Earnings Release • May 11, 2022
Earnings Release
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Regulated information • Brussels, 11 May 2022 - 7:30 (CET)
| Key Figures | |
|---|---|
| Result | • Group net result excluding RPN(i) was EUR 210 million |
| Inflows at Ageas's part |
• Group inflows were up 5% to EUR 5 billion with increases in both Life and Non-Life and across all regions • Life inflows increased by 5% to EUR 3.5 billion driven by new business in China and Unit-Linked in Belgium and Portugal • Non-Life inflows were up 5% to EUR 1.4 billion, increasing across all regions |
| Operating Performance |
• Combined ratio stood at 96.7%, including 8.5pp impact from adverse weather events in Belgium and the UK • Operating Margin Guaranteed stood at 109 bps and Operating Margin Unit-Linked amounted to 40 bps |
| Balance Sheet | • Shareholders' equity amounted to EUR 11.1 billion or EUR 60.03 per share • Group Solvency IIageas ratio remained strong at 203%, well within the Group's risk appetite and Solvency target • General Account Total Liquid Assets as at 31 March 2022 stood at EUR 1.1 billion • Life Technical Liabilities excl. shadow accounting of the consolidated entities were down 1% compared to end 2021 to EUR 74.4 billion |
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.
"I am pleased to see that we have made a good start to the year commercially in both Life and Non-Life and across all regions. In a difficult economic environment, including the on-going impact of Covid in China and of course the conflict at the borders of Europe touching us and the entire world deeply, Ageas is continuing to deliver as a trusted insurer for so many. Even against the background of volatile financial markets, inflation and storms, the business continues to perform on track, giving us confidence for the year ahead."
Hans De Cuyper, CEO Ageas
+32 (0)2 557 57 32@AgeasGroup Annual Reporting
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Ageas made a good commercial start to the year with inflows increasing both in Life and Non-Life and across all regions. The Life operating margins and the Non-Life combined ratio reflected the solid operating performance of the consolidated entities. The February storms in Belgium and the UK and the volatile equity markets negatively impacted the result. However, thanks to the strong underlying business performance, Ageas feels confident that it is on track to reach EUR 1 billion result (excluding the impact from RPN(i)) for the full year 2022.
The first quarter Group inflows including the non-consolidated entities (at Ageas's part) were 5% up compared to last year and amounted to EUR 5 billion. Life inflow growth was driven by new business sales in China and Unit-Linked in both Belgium and Portugal. The contribution of the recently acquired Life activities, AgeSa in Turkey, amounted to EUR 17 million. Non-Life inflows increased in the mature markets in 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 96.7% and includes the negative impact from the February storms of 8.5pp, affecting the profitability in Household in particular. Motor reported an excellent combined ratio at 91.8% thanks to a strong performance across all segments.
The Guaranteed operating margin of the consolidated entities of 109 bps was driven by the good timing of the realisation of capital gains in Belgium.
The Group Unit-Linked operating margin stood at 40 bps with solid margins and following increasing volumes both in Belgium and in Portugal.
The contribution of the non-consolidated partnerships to the Group net profit suffered from the turmoil on the equity markets leading to negative net capital gains, prolonged low interest rates and rising inflation, especially in Turkey. This was mitigated by the strong underlying performance of the consolidated entities. The net result excluding RPN(i) of EUR 210 million further included EUR 65 million negative impact from the storms in Belgium and the UK and the EUR 45 million capital gain on the sale of the Commercial lines front book business in the UK.
Based on this first quarter performance, and under the reserve of the impact of extreme negative developments in the financial markets, Ageas feels confident in confirming the outlook of EUR 1 billion for the full year 2022 result - excluding the impact from RPN(i).
Ageas's investment portfolio at the end of the first quarter 2022 amounted to EUR 79.8 billion compared to EUR 82.3 billion at the end of 2021. This decrease is related to lower unrealised capital gains on the fixed income portfolio due to an increase in interest rates. The fair value of the real estate portfolio increased to EUR 6.3 billion with EUR 2 billion of unrealised gains in line with the end of 2021.
Life Technical Liabilities for Ageas's part excluding shadow accounting for the consolidated entities, were down slightly compared to the end of 2021, due to market volatility. The strong increase in the Life Technical Liabilities in the non-consolidated entities was driven by continued growth in new business and high persistency levels.
Total shareholders' equity at the end of the first quarter stood at EUR 11.1 billion or EUR 60.03 per share. The unrealised capital gains on the fixed income portfolio reflected in the shareholder's equity decreased significantly as a result of rising interest rates.
Ageas's Solvency IIageas ratio increased to 203 %, driven by the solid operating performance and the sharp increase in the risk-free curve, somewhat mitigated by the impact of rising inflation. The contribution of the insurance operations fully covered the accrual of the expected dividend. The Operational Free Capital Generation of the Solvency II scope companies generated EUR 243 million Free Capital, while the General Account consumed EUR 46 million. The impact of the February storms was compensated by the benefit from the decision to no longer underwrite commercial lines business in the UK.
The regulatory PIM solvency ratio increased further to 205%, benefiting from spread movements. The solvency of the non-Solvency II scope companies increased to 231%, with the solvency level in Taiping Life based on the new C-Ross II framework.
Inflows for Ageas's part over the quarter increased by 4% thanks to strong growth in both Life (+5%) and Non-Life (+3%). An increase in Life inflows was recorded with both Guaranteed savings products and Unit-Linked benefitting this quarter from a successful sales campaign in the Broker channel. Non-Life inflows recorded solid growth in most business lines with the strong growth in Household and Motor more than offsetting a decrease in Accident & Health.
The Life Guaranteed operating margin over the quarter reached 113 bps thanks to a strong investment result driven by capital gains on equities and real estate. The Unit-Linked operating margin remained very strong at 43 bps driven by an improved net underwriting margin and volumes
The Non-Life combined ratio stood at 100.4% and was significantly impacted by adverse weather (11pp). Excluding weather, Non-Life showed a strong underlying performance benefitting from a better performance in Accident & Health and Household. Last year's combined ratio still included a benefit from lower claims frequency in Motor.
For Europe, the new segment combining the previous segments of Continental Europe and the UK, inflows were up this quarter both in Life and Non-Life at constant exchange rate. Scope-on-scope, Life inflows decreased 5% reflecting the transition from Guaranteed to Unit-Linked products. AgeSa, the Turkish Life company acquired in May 2021 continued to perform well in a challenging environment and contributed EUR 17 million, with a strong production in a USD denominated product. The additional inflows from the off-balance-sheet flexible pension products in Portugal were impacted by financial market volatility and amounted to EUR 36 million. Non-Life inflows were driven by a solid increase in Accident & Health and Other product lines in Portugal. At constant exchange rate, inflows in Turkey grew 57%.
Life Guaranteed operating margins amounted to a strong 98 bps, with a decrease compared to Q1 2021 due to the non-renewal of a large contract in Portugal. Life Unit-Linked operating margins continued its steady improvement to a strong 36 bps following the change in product mix.
The Non-Life combined ratio of Europe stood at 97.7%, including the impact from the February storms in the UK and no longer benefitting from lower claims frequency in Motor related to the lockdowns.
The net result reflects the contribution from the sale of the commercial lines in the UK, which amounted to EUR 45.5 million.
Inflows in Asia proved resilient in the first quarter, increasing 7% supported by the evolution of the Chinese Renminbi. At constant exchange rates, inflows only declined by 1% despite a delay in the new year opening campaigns, supported by the resilience of the agency force. New business was strong across the region and no longer affected by Covid-19 restrictions in South-East Asia. Life Technical liabilities were up 5% at constant exchange rate, supported by continued high persistency levels and growth in new business, with a focus on high-value regular premiums. The commercial trend was very positive in Non-Life, with inflows up 15%, driven by strong growth in Malaysia and in Taiping Reinsurance.
The Group recorded a solid operating performance in Asia, in both Life and Non-Life, translating into an increase in the underlying result. However, the net result was down due to the adverse evolution of the equity markets, mainly in China, which resulted in the realisation of negative net capital gains. Moreover, the persistent decline in interest rates in China continued to weigh on the Life result. In Non-Life, the lower net capital gains were mitigated by improved combined ratios across regions.
The Reinsurance inflows included EUR 392 million from the quota share agreements. Including the traditional protection business, total inflows increased versus the previous year amounting to EUR 516 million.
The Reinsurance result over the quarter was significantly impacted by its share in the negative result related to adverse weather in Belgium and the UK (EUR 30 million) partially compensated by an additional reserve release related to the Q4 2021 reserving review of the UK Motor contract. Last year's result still benefited from the lower claims frequency recorded at the level of the ceding entities.
The net result of the General Account benefited from a EUR 62 million positive contribution from the revaluation of the RPN(i) reference amount liability, leading to a positive net result of EUR 33 million for the quarter.
The total liquid assets in the General Account remained at the same level as at the end of last year, at EUR 1.1 billion. The total amount upstreamed from the operating companies in the first quarter amounted to EUR 87 million coming from Reinsurance.
On 31 March 2022, Ageas announced that its subsidiary Ageas UK Ltd had completed the sale of its Commercial lines front book business to AXA Insurance UK PLC. Ageas UK will in the future focus on the Personal lines business where the company has strong heritage and marketleading experience.
| KEY FIGURES AGEAS | |||
|---|---|---|---|
| in EUR million | 3M 22 | 3M 21 | Change |
| Net result Ageas | 271.8 | 295.9 | ( 8 %) |
| By segment: | |||
| - Belgium | 121.8 | 101.3 | 20 % |
| - Europe | 74.4 | 47.4 | 57 % |
| - Asia | 39.1 | 147.6 | ( 74 %) |
| - Reinsurance | 3.5 | 22.1 | ( 84 %) |
| - General Account & Elimination | 33.1 | ( 22.5 ) | * |
| of which RPN(I) | 61.5 | 1.7 | |
| Net result Ageas excl. RPN(I) | 210.3 | 294.2 | ( 29 %) |
| By type: | |||
| - Life | 145.0 | 227.0 | ( 36 %) |
| - Non-Life | 93.8 | 91.4 | 3 % |
| Weighted average number of ordinary shares (in million) | 185.2 | 187.0 | ( 1 %) |
| Earnings per share excl. RPN(I) (in EUR) | 1.14 | 1.58 | ( 28 %) |
| Gross inflows at Ageas' share (incl. non-consolidates entities) | 4,971.1 | 4,736.5 | 5 % |
| By segment: | |||
| - Belgium | 1,369.5 | 1,314.4 | 4 % |
| - Europe | 904.6 | 891.6 | 1 % |
| - Asia | 2,696.9 | 2,530.5 | 7 % |
| By type: | |||
| - Life | 3,537.8 | 3,371.9 | 5 % |
| - Non-Life | 1,433.3 | 1,364.6 | 5 % |
| Combined ratio | 96.7% | 91.7% | |
| Operating margin Guaranteed (bps) | 109 | 92 | |
| Operating margin Unit-Linked (bps) | 40 | 34 | |
| in EUR million | 31 Mar 2022 | 31 Dec 2021 | Change |
| Shareholders' equity | 11,087 | 11,914 | ( 7 %) |
| Net equity per share (in EUR) | 60.03 | 64.14 | ( 6 %) |
| Net equity per share (in EUR) excluding unrealised gains & losses | 45.62 | 43.43 | 5 % |
| Return on Equity - Ageas Group (excluding unrealised gains) | 13.2% | 10.9% | |
| Group solvency II ageas | 203% | 197% | 3 % |
| Life Technical Liabilities (consolidated entities) | 75,437 | 78,192 | ( 4 %) |
| - Life Technical Liabilities excl. shadow accounting | 74,376 | 75,233 | ( 1 %) |
| - Shadow accounting | 1,061 | 2,959 | ( 64 %) |
CAPITAL AND INVESTMENTS
| in EUR million | 31 Mar 2022 | 31 Dec 2021 | 30 Sep 2021 | ||
|---|---|---|---|---|---|
| Group Solvency IIageas | 203% | 197% | 187% | ||
| - Belgium | 217% | 212% | 190% | ||
| - Europe | 171% | 166% | |||
| - Reinsurance | 226% | 223% | 211% | ||
| Group Solvency IIpim | 203% | 188% | 183% | ||
| Shareholders' equity | 11,087 | 11,914 | 11,533 | ||
| in EUR billion | 31 Mar 2022 | 31 Dec 2021 | 30 Sep 2021 | 31 Mar 2022 | 31 Dec 2021 |
| Total investments | 79.8 | 82.3 | 82.8 | ||
| of which | |||||
| - Government bonds | 33.4 | 35.5 | 36.0 | 42% | 43% |
| - Corporate debt securities | 18.0 | 18.5 | 18.8 | 23% | 23% |
| - Loans | 14.8 | 14.5 | 14.3 | 18% | 18% |
| - Equity portfolio | 5.3 | 5.7 | 5.4 | 7% | 7% |
| - Real Estate | 6.3 | 6.1 | 6.0 | 8% | 7% |
• Strong commercial performance in Life and Non-Life despite the impact of adverse weather
| KEY FIGURES BELGIUM | |||
|---|---|---|---|
| in EUR million | 3M 22 | 3M 21 | Change |
| Net result attributable to shareholders | 121.8 | 101.3 | 20% |
| - Life | 97.7 | 69.7 | 40% |
| - Non-Life | 24.1 | 31.6 | (24%) |
| Gross inflows at Ageas' share | 1,369.5 | 1,314.4 | 4% |
| - Life | 809.3 | 771.4 | 5% |
| - Non-Life | 560.2 | 543.0 | 3% |
| Combined ratio - before LPT and QS | 100.4% | 94.6% | |
| Operating margin Guaranteed (bps) | 113 | 85 | |
| Operating margin Unit-Linked (bps) | 43 | 38 | |
| in EUR million | 31 Mar 2022 | 31 Dec 2021 | Change |
| Life Technical Liabilities | 60,940 | 63,004 | (3%) |
| - Life Techical Liabilities excl. shadow accounting | 60,201 | 60,718 | (1%) |
| - Shadow accounting | 739 | 2,286 | (68%) |
The combined ratio including the effect of the internal reinsurance agreement stood at 96.7% YTD. For more details, please refer to the Investor presentation and the tables on the website.
• Strong result including the sale of the commercial lines business and the February storms in the UK
| KEY FIGURES EUROPE | |||
|---|---|---|---|
| in EUR million | 3M 22 | 3M 21 | Change |
| Net result attributable to shareholders | 74.4 | 47.4 | 57% |
| - Life | 16.9 | 16.9 | (0%) |
| - Non-Life | 57.5 | 30.5 | 89% |
| Gross inflows at Ageas' share | 904.6 | 891.6 | 1% |
| - Life | 270.1 | 266.7 | 1% |
| - Non-Life | 634.5 | 624.9 | 2% |
| Combined ratio - before LPT and QS | 97.7% | 88.7% | |
| Operating margin Guaranteed (bps) | 98 | 131 | |
| Operating margin Unit-Linked (bps) | 36 | 26 | |
| in EUR million | 31 Mar 2022 | 31 Dec 2021 | Change |
| Life Technical Liabilities (consolidated entities) | 14,514 | 15,192 | (4%) |
| - Life Technical Liabilities excl. shadow accounting | 14,193 | 14,519 | (2%) |
| - Shadow accounting | 322 | 673 | (52%) |
The combined ratio including the effect of the internal reinsurance agreement stood at 85.0% YTD. For more details, please refer to the Investor presentation and the tables on the website.
| KEY FIGURES ASIA | |||
|---|---|---|---|
| in EUR million | 3M 22 | 3M 21 | Change |
| Net result attributable to shareholders | 39.1 | 147.6 | (74%) |
| - Life | 32.0 | 139.8 | (77%) |
| - Non-Life | 7.1 | 7.8 | (9%) |
| Gross inflows at Ageas' share | 2,696.9 | 2,530.5 | 7% |
| - Life | 2,458.3 | 2,333.7 | 5% |
| - Non-Life | 238.6 | 196.8 | 21% |
| Gross Inflows Life @ Ageas' share | 2,458.3 | 2,333.7 | 5% |
| - Single premium | 265.3 | 260.8 | 2% |
| - Regular premium | 2,193.0 | 2,072.9 | 6% |
| Combined ratio | 100.8% | 102.5% | |
| in EUR million | 31 Mar 2022 | 31 Dec 2021 | Change |
| Life Technical Liabilities @ Ageas' share | 35,172 | 32,954 | 7% |
• Net result contribution impacted by the adverse weather events in Belgium and the UK
| KEY FIGURES REINSURANCE | |||
|---|---|---|---|
| in EUR million | 3M 22 | 3M 21 | Change |
| Net result attributable to shareholders | 3.5 | 22.1 | (84%) |
| - Life | ( 1.6 ) | 0.6 | * |
| - Non-Life | 5.1 | 21.5 | (76%) |
| Gross inflows at Ageas' share | 515.9 | 487.1 | 6% |
| - Life | 8.1 | 10.8 | (25%) |
| - Non-Life | 507.8 | 476.3 | 7% |
| Combined ratio | 100.8% | 95.2% |
| in EUR million | 3M 22 | 3M 21 | Change |
|---|---|---|---|
| Net result including eliminations | 33.1 | ( 22.5 ) | * |
| Unrealised gain (loss) on RPN(I) | 61.5 | 1.7 | * |
| Total expenses | ( 20.5 ) | ( 20.6 ) | ( 0 %) |
| - Staff and Intercompany expenses | ( 6.9 ) | ( 8.4 ) | ( 18 %) |
| - Other operating and administrative expenses | ( 13.6 ) | ( 12.2 ) | 11 % |
| 31 Mar 2022 | 31 Dec 2021 | Change | |
| RPN(I) | ( 458.9 ) | ( 520.4 ) | ( 12 %) |
| Royal Park Investments | 0.3 | 1.3 | ( 77 %) |
| Provision Fortis Settlement | ( 114.4 ) | ( 114.4 ) | 0 % |
11 May 2022 09:30 CET (08:30 UK Time)
Listen only (access number 64961436#) +44 2 071 943 759 (UK) +32 2 403 58 16 (Belgium) +1 646 722 4916 (USA)
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• Michaël Vandenbergen +32 (0)2 557 57 36 [email protected]
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.
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