2009-11-18 axa aph general presentations cover...

Kevin Keenan Company Secretary Phone: 61 3 8688 3978 Fax: 61 3 9614 5298 18 November 2009 Australian Securities Exchange Company Announcements Office 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam

AXA Asia Pacific Holdings Limited Please refer to the attached investor presentation. Yours sincerely

Kevin Keenan Company Secretary of 25

AXA Asia Pacific Holdings Limited ABN 78 069 123 011

Investor presentation18 November 2009

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ContentsUnique investment proposition

AMP / AXA SA proposal

Asia – Highly valuable strategic footprint

Hong Kong

South East Asia

China and India

Australia and New Zealand – Model orientated to the future

Advice and distribution

Wealth management

Financial protection

Strong balance sheet and capital position

Summary

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4

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Unique investment propositionUnique exposure to Asia

Broad geographic exposure to Asia across 8 markets

Two thirds of earnings

Only Australian financial services firm with the majority of its business in Asia

Diverse operations across Australia, New Zealand and Asia provide resilience and flexibility

Multi-distribution: strategic advantage across all markets

Balance between wealth management and financial protection

Innovative products performing strongly in recent challenging environment (e.g. North, Takaful)

Attractive long term fundamentals for our markets

Compulsory retirement schemes in Australia, New Zealand, Hong Kong and Singapore

High savings rates, low insurance penetration and high margins in most of our markets

Economies generally growing faster than the world average1


1. IMA Asia ‘Asia Forecast Book Q4 2009 – Forecasts to 2015’

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AMP would acquire all shares in AXA and AXA’s Asian operations would be sold to AXA SA

Consideration per AXA minority share:0.6896 AMP shares; and

A$1.3796 cash based on the A$/US$ exchange rate on 5 November, with actual cash to vary with exchange rate

Committee of Independent Directors (“Independent Board Committee”) carefully reviewed the proposal with the assistance of advisers (Macquarie and Mallesons)

Proposal was subject to a significant number of material conditions including extensive due diligence by a competitor and numerous regulatory approvals, and no price protection for AMP shares

Independent Board Committee’s rejection of the proposal was announced to the ASX on Monday 9 November 2009

Unsolicited and conditional scheme proposal received from AMP and AXA SA on Saturday 7 November 2009

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The proposal did not fully reflect the key value drivers of AXA:

Unique position in the dynamic Asian markets, built over 25 years

Value of Australian and New Zealand businesses, with their strategic position and scale

Substantial upside to AXA’s operating earnings as economic conditions and markets rebound

Initiatives underway that will underpin medium term growth, with a track record of delivering on key initiatives and acquisitions


Proposal rejected because it was not in the best interests of AXA’s minority shareholders as it significantly undervalued AXA

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Asia –Highly valuable strategic footprint

The barriers to entry in Asia are very highForeign investment restrictions, limited new licences and many other regulatory barriers Relationships and JV partnerships take a long time to establish and opportunities are limited in numberNo coincidence that the strongest competitors (including AXA) have been in Asia the longest

Asia is a fast growth region for our industryAXA has been operating in the region for 25 years

Operating 15 businesses across 8 countries, with >4,000 employees, ~60,000 agents and advisers and around A$17 billion in funds under administration, management and adviceAccess to ~24 million customers through partnerships with leading banks across the region

The history and breadth of AXA’s Asian business, combined with the nature of the markets, makes it a highly valuable strategic footprint

Operating earnings3

A$255.5mValue of inforce1

A$6,018.0m

Value of new business2

A$407.2m

1. As at 30 June 2009, risk discount rate based on assumed equity return

2. Rolling 12 months to 30 June 2009, risk discount rate based on assumed equity return

3. 1H09 operating earnings

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Well positioned in emerging markets to benefit from strong growth in GDP per capita


Life insurance premiums (as a percentage of GDP) versus GDP per capita1

1. Swiss Re, Sigma No3/2009 ‘World insurance in 2008’

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Asian NBI2

1. Based on NBI for respective divisions at 100% share for the 9 months to 30 September 2009

2. NBI for respective divisions at 100% share

Asian NBI contribution2

We have achieved rapid growth in our Asian New Business Index (“NBI”) and diversified our portfolio

NBI growth in Asia over past 3 years at 33% CAGR

More than half of new business coming from markets other than Hong Kong1


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Hong Kong –Large and strong position in an attractive market

Significant savings in bank deposits

Savings rate of 28%1 with HK$6.4 trillion in cash deposits2

Compulsory savings through the Mandatory Provident Fund

Life insurance market predicted to grow at ~8% per annum3

Well positioned to benefit from economic growth in China

Real GDP growth forecast for Hong Kong of 4.4% (2010-2015)4

High margins5

1. Swiss Re Insights January 2009

2. Hong Kong Monetary Authority

3. Hong Kong life insurance market growth rate for 2009 – 2019 based on total premium income; Source Swiss Re -The Hong Kong Insurance Market - No 1/2009 - January 2009

4. IMA Asia ‘Asia Forecast Book Q4 2009 – Forecasts to 2015’

5. Value of new business / NBI

6. Excludes medical and general insurance

47%51%AXA Hong Kong total

1H081H09

83% 78%AXA Hong Kong financial protection6

The fundamental drivers of the Hong Kong market are strong

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Market ranking: #41 with over 1 million policy holders

Market share: 8.4%1

Total premium income: A$2.1 billion2

1. 6 months to 30 June 2009. Source – OCI data

2. 12 months to 31 December 2008

3. OCI - Provisional Statistics for Long Term Business. The market share and ranking of players are in term of NBI

AXA is the 4th largest financial protection provider in Hong Kong

2003-2009 1H Top 5 Players3


AXAHSBCAIAPrudentialHang Seng2008

Hang SengAXAHSBCPrudentialAIA2007

AIAAXAPrudentialHang SengHSBC2009 1H

AXAHang SengPrudentialHSBCAIA2006

ManulifePrudentialHang SengHSBCAIA2005

ManulifeHang SengPrudentialHSBCAIA2004

Hang SengManulifePrudentialHSBCAIA2003

5th4th3rd2nd1stYear

Rank

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AXA’s multi-channel distribution provides a key strategic advantage in the market

1. Source – internal analysis


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New management teamMichael Bishop: Regional Chief Executive AXA Asia Life (October 2008)

• Formerly Managing Director of Prudential Corporation Asia, President and CEO of Prudential's life business in Korea

Keith Perkins: Chief Operating Officer AXA Asia Life (January 2009)• Formerly Aviva's COO Korea, CEO Malaysia and CEO of HK/Dubai/Singapore

Stuart Harrison: Chief Executive AXA Hong Kong (April 2009)• Formerly Country Manager and Managing Director of AIA Australia; Vice President

and Chief Sales Officer for AIG Life Korea

Immediate priority to focus on near term growthAggressive agency growth – agent numbers up 7% at 30 September 2009 to 2,953 (2,766 at 31 December 2008)Salaried sales channel restructured to AXA Privilege and Swiss Privilege

• AXA Privilege NBI up 13% for 9 months to 30 September 2009• Swiss Privilege wealth management business impacted by challenging markets,

with NBI down 29% for 9 months to 30 September 2009Growth in bancassurance

• Citibank sales up 20% for 9 months to 30 September 2009Further distribution initiatives planned for 2010

The immediate priority for the new management team is to focus on organic growth


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South East Asia –Set to capitalise on achieving scale

AXA has operations in 5 countries, with strong JV partners

Unique distribution footprint through both agency and bancassurance partnersAccess to 2,464 branches and 17,627 agents and advisers

JV relationships very difficult to replicate

296.817,6272,464Total

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Top 10 bank

#2 bank

#1 bank

#2 bank

Strength of partner

48%125.87,205800Krung Thai Bank7thThailand

12%18.71,3355544thPhilippines

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AFFIN Holdings

Bank Mandiri

Bank JV partner

9th

16th

4th

AXA’s market rank

375

379

8,333

Agents & advisers1

6%

507%

42%

NBI CAGR3

11.183Malaysia

-

1,027

Bank branches1

34.4

106.8

NBI (A$m)2

Singapore

Country

Indonesia

1. As at 30 June 2009

2. 9 months to 30 September 2009

3. Based on local currency. 2005 – 2008 except for Malaysia, which is 2006 – 2008

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South East Asia –Set to capitalise on achieving scale

Rapid growth in South East Asia

1. NBI for the respective divisions at 100% share for the 9 months to 30 September 2009

2. 1H09 operating earnings at actual AXA share

3. NBI for the respective divisions at 100% share

4. At actual AXA share

Operating earnings4NBI3

Rapid growth in NBI not yet fully reflected in operating earnings

South East Asia represents 42% of Asia's NBI1 and 10% of Asia's operating earnings2

Further rollout of multi-distribution strategy underway

Asian NBI1

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China and India –Valuable strategic options

China and India have large and rapidly growing life insurance marketsLife insurance markets of US$96 billion in China (2nd largest in Asia) and US$49 billion in India (5th largest in Asia)1

Forecast to grow at 16-17% per annum over the next 10 years to become the two largest markets in Asia2

Both markets pose challenges for foreign playersAXA has established a strong distribution footprint in each market and is actively exploring new banking relationships Our approach and size of investment in these markets reflects both the opportunity and market dynamics

AXA’s operations in China and India represent valuable strategic options

China – NBI3 India – NBI3

1. World Insurance in 2008, Swiss Re sigma

2. Swiss Re - The Chinese and Indian Insurance Market - No 1/2009 - January 2009

3. NBI at 100% share

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AXA well positioned in advice and distribution, wealth management and financial protection

Highly professional advice/distribution

Large and diverse distribution footprint

One of the largest financial advice networks in Australia, with 1,623 owned/aligned advisers

Relationships with a further 6,500 independent financial advisers

Responding to the scale challenge in wealth management

Reducing management expenses

Innovative North product

New generation platform

Broadening single-manager and multi-manager investment offerings

Focus on profitable growth in financial protection

Well positioned for anticipated regulatory changes

Australia and New Zealand –Model orientated to the future

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Australia –Highly professional advice/distribution

Uniquely positioned across aligned channels, owned advice business and with significant access to independent financial advisers (IFAs)

Multiple aligned and owned advice brands supporting different adviser segments –one service model

High quality multi-distribution model well positioned to respond to anticipated regulatory changes

• 335 advisers licensed by AXA• Broad platform choice

• 219 self licensed advisers• Provides licensee services

• 167 AXA owned and salaried advisers1

• Pre-eminent in advice

• 40 AXA owned and salaried advisers• Clear market leader in QLD

• 381 advisers licensed by AXA• Trade under AXA brand• Use AXA platforms

• 481 advisers licensed by AXA• Trade under own brand• Use AXA platforms

1. Includes advisers employed by businesses operating under a partnership agreement with ipac

% of Sales (6 month to June 2009)

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Australia wealth management –Responding to the scale challenge

Management expenses reduced by ~10% in 20091

1. After adjusting for acquisitions to achieve a like-for-like comparison

2. Comparison of estimated marginal operating costs of North platform versus Super 1.0 platform based on FUA

3. As at 30 June 2009

Super 1.0 platform (Summit, Generations, iAccess) migrating over 3 years –A$14 billion of FUA3

Continue to diversify and broaden investment propositions across both single and multi-manager solutions

Innovative North productOver A$1 billion FUM since 2007 launchUnique product - numerous industry awardsPost retirement proposition – launch 1H 2010

New generation platformFully automated functionality - marginal operating costs 40% lower than current technology2

Platform development - full wrap service, low cost simple superannuation solution

Initiatives to improve operating efficiency and drive growth

Super 1.0 versus North platform marginal cost comparison2

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Significant operating earnings leverage as economic conditions improveNet inflows are improving and have a compounding impact on future earnings

FUA/FUM balances have grown strongly over the past 6 months

1. Plan for Life, June 2009 – All retail (ex cash management), administrator’s view

Industry net retail fund flows1

Leveraged to upside in investment markets

Australia wealth management –Responding to the scale challenge

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Australia – Focus on profitable growth in financial protection

Individual FP sales (incl increases) by quarter TTT (Lump Sum) market share – IFA segment1

1. Plan for Life, June 2009 – Life Statistics

Inforce premium of A$667 million provides critical mass and places AXA in top 5 in Australia

Growing new business in the IFA segment for individual life (largest market segment versus direct and bank)

Significant investment in financial protection technology to improve operational efficiency and market position has led to improved service and product ratings

Increasing value of new business and operating earnings

Retaining strong profitability and clients in group life

Our focus remains on profitable growth

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Australia – Well positioned for anticipated regulatory changes

>75% of new superannuation business in rollover and voluntary contributions12 existing superannuation products operating below 1% per annum fee levels Highly efficient North platform solution provides opportunity for lower cost product offerings (40% lower marginal operating costs)

Lower cost superannuation

Network already of very high standard – four of the top ten licensees in Australia as ranked by ‘Brand Management’ are AXA licenseesSignificant governance and quality control processes in placeSubstantial investment and resources dedicated to practice development and quality advice

Higher professional standards for financial advisers

Network well progressed in the transition to a fee-for-service environment>70% of advisers already using some fee-for-service pricingAdvisers already well versed in dollar cost disclosure

Fee-for-service remuneration model

Key expected regulatory requirements 1H09 earnings breakdown

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Total capital resources of A$5.5 billion

Significant excess capital

More than A$1.6 billion in total assets above regulatory requirements, including more than A$900 million in excess of target surplus1

Low gearingDebt to equity ratio at 30 September 2009 was less than 30%, well below our target ratio of 40% to 50%

Existing debt facilities of A$430 million availableIf fully drawn down, gearing would still only be at the bottom end of the target ratio

Expected organic growth funded through internally generated earnings

1. As at 30 September 2009

2. Management estimate. Assumes normalised investment returns. Any dividend payout is subject to the absolute discretion of AXA’s board

Usage of earnings2


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Asia – highly valuable strategic footprint

Very high barriers to entry

Large and strong position in the attractive Hong Kong market

Set to capitalise on achieving scale in South East Asia

Valuable strategic options in China and India

Australia and New Zealand – model orientated to the future

Highly professional advice and distribution

Responding to the scale challenge in wealth management

Focus on profitable growth in financial protection

Well positioned for anticipated regulatory changes

Significant earnings leverage as economic conditions improve


Summary

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DisclaimerFurther information on AXA Asia Pacific Holdings Limited is provided in the Company's half year accounts, Investor Compendium and results announcement released on 5 August 2009.

This presentation provides information in summary form only and is not intended to be comprehensive. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor.

This presentation should be used in conjunction with the 2009 half year Investor Compendium. Further information, including historical results and a description of activities of the Group, is available on our website, www.axaasiapacific.com.au

This presentation may contain certain “forward-looking statements”. The words “anticipate”, “believe”, “expect”, “project”, “forecast”, “estimate”, “likely”, “intend”, “should”, “could”, “may”, “target”, “plan” and other similar expressions are intended to identify forward looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Due care and attention have been used in the preparation of forecast information. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of AXA Asia Pacific Holdings Limited that may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements.

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