suduiraut - june 11, 2004 axa belgium financial protection in action alfred bouckaert, ceo axa...

Suduiraut - June 11, 2004

AXA Belgium

Financial Protection in Action

Alfred Bouckaert, CEO AXA Belgium

Suduiraut - 10 & 11 June 2004 SLIDE 2

1 : Evolution of the Belgian Market

2 : AXA in Belgium

3 : Results summary

4 : Strategic priorities

5 : Conclusion

Contents


0

5.000

10.000

15.000

20.000

25.000

30.000

1996 1997 1998 1999 2000 2001 2002 2003 (e)

Gross Premiums (mios €)

P&C Workers' Compens. Individual Life Group Life

CAGR : 4,1%

CAGR : 25,6%

CAGR : 7,6%

CAGR : 9,5%

High savings rate has fueled a strong growth in Life and Savings


Belgian distribution landscape has changed (Life + P&C turnover)

ClientsClients

Brokers

37%

Bank channel

35%

Tied Agents

8%

Mutual

13%

Direct

7%

1.488400

1.0241.2681.314

6.066

8.230

1.7022.841

7.907

310%

672%

30%124%

36%

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

Brokers TiedAgents

Mutual Bank Direct

GW

P (

Mio

€)

0%

100%

200%

300%

400%

500%

600%

700%

800%

Ev

olu

tio

n

1994 2002 Evolution

Insurance GWP evolution 1994/2002 : 10.035/22.169 mio € (+121%)

Source: UPEA


The Belgian insurance market has undergone considerable concentration

Top10 = 74% of the market

Top10 = 85% of the market

x 1.000.000 €

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

1996 2002


Furthermore, Belgium has become a bank insurance market

Fortis (AG, Générale, CGER)

ING (BBL, La Patriotique, ING)

KBC (KB, ABB, CERA)

Dexia (Dexia, Artesia, BACOB, DVV, Corona)

AXA (AXA Belgium, Anhyp, IPPA, Royale Belge)

AXA = distribution through self employed brokers and bank agents

Retail banking only



2 : AXA in Belgium

3 : Results Summary

4 : Strategic Priorities

5 : Conclusion

Contents


Our mission: Financial Protection

Asset protection Auto, home, property, liability

Asset accumulation

Retirement

Estate

planning

Life stages

Annuities

Life protection

Asset management

Investments Savings Consumer credit

MortgagesCredit cards

Sourced bank products

Customer needs

Risk management Financial Planning

Advice


1999 - 2001 : merger of AXA in Belgium


AXA Belgium distribution channels

Specialized Brokers: for large and medium-sized Companies (300)

General Brokers: for individuals and self-employed (12,000 - 2,700 professionals)

Bank agents (950)

La Poste

Viaxis : social finance

Partnerships : car manufacturers, banking partners, ...


2002 : integration into a financial protection group


A client facing organization

Individual ClientsIndividual Clients

Bank agentsBank agents BrokersBrokers BrokersBrokersOther channels

Car Manufact., Viaxis, ...

Other channels

Car Manufact., Viaxis, ...

Corporate ClientsCorporate Clients

DirectDirect

Support functions in synergySupport functions in synergy

ProductManagement

Bank Products

ProductManagement

Bank Products

ProductManagementLife & Invest

ProductManagementLife & Invest

ProductManagement P& - Indiv. &

Small businesses

ProductManagement P& - Indiv. &

Small businesses

ProductManagement

Medium / Large Businesses

ProductManagement

Medium / Large Businesses

Back OfficeInsurance- Indiv. & Small businesses

Back OfficeInsurance- Indiv. & Small businesses

Back OfficeBank

Back OfficeBank

Back OfficeInsurance-Corporate Lines

Back OfficeInsurance-Corporate Lines


A new retail organization became operational on January 1, 2004

Two main channels: bank agents & brokers

One sales management broken down per product at the sales level

integrated at area level with efforts and staff focusing on the best producer


1 : Evolution of the Belgian market

2 : Organisation of AXA in Belgium

3 : Results Summary


5 : Conclusion

Contents


AXA is a leader of the Belgian market

Market Market Share 2002 Volume 2002

#1 P&C 18.0% 7 873 M€

# 1 in Motor 20.2% 2 735 M€

# 2 in Property 16.4% 1 656 M€

# 1 in Worker comp 23.5% 1 011 M€

# 1 in Liability 19.4% 614 M€

#5 LIFE 11.8% 14 432 M€

# 4 Individual Life 11.5% 11 089 M€

# 3 Group Life 12.8% 3 342 M€

#2 P&C + LIFE 13.9% 22 305 M€


We have stabilized our market share in P&C ...

Wri

tte

n p

rem

ium

s

Gro

wth

Global growth of the Belgian market 2000 - 2002 : + 10,9%

2002 : size of the market 7 873 M€

Source: UPEA

25,4%15,4%

6,5%

7,8%

60,5%

-10,0%

0

200

400

600

800

1.000

1.200

1.400

1.600

AXA Fortis SMAP KBC Winterthur AGF

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

2000 2001 2002 delta 2000-2002

mio €


… significantly improving our combined ratio and our underlying earnings

Combined ratio has improved with 10 points between 1999 and 2003.

Underlying earnings doubled between 2002 and 2003, to € 118 mio adjusted earnings.


In Life we generated growth and improved earnings to € 94 mio in 2003

Wri

tten

pre

miu

ms

Gro

wth

Global growth of the Belgian market 2000 - 2002 : + 12,1%

2002: market size 14 432 M€

Source: UPEA

-21,4%

49,6%

127,4%

-24,4%

16,8%

91,2%

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

Fortis KBC SMAP ING AXA Dexia

-40,0%

-20,0%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

140,0%

2000 2001 2002 delta 2000-2002

mio €


In Life, premiums growth is significant and outperforming traditional insurers and bank-insurers

10.064

12.870 13.29414.432

18.138

1999 2000 2001 2002 2003 (*)

Belgian marketCAGR : 16%

907

1.129

1.742 1.689

2.125

1999 2000 2001 2002 2003 (*)

AXA Belgium

CAGR : 24%


We renewed growth in bank savings accounts and ...

273

677724

2001 2002 2003

Net New Money

In € Mio

4.3485.025

5.749

2001 2002 2003

AUM Savings accounts


… doubled our market share in mortgage loans (12% in 2003 vs. 5% in 2001)

454

1.926

377

941

212210176195

273248217141

0

500

1000

1500

2000

2000 2001 2002 2003

Mortgage loans Consumer loans Commercial loans

Mio €


Expenses are being reduced ...

689

647620

2001 2002 2003

- 10% over 3 years

Economic expenses (in Mio €)


... while strictly controlling FTE evolution


70%

58%

42%40% 40%

23%

17%14% 12%

10% 9% 8% 8% 7% 7% 6% 5% 5% 4% 4% 3% 2% 1% 1%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

TOM also spontaneous spontaneous

spontaneous 70% 58% 42% 40% 40% 23% 17% 14% 12% 10% 9% 8% 8% 7% 7% 6% 5% 5% 4% 4% 3% 2% 1% 1%

also spontaneous 45% 47% 28% 27% 32% 17% 16% 12% 8% 7% 8% 8% 6% 6% 6% 4% 5% 4% 3% 4% 3% 1% 1% 1%

TOM 25% 11% 15% 12% 8% 6% 2% 2% 4% 2% 1% 1% 1% 1% 1% 1% 0% 1% 1% 0% 0% 0% 0% 0%

Fortis Dexia AXAKBC/ CBC

ING EthiasArgen

taBBL

OMOB/

SMAP

DVV Verze- kering

AGBACO

BM&N P&V

Winterthur

AGF-Assubel

Bank van de

Generali

Centea

Deutsche Bank

Vader-land-sche

Verzekeringen De

UABArtesi

a

Top of mind and spontaneous awareness (april Top of mind and spontaneous awareness (april 2004)2004)


Perceived activities AXA vs competition

0

10

20

30

40

50

60

70

80

90

100

Fortis Dexia KBC ING AXA Ethias

Don't know

insuranceboth

bank



2 : AXA in Belgium

3 : Results Summary


5 : Conclusion

Contents


Priorities in AXA Belgium’s Strategic Plan

Increase growth

Maintain profitability

Improve efficiency


Increase growth in Life and Savings

Double the bank’s size

Increase loyalty

Develop cross-selling with bank and P&C database


Maintain profitability in P/C

Retention of existing base

Focus on best risks (seniors, geographical focus…)

Further improve claims management

Further streamline processes


Improve efficiency

A continuous process

Further cut cost base

Complete systems upgrading


An integrated customer policy for growth and loyalty

Our growth strategy is mainly based on :Our growth strategy is mainly based on :

customer loyaltycustomer loyalty

growth through cross-sellinggrowth through cross-selling


Significant potential of our customer base

AXA Belgium owns 50 % of Belgian householdsAXA Belgium owns 50 % of Belgian households

108.915

Credits & transactionalBank312.172

Risk 1.473.700Life &

Savings Bank

702.28396.380 41.255

229.683267.305 1.093.847

65.622Total : 1.903.007


Our potential

Cross-selling rate is only 1,5 contractsCross-selling rate is only 1,5 contracts..

1 product group

2 product groups

3 product groups

4 product groups

5 product groups

Cross-selling rate: number of AXA products hold by household

57% 21% 10% 10% 2,6%

0% 20% 40% 60% 80% 100%

num

ber

of

Pro

duct

gro

ups


As you sow, so you reap

1st step : Customer loyalty1st step : Customer loyalty


763,632 Total customer base Motor

342,793 Motor Wildcard families

Motor Wildcard (November 2003)

Target : Bonus Malus 0 (best level) for two years by AXA

Goal : A 30 % reduction in lapse rates

on “good risks”

Action : The next claim is free


691,000 Total customer base Home

500,000 Home Wildcard families

Home Wildcard (March 2004)

Target : AXA customers with no claim in

the past two years

Goal : Cut lapse rate by 20 % on

« good risks »

Action : € 200 cash, if claim > € 1.500


702,283 L & I customer base

65,177 Mass Affluent (AUM > €50,000)

Mass Affluent

Target : AXA customers with more than

€ 50.000 assets under management

Goal : Increase level of Mass Affluent

‘AUM of 5 %

Action : Free banking account + free banking cards Yearly financial check-up Services & relationship advantages


As you sow, so you reap

2nd step : Cross-selling2nd step : Cross-selling


195,000 Wildcard customers do not have Home insurance

342,793 Motor wildcard families

From Motor to Home

Target : Motor Wildcard without Home

Goal : 10 % cross-selling

Action : 2 months free on purchasing Home

insurance Home Wildcard if no claim in 2 years


« Good risks » targets on which cross-selling actions will be implemented

763,632 Motor customer families

691,000 Home customer families

702,283 L & I customer families

65,177 Mass Affluents (exp. > €50,000)

Cross-selling targets

500,000 Home Wildcard families

342,793 Motor Wildcard families

2 nd step: L&I customer families who over 45 years


HIP concept for our VIP customers

Happy Drive

Happy Home

Happy Life Happy You

HAPPYIMPORTANT

PEOPLEHIP

Differentiation:

1. Wildcard

2. Confidence guarantee

Differentiation:

1. Wildcard

2. Confidence guarantee

Differentiation:

1. Wildcard

2. VIP product (in co-operation with AXA Art)

Differentiation:

1. Wildcard

2. VIP product (in co-operation with AXA Art)

Differentiation:

1. Pension build-up & management programme

Differentiation:

1. Pension build-up & management programme

Differentiation:

1. MA programme AUM > 50,000: products, services & relationship advantages

Differentiation:

1. MA programme AUM > 50,000: products, services & relationship advantages



2 : AXA in Belgium

3 : Results Summary


5 : Conclusion

Contents


Conclusion: AXA Belgium, a clear example of Financial Protection

A fully integrated retail model

Maximizes distribution reach

Customer-centric and not based on products as in the past

Allows significant economies of scale

Growing underlying earnings, stable market share in P/C, growth in Life and Savings

Brand awareness increases and is essential in what is customer driven

suduiraut - june 11, 2004 axa belgium financial protection in action alfred bouckaert, ceo axa...

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