MUTUAL COMMITMENT. Cultivating its originality

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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

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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