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CNP Assurances Earnings Release 2019
1208_10-q_2019-11-15_69d294a5-bd70-4168-8e74-6a1538d26814.pdf
Earnings Release
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PRESS RELEASE
Paris, 15 November 2019
1
Quarterly indicators – First nine months of 2019
Net profit of €987 million, up 3.4%
Highlights
- Premium income of €25.9 billion, up 5.4% (up 5.7% like-for-like1 ), including 23.1% growth in Latin America
- Proportion of Savings/Pensions premiums represented by unit-linked contracts still high, at 40.7%
- Term Creditor Insurance premiums up 6.1%, with all host regions and the Group's main partners contributing to growth
- EBIT of €2,279 million, up 5.1% (up 5.8% like-for-like1 )
- Attributable net profit of €987 million, up 3.4% (up 3.6% like-for-like1 )
- Consolidated SCR coverage ratio of 161% after taking into account the advance recognition of the payment due under the new distribution agreement in Brazil
Antoine Lissowski, CNP Assurances' Chief Executive Officer, said:
"CNP Assurances' results and financial position confirm that the change in the business model in France and Europe is paying off by reducing the Group's sensitivity to falling interest rates. In the current persistently low and even negative interest rate environment, the Group is geared up to offer effective long-term protection solutions to its partners and customers."
The results indicators for the first nine months of 2019, on which CNP Assurances' Statutory Auditors do not provide an opinion, were reviewed by the Board of Directors at its meeting on 14 November 2019. This press release includes a certain number of alternative performance measures (APMs). These APMs and their calculation method are presented in the Investor/Analyst section of the CNP Assurances website at www.cnp.fr/en/Investor-Analyst (2019 Results).
1 Average exchange rates:
First nine months of 2019: Brazil: €1 = BRL 4.36; Argentina: €1 = ARS 49.92
First nine months of 2018: Brazil: €1 = BRL 4.30; Argentina: €1 = ARS 29.85
1. Premium income and APE margin for the first nine months of 2019
Consolidated premium income for the period totalled €25.9 billion, up 5.4% (up 5.7% like-for-like).
In France, premium income rose by 3.8% to €17.2 billion.
Savings/Pensions premium income amounted to €14.0 billion, an increase of 5.1% that was led by good momentum at CNP Patrimoine in the premium savings segment and at La Banque Postale.
- The proportion of Savings/Pensions premium income represented by unit-linked contracts held firm at 20.5%, while the Group's share of the French unit-linked market grew by 0.4 points to reach 10.6% at end-September.
- Net new money for the period reflected a €1.8 billion net outflow from traditional products and a €1.7 billion net inflow to unit-linked contracts, illustrating the changing profile of savings products.
Personal Risk/Protection premium income contracted by 1.6% to €3.2 billion.
- Personal Risk and Health Insurance premiums declined by 12.1% to €1.1 billion, reflecting the ongoing more selective approach to new business.
- Term Creditor Insurance premiums rose by 5.2% to €2.1 billion, led by dynamic performances from the BPCE and La Banque Postale networks.
The APE margin was 5.3% (versus 19.7% for the whole of 2018), with the value of new business in the traditional savings segment eroded by the negative interest rate environment.
In Europe excluding France, premium income amounted to €3.7 billion, a decrease of 6.0%.
Savings/Pensions premium income contracted by 8.5% to €3.0 billion. CNP Luxembourg continued to grow its business (up €0.3 billion), while CNP UniCredit Vita and CNP Partners experienced declines.
- The contribution of unit-linked contracts remained very high, at 62.1% of total premiums, attesting to the sustainability of the measures undertaken with our partners to refocus our business mix.
- Net new money for the period, corresponding to a €0.8 billion net inflow to unit-linked contracts and a €0.3 billion net inflow to traditional products, helped to improve the balance sheet risk structure.
Personal Risk/Protection premium income amounted to €0.8 billion, with Term Creditor Insurance premiums up 1.5% thanks to dynamic performances from the main distribution networks (CNP Santander and CNP UniCredit Vita).
The APE margin rose to 18.0% from 16.9% for the whole of 2018, with the improved product mix offsetting the impact of the less favourable economic environment.
All told, premium income totalled €20.9 billion in Europe, an increase of 1.9%. The APE margin, at 6.9% versus 19.3% for the whole of 2018, was severely eroded by the lower value of new business in the traditional savings segment.
In Latin America, premium income came to €5.0 billion, up by a strong 23.1% (up 25.3% at constant exchange rates).
Savings/Pensions premium income grew 29.2% (up 31.3% at constant exchange rates) to €3.8 billion, led by the Pensions business. In this segment, substantially all premium income is derived from unit-linked contracts. Savings/Pensions net new money rose sharply to €2.2 billion.
Personal Risk/Protection premium income rose by 6.5% (up 9.0% at constant exchange rates) to €1.2 billion, led by higher Term Creditor Insurance premiums (up 20.1% at constant exchange rates).
The APE margin remained very high, at 29.1% versus 30.1% for the whole of 2018.
Average consolidated net technical reserves totalled €319.6 billion at the period-end, compared with €313.7 billion at 30 September 2018.
2. Quarterly indicators – First nine months of 2019
Net insurance revenue (NIR) came to €2,333 million, up 3.9% (up 4.7% like-for-like).
In France, net insurance revenue rose by 1.1% to €1,298 million, reflecting the growth in technical reserves and their reconfiguration.
In Europe excluding France, net insurance revenue was up a strong 24.9% at €218 million, with all subsidiaries contributing to the increase.
In Latin America, net insurance revenue came to €817 million, an increase of 3.9% (up 6.0% at constant exchange rates) that was attributable to sharply higher technical reserves in the pensions business and an improved personal risk/protection loss experience.
Revenue from own-funds portfolios was up 4.9% (up 5.8% like-for-like) at €621 million, lifted in particular by higher realised capital gains in France on the equity portfolio.
Total revenue came to €2,954 million, an increase of 4.2% (up 4.9% like-for-like) that was attributable to strong business momentum in buoyant segments, disciplined management of less profitable segments and solid returns on diversification investments.
Administrative costs amounted to €676 million, an increase of 1.2% (up 2.1% like-for-like) that was less than the increase in net insurance revenue, leading to a further improvement in the cost/income ratio to 29.0% (versus 29.8% for the year-earlier period).
At €2,279 million, EBIT was up 5.1% (up 5.8% like-for-like).
Attributable recurring profit rose by 2.8% (up 3.2% like-for-like) to €1,686 million.
Attributable net profit came to €987 million, an increase of 3.4% (up 3.6% like-for-like).
IFRS book value stood at €17.4 billion at 30 September 2019, representing €25.3 per share (versus €23.2 per share at 31 December 2018).
The consolidated SCR coverage ratio was 161% at 30 September 2019 versus 169% at 30 June 2019 and 187% at 31 December 2018. The decrease was mainly due to the decline in interest rates over the first nine months of the year. The ratio has been calculated using the standard formula under Solvency II, without applying transitional measures, and takes into account the advance recognition of the BRL 7 billion payment that will be due by CNP Assurances when the various conditions precedent applicable to the new distribution agreement in Brazil have been fulfilled. The decrease from 187% at 31 December 2018 to 161% at 30 September 2019 is explained by adjustments linked to market trends, by the strategic asset allocation, by the capital generated by operations net of expected dividends, by the advance recognition of the Brazilian payment.
| (in € millions) | 9 months 2019 |
9 months 2018 |
% change (reported) |
% change (like-for-like) |
|---|---|---|---|---|
| Premium income | 25,898 | 24,581 | +5.4 | +5.7 |
| Average net technical reserves | 319,605 | 313,662 | +1.9 | - |
| Total revenue | 2,954 | 2,837 | +4.2 | +4.9 |
| Net insurance revenue (NIR), of which: | 2,333 | 2,245 | +3.9 | +4.7 |
| France | 1,298 | 1,283 | +1.1 | +1.1 |
| Latin America | 817 | 787 | +3.9 | +6.0 |
| Europe excluding France | 218 | 175 | +24.9 | +24.9 |
| Revenue from own-funds portfolios | 621 | 592 | +4.9 | +5.8 |
| Administrative costs, of which: | 676 | 668 | +1.2 | +2.1 |
| France | 443 | 443 | 0.0 | 0.0 |
| Latin America | 140 | 138 | +1.9 | +6.2 |
| Europe excluding France | 93 | 87 | +6.2 | +6.2 |
| Earnings before interest and taxes (EBIT) | 2,279 | 2,169 | +5.1 | +5.8 |
| Finance costs | (189) | (184) | +2.8 | +2.8 |
| Non-controlling and net equity accounted interests | (403) | (344) | +17.0 | +19.9 |
| Attributable recurring profit | 1,686 | 1,640 | +2.8 | +3.2 |
| Income tax expense | (544) | (570) | -4.6 | -4.2 |
| Fair value adjustments and net gains (losses) | 273 | 136 | +100.1 | +98.8 |
| Non-recurring items | (429) | (253) | +69.8 | +69.9 |
| Attributable net profit | 987 | 955 | +3.4 | +3.6 |
APPENDICES
Premium income by country
| (in € millions) | 9 months 2019 |
9 months 2018 |
% change (reported) |
% change (like-for-like) |
|---|---|---|---|---|
| France | 17,190 | 16,564 | +3.8 | +3.8 |
| Brazil | 4,953 | 4,016 | +23.3 | +25.3 |
| Italy | 2,214 | 2,775 | -20.2 | -20.2 |
| Luxembourg | 736 | 423 | +73.9 | +73.9 |
| Germany | 351 | 361 | -2.7 | -2.7 |
| Spain | 185 | 193 | -4.5 | -4.5 |
| Cyprus | 119 | 111 | +7.2 | +7.2 |
| Poland | 69 | 61 | +13.1 | +13.1 |
| Denmark | 13 | 16 | -17.2 | -17.2 |
| Norway | 16 | 15 | +9.3 | +9.3 |
| Austria | 17 | 9 | +93.1 | +93.1 |
| Argentina | 17 | 22 | -24.3 | +26.6 |
| Portugal | 4 | 4 | +10.6 | +10.6 |
| Other International | 15 | 12 | +24.9 | +24.9 |
| Total International | 8,708 | 8,017 | +8.6 | +9.7 |
| Total | 25,898 | 24,581 | +5.4 | +5.7 |
Premium income by segment
| (in € millions) | 9 months 2019 |
9 months 2018 |
% change (reported) |
% change (like-for-like) |
|---|---|---|---|---|
| Savings | 16,193 | 15,724 | +3.0 | +3.0 |
| Pensions | 4,566 | 3,772 | +21.1 | +22.6 |
| Personal Risk | 1,275 | 1,391 | -8.3 | -7.4 |
| Term Creditor Insurance | 3,243 | 3,055 | +6.1 | +6.5 |
| Health | 327 | 382 | -14.4 | -14.3 |
| Property & Casualty | 295 | 258 | +14.3 | +16.0 |
| Total | 25,898 | 24,581 | +5.4 | +5.7 |
Premium income by country and by segment
| 9 months 2019 |
|||||||
|---|---|---|---|---|---|---|---|
| (in € millions) | Savings | Pensions | Personal Risk |
Term Creditor Insurance |
Health | Property & Casualty |
Total |
| France | 13,195 | 800 | 838 | 2,079 | 279 | 0 | 17,190 |
| Brazil | 45 | 3,756 | 385 | 491 | 20 | 256 | 4,953 |
| Italy | 2,062 | 8 | 20 | 124 | 0 | 0 | 2,214 |
| Luxembourg | 736 | 0 | 0 | 0 | 0 | 0 | 736 |
| Germany | 0 | 0 | 4 | 347 | 0 | 0 | 351 |
| Spain | 107 | 2 | 2 | 74 | 0 | 0 | 185 |
| Cyprus | 42 | 0 | 10 | 0 | 28 | 39 | 119 |
| Poland | 0 | 0 | 7 | 61 | 0 | 0 | 69 |
| Denmark | 0 | 0 | 0 | 13 | 0 | 0 | 13 |
| Norway | 0 | 0 | 0 | 16 | 0 | 0 | 16 |
| Austria | 0 | 0 | 0 | 17 | 0 | 0 | 17 |
| Argentina | 4 | 0 | 9 | 3 | 0 | 0 | 17 |
| Portugal | 0 | 0 | 0 | 4 | 0 | 0 | 4 |
| Other International | 2 | 0 | 0 | 13 | 0 | 0 | 15 |
| Total International | 2,998 | 3,766 | 438 | 1,163 | 48 | 295 | 8,708 |
| Total | 16,193 | 4,566 | 1,275 | 3,243 | 327 | 295 | 25,898 |
Premium income by region and by partner/subsidiary
| (in € millions) | 9 months 2019 |
9 months 2018 |
% change (reported) |
|---|---|---|---|
| La Banque Postale | 6,570 | 6,176 | +6.4 |
| BPCE | 5,102 | 5,763 | -11.5 |
| CNP Patrimoine | 2,753 | 1,656 | +66.2 |
| Companies and local authorities | 1,236 | 1,379 | -10.3 |
| Financial institutions (France) | 926 | 942 | -1.7 |
| Mutual insurers | 369 | 390 | -5.4 |
| Amétis | 201 | 234 | -14.2 |
| Other France | 33 | 24 | +35.1 |
| Total France | 17,190 | 16,564 | +3.8 |
| Caixa Seguradora (Brazil) | 4,953 | 4,016 | +23.3 |
| CNP UniCredit Vita (Italy) | 2,058 | 2,574 | -20.1 |
| CNP Luxembourg (Luxembourg) | 736 | 423 | +73.9 |
| CNP Santander Insurance (Ireland) | 567 | 548 | +3.5 |
| CNP Partners (Spain) | 214 | 280 | -23.8 |
| CNP Cyprus Insurance Holdings (Cyprus) | 121 | 114 | +6.7 |
| CNP Assurances Compañía de Seguros (Argentina) | 17 | 22 | -24.3 |
| Other International | 42 | 39 | +8.3 |
| Total International | 8,708 | 8,017 | +8.6 |
| Total | 25,898 | 24,581 | +5.4 |
Unit-linked sales by region and by partner/subsidiary
| (in € millions) | 9 months 2019 |
9 months 2018 |
% change (reported) |
|---|---|---|---|
| La Banque Postale | 974 | 1,013 | -3.9 |
| BPCE | 664 | 1,224 | -45.8 |
| CNP Patrimoine | 1,150 | 735 | +56.4 |
| Amétis | 49 | 78 | -36.8 |
| Other France | 26 | 26 | -0.1 |
| Total Unit-linked France | 2,863 | 3,076 | -6.9 |
| Caixa Seguradora (Brazil) | 3,754 | 2,906 | +29.2 |
| CNP UniCredit Vita (Italy) | 1,426 | 1,890 | -24.5 |
| CNP Partners (Spain) | 59 | 124 | -52.1 |
| CNP Luxembourg (Luxembourg) | 311 | 201 | +54.8 |
| CNP Cyprus Insurance Holdings (Cyprus) | 42 | 40 | +4.0 |
| Total Unit-linked International | 5,592 | 5,161 | +8.4 |
| Total Unit-linked | 8,455 | 8,237 | +2.6 |
Unit-linked sales as a proportion of Savings/Pensions premiums by region
| 9 months 2019 | |||||
|---|---|---|---|---|---|
| (in € millions) | Savings/Pensions | o/w Unit-linked | o/w Traditional | % Unit-linked | |
| France | 13,994 | 2,863 | 11,132 | 20.5 | |
| Latin America | 3,805 | 3,754 | 51 | 98.7 | |
| Europe excluding France | 2,959 | 1,838 | 1,121 | 62.1 | |
| Total | 20,758 | 8,455 | 12,304 | 40.7 |
Premium income from partnership with La Banque Postale
| (in € millions) | 9 months 2019 |
9 months 2018 |
% change (reported) |
|---|---|---|---|
| Savings | 6,149 | 5,731 | +7.3 |
| Pensions | 272 | 315 | -13.7 |
| Personal Risk | 14 | 13 | +13.4 |
| Term Creditor Insurance | 135 | 117 | +15.3 |
| Total | 6,570 | 6,176 | +6.4 |
Premium income from partnership with BPCE
| (in € millions) | 9 months 2019 |
9 months 2018 |
% change (reported) |
|---|---|---|---|
| Savings | 4,098 | 4,861 | -15.7 |
| Pensions | 76 | 80 | -4.7 |
| Personal Risk | 88 | 91 | -3.4 |
| Term Creditor Insurance | 840 | 731 | +14.9 |
| Total | 5,102 | 5,763 | -11.5 |
Caixa Seguradora premium income by segment in BRL
| (in BRL millions) | 9 months 2019 |
9 months 2018 |
% change (reported) |
|---|---|---|---|
| Savings | 196 | 143 | +37.0 |
| Pensions | 16,393 | 12,493 | +31.2 |
| Personal Risk | 1,681 | 1,676 | +0.3 |
| Term Creditor Insurance | 2,145 | 1,774 | +20.9 |
| Health | 85 | 223 | -61.7 |
| Property & Casualty | 1,116 | 946 | +18.0 |
| Total | 21,616 | 17,255 | +25.3 |
CNP UniCredit Vita premium income by segment
| (in € millions) | 9 months 2019 |
9 months 2018 |
% change (reported) |
|---|---|---|---|
| Savings | 1,971 | 2,492 | -20.9 |
| Pensions | 8 | 8 | +2.1 |
| Personal Risk | 19 | 14 | +32.1 |
| Term Creditor Insurance | 61 | 60 | +1.1 |
| Total | 2,058 | 2,574 | -20.1 |
CNP Santander Insurance premium income by country
| (in € millions) | 9 months 2019 |
9 months 2018 |
% change (reported) |
|---|---|---|---|
| Germany | 351.1 | 360.7 | -2.6 |
| Poland | 68.8 | 60.8 | +13.1 |
| Spain | 60.4 | 53.0 | +13.9 |
| Italy | 28.6 | 25.5 | +11.8 |
| Denmark | 13.0 | 15.7 | -17.2 |
| Norway | 16.1 | 14.7 | +9.3 |
| Austria | 16.8 | 8.7 | +93.1 |
| Sweden | 7.4 | 5.9 | +25.7 |
| Finland | 3.4 | 2.9 | +14.5 |
| Belgium | 1.7 | 0.3 | n.m. |
| Netherlands | 0.1 | 0.0 | n.m. |
| Total | 567 | 548 | +3.5 |
INVESTOR CALENDAR
- 2019 premium income and profit: Thursday, 20 February 2020 at 7:30 a.m.
- Annual General Meeting: Friday, 17 April 2020
- First-quarter 2020 results indicators: Friday, 15 May 2020 at 7:30 a.m.
- First-half 2020 premium income and profit: Monday, 3 August 2020 at 7:30 a.m.
- Nine-month 2020 results indicators: Thursday, 19 November 2020 at 7:30 a.m.
This press release, along with all of CNP Assurances' regulated information published in accordance with Article L.451-1-2 of the French Monetary and Financial Code and Articles 222-1 et seq. of the Autorité des Marchés Financiers' General Regulations, is available on the Group's investor information website at www.cnp.fr/en/investor-analyst.
About CNP Assurances
A benchmark player in the French personal insurance market, CNP Assurances is active in 19 countries in Europe and Latin America, with a significant presence in Brazil, its second largest market. Acting as an insurer, co-insurer and reinsurer, CNP Assurances develops innovative personal risk/protection and savings/pensions solutions.
It has more than 37 million personal risk/protection insureds worldwide and more than 14 million savings/pensions policyholders. In line with its business model, the Group's solutions are distributed by multiple partners. The solutions are aligned with each partner's physical or digital distribution model, while also being tailored to local clients' needs in each country.
CNP Assurances has been listed on the Paris Stock Exchange since October 1998. The Group reported net profit of €1,367 million in 2018.
Contacts
Press Florence de Montmarin | +33 (0)1 42 18 86 51 Tamara Bernard | +33 (0)1 42 18 86 19 Investors and analysts Nicolas Legrand | +33 (0)1 42 18 65 95 Jean-Yves Icole | +33 (0)1 42 18 86 70 Typhaine Lissot | +33 (0)1 42 18 83 66
Julien Rouch | +33 (0)1 42 18 94 93
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Disclaimer:
Some of the statements contained in this presentation may be forward-looking statements referring to projections, future events, trends or objectives that, by their very nature, involve inherent risks and uncertainties that may cause actual results to differ materially from those currently anticipated in such statements. These risks and uncertainties may concern factors such as changes in general economic conditions and financial market performance, legal or regulatory decisions or changes, changes in the frequency and amount of insured claims, changes in interest rates and foreign exchange rates, changes in the policies of central banks or governments, legal proceedings, the effects of acquisitions and divestments, 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 Autorité des Marchés 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.
Certain prior-period information may be reclassified on a basis consistent with current year data. The sum of the amounts presented in this document may not correspond exactly to the total indicated in the tables and the text. Percentages and percentage changes are calculated based on unrounded figures and there may be certain minor differences between the amounts and percentages due to rounding. CNP Assurances' final solvency indicators are submitted post-publication to the insurance supervisor and may differ from the explicit and implicit estimates contained in this document.
This document may contain alternative performance measures (such as EBIT) that are considered useful by CNP Assurances but are not recognised in the IFRSs adopted for use in the European Union. These measures should be treated as additional information and not as substitutes for the balance sheet and income statement prepared in accordance with IFRS. They may not be comparable with those published by other companies, as their definition may vary from one company to another.