Alleanza Assicurazioni First Half Results

Transcription

1 Alleanza Assicurazioni 2006 First Half Results September 5th, 2006 A Member of the Generali Group

2 Disclaimer This presentation is focused on the development of Alleanza s insurance business in 1H2006 We are not in a position to comment on the impacts on Alleanza of the Banca Intesa-SPIMI merger and of the related Industrial Plan which will address, among other issues, bancassurance As a consequence of the new scenario, the Alleanza capital management issue is currently in stand by 2

3 Agenda Consolidated Key Results Highlights by Business Unit 2006 Outlook Financial Reporting Appendix 3

4 We have a focused strategy: ongoing value creation euro mln, net of minorities FY2005 NBV: the turnaround 1H06 NBV: the trend continues +23.8% +16.9% % mln mln (7.9) mln mln H YE assumptions 1H 2006 Impact of discount rate rise from 5.46% to 5.75% 4

5 Product mix boosts value and margins euro mln, net of minorities APE Margin +15.8% Strong and growing margins Margin increase sustained by: 32.2% 37.3% PVNBP Margin +16.7% commercial strategy of the Alleanza Core network, with a focus on annual premiums and their term, the cancellation of single recurrent premiums and the reduction of corporate policies Intesa Vita's increased sales of higher value added products 3.6% 4.2% 5

6 on stable volumes against a slowing market euro mln, net of minorities APE PVNBP +0.8% +0.6% Beating market performance Against a background of the Italian Life Assurance market falling by roughly 6% (*) in terms of new business sales, the Alleanza Group recorded a -2.5%, with stable APE and PVNBP to prove a positive contribution from the product mix (high incidence of annual premiums) (*) ANIA data 3, ,166.0 Annual Premium Equivalent (APE) is calculated as the first annuity of annual premiums plus 1/10th of single premiums Present Value of New Business Premiums (PVNBP) is the sum of all single premiums and of the present value of annual premium instalments. thus giving value also to contract term 6

7 Steady net income boosted by one off factors euro mln Contribution to Net Income Drivers by Business Line Consolidated net result grows by 28% year on year on the back of: Alleanza Core Intesa Vita Real Estate a one off growth in the result of Generali Properties, following Financial Law 2006, with a net tax benefit of 59 mln, following fiscal revaluation of assets a positive result from Intesa Vita's financial management a substantial stability of the Alleanza Core result 7

8 Agenda Consolidated Key Results Highlights by Business Unit 2006 Outlook Financial Reporting Appendix 8

9 Focus on value: Alleanza Core NBV generation euro mln Growth sustained by product mix 93.7 mln 6.9 mln 16.8 mln 2.1 mln mln +27.6% (7.1) mln mln +20.0% Product Mix/ Term 1H 2005 End of reinsurance Volume 2005YE 1H 2006 assumptions Impact of discount rate rise from 5.54% to 5.74% 9

10 Alleanza Core s strategically defined Product Mix euro mln Corporate Single recurring Retail Single NB Annual Premiums NB Single Premiums % +42.2% Clear Strategy Pursued Annual Premiums pushed by commercial strategy geared to focused network incentives Term of Annual Premiums grows to 18.6 years from 17.3 years in June 2005 and 17.7 years in December 2005 Corporate Single Premiums halved from 200 to 100 mln, and single recurring premiums virtually cancelled due to their lower profitability Retail Single Premiums grow on the back of commercial incentive policies 10

11 supports strong and improving margins euro mln, net of taxation, reinsurance and cost of capital Alleanza Core APE +2.2% Alleanza Core APE Margin +17.4% % 57.4% Alleanza Core PVNBP +2.1% Alleanza Core PVNBP Margin +17.7% 1, , % 7.3% 11

12 We are pursuing targeted Core sales force growth Network Size Efficient Commercial Strategy 15,920 16, % Non salaried 13,497 14,370 As anticipated in the Strategic Plan, network growth is actively pursued, with a 6.4% growth vs a targeted 5% CAGR Salaried 2,423 2,564 FY H

13 and network incentive alignment Alleanza Network Compensations Incentivise value production Variable Compens. Fixed Compens. 59.0% 63.1% 41.0% 36.9% FY H 2006 Growth of variable compensation reflects efficient commercial strategy of identifying and promoting higher value add products Compensation packages stronglygeared to performance attract high potentials to Alleanza Core network 13

14 Margin-led product mix underpins growth in Intesa Vita euro mln % of NBS Focus on high margin products Traditional 59.0% 54.3% The proportion of higher value added index and unit linked products rises on the total, contributing to improved NBV and margins Index Linked 34.4% 35.3% Unit Linked 6.6% 10.4% 1H H

15 Intesa Vita New Business Generation euro mln, net of minorities, taxation and cost of capital NBV 20.6 mln 22.0 mln +6.9% 1H YE assumptions (0.8) mln 21.2 mln Impact of discount rate rise from 5.26% to 5.78% 1H 2006 New Business Margin +2.9% NBV is negatively affected by the change in assumptions due to increased 1H2006 discount rates (5.78%). Using 2005 yearend assumptions (5.26%), growth would have been +6.9% As production is near to 100% concentrated on single premiums, PVNBP equates roughly to NB premiums (10x APE) APE +4.0% -0.8% 12.6% 13.1%

16 Agenda Consolidated Key Results Highlights by Business Unit 2006 Outlook Financial Reporting Appendix 16

17 Net income target revised due to one off fiscal effects From the Plan 2006 Targets 2006 Plan euro million Consolidated NBV Consolidated Net Income X Targets FY2005 Results and Strategic Plan Consolidated NBV increase is mainly based on Alleanza Core contribution Consolidated Net Income is affected by Real Estate Capital Gains harvesting delay to capture fiscal benefits 53 NBV target maintained at mln range, notwithstanding growth in interest and discount rates FY06 Net Income target revised to a range of mln to take account of fiscal realignment equal to approximately 60 mln, accounted for in 1H06

18 Agenda Consolidated Key Results Highlights by Business Unit 2006 Outlook Financial Reporting Appendix 18

19 1H2006 Consolidated Net Income euro mln 1H H 2006 % Net Earned Premiums 4, ,366.8 (133.9) (3.0)% Net Insurance Benefits and Claims (5,017.8) (4,299.6) (718.2) (14.3)% Operating Expenses (231.1) (233.3) (2.2) 1.0% Net Income from Subsidiaries, Affiliates and JVs % Net Income from Investments % Net Income from Investments at Fair Value through P&L (234.1) (620.3) (160.6%) Other Income & Charges n.s Earnings before other Income & Charges. Taxes & Minorities % Taxes (88.7) (87.2) (1.5) (1.7%) Minorities (30.4) (59.2) % Net Income % 19

20 Net Insurance Benefits and Claims euro mln Net Insurance Benefits and Claims Analysis 5, , , , , % Payments Changes in Reserves Sums paid increase mainly on the back of the reduction of corporate policies at Alleanza Core Changes in reserves are reduced due to higher payments and to the negative performance from investments backing unit and index linked policies where the risk is borne by the policyholder, accounted for in Net Income from Investments at Fair Value through P&L 20

21 Acquisition Commissions euro mln. gross of reinsurance Acquisition commissions increase supporting NBV generation +20.0% +20.4% (*) Alleanza Core (*) % Alleanza Core NBV Intesa Vita % 1, ,481.3 (*) Before capitalisation of part of acquisition costs (**) Products on which most of front end fees (acqusition costs) are concentrated Intesa Vita index & unit linked NBS (**) 21

22 Investments Available for Sale & Related UCGs euro mln Equities Investments Unrealised Capital Gains Unrealised capital 37, , , % 8.5% gains driven by increased interest rate Bonds Mutual Funds 36.8% 81.3% 79.3% 79.0% 52.3% 4.4% 12.4% 12.5% 10.9% 14.3% FY H 2006 FY H mln capital gains realised in 1H06 The corresponding reserve for unrealised gains and losses on AFS is reduced by approximately 80 mln, from to mln 22

23 Net Income fr. Financial Instruments and Other Investments euro mln Net Income Analysis % Net income from financial instruments increases mainly on the back of higher income due to higher interest rates Interest & Other Income Net Realised Capital Gains

24 Shareholders Equity euro mln. net of minorities Shareholders Equity Analysis Share Capital & Capital Reserves Revenue Reserves 3, , % 25.9% 43.8% 45.9% Changes are mainly due to variation in reserve for unrealised gains and losses on AFS and dividend payment (100% payout) Res.for Unr.G&L on Investments AFS Profit of the Period 18.7% 16.9% 12.8% 11.3% FY H

25 Agenda Consolidated Key Results Highlights by Business Unit 2006 Outlook Financial Reporting Appendix 25

26 Profit & Loss euro mln 1H2006 1H2005 Change % Net earned premiums 4, ,500.7 (133.9) (3.0%) Gross premiums 4, ,952.4 (146.0) (2.9%) Premiums ceded in reinsurance (439.6) (451.7) 12.1 (2.7%) Fee and commission income and income from financial services activities % Income from financial assets at fair value through profit and loss (234.1) (620.3) (160.6%) Income from subsidiaries, associated companies and joint ventures % Other income from financial instruments and other investments % Interest income % Other income from financial instruments and other investments % Realised gains % Unrealised gains Other income (37.7) (34.1%) TOTAL INCOME 5, ,980.1 (642.1) (10.7%) Net insurance benefits and claims 4, ,017.8 (718.2) (14.3%) Gross insurance benefits and claims 4, ,504.0 (725.3) (13.2%) Reinsurers' share (479.1) (486.2) 7.1 (1.5%) Fee and commission expenses % Expenses from subsidiaries, associated companies and joint ventures Other expenses for finacial instruments and other investments % Interest expenses % Other expenses for financial instruments and other investments (1.4) (31.8%) Realised losses % Unrealised losses (2.1) (40.4%) Administration costs % Other expenses (63.2) (50.2%) TOTAL EXPENSES 4, ,608.5 (740.0) (13.2%) EARNINGS BEFORE TAXES % Taxes (1.5) (1.7%) Third Parties % RESULT OF THE PERIOD % 26

27 Assets euro mln ASSETS 1H2006 FY2005 Change % INTANGIBLE ASSETS % Goodwill % Other intangible assets TANGIBLE ASSETS (3.5) (5.4%) Land and buildings % Tangible assets and inventories (7.4) (22.7%) AMOUNTS CEDED TO REINSURERS FROM INSURANCE PROVISION 7, , % INVESTMENTS 50, ,129.1 (567.6) (1.1%) Land and buildings (3.6) (2.1%) Investments in subsidiaries, associated companies and joint ventures 1, % Loans 1, , % Held to maturity Available for sale 36, ,411.8 (1,121.0) (3.0%) Financial assets at fair value through profit and loss 11, , % RECEIVABLES % Receivables arising out of direct insurance operations % Receivables arising out of reinsurance operations 0.6 (0.6) Other receivables % OTHER ASSETS 1, , % Deferred acquisition costs Current tax (63.4) (11.5%) Deferred tax receivables % Other Assets % CASH AND CASH EQUIVALENTS (273.9) (55.8%) TOTAL ASSETS 60, ,639.8 (150.9) (0.2%) 27

28 Liabilities EQUITY AND LIABILITIES 1H2006 FY2005 Change % SHAREHOLDERS' EQUITY 3, ,754.7 (96.0) (2.6%) Group Shareholders' equity 2, ,008.0 (145.8) (4.8%) Share capital % Capital reserve % Revenue reserve 1, ,318.2 (5.7) (0.4%) Own shares (9.4) (9.5) 0.1 (1.1%) Reserve for currency translation differences Reserve for unrealised gains and losses on investments available for sale (78.9) (14.0%) Other profit or loss equity consolidated Group result of the period (61.4) (16.0%) Third parties' equity % OTHER PROVISIONS (13.8) (23.8%) INSURANCE PROVISIONS 46, ,346.3 (54.4) (0.1%) FINANCIAL LIABILITIES 8, ,034.1 (147.0) (1.6%) Financial liabilities at fair value trough profit and loss (101.6) (10.3%) Other financial liabilities 8, ,050.8 (45.4) (0.6%) PAYABLES (129.1) (21.3%) Payables arising out of direct insurance operations % Payables arising out of reinsurance operations (101.7) (75.2%) Other payables (72.8) (20.2%) OTHER LIABILITIES 1, % Deferred tax liabilities 1, % Current tax liabilities (62.5) (46.0%) Other liabilities (5.0) (12.5%) TOTAL EQUITY AND LIABILITIES 60, ,639.8 (151.0) (0.2%) 28

29 New Business Premiums euro mln, gross of minorities New business premiums 1H2006 1H2005 Change % Total 3, , % Alleanza (168.0) (21.9%) Retail (68.0) (12.0%) Corporate (100.0) (50.0%) Intesa Vita 3, ,265.4 (26.3) (0.8%) Annual Total % Alleanza % Intesa Vita Single recurring Total (61.7) (99.0%) Alleanza (61.7) (99.0%) Single retail Total 3, ,632.2 (56.1) (1.5%) Alleanza (29.6) (8.1%) Retail % Corporate (100.0) (50.0%) Intesa Vita 3, ,265.4 (26.5) (0.8%) 29

30 New Business Single Premiums euro mln, gross of minorities 1H2006 1H2005 Change % New Business Single Premiums Total 2, ,507.8 (76.0) (3.0%) Traditional retail 1, ,091.8 (100.4) (4.8%) Traditional corporate (100.0) (50.0%) Unit Linked % Index linked Alleanza (29.6) (8.1%) Traditional retail % Traditional corporate (100.0) (50.0%) Unit Linked Index linked Intesa Vita 3, ,265.4 (26.5) (0.8%) Traditional retail 1, ,925.1 (167.5) (8.7%) Unit Linked % Index linked 1, , % 30

31 New Business Value euro mln, net of minorities 1H2006 1H2005 Change % Premiums Total 2, ,200.1 (81.1) (3.7%) Alleanza (68.0) (12.0%) retail % corporate (100.0) (50.0%) Intesa Vita 1, ,632.7 (13.1) (0.8%) APE Total % Alleanza % retail % corporate (10.0) (50.0%) Intesa Vita (1.3) (0.8%) Present Value of New Business Premiums (PVNBP) Total 3, , % Alleanza 1, , % retail 1, , % corporate (100.0) (50.0%) Intesa Vita 1, ,632.7 (13.1) (0.8%) New Business Value Total % Alleanza % Intesa Vita % 31

32 Reserves euro mln Change Change % % Gross technical reserves 46, , ,690.0 (54.4) (0.1%) 2, % Traditional 37, , ,715.2 (226.4) (0.6%) 1, % Unit Linked 2, , , % % Index linked 6, , , % 1, % Gross Alleanza Total 20, , ,369.7 (157.3) (0.8%) % Traditional 20, , ,344.7 (161.1) (0.8%) % Unit Linked % % Index linked Gross Intesa Total 25, , , % 2, % Traditional 17, , ,370.5 (65.3) (0.4%) % Unit Linked 2, , , % % Index linked 6, , , % 1, % Borne by reinsurers Total 7, , , % % Traditional Net Total 39, , ,655.1 (167.7) (0.4%) 2, % Traditional 30, , ,680.3 (339.7) (1.1%) % Unit Linked 2, , , % % Index linked 6, , , % 1, % 32

33 Operating Expenses euro mln 1H2006 1H2005 Change Direct expenses Total (7.2) (2.5%) Alleanza (21.9) (12.3%) Intesa Vita % Other (1.2) (25.0%) % Fixed personnel expenses Other admin expenses Total % Alleanza % Intesa Vita % Other Total % Alleanza % Intesa Vita (0.6) (3.9%) Other (1.7) (37.0%) Commissions Total % Alleanza % Intesa Vita % DAC Total (44.9) (44.9) Alleanza (44.9) (44.9) Intesa Vita Investment management expenses Total (0.8) (6.4%) Alleanza % Intesa Vita (0.4) (5.9%) Other 0.7 (0.7) Indirect expenses Total (0.1) (25.0%) Alleanza (0.1) (25.0%) Intesa Vita Borne by reinsurers Total (64.2) (74.5) 10.3 (13.8%) Alleanza (64.2) (74.5) 10.3 (13.8%) Intesa Vita Al netto quota riassicuaratori Total % Alleanza (11.4) (10.4%) Intesa Vita % Other (1.9) (34.5%) 33

34 Disclaimer Certain of the statements contained herein are statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. The user of such information should recognise that actual results, performance or events may differ materially from such expectations because they relate to future events and circumstances which are beyond our control including, among other things, general economic and sector conditions. Neither Alleanza Assicurazioni SpA nor any of its affiliates, directors, officers employees or agents owe any duty of care towards any user of the information provided herein nor any obligation to update any forward-looking information contained in this document. 34