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Suduiraut - June 11, 2004 AXA Belgium Financial Protection in Action Alfred Bouckaert, CEO AXA Belgium.

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Presentation on theme: "Suduiraut - June 11, 2004 AXA Belgium Financial Protection in Action Alfred Bouckaert, CEO AXA Belgium."— Presentation transcript:

1 Suduiraut - June 11, 2004 AXA Belgium Financial Protection in Action Alfred Bouckaert, CEO AXA Belgium

2 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

3 Suduiraut - 10 & 11 June 2004 SLIDE 3 CAGR : 4,1% CAGR : 25,6% CAGR : 7,6% CAGR : 9,5% High savings rate has fueled a strong growth in Life and Savings

4 Suduiraut - 10 & 11 June 2004 SLIDE 4 Belgian distribution landscape has changed (Life + P&C turnover) Clients Brokers 37% Bank channel 35% Tied Agents 8% Mutual 13% Direct 7% Insurance GWP evolution 1994/2002 : / mio (+121%) Source: UPEA

5 Suduiraut - 10 & 11 June 2004 SLIDE 5 The Belgian insurance market has undergone considerable concentration Top10 = 74% of the market Top10 = 85% of the market x

6 Suduiraut - 10 & 11 June 2004 SLIDE 6 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

7 Suduiraut - 10 & 11 June 2004 SLIDE 7 1 : Evolution of the Belgian Market 2 : AXA in Belgium 3 : Results Summary 4 : Strategic Priorities 5 :Conclusion Contents

8 Suduiraut - 10 & 11 June 2004 SLIDE 8 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 Mortgages Credit cards Sourced bank products Customer needs Risk management Financial Planning Advice

9 Suduiraut - 10 & 11 June 2004 SLIDE : merger of AXA in Belgium

10 Suduiraut - 10 & 11 June 2004 SLIDE 10 AXA Belgium distribution channels Specialized Brokers: for large and medium-sized Companies (300) General Brokers: for individuals and self-employed (12, ,700 professionals) Bank agents (950) La Poste Viaxis : social finance Partnerships : car manufacturers, banking partners,...

11 Suduiraut - 10 & 11 June 2004 SLIDE : integration into a financial protection group

12 Suduiraut - 10 & 11 June 2004 SLIDE 12 A client facing organization Individual Clients Bank agents Brokers Other channels Car Manufact., Viaxis,... Other channels Car Manufact., Viaxis,... Corporate Clients Direct Support functions in synergy Product Management Bank Products Product Management Bank Products Product Management Life & Invest Product Management Life & Invest Product Management P& - Indiv. & Small businesses Product Management P& - Indiv. & Small businesses Product Management Medium / Large Businesses Product Management Medium / Large Businesses Back Office Insurance- Indiv. & Small businesses Back Office Insurance- Indiv. & Small businesses Back Office Bank Back Office Bank Back Office Insurance-Corporate Lines Back Office Insurance-Corporate Lines

13 Suduiraut - 10 & 11 June 2004 SLIDE 13 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

14 Suduiraut - 10 & 11 June 2004 SLIDE 14 1 : Evolution of the Belgian market 2 : Organisation of AXA in Belgium 3 : Results Summary 4 : Strategic Priorities 5 :Conclusion Contents

15 Suduiraut - 10 & 11 June 2004 SLIDE 15 AXA is a leader of the Belgian market Market Market Share 2002 Volume 2002 #1 P&C18.0%7 873 M # 1 in Motor 20.2% M # 2 in Property16.4%1 656 M # 1 in Worker comp23.5%1 011 M # 1 in Liability19.4% 614 M #5 LIFE11.8% M # 4 Individual Life 11.5% M # 3 Group Life12.8% M #2 P&C + LIFE13.9% M

16 Suduiraut - 10 & 11 June 2004 SLIDE 16 We have stabilized our market share in P&C... Written premiums Growth Global growth of the Belgian market : + 10,9% 2002 : size of the market M Source: UPEA

17 Suduiraut - 10 & 11 June 2004 SLIDE 17 … significantly improving our combined ratio and our underlying earnings Combined ratio has improved with 10 points between 1999 and Underlying earnings doubled between 2002 and 2003, to 118 mio adjusted earnings.

18 Suduiraut - 10 & 11 June 2004 SLIDE 18 In Life we generated growth and improved earnings to 94 mio in 2003 Written premiums Growth Global growth of the Belgian market : + 12,1% 2002: market size M Source: UPEA

19 Suduiraut - 10 & 11 June 2004 SLIDE 19 In Life, premiums growth is significant and outperforming traditional insurers and bank-insurers Belgian market CAGR : 16% AXA Belgium CAGR : 24%

20 Suduiraut - 10 & 11 June 2004 SLIDE 20 We renewed growth in bank savings accounts and... In Mio

21 Suduiraut - 10 & 11 June 2004 SLIDE 21 … doubled our market share in mortgage loans (12% in 2003 vs. 5% in 2001) Mio

22 Suduiraut - 10 & 11 June 2004 SLIDE 22 Expenses are being reduced % over 3 years Economic expenses (in Mio )

23 Suduiraut - 10 & 11 June 2004 SLIDE while strictly controlling FTE evolution

24 Suduiraut - 10 & 11 June 2004 SLIDE 24 Top of mind and spontaneous awareness (april 2004)

25 Suduiraut - 10 & 11 June 2004 SLIDE 25 Perceived activities AXA vs competition

26 Suduiraut - 10 & 11 June 2004 SLIDE 26 1 : Evolution of the Belgian Market 2 : AXA in Belgium 3 : Results Summary 4 : Strategic Priorities 5 :Conclusion Contents

27 Suduiraut - 10 & 11 June 2004 SLIDE 27 Priorities in AXA Belgiums Strategic Plan Increase growth Maintain profitability Improve efficiency

28 Suduiraut - 10 & 11 June 2004 SLIDE 28 Increase growth in Life and Savings Double the banks size Increase loyalty Develop cross-selling with bank and P&C database

29 Suduiraut - 10 & 11 June 2004 SLIDE 29 Maintain profitability in P/C Retention of existing base Focus on best risks (seniors, geographical focus…) Further improve claims management Further streamline processes

30 Suduiraut - 10 & 11 June 2004 SLIDE 30 Improve efficiency A continuous process Further cut cost base Complete systems upgrading

31 Suduiraut - 10 & 11 June 2004 SLIDE 31 An integrated customer policy for growth and loyalty Our growth strategy is mainly based on : customer loyalty customer loyalty growth through cross-selling growth through cross-selling

32 Suduiraut - 10 & 11 June 2004 SLIDE 32 Significant potential of our customer base AXA Belgium owns 50 % of Belgian households Credits & transactional Bank Risk Life & Savings Bank Total :

33 Suduiraut - 10 & 11 June 2004 SLIDE 33 Our potential Cross-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% 2,6% 0%20%40%60%80% 100% number of Product groups

34 Suduiraut - 10 & 11 June 2004 SLIDE 34 As you sow, so you reap 1st step : Customer loyalty 1st step : Customer loyalty

35 Suduiraut - 10 & 11 June 2004 SLIDE ,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

36 Suduiraut - 10 & 11 June 2004 SLIDE ,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

37 Suduiraut - 10 & 11 June 2004 SLIDE ,283 L & I customer base 65,177 Mass Affluent (AUM > €50,000) Mass Affluent Target : AXA customers with more than 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

38 Suduiraut - 10 & 11 June 2004 SLIDE 38 As you sow, so you reap 2nd step : Cross-selling 2nd step : Cross-selling

39 Suduiraut - 10 & 11 June 2004 SLIDE ,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

40 Suduiraut - 10 & 11 June 2004 SLIDE 40 « 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

41 Suduiraut - 10 & 11 June 2004 SLIDE 41 HIP concept for our VIP customers Happy Drive Happy Home Happy Life Happy You HAPPY IMPORTANT PEOPLE HIP 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

42 Suduiraut - 10 & 11 June 2004 SLIDE 42 1 : Evolution of the Belgian Market 2 : AXA in Belgium 3 : Results Summary 4 : Strategic Priorities 5 :Conclusion Contents

43 Suduiraut - 10 & 11 June 2004 SLIDE 43 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

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