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CNP 2003 Resultats

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					CNP Assurances
       France's leading
       personal insurer

              Activity
    Low interest rates
      The challenges for a
      life insurer in France
                  June 2005




                                      1
             CNP Assurances - June 2005
                                                   Overview



CNP Assurances : activity


Low interest rates
     The challenge for an ALM specialist
     Maintaining the margins
     Investment strategy


Other scenarios : rising interest rates, falling equity
    markets



                                                                            2
                                                   CNP Assurances - June 2005
                                                                       CNP Assurances : activity
                                                 French personal insurance market
                                                                               117.0
                                                       103.2
      In €bn                       95.6



                                              +8%                  + 13 %


                                  FY 02                FY 03                   FY 04

                1st quarter 2005 : savings market +12 % *
                     In 2004 : savings market +13 %
                     Growth driven by:
                          – Transfers (from Livret A passbook savings accounts, bank-type PEPs)
                          – Unit-linked market up 35% in 2004, 25% in 1st quarter 2005
                          – French pension reform : momentum around new products in 2004
                          – “Sarkozy” measures (employee-savings and donations)

                Outlook for 2005: savings market between +6% and +10% **
                                                                                                                3
                                                                                       CNP Assurances - June 2005
* FFSA estimates April.2005 and ** May 2005
                                                         CNP Assurances : activity
                                   1st quarter 2005 premium income
   Since 1 January 2005 : changeover of CNP accounts from French
    GAAP to IFRS
      Consequence : decrease of €151m in the group premium income for
       Q1, because:
         – On non-discretionary with-profits savings contracts, only the
           commissions charged on premiums are taken into account, vs. the
           whole premiums previously (decrease: €130.2m)
         – Some products accounted under IAS 18 are not taken into
           account anymore (decrease: €20.9m)

   Acquisition of Fineco Vita in Italy
      Closing : 17 February 2005
      Fineco Vita consolidated since 18 Feb 2005 (€468.5m under IFRS)
      Premium income since 1 January 2005
         – €650.9m (IFRS), €678.9m (French GAAP)
         – In line with the target for 2005 (€2.8bn in French GAAP vs. €1.9bn in
           2004)                                                                                 4
                                                                        CNP Assurances - June 2005
                                                                                CNP Assurances : activity
         1st quarter 2005 premium income by business segment
                                                                                                              In €m
              Under IFRS                           Q1                  Change /                  Like-for-like
                                                  2005                 Q1 2004                     change *
   Savings                                     6,259.8                + 18.5 %                        + 9.7 %
   Pensions                                       359.2               + 22.0 %                      + 20.3 %
   Personal risk                                  489.2               + 31.5 %                      + 31.3 %
   Loan insurance                                 435.0                 + 7.3 %                       + 7.2 %
   Health insurance                                69.3               + 21.2 %                      + 21.2 %
   Property & Casualty                             57.4               + 15.4 %                      + 14.5 %

   Total                                     7,669.9                + 18.7 %                       + 11.4 %
* Like-for-like change : at constant exchange rate and excluding the acquisition of Fineco Vita (consolidated since 18.02.05)

         The changeover from French GAAP to IFRS in Q1 2005 leads to a
          decrease of €151m in the group premium income
             €151m split by business segment: savings (€43.9m), pensions (€90.1m), loan
              insurance (€13.6m) and P&C (€3.4m)
             €151m split by country: France (€98.6m), Brazil (€48.4m), Italy (€3.9m)                                         5
                                                                                                     CNP Assurances - June 2005
                                                                    CNP Assurances : activity
                                                             New pension products

Total French market in 2004 : 1,3 million PERPs sold, €500m premium income*
       1st quarter 2005 : 164 000 PERPs sold, €160m income **
CNP at end-Dec. 2004
       New pension products and PERP offerings launched by CNP and its partner
        networks : 492,000 contracts, €260m premium income
              – PERP sold by the networks (incl. Prefon sold by French Post Office) : 308,000
                contracts, €85m premium income
              – 2/3 of new clients do not have life insurance yet
              – lower-than-expected subscriber age : around 40
              – average regular monthly payment : around €50
       Outlook for 2005
              – Individual products : increase the number of contracts and raise premium levels
                    – CNP at 1st quarter 2005: 69,000 new pension products (€82m), of which
                      33,000 PERP (€31m)
              – Group products : offer a comprehensive range (article 83, PERE and PERCO)
                                                                                                         6
                                                                                CNP Assurances - June 2005
* FFSA estimate, Jan. 2005 and ** April 2005
                                                           CNP Assurances : activity
                                                          Unit-linked contracts
                                         stable                        - 8%
                                                         CNP
     Unit-linked sales                    2001-2004               Q1 2005

                                        - 14%          French        + 25%
                                                       market
   Lower growth potential
         – Success of the unit-linked product « Nuances 3D » in the Savings Banks,
           launched at end-2001
         – 2002 : unit-linked sales at CNP : + 1 % vs. - 32 % on the French market
      Caisses d’épargne at the level of the market, La Poste on a recovery pace


   Developing unit-linked business is however a target for CNP
      Together with the partner networks:
         – Increase awareness of the networks and the clients (communication campaigns)
         – Adapt the unit-linked offer (combined products with variable unit-linked layer
           depending on the age and situation of the policyholder, etc.)
      Create renewed business momentum in 2005, but in the extent of the
      nature of CNP’s client base                                                     7
                                                             CNP Assurances - June 2005
                                                       CNP Assurances : activity
      Shift to IFRS : impact on CNP’s opening balance sheet
French GAAP shareholders’ equity

        Unrealised gains recognised in equity

        Impact of tax differential (short/long-term)

        Measurement of employee benefits according to IAS 19

        Shift from goodwill in euros to goodwill in local currency


        Impact of amortised cost on properties

        Treasury shares

                                                       IFRS shareholders’ equity

       Increase in shareholders’ equity                                                      8
                                                                     CNP Assurances - June 2005
                                                       CNP Assurances : activity
                      IFRS profit & loss account : new captions
Compared to French GAAP:


        Positive impact                             Negative impact
                                                    Goodwill impairment
      No goodwill amortisation
                                                           charge

                   Change in value of trading securities

                                    LAT gap

                  Change in employee benefit obligations

                      Valuation difference, properties
                             (depreciation rates)

                                 Tax differential
                           (short-term / long-term)

                                                                                            9
                                                                   CNP Assurances - June 2005
                                                   Overview



CNP Assurances : activity


Low interest rates
     The challenge for an ALM specialist
     Maintaining the margins
     Investment policy


Other scenarios : rising interest rates, falling equity
    markets



                                                                           10
                                                   CNP Assurances - June 2005
                     Low interest rates : the challenge for an ALM specialist
                                Role of ALM at CNP Assurances


Positioning of the ALM function
   Integrated multi-disciplinary team: ALM specialists working with
    finance (assets), actuary (liabilities), IT (models)

   Segregated from the Asset Management function
      Day to day asset management considerations never take precedence
       over ALM considerations: the challenges and timeframes are not the
       same

   ALM directly influences
      Product design and contract wording, from the outset
      Yield policies (policyholder dividends)
      Technical reserves and provisions (policyholders' surplus reserve,
       unrealised gains, etc.)
      Asset allocation
      Hedging strategies (derivatives, etc.)                                           11
                                                                CNP Assurances - June 2005
                      Low interest rates : the challenge for an ALM specialist
                                 Role of ALM at CNP Assurances


Segregated funds
   50 asset portfolios representing different commitment profiles
    (duration, yield guarantee, etc.)

   Benefits
      more accurate asset/liability analyses and more focused investment
       strategies
      Improved monitoring of margins and risks, by type of contract
      Highly ethical approach to allocating investment income

   Assets/liabilities analysed at 3 levels
      basic level: the segregated fund (50 portfolios)
      company level (10 insurance companies)
      consolidated level: CNP Group

                                                                                         12
                                                                 CNP Assurances - June 2005
                      Low interest rates : the challenge for an ALM specialist
                                 Role of ALM at CNP Assurances


Asset/liability simulations : for each segregated fund

   Detailed profiles of liabilities and related assets
   Financial market scenarios
   Policyholder behaviour
   Insurer behaviour (policyholder yields and investment strategy)




                                                                                         13
                                                                 CNP Assurances - June 2005
                     Low interest rates : the challenge for an ALM specialist
                           Risk of a sharp drop in interest rates
                                          4,30%

  Interest rates are still low,
      and have declined                                 3,70%
                                                                      3,61%
    since 1 January 2005
                                                                                       3,15%

                                   30 June 2004   31 Dec 2004   31 March 2005 10 June 2005



Risk: asset yield too low to cover yield commitments given to
   the insured
     In a period of falling interest rates, asset yields decline due to
      new investments at the lower rates
     Yield commitments given to the insured may be higher
     The interest spread can represent a heavy and escalating
      burden (if contract allows for top-up premiums with the same
      guaranteed yield)                                                                         14
                                                                        CNP Assurances - June 2005
                                         Low interest rates : the challenge for an ALM specialist
                                       Breakdown of liabilities by type of contract
                                                At 31 December                             At 31 December
                                                   2004 (€m)           Breakdown %            1997 (€m)           Breakdown %

    Unit-linked contracts sssssdd16,066.2                               9.6 %                  1,631                    2.0 %
  Contracts offering guaranteed
   rate of return (gr)
   0 < gr < 60% TME (1)                           71,112.3             42.5 %                 27,516.3              33.3 %
  Contracts offering guaranteed
   rate of return (gr) = 0%                       42,977.9             25.7 %                   4,330.3                  5.2 %
  Contracts offering a higher
   variable rate of return                          2,929.2              1.8 %                  3,475.8                  4.2 %
  Contracts offering a higher
   fixed rate of return                             7,368.4              4.4 %                28,355.5              34.3 %
  Guaranteed rate contracts
   including dividends                            \2,468.3              1.5 %                  3,277.7               4.0 %
  Others (2)                                     24,346.6             14.6 %                 13,964.3              16.9 %
     Total                                    167,269.0             100.0 %                  82,551.1           100.0 %
(1) TME : average state bond yield (2) including personal risk, loan insurance, annuities
    Between 1997 and 2004, CNP's exposure to interest rate risks on its contracts declined significantly, reflecting:
        Growth in unit-linked business
        A sharp decline in the proportion of contracts offering a higher fixed rate of return
        The increased proportion of contracts offering a guaranteed rate of return not exceeding 60% of the TME
         CNP practice: rate of return guaranteed for 8 or 10 years only, no guarantee beyond this period
    These liabilities are matched by assets with similar interest rate profiles and the commitments                              15
     are adequately covered by technical reserves                                                         CNP Assurances - June 2005
                             Low interest rates : the challenge for an ALM specialist
                           Highly efficient asset/liability management
                                            Managing sharply falling interest rates

       Asset yield projected over 10 years with income reinvested in 1% or
        2% fixed rate bonds from 2006, assuming flat equities prices
       In force business at end-2004, surrenders and payments taken into account



4,50%                                                        CNP Group on a 100% basis
4,00%
3,50%
3,00%
2,50%                                                                     Asset yield with income:

2,00%                                                                         ..reinvested at 2%

1,50%                                                                         ..reinvested at 1%
1,00%
0,50%                                                                         Guaranteed yield
0,00%
        2005   2006   2007 2008   2009   2010   2011   2012 2013   2014   2015                           16
                                                                                 CNP Assurances - June 2005
                                                   Overview



CNP Assurances : activity


Low interest rates
     The challenge for an ALM specialist
     Maintaining the margins
     Investment policy


Other scenarios : rising interest rates, falling equity
    markets



                                                                           17
                                                   CNP Assurances - June 2005
                                         Low interest rates : maintaining the margins
                             Life insurance products marketed in France

     Policyholders’ dividends : French regulations
        Allocated to policyholders :
                                 Guaranteed rate
                                 - between 0% and 60% of
                                 the TME*
                                 + Dividends                        = at least 85% of
                                 - discretionary bonus           net investment income
                                                                       for the year
                                 - decided by the insurer
                                 at year-end




        Distribution of the dividends may be deferred for a maximum of 8
         years
           Deferred dividends are accrued in the balance sheet under
            "Policyholders' surplus reserve" (PSR)
                                                                                                18
                                                                        CNP Assurances - June 2005
* average state bond yield
                                                  Low interest rates : maintaining the margins
                                                         Adjusting policyholder yields
                                          Non-unit-linked savings and pension products

              Note
                 Profitability depends on the ability to deduct a satisfactory management loading
                  after crediting rates and policyholder dividends
                 Issue: fall in interest rates
                         time lag before the fall is reflected in policyholder return
                 Mechanisms
                                                                                        PSR*


                                           Investment income
               Management                                                       Crediting rate and
                 loading                                Realised              policyholder dividends
                                        Coupon rate     gains on
                                                         equities

             In 2004
                Return on assets: 4.9%
                Crediting rate and policyholder dividends for main products:
                 4%, vs 4.1% in 2003 and 4.5% in 2002
                                                                                                                19
                                                                                        CNP Assurances - June 2005
* Policyholders’ surplus reserve
                                                         Low interest rates : maintaining the margins
                                                                              Components of margin
        Example of a typical non-unit-linked savings product
                                                           % managed assets

                                                                          2002                   2003            2004
   Premium loading                                                        0.38 %                 0.38 %          0.36 %
      Investment income                                                   4.7 %                  4.90 %          4.80 %
      Yield paid to policyholders                                         -4.5 %                 -4.10 %         -4.00 %
      PSR* write-off                                                      0.6 %
   Management loading **                                                  0.80 %                 0.80 %          0.80 %
       Total loading                                                      1.18 %                 1.18 %          1.16 %

   Commissions                                                            -0.63 %                -0.63 %         -0.62 %
   Costs                                                                  -0.24 %                -0.23 %         -0.21 %
      Margin on insurance operations                                      0.31 %                 0.32 %          0.33 %

                    Margins preserved in 2004 despite lower interest rates
                                                                                                                             20
                                                                                                     CNP Assurances - June 2005
* PSR: polycholders’ surplus reserve   ** and other revenues, including capitalisation reserve
                                                   Overview



CNP Assurances : activity


Low interest rates
     The challenge for an ALM specialist
     Maintaining the margins
     Investment policy


Other scenarios : rising interest rates, falling equity
    markets



                                                                           21
                                                   CNP Assurances - June 2005
                                                      Low interest rates : investment policy
                              Asset values boosted by market recovery
                                                                                        In €m
                      Unrealised               Unrealised
                        gains                    gains          Book value       Breakdown
                     31 Dec. 2003             31 Dec. 2004     31 Dec. 2004    excl. unit-linked


    Property                978                   1,277            4,218               2.3%

    Bonds                 6,370                   9,184          132,723             84.9%

    Equities              1,275                   2,316           34,053             12.8%
                                                                                                 (1)
    Total               8,623                  12,777          170,994              100%
(1) Assets excluding unit-linked: €154,929m


   Very high quality assets
         Bonds: more than 98% rated at least A (including 58.9% AAA)
          and less than 0.1% non-investment grade (excluding Brazil)
                                                                                                       22
                                                                               CNP Assurances - June 2005
                     Low interest rates : the challenge for an ALM specialist
                                                             CNP policy


   In response to rock-bottom interest rates
      Limitation of the maturities of new investments
         – In the extent of the assets and liabilities management :
           average maturity of assets = 6.72 years (fixed rates > 1 year)


      Increased hedging to cover the risk of interest rate hike in the
       long term

      Significant proportion of the portfolio invested in :
         – floating rate or indexed bonds (10% of the total bond portfolio)
         – Structured bonds with floating components




                                                                                        23
                                                                CNP Assurances - June 2005
                                   Low interest rates : investment policy
                                  Quality of assets (end-2004)
   Bond portfolios (excluding Brazil)
      By rating:
         – AAA (58.9%), AA (27.5%), A (11.7%)
         – BBB (1.7%), non-investment grade (0.08%)
      By type:
         – Government (G7, EU): 44%, Other: 56%
   Life portfolios: 97.6%
    Non-Life portfolios: 2.4% (o/w property 8%, equities 32%,
    bonds 60%)
   Private equity funds
      3.5% of equity portfolio excluding unit-linked (book value)
      Investments in nearly 70 funds
      Euro (79%), Dollar (19%), Sterling (2%)
   Hedge funds
      Book value: €636.3m in 2004, vs €261.0m in 2003                              24
                                                            CNP Assurances - June 2005
                                                   Overview



CNP Assurances : activity


Low interest rates
     The challenge for an ALM specialist
     Maintaining the margins
     Investment policy


Other scenarios : rising interest rates, falling equity
    markets



                                                                           25
                                                   CNP Assurances - June 2005
                                                               Other scenarios
                              Risk of a sharp rise in interest rates



Risk: underperforming assets (paying interest at below current market
   rates)


   Possible consequences
      Policyholders may be tempted to invest in new, higher yield products
          – lower premium income from the products concerned
      High surrender rates
      Sale of assets at a loss




                                                                                          26
                                                                  CNP Assurances - June 2005
                                                             Other scenarios
                             Risk of a sharp rise in interest rates


Policyholder behaviour
   Incentive to surrender the contract
      Contract yield below current market rates

   Incentives to hold on to the contract
      Fees
      Income tax and inheritance tax (payments made before the age of 70)

   Other factor (impact difficult to quantify)
      Policyholder inertia (varies depending on age, income level, etc.)




                                                                                        27
                                                                CNP Assurances - June 2005
                                                                    Other scenarios
                                 Risk of a sharp rise in interest rates

   Rising interest rates : reduce gains on the bond portfolio, but improve the yield
    of new investments and facilitate the deduction of margins from policyholder
    portfolios
         Rising interest rates will benefit a life insurer such as CNP
           Assurances provided that:
           – rates increase at a measured pace
           – the asset portfolio has the right profile

CNP strategy
 Fixed rate bond portfolio, maturities kept short enough to allow
  yields to adjust to rising interest rates
   A significant proportion of the portfolio invested in floating rate or
    indexed bonds (10% of the total bond portfolio)
   Interest rate hedging programme
       Medium/long-term caps (5 to 10 years)
       Opportunistic buying policy (heavy buying when rates are low: early 1999,
        early 2003)
       Hedged notional (Dec 2004): €19bn                                                       28
                                                                        CNP Assurances - June 2005
                                                             Other scenarios
                                                               Equity risk

Advantages/disadvantages of investing in equities
   Total yield (dividends + appreciation) over the long term
    significantly higher than for bonds
      Risk premium: moderate assumption of 2%/year on average, arguing
       in favour of a diversification into equities


   High volatility incompatible with the insurer's commitments
      Capital guarantee (except for unit-linked products) and yield
       guarantee
      Surrender option


   Risk of capital losses, affecting the insurer's shareholders' equity



                                                                                        29
                                                                CNP Assurances - June 2005
                                                             Other scenarios
                                                               Equity risk

Assessment factors
   Accounting and insurance rules governing the treatment of the
    effects of falling prices

   Contract characteristics
      Time frame, surrender option
      Is the yield guaranteed or can it be adjusted?

   Reserves available to offset the effects of falling prices
      Level of unrealised gains
      Level of reserves available to smooth the effects (policyholders'
       surplus reserves)


   In 2002, CNP financed the entire amount of its provisions through
    transfers from the policyholders' surplus reserve

                                                                                         30
                                                                 CNP Assurances - June 2005
                                                 Other scenarios
                                                  Equity risk


Weighting of equities in CNP portfolios

Types of portfolios                          Equities weighting

Proprietary portfolio                             35 – 40 %
Pensions portfolios                               25 – 30 %
Savings portfolios (low guaranteed yield)         10 – 15 %
Savings portfolios (high guaranteed yield)        0–5%



CNP Group average                                 12.8 %



                                                                            31
                                                    CNP Assurances - June 2005
                                                             CNP Assurances : an ALM expert

        CNP's share price held firm throughout the stock market crisis,
         significantly outperforming other European insurance stocks

CNP Assurances share price in euros: 8 June 2001 – 8 June 2005
60
                                                                                                                  CNP Assurances
55
                                                                                                                  June 2005
50                                                                                                                + 44 %
45

40

35
                                                                                                                  CAC 40 (Fr)
30                                                                                                                - 23 %
25
                                                                                                                   DJ Insurance
20                                                                                                                 - 49 %
15

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                                                                                                              CNP Assurances - June 2005
                                               Financial Calendar




   11 May 2005:   First-quarter 2005 premium income under IFRS

   7 June:        Annual General Meeting

   10 August:     Second-quarter 2005 premium income under IFRS

   20 September: First-half 2005 results under IFRS

   8 November:    Third-quarter 2005 premium income under IFRS




                                                                                33
                                                        CNP Assurances - June 2005
                                                                         Disclaimer


“Some of the statements contained in this document may be forward-looking statements
referring to projections, future events, trends or objectives which, by their very nature,
involve inherent risks and uncertainties. Actual results could differ materially from those
currently anticipated in such statements by reason of factors such as changes in general
economic conditions and conditions in the financial markets, legal or regulatory decisions
or changes, changes in the frequency and amount of insured claims, particularly as a result
of changes in mortality and morbidity rates, changes in surrender rates, interest rates,
foreign exchange rates, the competitive environment, the policies of foreign central banks
or governments, legal proceedings,the effects of acquisitions and the integration of newly-
acquired businesses, and general factors affecting competition.
Further information regarding factors which may cause results to differ materially from those
projected in forward looking statements is included in CNP Assurances’ filings with
the Autorité des Marchés Financiers. CNP Assurances does not undertake to update any
forward-looking statements presented herein to take into account any new information,
future event or other factors.”


“The English language version of this document is a free translation from the original, which
was prepared in French. All possible care has been taken to ensure that the translation is
an accurate representation of the original. However, in all matters of interpretation
of information, views or opinions expressed therein, the original language version
of the document in French takes precedence over the translation.”

                                                                                                   34
                                                                           CNP Assurances - June 2005
         Investor Relations Team
             Brigitte MOLKHOU
         brigitte.molkhou@cnp.fr
                +33 1 42 18 77 27


                CNP Assurances
            4, place Raoul Dautry
           75716 Paris Cedex 15
                     infofi@cnp.fr


               www.cnp.fr/eng
          Financial Information
Receive CNP Financial Newsletter




                                            35
                    CNP Assurances - June 2005

				
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