unipol group 2006-2009 strategic plan

UNIPOL GROUP
2006-2009 STRATEGIC PLAN
Contents
CHAPTER 1: 2006-2009 STRATEGIC PLAN
9
Group positioning
9
Key Pillars
9
Key Figures
CHAPTER 2: CORPORATE AND FUNCTIONAL
REORGANIZATION PLAN
1
Contents
CHAPTER 1: 2006-2009 STRATEGIC PLAN
9
Group positioning
9
Key Pillars
9
Key Figures
CHAPTER 2: CORPORATE AND FUNCTIONAL
REORGANIZATION PLAN
2
Unipol is an integrated group offering insurance and
banking services
Insurance Area
Composite
companies
Specialised
companies
Banking Area
Bancassurance
• FY 2006 Premiums about 10.8 Euro/bn
• ~4,500 points of sales; distribution
agreements with ~1,500 branches
• Excellent Group Technical Results
• Balanced mix of premiums
(~40% Non-Life and ~60% Life)
• 265 branches nationwide
• More than 50% of the branches are colocated with insurance agencies
• ~40 financial counters
• FY 2006 deposits about 34 Euro/bn
3
The Group is the third insurance player in the market
2005, Gross Direct Written Premiums, Italian GAAP
Market share
Life
Group
Premiums
€ billion
Generali*
Italian Insurance market
Group
Premiums
€ billion
27.8
Allianz
14.6
25.3
25.3
13.3
13.3
Unipol
10.8**
9.8
9.8
FonSAI
10.2
9.3
9.3
Cattolica
Allianz
9.0
Unipol
6.7**
Poste Vita
Generali*
5.3
4.8
4.8
19.7
Eurizon
26.9
26.9
12.2
12.2
9.2
9.2
7.9
7.9
5.8
6.3
6.3
4.6
Non-Life
Group
Premiums
€ billion
Generali*
8.0
FondSAI
7.1
Allianz
5.6
Unipol
Reale Mutua
*Proforma, Toro Group included; Source: ANIA
** 2006 preliminary figures: 10,8 €/bn Premiums (o/w 6.7 Life and 4.1 Non Life)
4.1**
1.8
22.0
22.0
19.7
19.7
15.4
15.4
10.9
10.9
5.0
5.0
4
Both business areas grew at very fast pace
1999-2005, Italian GAAP
CAGR 1999-2005
Banking growth
Customer deposits + Customer funds
€ billion
Insurance growth
Gross Domestic Written Premiums
€ billion
8.9
6.0
1.9
2.0
1.1
0.8
1.2
1999
2000
2.8
2001
3.8
Premiums
656
389
Customer funds
28.5
4.9
3.9
49%
49%
3.9
3.7
2002
5.1
2003
5.7
2004
20.2
4.3
2.3
Acquisition
Acquisition
Life
9.6
2.1
3.2
Customer deposits
10.7
33.5%
33.5%
4.9
P&C
6.8
2.6
0.4
2005
Acquisition
Premiums
Premiums
1,929
140
3.9
0.5
2.2
3.4
1999
2000
Acquisition of
51 branches
from Banca
Intesa
7.4
1.1
9.2
2.2
6.3
7.0
2001
2002
Acquisition
of 60
branches
from
Capitalia
14.1
2.6
11.5
2003
23.6
15.9
2004
2005
Acquisition
of 22
branches
from
Antonveneta
88
1,108
5
Three core skills enabled the Group to grow
considerably in the last years
Business
growth and
profitability
X Unipol Ass. business overperformed market
growth (since 1999: Unipol Ass. +15.4% vs
Market + 10.0%)
X Combined ratio constantly below market
average
X Profitable business development with
Affinity Group (33% of Unipol Ass. Non-Life
business)
Steady
growth of
insurance
original
business
Merger
competencies
X Acquisition and integration of 6 companies
since 2000
X Strengthen Aurora up to the 3° composite
Italian company
X Fast integration of key shared functions (IT,
claims)
Fast
integration
after
acquisitions
Innovation
and growth
options
X Development of Unipol Banca based on an
integrated model (banking branch +
insurance agency) innovative in the Italian
market
X Development of channel/product specialized
companies (e.g., Linear, Unisalute)
Development
of new
businesses
6
An integrated model based on increasing
convergence of households’ financial needs
Evolution of customer needs makes the
difference more and more artificial
Need
X Buy a house
A large customer base in insurance makes
the opportunity real and feasible to boost
the banking client portfolio
Offer required
X Mortgage loans
X Unipol has 6 million customers
X Home insurance
X Payment protection
coverage
X Own a car
X Car financing
X Motor coverage
X Road assistance
X…
X Save for retirement X Mutual funds
X Life assurance
X Saving plan
Develop
integrated
insurance and
banking offer
X Top 40% of agencies have average
portfolio of 4,000 customers
X 20% of client of Unipol Banca comes from
insurance (35% on average in the branches
co-located with insurance agencies)
X Pension Funds
X Protect the
family
X Death coverage
X Health coverage
X Break even level for Unipol Banca branch
is low (around 500 current accounts)
X LTC
X De-cumulate
assets
X Reverse mortgage
X Annuity
X…
7
Contents
CHAPTER 1: 2006-2009 STRATEGIC PLAN
9
Group positioning
9
Key Pillars
9
Key Figures
CHAPTER 2: CORPORATE AND FUNCTIONAL
REORGANIZATION PLAN
8
Strategic guidelines and key targets
Insurance
Reinforce current market position and
improve profitability
2009
Banking
Scale up and improve profitability
X +50% Insurance
technical result
Corporate Center
Reinforce ‘holding functions’ to increase
integration and to strengthen
commercial coordination
Capital Management
Enhance value and identify external
growth opportunities in line with the
Group’s strategy and profitability targets
X Banking net
profit above 90
millions
X x2 EPS
X Expected ROE at
14%
9
Strategic guidelines and key targets
Insurance
Reinforce current market position and
improve profitability
Banking
Scale up and improve profitability
X Improve offering and sales
performance
X Cut operating costs by
exploiting unrealized synergies
X Maintain technical excellence
mainly focusing on claims
X Increase Life New Business
Value with a more profitable
mix
Corporate Center
Reinforce ‘holding functions’ to increase
integration and to strengthen
commercial coordination
Capital Management
Enhance value and identify external
growth opportunities in line with the
group’s strategy and profitability targets
10
Strategic guidelines and key target
Insurance
Reinforce current market position and
improve profitability
Banking
Scale up and improve profitability
Corporate Center
Reinforce ‘holding functions’ to increase
integration and to strengthen
commercial coordination
X Improve cost/income ratio
leveraging on strong revenue
growth increasing:
ƒ Align recently opened
branches to the average
performance
ƒ Increase network sales
productivity
X Expand branch network
Capital Management
Enhance value and identify external
growth opportunities in line with the
group’s strategy and profitability targets
11
Strategic guidelines and key targets
Insurance
Reinforce current market position and
improve profitability
Banking
Scale up and improve profitability
Corporate Center
X Rationalize Group structure
Reinforce ‘holding functions’ to
increase integration and to
strengthen commercial coordination
X Promote coordination among
business areas
Capital Management
Enhance value and identify external
growth opportunities in line with the
group’s strategy and profitability targets
12
Strategic guidelines and key targets
Insurance
Reinforce current market position and
improve profitability
Banking
Scale up and improve profitability
Corporate Center
Reinforce ‘holding functions’ to increase
integration and to strengthen
commercial coordination
Capital Management
X Minorities buy-out
Enhance value and identify external
growth opportunities in line with
the group’s strategy and
profitability targets
X Seize external growth
opportunities
X Confirm pay-out policy
13
Excess capital provides resources to tackle market
opportunities
€ million
The PTO on 100%
Aurora shares for a total
amount of 751 mn €
started on 29 January
2007
Potential add-on of
1 bln € of hybrid capital
to be issued in case of
acquisition
2,700
800
∼2,000
∼300
Excess
capital
YE ‘05
Minorities
buy-out
Capital
required to
finance
growth, net
of retained
earnings
∼400
Excess of
Issuing of
subordinated regulatory
capital
notes
available
across the
plan
14
Contents
CHAPTER 1: 2006-2009 STRATEGIC PLAN
9
Group positioning
9
Key Pillars
9
Key Figures
CHAPTER 2: CORPORATE AND FUNCTIONAL
REORGANIZATION PLAN
15
Key economics
Insurance business, Gross Domestic Written Premiums
€ million, percent
Non-Life Premiums
Combined Ratio
Non-Life Technical
Result
Life Premiums*
Life New Business
Margin
2005
2009
3,948
4,800
5.0%
93.7%
92.0%
–1.7 p.p.
245
350
9.3%
5,188
7,150
8.3%
20.6%
23.6%
+3.0 p.p.
* IFRS Proforma including 100% of BNL Vita and 50% of Quadrifoglio.
CAGR 05-09
16
Key economics
Unipol Banca
€ million, percent
2005
CAGR 05-09
7,021
9,000
6.4%
Customer Funds
23,645
32,200
8.0%
Customer Loans
5,261
8,600
13.1%
84.3%
56.4%
–27.9 p.p.
Gross operating income
187
446
24.3%
Net profit
–4*
94
-
ROE
n.s.
9.5%
-
Customer Deposits
Cost Income
*
2009
+20.4 Italian GAAP
17
Key performance indicators
Group
€ million, percent
Total Gross Domestic
Written Premiums
Group Net profit
ROE*
EPS (€ Cent.)
Excess regulatory
capital
* Net of excess capital
** Across the 3-years plan
CAGR ‘05-’09
2005
2009
9,136
11,950
6.9%
254
570
22.3%
9.2
∼14
∼5 p.p.
11
24
22.3%
2,700
∼2,000**
-
18
Summary of Key Consolidated Figures
INSURANCE BUSINESS
INSURANCE INCOME *
INSURANCE BUSINESS
UNIPOL GROUP
MARKET SHARES (Ins. Income)
TOTAL INVESTMENTS
(EUR/m)
stable
FY 2005
10.9%
~6,700
~4,100
6,782
+12%
3,948
(EUR/bn)
~10,800
10,730
10.9%
9.4%
9.2%
2005
FY 2006E
Non-Life
Life
* Direct premium income – local GAAP
2006E
Total Non-Life
Total Life
BANKING BUSINESS
(EUR/m)
23,645
4.3
4,2
31,7
33.6
FY 2005
3Q06
Inv. on behalf of policyholders (former Class D)
UNIPOL GROUP
BANKING BUSINESS
NET PROFIT
LOANS TO CUSTOMERS
(EUR/m)
(EUR/m)
Funds
35.9
+5.5%
over
2005
Other investments
BANKING DEPOSITS AND FUNDS
Deposits
37.9
~26,400
+12%
254
+5.5%
increasing
30
~6,200
~7,800
7,021
FY 2005
5,261
+7.8%
+18%
282
5,261
FY 2006E
FY 2005
FY 2006E
FY 2005
FY 2006E
19
Contents
CHAPTER 1: 2006-2009 STRATEGIC PLAN
9
Group positioning
9
Key Pillars
9
Key Figures
CHAPTER 2: CORPORATE AND FUNCTIONAL
REORGANIZATION PLAN
20
The current structure of Unipol Group
Main companies
HOLMO
MPS
P&V Group
(BE)
HOPA
56.24%
27.84%
4.59%
5.40%
4.50%
BNP
PARIBAS
JP MORGAN
(USA)
1.43%
FINSOE
Permanent stake: 50.2% of ordinary
shares (31% of the total share capital)
Holding and
Insurance Company
INSURANCE
INSURANCE
66.66%
AURORA
ASSICURAZIONI
98.48% (*)
UNISALUTE
BANCASSURANCE
BANCASSURANCE
50%
50%
QUADRIFOGLIO
VITA
BNL VITA
BANKING
BANKING
84.53% (*)
UNIPOL
BANCA
86.15%
UNIPOL
MERCHANT
BANCA PER LE IMPRESE
100% (*)
99.80%
(*) Direct + indirect stake
LINEAR
100%
NAVALE
ASSICURAZIONI
100%
UNIPOL SGR
UNIPOL FONDI
21
Unipol Group Reorganization Plan:
goals and transaction structure
Transaction
Transaction structure
structure
Goals
Goals
Voluntary tender offer for 33.34% stake of Aurora
not held by Unipol at a price of €2.45 per share
Total Offer Value up to €751m
Acquisition of the full
control (100%) of Aurora
Assicurazioni
Hive-down of the insurance business of Aurora
Merger by incorporation of Aurora into Unipol:
Exchange ratio expected in a range between:
0.431 – 0.511 Unipol ordinary shares for each Aurora share
0.266 – 0.315 Unipol pref. shares each Aurora share
Rationalization of the
corporate structure within
Unipol, by separating
holding and insurance
activities
Hive-down of the insurance business of Unipol and
creation of Unipol Assicurazioni S.p.A., wholly
controlled (100%) by Unipol Gruppo Finanziario
S.p.A.
22
Unipol Group at the end of the transaction
Main companies
HOLMO
MPS
P&V Group
(BE)
HOPA
56.24%
27.84%
4.59%
5.40%
4.50%
BNP
PARIBAS
JP MORGAN
(USA)
1.43%
FINSOE
Permanent stake: 50.2% of ordinary
shares (31% of the total share capital)
UNIPOL
Gruppo Finanziario S.p.A.
INSURANCE
INSURANCE
100%
100%
BANCASSURANCE
BANCASSURANCE
UNIPOL
ASSICURAZIONI
50%
AURORA
ASSICURAZIONI
50%
QUADRIFOGLIO
VITA
BNL VITA
BANKING
BANKING
84.53%
UNIPOL
BANCA
86.15%
UNIPOL
MERCHANT
BANCA PER LE IMPRESE
~100%
Other insurance
companies
100%
100%
UNIPOL SGR
UNIPOL FONDI
23
DISCLAIMER
This presentation contains information relating to
forecasts of figures, results and events which reflect
the current management outlook, but these could
differ from what actually happens owing to events,
risks and market factors that it is presently impossible
either to know or to predict.
24
Contatti
Investor Relations
Unipol Assicurazioni - Via Stalingrado 45
Bologna
Adriano Donati
Tel. +39.051.507.6166
[email protected]
Francesco Fronzoni
Tel. +39.051.507.6563
[email protected]
25