Strong momentum in our business (Mark Pearson)

AXA US LIFE & SAVINGS
Strong momentum in our business
Investor Day
November 20, 2014
Mark PEARSON – AXA US CEO
Member of AXA Group Management Committee
AMBITION AXA |
Delivering on our strategic aspirations
UNDERLYING EARNINGS
NEW BUSINESS VALUE
In USD millions
In USD millions
New Business Value Margin
12%
13%
21%
671
741
338
591
325
2010
2011
2012
2013
1H14
Ambition
AXA
2015
GROSS ECONOMIC EXPENSES
31%
473
1,100
640
27%
164
188
2010
2011
2012
450
270
2013
1H14
Ambition
AXA
2015
NEW BUSINESS INTERNAL RATE OF RETURN
In USD millions
1,362
1,310
1,249
1,400
1,217
10%
11%
16%
16%
2013
1H14
13%
15%
598
2010
2011
2012
2013
1H14
D2 | AXA Investor Day – AXA US | 20 November 2014
Ambition
AXA
2015
2010
2011
2012
Ambition
AXA
2015
MIX OF BUSINESS |
More profitable and significantly lower capital/risk profile
FY08 Total APE Mix
22%
48%
Aligned distribution – AXA Advisors now
generating 74% of APE (53% in FY07)
15%
15%
Fixed rate GMxB VA
Life
Employer Sponsored Non-GMxB VA
Investment Products & Other
Innovative – fixed rate GMxB variable
annuities now represent 2% (48% in FY08)
Separate account AUM – increased 60%
since 2008, to $113bn
1H14 Total APE Mix
2%
General account – reduced 4% since
2008, to $58bn
28%
33%
9%
11%
17%
Fixed rate GMxB VA
Employee Sponsored Non-GMxB VA
Floating Rate GMxB VA
Life
New Non-GMxB VA
1
Investment Products & Other
D3 | AXA Investor Day – AXA US | 20 November 2014
1.
New Non GMxB Variable Annuity includes: Investment Edge and Structured Capital Strategies
RESHAPING THE SAVINGS BUSINESS |
95% non-guaranteed or floating rate
Individual Annuity APE Mix
12%
22%
22%
26%
57%
47%
100%
68%
31%
2011
2012
Fixed Rate GMxB Variable Annuity
Floating Rate GMxB Variable Annuity
Non-GMxB Variable Annuity
D4 | AXA Investor Day – AXA US | 20 November 2014
2013
Retirement Cornerstone – our #1 selling
annuity was priced when 10 year interest
rates were 1.9% and has a floating rate
guarantee linked to treasury rates
Client value – expanded portfolio offers
wide range of options covering both
performance and protection needs
27%
10%
2007
72%
Aggressively managing mix – third party
distribution agreements managed to value
requiring diversified product mix
5%
1H14
Investment options – assets exposed to
guarantees are >90% passive and have
volatility management tools (ATM)
INFORCE MANAGEMENT |
480
635
12%
Delivering value to policy holders whilst derisking our book
Key Inforce Actions
Million in USD
Paid out to clients on
top of account value
Million in USD
Reduction in IFRS
Reserves
Reduction in economic
capital from inforce actions
D5 | AXA Investor Day – AXA US | 20 November 2014
GMxB / GMDB buyout offers
Over 33k clients have accepted an early
payout option
Transition to passive funds
Now 75% of legacy inforce AUM in
passive funds
Volatility management tools
Over 80% of legacy inforce AUM covered
by volatility management tools (ATM)
ACTIVELY GROWING IN SELECT MARKETS |
EMPLOYER
SPONSORED
(GROUP PENSION)
LIFE
INVESTMENT
PRODUCTS
DISTRIBUTION
Targeting select segments
#1 Player in 403(b) K-12 education market, currently serving
700,000 teachers
Access to over 8,000 school payroll slots through over 850
dedicated AXA Advisors
Over 1.4 million clients; ranked #3 in the overall variable universal
life market
Piloting predictive underwriting capabilities
Over 350,000 clients; #6 top broker dealer by revenue
High cross sell rates as accounts are often paired with other life
and retirement products
AXA Advisors: aligned, nationwide advisory force of 5,000
Third Party: 1,000+ third party selling agreements
Partnerships with US Property and Casualty carriers
Sources: Financial Planning Magazine, 2014 ranking based on 2013 calendar year; LIMRA 2014: “Quarterly NFP Report - Employer Sponsored” and “LIMRA Quarterly Sales Reports”
D6 | AXA Investor Day – AXA US | 20 November 2014
LOOKING FORWARD
Need for our products &
services has never been
greater
Turnaround of the US Business
NBV Growth
X 2.8
US Population Growth
In millions
473
+42%
400
281
316
•
In USD millions
•
•
•
•
164
334
FY10
FY13
Derisked and innovative variable
annuity portfolio
Aggressively managing mix
New generation products make up
an increasing share of our portfolio
Comprehensive hedging program
Reserve strengthening in 2009
through 2012 to reflect policyholder
behavior
Strategic Initiatives
2000
2013
2020
2050
Percentages of Americans:
71% know saving for retirement
is “extremely” or “very”
important
Build direct-to-consumer distribution capabilities, now piloting
Group Pension online enrollment
Drive AXA Advisors productivity through enhanced advice tools
and social media marketing
53% are not contributing to a
retirement plan
Drive sales through US Property and Casualty carriers
88% of annuity owners are
“very” or “somewhat”
confident about retirement
Offer new options for GMxB legacy clients including lump sum
payment
Sources: U.S. Census Bureau, U.S. Bureau of labor statistics (July 25, 2014); LIMRA 2014: « US Consumers Today: The Middle Market” and “Annuities: Love Them When You Know
Them, Hate Them When You Don’t”
D7 | AXA Investor Day – AXA US | 20 November 2014
Appendix
BIOGRAPHY
MARK PEARSON
MEMBER
CEO, AXA US
OF AXA GROUP MANAGEMENT COMMITTEE
 Mark Pearson is the CEO of AXA US operations, and a member of both the AXA Group’s
Executive and Management Committee.
 He was previously President and Chief Executive Officer of AXA Japan from 2008 to 2011
after being appointed regional chief executive of AXA Asia Life in 2001.
 Mark Pearson joined AXA Group in 1995 after approximately 20 years in the insurance
sector, holding several senior management positions at National Mutual and Friends
Provident.
D9 |
AXA Investor Day – AXA US | 20 November 2014