CNP Assurances - Quarterly Indicators for the Three Months Ended 31 March 2011
PARIS, May 9, 2011 /PRNewswire-FirstCall/ --
- First-Quarter 2011 Premium Income: EUR8.1 Billion
- First-Quarter 2011 Net Profit: EUR270 Million
CNP Assurances, the leading personal insurer in France with operations in the rest of Europe and in South America, has announced its quarterly indicators for the first three months of 2011.
Highlights
- EUR8.1 billion in premium income, down 14.1% from first-quarter 2010
- Lower savings revenue in France and Italy, amid declining markets
- Higher premiums in risk business (personal risk up 4.6%; term creditor insurance up 7.1%)
- Average technical reserves, excluding deferred participation, up 6.3% to EUR284.2 billion, lifted by structurally positive net new money
- EBIT stable at EUR453 million
- Net profit down 3.6% to EUR270 million
- Solvency capital requirement under Solvency I covered 1.56 times including unrealised gains
Gilles Benoist, Chief Executive Officer, said:
"Like the entire industry, CNP Assurances experienced a decline in savings revenue in the first quarter of 2011. However, our strategy of focusing on higher-margin personal risk products both in France and in other countries is continuing to pay off, and CNP Assurances is still strongly profitable. We will continue to focus on margins rather than volume."
1. First-Quarter 2011 Business Review[1]
Consolidated premium income fell by 14.1% to EUR8.1 billion under IFRS (and by 15.2% to EUR8.3 billion under French GAAP). The decline reflected a drop in savings revenue throughout the entire European market. Conversely, the risk segment (primarily personal risk and term creditor insurance) continued to enjoy sustained growth across all markets.
Average technical reserves excluding deferred participation rose by an estimated 6.3%, confirming the resilience of the CNP Assurances business model.
Net new money for the Group was positive, amounting to EUR2.2 billion for
the quarter.
IFRS French GAAP
Premium income Q1 2011 % Q1 2011 %
(in EURm) change change
Savings 5,397.5 - 25.3 5,598.6 - 24.7
Pensions 1,243.7 + 56.7 1,288.8 + 28.1
Personal risk 465.5 + 4.6 465.8 + 4.7
Term creditor insurance 765.6 + 7.1 765.5 + 7.1
Health insurance 111.1 - 15.4 111.1 - 15.4
Property & Casualty 87.5 + 14.2 87.5 + 14.2
TOTAL 8,070.9 - 14.1 8,317.4 - 15.2
In France, premiums were down 16.6%. The downturn stemmed from a market-wide decline in savings business, mainly due to uncertainty about forthcoming tax changes and heightened competition from bank products.
Outside France, premiums dipped 4.1% to EUR1.8 billion, reflecting mixed performances. Brazil's contribution was 8.5% higher, helped by a favourable exchange rate, while that of Italy was down 63.5%, chiefly as a result of lower savings revenue and an unfavourable basis of comparison in 2010. Business growth was solid in the other European countries, thanks to the development of risk products. Ireland signed a major EUR442 million group-pensions contract.
IFRS French GAAP
Premium income Q1 2011 % Q1 2011 %
(in EURm) change change
France 6,248.2 -16.6 6,294.6 - 18.3
Italy (1) 381.2 - 63.5 459.1 - 58.7
Portugal (2) 69.6 + 173.0 90.9 + 12.5
Brazil (5) 665.9 + 8.5 764.6 + 9.6
Argentina (5) 6.0 + 115.0 6.0 + 115.0
Spain (3) 193.0 + 23.1 193.0 + 23.1
Cyprus 58.4 + 21.0 60.7 + 25.6
Ireland 448.1 - 448.1 -
Other (4) 0.6 - 93.2 0.6 - 93.2
TOTAL 8,070.9 - 14.1 8,317.4 - 15.2
(1) Italian branches, CNP Italia, Cofidis Italy, CNP
UniCredit Vita and BVP Italy
(2) Cofidis Portugal and BVP Portugal
(3) Spanish branches, Cofidis Spain, CNP Vida and BVP
Spain
(4) Cofidis Belgium, Czech Republic, Romania, Greece
and Hungary
(5) Based on exchange rates at 31 March 2011
Sales of unit-linked contracts continued to grow in the first quarter, representing 16.8% of savings/pension revenue for the Group as a whole.
- France
In France, CNP Assurances reported EUR6.2 billion in premium income for the first quarter, down 16.6% from the year-earlier period. The decline was attributable to a 19.9% drop in savings revenue. Like the rest of the French market, CNP Assurances was hurt by competition from short-term banking products and uncertainty surrounding proposed tax changes. A variety of marketing initiatives planned for the rest of the year throughout the distribution networks should help to sustain the business.
The risk segment continued to grow, with premium income from personal risk products rising by 1.6% in France and term creditor insurance revenue by 1%.
In a declining French market, savings and pensions net new money fell by 58% but nevertheless remained structurally positive at EUR1.2 billion in the first quarter.
i. La Banque Postale
Premium income generated by La Banque Postale contracted 6% to EUR2.5 billion, a much smaller decline than that of the market. Business during the period was led by life insurance sales to private banking customers, which rose 5%.
The pension and personal risk segments held steady, on the back of strong growth in first-quarter 2010. Unit-linked contracts generated 5% of new money, the same percentage as the year before.
ii. Savings Banks
The Savings Banks generated premium income of EUR2.6 billion in the first quarter, a 26.5% decline that was due to the network's stronger marketing focus on banking products during the three-month period and to high prior-year comparatives.
The contribution of unit-linked sales to total new money rose to 16%, lifted by a marketing campaign offering an attractive return on unit-linked investments and the marketing of a life-insurance fund based on the new tranche of the BPCE loan, which accounted for more than 75% of unit-linked sales for the period.
The personal risk offering continued to expand, with the twofold increase in revenue confirming the success of the funeral insurance product.
iii. CNP Tresor
CNP Tresor's contribution to premium income amounted to EUR151 million, down 13.3% on first-quarter 2010. The decline was due to a highly successful marketing campaign in first-quarter 2010 that led to a high basis of comparison.
iv. Companies & Local Authorities
The Companies & Local Authorities partnership centre generated premium income of EUR434 million, down a slight 1.8%. Business momentum remained strong but period-on-period comparisons were adversely affected by a very large premium recorded in first-quarter 2010 under a group pensions contract. In the personal risk segment, revenue was lifted by a number of group insurance contracts won in 2010 that came into effect on 1 January 2011.
v. Financial Institutions
Premium income from financial institutions receded by 5.9% to EUR362.2 million, following an excellent year in 2010. The French government's announcement that certain tax incentives would be withdrawn on 1 January 2011 encouraged investors to finalize their transactions before the end of the year. In addition, revenue was eroded by the loss of the Cofidis term creditor insurance business as of 1 January 2011.
vi. Mutual Insurers
Premium income generated by the Mutual Insurers partnership centre declined to EUR188.5 million. As of 31 March 2011, MFPrevoyance was not yet included in the scope of consolidation. Had it been included, premium income would have been stable. In the first quarter of 2011, a new agreement was signed with MGEN (the French teachers' mutual) concerning the launch of a voluntary long-term care insurance contract alongside the mandatory plan adopted in 2009.
- International operations
Premium income from operations outside France contracted 4.1% to EUR1.8 billion, or 4% to EUR2 billion under French GAAP[2]. Excluding the favourable effect of the Brazilian Real's appreciation against the Euro, the decline was 6.8%, reflecting difficulties in the European savings segment (down 54%), and especially at the Italian subsidiary CNP UniCredit Vita (down 72.2%). The other segments, particularly risk, enjoyed robust growth, with term creditor insurance premiums rising 38.2% and personal risk premiums up 13.6%.
i. Caixa Seguros (Brazil)
Caixa Seguros's contribution to consolidated premium income rose 8.5% to EUR666 million, lifted by the favourable effect of the Brazilian Real's appreciation against the Euro. On a local currency basis, revenue was stable compared with first-quarter 2010.
The savings, personal risk and term creditor insurance businesses continued to grow, while the pensions business remained stable. Unlike in 2010, marketing campaigns did not begin until the end of March. They are expected to stimulate sales in the coming months. In addition, a group health insurance offer was launched during the quarter.
ii. CNP UniCredit Vita (Italy)
CNP UniCredit Vita's premium income dropped 69.8% to EUR312 million, hurt by the decline in savings business compared with first-quarter 2010 which saw very strong sales of the UniGarantito traditional savings product. Following an in-depth reorganisation, during the first quarter the network focused on selling products that would generate financial resources for the bank. This was in a period when customers were less inclined to save and turned their backs on traditional savings products that became less attractive as interest rates rose.
On the other hand, the term creditor insurance business continued to expand rapidly, with a twofold increase in premium income, and the personal risk business also enjoyed strong growth, stimulated by the introduction of a new term life insurance contract.
iii. CNP Barclays Vida y Pensiones (Southern Europe)
CNP BVP reported cumulative premium income of EUR239 million, compared to EUR42.8 million to end-March 2010. This remarkable performance comes just over one year since the subsidiary was first consolidated. Business was boosted by a nearly six-fold increase in sales of tax-advantaged pension products in Spain. In Portugal, the market was driven by demand for guaranteed yield savings products, against a backdrop of widening Portuguese bond spreads. In Italy, demand remained strong for the BLIP savings product with a 61% unit-linked/39% traditional savings weighting that was launched in 2010.
iv. CNP Vida (Spain)
CNP Vida's premium income shrank 40.6% to EUR71.2 million. Savings revenue declined but the term creditor insurance business continued to grow, with revenue rising four-fold from first-quarter 2010.
v. CNP Marfin Insurance Holding (Cyprus/Greece)
Consolidated premium income for CNP Marfin Insurance Holding totalled EUR58.4 million in the first three months of 2011, of which 79% was generated in Cyprus. Business grew a healthy 21% despite Greece's economic difficulties, thanks to a sharp increase in savings revenue (up 48.7%) and term creditor insurance revenue (up 63.4%).
vi. CNP Europe Life (Ireland)
The Irish subsidiary reported solid growth, led by the signing of a major EUR442 million group pension contract for the Ireland and UK-based employees of a large international company. Similar to the other plans that CNP Assurances has been managing for years with large firms based in France, this contract was negotiated and written with the help of CNP Assurances's French teams.
2. First-quarter 2011 profit indicators
Q1 2011 Q1 2010 % change
in EURm In EURm
Premium income 8,070.9 9,391.3 - 14.1
Average technical reserves 284,225 267,472 + 6.3
excluding deferred
participation
Net insurance revenue excluding 506.9 592.5 - 14.4
own funds portfolios
Revenue from own funds 127.9 123.0 + 4.0
portfolios
Total net insurance revenue 634.9 715.5 - 11.3
EBIT 453.3 452.6 + 0.2
Net profit 270 280 - 3.6
Despite a 14.1% decline in consolidated premium income in the first quarter of 2011, technical reserves including deferred participation - the main driver of CNP Assurances's business model - were up an estimated 3.1% at 31 March 2011 to EUR288.5 billion. Average technical reserves for the period excluding deferred participation rose faster, by an estimated 6.3% to EUR284.2 billion.
Net insurance revenue, excluding own funds portfolios, contracted by 14.4%, while net insurance revenue from own-funds portfolios was up 4.0%. In all, net insurance revenue was down 11.3% to EUR635 million in the first quarter of 2011.
Net profit came to EUR270 million for the period.
3. Solvency capital
The solvency capital requirement under Solvency I was covered an estimated 1.56 times including unrealised capital gains and around 1.10 times by equity and quasi-equity alone (1.12 times after taking into account the EUR700 million and GBP300 million subordinated debt issues carried out in early April 2011 and the repayment of EUR750 million in subordinated debt during the same month).
APPENDICES
PREMIUM INCOME BY PARTNERSHIP CENTRE
IFRS French GAAP
Q1 2011 Q1 2010 % Q1 2011 Q1 2010 %
in EURm in EURm change in EURm in EURm change
La Banque Postale 2,451.7 2,610.4 - 6.1 2,452.5 2,611.4 - 6.1
Savings Banks 2,643.0 3,598.4 - 26.5 2,643.5 3,599.0 - 26.6
CNP Tresor 150.8 174.0 - 13.3 150.8 174.0 - 13.3
Financial 362.2 384.9 - 5.9 362.2 384.9 - 5.9
Institutions France
(1)
Mutual Insurers 188.5 236.2 - 20.2 188.5 236.2 - 20.2
Companies and Local 434.0 442.0 - 1.8 479.2 654.5 - 26.8
Authorities
Other (France) 18.0 45.5 - 60.5 18.0 45.5 - 60.5
TOTAL France 6,248.2 7,491.4 - 16.6 6,294.6 7,705.6 - 18.3
CNP Seguros de Vida 6.0 2.8 + 115.0 6.0 2.8 + 115.0
(Argentina) (2)
CNP Vida (Spain) 71.2 119.9 - 40.6 71.2 119.9 - 40.6
Caixa Seguros 665.9 613.5 + 8.5 764.6 697.9 + 9.6
(Brazil) (2)
CNP UniCredit Vita 311.9 1,031.4 - 69.8 389.8 1,098.3 - 64.5
(Italy)
Marfin Insurance 58.4 48.2 + 21.0 60.7 48.3 + 25.6
Holdings Ltd
(Cyprus)
CNP Europe 448.1 0.5 - 448.1 0.5 -
(Ireland)
BVP Portugal 70.1 16.0 + 339.1 91.4 71.3 + 28.2
BVP Spain 112.8 26.8 + 320.0 112.8 26.8 + 320.0
BVP Italy 56.2 - - 56.2 - -
Financial 3.1 25.9 - 88.0 3.1 25.9 - 88.0
Institutions
outside France
Branches 19.1 15.0 + 28.0 19.1 15.0 + 28.0
Other - 0.01 - - 0.01 -
(International)
TOTAL International 1,822.7 1,899.9 - 4.1 2,022.8 2,106.6 - 4.0
TOTAL 8,070.9 9,391.3 - 14.1 8,317.4 9,812.2 - 15.2
(1) Excluding Cofidis outside France.
(2) Average exchange rates:
Argentina: EUR1 = ARS 5.6162
Brazil: EUR1 = BRL 2.2634
PREMIUM INCOME BY BUSINESS SEGMENT
IFRS
Premium income Q1 2011 Q1 2010 % Q1 2011 at
(in EURm) constant
change exchange
rates (pro
forma) (1)
Savings 5,397.5 7,230.0 - 25.3 5,360.2
Pensions 1,243.7 793.6 + 56.7 1,212.4
Personal risk 465.5 445.1 + 4.6 456.9
Term creditor 765.6 714.6 + 7.1 740.2
insurance
Health insurance 111.1 131.3 - 15.4 111.1
Property & 87.5 76.7 + 14.2 82.0
Casualty
TOTAL 8,070.9 9,391.3 - 14.1 7,962.6
French GAAP
Premium income Q1 2011 Q1 2010 % Q1 2011 at
(in EURm) constant
change exchange
rates (pro
forma) (1)
Savings 5,598.6 7,438.4 - 24.7 5,553.5
Pensions 1,288.8 1,006.1 + 28.1 1,257.5
Personal risk 465.8 445.1 + 4.7 457.3
Term creditor 765.5 714.6 + 7.1 740.1
insurance
Health insurance 111.1 131.3 - 15.4 111.1
Property & 87.5 76.7 + 14.2 82.0
Casualty
TOTAL 8,317.4 9,812.2 - 15.2 8,201.4
(1) Average exchange rate for Brazil
At 31 March 2011 EUR1 = BRL 2.2634
At 31 March 2010 EUR1 = BRL 2.3286
UNIT-LINKED SALES
IFRS French GAAP
Q1 2011 Q1 2010 % Q1 2011 Q1 2010 %
in EURm in EURm change in EURm in EURm change
La Banque Postale 122.2 132.0 - 7.4 123.0 133.1 - 7.6
Savings Banks 422.5 511.4 - 17.4 422.9 512.1 - 17.4
CNP Tresor 7.3 6.3 + 16.2 7.3 6.3 + 16.2
Other 1.8 2.3 - 20.7 1.8 2.3 - 20.7
TOTAL individual 553.8 652.0 - 15.1 555.0 653.7 - 15.1
unit-linked France
Group unit-linked 5.7 5.2 + 11.4 50.9 217.6 - 76.6
France
TOTAL France 559.6 657.2 - 14.9 606.0 871.4 - 30.5
CNP UniCredit Vita 83.5 119.9 - 30.4 161.4 186.9 - 13.6
Caixa Seguros 373.4 388.9 - 4.0 373.4 388.9 - 4.0
CNP Vida 35.1 89.4 - 60.8 35.1 89.4 - 60.8
Marfin Insurance 16.0 16.5 - 3.0 18.0 16.6 + 8.9
Holdings Ltd
CNP Europe 5.7 0.5 + 1,016.1 5.7 0.5 + 1,016.1
BVP Portugal - - - 87.1 55.3 + 57.4
BVP Spain 61.7 9.8 + 527.2 61.7 9.8 + 527.2
BVP Italy 21.9 - - 21.9 - -
TOTAL International 597.3 625.1 - 4.5 764.3 747.4 + 2.3
TOTAL Unit-linked 1,156.9 1,282.3 - 9.8 1,370.3 1,618.8 - 15.4
PREMIUM INCOME BY INSURANCE CATEGORY
IFRS French GAAP
Q1 2011 Q1 2010 % Q1 2011 Q1 2010 %
in EURm in EURm change in EURm in EURm change
Individual
insurance 6,165.8 7,924.1 - 22.2 6,366.9 8,132.4 - 21.7
Group insurance 1,905.1 1,467.2 + 29.8 1,950.5 1,679.7 + 16.1
TOTAL 8,070.9 9,391.3 - 14.1 8,317.4 9,812.2 - 15.2
PREMIUM INCOME BY COUNTRY AND BY BUSINESS SEGMENT
IFRS
Savings Pensions Personal risk
EURm Q1 11 % Chg. Q1 11 % Chg. Q1 11 % Chg.
France 4,844.5 - 19.9 355.3 - 8.3 340.5 +1.6
Italy (1) 318.6 - 68.6 5.3 - 9.2 2.0 +117.2
Portugal (2) 66.8 +620.5 0.0 - 0.0 -
Other (Europe) (3) 0.0 - 0.0 - 0.0 -
Brazil 17.7 + 14.3 398.1 + 1.7 110.2 + 14.4
Argentina 0.9 + 14.7 0.0 - 1.7 + 34.1
Spain (4) 117.1 - 6.8 42.6 +386.3 2.6 + 1.6
Cyprus 26.1 +48.7 0.0 - 8.5 - 2.1
Ireland 5.7 - 442.4 - 0.0 -
Sub-total
International 553.0 -53.3 888.3 +118.7 125.0 +13.6
TOTAL 5,397.5 -25.3 1,243.7 +56.7 465.5 +4.6
(1) CNP UniCredit Vita, CNP Italia branches, Cofidis in Italy and BVP
Italy
(2) Cofidis in Portugal and BVP Portugal
(3) Cofidis in Europe excluding Italy, Portugal and Spain
(4) CNP Espana branches, Cofidis in Spain, CNP Vida and BVP Spain
Table continues:
IFRS
Term creditor Health Property Total
insurance insurance & Casualty
EURm Q1 11 % Chg. Q1 11 % Chg. Q1 11 % Chg. Q1 11 % Chg.
France 602.6 1.0 105.3 - 16.7 0.0 - 6,248.2 -16.6
Italy (1) 55.2 +148.6 0.0 - 0.0 - 381.2 -63.5
Portugal (2) 2.7 -82.7 0.0 - 0.0 - 69.6 +173
Other (Europe) (3) 0.6 -93.2 0.0 - 0.0 - 0.6 -93.2
Brazil 68.8 + 38.6 0.0 - 71.1 +17.4 665.9 + 8.5
Argentina 3.5 +335.9 0.0 - 0.0 - 6.0 +115
Spain (4) 30.7 +54.8 0.0 - 0.0 - 193.0 +23.1
Cyprus 1.5 +63.4 5.8 +17.8 16.4 +2 58.4 +21.0
Ireland 0.0 - 0.0 - 0.0 - 448 .1 -
Sub-total
International 163.0 + 38.2 5.8 +17.8 87.5 +14.2 1,822.7 -4.1
TOTAL 765.6 +7.1 111.1 -15.4 87.5 +14.2 8,070.9 -14.1
(1) CNP UniCredit Vita, CNP Italia branches, Cofidis in Italy and BVP
Italy
(2) Cofidis in Portugal and BVP Portugal
(3) Cofidis in Europe excluding Italy, Portugal and Spain
(4) CNP Espana branches, Cofidis in Spain, CNP Vida and BVP Spain
CAIXA SEGUROS PREMIUM INCOME
(BRLm) IFRS French GAAP
Market Segment Q1 2011 % Q1 2011 %
Change change
Savings 40.2 + 5.3 263.5 + 7.4
Pensions 901.0 - 6.3 901.0 - 6.3
Personal risk 249.4 + 5.4 249.4 + 5.4
Term creditor 155.6 + 27.7 155.6 + 27.7
insurance
Health insurance 160.9 + 8.2 160.9 + 8.2
TOTAL 1,507.2 + 0.0 1,730.5 + 0.9
CNP UNICREDIT VITA PREMIUM INCOME
EURm IFRS French GAAP
Market Segment Q1 2011 % Q1 2011 %
change change
Savings 282.6 - 72.2 360.5 - 66.7
Pensions 5.3 - 9.2 5.3 - 9.2
Personal risk 2.0 + 117.2 2.0 + 117.2
Term creditor 21.9 + 128.5 21.9 + 128.5
insurance
TOTAL 311.9 - 69.8 389.8 - 64.5
CNP BVP PREMIUM INCOME
EURm IFRS French GAAP
Market Segment Q1 2011 % Q1 2011 %
Change change
Savings 165.7 + 714.7 187.0 + 147.2
Pensions 41.8 + 493.2 41.8 + 493.2
Personal risk 2.6 - 10.2 2.6 - 10.2
Term creditor 28.9 + 131.2 28.9 + 131.2
insurance
TOTAL 239.0 + 458.3 260.3 + 165.3
Investor Calendar
- Ex-dividend date: Tuesday, 10 May 2011
- Dividend payment date (EUR0.77 per share) : Friday, 13 May 2011
- First-half 2011 premium income and results: Friday, 29 July 2011 at 7:30 a.m.
- Third-quarter 2011 premium income and results: Wednesday, 9 November 2011 at 7:30 a.m.
This financial press release is available for consultation, in French and English on the CNP Assurances web site, http://www.cnp-finances.fr.
Disclaimer: Some of the statements contained in this press release may be forward-looking statements referring to projections, future events, trends or objectives that, by their very nature, involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated in such statements by reason of factors such as changes in general economic conditions and conditions in the financial markets, legal or regulatory decisions or changes, changes in the frequency and amount of insured claims, particularly as a result of changes in mortality and morbidity rates, changes in surrender rates, interest rates, foreign exchange rates, the competitive environment, the policies of foreign central banks or governments, legal proceedings, the effects of acquisitions and the integration of newly-acquired businesses, and general factors affecting competition. Further information regarding factors which may cause results to differ materially from those projected in forward-looking statements is included in CNP Assurances' filings with the Autorite des Marches Financiers. CNP Assurances does not undertake to update any forward-looking statements presented herein to take into account any new information, future event or other factors.
Press Relations Investor and Analyst Relations
Florence de Montmarin Jim Root
+33-01-42-18-86-51 +33-01-42-18-71-89
Tamara Bernard Annabelle Beugin-Soulon
+33-01-42-18-86-19 +33-01-42-18-83-66
e-mail : [email protected] E-mail: [email protected]
---------------------------------
[1] Unless otherwise indicated, all figures and growth rates are based on IFRS.
[2] Differences in premium income between French GAAP and IFRS are due to the fact that for investment contracts without Deferred Participation Feature, only the loading is recognized in revenue in the IFRS accounts, in accordance with IAS 39. The main countries affected by the application of IAS 39 are Italy and Portugal.
SOURCE CNP Assurances
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