AXA Mediterranean and Latin American Region
Investor Day - Overview
May 27, 2008
London
Cautionary statements
Cautionary statements concerning forward-looking statements
Certain statements contained herein are forward-looking statements including, but not limited to,
statements that are predications of or indicate future events, trends, plans or objectives. Undue reliance
should not be placed on such statements because, by their nature, they are subject to known and
unknown risks and uncertainties.
Please refer to AXA's Annual Report on Form 20-F and AXA’s Document de Référence for the year
ended December 31, 2007, for a description of certain important factors, risks and uncertainties that may
affect AXA’s business. In particular, please refer to the section "Special Note Regarding Forward-Looking
Statements" in AXA's Annual Report on Form 20-F. AXA undertakes no obligation to publicly update or
revise any of these forward-looking statements, whether to reflect new information, future events or
circumstances or otherwise.
Non-Gaap measures
Adjusted earnings, underlying earnings, Life & Savings APE and NBV are non-GAAP measures and, as
such, are not audited, may not be comparable to similarly titled measures reported by other
companies and should be read together with our GAAP measures. Management uses these non-GAAP
measures as key indicators of performance in assessing AXA’s various businesses and believes that the
presentation of these measures provides useful and important information to shareholders and investors
as measures of AXA’s financial performance.
Please refer to AXA’s Full Year 2007 presentation for further detail on these definitions and for a
reconciliation of underlying and adjusted earnings to net income.
AXA Mediterranean and Latin American Region – May 27, 2008 – 1
AXA Mediterranean and Latin American Region – May 27, 2008 – 2
Agenda
1 Overview of AXA Mediterranean and Latin American Region
Jean Raymond Abat – CEO, AXA Mediterranean and Latin American Region
2 Questions and Answers
3 AXA in Spain
Javier de Agustin – CEO, AXA Seguros
4 AXA MPS in Italy
Frédéric de Courtois – CEO, AXA MPS
5 AXA in Turkey
Cemal Ererdi – CEO, AXA Turkey
6 Conclusion
Jean Raymond Abat – CEO, AXA Mediterranean and Latin American Region
7 Breakout sessions
AXA Mediterranean and Latin America Region – May 27, 2008 – 3
AXA Mediterranean and Latin American Region: Key takeaways
A growth story fuelled by successful
An efficient regional platform
acquisitions and sustained organic growth
€ bn
+33% 11
Technical /
CAGR Product Distribution Quality
4 Investment Productivity
Innovation Management of Service
5 Margins
7
2004 2007 Marketing
Pro Forma
Revenues reported by AXA Human Resources
AXA MPS, AXA Gulf Region and ING Seguros in Mexico(1)
An increasing contributor to AXA’s Ambition 2012
€m
Contribution to AXA’s Underlying Earnings(2)
6% 8% >10%
2004 2007 2012
(1) Mexico closing remains subject to regulatory authorities
(2) Group share, excluding holdings
AXA Mediterranean and Latin American Region – May 27, 2008 – 4
Why a Mediterranean and Latin American Region?
A critical size
Revenues(1) AUM Underlying earnings(2)
€ 11bn € 40bn € 435m
Clients(1) People(1)
>15m 12,000
(1) Pro-forma including AXA MPS, Mexico & Gulf Region, to be reported by AXA from 2008, subject to approval of the ING Seguros closing by regulatory authorities.
2007 revenues reported by AXA amounted to € 7.2bn
(2) Underlying earnings are reported figures and exclude holdings, AXA MPS, Mexico and Gulf Region.
AXA Mediterranean and Latin American Region – May 27, 2008 – 5
Why a Mediterranean and Latin American Region?
Common market features
Insurance premiums(1)
€ bn
CAGR 04-06
204
180
+7%
L&S
Sustained growth
+6%
P&C
2004 2006
Insurance penetration rate
% of GDP, 2006
6.2
P&C 4.8 L&S
3.1 4.0
Low 2.1 2.6
penetration rate
Med. Med.
Region(2)
EU15 USA Region(2) USA EU 15
The Mediterranean and Latin American Region has a high growth potential
(1) Sum of national markets where AXA is present in Mediterranean and Latin American Region. Source: Swiss Re Sigma research.
(2) Average of national markets where AXA is present in Mediterranean and Latin American Region. Source: Swiss Re Sigma research.
AXA Mediterranean and Latin American Region – May 27, 2008 – 6
Why a Mediterranean and Latin American Region?
An integrated team
An operational structure with key roles, booster of business and
provider of support functions
Jean Raymond Abat
CEO, AXA Mediterranean &
Latin American Region
Business Units Support Functions
Daniel Antunes Javier de Agustin Xavier de Bellefon
CEO, Morocco CEO, Spain CEO, Mexico
Frédéric Fléjou François Coste
Regional CFO Regional COO
Frédéric de Courtois Cemal Ererdi Eric Kleijnen
CEO, AXA-MPS Italy CEO, Turkey CEO, Greece
Didier Boussemart Sylvie Vuitteney
Regional General Secretary Regional HR Director
Jean Louis Laurent Josi João Leandro Andrea Rossi
CEO, Gulf Region CEO, Portugal CEO, AXA Assic. Italy
AXA Mediterranean and Latin American Region – May 27, 2008 – 7
AXA is a strong regional leader …
Spain Greece
Portugal P&C L&S
P&C L&S
Rank 2 10 Rank 11 8
P&C L&S
2007: Source Hellenic Association of
Rank 2 7 2007: Source Spanish Association of
Insurance Companies
Insurance Companies
2007: Source Instituto de Seguros de
Portugal
Turkey
P&C L&S
Mexico Rank 2 4
2007: Source Turkish Association of
P&C L&S Insurance Companies
Rank 3 7
2007: Source Mexican Association of
Insurance Companies
Italy Gulf Region
Morocco P&C L&S P&C
Rank 7 8 Rank 6
P&C L&S
Rank 1 5 2007: Sources Italian Association of
Insurance Companies / Prometeia 2006: Source Arab Insurance Group
2007: Source Moroccan Association of
Insurance Companies
AXA is also present in Lebanon and has minority holdings in Jordan and Tunisia
AXA Mediterranean and Latin American Region – May 27, 2008 – 8
… with a well-balanced business mix …
P&C revenues: € 6.7bn (58%) L&S revenues: € 4.8bn (42%)
€ bn, 2007 € bn, 2007
Spain 2.7 Italy 3.2
Italy 1.4
Spain 0.8
Portugal 0.4
Portugal 0.2
Mexico 1.1
Mexico 0.3
Turkey 0.6
Greece 0.1
Gulf Region 0.2
Turkey 0.1
Morocco 0.2
Greece 0.1 Morocco 0.0
Revenues reported by AXA in 2007
AXA MPS, AXA Gulf Region and ING Seguros in Mexico(1)
Emerging markets
(1) The closing remains subject to approval by regulatory authorities
AXA Mediterranean and Latin American Region – May 27, 2008 – 9
… and focus on profitable growth
Property & Casualty
Revenues Underlying earnings(1)
€ bn €m
+16% 5.3
CAGR
3.4
362
+39%
CAGR
2004 2007
Combined ratio 136
99.2%
-3.8 pts
95.4%
2004 2007
2004 2007
(1) Group share
AXA Mediterranean and Latin American Region – May 27, 2008 – 10
… and focus on profitable growth
Life & Savings
New business volume (APE)(1) Underlying earnings(1)
€m €m
+18% 206
CAGR
125
+17% 73
CAGR
46
2004 2007
New business margin
+2.5 pts 20.7%
18.2%
2004 2007
2004 2007
(1) Group share
AXA Mediterranean and Latin American Region – May 27, 2008 – 11
A strong Ambition for 2012
L&S APE(1) P&C Revenues
€m € bn
>10% 5%-10%
CAGR CAGR
379 6.7
(2) 174 (3) 1.4
5.3
206
2007 pro forma 2012 2007 pro forma 2012
While increasing NBV margin While optimizing combined ratio
(20.7% in 2007) (95.4% in 2007)
Entities reported by AXA in 2007
Scope changes
Underlying Earnings(4)
€m
>15%
CAGR
435
2007 2012
(1) Modelled APE, Group share.
(2) Pro forma includes AXA MPS and minorities of Turkey (closing subject to approval by regulatory authorities) and excludes ING Mexico
(3) Pro forma includes AXA MPS and ING Seguros in Mexico (closing subject to approval by regulatory authorities)
(4) Group share, excluding holdings
AXA Mediterranean and Latin American Region – May 27, 2008 – 12
How we will achieve our Ambition:
Leveraging the regional platform
+
Developing new distribution channels
+
Increasing exposure to emerging markets
AXA Mediterranean and Latin American Region – May 27, 2008 – 13
Leveraging the regional platform
We have demonstrated strong integration capabilities…
Acquisition of
Minority
Shareholder
Merger with Acquisition of
Acquisition of
Norwich Union in Minority
Alpha Insurance
the Gulf Region Shareholder
Acquisition of
Joint Venture with
Minority Acquisition of Acquisition of Acquisition of
Monte dei Paschi
Shareholder Seguro Directo Winterthur ING Seguros
di Siena (MPS)
Direct Seguros
2004 2005 2006 2007 2008
In 2007, successful integration of Winterthur in Spain
AXA Mediterranean and Latin American Region – May 27, 2008 – 14
Leveraging the regional platform
… while building an efficient platform
Regional
platform
enhancement
Regional
strategy by
business line
Deployment of
regional IT
governance Team 100%
Implementation
dedicated to
of 4 key regional
the Region Claims
priorities
management
Regional
Reuse of best Executive
practices Common IT
Committee
solution Product
Local Finance development innovation
strategies
First synergies Support
IT Service
Italy between functions
delivery Direct Quality of
entities: implementation
Spain Convergence Service
Customer
Portugal IT (Web Med),
Service
HR, Audit, Launch of AXA
Turkey People HR
Finance, Tech Med
Regional HR engagement for
Morocco retention Region
Ambition 2012
processes
Gulf Region
2004 2005 2006 2007 2008
AXA Mediterranean and Latin American Region – May 27, 2008 – 15
Leveraging the regional platform
IT
Improve IT efficiency
Regional IT strategy to achieve Ambition 2012
One common IT One single IT Shared applications
infrastructure development team on key business
capabilities
Regional IT budget (1)
Increase in productivity
Projects 36%
More projects 55%
Less maintenance costs
Maintenance 64%
At constant budget: €140 m(1) 45%
(1) Scope limited to Spain, Italy (excluding AXA MPS), 2007 2012
Portugal, Greece and Morocco
AXA Mediterranean and Latin American Region – May 27, 2008 – 16
Leveraging the regional platform
Claims
Manage claims efficiency Management
Claims management savings
€ m, pre-tax
Procurement 89
Fraud
Leakage
Equivalent to 1.7 points of
57 combined ratio saved
through fraud, leakage and
31 insurance procurement
initiatives
13
2004 2005 2006 2007
Additional savings equivalent
More to come to 2 points decrease in
from 2008 onward combined ratio(1)
(1) On a comparable basis, excluding Mexico
AXA Mediterranean and Latin American Region – May 27, 2008 – 17
Leveraging the regional platform
Product
Innovate Innovation
Product innovation and rollout capabilities are embedded in our culture
Ticket Vida
A pure risk product
easy to sell
Be innovative cross-selling possibilities
Launched in Spain
Re-used in Portugal, France and Italy
Applicability to other markets under
review : Greece, Turkey and Gulf Region
Accumulator®
Successful rollout in Spain, Italy and
Portugal started in Q2 2007
Rollout successful
€ 20m APE(1) in 2007, ahead of initial
products objectives
€ 6m APE(1) in Q1 2008, with a 41%
NBV margin
(1) APE Group share, including AXA MPS in both periods (AXA MPS was not included in APE reported by AXA in 2007)
AXA Mediterranean and Latin American Region – May 27, 2008 – 18
Leveraging the regional platform
Quality of
Improve Quality of Service Service
Making the difference through Quality of Service …
Three-step approach
Step 1 Step 2 Step 3
Distributor
Improve effectiveness
of selling processes to
support distributor
Identify the key
Analyse the activities and +400,000
processes that
“Customer and customer needs
distributor
affect customer New clients
and distributor
experience” End-customer in 2007
needs
Increase customer
satisfaction in services
delivered through post-
selling processes
AXA Mediterranean and Latin American Region – May 27, 2008 – 19
Leveraging the regional platform
Quality of
Improve Quality of Service Service
…with concrete results
Spain Italy
Focus on distributor Focus on end-customer
Scope: quotation process in Small and Scope: motor material high frequency
Medium Enterprise (SME) P&C business claims management process
Drivers for differentiation: speediness in Drivers for differentiation: speediness in
quotation (48 hours) settlement in cycle time (21 days)
Key elements of success: underwriting Key elements of success: new claims
application in WebMed (re-used in Portugal); system; alignment of rewarding system with
employee engagement with new processes cycle time target; new process control tool;
(change management actions: reward & strong training and empowerment of the
recognition) process owners
Quotations delivered in 48 hours: Claims managed in 21 days:
Current performance: 95% Current performance: 69%
AXA Mediterranean and Latin American Region – May 27, 2008 – 20
Leveraging the regional platform
HR
Our people are key
AXA Mediterranean & Latin American Region leverages on:
Quality of employee Alignment of HR Development Common Regional
engagement processes Dynamics culture
High level of Unique Performance Development & Regional
employee Management training platform governance
engagement index System
High exposure to Dedicated Regional
(77 in 2007)
Alignment of international projects teams supporting
Integration remuneration & cultures to transversality
processes: new policies enhance individual
Networking in
teams fully on board learning curves
Organisation & professional families
Passport 2012 Talent Review Energise mobility of
Talents
for a true Regional “spirit”
AXA Mediterranean and Latin American Region – May 27, 2008 – 21
Developing new distribution channels
A real multi-distribution approach
2007 Revenues breakdown by distribution channel (1)
Non-Proprietary
Proprietary
P&C L&S
33% 100% 10% 100%
60%
10% 42%
3% 70%
51% 3%
4%
58% 26%
30%
Agents Direct SSF (2) Partner- Brokers Tot Agents SSF (2) Partnerships Brokers Tot
ships (3) P&C (with banks) L&S
(1) Pro forma including AXA MPS, Mexico and Gulf Region, which will be reported by AXA from 2008.
Mexico closing remains subject to approval by regulatory authorities
(2) SSF: Salaried Sales Forces
(3) Includes car dealers and banks
AXA Mediterranean and Latin American Region – May 27, 2008 – 22
Developing new distribution channels
Become market leader in L&S through bancassurance agreements
Joint venture with #3 largest Italian bank
Monte dei Paschi di Exclusive agreement (20 years(1))
Siena : AXA MPS 3,000 bank outlets(2)
#3 largest Greek bank
Acquisition of
Exclusive agreement (20 years)
Alpha Insurance
380 bank outlets
Next challenges …
(1) Long-term commitment: 10 years, automatically renewable for another 10 years.
(2) Including Banca Antonveneta.
AXA Mediterranean and Latin American Region – May 27, 2008 – 23
Developing new distribution channels
Enhance leadership in P&C business by leveraging direct channel
AXA Direct Business
Revenues
€m
+15%
- #2 largest player in Direct market in Spain
CAGR 237
and in Portugal
155
- Launch direct business in Italy in 2008
Combined ratio below 100% in 2007
2004 2007
Direct back-office and support functions are integrated
with traditional channels, generating economies of scales
AXA Mediterranean and Latin American Region – May 27, 2008 – 24
Increasing exposure to emerging markets
The purchase of ING Seguros in Mexico is a great opportunity for AXA(1)
Insurance premiums(2)
USD bn
17.3 CAGR 04-07
12.3 +14%
A fast growing L&S
market… +10%
P&C
2004 2007
Insurance penetration rate(3)
% of GDP, 2006
P&C L&S
3.1 6.2
… with high
potential 1.0 1.0
2.0
0.8
Mexico ASEAN EU15 Mexico ASEAN EU15
(1) Subject to approval by regulatory authorities
(2) Source: Mexican Association of Insurance Companies
(3) Source: Swiss RE Sigma reports on World Insurance 2004-2006
AXA Mediterranean and Latin American Region – May 27, 2008 – 25
Increasing exposure to emerging markets
ING Seguros has a leading position with strong turnaround potential
Our objective : to be #1 within 3 to 5 years
ING Seguros is ranked #3 with a 12% market share
Business Ranking Market
line share
Motor #3 16%
Other P&C #2 14%
Health #2 19%
Life #7 6%
Source: Mexican Association of Insurance Companies
Capacity to manage turnaround,
with full benefit from regional support and expertise
The company’s top line has been relatively stable over the last few years with a breakeven profitability
Objective: Gain new market shares while reducing the combined ratio from 105% to below 100% within
2 years
Action plan:
Productivity improvements
Improved distribution efficiency
New product offer in Life and retail P&C
Development of new customer segments (SME, …)
AXA Mediterranean and Latin American Region – May 27, 2008 – 26
Increasing exposure to emerging markets
AXA Gulf has a solid position to capture the potential of this region
The largest P&C international
A true multinational company
player in the region
492 people from 26 nationalities
P&C revenues
covering 5 countries
USD m
+34% 278 A centralized organization in Service and
CAGR Support functions
116
A regional platform dedicated to
servicing high frequency claims (Motor
2004 2007 and Medical)
Breakdown of 2007 revenues
Markets with high potential
Bahrain
All Gulf markets have forecasted growth
7% above 20% in the long term
Insurance markets are just starting:
penetration rate lower than 1.5%
Qatar Very strong potential in Saudi Arabia
10% driven by:
local demographics (28 million people,
median age 21)
sustained oil prices
Saudi Arabia UAE Oman
30% 47% 6% Life growth opportunity
AXA Mediterranean and Latin American Region – May 27, 2008 – 27
Increasing exposure to emerging markets
Investments in Turkey and Morocco open new business opportunities
We have reinforced our presence
through buy-out of minority shareholder
Turkey(1) Morocco
#2 #1
In P&C market In P&C market
Profitable growth over the last 3 years +15% growth in P&C revenues in 2007
The buy-out of OYAK’s participation(1) opens Combined ratio from 101.6% in 2004 to 97.5%
new growth opportunities in Life and PPP in 2007
business
(1) Subject to approval by regulatory authorities
AXA Mediterranean and Latin American Region – May 27, 2008 – 28
AXA Mediterranean and Latin American Region: Key takeaways
A growth story fuelled by successful
An efficient regional platform
acquisitions and sustained organic growth
€ bn
+33% 11
Technical /
CAGR Product Distribution Quality
4 Investment Productivity
Innovation Management of Service
5 Margins
7
2004 2007 Marketing
Pro Forma
Revenues reported by AXA Human Resources
AXA MPS, AXA Gulf Region and ING Seguros in Mexico(1)
An increasing contributor to AXA’s Ambition 2012
€m
Contribution to AXA’s Underlying Earnings(2)
6% 8% >10%
2004 2007 2012
(1) Mexico closing remains subject to regulatory authorities
(2) Group share, excluding holdings
AXA Mediterranean and Latin American Region – May 27, 2008 – 29
Agenda
1 Overview of AXA Mediterranean and Latin American Region
Jean Raymond Abat – CEO, AXA Mediterranean and Latin American Region
2 Questions and Answers
3 AXA in Spain
Javier de Agustin – CEO, AXA Seguros
4 AXA MPS in Italy
Frédéric de Courtois – CEO, AXA MPS
5 AXA in Turkey
Cemal Ererdi – CEO, AXA Turkey
6 Conclusion
Jean Raymond Abat – CEO, AXA Mediterranean and Latin American Region
7 Breakout sessions
AXA Mediterranean and Latin America Region – May 27, 2008 – 30
Agenda
1 Overview of AXA Mediterranean and Latin American Region
Jean Raymond Abat – CEO, AXA Mediterranean and Latin American Region
2 Questions and Answers
3 AXA in Spain
Javier de Agustin – CEO, AXA Seguros
4 AXA MPS in Italy
Frédéric de Courtois – CEO, AXA MPS
5 AXA in Turkey
Cemal Ererdi – CEO, AXA Turkey
6 Conclusion
Jean Raymond Abat – CEO, AXA Mediterranean and Latin American Region
7 Breakout sessions
AXA Mediterranean and Latin America Region – May 27, 2008 – 31
AXA Spain: Key takeaways
#2 in a market with high growth potential
We operate an efficient platform
Cost Customer Multi-channel
optimisation centricity distribution
Our strategy: profitable growth
AXA Mediterranean and Latin American Region – May 27, 2008 – 32
Spain, a growing insurance market with good potential
A growing market… …which remains under-penetrated…
Insurance premiums Insurance penetration rate
€ bn % of GDP, 2006, P&C and L&S
55 CAGR 04-07 9.3
45
+7%
23 5.2
19
L&S
26 32 +7%
P&C
2004 2007 Spain EU15
Source: Spanish Association of Insurance Companies Source: Swiss Re Sigma research.
… with potential for further growth
The Spanish population is ageing fast of Spanish workers believe their
+100
90
80
70
Men Women
+100
90
80
70
Men Women
41% retirement income will be
insufficient to cover their needs
60 60
50 50
40 40
Monthly lower in Spain than in
25%
30 30
20 20
10 10 retirement other Western
0 0
400 300 200 100 0 100 200 300 400 400 300 200 100 0 100 200 300 400
savings are European countries
2005 2020
Source: Spanish National Statistics Institute Source: AXA 2007 retirement scope
AXA Mediterranean and Latin American Region – May 27, 2008 – 33
A strong leading position…
AXA Spain is the second …with a sizeable client base
largest player …
Market insurance premiums
2007, € bn Total Clients
1.MAPFRE
2. 2.7
5.5
0.8 3.5 6.4%
2.4 7.9 14.5%
4m
3. SANTANDER 0.2 2.9 3.1 5.6%
4. ALLIANZ 2.1 0.7 2.9 5.2% Motor Household
5. GENERALI 1.5 1.0 2.5 4.6%
P&C
L&S
2.3 m 1.0 m
6. AVIVA
2.2 2.2 4.1%
Market share
7. CASER 1.3 0.8 2.1 3.9%
8. CATALANA 1.5 0.5 2.0 3.7% Health Life and Savings
9. ZURICH 1.4 0.5 1.9 3.4%
0.3 m 0.4 m
10. CAIFOR
0.2 1.4 1.6 3.0%
Source: Spanish Association of Insurance Companies
AXA Mediterranean and Latin American Region – May 27, 2008 – 34
…with a focus on profitability
P&C Combined ratio L&S NBV(1)
€m +8%
98.8% -2.0 pts 13.8
on a comparable basis
on a comparable basis
11.4
95.0%
2006 2007 2006 2007
Underlying earnings(1)
€m
+27% 213
on a comparable basis
81
2006 2007
(1) Group share. Underlying earnings exclude holdings
AXA Mediterranean and Latin American Region – May 27, 2008 – 35
AXA has successfully managed the largest-ever insurance merger in Spain…
Fast execution: towards single operation and shared culture…
2006 2007 2008
Joint
BRAND Single
BRAND
Key principles: speed, transparency, pragmatism
Single TEAM
Single Single
DISTRIBUTION NETWORKS ACCOUNTING
Trade Union LEGAL MERGER
Single
MERGER PROTOCOL P&C companies
DISTRIBUTION TOOLS
Single
UNDERWRITING TOOLS
Single
MIS TOOLS
Single
OFFER
Single
PROVIDER NETWORK
CHANGE MANAGEMENT
… while maintaining 2007 overall market share
Expanded customer base
Motor growth Health growth
+4.8%
+2.7%
+12.8%
+9.9% +166,000
Net new clients
AXA Market Average AXA Market Average
Source: Spanish Association of Insurance Companies
in 2007
AXA Mediterranean and Latin American Region – May 27, 2008 – 36
… and will benefit from high cost synergies
Synergies are ahead of pace 75% of restructuring costs realised
€ m, pre-tax € m, pre-tax
65
26 99 131
10
2007 2010 Est.
FY07 achievement booked to net income
FY07 actual Initial expected synergies
Through…
Staff reduction Restructuring of premises
Workforce, Full Time Equivalent Occupancy, thousand m2
-13% -16%
93.5
3 886
3 379
78.6
2006 2010 Est. 2006 2008 Est.
AXA Mediterranean and Latin American Region – May 27, 2008 – 37
AXA Spain’s distribution strategy is based on a multi-channel approach
AXA Spain’s distribution network
Strong distribution muscle
A balanced organisation with exclusive Exclusive general agents 2 400
and independent distributors
Life-specialist, exclusive agents 700
Revenues by channel
€ m, 2007
Brokers 3 900
of which share of wallet >30% 900
42% 41%
Large int’l
brokers 193 Extensive geographic reach
AXA’s commercial branches
1 470 1 445
@
6% 4% 7% Agent
Broker
Hybrid @
209 137 228 @ @
@ Virtual @
Direct Exclusive Specialised Brokers Banks & Int’l @
@
agents excl. Agents Affinities
@
Exclusive Independent @
distributors distributors
52% 48%
DISTRIBUTION STRATEGY
Specific value proposition for each different channel
Channel segmentation, product, remuneration, service and support adapted to each segment
Focus on commercial effectiveness, client retention and development of client relationships
AXA Mediterranean and Latin American Region – May 27, 2008 – 38
Our 3,000+ tied agents are real professionals
A compelling proposition to develop professional Agents : “AXA Career”
Evolving value proposition to agents as they Evolving stages in the AXA Career
“move up the ladder” Other AXA
professional Training &
agents Professional Executive Delegate General
Supported by proximity management, strong (Outside of ‘AXA Career’)
Development
product programmes (“Motor 2012”) and
marketing # agents 1 069 918 627 311 302 129
Training for L&S with tested results
Revenues / 257 97 316 457 932 2 091
Succession planning agent (€k)
Superior agent productivity Visible high street presence
Revenues by agents
€ k, 2007
>350
170
AXA Market Average “Delta offices” AXA boutiques
2007: 150 new high street ‘stores’
Source: Spanish Association of Insurance Companies In total, more than 1,000 high street AXA ‘stores’
AXA Mediterranean and Latin American Region – May 27, 2008 – 39
All 4,000 Spanish brokers work with AXA on a segmented basis
AXA Spain is a recognised referent for Spanish brokers
Focused on maintaining and developing long term relationships
Specific value proposition for each broker segment
Adapted products and services: flexibility, speed and quality of service
Supported by proximity management, strong product programmes (“Motor 2012”) and marketing
Broker segmentation Business rising and more satisfaction
SHARE OF WALLET SHARE OF WALLET Motor revenues Non-Motor revenues
WITH AXA 30% €m 493 €m
+6%
+10% 444
> € 3m
4 3 7 CAGR
CAGR
BUSINESS VOLUME
368
€ 1m-€ 3m
2005 2007 2005 2007
Broker satisfaction index (Distributor Scope)
2006 64
10% >5%
CAGR CAGR
2.7
13.8
2007 2012
2007 2012
Underlying Earnings(1)
€m
>15%
CAGR
213
2007 2012
(1) Group share. Underlying earnings exclude holdings
AXA Mediterranean and Latin American Region – May 27, 2008 – 48
Agenda
1 Overview of AXA Mediterranean and Latin American Region
Jean Raymond Abat – CEO, AXA Mediterranean and Latin American Region
2 Questions and Answers
3 AXA in Spain
Javier de Agustin – CEO, AXA Seguros
4 AXA MPS in Italy
Frédéric de Courtois – CEO, AXA MPS
5 AXA in Turkey
Cemal Ererdi – CEO, AXA Turkey
6 Conclusion
Jean Raymond Abat – CEO, AXA Mediterranean and Latin American Region
7 Breakout sessions
AXA Mediterranean and Latin America Region – May 27, 2008 – 49
MPS: the 3rd largest Italian bank
Innovator by tradition
1472: World’s oldest bank
1989: Pioneer in bancassurance
Reference shareholder
Fondazione MPS (58.6% of voting capital)
Focus on
Retail banking, corporate and private
banking, wealth management
Including
2007 Stand alone
Antonveneta
Consolidator on the market Branches ~2,000 ~3,000
o/w in Northern Italy 30% 43%
Ongoing acquisition of Banca Antonveneta Market share 6% 9%
#3 banking group in Italy Customers (m) ~4.8 ~6.4
Market share in excess of 9% SME customers ~50,000 ~80,000
AXA Mediterranean and Latin American Region – May 27, 2008 – 50
A key player in the Italian bancassurance
Until 2005, a growth story
First movers in bancassurance in Italy
CAGR 2000-2005: +17% versus +13% for the market, with two main product ranges:
Index-linked (4 to 6 years products)
General account products for individuals and corporations
In 2006, unit-linked share in GWP was around 8%
Limited P&C and protection business
Insurance companies considered as pure “product factories”
2006 – 2007 : Discontinuity phase
Negative trend in bancassurance channel in Italy
New production CAGR 2005-2007: -7.3%…
Change in economic and regulatory environment (i.e. interest rates, Basel II) …
…triggering the need to change and to adopt a new strategy for MPS and AXA MPS…
19 October 2007: AXA MPS strategic partnership
AXA Mediterranean and Latin American Region – May 27, 2008 – 51
AXA and MPS joined forces
Strong complements and
synergies between AXA and MPS
Common strategy involving L&S, pension funds, P&C
PRODUCTION
50%-50% joint venture, with AXA insurance practices
and management control
Management of insurance companies’ assets by AXA
Joint venture
AXA MPS single provider of open pension funds to AXA AXA MPS
50% 50%
Assicurazioni, and MPS provider of banking products
+
management control
A win-win exclusive agreement
Innovative joint venture allowing AXA to capture the
DISTRIBUTION
value created by the development of franchise / goodwill GRUPPO MPS New third party
distribution
Long-term commitment: 10 years, automatically ~3,000 + Financial advisors
(i.e. banks,
renewable for another 10 years branches(1) Banca Personale /
financial advisors,
AXA Sim
Balanced profit sharing: 45% AXA MPS and 55% MPS affinity groups)
Agreement to be extended to new acquisitions by MPS
(i.e. Antonveneta) applying in particular same purchase
price criteria utilized for the original JV deal
(1) Including Banca Antonveneta
AXA Mediterranean and Latin American Region – May 27, 2008 – 52
A new strategy for growth…
One mission A strong strategic vision
Expand offer in order to satisfy all bank
service models in addition to the
previous focus on the affluent one
Differentiated commercial approach for
“PROTEGGERE IN product type:
OGNI MOMENTO:
UN MESTIERE Face-to-face for advice-based
DA FARE INSIEME”
products
“Together, we will (e.g. General Accounts)
protect our clients Non face-to-face for simple products
at all times” (e.g. P&C, protection)
Become a proactive commercial partner
(e.g. products advice, channel
support, marketing campaigns) and
not just a product factory
AXA Mediterranean and Latin American Region – May 27, 2008 – 53
…based on three levers
Key initiatives
Renew product range in order to cover all clients’
financial protection needs and increase profitability
INNOVATIVE (Oct ‘07 – Mar ‘09)
and
Improve customer service: from the minimum
EFFECTIVE
OFFERING
standard to service guarantees
Improve product mix
Improve performances
Our Strategy:
EXCELLENT
SUPPORT TO THE Enhance P&C, “personal protection” and pension
NETWORK business models
and
DISTRIBUTION Reinforce distribution support by AXA MPS,
CHANNELS dedicated to each service model
EXPANSION
Introduce new HR performance management
HUMAN RESOURCE (e.g. management by objectives, incentive system)
ENGAGEMENT Launch of training plans for managers and middle
managers
AXA Mediterranean and Latin American Region – May 27, 2008 – 54
Focus on a new distribution business model
Focus on distribution model
Building a flexible sales platform
AXA-MPS
directly under-
Face-to-face written
sales of policies
products not
linked to Principally for
banking offer corporate risks
Semi-direct
that require special
sales underwriting
Alternative Classic “Stand- support
Alone” Offer
sale channels
Main channel
linked to the
Preliminary sales
Bundle sales bank phase executed in
the branch office
optional for
Sales and post-
customers Direct from call
sales conducted
centre (outbound)
Automatic by AXA MPS
Direct from the
...
bundle sale Bank Internet site
Distribution
opportunities Through bank
created through flyers / account
sales of a banking statement
Coverage and
product
protection sold Up and running
automatically
AXA Mediterranean and Latin American Region – May 27, 2008 – 55
A strong Ambition
L&S NBV(1) P&C Revenues
€m €m
>20% >20%
CAGR
CAGR
14.0
79
2007 2012
2007 2012
Underlying Earnings(1)
€m
>20%
CAGR
2007 2012
(1) Group share
AXA Mediterranean and Latin American Region – May 27, 2008 – 56
The implementation of our action plan is on track (1/3)
First achievements
4Q 2007 1Q 2008 2Q 2008
New organization
COMPANY Enriched the company with new competencies
GROWTH
P&C system development
Accumulator® (first variable annuity product)
Double Engine (first multi-line product)
SUCCESSFUL
PRODUCT Direct marketing initiative: credit protection insurance
LAUNCHES
Double Prestige
(for private banking customers)
AXA MPS Vita Sicura and
Patrimonio Sicuro (Family Clients)
AXA Mediterranean and Latin American Region – May 27, 2008 – 57
The implementation of our action plan is on track (2/3)
Within the new offer…
AXA MPS Accumulator®
(Investimento e Reddito)
Unit Variable Annuity
Launched in September 2007
APE (1Q08): € 22.0m
AXA MPS Double Engine
Multi-line product (General Account + Unit
Linked), with recurring or single premiums
Launched in December 2007
APE (1Q08): € 18.1m
AXA MPS Double Prestige
General account policy, with single
premium, for private banking customers
Launched in March 2008
AXA MPS Vita Sicura
and Patrimonio Sicuro
Life (death benefit with simple
underwriting) and non-life policies (liability
and legal protection) for families
Launched in May 2008
AXA Mediterranean and Latin American Region – May 27, 2008 – 58
The implementation of our action plan is on track (3/3)
First achievements
4Q 2007 1Q 2008 2Q 2008
Strengthening of the team
dedicated to MPS network and
NEW STRATEGY organized by service model
TO SUPPORT
DISTRIBUTION
Working group to study
the implementation of a
semi-direct model
First review of General Account asset allocation (close
duration GAP), leading to a significant increase of General
ASSET Account returns (from 3.67% in 2006 to 4.45% in 2007)
ALLOCATION
CHANGE
Investment in corporate bonds
AXA Mediterranean and Latin American Region – May 27, 2008 – 59
Significant New Business Value creation and turn-around of net inflows
APE(1) NBV(1)
€m €m
-24%
63 +47% In Q1 2008, shift towards
5.8 higher profitability products,
48
3.9 driven by new offerings:
Accumulator®
Double Engine
Q1 2007 Q1 2008
Q1 2007 Q1 2008
YTD April 2008 APE : -1%
Net inflows
€m
8
Significant improvement in net inflows,
Q1 2007 Q1 2008 driven by lower surrenders, notably due
to better asset management
performance. Q1 2008 surrenders were
50% lower than Q1 2007
+234m
-226
(1) Group share
AXA Mediterranean and Latin American Region – May 27, 2008 – 60
Why AXA MPS should be a growth story
First steps meet our expectations despite difficult market conditions
INTERNAL Full change of products necessary to increase profitability
GROWTH Our proposition is to transform AXA MPS from a product factory to a
full-fledged service company to serve all service models and customer
segments
Antonveneta deal: by 2009, at the latest, expansion to another 1,000
EXTERNAL branches of the distributive network
GROWTH
AXA MPS as a platform for other agreements in Italy
Unique model in the Italian bancassurance market:
long-term partnership sharing the same strategic vision
AXA Mediterranean and Latin American Region – May 27, 2008 – 61
Agenda
1 Overview of AXA Mediterranean and Latin American Region
Jean Raymond Abat – CEO, AXA Mediterranean and Latin American Region
2 Questions and Answers
3 AXA in Spain
Javier de Agustin – CEO, AXA Seguros
4 AXA MPS in Italy
Frédéric de Courtois – CEO, AXA MPS
5 AXA in Turkey
Cemal Ererdi – CEO, AXA Turkey
6 Conclusion
Jean Raymond Abat – CEO, AXA Mediterranean and Latin American Region
7 Breakout sessions
AXA Mediterranean and Latin America Region – May 27, 2008 – 62
Turkey: a fast growing market with strong potential ...
Positive economic trend
2007 Macro economics Over the last 4 years:
Population (m) 71
Strong real GDP growth: +7%
Population aged 20-60 (%) 55%
GDP (€ bn) 476
Inflation maintained below 10%
GDP per capita (€) 6,700
Source: Turkish Statistical Institute
Fast growing market Strong potential
Insurance premiums CAGR 04-07 Insurance premiums
TRY bn 11.0 +5% % of GDP, 2006
6.2
6.8
P&C 3.1 L&S
L&S
+20% 1.4
excl. PPP 1.0 2.0
P&C 0.2
2004 2007 ASEAN Turkey EU15 Turkey ASEAN EU15
2007 insurance premiums: € 6.1bn
Under-penetration in both P&C and L&S business
2007 growth net of inflation: +8%
Source: Association Insurance and Reinsurance Companies Source: Swiss RE Sigma reports on World Insurance 2004-2006
AXA Mediterranean and Latin American Region – May 27, 2008 – 63
... converging to international standards
Moving closer to international standards
2004: New solvency margin (25% of GWP)
Regulatory 2005-2007: Accounting standards closer to IFRS
environment 2007: Update of reserving standards
Acceleration since 2006
Groupama International Purchased majority shares in Basak group
2006 Ergo Purchased majority shares in Isvicre group
Liberty Mutual Purchased Seker Insurance
65% of the Mapfre Purchased majority shares in Genel Group
insurance Eureko Purchased majority shares in Garanti P&C and 15% share
2007 in Garanti PPP
market owned
Aviva 50% joint venture with Ak PPP
by foreign
Zurich Financial Services Zurich Purchased TEB Insurance
companies Aegon Purchased Ankara PPP
2008 AXA Purchase of OYAK participation in AXA OYAK
Allianz Purchase of Koç participation in Koç Allianz
AXA entered the Turkish market in 1994 as one of the first international
groups, cementing a strong position in the sector
AXA Mediterranean and Latin American Region – May 27, 2008 – 64
AXA Turkey: a strong leader in P&C …
#2 in the market
12% market share
P&C Revenues Diversified distribution networks
TRY m
P&C Other
+19% 1,100
2007 5% Tied agents
Partnerships
CAGR 29%
648 26%
Financial 4%
8% 28%
institutions
Brokers Non tied agents
2004 2007
AXA Mediterranean and Latin American Region – May 27, 2008 – 65
… outperforming the market
Top performer in P&C in 2007(1)
+26.1%
+13.7%
Casco (45% of AXA’s revenues)
2007 P&C growth AXA Market Average
+19.6% +10.6%
+15.4% +7.3%
Fire (19% of AXA’s revenues)
AXA Market Average
AXA Market Average +16.5%
+13.7%
Motor TPL (16% of AXA’s revenues)
AXA Market Average
Disciplined P&C growth
Strong profitability focus… … based on segmented underwriting
Combined ratio
Growth in Casco business due to segmented tariff
101.1% -4.1 pts Decrease of exposure in non profitable Motor TPL segments
98.4% Growth in profitable Fire business
97.0%
(SME, Household)
2005 2006 2007
AXA outperformed the market in 2007 with high performance in profitable segments: Casco and Fire
(1) Source Association Insurance and Reinsurance Companies
AXA Mediterranean and Latin American Region – May 27, 2008 – 66
AXA Turkey: a superior growth in the Savings and Credit Life market …
#4 in the market
8% market share
L&S Revenues Distribution networks
TRY m
+10% L&S
CAGR 141 2007
Other
17%
Non tied agents
107
53%
Financial 25%
institutions
5%
2004 2007
Brokers
AXA Mediterranean and Latin American Region – May 27, 2008 – 67
… with a new opportunity in the Private Pension Plan market ?
Small market with PPP business established in 2004
Market insurance premiums (excluding PPP)(1) New opportunities of the growing PPP business
2007 Mainly distributed by banks and FA
No profit recorded since 2004
Life & Savings Funds under management(2) :TRY 4.6bn as of 2007
TRY 1.4bn
13%
87%
Property & Casualty
TRY 9.6bn AXA Turkey is well positioned to take advantage
of arising opportunities for growth and profitability
Main products
Saving products
Credit Life Strong organisation, efficient and profit maker
Mainly distributed by banks
AXA Turkey’s position
Operational platform with banking network
High performance compared to market
8% of the market (#4)
(1) Source: Association Insurance and Reinsurance Companies
(2) Source: Pensions Monitoring System
AXA Mediterranean and Latin American Region – May 27, 2008 – 68
AXA Turkey’s strategy: focus on profitability
2007 ROE twice the market average(1)
16.6%
8.0%
2007 Return on Equity Property & Casualty
19.5% AXA Market Average
10.1%
44.8%
AXA Market Average 21.7%
Life & Savings
AXA Market Average
P&C Underlying earnings(2) L&S Underlying earnings(2)
TRY m TRY m
+54% 33 +84% 9.4
CAGR CAGR
9 1.5
2004 2007 2004 2007
(1) Source: Association Insurance and Reinsurance Companies
(2) Group share
AXA Mediterranean and Latin American Region – May 27, 2008 – 69
Strong productivity supported by successful IT structure
Powerful IT structure Superior productivity
IT system developed in-house; Premium / employee
TRY m
Full system integration based on Oracle, SAS and Net
technologies 2.5
Applications AXA Turkey
IT systems gather all sales
information regarding customers, 2.0
distributors and products 1.5
Operating systems
Data extracted from systems and Market average
displayed in customized web- 1.0
P&C L&S & Health based applications; information 0.5
on a real time basis through the
0.0
same web-based applications
2002 2003 2004 2005 2006 2007
1,005 721 704 616 573 567
Detailed analysis reports Number of
employees
The same systems/databases
Easy to use tools are used by all employees /
distributors, whatever the step in Staff numbers decrease : -44% in 5 years
the value chain, e.g.,
Agents receive CRM Personnel productivity : at TRY 2.2m
information to help them better (€ 1.1m), the ratio premium / employee is 3
monitor their client base times higher than the market average
AXA managers have access to
activity reports on a regular Low enlarged expense ratio(1) : 20.8% (of
basis which 15.5% is commission)
(1) Enlarged expense ratio is a non-Gaap measure. Management uses it as a key indicators of performance.
It is defined as the result of the formula : Expense ratio + (claims handling costs / earned premiums gross of reinsurance)
AXA Mediterranean and Latin American Region – May 27, 2008 – 70
A unique technical know-how generating strong technical results
Underwriting segmentation Positive results
Customised offer
Sole Motor Casco technical profit
Customer Customer Customised maker in 2005 and 2006,
profiling segmentation Offer major profit maker in 2007
Customer's profile is automatically analysed based on their
Technical profit of Motor Casco line
policies, loyalty, profitability, claims frequency and reliability
TRY m, Statutory P&L statement
Customers are then segmented
+36%
By type: personal, commercial, industrial
CAGR
By segment: from 1-star (lower segment) to 5-star (premium 41
segment) 22 12 5
Offering is then customised
Tariff (same whatever the channel is) based on basis tariff and 2005 2006 2007
customer segment
Tailored up-/cross-selling opportunities according to customer
-92
segment
Claims segmentation
Anti-fraud measure -250
Claims scoring
AXA Sector
Supported by strong claims management tools
Source: Association Insurance and Reinsurance Companies
AXA Mediterranean and Latin American Region – May 27, 2008 – 71
We expand through all distribution channels …
Strong agent and brand organisation Developing bancassurance
Growth due to operational platform
İSTANBUL
İstanbul
BAKIRKÖY KADIKÖY
CORPORATE
BLACK SEA
Bancassurance revenues (P&C + L&S)
CENTRAL ANATOLIA TRY m
MARMARA Ankara
+30% 85
65
AEGEAN
SOUTH ANATOLIA
MEDITERRANEAN
1,360 agents, 26 brokers
2006 2007
Profit centre management focused on customer
satisfaction New distribution agreement with banking
Agency scorecard network
Bank contact centre
IT and process are multi-channel compliant HSBC, Fortis, Deniz Bank (Dexia),
Finansbank (NBG), Oyak Bank (ING),
Implementation of AXA Academy in order to T-Bank, Bank Positif, Millennium Bank
improve professionalism and loyalty of agents
AXA Mediterranean and Latin American Region – May 27, 2008 – 72
… and increase our Quality of Service through the improvement of
employee engagement
Staff motivation High Quality of Service
Customer satisfaction
Employee engagement index AXA Turkey had the highest customer
91
satisfaction in the insurance sector for
89
two consecutive years (2006-2007)(1)
87
High Distributor satisfaction
2005 2006 2007
86%
+3 pts
Performance management
83%
Training and development management
Employee and team work activities
2006 2007
(1) Source : Kalder independent survey (180,000 participants)
AXA Mediterranean and Latin American Region – May 27, 2008 – 73
We are confident for the future
Our objective is to continue our “win-win” strategy (growth and profit)
by leveraging our advantages against the competitors.
100% ownership by AXA creates conditions
to increase our presence in some activities, especially in Life.
Leverage Bancassurance especially in Life
Distribution Business with new agreement
Launch a version of Accumulator® adapted to
Offer regulatory environment and customer
behaviour?
New Enter in Private Pension Plan business Our objective :
opportunities Motor TPL and SME markets in medium term
To become #1
with a market share
1Q08 P&C revenues: +13% above 13%
2008 has started
on a positive 1Q08 L&S APE: +14%
note 1Q08 L&S NBV: +53%
AXA Mediterranean and Latin American Region – May 27, 2008 – 74
Agenda
1 Overview of AXA Mediterranean and Latin American Region
Jean Raymond Abat – CEO, AXA Mediterranean and Latin American Region
2 Questions and Answers
3 AXA in Spain
Javier de Agustin – CEO, AXA Seguros
4 AXA MPS in Italy
Frédéric de Courtois – CEO, AXA MPS
5 AXA in Turkey
Cemal Ererdi – CEO, AXA Turkey
6 Conclusion
Jean Raymond Abat – CEO, AXA Mediterranean and Latin American Region
7 Breakout sessions
AXA Mediterranean and Latin America Region – May 27, 2008 – 75
AXA Mediterranean and Latin American Region: Key takeaways
A growth story fuelled by successful
An efficient regional platform
acquisitions and sustained organic growth
€ bn
+33% 11
Technical /
CAGR Product Distribution Quality
4 Investment Productivity
Innovation Management of Service
5 Margins
7
2004 2007 Marketing
Pro Forma
Revenues reported by AXA Human Resources
AXA MPS, AXA Gulf Region and ING Seguros in Mexico(1)
An increasing contributor to AXA’s Ambition 2012
€m
Contribution to AXA’s Underlying Earnings(2)
6% 8% >10%
2004 2007 2012
(1) Mexico closing remains subject to regulatory authorities
(2) Group share, excluding holdings
AXA Mediterranean and Latin American Region – May 27, 2008 – 76