AI Terminal

MODULE: AI_ANALYST
Interactive Q&A, Risk Assessment, Summarization
MODULE: DATA_EXTRACT
Excel Export, XBRL Parsing, Table Digitization
MODULE: PEER_COMP
Sector Benchmarking, Sentiment Analysis
SYSTEM ACCESS LOCKED
Authenticate / Register Log In

ageas SA/NV

Earnings Release Nov 9, 2022

3905_10-q_2022-11-09_1598644d-adef-42ff-95e8-e89705e02d4c.pdf

Earnings Release

Open in Viewer

Opens in native device viewer

PRESS RELEASE

Regulated information • Brussels, 9 November 2022 - 7:30 (CET)

Ageas reports nine months 2022 results

  • Continued solid commercial and operating performance
  • Group net result affected by financial markets in Asia and inflation in Europe.
Key Figures
Result • Group nine months net result excluding RPN(i) amounted to EUR 567 million
• Group third quarter net result excluding RPN(i) amounted to EUR 111 million, affected by net capital losses in Asia and inflation in
Europe for an amount of EUR 175 million
Inflows • Group inflows were up 3% to EUR 13 billion with increases in both Life and Non-Life
• Life inflows increased by 3% to EUR 9 billion driven by new business in China
• Non-Life inflows were up 5% to EUR 4 billion supported by all regions
Operating
Performance
• Combined ratio stood at 94.4%, including 3pp impact from adverse weather events in Belgium and the UK during the first quarter
• Operating Margin Guaranteed stood at 87 bps and Operating Margin Unit-Linked amounted to 39 bps
Balance Sheet • Shareholders' equity amounted to EUR 8 billion or EUR 42.32 per share
• Group Solvency IIageas ratio improved and reached 225%, well within the Group's risk appetite
• General Account Total Liquid Assets as at 30 September 2022 stood at EUR 1 billion
• Life Technical Liabilities excl. shadow accounting stood at the same level as at end 2021 at EUR 91 billion at Ageas's part

A complete overview of the figures and comparison with previous year can be found on page 5 of this press release and on the Ageas website. Key figures and main highlights on the segments can be found in the Annexes of this press release.

Impact24 -- Achievements

Ageas opened its reinsurance activity to third parties trading under the brand Ageas Re

To support the development of its core business, Ageas invested in its agency distribution channel by partnering with Million Dollar
Round Table

Exploring new partnerships with the ambition to participate in ecosystems and the platform economy, Ageas teamed up with eBaoTech
Corporation at Group level and with Amazon in the UK

Ageas obtained the CO2-neutral label issued by CO2 Logic

« Ageas continued to perform well commercially and operationally in the third quarter of 2022. This translated into sustained growth in inflows in the Life business in China and an increase across the business in Non-Life. The strong combined ratio and good margins in Life indicate that the insurance activities continue to perform within the Impact24 operating targets. It is mainly the low interest rates in China and the net capital losses in Asia that have affected the Group net result in the third quarter. In the context of our Impact24 strategy, we took important steps that will drive our business forward in terms of growth, commercial excellence, integration of data & technology and sustainability. I want to thank our people around the world for demonstrating their strong focus on value added growth under extreme volatile market circumstances. »

Hans De Cuyper, CEO Ageas

+32 (0)2 557 57 36 Rue du Marquis 1 Ticker: AGS About us 1000 Brussels – Belgium ISIN: BE0974264930 Impact24 INVESTOR RELATIONS www.ageas.com Sustainability +32 (0)2 557 57 32@AgeasGroup Annual Reporting

MEDIA CONTACT AGEAS EURONEXT BRUSSELS QUICK LINKS

Solid operating performance

Ageas continued its solid commercial performance of the first half of the year with growth in inflows driven by Non-Life, supported by all regions, and Life new business in China. The Life margins and the Non-Life combined ratio for the consolidated entities all reached the Group's targets as defined within Impact24. Overall, Ageas's Insurance operations delivered a solid operating performance, improving across all segments. The noncontrolled partnerships also performed very well with an underlying result for Asia of EUR 458 million. However, as from the third quarter, this strong performance could no longer compensate for the increasing negative impact from the financial markets, the prolonged low interest rates in China and the continuously rising inflation in Europe, as referenced in the press release issued on 26 October 2022. As a result, the year-to-date net result (excluding the impact from RPN(i)) amounted to EUR 567 million.

Group inflows at Ageas's part including the non-consolidated entities were up 3% compared to last year, amounting to EUR 13 billion. Life inflows continued the strong sales momentum in China. Non-Life inflows increased in the mature markets of Belgium and Portugal as well as in the Asian partnerships, driven by portfolio growth and tariff increases in response to increased inflation.

The Non-Life combined ratio for the consolidated entities stood at 94.4%, reaching the Group's target and reflecting the strong underlying performance and the resilience in most of our operations in the context of continued high inflation.

The Guaranteed operating margin of the consolidated entities stood at 87 bps, within target range despite the lower level of realised capital gains in Belgium.

The Group Unit-Linked operating margin stood at 39 bps driven by improved expense margins in Belgium and the changing product mix in Portugal.

The Asian joint ventures delivered a strong underlying performance. Their contribution to the Group third quarter net result was however affected by the prolonged low interest rates in China and net capital losses in Asia for a total amount of EUR 190 million.

On a year-to-date basis, the Group net result, excluding RPN(i), amounted to EUR 567 million. In addition to the impact of the financial markets since the beginning of the year, this result includes a EUR 75 million negative impact from the storms in Belgium and in the UK and a EUR 28 million negative of the IAS29 on hyperinflation accounting in both of our Turkish entities. The capital gain on the sale of the Commercial lines front book business in the UK (EUR 45 million) and the entry into the consolidation scope of Ageas Federal Life in India after the step up to 74% (EUR 50 million) had a positive effect.

The steep increase in interest rates significantly impacted the unrealised capital gains on the fixed income portfolio, causing a decrease in Ageas's investment portfolio and the shareholders' equity.

The investment portfolio amounted to EUR 73.3 billion as at 30 September 2022 compared to EUR 82.3 billion at the end of 2021. The unrealised capital gains on the equity portfolio amounted to EUR 0.5 billion. The fair value of the real estate portfolio increased to EUR 6.5 billion with over EUR 2 billion of unrealised gains, in line with the end of 2021.

The total shareholders' equity stood at EUR 8 billion at the end of September 2022 or EUR 42.3 per share.

Life Technical Liabilities at Ageas's part, excluding shadow accounting, stood at the same level as at the end of 2021, recovering from the decline earlier in the year due to market volatility and supported by the continued growth in new business and high persistency levels in the nonconsolidated entities.

Ageas's Solvency IIageas ratio increased by 28 percentage points over nine months to reach a high 225%, largely above the Group's target of 175%. This sharp increase was driven by the solid operating performance of the Group and by the rise in interest rates. The contribution of the insurance operations fully covered the accrual of the expected dividend.

The regulatory PIM solvency ratio increased strongly to 230%.

For the non-Solvency II scope companies, the solvency ratio amounted

PRESS RELEASE

to 216%, down due to the adverse market evolution in China.

The strong performance of both the Solvency II and non-Solvency II scope entities translated in an Operational Free Capital Generation of EUR 846 million for the Group over for the first nine months compared to EUR 651 million over the same period last year.

Belgium

Year-to-date inflows remained flat with a solid growth in Non-Life (+4%) compensating for the decrease in Life (-3%). Non-Life inflows recorded strong growth in Household and Motor. Life inflows decreased in both Unit-Linked and Guaranteed products due to lower volumes in Savings products partially compensated for by an increase in Group Life.

The Life Guaranteed operating margin reached 86 bps, which is slightly lower than last year due to a lower realised level of capital gains. Excluding the allocated capital gains, the technical guaranteed margin is in line with last year. The Unit-Linked operating margin remained very strong at 41 bps driven by an improved net underwriting margin.

The Non-Life combined ratio stood at 92.9% and included a 4pp impact from adverse weather. The strong performance was driven by a good claims experience and higher volumes, mainly in Household.

Europe

For Europe, Life inflows were down year-to-date, while Non-Life inflows were up, leading to a slight overall increase in total inflows for the period at constant exchange rates.

Life inflows decreased 15% at constant exchange rates, impacted by a decrease of Unit-Linked and Guaranteed products in Portugal and France. The off-balance-sheet flexible pension products in Portugal contributed EUR 68 million in inflows for the nine months of 2022.

Non-Life inflows increased 8% at a constant exchange rate, with Portugal and Turkey respectively achieving an increase of 9% and 92%, the latter driven by tariff increases in response to increased inflation, while the UK decreased 6%. UK inflows were down mainly due to pricing discipline in light of claims inflation in Motor.

Life Guaranteed operating margins decreased to 97 bps year-on-year, while Life Unit-Linked operating margins amounted to 33 bps, an increase compared to the same period last year driven by a continued shift in product mix.

The Non-Life combined ratio for Europe stood at 97.3%, an increase compared to the 2021 nine months figure, which partially benefited from Covid related lockdowns. Year-to-date, the combined ratio was impacted by rising claims inflation.

The IFRS net result of EUR 116 million reflected the strong operating performance in both Life and Non-Life and the contribution from the sale of the commercial lines in the UK in Q1, which amounted to EUR 45 million.

Asia

Inflows in Asia were up 10% over 9 months, supported by a strong growth in new business and a favourable foreign exchange rate evolution. The third quarter benefitted from an excellent commercial performance, with a 16% increase in inflows thanks to solid sales momentum in both Life and Non-Life across the region. In Life, new business was up 26%, driving growth in China, Malaysia, Thailand, and India. In Non-Life, Inflows increased by 25%, supported by the relaxation of previous pandemic-related restrictions.

The net result in the third quarter was severely impacted by impairments in the context of bear financial markets, and by the continued decrease in the liabilities discount curve in China. However, when excluding these elements, as well as the EUR 50 million positive capital gains recorded from the step up to 74% in the Indian joint venture Ageas Federal Life, the underlying result stood at a high level, amounting to EUR 458 million over 9 months compared to EUR 345 million for the same period of last year. This strong underlying result illustrates the excellent operating performance across the region.

Reinsurance

Reinsurance gross inflows amounted to EUR 1.2 billion, of which EUR 1.1 billion was from the internal quota share agreements. Excluding last year's reclassification of inflows from Portugal (EUR 66 million), the total reinsurance inflows increased by 3% yearon-year.

The Reinsurance result from the quota share agreements was in line with that of the ceding entities, while the total reinsurance result benefited from favorable prior year results.

PRESS RELEASE

General Account

The net result of the General Account included a EUR 138 million positive impact from the revaluation of the RPN(i) reference amount liability for 9 months 2022, leading to a positive net result of EUR 40 million. The total liquid assets stand at EUR 1 billion.

The EUR 756 million upstreamed funds from the operating companies in the first 9 months of the year more than covered the holding costs, the share buyback programme of the first half of the year and the EUR 495 million dividend paid to Ageas shareholders in the second quarter.

Impact24 Achievements

As part of its Impact24 strategy, Ageas confirmed its intention to further develop the company's core business, investing further in its traditional distribution channels. In this context, Ageas has become an official sponsor of the Million Dollar Round Table professional association (MDRT), a global association of the world's leading life insurance and financial services professionals. This three-year partnership will enable Ageas to strengthen and grow the full potential of its agency distribution network in Europe and Asia and to improve its commercial excellence.

Ageas is also exploring new partnerships and opportunities to participate in ecosystems and in the platform economy. Ageas has announced a partnership with eBaoTech Corporation (eBaoTech), a global digital solution provider for the insurance industry, building on its InsureMO® platform as part of the Group's digital transformation. In addition, Ageas UK recently announced that it is one of the first participating insurers in the new Amazon Insurance Store supporting its growth strategy and using its expert personal lines insurance capabilities in the development of a new and progressive digital platform aligned with Impact24.

Also under the current strategic plan, Reinsurance has been identified as a key engine for future growth. In this view, Ageas announced that it will progressively develop reinsurance activities to third parties, starting with the upcoming 1st January 2023 renewals.

With long-term thinking at its heart, Ageas, together with the Capricorn Digital Growth Fund, has invested in the Belgian start-up company Trensition. This allows the company to scale up its Trendtracker platform, on which Ageas already relies for its annual Group-wide trend scanning exercise.

As an insurer, Ageas is conscious of the social impact it can create through its long-term investments. The intention is to support local economies but also to play a role in evolving towards a more sustainable society. The investment by the Group's Belgian operating entity AG Insurance in Fluxys who plays a crucial role in the Belgian transition towards sustainable energy, aligns perfectly with the Group's strategy.

Ageas obtained the CO2-neutral label issued by CO2 Logic for the 2021 measured CO2 emissions. The Group will continue to work towards structurally lower CO2 emissions.

KEY FIGURES AGEAS

Annex 1: Group

in EUR million 9M 22 9M 21 Change Q3 22 Q3 21 Change HY 22
Net result Ageas 704.4 567.8 24 % 141.0 161.1 ( 12 %) 563.4
By segment:
- Belgium 334.1 287.9 16 % 89.1 96.6 ( 8 %) 245.0
- Europe 115.8 140.7 ( 18 %) 21.0 43.8 ( 52 %) 94.8
- Asia 166.8 303.4 ( 45 %) 5.4 100.6 ( 95 %) 161.4
- Reinsurance 47.8 44.6 7 % 28.1 14.4 95 % 19.7
- General Account & Elimination 40.0 ( 208.9 ) * ( 2.5 ) ( 94.3 ) 97 % 42.5
of which RPN(I) 137.5 ( 123.3 ) 30.1 ( 66.7 ) 107.4
Net result Ageas excl. RPN(I) 566.9 691.1 ( 18 %) 110.9 227.8 456.0
By type:
- Life 421.8 541.1 ( 22 %) 80.8 201.0 ( 60 %) 341.0
- Non-Life 242.6 235.5 3 % 62.8 54.4 15 % 179.8
Weighted average number of ordinary shares (in million) 184.3 187.0 ( 1 %) 184.7
Earnings per share excl. RPN(I) (in EUR) 3.08 3.04 1 % 2.47
Gross inflows at Ageas' share (incl. non-consolidates entities) 12,772.2 12,350.5 3 % 3,807.5 3,805.3 0 % 8,964.7
By segment:
- Belgium 3,717.4 3,730.1 ( 0 %) 1,196.1 1,320.8 ( 9 %) 2,521.3
- Europe 2,607.0 2,777.6 ( 6 %) 841.2 957.6 ( 12 %) 1,765.8
- Asia 6,447.8 5,842.7 10 % 1,770.2 1,526.9 16 % 4,677.6
By type:
- Life 8,830.0 8,608.9 3 % 2,563.4 2,588.4 ( 1 %) 6,266.6
- Non-Life 3,942.2 3,741.6 5 % 1,244.1 1,216.9 2 % 2,698.1
Combined ratio 94.4% 95.2% 93.6% 99.3% 94.9%
Operating margin Guaranteed (bps) 87 96 71 117 95
Operating margin Unit-Linked (bps) 39 34 39 31 39
in EUR million 30 Sep 2022 31 Dec 2021 Change 30 June 2022
Shareholders' equity 7,772 11,914 ( 35 %) 9,021
Net equity per share (in EUR) 42.32 64.14 ( 34 %) 49.11
Net equity per share (in EUR) excluding unrealised gains & losses 45.28 43.43 4 % 45.61
Return on Equity - Ageas Group (excluding unrealised gains) 11.5% 10.9% 13.7%
Group solvency II ageas 225% 197% 14 % 221%
Life Technical Liabilities (consolidated entities) 73,934 78,192 ( 5 %) 73,028
- Life Technical Liabilities excl. shadow accounting 74,147 75,233 ( 1 %) 72,970
  • Shadow accounting ( 214 ) 2,959 * 58

Annex 2: Capital Position & Investment Portfolio

CAPITAL AND INVESTMENTS

in EUR million 30 Sep 2022 31 Dec 2021 30 June 2022
Group Solvency IIageas 225% 197% 221%
- Belgium 235% 212% 230%
- Europe 189% 166% 185%
- Reinsurance 219% 223% 222%
Group Solvency IIpim 229% 188% 229%
Shareholders' equity 7,772 11,914 9,021
in EUR billion 30 Sep 2022 31 Dec 2021 30 June 2022 30 Sep 2022 31 Dec 2021
Total investments 73.3 82.3 75.7
of which
- Government bonds 29.3 35.5 30.8 40% 43%
- Corporate debt securities 15.7 18.5 16.6 21% 23%
- Loans 15.6 14.5 15.1 21% 18%
- Equity portfolio 4.5 5.7 4.9 6% 7%
- Real Estate 6.5 6.1 6.3 9% 7%

Annex 3: Belgium

• Overall strong performance

KEY FIGURES BELGIUM

9M 22 9M 21 Change Q3 22 Q3 21 Change HY 22
334.1 287.9 16% 89.1 96.6 (8%) 245.0
228.7 227.2 1% 61.5 98.6 (38%) 167.2
105.4 60.7 74% 27.6 ( 2.0 ) * 77.8
3,717.4 3,730.2 (0%) 1,196.2 1,320.9 (9%) 2,521.2
2,323.7 2,384.4 (3%) 768.2 898.4 (14%) 1,555.5
1,393.7 1,345.8 4% 428.0 422.5 1% 965.7
92.9% 97.5% 89.7% 104.5% 94.6%
86 93 69 116 94
41 35 42 33 41
Change 30 June 2022
59,058 63,004 (6%) 59,435
30 Sep 2022 31 Dec 2021

The combined ratio including the effect of the internal reinsurance agreement stood at 91.2% YTD.

  • Life Techical Liabilities excl. shadow accounting 59,078 60,718 (3%) 59,310 - Shadow accounting ( 20 ) 2,286 * 125

For more details, please refer to the Investor presentation and the tables on the website.

ANNEXES

Annex 4: Europe

• Result impacted by IAS29 inflation accounting in Türkiye and claims inflation in the UK

KEY FIGURES EUROPE
in EUR million 9M 22 9M 21 Change Q3 22 Q3 21 Change HY 22
Net result attributable to shareholders 115.8 140.7 (18%) 21.0 43.8 (52%) 94.8
- Life 40.4 42.1 (4%) 13.2 11.7 13% 27.2
- Non-Life 75.4 98.6 (24%) 7.8 32.1 (76%) 67.6
Gross inflows at Ageas' share 2,607.0 2,777.6 (6%) 841.1 957.6 (12%) 1,765.9
- Life 749.7 936.5 (20%) 234.0 332.6 (30%) 515.7
- Non-Life 1,857.3 1,841.1 1% 607.1 625.0 (3%) 1,250.2
Combined ratio - before LPT and QS 97.3% 92.2% 96.3% 91.1% 97.7%
Operating margin Guaranteed (bps) 97 115 85 118 102
Operating margin Unit-Linked (bps) 33 31 34 28 33
in EUR million 30 Sep 2022 31 Dec 2021 Change 30 June 2022
Life Technical Liabilities (consolidated entities) 13,188 15,192 (13%) 13,607
- Life Technical Liabilities excl. shadow accounting 13,381 14,519 (8%) 13,674
  • Shadow accounting ( 193 ) 673 * ( 67 )

The combined ratio including the effect of the internal reinsurance agreement stood at 95.4% YTD.

For more details, please refer to the Investor presentation and the tables on the website.

ANNEXES

Annex 5: Asia

  • Strong sales momentum driven by growth in new business in China
  • Solid underlying performance
  • Net result impacted by the financial market evolution

KEY FIGURES ASIA

in EUR million 9M 22 9M 21 Change Q3 22 Q3 21 Change HY 22
Net result attributable to shareholders 166.8 303.4 (45%) 5.4 100.6 (95%) 161.4
- Life 153.5 270.2 (43%) 5.8 90.1 (94%) 147.7
- Non-Life 13.3 33.2 (60%) ( 0.4 ) 10.5 * 13.7
Gross inflows at Ageas' share 6,447.7 5,842.7 10% 1,770.1 1,526.9 16% 4,677.6
- Life 5,756.5 5,288.0 9% 1,561.1 1,357.4 15% 4,195.4
- Non-Life 691.2 554.7 25% 209.0 169.5 23% 482.2
Gross Inflows Life @ Ageas' share 5,756.5 5,288.0 9% 1,561.1 1,357.4 15% 4,195.4
- Single premium 906.9 678.2 34% 431.2 161.7 * 475.7
- Regular premium 4,849.4 4,609.5 5% 1,129.9 1,195.7 (6%) 3,719.5
Combined ratio 101.5% 99.4% 102.5% 100.7% 101.0%
in EUR million 30 Sep 2022 31 Dec 2021 Change 30 June 2022
Life Technical Liabilities @ Ageas' share 37,462 32,954 14% 36,581

ANNEXES

Annex 6: Reinsurance

• Net result supported by prior year development

KEY FIGURES REINSURANCE

in EUR million 9M 22 9M 21 Change Q3 22 Q3 21 Change HY 22
Net result attributable to shareholders 47.8 44.6 7% 28.1 14.4 95% 19.7
- Life ( 0.8 ) 1.6 * 0.2 0.6 (67%) ( 1.0 )
- Non-Life 48.6 43.0 13% 27.9 13.8 * 20.7
Gross inflows at Ageas' share 1,246.0 1,273.4 (2%) 364.2 370.5 (2%) 881.8
- Life 22.7 32.9 (31%) 7.3 11.1 (34%) 15.4
- Non-Life 1,223.3 1,240.5 (1%) 356.9 359.4 (1%) 866.4
Combined ratio 97.1% 97.5% 93.6% 97.7% 98.9%

Annex 7: General Account

KEY FIGURES GENERAL ACCOUNT

in EUR million 9M 22 9M 21 Change Q3 22 Q3 21 Change HY 22
Net result including eliminations 40.0 ( 208.9 ) * ( 2.5 ) ( 94.3 ) 97 % 42.5
Unrealised gain (loss) on RPN(I) 137.5 ( 123.3 ) * 30.1 ( 66.7 ) * 107.4
Total expenses ( 69.4 ) ( 59.7 ) 16 % ( 23.4 ) ( 17.0 ) 38 % ( 46.0 )
- Staff and Intercompany expenses ( 20.1 ) ( 20.6 ) ( 2 %) ( 6.3 ) ( 5.5 ) 15 % ( 13.8 )
- Other operating and administrative expenses ( 49.3 ) ( 39.1 ) 26 % ( 17.1 ) ( 11.5 ) 49 % ( 32.2 )
30 Sep 2022 31 Dec 2021 Change 30 June 2022
RPN(I) ( 362.3 ) ( 520.4 ) ( 30 %) ( 413.0 )
Royal Park Investments 0.3 1.3 ( 77 %) 0.3
Provision Fortis Settlement ( 4.2 ) ( 114.4 ) ( 96 %) ( 111.7 )

ANALYST & INVESTOR CONFERENCE CALL:

9 November 2022 09:30 CET (08:30 UK Time)

AUDIOCAST: WWW.AGEAS.COM

Listen only (access number 28232092#) +44 2 071 943 759 (UK) +32 2 403 58 16 (Belgium) +1 646 722 4916 (USA)

AUDIO PLAYBACK NUMBER:

+44 2 033 645 147 (UK) +32 2 403 72 61 (Belgium) +1 646 722 4969 (USA) (access number 425024307#) Available until 9 December 2022

CONTACT DETAILS

INVESTOR RELATIONS

PRESS

• Michaël Vandenbergen +32 (0)2 557 57 36 [email protected]

DISCLAIMER

The information on which the statements in this press release are based may be subject to change and this press release may also contain certain projections or other forward looking statements concerning Ageas. These statements are based on current expectations of the management of Ageas and are naturally subject to uncertainties, assumptions, and changes in circumstances. The financial information included in this press release is unaudited. The forward-looking statements are no guarantee of future performance and involve risks and uncertainties that could cause actual results to differ materially fromthose expressed in the forward-looking statements.Many of these risks and uncertainties relate to factors that are beyond Ageas's ability to control or estimate precisely, such as futuremarket conditions and the behaviour of other market participants.Other unknown or unpredictable factors beyond the control ofAgeas could also cause actual results to differmaterially fromthose in the statements and include but are not limited to the consent required from regulatory and supervisory authorities and the outcome of pending and future litigation involving Ageas. Therefore, undue reliance should not be placed on such statements. Ageas assumes no obligation and does not intend to update these statements, whether as a result of new information, future events or otherwise, except as required pursuant to applicable law.

Talk to a Data Expert

Have a question? We'll get back to you promptly.