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Suduiraut - June 11, 2004

Suduiraut - June 11, 2004. AXA Belgium Financial Protection in Action Alfred Bouckaert, CEO AXA Belgium. Contents. 1 : Evolution of the Belgian Market 2 : AXA in Belgium 3 : Results summary 4 : Strategic priorities 5 : Conclusion.

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Suduiraut - June 11, 2004

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  1. Suduiraut - June 11, 2004 AXA Belgium Financial Protection in Action Alfred Bouckaert, CEO AXA Belgium

  2. Contents • 1 : Evolution of the Belgian Market • 2 : AXA in Belgium • 3 : Results summary • 4 : Strategic priorities • 5 : Conclusion

  3. High savings rate has fueled a strong growth in Life and Savings CAGR : 9,5% CAGR : 7,6% CAGR : 25,6% CAGR : 4,1%

  4. Belgian distribution landscape has changed (Life + P&C turnover) Clients Bank channel 35% Brokers 37% Tied Agents 8% Mutual 13% Direct 7% Insurance GWP evolution 1994/2002 : 10.035/22.169 mio € (+121%) Source: UPEA

  5. The Belgian insurance market has undergone considerable concentration x 1.000.000 € 1996 2002 Top10 = 74% of the market Top10 = 85% of the market

  6. Furthermore, Belgium has become a bank insurance market • Fortis (AG, Générale, CGER) • ING (BBL, La Patriotique, ING) • KBC (KB, ABB, CERA) • Dexia (Dexia, Artesia, BACOB, DVV, Corona) • AXA (AXA Belgium, Anhyp, IPPA, Royale Belge) AXA = distribution through self employed brokers and bank agents Retail banking only

  7. Contents • 1 : Evolution of the Belgian Market • 2 : AXA in Belgium • 3 : Results Summary • 4 : Strategic Priorities • 5 : Conclusion

  8. Estate planning Customer needs Retirement Risk managementFinancial Planning Annuities Asset management Asset accumulation Advice Investments Savings Consumer credit Mortgages Credit cards Sourced bank products Life protection Asset protection Auto, home, property, liability Life stages Our mission: Financial Protection

  9. 1999 - 2001 : merger of AXA in Belgium

  10. AXA Belgium distribution channels • Specialized Brokers: for large and medium-sized Companies (300) • General Brokers: for individuals and self-employed (12,000 - 2,700 professionals) • Bank agents (950) • La Poste • Viaxis : social finance • Partnerships : car manufacturers, banking partners, ...

  11. 2002 : integration into a financial protection group

  12. Corporate Clients Individual Clients Bank agents Brokers Brokers Direct Other channels Car Manufact., Viaxis, ... Product Management Medium / Large Businesses Product Management Bank Products Product Management Life & Invest Product Management P& - Indiv. & Small businesses Back Office Bank Back Office Insurance- Indiv. & Small businesses Back Office Insurance-Corporate Lines Support functions in synergy A client facing organization

  13. A new retail organization became operational on January 1, 2004 • Two main channels: bank agents & brokers • One sales management • broken down per product at the sales level • integrated at area level • with efforts and staff focusing on the best producer

  14. Contents • 1 : Evolution of the Belgian market • 2 : Organisation of AXA in Belgium • 3 : Results Summary • 4 : Strategic Priorities • 5 : Conclusion

  15. AXA is a leader of the Belgian market Market Market Share 2002 Volume 2002 • #1 P&C 18.0% 7 873 M€ • # 1 in Motor 20.2% 2 735 M€ • # 2 in Property 16.4% 1 656 M€ • # 1 in Worker comp 23.5% 1 011 M€ • # 1 in Liability 19.4% 614 M€ • #5 LIFE 11.8% 14 432 M€ • # 4 Individual Life 11.5% 11 089 M€ • # 3 Group Life 12.8% 3 342 M€ • #2 P&C + LIFE 13.9% 22 305 M€

  16. We have stabilized our market share in P&C ... Global growth of the Belgian market 2000 - 2002 : + 10,9% Growth Written premiums 2002 : size of the market 7 873 M€ Source: UPEA

  17. … significantly improving our combined ratio and our underlying earnings • Combined ratio has improved with 10 points between 1999 and 2003. • Underlying earnings doubled between 2002 and 2003, to € 118 mio adjusted earnings.

  18. In Life we generated growth and improved earnings to € 94 mio in 2003 Global growth of the Belgian market 2000 - 2002 : + 12,1% Growth Written premiums 2002: market size 14 432 M€ Source: UPEA

  19. In Life, premiums growth is significant and outperforming traditional insurers and bank-insurers Belgian market CAGR : 16% AXA Belgium CAGR : 24%

  20. We renewed growth in bank savings accounts and ... In € Mio

  21. … doubled our market share in mortgage loans (12% in 2003 vs. 5% in 2001) Mio €

  22. Expenses are being reduced ... Economic expenses (in Mio €) - 10% over 3 years

  23. ... while strictly controlling FTE evolution

  24. Top of mind and spontaneous awareness (april 2004)

  25. Perceived activities AXA vs competition

  26. Contents • 1 : Evolution of the Belgian Market • 2 : AXA in Belgium • 3 : Results Summary • 4 : Strategic Priorities • 5 : Conclusion

  27. Priorities in AXA Belgium’s Strategic Plan Increasegrowth Maintainprofitability Improveefficiency

  28. Increase growth in Life and Savings • Double the bank’s size • Increase loyalty • Develop cross-selling with bank and P&C database

  29. Maintain profitability in P/C • Retention of existing base • Focus on best risks (seniors, geographical focus…) • Further improve claims management • Further streamline processes

  30. Improve efficiency • A continuous process • Further cut cost base • Complete systems upgrading

  31. An integrated customer policy for growth and loyalty Our growth strategy is mainly based on : • customer loyalty • growth through cross-selling

  32. Risk 1.473.700 Life & Savings Bank 702.283 229.683 1.093.847 267.305 108.915 41.255 96.380 65.622 Total : 1.903.007 Credits & transactional Bank 312.172 Significant potential of our customer base AXA Belgium owns 50 % of Belgian households

  33. Product groups number of 57% 21% 10% 10% 2,6% 100% 0% 20% 40% 60% 80% Our potential Cross-selling rate is only 1,5 contracts. Cross-selling rate: number of AXA products hold by household 1 product group 2 product groups 3 product groups 4 product groups 5 product groups

  34. As you sow, so you reap 1st step : Customer loyalty

  35. 342,793 Motor Wildcard families 763,632 Total customer base Motor Motor Wildcard (November 2003) • Target : • Bonus Malus 0 (best level) for two years by AXA • Goal : • A 30 % reduction in lapse rates on “good risks” • Action : • The next claim is free

  36. 500,000 Home Wildcard families 691,000 Total customer base Home Home Wildcard (March 2004) • Target : • AXA customers with no claim in the past two years • Goal : • Cut lapse rate by 20 % on « good risks » • Action : • € 200 cash, if claim > € 1.500

  37. Mass Affluent • Target : • AXA customers with more than € 50.000 assets under management • Goal : • Increase level of Mass Affluent ‘AUM of 5 % • Action : • Free banking account + free banking cards • Yearly financial check-up • Services & relationship advantages 65,177 Mass Affluent (AUM > €50,000) 702,283 L & I customer base

  38. As you sow, so you reap 2nd step : Cross-selling

  39. 342,793 Motor wildcard families 195,000 Wildcard customers do not have Home insurance From Motor to Home • Target : • Motor Wildcard without Home • Goal : • 10 % cross-selling • Action : • 2 months free on purchasing Home insurance • Home Wildcard if no claim in 2 years

  40. 500,000 Home Wildcard families 342,793 Motor Wildcard families « Good risks » targets on which cross-selling actions will be implemented Cross-selling targets 691,000 Home customer families 763,632 Motor customer families 65,177 Mass Affluents (exp. > €50,000) 2 nd step: L&I customer families who over 45 years 702,283 L & I customer families

  41. HIP concept for our VIP customers HIP HAPPYIMPORTANTPEOPLE Happy Drive Happy Home Happy You Happy Life Differentiation: MA programme AUM > 50,000: products, services & relationship advantages • Differentiation: • Wildcard • Confidence guarantee Differentiation: Pension build-up & management programme Differentiation: Wildcard VIP product (in co-operation with AXA Art)

  42. Contents • 1 : Evolution of the Belgian Market • 2 : AXA in Belgium • 3 : Results Summary • 4 : Strategic Priorities • 5 : Conclusion

  43. Conclusion: AXA Belgium, a clear example of Financial Protection • A fully integrated retail model • Maximizes distribution reach • Customer-centric and not based on products as in the past • Allows significant economies of scale • Growing underlying earnings, stable market share in P/C, growth in Life and Savings • Brand awareness increases and is essential in what is customer driven

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