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CNP Assurances Earnings Release 2019
1208_10-q_2019-05-16_99d9b971-e82b-4691-8870-635a7904ecaf.pdf
Earnings Release
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PRESS RELEASE
Paris, 16 May 2019
1
Quarterly indicators – First three months of 2019
Net profit of €326 million, up 4.2% Consolidated1 SCR coverage ratio of 180%
HIGHLIGHTS
- Premium income was stable at €8.5 billion (- 0.7% as reported and + 0.6% like-for-like 2 )
- The proportion of Savings/Pensions premiums represented by unit-linked contracts was maintained at a satisfactory level in France (21.2% vs. 24.1% in the year-earlier period) and for the Group as a whole (at 38.9% vs. 42.3% in the year-earlier period)
- Continued growth in the Brazilian market: Caixa Seguradora is now the country's third largest insurer
- The APE margin stood at 19.4%, reflecting the impact of lower interest rates in Europe
- EBIT came in at €640 million, up 2.5% (+ 5.6% like-for-like 2 )
- Attributable net profit was €326 million, up 4.2% (+ 6.0% like-for-like 2 )
- Robust consolidated SCR coverage ratio 3 at 180% (vs. 187% at 31 December 2018)
Antoine Lissowski, CNP Assurances' Chief Executive Officer, said:
"CNP Assurances reported first-quarter net profit up 4.2% in an environment shaped by extremely low interest rates and by the effects of the fall in share prices in 2018. In this environment, our APE margin and SCR coverage ratio remained comfortably high. This solid performance resulted from the operational implementation of our three-pronged strategy focused on improving service quality, developing our partnerships and delivering shareholder value."
The first-quarter 2019 results indicators, on which CNP Assurances' Statutory Auditors do not provide an opinion, were reviewed by the Board of Directors at its meeting on 15 May 2019. This press release includes a certain number of alternative performance measures (APMs). These APMs and their calculation method are presented in the Investors section of the CNP Assurances website www.cnp.fr/en/the-cnp-assurances-group/investors (2019 Results).
1 Including, with immediate effect, the impact of the new distribution agreement in Brazil
2 Average exchange rates:
First-quarter 2019: Brazil: €1 = BRL 4.28; Argentina: €1 = ARS 44.28
First-quarter 2018: Brazil: €1 = BRL 3.99; Argentina: €1 = ARS 24.22
3 187% excluding the advance recognition of the payment due under the new distribution agreement in Brazil (194% at year-end 2018)
1. First-quarter 2019 premium income and APE margin
Premium income was stable at €8.5 billion (- 0.7% as reported and + 0.6% like-for-like4 compared with the first quarter of 2018).
In France, premium income declined 1.7% to €5.9 billion.
Savings/Pensions premium income contracted by 1.7% to €4.8 billion, with the very strong performance by CNP Patrimoine's premium savings business (up €0.5 billion) almost entirely offset by the slower inflow of new money from BPCE network clients. Of the total, 21.2% came from unit-linked contracts versus 24.1% in the year-earlier period, reflecting the decrease in "Fourgous" transfers. Savings/Pensions net new money represented an outflow of €0.4 billion, with a €0.6 billion net inflow to unit-linked contracts offset by a €1.0 million net outflow from traditional contracts.
Personal Risk/Protection premium income contracted by 2.1% to €1.0 billion. Personal Risk and Health insurance premiums fell by 16.3% to €0.3 billion, due to late-2018 contract terminations. Term Creditor Insurance premiums rose by 6.3%, led by the La Banque Postale and BPCE networks. The increase also reflected the positive effect of prior years adjustments.
The APE margin for the period stood at 17.1% versus 19.7% for the whole of 2018, with the decline mainly due to the impact of lower interest rates in the first quarter.
In Latin America, premium income totalled €1.5 billion, up 6.9%. At constant exchange rates, the year-on-year increase was 15.0%, reflecting the Brazilian subsidiary's robust business performance.
Savings/Pensions premium income grew 13.3% (up 21.6% at constant exchange rates) to €1.2 billion, led by the pensions business. Caixa Seguradora continued to outperform the Brazilian insurance market, lifting its market share to 11.7% 5 from 9.9% at year-end 2018. The company is now Brazil's third largest insurer. The proportion of savings and pensions premiums represented by unit-linked contracts remained very high at 98.6%. Savings/Pensions net new money rose sharply to €0.7 billion, substantially all of which came from unit-linked contracts.
Personal Risk/Protection premium income amounted to €0.4 billion, down 8.1% (down 0.6% at constant exchange rates). The 4.7% increase in Term Creditor Insurance premiums at constant exchange rates reflected growth in the consumer finance business and Caixa Econômica Federal's decision to increase originations in some segments of its lending business.
The APE margin remained high, at 29.2% versus 30.1% in 2018. This indicator takes into account the advance recognition of the reduction in CNP Assurances' right to a share of prestamista, vida, and previdência businesses 6 (from 51.75% to 40%) under the new distribution agreement signed at end-August 2018.
In Europe excluding France, premium income amounted to €1.1 billion, a decrease of 4.8%.
In Savings/Pensions, premium income amounted to €0.9 billion, a decrease of 8.3%. The strong €0.1 billion increase in premium income recorded by CNP Luxembourg only partly offset the decline in premiums at CNP Partners and CNP UniCredit Vita (down €0.2 billion) in an Italian insurance market hit by the withdrawal of certain tax-advantaged products. The unit-linked weighting fell to 58.6% from 76.8% in the first quarter of 2018, mainly as a result of lower unit-linked sales at CNP UniCredit Vita. Net new money was a positive €0.2 billion, reflecting net inflows to both unit-linked and traditional contracts.
Personal Risk/Protection premium income rose 8.9% to €0.3 billion, with growth led by further increases in business written by CNP Santander and CNP UniCredit Vita.
Favourable changes in the product mix drove an increase in the APE margin to 17.2% from 16.9% for the whole of 2018.
Average consolidated net technical reserves totalled €316.1 billion at the period-end compared with €312.1 billion at 31 March 2018, an increase of €3.9 billion or 1.3%.
4 In the like-for-like comparatives, the contributions of Holding d'Infrastructures Gazières (the vehicle for the investment in GRTgaz), Filassistance and Assuristance have been excluded from the 2019 figures as these entities were included in the scope of consolidation at year-end 2018.
5 At end-February 2019 6 Death/disability insurance, consumer finance term creditor insurance, pensions
2. Quarterly indicators – First three months of 2019
Net insurance revenue (NIR) came to €716 million, up 2.8% (up 5.8% like-for-like).
In France, net insurance revenue rose 2.2% to €393 million, led by growth in technical reserves for unit-linked Savings business.
In Latin America, net insurance revenue came to €258 million, a decrease of 0.2%. At constant exchange rates, the year-on-year change was an increase of 7.9%, reflecting sharply higher technical reserves in the Pensions business and a favourable volume effect in the Personal Risk/Protection segment.
In the Europe excluding France region, net insurance revenue grew by 21.0% to €66 million, led by higher premium income at CNP Santander.
Revenue from own-funds portfolios amounted to €147 million, representing a decline of 2.3% (down 0.1% like-for-like). The erosion observed in the first quarter of 2019 reflected low interest rates in Europe, partly offset by profit-taking transactions.
Total revenue came to €863 million, an increase of 1.9% (+ 4.7% like-for-like).
Administrative costs amounted to €223 million, up by a slight 0.2% as reported (+ 2.3% like-for-like).
The cost/income ratio continued to improve, falling to 31.2% from 32.0% for the year-earlier period.
At €640 million, EBIT was up 2.5% (+ 5.6% like-for-like).
Attributable net profit came to €326 million, an increase of 4.2% (+ 6.0% like-for-like).
IFRS book value was €16.9 billion at 31 March 2019, representing €24.6 per share (vs. €23.2 per share at 31 December 2018).
The consolidated SCR coverage ratio was 180% at 31 March 2018, versus 187% at 31 December 2018. The decline was due to the decrease in the risk-free interest rate, the effect of which was partly offset by favourable stock market trends in the first quarter of 2019. The ratio at 31 March 2019 takes into account the €500 million Tier 2 subordinated notes issue carried out in February 2019.
| (in € millions) | Q1 2019 | Q1 2018 | % change (reported) |
% change (like-for-like) |
|---|---|---|---|---|
| Premium income | 8,549 | 8,610 | -0.7 | +0.6 |
| Average net technical reserves | 316,063 | 312,146 | +1.3 | - |
| Total revenue | 863 | 848 | +1.9 | +4.7 |
| Net insurance revenue (NIR), of which: | 716 | 697 | +2.8 | +5.8 |
| France | 393 | 385 | +2.2 | +2.2 |
| Latin America | 258 | 258 | -0.2 | +7.9 |
| Europe excluding France | 66 | 54 | +21.0 | +21.0 |
| Revenue from own-funds portfolios | 147 | 151 | -2.3 | -0.1 |
| Administrative costs, of which: | 223 | 223 | +0.2 | +2.3 |
| France | 148 | 149 | -1.2 | -1.2 |
| Latin America | 45 | 44 | +1.6 | +12.0 |
| Europe excluding France | 31 | 29 | +5.1 | +5.1 |
| Earnings before interest and taxes (EBIT) | 640 | 625 | +2.5 | +5.6 |
| Finance costs | (63) | (61) | +3.0 | +3.0 |
| Non-controlling and net equity accounted interests | (126) | (125) | +1.1 | +9.2 |
| Attributable recurring profit | 451 | 439 | +2.8 | +4.9 |
| Income tax expense | (146) | (153) | -4.3 | -1.8 |
| Fair value adjustments and net gains (losses) | 91 | 31 | n.m. | n.m. |
| Non-recurring items | (69) | (4) | n.m. | n.m. |
| Attributable net profit | 326 | 313 | +4.2 | +6.0 |
APPENDICES
Premium income by country
| (in € millions) | Q1 2019 | Q1 2018 | % change (reported) |
% change (like-for-like) |
|---|---|---|---|---|
| France | 5,879 | 5,983 | -1.7 | -1.7 |
| Brazil | 1,540 | 1,437 | +7.1 | +14.9 |
| Italy | 675 | 896 | -24.6 | -24.6 |
| Luxembourg (1) | 167 | 32 | n.m. | n.m. |
| Germany | 116 | 118 | -1.5 | -1.5 |
| Spain | 82 | 63 | +29.9 | +29.9 |
| Cyprus | 39 | 37 | +6.2 | +6.2 |
| Poland | 22 | 20 | +8.8 | +8.8 |
| Argentina | 6 | 9 | -30.4 | +27.4 |
| Denmark | 5 | 5 | +13.1 | +13.1 |
| Norway | 5 | 3 | +67.3 | +67.3 |
| Austria | 5 | 2 | n.m. | n.m. |
| Portugal | 2 | 1 | +25.5 | +25.5 |
| Other International | 5 | 4 | +24.4 | +24.4 |
| Total International | 2,670 | 2,627 | +1.6 | +6.1 |
| Total | 8,549 | 8,610 | -0.7 | +0.6 |
(1) Corresponds to CNP Luxembourg premium income.
Premium income by segment
| (in € millions) | Q1 2019 | Q1 2018 | % change (reported) |
% change (like-for-like) |
|---|---|---|---|---|
| Savings | 5,458 | 5,575 | -2.1 | -2.1 |
| Pensions | 1,397 | 1,305 | +7.0 | +13.3 |
| Personal Risk Insurance | 400 | 437 | -8.6 | -5.8 |
| Term Creditor Insurance | 1,097 | 1,046 | +4.9 | +6.1 |
| Health | 99 | 154 | -35.9 | -35.5 |
| Property & Casualty | 98 | 92 | +6.3 | +13.2 |
| Total | 8,549 | 8,610 | -0.7 | +0.6 |
Premium income by country and by segment
| Q1 2019 | |||||||
|---|---|---|---|---|---|---|---|
| (in € millions) | Savings | Pensions | Personal Risk |
Term Creditor Insurance |
Health Insurance |
Property & Casualty |
Total |
| France | 4,581 | 259 | 250 | 710 | 80 | 0 | 5,879 |
| Brazil | 15 | 1,134 | 134 | 163 | 9 | 85 | 1,540 |
| Italy | 625 | 3 | 6 | 41 | 0 | 0 | 675 |
| Luxembourg | 167 | 0 | 0 | 0 | 0 | 0 | 167 |
| Germany | 0 | 0 | 1 | 116 | 0 | 0 | 116 |
| Spain | 56 | 1 | 0 | 25 | 0 | 0 | 82 |
| Cyprus | 14 | 0 | 4 | 0 | 9 | 13 | 39 |
| Poland | 0 | 0 | 2 | 20 | 0 | 0 | 22 |
| Argentina | 1 | 0 | 3 | 2 | 0 | 0 | 6 |
| Norway | 0 | 0 | 0 | 5 | 0 | 0 | 5 |
| Denmark | 0 | 0 | 0 | 5 | 0 | 0 | 5 |
| Austria | 0 | 0 | 0 | 5 | 0 | 0 | 5 |
| Portugal | 0 | 0 | 0 | 2 | 0 | 0 | 2 |
| Other International | 1 | 0 | 0 | 4 | 0 | 0 | 5 |
| Total International | 877 | 1,138 | 150 | 388 | 19 | 98 | 2,670 |
| Total | 5,458 | 1,397 | 400 | 1,097 | 99 | 98 | 8,549 |
Premium income by region and by partner/subsidiary
| (in € millions) | Q1 2019 | Q1 2018 | % change (reported) |
|---|---|---|---|
| BPCE | 1,953 | 2,475 | -21.1 |
| La Banque Postale | 2,180 | 2,162 | +0.9 |
| CNP Patrimoine | 908 | 404 | +124.9 |
| Companies, local authorities and mutual insurers | 459 | 541 | -0.2 |
| Financial institutions (France) | 300 | 314 | -4.6 |
| Amétis | 70 | 69 | +1.3 |
| Other France | 8 | 18 | -54.3 |
| Total France | 5,879 | 5,983 | -1.7 |
| Caixa Seguradora (Brazil) | 1,540 | 1,437 | +7.1 |
| CNP UniCredit Vita (Italy) | 645 | 825 | -21.8 |
| CNP Santander Insurance (Ireland) | 187 | 175 | +6.6 |
| CNP Luxembourg (Luxembourg) | 167 | 32 | n.m. |
| CNP Partners (Spain) | 72 | 99 | -27.7 |
| CNP Cyprus Insurance Holdings (Cyprus) | 40 | 38 | +5.2 |
| CNP Assurances Compañía de Seguros (Argentina) | 6 | 9 | -30.4 |
| Other International | 13 | 11 | +18.9 |
| Total International | 2,670 | 2,627 | +1.6 |
| Total | 8,549 | 8,610 | -0.7 |
Unit-linked sales by region and by partner/subsidiary
| (in € millions) | Q1 2019 | Q1 2018 | % change (reported) |
|---|---|---|---|
| BPCE | 289 | 630 | -54.2 |
| La Banque Postale | 319 | 357 | -10.4 |
| CNP Patrimoine | 396 | 166 | +138.7 |
| Amétis | 19 | 22 | -13.4 |
| Other France | 4 | 8 | -50.7 |
| Total Unit-linked France | 1,028 | 1,184 | -13.2 |
| Caixa Seguradora (Brazil) | 1,133 | 1,003 | +12.9 |
| CNP UniCredit Vita (Italy) | 411 | 644 | -36.1 |
| CNP Luxembourg (Luxembourg) | 71 | 15 | n.m. |
| CNP Cyprus Insurance Holdings (Cyprus) | 13 | 13 | +2.7 |
| CNP Partners (Spain) | 11 | 54 | -80.3 |
| Total Unit-linked International | 1,640 | 1,728 | -5.1 |
| Total Unit-linked | 2,668 | 2,912 | -8.4 |
Unit-linked sales as a proportion of Savings/Pensions premiums by region
| Q1 2019 | |||||
|---|---|---|---|---|---|
| (in € millions) | Savings/Pensions | o/w Unit-linked | o/w Traditional | % Unit-linked | |
| France | 4,840 | 1,028 | 3,812 | 21.2 | |
| Latin America | 1,150 | 1,133 | 17 | 98.6 | |
| Europe excluding France | 865 | 507 | 359 | 58.6 | |
| Total | 6,855 | 2,668 | 4,187 | 38.9 |
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Premium income from partnership with La Banque Postale
| (in € millions) | Q1 2019 | Q1 2018 | % change (reported) |
|---|---|---|---|
| Savings | 2,030 | 2,001 | +1.4 |
| Pensions | 100 | 117 | -14.4 |
| Personal Risk Insurance | 6 | 6 | +7.1 |
| Term Creditor Insurance | 45 | 38 | +17.3 |
| Total | 2,180 | 2,162 | +0.9 |
Premium income from partnership with BPCE
| (in € millions) | Q1 2019 | Q1 2018 | % change (reported) |
|---|---|---|---|
| Savings | 1,578 | 2,148 | -26.5 |
| Pensions | 30 | 32 | -6.4 |
| Personal Risk Insurance | 28 | 32 | -11.1 |
| Term Creditor Insurance | 317 | 264 | +20.3 |
| Total | 1,953 | 2,475 | -21.1 |
Caixa Seguradora premium income by segment in BRL
| (in BRL millions) | Q1 2019 | Q1 2018 | % change (reported) |
|---|---|---|---|
| Savings | 63 | 39 | +62.1 |
| Pensions | 4,850 | 4,003 | +21.1 |
| Personal Risk Insurance | 572 | 618 | -7.4 |
| Term Creditor Insurance | 696 | 663 | +4.9 |
| Health | 40 | 89 | -55.5 |
| Property & Casualty | 365 | 318 | +14.7 |
| Total | 6,586 | 5,732 | +14.9 |
CNP UniCredit Vita premium income by segment
| (in € millions) | Q1 2019 | Q1 2018 | % change (reported) |
|---|---|---|---|
| Savings | 614 | 800 | -23.2 |
| Pensions | 3 | 3 | -8.9 |
| Personal Risk Insurance | 6 | 4 | +40.4 |
| Term Creditor Insurance | 22 | 18 | +25.3 |
| Total | 645 | 825 | -21.8 |
CNP Santander Insurance premium income by country
| (in € millions) | Q1 2019 | Q1 2018 | % change (reported) |
|---|---|---|---|
| Germany | 116.5 | 118.0 | -1.2 |
| Poland | 22.3 | 20.5 | +8.8 |
| Spain | 19.3 | 16.7 | +15.4 |
| Italy | 9.1 | 7.7 | +17.3 |
| Norway | 5.4 | 3.3 | +67.3 |
| Denmark | 5.2 | 4.6 | +13.1 |
| Austria | 5.1 | 1.8 | +183.9 |
| Sweden | 2.4 | 1.8 | +33.8 |
| Finland | 1.1 | 1.0 | +14.7 |
| Belgium | 0.5 | 0.0 | n.m. |
| Total | 187 | 175 | +6.6 |
INVESTOR CALENDAR
- First-half 2019 premium income and profit: Monday, 29 July 2019 at 7:30 a.m.
- Nine-month 2019 results indicators: Friday, 15 November 2019 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 https://www.cnp.fr/en/the-cnp-assurances-group/investors.
About CNP Assurances
CNP Assurances is France's leading personal insurer, with net profit of €1,367 million in 2018. The Group has operations in other European countries and in Latin America, with a significant presence in Brazil, its second largest market.
It has more than 37 million personal risk/protection insureds worldwide and more than 14 million savings/pensions policyholders. Acting as an insurer, co-insurer and reinsurer, CNP Assurances develops innovative personal risk insurance and savings solutions. These solutions are distributed by many partners and are tailored to their distribution methods, ranging from physical networks to full online, and to policyholders' needs in each country.
CNP Assurances has been listed on the Paris Stock Exchange since October 1998 and has a stable core shareholder base (Caisse des Dépôts, La Banque Postale, Groupe BPCE and the French State).
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.