MUTUAL COMMITMENT. Cultivating its originality

Transcription

1 MUTUAL COMMITMENT Cultivating its originality Business Report 2014

2 Cultivating its originality is to be 02 Attractive great brands Highlights of Collective Conversation with Thierry Derez 12 Key figures Governance 16 Human Staff at the core of the Group s operations and challenges Commitment as an everyday approach 22 Conquering MAAF MMA GMF Specialised subsidiaries and companies International business, a growth market 34 Expert Multiple areas of expertise Health and Protection 40 Innovative Innovative claim management The switch to digital, a springboard for tomorrow Visit us on Find this document in electronic format. 48 Strong Unique financial management model Confirmed solidity with properly assessed risks 54 Well established reinsurance business Combined accounts 2014

3 Cultivating its originality... The unique nature of Covéa first came to light in 2003 when the Group decided to become a SGAM (a mutual insurance group company), the first in France. These first steps had an immediate effect on the originality of its position on the insurance market in France. Different and complementary companies, women and men deeply involved in the business, a mutual commitment towards its staff, partners and general public, presence on the international stage, recognised expertise, numerous innovations and real financial strength are just some of the factors which also ensure the durability of its unique development model. 01

4 BUSINESS REPORT 2014 / Covéa 02

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6 3 great brands paths all with a different history, different positions but also common values brought together to form the Covéa Group. MAAF is a mutual insurance company with no intermediary, offering global insurance solutions for individual private clients as well as corporate professionals. As a multi-specialist insurer with a network of general agents, MMA targets both the public at large and the business community. AN ADVENTURE GMF is a mutual insurance company with no intermediary, a true point of reference for those working in the public sector, offering policies and services in the fields of property and personal insurance. of mutual benefit SGAM status allows brands to share resources and activities constituting an additional margin of competitiveness. human More than 26,000 staff both in France and abroad take part in the Covéa adventure. solid The Group s financial solidity guarantees the durability of its companies and therefore of the insurance cover and services offered to policyholders. expanding The Group s position and strength make it very attractive. Some twenty brands make up Covéa, in France and abroad, contributing to an increasing share in its turnover. appealing Over 11 million clients and policyholders place their trust in Covéa in France. BUSINESS REPORT 2014 / Covéa 04

7 Covéa s activities in France Marketing and Strategic Transformation Institutional Partners I N S U R A N C E S U B S Life Assurance, Motor and Home I D I A R I E S I N F R A N C E Policyholders and Clients Investment and Risk Management IP AND AFFILIATED MUTUAL COMPANIES General Secretariat and International External and Institutional Communication IT and Information System Actuarial, Control and Economic Management S E R V I C E S A N D Accounts and Financial Communication F I N A N C E S Human Resources and Internal Communication Indemnities Services Assistance 05

8 Highlights of 2014 Reorganisation of Covéa for more competitiveness. Creating a central Headquarters for Covéa, combining all the Group s executive Management. Setting up Corus, the 1 st collaborative network to assist 23,000 staff in France. Celebrating 80 years of GMF. Signing new agreements within the brands to combat any form of discrimination. Launching Covéa Vox, the Group s internal radio system. Innovations Cohesion Creating Covéa Next, an investment structure for start-ups. Developing geolocalised assistance via Fidélia on the GMF and MAAF apps. Launching mobile apps: # Covisioto (*) by Covéa AIS: automatically informs the insured party of each stage of repair to their vehicle. # Grave pas grave? (Serious not Serious?) by MAAF: first mobile service providing expert analysis of symptoms and urgent medical assistance, operated in collaboration with the Paris SAMU emergency ambulance service. # Ecoconduite (Ecodrive) by MAAF: drive better, use less fuel, pollute less. # ASSR 1&2, created by MMA to prepare high-school students for their test. (*) being tested with 250 repair mechanics BUSINESS REPORT 2014 / Covéa 06

9 Freezing car insurance premiums for MAAF. New offers for MMA: one for borrowers, the other for professional car manufacturers (MMA BTP). Spread of the pick-up service throughout France operated by Fidélia. New Aide aux aidants (Help for Helpers) guarantee in Covéa brand health policies. Provision by MAAF, in partnership with HandiCaPZéro, of braille editions of its documentation for blind or visually impaired clients/ future clients, including client magazines and its main insurance policies. Strengthening the Group s presence on the international stage with the proposed acquisition of Sterling Insurance Group. Management by Covéa AIS and Fidélia of a series of exceptional weather-related events. Awareness campaigns aimed at the public at large and speared by MMA: crash-test in Marseille, accident prevention campaign focussing on speed organised jointly with Europe 1 Radio Station. Reaffirming GMF s commitment to a joint rugby event aimed at everybody by choosing to take the Association 1Jersey for Life and the Drop de Béton to the Women s Rugby World Cup. Actions Solutions 07

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12 Our position allows us to prepare, with total confidence, for all regulatory, economic, environmental and digital challenges facing all operators on the insurance stage. BUSINESS REPORT 2014 / Covéa 10

13 Conversation with Thierry Derez, Chairman What conclusion are you drawing up for Covéa in 2014? Our financial results are good, despite the complex financial markets, with particularly low bond rates. We are also posting good business results in significant areas, such as motors, housing, legal protection, corporate risk and life assurance, with turnover in excess of 16.5 billion euros - in other words, up by 6.5%. The result is rather gratifying, although we ve still had to tackle a whole string of weatherrelated events, the accumulation of which represents forces as strong as Xynthia, Quentin or Klaus and resulted in mobilised teams virtually all year. Have other companies joined the Group? We strengthen our presence on the international front, in the United Kingdom, with the proposed acquisition at year s end of Sterling Insurance Group. In 2014, our turnover continued to grow, mainly thanks to our Italian affiliate specialising in life assurance, Bipiemme Vita. It now represents 13% of our global turnover. What are the stakes for 2015? The introduction of the Hamon Law, the conclusion of Solvency II implementation, the group health insurance action plan, etc. We must tackle regulatory as well as economic and environmental challenges, which involve all insurance companies and are common to all companies in the Group. Similarly, we make the transition to Big Data and digitisation. Our position allows us to prepare for these challenges with the greatest confidence. Our objective is to gain even more competitiveness and offer even more services to our policyholders, since it is these same policyholders who rely on us to be reactive, efficient and totally in tune with their expectations. In 2015 we are operating a simplified organisation, in order to use all possible avenues opened by pooling resources. In concrete terms, what is the significance of the new organisation set-up? Covéa is made up of various entities built around the principle of mutual insurance. While reaffirming their pre-eminence from an institutional point of view, we wish to create one single enterprise within two years. Notably, from now on our overall strategy will be defined by Covéa itself, not by the individual brands. In order to increase available synergies, we have just set up several management departments: a Motor and Home Covéa technical department, a life assurance department and a Covéa human resources and internal communication department. We are also creating 4 key functions in line with Solvency II Directive: Risk, Compliance, Audit and Actuarial. What s the status of preparatory work for the introduction of the Solvency II Directive? Preparing for the introduction of Solvency II is of course a large-scale project for Covéa. Solvency II constitutes a new way of understanding the insurance business and will have an impact on the way all our staff operate. These preparations are also an opportunity for us to reflect on how best to use our resources and how to steer our development to ensure we keep a keener, more appropriate and judicious eye on future prospects. We will also develop a different understanding of risk. What is your strategy as regards the Group s financial rating? Our strategy is very logically defined acrossthe-board at Covéa. From now on, therefore, we must compare ourselves to other categories of operators in certain areas of our activity and not just with our day-to-day competitors. We also plan to develop our business in professional and corporate risk as well as in group health insurance. To do that, a good rating becomes increasingly necessary. And whether it s in concept and design or in the implementation of Solvency II, mechanisms are always at play that resemble those of grading. This very much reflects the history of the Group. independent companies... group to become 1 single forming enterprise, composed of brands. 11

14 Key figures At 31 december 2014 Property and Liability Individual Health Corporate Legal Protection No. 1 (1) No. 4 No. 3 No. 1 Life and non-life turnover 16.5 billion euros (+6.5%) NON-LIFE 67% LIFE 33% Policyholders and clients over 11 (2) million Net result (portion of the Group) 961 million euros Solvency ratio 455% Vehicles insured 10.3 (2) million Homes insured 7.5 (2) million Equity capital 11.6 billion euros Staff and partners (France and abroad) 26,298 (1) Source: l Argus de l Assurance at 31/12/2013 (2) Figures for the French companies within the Covéa consortium (ex-carma) BUSINESS REPORT 2014 / Covéa 12

15 Governance Covéa's Board of Directors at 31 december 2014 Audit Committee at 31 december 2014 Thierry Derez Jean-Claude Seys Denis Barré Monique Berger Jean-Claude Biscou Serge Dussaussois Michel Roux Rémy Verges Assurances Mutuelles de France represented by Alex Capelle Assistance Protection Juridique represented by Jean-Pierre Gualezzi Apgis represented by Gilbert Lebrument DAS Assurances Mutuelles represented by Patrice Daudier de Cassini Fidélia Assistance represented by Xavier Dejaiffe Force et Santé represented by Michèle Beyt La Garantie Mutuelle des Fonctionnaires represented by Hubert Ivanoff GMF Assurances represented by Jean-Marie Iché GMF Vie represented by Christiane Maurech MAAF Assurances represented by Michel Castagné MAAF Assurances SA represented by Bernard Barbottin MAAF Santé represented by Charles Zanoni MMA IARD Assurances Mutuelles represented by Michel Coursat MMA IARD (SA) represented by Anne-José Fulgéras MMA Vie Assurances Mutuelles represented by Christophe Guettier MMA Vie (SA) represented by Mario Colaiacovo Prony Habitations represented by Christian Delahaigue La Sauvegarde represented by Jean Fleury SMI represented by Gérard Dufour Téléassurances represented by Pierre Vionnet Alex Capelle (Assurances Mutuelles de France) Président Michèle Beyt (Force et Santé) Michel Coursat (MMA IARD Assurances Mutuelles) Christian Delahaigue (Prony Habitations) Anne-José Fulgéras Hubert Ivanoff (La Garantie Mutuelle des Fonctionnaires) Michel Roux Pierre Vionnet (Téléassurances) Jean-Jacques Vouhé 13

16 Governance Executive Committee at 1st february 2015 A B C F E D H I G Q R S T A Paul ESMEIN B Valérie COHEN C Amaury de HAUTECLOCQUE D Stéphane DUROULE E Patrice FORGET F Lionel CALVEZ G Joaquim PINHEIRO Chief Advisor Technical Director Motor and Home and for private individual clients Director of cooperative Strategies Managing Director MAAF Managing Director, General Secretariat/ International Key function, Risk Management Managing Director, Indemnities Assistance Services O Maud PETIT P Éric LECUYER Managing Director, Director Actuaries, Accounts Control and Economic and Financial Steering Committees Communication BUSINESS REPORT 2014 / Covéa Q Didier BAZZOCCHI R Françoise ICKOWICZManaging Director, TORDJEMANN Health/Protection and Institutional Partnerships 14 Director, External and Institutional Communication S Thierry DEREZ Chairman and Managing Director

17 K P N M L J O U V W H Philippe RENAULT I Christian BAUDON J Sophie BEUVADEN K Michel GOUGNARD L Bertrand LEFEBVRE M Jérôme RONCORONI N Hervé FRAPSAUCE Managing Director, Technology and Information System Managing Director, Insurance Managing Director, Investments and Risk Control Managing Director, HR & Internal Communication Key function, Group Internal Audit Key function, Compliance Managing Director MMA T Laurent TOLLIÉ Managing Director GMF U V Edouard Jean-François VIEILLEFOND ANDRJANCZYK Director Life Assurance Key function, Actuarial 15 W Antoine ERMENEUX Director, Strategic Marketing and Transformation

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20 Staff at the core of the Group s operations and challenges A staff of 23,000 * in France, a group in constant development, numerous employing companies, multiple geographical locations, and as many incentives to implement one common human resources policy within Covéa. * all employment contracts combined New stakes and new experiences at the workplace Insurance covers all facets of life and draws its originality from them. It offers a wide range of activities affected by the implementation of new regulations, such as Solvency II, and the increasing challenges brought about by the digital revolution. In order to adapt to these changes, Covéa is on a constant lookout for talent and conducts a dynamic recruitment policy supported by a Covéa employment bursary common to all the Group s brands. Among the most sought after skills in 2014: commercial activities, claims management, actuarial, skills linked to audit, compliance and reporting. Fields with most applicants are health and engineering. 1,200 (1) Offers posted on the Covéa employment bursary 2,300 (1) recruitments on temporary and permanent contracts Facilitating the integration of students For several years now, Covéa has developed a student block-release policy with a triple objective: to promote acceptance and training, form partnerships with the major academies and universities through which, above all, a large number of recruitments are achieved. 800 (1) interships and sandwichcourses recrutments Co-development: a personal and group experience at the company s service Through co-development, managers wishing to focus on self-development can meet and offer mutual help on how to approach this. More than just a place to exchange words and views, it s a place for action aimed at improving each person s managerial skills. Over 750 staff members (across all brands) have already joined the monthly workshops held throughout the year. Covéa is currently one of the rare French groups to take an interest in quality relations as a vehicle for efficiency, performance and personal development. (1) at 31 december 2014 BUSINESS REPORT 2014 / Covéa 18

21 Belonging to Covéa: a human issue, an asset for tomorrow Fully aware of the issues connected with each person within the Group, Covéa introduced in 2014 three tools which would all play their part in the same challenge: to make Covéa everyone s home. Two tools to strengthen ties Inform better to share more - it was in this spirit that the internal Covéa Vox radio channel was created, which each week tackles topics interesting to staff; and Corus, the unique company social network, which facilitates the exchange ideas and information to constitute a real tool for raise the collective intelligence within the Group. Covéa Campus: workshop for ideas and collaboration The company s Covéa Campus university acts as an accelerator in Covéa s development, aiming primarily at strengthening the feeling of being a real part of Covéa. Run by a dedicated team, it relies on Corus, the internal social network. Since early 2015, 360 people have taken part in monthly collaborative workshops based around three discussion topics. The 1,300 spontaneous candidacies with different profiles have enabled the creation of groups to promote the wealth of exchanges and knowledge about each other. Prepare for the future Covéa s human resources, combined since 1st February 2015 into one Executive Management Department Management Department for Human Resources and Internal Communication have been working on a common status for all MAAF, MMA and GMF staff. 4 objectives are involved in this project: more equality between the teams, greater efficiency in terms of the management of resources, projects and recruitments, savings through a personnel and pay management tool common to the three brands and, finally, and professional development giving staff greater mobility within the Group. CORUS 900 ambassadors 16,000 active members 533 communities COVÉA CAMPUS 2015 discussion topics Covéa, what force and what uniqueness? Covéa, what management in the digital age? Covéa, how to work better together? 19

22 Commitment as an everyday approach Being at the heart of our values and our mutual commitments, the Company s Corporate Responsibility [(Responsabilité Sociétale de l Entreprise (RSE)] has for several years grown in importance within the brands. An importance that today is leading Covéa to set up an RSE Committee to facilitate joint achievement and create a global policy. Intensify our commitments The three brands, mindful of the well-being of their staff, are proposing total accompaniment through all stages of their professional life: professional training, career management, mobility, stress management, etc. An involvement which is also shown by the signing of numerous agreements, such as the agreement reinforcing professional equality between women and men (within the DIVERSIMAAF programme) at MAAF and MMA, and the generation contract at GMF. On a wider basis, each of the brands is taking action on professional equality and the hiring of young people and senior citizens. Act for diversity Covéa draws its strength from its cultural and social diversity: sources of cohesion, innovation and performance. MAAF, MMA and GMF are signatories to the Charter of diversity and thus combat any form of discrimination. Awareness activities are carried out with staff in order to combat stereotyping, particularly in respect of disabilities. Each of the brands has created its Handicap Mission to promote professional integration and keep disabled persons in employment. Assisting vulnerable persons The MAAF Foundation and the MMA Foundation contribute to finance collective interest projects of a humanitarian, cultural, sporting or educational nature aimed at promoting greater quality of life for disabled persons. GMF has, for over 25 years now, been a partner of the UNAPEI with whom it carries out various activities to defend the interests of the mentally disabled and their families. For its part, MAAF has been working with HandiCapZero to make information on its products and services accessible to the blind and visually impaired. Since 2008, GMF has supported the French National Parks organisation in a vast programme to improve accessibility for the disabled. Through its MMA Mutual Aid and GMF Solidarity Funds, Covéa is also able to offer financial assistance to policyholders who are victims of non-insurable risk. Rate of disabled staff employed in the Company * : MAAF: 5.05% MMA: 5.83% GMF: 5.76% * Legal minimum: 2% BUSINESS REPORT 2014 / Covéa 20

23 Covéa s RSE policy, 3 objectives: Accelerate performance and responsibility in customer service and risk management Unite staff in the creation of Covéa Develop social initiatives Participate in national and local Association projects Covéa is a partner in the Nos quartiers ont des talents [Our neighbourhoods have talents] association and is thus committed to concrete actions to promote employment for everyone and put into practice the principle of equal opportunities. For several years now, MMA has supported the Fondation Agir Contre l Exclusion (FACE) [Act Against Exclusion Foundation], a national network of companies that undertake to carry out, at local level, campaigns to combat exclusion of any kind. The historical attachment of GMF to rugby continued, on the occasion of the final stages of the Top 14, with the launch of a crowd-funding campaign on the website assurement.rugby. com. The aim was then to support a project connected with rugby, to help young people in difficulty. Involving our staff to adopt an environmental attitude To act for the environment is also to share your convictions and bring them alive among your colleagues. On the occasion of the week for durable development and the European week for the reduction of waste matter, Covéa organised events around the themes of the circular economy and recycling, which were a resounding success for the brands. Various activities were carried out at MAAF, MMA and GMF to reduce the environmental impact of travel by staff members. These include: a growing number of video conferences, encouragement to use public transport and car sharing, rolling out a fleet of electrically-powered vehicles, trialling a refund per kilometre for travelling by bicycle at MMA, etc. GMF launched an awareness campaign across its sites to encourage lower consumption of energy and paper, an operation which ended in positive changes in staff behaviour. Contribute to save the environment Although its operations have a limited effect on the environment, Covéa carries out campaigns aimed at reducing its environmental impact. For several years now, the brands have thus been measuring the direct and indirect impact of its greenhouse gas emissions, linked to its internal operations and the running of its various business premises. Measures are put in place to reduce GHG emissions and energy consumption. Working with environmentally conscientious providers for the management of accidents and damage is a choice Covéa made by becoming a partner of Axalta, a committed paint manufacturer Covéa is a signatory to the Durable Building Plan Charter in favour of improving the energy efficiency of tertiary public and private buildings and the well-being of the users of these buildings. The Group s commitment to environmental issues is translated into hard fact particularly by the numerous renovation initiatives undertaken and which have been awarded various official commendations. Making the public aware of adopting eco-responsible behaviour was the objective of MAAF when it launched its Ecorouler [ Eco-drive ] mobile app helps reduce fuel consumption and therefore its environmental impact. To be responsible for the planet also means preserving its biodiversity. GMF has, within the framework of its partnership with the French National Parks organisation, introduced into the new three-year agreement a section on biodiversity. For its part, MAAF has pursued its involvement in the protection of dolphins, its emblem, alongside the Groupe d Etude des Cétacés du Cotentin (GECC) [Study Group for cetaceans in the Cherbourg peninsula]. Solidarity, at the heart of our values One of Covéa s most effective values is solidarity. It expresses itself in plans and programmes like Solid action at GMF, which allows staff to devote a part of their annual leave to social solidarity or environmental protection activities, or even, at MAAF, by donating leave where members of staff can offer days to their colleagues who might have a seriously ill child, has been involved in an accident or is disabled. 21

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26 MAAF A strong brand, well known to the public at large for its quality value ratio Thanks to its solid client-focus, with strong staff involvement with our policyholders, while at the same time upholding its technical fundamentals, MAAF must pursue its market conquest of the professional sector and develop its digital transformation to strengthen its position with private individuals. Stéphane Duroule, Managing Director MAAF Track record for 2014 MAAF posted good results in After the success of the 2013 launch of MAAF POWER (5% discount on car premiums in 2013 and no increase for 2014), MAAF POWER Season 2 was launched in August 2014 with a major feature on price rates: the freezing of car premiums for 2015 an initiative which broadly contributed to the 112,000 net new policies taken out in 2014 (+3%), the best performance recorded since The multi-risk home insurance portfolio also rose by 2.9%. On the crafts and small business market, its core target, MAAF worked throughout the year on revamping its professional offer and adapted its distribution model. Its protection business was also on the up with the number of policies growing by 1.6%. Finally, MAAF recorded performance near its 2011 record, with 940 million euros lodged in savings. As regards net sums collected, these came to 324 million euros. Close to 70,000 new clients put their trust in MAAF in The loyalty programme L enchantement client [ Client enchanting ], launched at the end of 2013 and very widely involving the networks and loss management, was well received. Client satisfaction is the central motto. What s on the cards for 2015? For 2015, MAAF is clearly setting its sights on the professional market. With this in mind, a new offer has been drawn up specifically targeting it and an unprecedently wide-ranging training plan has been put in place. The system, dedicated to welcoming this clientele and responding to their specific needs, will be rolled out from 2015 across all points of sale. As with Covéa s other brands, MAAF is faced with far-reaching changes across all its markets, particularly with the introduction of the Hamon Law on 1 st January 2015 which aims at facilitating the cancellation of car and home insurance policies and the imminent implementation of ANI (the National Interprofessional Agreement). All these represent so many regulatory developments which MAAF certainly intends turning into opportunities, and thus capture new market shares, particularly in the area of group health thanks to the efficiency of its conquest model. Finally, MAAF wishes to reinforce its relationship with its 3.7 million policyholders and clients through a relationship of lasting trust, based on always striving to provide quality service and an unfailing accompaniment at each stage of their life. MAAF intends to keep abreast of social changes by making even more space for digital communication. BUSINESS REPORT 2014 / Covéa 24

27 3.7 million policyholders/ clients * 3.9 million insured vehicles * 2.5 million insured homes * 585 points of sale over 7,500 staff members (full-time) * covering MAAF Insurance, MAAF Health and MAAF Life 25

28 MMA Its distribution networks make it possible to provide personalised support to company heads MMA combines listening and expertise. With a new model under construction, it s making its contribution to the individual private policyholder markets: car, home, life and health. On the professional and corporate market, MMA will be, along with its intermediaries, agents and brokers, the engine for the necessary diversification of the Group. Hervé Frapsauce, Managing Director MMA Track record for 2014 MMA launched its strategy as a rhythm. 3 represents preparation for the creation of a model for the future in the private market, adapted to changing client behaviour patterns and the digital era. 2 is a profitable development in the Life market, positioning itself on legacies and bequests. 1 is for growth in the professional and business communities. And 0 is the pursuit to improve its structural profitability in Motor and Home. Its BTP offer, launched in July 2014 and built around a strong and shared client vision, is a direct first-hand tool to strengthen growth in the professional and business communities. In 2014, turnover in this segment continued to rise. Close to 17,000 new deals were struck with SMEs. On the Life market, MMA engaged its specialised networks to achieve a foothold in the legacy and bequest market. What s on the cards for 2015? In 2015, the principle continues with increased development of the professional and corporate market in motor and home and personal insurance policies by systematically applying a global approach logic for this key goal. To underline its presence in the SME market, MMA will significantly strengthen its presence among the specialist brokerage firms in this segment. Very clearly, MMA is readying itself to become a key player in the market for individual and group health, contingency and retirement policies. If the individual health of employees is called into question by ANI (the National Interprofessional Agreement), one part of the market is going to remain: pensioners, complementary insurance holders and young people. General agents will be able to build on their relationships and strengthen their positions on these markets. Finally, MMA continues to highlight protection policy arrangements to its policyholders. BUSINESS REPORT 2014 / Covéa 26

29 3.3 million policyholders/ clients 2.8 million insured vehicles 1.8 million insured homes 1,761 points of sale over 6,800 staff (full-time) 27

30 GMF General public insurer, 1 st benchmark for civil servants For 2020, it is our ambition to create the GMF evidence for civil servants, a niche market to GMF. We shall be setting up significant areas of transformation, thanks to digitisation, in client relations, marketing and pooling resources. We shall thus be pursuing our development model, based on strong client loyalty, good risk management and value for money. Laurent Tollié, Managing Director GMF Track record for 2014 GMF consolidated its position. GMF Life s turnover beat all records, up by 19.5% compared with 2013, with a net income of 627 million euros. The policyholder portfolio was up by 1.8%. Its progression in motor and home remains well above the market: 1.6% in motor and 1.7% in home was also marked by the year-end launch of the new claims management system, making it possible to take account of the new technological and regulatory constraints. New online services were introduced for the benefit of policyholders: the possibility of making additional payments into Life policies, monitoring legal expense claims in the policyholder space of gmf.fr and the switch to a paperless monthly instalment schedule. What s on the cards for 2015? The brand, ever present in car and home insurance, will pursue its base on the health and protection market. It is developing its Accidents and Family business as well as complementary Health cover, all of which will allow it to galvanise these markets. It has a potential for significant development in civil servants market. For 2015, GMF will be pursuing its commercial dynamic, by taking account of the opportunities and risks presented by the Hamon Law. It is also putting in place an action plan to strengthen its excellent relations with military and police. It is continuing with its switch to digital operation by developing its digital channels and complementary contact procedures. BUSINESS REPORT 2014 / Covéa 28

31 3.5 million policyholders/ clients 3.1 million insured vehicles 2.7 million insured homes 387 points of sale over 6,600 staff (full-time) 29

32 Specialist subsidiaries and companies Covéa Fleet Covéa Fleet, a subsidiary of Covéa Coopérations, MMA Motor and Home and MAAF, is the only insurer in France specialising in the fleet vehicles, haulage and goods transport markets, with a network of over 3,000 contributors (agents, brokers and employees). Covéa Fleet has also built multiple partnerships, particularly with car makers and the captive financial opportunities these represent, for insurance on financing, damages and mechanical warranties, in France and Europe. This activity, which is developing strongly, is dealt with by the Covéa Affinity brand. Its turnover reached 367 million euros, up by 17%. Turnover 789 million euros Covéa Risks Covéa Risks works exclusively with brokers. It maintains business relations with the major international brokerage groups as well as with national or regional brokers. It offers its contributors a full range of all-inclusive products as well as bespoke policies aimed at professional clients and the various categories of SMEs. In addition, it has a range of products for the general public that sits alongside those intended for professional clients and entrepreneurs. Capitalising on the expertise and know-how of the MMA management departments, Covéa Risks intends rolling out a development strategy aimed at positioning itself among the top players in the professional and Motor and Home brokerage field while not compromising the profitability of its operations. Turnover 655 million euros BUSINESS REPORT 2014 / Covéa 30

33 Covéa Caution Covéa Caution operates across 3 areas of financial guarantees in different business sectors: Security, known as legal, is obligatory in exercising the legal profession, also in the property and tourist industries in particular, Building security, aimed at those involved in the professional construction industry, Securities for suppliers and other persons involved in the provision of services and transport. Due particularly to the introduction of Solvency II Directive, the security operation has been suspended, involving the run-off of the portfolio. The aim consists of a progressive decrease of the portfolio while still preserving the interests of clients; for the majority of these, a financial guarantee is vital for them to carry on their professional activity. Covéa Caution therefore sets all its resources in motion to offer solutions of continuity in the area of security. 10 Turnover million euros Nexx Assurances Nexx is a remote insurer which since 1997 has been developing new marketing concepts for its products: Direct selling via the internet and by telephone, Provision of specific offers for closely linked targets, Setting up partnerships with companies wishing to diversify their business activities. In parallel with this, NEXX supports MAAF with internet sales and insurance aimed at professionals. In 2014, dedicated teams also made it possible to carry out important tests for the Group: tests on retaining clients, promotion and the development of electronic signatures, and selling group insurance policies over the telephone within the implementation of new healthcare offers. 160,100 policies 94,000 clients 31

34 International business: a growth market Covéa has been well established internationally for over 30 years, both in Europe and North America. In 2014, the foreign subsidiaries accounted for 13% of the Group s turnover. Covéa has just strengthened its presence in the United Kingdom with the project of acquisition of Sterling Insurance Group. Subsidiaries and shareholdings at 1 st march 2015 UK Italy USA Luxembourg Spain Canada Covea Insurance insurance non-life brokers subsidiary 931 Swinton brokerage non-life multi-chanel subsidiary 3,969 Sterling Insurance Group insurance home small businesses accidents/protection brokerage/direct subsidiary 340 Bipiemme Vita insurance life/accident and healthcare partner bank subsidiary 76 Bipiemme Assicurazioni insurance non-life partner bank subsidiary 17 CSE insurance non-life non-exclusive agents subsidiary 133 AME Life Lux insurance life brokers and authorised agents subsidiary 23 Caser insurance non-life/life bancassurance shareholding La Capitale AG insurance non-life brokers and affiliated agents shareholding Penncorp insurance life/accident and healthcare brokers and agents shareholding Workforce at 31/12/2014 BUSINESS REPORT 2014 / Covéa 32

35 2.1 billion euros turnover +19% compared to 2013 Turnover on the rise Covéa s turnover on the international front continues to rise, largely due to the revenue from its Life subsidiary in Italy, BPM Vita, which is up by nearly 30%. A driver for growth and a lever for diversification Internationalisation is an important issue for Covéa. Its development provides an opportunity for external growth on the motor and home market, while prospects on the French market are more constrained. Over and above the synergies with foreign subsidiaries, internationalisation provides Covéa with important experiences from which it can benefit in its home own market. For example, in the United Kingdom, tacit renewal of motor insurance policies does not exist, which is similar to the operating conditions imposed by the Hamon law. A prudent and selective strategy Covéa chooses countries which enjoy a mature insurance market and a stable regulatory environment. Its priorities lie in locations where it is already present: the United Kingdom, Italy and, to a lesser extent, Spain, Luxembourg, the USA and Canada. Companies must show durable profitability, solid governance and real potential in terms of distribution. Acquisition of Sterling Insurance Group In March 2015, Covéa finalised its proposal started in 2014 to acquire Sterling Insurance Group in the United Kingdom, a market where the Group was already active through Swinton brokerage firm as well as its Covea Insurance subsidiary. Sterling Insurance Group markets a wide range of products: medium and high-end home insurance, SME insurance, income protection and individual pension schemes. It also markets administrative services and solutions for several large British financial companies. Its technical expertise in home insurance, provident cover and professional insurance complements the knowhow of Covea Insurance. 33

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38 Multiple areas of expertise Through its brands and their subsidiaries, Covéa covers all types of insurance: damage to property and civil liability, legal protection, personal insurance, assistance and deals to all policyholders, from private individuals and professionals, to corporates and associations with guarantees adapted to their needs and to major social changes. Life assurance: rates maintained With growth close to 8%, Covéa s gross income in France amounted to almost 4 billion euros, while net income more than doubled to over 800 million euros. For several years now the bond rates have fallen regularly and made financial performance more difficult. The objective of the Life companies in the Group is to maintain their current positions and, with prudent management, to maintain performance. Performance achieved through good financial management From this point forward, the 3 Life companies MAAF Life, MMA Life and GMF Life have been combined under one Covéa Life Management Department, joining forces to develop new synergies and a strong unified strategy aimed principally to protect our clientele. Interest rates for 2014 MAAF 3.01% net* on the support in euros of Winalto and Winalto Pro, two main policies currently on the market MMA net yield* of between 2.55% and 3.05% on the fund in euros of the main life assurance and capitalisation policies GMF 3.05% net * on all policies and funds in euros * Rate net of management costs, ex-national insurance and tax deductions BUSINESS REPORT 2014 / Covéa 36

39 Motor and Home insurance for private individuals: the core of the business In Motor and Home, Covéa is the leader in France and is determined to remain so. In a difficult, volatile and highly competitive segment, made even more so since the introduction of the Hamon Law, the private individual market remains essential for the Covéa brands. The Group is working on setting up a new economic model based on e-business. That s the idea behind the February 2015 creation of a motor and home technical management department for private clients within Covea s Insurance Management department. The objectives of this new Management department are to: Share technical know-how, tools and trial exercises Improve technical risk management Be more flexible and quicker to develop new products and/or services. Motor * +180,000 new vehicles Home +147,000 new homes * off fleets Professionals and Corporates, a strategic market Covéa is present on the Professionals and Corporates market through the MAAF and MMA brands. Thanks to a comprehensive range of products that also covers business activity, civil liability, vehicle fleets and haulage, legal protection, as well as health and provident cover for staff and managers, the Group is a major player in this sector. This is a strategic market for Covéa, whose development potential remains considerable. Whilst MAAF is historically very present on the Professionals and small business markets, MMA operates across this segment and, thanks to its expertise, deals with all sectors ranging from Professionals to small businesses, as well as large companies and industries. The specific nature of its distribution method, backed up by a significant network of general agents and brokers, is a powerful asset. The closeness that this creates fosters quality operational management. MMA is currently involved in major developments to boost its capacity for growth. A review of available products is ongoing with a view to responding more closely to the needs of corporate clients. Covéa insures nearly 600,000 professionals and corporates in France. Turnover for Professionals and Corporates: 2.5 billion euros MMA BTP, the new product aimed at professionals in the building industry In 2014, MMA launched MMA BTP, a competitive, simplified and effective product in step with technical (solar-powered, wind-driven, etc.) and regulatory (environmental responsibility, energy performance) developments in the building trade. One single policy combines all the guarantees necessary for professionals engaged in the construction industry as well as their properties and liabilities. 37

40 Health and Provident cover individual health in France n 4 group health n 10 provident cover n 15 BUSINESS REPORT 2014 / Covéa 38

41 Covéa, a significant player on the market Through its brands, MAAF, MMA, GMF, and its affiliated partners SMI and APGIS, Covéa covers nearly 3.5 million people with health insurance, 40% of whom are covered under company group policies. In Protection, the Group has over 4 million beneficiaries. Premiums acquired in health and protection in 2014 amounted to 1.99 billion euros. Covéa adopts a voluntary and patient development strategy on its health and provident business to make it a catalyst for growth in the medium term. Regulatory changes: ANI and the new responsible contracts The implementation of certain conditions in the National Interprofessional Agreement (ANI) of January 2013 constitutes something of an upheaval for the health insurance market: effective from 1 st January 2016, the obligation for all companies to let their staff benefit from a group healthcare scheme is going to entail a significant drop in the number of individual health insurance policies. Moreover, the social security financing law (LFSS) for 2014 amended the specifications for policies known as responsible which all individual and company complementary health policies must comply with if they want to continue to enjoy exemptions from national insurance and tax contributions. This has led all bodies offering complementary cover to revise all their health insurance products in order to comply with these new regulatory constraints. Opportunities to be seized The reactivity and expertise of the teams at Covéa, the reputation of its brands, the know-how of APGIS and SMI as well as the power of the commercial networks of MAAF, MMA and GMF are all assets which the Group has mobilised so as to turn these regulatory disruptions into opportunities and strengthen its positions on the professional and corporate markets for health and provident insurance. Over these last two years, there have thus been no less than seven individual or group health and provident insurance policies created or reworked to meet the new regulatory constraints and the expectations of policyholders, such as for example, Les façonnables [ The reworkables ] for MAAF (revised in April 2015) or, for MMA, the launching in 2014 and 2015 of two new standard products, Affipro Santé [ Affipro Health ] and Affipro Prévoyance [ Affipro Protection ], as well as new bespoke offers. Creating and offering new products to the market in Health and Provident insurance is based on good collaboration between MAAF, MMA and GMF. Reorganisation of individual health products Individual health arrangements for employees are amended by ANI, but a part of the market will remain and develop: retired persons, young persons, civil servants, complementary insurance policies. Covéa, quite obviously, is continuing to strengthen its positions on those markets, but in a more targeted manner. At the end of October 2014, MMA launched Vital, a new range of individual health insurance products. GMF launched a new complementary offering Essentielle [ Essential ] in june Individual provident schemes - another growth area Provident cover are an everstronger preoccupation among the public at large as protection against the hazards of life. The individual provident cover continues to grow at MAAF, MMA and GMF. The potential for Covéa to develop in this area remains significant. A new product Assurance revenus [ Income Insurance ] was created at MMA in GMF is also developing its Accidents et Famille [ Accidents and Family ] offer. More and more services Covéa is offering its policyholders a very extensive range of services, via the Fidélia assistance platform and its Santéclair healthcare access platform, as an inclusive part of their health insurance policy. The Group has done everything in its power to guide policyholders on how to access healthcare services. It provides them with networks of health professionals and establishments. It offers services and advice to guide them through the care system as well as personalised prevention and support services. Over time, the market for complementary health cover should evolve towards more services. Covéa has the necessary means to develop innovative services of consistently higher quality. The Grave pas grave? [ Serious not serious? ] app: the first mobile expert service for the analysis of symptoms and assistance in emergency medical treatment in collaboration with the Paris SAMU. 39

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44 Innovative claim management Covéa AIS (Assistance-Indemnisations-Services) groups together claims management and assistance with Fidélia, and the Legal Protection areas of the three brands MAAF, MMA and GMF, with DAS and APJ. Its size, organisation and common governance allow it to continue exploring new avenues to offer clients ever more innovative and high-performance services. Extreme weather ever more frequent 2014 was a record year. Storms, repeated and worsening, a succession of hailstorms, etc. For Covéa this has meant over 168,000 claims involving 260 million euros in compensation. The Whitsun hailstorm that hit the Île-de- France, a densely populated region and therefore one with a large number of vehicles and homes, was particularly devastating. That episode alone generated 50,000 motor claims and 38,000 IRD claims, reaching a total of more than 198 million euros. Once again, the Covéa AIS partnership with Safra proved invaluable by enabling it to promptly place mobile dent repair units in the most strategic locations to cater for the large number of hail-damaged vehicles. Covéa - experience that sets it apart When an accident or damage occurs, it is a key moment for the client. Covéa AIS offers new services aiming to strengthen client confidence and loyalty. Geographical Assistance: how can we discover a policyholder s precise location when their car breaks down? Thanks to smartphone technology, breakdown mechanics can locate and assist them without delay. The pick-up service: rather than calling a taxi in the event of a breakdown, it s the car rental company that looks for the client directly onsite and takes him to a replacement vehicle. Once the rental is over, he is accompanied to the garage to pick up his vehicle or to any other place of choice. Ever more extreme weather services In addition to setting up organisations specifically to look after clients, collect their damaged vehicles and have them appraised more quickly, it is now possible to collect on-the-spot statements from clients in disaster areas by setting up onsite mobile offices painted in Group brands colours. Covéa AIS has also negotiated preferential rates with Leaseway and AMTT for the rental or purchase of new or second-hand vehicles. Unique and comprehensive health check-ups Covéa is the only French insurer today to have such a strong network of highquality and responsive health-check professionals. These professionals serve all Group brands, evaluating compensation beyond the mere payment of monetary compensation. The Covéa heath-check inspectors guide victims to concrete compensation for damages, such as assistance in vocational rehabilitation. They sometimes go as far as to design a complete life project for the seriously injured, including vehicle and home adaptation... and all in collaboration with Fidélia social workers and Covéa occupational therapists and architects. Support that is greatly appreciated by victims. The women and men at Covéa AIS 4,500 staff in Claims Management 1,200 staff in Assistance 500 staff in Legal Protection BUSINESS REPORT 2014 / Covéa 42

45 Covéa Legal Protection The Legal Protection business at Covéa is provided by the specialised subsidiaries Assistance Protection Juridique (APJ) and DAS. Together, these companies make up over 20% of legal protection insurance in France. APJ Assistance Protection Juridique (APJ) is the legal protection insurer of MAAF and GMF policyholders. It helps private individuals and professional clients in disputes to have their rights admitted without being constrained to procedures whose outcome, delays and cost would have a deterrent effect. It provides legal information by telephone and, in 2014, modernised its business by setting up an internet site making it possible to download practical files, letter templates, and dispute statements online, as well as the transmission of documents and monitoring of cases in real time. The partnership with the Banques Populaires network concluded in 2013 proved to be a real accelerator for growth in Turnover 128 million euros DAS is the legal protection company of the intermediary insurance companies working under the MMA banner. Its acknowledged expertise has raised it to the rank of leader in the legal protection market for professional clients. DAS secures and simplifies day-to-day issues affecting both professional and individual private clients by offering them legal protection policies with extended guarantees. Over 2 million clients have put their trust in DAS. They benefit from the advice of its legal experts who pass on legal information to them on a daily basis and identify the best solutions, whether out-of-court or by taking a legal action, in defence of their rights. In 2014, there were over 145,000 requests for legal information and 30,000 legal protection disputes undertaken. To accelerate its development, DAS relies on the 1,761 points of sale of the MMA general agents and over 500 brokers and partners. Legal Protection turnover * 88 million euros * By integrating the turnover on Unpaid Rents and Monetary Losses, business areas from which DAS has opted to disengage itself, company turnover reached million euros in

46 Fidélia Assistance FIDELIA Assistance is the assistance company of the three Covéa brands (MAAF, MMA and GMF) and operates 24 hours a day, in France and around the world, to come to the aid of its clients. It operates in the fields of: medical assistance (repatriation, medevac), vehicle assistance (breakdowns, towing), assistance at home (broken locks and plumbing, breakdowns in domestic electrical appliances, etc.), personal services (home help, child care, private tuition, etc.) and health assistance (help for helpers, hospitalisation assistance, convalescence at home, etc). Fidélia Assistance works on a white label basis with the majority of its clients. It also assists insurance companies such as the Mutuelle de Poitiers, mutual health companies like the Mutuelle Générale de la Police, the Mutuelle Nationale Territoriale, the GMPA, and financial institutions like the Banque Postale, Sofinco and Natixis. Business slightly down In 2014, Fidélia saw a drop of 2.3% in the number of new files opened, contrary to 2013 when it had seen an increase of 2.9% against the previous year. This can be particularly explained by the weather conditions limiting the number of accidents and breakdowns and a particularly dreary summer, with a wet month of July and a markedly cool August resulting in a lower volume of cars on the road. Confirmed client satisfaction Thanks to the involvement and dynamism of the FIDELIA Assistance staff, the overall customer satisfaction rate was maintained in 2014 at a high level of 96%. Turnover 391 million euros Over 12 million clients 1.2 million new accounts opened * * including the FIDELIA Services business Ever greater collaboration The grouping together of the Indemnity, Assistance and Legal Protection divisions under one common Covéa AIS management department in 2013 has opened new opportunities for greater benefits by combining existing networks, tools, know-how and the creation of innovative services. Thus, in 2014, the network of car experts and IRD MAAF, MMA and GMF was expanded to include Legal Protection companies DAS and APJ. In 2015, these companies will also pool their networks of lawyers and doctors, thus winning their loyalty and negotiating more competitive fees. A pooling of recovery resources is also planned, as well as the creation of a common legal database. Pre-empting changes It order to hold on to its lead in its various business sectors, Covéa AIS is preparing itself to pre-empt future changes and permanently adapt itself to social, technical and regulatory developments. Thanks to the information it collects and focuses on, claims management must play its part in future challenges by focussing on prevention, making it possible to reduce the number of claims and their intensity, and thus limiting the financial costs involved. By sharing its data, it will be a major player in optimising risk selection and portfolio monitoring. The ambition is to advance consistently over time in these areas by strengthening client knowledge and making it possible to offer services that are always in line with clients immediate needs, thus adding value to the overall package. BUSINESS REPORT 2014 / Covéa 44 Workforce of 1,185

47 The switch to digital, a springboard for tomorrow Integrating the switch to digital into its strategy. Testing new solutions that will pay dividends in terms of customer loyalty and ensure the competitiveness of MAAF, MMA and GMF. Together, creating the insurance products and services of tomorrow. Actions which must be speeded up within the Group in the face of ever greater competition. Adapting to digital The digital revolution has had a very marked effect on policyholders habits. The internet and social networks have brought about changes in their behaviour patterns. They are better informed and have become more demanding, more impatient. The Group s brands have made the switch to digital and already offer a large number of online services via their internet sites, client spaces and newly launched mobile apps. In 2014, for example, Covisioto* was created to inform the policyholder of each stage of the repair on his damaged vehicle. And thanks to geolocalised assistance, policyholders are attended to more quickly. Between now and 2020, the Group wants to step up the development of new, simpler and more personalised client experiments, in whichever interaction channel chosen by the policyholder. Social networks, will be fully integrated into the system. With the launch of the electronic signature, contact with the client will be progressively paperless. Better knowledge of clients and their risks Getting to know clients better in order to offer them a well-honed deal at the fairest price. Anticipating each client s needs by knowing the key moments that concern them. Being able to present them with personalised prevention solutions. These are advantages that make all the difference and are made possible through proper and full use of Big Data, this mass of data that is now available. In 2014, Covéa decided to invest in these new technologies by creating data lakes, infrastructures and dedicated software. The objective: to provide Covéa staff with these new systems and extract as much added value as possible. With the switch to digital continuing in 2015, Covéa now has an industrial Big Data platform. The objective: get to know clients better and recognise their risks thanks to numerous new data sources. Prevention in the service of clients The Group already has risk prevention tools which allow it to make policyholders aware of risks, fix its prices and get prepare themselves well in advance of extreme weather events. Coventéo is a programme connected to Météo France intended for weather forecast claims management and assistance teams to forewarn and estimate the degree of bad weather in order to put adequate organisational procedures in place. It is also used by managers to check guarantees and warranties. Covisiomap is used to select risks and prevention measures. It analyses and gives precise map-readings of floods, fires, droughts, seismic vents, areas prone to burglaries and agressions, and draws up models of catastrophes such as dam breaks. Covéa continues its search for innovative solutions to better estimate risks and provide more effective warning. * being tested with 250 repair mechanics 45

48 Anticipating market developments New technologies, new behaviour patterns, new needs, new habits. Covéa makes every effort to adapt to social changes, anticipate market developments and imagine the insurance world of the future. Always on the lookout for new solutions, Covéa strives to invent the products and services of tomorrow s insurance world to always offer the best to its policyholders, and protect and facilitate their everyday life. In June 2014, the Group, in partnership with Paris Région Lab created the Habitat Connecté [ Connected Home ] incubator, a structure to accompany start-up companies developing solutions to protect the home and its inhabitants, and improve their well-being and comfort, by means of connected devices, innovative technologies, mobile apps or new services. In October, 4 young companies were selected and have since enjoyed the support, advice and market knowledge of the Paris Région Lab and Covéa, allowing them to carry out many more trials and accelerate their development. 4 start-ups integrated in the Covéa incubator: 3D Sound Labs Mesdepanneurs.fr Oxolis Tallk The Lab, a motor for innovation In 2014, Covéa created the Lab, an internal projects incubator common to all the Group s brands to speed up innovation based around problems experienced by clients. The person bringing the idea to the table is accompanied, to manage his or her project just as an entrepreneur would do. BUSINESS REPORT 2014 / Covéa 46

49 All on the road to the digital revolution Surf the digital transformation and imagine the insurance industry of the future, a mission more particularly entrusted to the Marketing and Strategic Transformation Management or the Technology and IT System Management. But in fact all the Group s management teams are involved in this search for innovations. In order to naturally integrate the digital concept as a factor for competitiveness at all levels, Covéa launched an acculturation programme for its staff. In 2014, the first Digital Day was held during which the Group s main digital projects were presented. The event is being repeated on several of the Group s sites in Technology and IT System Management transformed In March 2015, the TISM gave new impetus to Covéa s strategy by transforming its organisation. Investments must bring to all Covéa s management teams a higher degree of competitiveness, a simplified and modernised production tool and the ability to offer clients quality services adapted to the challenges of tomorrow. An investment structure dedicated to innovation In December 2014, Covéa created Covéa Next. This structure gave financial and operational backing to start-ups developing technologies or innovative services which could be beneficial in the field of insurance, by taking a share interest in their capital. For its first investment, Covéa Next took a share interest in the equity of Wezzoo, a web and mobile device for the collection, analysis and visualisation of local data in real time, and offering meteorological and health services within the local community. 47

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52 Unique financial management model Geopolitical problems and strong disparities between different areas of the global market, the steady drop in interest rates on bonds and debentures, the very large scale of liquidities and national debt - these are just some of the factors impacting companies, particularly in the insurance industry. Against this background, Covéa has maintained its financial strength and applied attractive rates for the principal policies offered by its brands. To achieve these objectives, Covéa relies on a unique and practical model based skilfully on the principle of anticipation. An organisation adapted to risk structure As protector of the power and financial strength of the Group, the Investments and Risk Control Management Department supervises all management and financial control functions. It establishes the Group companies investment programmes which are then implemented by Covéa Finance and Covéa Immobilier [Property]. Covéa Finance: pivotal entity Covéa Finance is the In 2014, asset management lynchpin in the management was characterised by of the quoted transferable anticipation and quick assets of all companies decision-making on in the Group. Owned by investment or disinvestment. Covéa Coopérations, Covéa Often going against the tide Finance also contributes to of the market, Covéa Finance the financial strength of the bought shares at their lowest, companies as a whole and thus making it possible to the finalisation of Covéa s net create remarkable latent result, notably by the payment capital gains and realise of dividends. around 900 million on capital gains in On the bond market, the constant search for the improvement of base points paved the way for positive results over time. Largely effected by the implementation of Solvency II, Covéa Finance is particularly in charge of feeding the database system with information on assets billion euros of managed assets 10 th French asset management company 57 funds 17 billion euros Exposure in shares BUSINESS REPORT 2014 / Covéa 50

53 Covéa Immobilier: leading player Dedicated to property management and the exploitation of Covéa assets and brands, in 2014 Covéa Immobilier transferred its investment business to a SAS [Simplified Joint Stock Company] and achieved the convergence of all management structures. In 2014, investment conditions remained difficult, as the property market was suffering from speculative bubbles and a huge abundance of liquid assets. Rental management was marked by an over-supply of professional properties (particularly in the Île-de-France region) and by an increase in vacant properties. Covéa Immobilier made a few transfers and sales, picking up significant capital gains of over 100 million euros. On the operations side, in 2014 Covéa Immobilier provided the Group s staff with a Head Office in the heart of Paris, where 22,000 m 2 were renovated and converted to house the offices of the Chairman and the General Managers. Three Management Departments and expert functions for the drawing up of investment programmes and risk control Management Department for Investments and assets-liabilities control: responsible for drawing up investment programmes and assets-liabilities studies. Management Department for Share interests, Liquid Assets and the Asset Control: expertise on all the Group s companies, in charge of managing liquid assets, share interests, all transfer and acquisition operations and controlling compliance with asset management procedures, a key function of Solvency II. Management Department for Risk Control, a key function of Solvency II: in charge of risk control across Covéa and the analysis and monitoring of the solvency margin based on all the Group s developments and projects (ORSA). INVESTMENT PROPERTY AT 31 DECEMBER 2014 Investment assets of 4.23 billion euros, mostly situated in Paris and the Paris region. 231 properties 700,000 m 2 of which 390,000 are offices 3,450 residential properties, 282 boutiques 42% (in value) of office properties situated in the Central Business Area in Paris OPERATING PROPERTIES AT 31 DECEMBER 2014 Operating property assets of 505 million euros, consisting of: 1,088 sites (central, regional and commercial agencies) 573,138 m 2 of gross usable floor area 51

54 Confirmed solidity with properly assessed risks In 2014, Covéa continued its preparations for the introduction of the Solvency II Directive on 1 st January 2016 and progressively adapted its organisation. This large-scale Group project mobilises numerous members of staff within each of the companies. Over time, Solvency II will lead Covéa to change its perception and understanding of risk and have an ever more precise and clearer view of its solvency. An adapted organisation Since June 2013, Covéa has been introducing simplification of its organisation and increased pooling of its resources. Strategic approaches and the framework of propensity for risks are now defined for Covéa as a whole. Operational steering is down to the different brands within the Group, through their relationship with policyholders. The governance model thus structured brings strength and strong cohesion to all the companies, their clients, their staff and their partners. Against this background, Covéa is setting up the PSBF (Pilotage Stratégique, Budgétaire et Financier) [Strategic, Budgetary and Financial Steering], a process which makes it possible to arrange priorities and turn them into material actions and figures 5 years down the line. A risk culture to be developed The Solvency II Directive imposes the identification and quantification of all risks to which an insurance company can be exposed. The Group s risk management apparatus is in the process of being implemented. It is based on ORSA, the internal assessment of risks and solvency across a specific organisation, notably with the creation of a key function dedicated to handling risk management within the Investments and Risk Control Management Departments. Three other key functions were also created in February 2015: Compliance, attached to the General Secretariat, the internal Audit of the Group, attached to the Chairman s office, the Actuarial, attached to the Actuarial, Control and Economic Management Department. Each member of staff, irrespective of his or her area of work, is affected by this new approach to risks. The Covéa directors and administrators as well as numerous members of staff have already been made aware of the ramifications through Solvency II training sessions, thus allowing each person to take the measure of his or her new role. Much information to produce In 2014, regulatory deadlines intensified and Covéa set about its preparatory work in time for the introduction of Solvency II. In due course, the Group must produce a large number of documents, making it necessary to collect data from all companies in the Group and an even larger number of information systems. Work to standardise the calculations and reporting, already well ahead, will continue in order to be up to speed with the requirements of the Directive. BUSINESS REPORT 2014 / Covéa 52

55 THE BENEFITS OF THE DIRECTIVE Solvency II poses a certain number of challenges which, over time, will allow the Group to: Have better visibility of its strength. Encourage the development of risk culture. Promote a better allocation of its equity. Intensify a participative approach. Strengthen governance. Promote international convergence with other regulatory frameworks. Over 3,000 annual reports to be produced Over 500 administrators, directors and members of staff have already undergone training on Solvency II 53

56 Reinsurance Thanks to its financial standing and robust solvency, the Covéa Group, via one of its mutuals Assurances Mutuelles de France (AM) has been present on the reinsurance market for over sixty years. The financial solidity of AM is characterised by an excellent solvency ratio, equity of 1.2 billion euros and an A rating both on the AM Agency Best list and Standard & Poor's. The AM Reinsurance Acceptances Management Department operates a policy of promoting the continuity of relations with carefully chosen partners and relies on an experienced team of 26 staff members. Its underwriting policy, which has remained stable over time, is based on a technical approach aiming at commercial development. Contributions acquired in 2014 amounted to million euros. AM underwrites a portfolio of 1,232 agreements, in 37 countries and with more than 200 assignors. In 2015, a new underwriting country was added the English-speaking part of Canada. In a medium term development project, the Reinsurance Management Department is investing in human resources and analysis tools. It is also contemplating to further widen the geographical field of its business. In spite of an ever competitive reinsurance market, AM is posting a growth in premiums estimated at 6.5% for 2015, essentially thanks to the development of business relations with existing partners. Harmonious development and strengthened financial solidity Covéa Group turnover reached 16.5 billion euros in 2014, up 6.5%. This growth applies to all the Group s business activities, both in France and abroad. The share of the turnover achieved outside France was 13% (essentially in Italy and Great Britain). Healthy underwriting profits achieved despite constant and significant climatic events, combined with excellent financial management, made it possible to record a net result in 2014 (across the Group) of 961 million euros against 824 million euros in Equity capital (across the Group) thus reached 11.6 billion euros at 31 December Latent capital gains on financial investments amounted to almost 14 billion euros a strong increase against a background of a fall in bond rates. The essential Turnover Net result (across the Group) Equity Group Share Regulatory solvency ratio in ,536 million euros in 2014 in 2014 in , % million euros million euros in 2013 in 2013 in 2013 in ,525 million euros 824 million euros 10,622 million euros 405% BUSINESS REPORT 2014 / Covéa 54

57 Consolidated Balance Sheet 2014 Amortisation ASSETS (in thousands of euros) Gross amount and provisions Net amount 2014 Net amount 2013 Goodwill 1,035, , , ,089 Intangible assets 486, , , ,319 - Insurance business portfolio value 157,983-88,761 69,222 71,612 - Other 328, , , ,707 Insurance company investments 79,853, ,670 79,138,426 75,185,265 - Land and buildings 3,535, ,132 2,920,941 3,006,328 - Investments in tied companies and businesses in which Covéa has a stake 1,689, ,600 1,523,121 1,332,453 - Other investments 74,628,302 66,062 74,694,364 70,846,484 Investments for unit-linked accounts 3,572,421 3,572,421 2,955,896 Investments in other companies 655,253-75, , ,223 Equity affiliates 329, , ,629 Underwriting reserves held by reinsurers and retrocessionnaires 2,139,836 2,139,836 2,077,989 Insurance and reinsurance receivables 2,528, ,669 2,400,959 2,323,022 Customer receivables from banking companies 1,167,783 1,167,783 1,102,646 Other receivables 1,168,093-38,089 1,130,004 1,250,393 Other assets 677, , , ,756 Accrual accounts - Assets 3,029,330 3,029,330 2,828,717 - Deferred sales charges 744, , ,169 - Deffered tax assets 1,171,278 1,171,278 1,044,780 - Other 1,113,354 1,113,354 1,091,768 Translation gains or losses TOTAL ASSETS 96,644,198-2,465,793 94,178,405 89,168,944 Liabilities (in thousands of euros) Group capital 11,629,744 10,621,760 - Mutual capital or equivalent funds 1,108,652 1,104,037 - Premiums 6,358 3,386 - Reserves 9,554,181 8,690,765 - Net income 960, ,572 Minority interests 68,607 63,287 Subordinated debt 185, ,739 Gross underwriting reserves 74,548,747 71,020,103 - Life insurance underwriting reserves 51,225,836 48,500,672 - Non-life insurance underwriting reserves 23,322,911 22,519,431 Underwriting reserves for unit-linked contracts 3,597,525 2,984,175 Provisions for liabilities and charges 626, ,117 Insurance and reinsurance liabilities 916,609 1,105,555 Bonds and negotiable debt instruments Debts with banking companies 523, ,276 Other payables 1,734,978 1,735,796 Accrual accounts 346, ,136 Translation gains or losses TOTAL LIABILITIES 94,178,405 89,168,944 55

58 Commitments received and granted 2014 (in thousands of euros) COMMITMENTS RECEIVED Insurance companies 39,227 49,872 Other companies 91,236 62,210 COMMITMENTS GRANTED Insurance companies 368, ,028 Other companies 54,236 62,918 PLEDGES RECEIVED FROM REINSURERS AND RETROCESSIONNAIRES 1,186,331 1,095,264 OUTSTANDINGS ON LONG-TERM FINANCIAL INSTRUMENTS 400, Consolidated Profit and Loss Account 2014 ALL BUSINESS LINES (in thousands of euros) Non-life insurance business Life insurance business Other business Total 2014 Total 2013 Premiums issued 11,170,705 5,453,894 16,624,599 15,606,842 Change in unearned premiums -88,936-88,936-82,007 Premiums earned 11,081,769 5,453,894 16,535,663 15,524,835 Gross premium or income from other activities 374, , ,255 Other operating income 68,491 36,464 3, ,201 96,929 Financial income net of expense 1,225,280 2,576,934 62,106 3,864,320 3,117,528 Total operating income 12,375,540 8,067, ,249 20,883,081 19,139,547 Expenses from insurance services -8,057,180-7,419,708-15,476,888-14,284,481 Reinsurance expense or income net of disposals -200,194-15, , ,058 Expenses from other activities -505, , ,115 Management expenses -2,693, ,486-3,037,972-2,983,980 Total operating expenses -10,950,860-7,780, ,920-19,236,814-18,081,634 CURRENT OPERATING INCOME 1,424, ,258-65,671 1,646,267 1,057,913 Intersectoral transfers -135,883-3, , Current economic operating income 1,288, ,390 74,080 1,646,267 1,057,913 Other net income -70,955-63,044 Extraordinary profit or loss -33, ,734 Income tax -554, ,157 NET PROFIT OF CONSOLIDATED COMPANIES 987, ,446 Group share in net profit or loss of disposed companies Group share in profit of equity affiliates 18,512 9,633 Provision for depreciation of goodwill -33,540-40,533 CONSOLIDATED NET PROFIT OR LOSS 972, ,546 Minority interests -11,734-10,974 NET INCOME (Group share) 960, ,572 BUSINESS REPORT 2014 / Covéa 56

59 We wish to thank all members of the Covéa staff who were kind enough to lend their image to illustrate this publication when reporting operations took place at the MAAF offices at rue Monge in Paris, at boulevard de la République in Aix-en-Provence, the MMA premises of Novaxis VI in le Mans, at GMF in Levallois-Perret, the FIDELIA offices in Saint-Cloud and as well as at central headquarters of Covéa Paris-Tivoli. Designed and produced by: Editorial: Covéa Photo credits: LaCompany/Stéphanie Tétu and LaCompany/Frédéric Stucin Document published by Covéa External and Institutional Communication Department Tel.: + 33 (0) [email protected] This document is printed on 100% recyclable, biodegradable coated paper made from ECF pulp (Elemental Chlorine Free). It was manufactured in European paper mills with the following certifications: ISO 9001 (for quality management), ISO (for environmental management), PEFC (for using papers from sustainably managed forests) OHSAS (for health and safety).

60 MUTUAL GROUP INSURANCE COMPANY governed by the French Insurance Code RCS Paris rue Saint-Lazare PARIS MUTUAL COMMITMENT