ag insurance road show presentation march 2015€¦ · ag insurance – road show presentation...
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1
AG Insurance – Road Show Presentation
March 2015
2
Disclaimer
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The information and the opinions in this document have been prepared by the Company solely for use at a meeting regarding a proposed offering (the “Offering”)
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This document is an advertisement for the purposes of the applicable measures implementing Directive 2003/71/EC, as amended. It does not constitute or form
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any contract or commitment or investment decision whatsoever. Any purchase of the Notes in the Offering should be made solely on the basis of the prospectus
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means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State),
and includes any relevant implementing measure in each Relevant Member State and the expression 2010 PD Amending Directive means Directive 2010/73/EU.
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This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) other persons to whom it may lawfully be
communicated.
3
Disclaimer
The distribution of this document and other information in connection with the Offering in certain jurisdictions may be restricted by law. This document and any
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any such jurisdiction.
This document contains certain "forward-looking statements" with respect to the Group's financial condition, results of operations and business and certain of the
Group's plans and objectives with respect to these matters. Forward-looking statements are sometimes, but not always, identified by their use of a date in the
future or such words as "anticipates", "aims", “believes", “continue”, "could", "due", "estimates“, "expects", "goal", “intends", "may", “plans", “project”, “seeks”,
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looking statements. These factors include, but are not limited to, changes in the economies and markets in which the Group operates; changes in the regulatory
and competition frameworks in which the Group operates; the impact of legal or other proceedings against or which affect the Group; and changes in interest and
exchange rates. All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to the Company or any
other member of the Group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. The Company may or may
not update these forward-looking statements.
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This document is the sole responsibility of the Company and has not been approved by any regulatory authority. The information contained in this document has
not been independently verified. The information and opinions contained in this document are provided as at the date of this document and are subject to change
without notice.
Without prejudice to the above, to the fullest extent permitted by applicable law and regulation:
(a) neither the Company nor any other member of the Group or persons acting on their behalf shall otherwise have any liability whatsoever for loss, howsoever
arising, directly or indirectly, from use of the information contained within this document; and
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the accuracy or completeness of the information contained within this document.
Without prejudice to the above, no reliance may be placed upon the information contained within this document, including to the extent that such information is
subsequently updated by or on behalf of the Company or any member of the Group. Past performance of securities of the Group cannot be relied upon as a
guide to the future performance of any securities of the Group.
No representation, warranty or undertaking, expressed or implied, is or will be made by any investment bank involved with the Offering (each such investment
bank, a “Manager”) or their respective affiliates, advisors or representatives or any other person as to, and no reliance should be placed on, the truth, fairness,
accuracy, completeness or correctness of the information or the opinions contained herein (and whether any information has been omitted from this document).
Each Manager and each of their respective directors, officers, employees, affiliates, advisors and representatives disclaims all liability whatsoever (in negligence
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and will not regard any other person as their respective clients in relation to such matters and will not be responsible to any other person for providing the
protections afforded to their respective clients, or for providing advice in relation to such matters.
4
Agenda
Overview of AG Insurance
Key Investment Highlights
Ratings and peers
Proposed Transaction
Concluding Remarks and Q&A
Appendix
5
OVERVIEW OF AG
INSURANCE
Section 1
6
AG Insurance – strong ownership structure
Ageas AG Insurance core activity for Ageas. Main contributor in terms of
balance sheet (54%) and Insurance net result (53%).
Net cash position (general account) at EUR 1,6 bio and a Group
Solvency ratio amounting to 210%
Important progress in solving legacies and reducing complexity
Public company listed on Euronext Brussels
Rating: Baa3/BBB-/BBB+
BNP Paribas/BNP Paribas Fortis AG Insurance is market leader in Belgium, one of the 4 core
markets of BNPP (France, Italy, Belgium and Luxembourg)
Complementary activities (complete range of insurance products
proposed by AG Insurance in Belgium) with bank activities of BNP
Paribas thanks to the distribution agreement in place
Tight cooperation between Ageas and BNPP Cardif
BNP Paribas Fortis is100% owned by BNP Paribas (A2/A+/A+),
public company listed on Euronext Paris
#1 life and #2 non life
in Belgium
Rated A-(Positive) /
A(stable)
75% 25%
New 32NC12
issue
Legal structure Significance of AG Insurance in Ageas (2014)
35%
65%
AG Insurance Rest of Ageas group
53%
47%
54%
46%
Infl
ow
In
su
ran
ce n
et
resu
lt
To
tal assets
7
KEY INVESTMENT
HIGHLIGHTS
Section 2
8
Key Investment Highlights
Well diversified and conservative investment
portfolio
• Conservative asset mix with 77% in
bonds, of which 85% rated A or higher
(market value)
Profitable growth in all P&C product lines
• Growth rate of inflows between 2013 and
2014 of 2.1%
• Combined ratio up due to extreme
weather events
Solid Financial Position
• Strong Solvency ratio: 210%* in 2014
(Solvency I)
Undisputed market leadership position in Belgium
• Number 1 in life, number 2 in P&C
• Twice the market size of the closest
competitor in life
Successful navigation of low interest rate environment
• Gradual lowering of guaranteed rates for
Savings products
• Liabilities & fixed income portfolio follow
similar run off pattern
Comprehensive product offering, multi-channel distribution & strategy
• Full life and non-life product range
covering all market segments
• Clearly defined strategy
Stable political and improving macro-economic outlook for
Belgium
• Stable political environment and growth
of GDP above Eurozone
• Low interest rate on government bonds
* Before dividend distribution of 2014, the Solvency I ratio is 189% as disclosed by Ageas.
9
-6,0
-4,0
-2,0
0,0
2,0
4,0
6,0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Stable political and improving macro-economic outlook for Belgium (1/2)
Source: Bloomberg; Europe based on European average consisting of European Union countries excluding Luxembourg
► S&P improved the sovereign credit outlook for Belgium from negative to stable in February 2014
► In February 2015 after accessing the fiscal policy of Belgium the European Commission concluded that opening Extensive Deficit Procedures are not warranted
Sovereign CDS spread performance (5yr, in bps)
Growth of the GDP above Eurozone
Source: Eurostat
Europe Belgium
0
20
40
60
80
100
120
140
160
180
200
jan/13 apr/13 jul/13 okt/13 dec/13 apr/14 jul/14 sep/14 dec/14
1758397-001
Europe Belgium France Germany United Kingdom Netherlands
10
High level of Savings Individuals net wealth compensates public and private deficit
848,7 879 901
-355,4 -355,7 -398
-287,7 -346,8 -369
-1000
-800
-600
-400
-200
0
200
400
600
800
1000 2012 2013 2014
Stable political and improving macro-economic outlook for Belgium (2/2)
Stable political environment
Non-financial
Corporations
Individuals
General
Government
Net Financial
Wealth
Source: National Bank Belgium
11
Undisputed market leadership position in Belgium
Market leading position
Non
-life
insu
ran
ce
Life
insu
ran
ce 24,9%
12,1% 9,0% 8,6% 8,0%
5,4% 4,7% 2,2%
25,1%
AG Insurance AXA KBC Ethias Belgius Allianz P&V Baloise Other
Life: #1 in Belgium (% Gross inflow)
16,3% 18,7%
8,3% 11,3%
4,8% 5,3% 6,2% 6,8%
22,3%
AG Insurance AXA KBC Ethias Belgius Allianz P&V Baloise Other
Non-life: #2 in Belgium (% Gross inflow)
Source: Assuralia 2013
21,4%
14,8%
8,7% 9,7% 6,7% 5,4% 5,3% 4,0%
24,0%
AG Insurance AXA KBC Ethias Belfius Allianz P&V Baloise Other
Total: #1 in Belgium (% Gross inflow)
To
tal in
su
ran
ce
12
Net profit attributable to shareholders (in EUR mio)
432,6 446,6
522,2
2012 2013 2014
Solid Financial Position(1/2)
Gross Inflow (in EUR mio)
Embedded Value
5.127 4.101 3.963
1.759
1.855 1.893
2012 2013 2014
Non-Life
Life
89
73
2013 2014
VANB
5.393 5.659
2013 2014
Embedded Value
13
2.450 2.516
4.716
5.277
2013 2014
Required MinimumMargin
Available Solvency
Solid Financial Position (2/2)
Solvency I ratio*
210%
192%
2014 leverage (Subordinated liabilities as % of Total available capital) : 23%
EUR mio EUR mio (as of 31 December) 2013 2014
Shareholders’ equity 4.902,0 6.251,4
Revaluation of AFS & HTM debt securities,
10% of equity securities, net of tax, net of
shadow
(1.722,2) (2.693,1)
Revaluation of real estate to fair value (90%),
net of tax 751.9 789,7
Other* (392,3) (303,8)
Subordinated liabilities 1.177,1 1.233,1
Total available capital 4.716,5 5.277,3
Available capital
* Non-controlling interests, intangible assets equalisation reserve and other
Figures in EUR mio Impact on income statement Impact on Shareholders’ equity Impact on Solvency I ratio
Interest rate risk – down 22,7 1%-pts
Interest rate risk - up (89,2) (4)%-pts
Equity securities market risk (190,6) (558,0) (22)%-pts
Real estate risk (207,1) (273,4) (11)%-pts
Spread risk (6,7) (620,7) (25)%-pts
The table shows the (net of income tax) impact, as determined at year-end, of stress testing on the income statement and on shareholders’ equity using scenarios that may occur
once every 30 years:
Interest rates: decrease of around 3 bps for the very short end of the yield curve (one year), 10 bps on the short end of the yield curve (up to ten years) and 40 bps on the long end;
increase of 75 bps.
Equity securities: decrease in fair value with 33% (non-listed equities with 40%).
Real estate: decrease in fair value with 18% (33% for indirect investments).
Spread risk: factor times duration. The factor ranges from 70 bps for AAA to almost 2 % for BBB corporates.
Capital sensitivity
* Without the expected dividend of 2014, the Solvency I ratio is 189% as disclosed by Ageas.
14
Comprehensive product offering, multi-channel distribution & strategy (1/2)
Life insurance Non-life insurance
Savings
• Universal
Life
• Fiscal
Products
Traditional
• Primarily
Death
Cover
Insurance
Unit Linked Group Life
P&C
• Motor
• Property
• Third Party liability
• Legal Assistance
Accident & Health
• Accident including Workmen’s
compensation
• Disability
• Health Care
Dis
trib
utio
n m
ix
Str
ate
gy
Pro
du
ct m
ix
Bancassurance Broker B2B
Bank
Channel
Broker
Channel
Employee benefits & health care
channel
Non-Life (P&C) Life Life Non-Life (P&C/Workmen’s compensation)
Health Care** Employee Benefits
Development Life
Development Non-Life
* Source : Assuralia 2013.
•AG Insurance is collaborating with BNP Paribas Fortis (900 Branches) and Bpost Bank (680 Offices) representing a broad distribution network in Belgium
•Bank channel represents 33% of Life and 8% of Non-Life distribution mix in Belgium in 2013*
Bank Channel
•Distribution is ensured by around 3.500 independent brokers and Fintro Agents
•Brokers channel represents 30% of Life and 58% of Non-Life distribution mix in Belgium in 2013* Broker Channel
** Health Care Individual also distributed through broker and bank channel
15
Multi- channel
distribution
Enhance cross-selling strategy and exploit untapped distribution synergies
Enhance cross-selling with BNPP Fortis
Explore new channels and partnerships
Product & Service
Leadership
Continue product and service leadership in Life and Non-Life …
Strengthen Non-Life offering for Retail & SME market (e.g. packs)
(Structured) unit-linked products in Individual Life
… with a focus on market segments with high potential:
Non-Life: Re-enter market for medium-sized companies
Group Life & Health Care: penetrate segment below top 300 companies, currently not being well served and sector
plans
Further implement operational excellence strategy
Continue platform reengineering in Group Life
Further unroll lean projects: a long-term approach not primarily focused on costs but on efficiently providing what the
customer wants
Operational Excellence
CUSTOMER CENTRIC
Product &
Service
Leadership
Operational
Excellence
► To be a leading and profitable multi-distribution service provider of insurance products
► To strengthen our market leadership position in our three main market segments: Life, Group Life, and Non-Life
Comprehensive product offering, multi-channel distribution & strategy (2/2)
MISSION
By focusing on 3 strategic levers:
Multi-
channel
distribution
Source : AG Insurance website.
16
Managing guarantees in a low interest rate environment
Gradual lowering of guaranteed rates for Savings products
► 2014: as from 1/09/2014 the guaranteed rate is at
1.00%
► Guaranteed rates new premium follow evolution of
Belgian OLO
► Total Life liabilities: average guaranteed rate went
down during the 2014 period
► Average guaranteed rate will further go down thanks
to new contracts at lower guaranteed rates
► Liabilities & fixed income portfolio follow similar run off pattern
► 75 - 100 bps gross investment margin between yield fixed income portfolio & guaranteed i-rate. Return on equities &
real estate may offer additional margin opportunities
► Guarantees above 4% benefit from extra coverage, representing additional margin on total provisions
► Part of margin returned as discretionary profit sharing
► Protection in case of rising yields on liabilities (Market Value Adjustment clause) & on assets (hedging strategies)
Successful navigation of low interest rate environment (1/2)
Interest Guarantees vs. yield OLO 10 years
Source : Website Ageas – Full year 2014 result presentation.
17
► The existing portfolio is well-matched
► The cash flow gap and the duration gap are limited
► Both indicators are closely monitored on a monthly basis
► The duration gap remains very low end 2014 and has even decreased compared to 2013
Successful navigation of low interest rate environment (2/2)
Existing portfolio – Global account: cash-flow matching
2012 2013 2014
Guaranteed interest rate 2,89% 2,80% 2,72%
Fixed income yield 4,03% 3,97% 3,84%
Duration gap (0,12) (0,16) (0,06)
Source : Website Ageas – Full year 2014 result presentation.
18
36,8% 36,7% 37,6%
62,7% 63,2% 63,6%
2012 2013 2014
Claims ratio
Expense ratio
Profitable growth in all P&C product lines
Consistent inflow growth (in EUR mio)... …across our two major business lines (2013-2014)
2,8% impact of the June
2014 hailstorm
Operating performance in Non-life: Combined ratio up due to extreme weather events
1.855 1.893
2013 2014
2,78%
1,93%
Household
Motor
99,5% 99,9% 101,2%
98,4%
19
Well diversified and conservative investment portfolio
Bonds size: EUR 51.9 bio*
► In challenging market conditions, economic
asset mix evolving towards:
• less cash
• less sovereigns
• more credits & (infrastructure) loans
► Thanks to diversification into corporate
bonds & loans, investment yield resilient to
general decrease of market yield
Total EUR 51.9 bio
49%
29%
8%
5% 4%
4% 1%
Sovereign bonds
Other bonds
Loans
Real estate
Other assets
Equities
Cash & Cashequivalent
Bond portfolio by country Bond portfolio by sector Split by ratings
Government
62%
Bank and
Finance
19%
Corporate non Fin
19%
Structured Credit
Instruments
0%
Government
Corporate
non
financial
Banks and
other
financial
institutions
Total
AAA 15% – 45% 18%
AA 76% 12% 32% 55%
A 4% 36% 15% 12%
BBB 5% 49% 8% 14%
BB or
lower 0% 3% 0% 1%
unrated 0% 0% 0% 0%
Total size: EUR 67.5 bio*
* Excluding Investments on behalf of policyholders. All assets at fair value except the ‘Held to Maturity’ assets and loans which are valued at amortized costs
2014 Total investment portfolio
Of total bond portfolio, 85% rated A or higher
25%
4%
8%
7%
18%
38%
OthercountriesItaly
Germany
Austria
France
20
RATING AND PEERS
Section 3
21
Strong rating position…
S&P
Financial Strength Rating A- Positive outlook
Counterparty Credit Rating A- Positive outlook
Last review 14 October 2014
Fitch
Insurer Financial Strength A+ Stable outlook
Long term Issuer Default
Rating A Stable outlook
Last review 10 December 2014
“Standard & Poor's Ratings Services said today it revised to
positive from stable its outlooks on Belgium-based insurance
group Ageas' core subsidiary AG Insurance and holding
company Ageas SA/NV. At the same time, we affirmed the 'A-'
financial strength rating and issuer credit rating on AG Insurance
and the 'BBB-' issuer credit rating on Ageas SA/NV. […]. We
assess Ageas' business profile as strong based on its strong
competitive position in Belgium, through AG Insurance,
complemented by business positions in multiple markets. Our
assessment is supported by the strong bancassurance ties the
group retains in Belgium, and by its product diversification
between life and property/casualty.” (P/C). S&P, December 20,
2013)
“On Oct. 14, 2014, Standard & Poor's Ratings Services affirmed
its 'A-' financial strength and counterparty credit ratings on AG
Insurance, the core operating subsidiary of Belgian insurance
group Ageas. The affirmation reflects our view of the group's
strong business risk profile and very strong capital and earnings,
despite first-half 2014 earnings falling short of our expectations.”
(S&P, October 14, 2014)
“The ratings of AG Insurance benefit from its strong solvency. Its
regulatory solvency margin was 192% at end-2013, and group
solvency was 214%. Fitch expects solvency to remain good,
supported by retained earnings. […]. AG Insurance is the largest
insurer in Belgium. Access to extensive and diversified
distribution channels, including the banking network of BNP
Paribas Fortis (Long-Term IDR: A+/Stable), is a key positive
rating factor.”
(Fitch, December 10, 2014)
Expected rating of the New Instrument
S&P BBB “Intermediate”
Fitch BBB+
22
Issuer/Issue Name Country Fitch Long Term
Rating Standard & Poor’s
AG Insurance BEL A A- +
AEGON N.V. NLD A A-
AXA FRA A A- +
Allianz SE DEU AA- AA
Assicurazioni Generali SpA ITA BBB+
ING Group N.V. NLD A - A- -
KBC Group N.V. BEL A- A- -
CNP Assurances FRA A
Talanx AG DEU A-
…particularly when compared with peers
Positive Negative Evolving Stable
Outlook + –
Watch N/A
23
PROPOSED TRANSACTION
Section 4
24
Shareholders’equity
EUR mio (as of 31 December) 2013 2014
Share capital 526,6 526,6
Share premium reserve 231,5 231,5
Retained earnings 2.202,9 2.662,0
Unrealised gains and losses 1.941,0 2.831,3
Shareholders’ equity 4.902,0 6.251,4
Subordinated Loans 1.177,1 1.233,1
Hybrone on-loan* Peppermint Ambleve
Borrower AG Insurance AG Insurance AG Insurance
Lender Ageas SA/NV Third Party Investor BNP Paribas Fortis/Ageas Group
Issue Date 20/06/2006 21/03/2013 18/12/2013
Maturity Perpetual Perpetual 18/06/2044
First Call Date 20/06/2016 21/03/2019 18/06/2024
AG Insurance has the right to request redemption of the loan on the first call date. If not redeemed on their first call date, loans can be redeemed on every subsequent coupon
payment dates - No redemption at the request of the Lender at any time.
Nominal value 500.000.000 EUR
Outstanding: 336.364.000 550.000.000 USD 450.000.000 EUR
Coupon 5,16% 6,75% 5,25%
Coupon Payment Annually Semi-annually Annually
Coupon after First Call Date EURIBOR 3M + 2,03% 6Y USD Mid Swap Rate + 5,433% EURIBOR 3M + 4,136%
Coupon Payment after First Call Date Quarterly Semi-annually Quarterly
Early Repayment in case of Tax Event or
Capital Disqualification Event Yes Yes Yes
25
AG Insurance redemption profile pro-forma for EUR 32-nc-12 new issue
2015 2016 2017 2018 2019 2020 2021 2022 2024 2025 2026 2027
AG Insurance redemption profile pro -forma
Perpetual Dated
Hybrone
€336.4mm
Perp-nc-2016
5,125%
Peppermint
$550.0mm
Perp-nc-
2019
6,750%
Ambleve
€450.0mm
2044-nc-2024
5,250%
New Issue
€
32-nc-12
New EUR
32-nc-12
26
► The new issue will pre-finance redemption of the Hybrone on-loan which has a first
call date on 20 June 2016 with a new dated hybrid instrument targeting Solvency II
Tier 2 compliance
► This transaction will:
• Pro-actively lock-in refinancing of the Hybrone instrument at an attractive level
• Establish the AG Insurance credit with the Euro institutional investor base
• Optimise AG Insurance’s capital structure under the Solvency II regime via the
issuance of Tier 2 hybrid capital
• Decrease the weighted average cost of capital
► Simultaneous tender offer by Ageas Hybrid Financing (“AHF”) of the outstanding
€500m (€336.4m o/s) 5,125% Fixed to Floating Rate perpetual securities callable
from 20 June 2016 (the “Existing Notes”)
• AHF is offering to repurchase any and all of the Existing Notes at a fixed tender
price of [X]
• The new issue will be co-ordinated with the purchase of Existing Notes
Rationale for issuance and key investment highlights
27
Item Solvency II Tier 2 Requirements Aligned with Rating Agency Requirements
Issuer • AG Insurance SA/NV
Notes • €[l]m Fixed Rate Reset Dated Subordinated Notes
Maturity • Year [32] subject to compliance with the Solvency Condition and the Regulatory Deficiency Event
Status
• Junior to the claims of all unsubordinated creditors, policy holders and beneficiaries of the Issuer;
• Pari passu with (i) Tier 2 Capital and (ii) all obligations which rank, or are expressed to rank, pari passu therewith; and
• Senior to (i) share capital of the Issuer, (ii) any obligations which rank junior to the Notes (including the $550m PerpNC6) and (iii) Tier 1 Capital
(“Junior Securities”)
Interest
• Fixed rate until [l] (the “First Call Date”) payable annually in arrear. Thereafter reset on the First Call Date and every reset date thereafter to the sum
of relevant mid swap rate, the initial credit spread and the step-up
• Step-up after year 12 of 100bps (provided it is less than 50% of the initial credit spread at issuance)
Interest Deferral/
Cancellation
• The Issuer may elect to defer any interest payment on a cumulative basis provide the Issuer has not made or declared a distribution or dividend on
any Junior Securities in the previous 6 months
• Interest will be mandatorily deferred upon a Regulatory Deficiency Event or non-compliance with the Solvency Condition
• Deferred interest payments will constitute Arrears of Interest which will themselves bear interest
Arrears of Interest • Arrears of Interest may be paid at any time and must be paid on the earlier of (i) redemption of the Notes; (ii) winding-up of the Issuer; (iii)
redemption or repurchase of any share capital of the Issuer; or (iv) the Issuer declares or pays a dividend on any Junior securities
Optional
Redemption
• The Issuer may redeem all of the Notes at par on the First Call Date and any interest payment date thereafter
• All redemptions are subject to regulatory approval, compliance with the Solvency Condition and the Regulatory Deficiency Event
• Upon a Special Event, the Issuer may redeem all of the Notes at 100% of their principal amount prior to the First Call Date or at par thereafter
• If the Issuer elects to redeem the Notes prior to the 5th year, any such redemption or purchase must be in compliance with regulatory requirements
and the Notes must be exchanged or converted into another Tier 2 instrument or funded out of the proceeds of issue of regulatory capital of the
same or higher quality as the Notes
Special Events • (i) Full regulatory disqualification of the Notes from Tier 2 capital of the Issuer, (ii) Loss of Tax Deductibility, (iii) Notes subject to Withholding Tax,
and (iv) Change in ratings agency equity treatment of the Notes
Regulatory
Deficiency Event
• Insufficient own funds regulatory capital to cover the relevant capital requirements
• Regulator requests that the Issuer defers payment
Solvency Condition • The Issuer is able to pay its debts to senior and parity creditors as they fall due, credit has not been imperilled within the meaning of Article 2 of the
Belgium Law on Bankruptcy and the total assets exceed total liabilities (other than liabilities to junior creditors)
Law • English except for the Status condition which shall be governed by Belgium Law
A high level overview of the terms – SII Style Tier 2 32NC12 - Termsheet
28
CONCLUDING REMARKS AND
Q&A
Section 5
29
Concluding remarks
• Strong franchise and #1 market share in Belgium
• Core entity within Ageas Group
• Well-diversified and conservative investment portfolio and strong solvency position
• Resilient performance, strong country backing, and sound and stable ratings
• Adequate investment margin, normalized combined ratio under 100% thanks to rigorous underwriting process
AG Insurance
• An attractive opportunity to invest in the top insurance company in Belgium
• Longest call date of any Euro insurance hybrid bond offers attractive additional duration and yield
The proposed
transaction
30
Investor Relations
Contact: Hervé Votron
Tel: + 32 2 664 06 01
E-mail: [email protected]
Website: www.aginsurance.be
31
APPENDIX
Section 6
32
Ageas: Company profile - Active in 12 countries in Europe & Asia
* Inflow included non-consolidated partnerships @ 100%
Belgium – 75%
► Life: €3.963 mio (#1)
► Non-Life: €1.893 mio (#2)
UK – 100%
► Life: €138 mio - sold
► Non-Life: €2.260 mio (#2 in
Motor)
Portugal
► Life–51%: €1.352 mio (#1)
► Non-Life–100%: €264 mio
Italy – 50%
► Non-Life: €217 mio
(#1bancassurance)
Turkey – 36%
► Non-Life: €590 mio (#4)
India – 26%
► Life: €109 mio
China – 25%
► Life: €8.177 mio (#7)
Hong Kong – 100%
► Life: €481 mio
Thailand
► Life–31%: €1.744 mio (#1)
► Non-Life–15%: €235 mio (#4)
Malaysia – 31%
► Life: €568 mio (#5)
► Non-Life: €587 mio (#5)
France – 100%
► Life: €362 mio
Luxembourg – 33%
► Life: € 2.841 mio (#1 FOS)
33
Strong expertise and presence on Belgian market since 1824
1824 Creation of a life insurance company
“Maatschappij van Algemene Verzekeringen op het Leven, de Dotale Fondsen en de
Overlevingen”
1830: Creation of a non-life company
“Maatschappij van Algemene Verzekeringen tegen Gevaren van Brand”
1971: Acquisition of the “Compagnie d’Assurance Maritime et d’Incendie d’Anvers Securitas”
1986 Absorption of AG van 1830
1990 Absorption of AG van 1824
1999 Fortis AG SA/NV
2006 Merger Fortis AG + “les Assurances de Fortis Banque SA”: Fortis Insurance Belgium
2008/2009 Fortis Bank and Fortis Insurance Belgium were separated; leading to selling all the banking activity
to amongst others BNP Paribas, the BNP Paribas group acquired 25% of Fortis Insurance Belgium
After Fortis disentanglement Fortis Insurance Belgium is the most important company in Fortis
Holding (renamed in April 2010 into Ageas)
06/2009 New brand name: AG Insurance
34
A well-diversified and highly experienced management team
Board of Directors
Jozef De Mey Chairman - Ageas
Bart De Smet Vice-chairman - Ageas
Xavier de Walque
Renate Krümmer
Renaud Dumora
Barry Smith
Lionel Perl
Peter Vandekerckhove - BNPP
Daniël van Woensel
+
Management Committee’s members
Chief Executive Officer
Antonio Cano
Chief Investment Officer
Wim Vermeir
Chief Financial Officer
Hans De Cuyper
Risk Management & Compliance
Heidi Delobelle
Bank Channel and Life insurance
Development
Benny De Wyngaert
Internal Audit
Anne-Catherine Reul
Business Development
Edwin Klaps
Business Operating Office
Philippe Van Belle
Communication & Human Resources
Raphaël Copis
Broker Channel and Non-life
insurance Development
Philippe Landrain
EB/HC Channel
Jean-Michel Kupper
Management Committee’s members
35
EUR mio (as of 31 December) 2012 2013 2014
Gross inflow Life 5.126,6 4.101,0 3.963,0
Gross inflow Non-Life 1.759,0 1.854,8 1.893,0
Life technical result 354,0 329,9 287,2
Non-life technical result 95,7 89,3 69,3
Total technical result 449,7 419,2 356,5
Capital gains (losses) allocated to operating margin 128,4 122,1 163,5
Operating margin 578,1 541,3 519,9
Other result 82,9 72,2 110,7
Profit before taxation 661,0 613,5 630,6
Income tax expenses (223,6) (161,5) (101,0)
Net result for the period 437,4 452,0 529,7
Attributable to non-controlling interests (4,8) (5,5) (7,4)
Net profit attributable to shareholders 432,6 446,6 522,2
Consolidated income statement
36
Consolidated balance sheet
EUR mio (as of 31 December) 2012 2013 2014
ASSETS
Cash and cash equivalents 889 686 799
Trading assets 23
Investments 50.095 49.268 54.840
Government Bonds 30.329 29.366 32.200
Other Bonds 17.977 17.370 19.714
Equity securities 1.789 2.532 2.927
Loans 3.748 4.712 5.269
Real estate 3.428 3.334 3.648
Investment property 2.392 2.332 2.608
Property & plant 1.036 1.001 1.040
Other assets 2.737 3.032 2.990
Investments on behalf of policyholders 6.035 6.400 6.713
TOTAL ASSETS 66.956 67.432 74.260
LIABILITIES
Trading liabilities 0 5 49
Tax liabilities 1.269 1.085 1.453
Borrowings 1.658 1.907 1.978
Non OBO policy and claim reserves 50.073 50.320 54.582
Subordinated liabilities. 896 1.171 1.233
Other Liabilities 1.596 1.520 1.764
Liabilities on behalf of policyholders 6.035 6.400 6.713
Total Liabilities 61.527 62.407 67.772
Equity
Shareholders' Equity 5.299 4.902 6.252
Minority interests 129 123 237
Total Equity 5.428 5.025 6.488
TOTAL LIABILITIES & EQUITY 66.956 67.432 74.260
37
EUR mio (as of 31 December) 2013 2014
AAA 4.265,0 4.853,7
AA 22.454,0 24.363,6
A 796,0 1.325,9
BBB 1.788,2 1.592,0
Total investment grade 29.303,2 32.135,1
BB or lower 63,1 63,7
Unrated 0,2 0,8
Total non-investment grade and unrated 63,3 64,5
Total government bonds 29.366,5 32.199,5
Additional information on the quality of Government Bonds
15%
76%
3% 6% 0% 0%
AAA
AA
A
BBB
BB or low
Unrated
15%
76%
4% 5% 0% 0%
38
EUR mio (as of 31 December) 2013 2014
AAA
AA 996,1 1.166,6
A 3.016,7 3.497,2
BBB 2.998,9 4.749,6
Total investment grade 7.011,6 9.413,4
BB or lower 214,9 219,9
Unrated 79,0 37,5
Total non-investment grade and unrated 293,9 257,4
Total corporate bonds 7.305,5 9.670,8
Additional information on the quality of Corporate Bonds
0% 14%
41%
41%
3% 1%
AAA
AA
A
BBB
BB or low
Unrated
0% 12%
36%
49%
2% 0%
39
EUR mio (as of 31 December) 2013 2014
AAA 4.307,6 4.422,8
AA 3.344,5 3.112,4
A 1.407,5 1.464,3
BBB 587,4 778,5
Total investment grade 9.647,0 9.778,0
BB or lower 26,9 4,9
Unrated 34,3 9,7
Total non-investment grade and unrated 61,1 14,6
Total banks and other financials 9.708,1 9.792,6
Additional information on the quality of bonds of banks and other financial institutions
44%
35%
14%
6% 0% 0%
AAA
AA
A
BBB
BB or low
Unrated
45%
32%
15%
8% 0% 0%
40
Additional information on the quality of Structured credit instruments
EUR mio (as of 31 December) 2013 2014
AAA 166,6 132,4
AA 23,7 19,5
A 93,8 34,9
BBB 1,7 0,0
Total investment grade 285,8 186,8
BB or lower 0,0 0,0
Unrated 62,2 61,6
Total non-investment grade and unrated 62,2 61,6
Total Structured credit instruments 348,0 248,4
44%
34%
14%
6% 0% 0%
AAA
AA
A
BBB
BB or low
Unrated
45%
32%
15%
8% 0% 0%
41
Real Estate Portfolio – AG insurance is the Belgian leader
Well diversified Real Estate Portfolio
► Well diversified investments:
► Offices
► Retail
► Logistics
► Nursing homes
► Car parks across Europe
► International:
► Belgium
► France
► Luxembourg
► Spain, Germany, Italy, the
Netherlands (only for Interparking*)
Real Estate (Fair value,
EUR mio)
2013 (Economic) 2014 (Economic) Variation
Investment property 2.332 2.607 +275(+12%)
Land and buildings held for own
use
922 941 +19(+2%)
Buildings held for resale 155 60 -95(-61%)
Real Estate funds 460 429 -31 (-7%)
Other indirect 600 736 +136 (+23%)
Unrealised Capital Gains 1.266 1.331 +65 (+5%)
Total Real Estate (Fair value) 5.735 6.104 +369 (+6%)
* AG Insurance owns 51% of
Interparking
42
Concentration risk - 2014
31 December 2014 Government Bank of Finance Other corporate
Structured credit
instruments Total
Belgium 18.837,7 119,1 696,6 2,1 19.655,5
France 5.448,6 2.018,0 2.133,0 15,7 9.615,3
Germany 1.254,0 1.791,5 856,4 44,3 3.946,2
Austria 2.701,2 436,0 452,5 3.589,7
Supranational 200,6 2.366,7 2.567,3
Italy 1.078,1 166,0 625,0 34,9 1.904,0
Spain 568,4 547,0 376,1 1.491,5
Netherlands 481,1 396,2 536,7 54,2 1.468,2
UK 267,8 897,6 9,8 1.175,2
United States 26,9 645,2 454,4 25,7 1.152,2
Ireland 555,7 16,1 108,3 680,1
Australia 215,7 394,4 610,1
Finland 215,6 92,5 144,4 452,5
Slovakia 275,7 167,8 443,5
Sweden 168,6 260,1 428,7
Czech Republic 234,6 48,0 282,6
Switzerland 102,5 177,3 279,8
Poland 253,9 4,5 15,5 274,0
Norway 121,5 88,5 210,0
Mexico 8,4 181,4 189,8
Denmark 23,2 142,2 165,4
Brazil 19,7 108,3 128,0
Luxembourg 21,1 105,9 127,0
Other European
countries
9,1 38,1 63,5 110,7
Asia 72,9 288,6 361,5
Other countries 37,3 155,3 348,3 61,6 602,5
Total Debt securities 32.199,5 9.792,6 9.670,8 248,3 51.911,2