494) Diversif. 2003 2000 2004 2,282 2,390 TOTAL 44

  46. Return on invested capital Group RORAC % ROE % 20.2 15.2 15.7 12.9 2003 2004 2003 2004 45

  47. Dividend policy Group Euro Dividend policy Dividend Per Share YoY growth +33% • Euro 0.80 DPS will be distributed on ordinary shares in May 2005, for a pay-out of 538 million euro • the dividend policy is consistent with the 3-year plan value creation program 0.80 +36% 0.60 0.44 2002 2003 2004 46

  48. 2005 outlook 47

  49. Outlook Group Life: continuous investment in proprietary channels will drive high volumes and a good quality mix. Good start for bancassurance, but focus is on value rather than volumes PFS: cost synergies and strong volumes growth expected after completion of the BNLI merger P+C: cycle is peaking, but current level of profitability can still be maintained for a while Economic results are expected to reflect positive business trends, with key contributions from Life and PFS segments 48

  50. Cautionary Note Regarding Forward-Looking Statements Certain of the statements contained herein may be 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. In addition to statements which are forward-looking by reason of context, the words “may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue” and similar expressions identify forward-looking statements. 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 RAS Spa’s core business and core markets, (ii) performance of financial markets, including emerging 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 including the Euro - U.S. dollar exchange rate, (viii) changing levels of competition, (ix) changes in law and regulations, including monetary convergence and the European Monetary Union, (x) changing in the policies of central banks and/or global basis. The matters discussed in this release may also involve risks and uncertainties described from time to time in Allianz’s filings with the U.S. Securities and Exchange Commission Allianz assumes no obligation to update any forward-looking information contained in this release. 49