CNP Assurances "2015 Annual Results"

CNP Assurances, the leading personal insurer in France, with operations in the rest of Europe and in Latin America, has announced its 2015 revenue and results. These indicators were approved for publication by the Board of Directors at its meeting on 16 February 2016.

HIGHLIGHTS

· Premium income of €31.6 billion, up 2.5% (3.4% like-for-like(2))

· New business margin(3) up 0.8 points to 14.5%

· Solvency II coverage rate(1) of 192%

· Attributable net profit up 4.7% (10.7% like-for-like(2)) at €1,130 million

· A cash dividend of €0.77 per share to be recommended at the Annual General Meeting on 28 April 2016

Frédéric Lavenir, CNP Assurances’ Chief Executive Officer, said: "Business and earnings continued to grow steadily in 2015, in a low interest rate environment and despite the decline in the Brazilian real. The process of transforming the business continued during the year, in line with the strategy announced in 2013. In 2016, development of our multi-partner business model will move up a gear and we will assertively deploy our digital strategy."

1. 2015 business review and new business margin

Consolidated premium income for the year came to €31.6 billion, an increase of 2.5% as reported and 3.4% like-for-like.

Premium income in France amounted to €24.8 billion in 2015, an increase of 1.1%. New business value (NBV) was up by €15 million and new business margin by 0.3 points. Growth was led by the 21.4% increase in unit-linked sales, which accounted for 15.6% of total savings/pensions premiums vs. 13.1% in 2014. Life and pensions net new money(1)** in France was a positive €2.2 billion, reflecting a €2 billion net inflow to unitlinked savings/pensions contracts and a €0.2 billion net inflow to traditional savings/pension products. In personal risk/protection insurance(2)**, new business value was up by 32%, thanks to higher term creditor insurance volumes and improved loss ratios for group health and death/disability insurance.

In Latin America, growth momentum was maintained across all business segments in a difficult economic environment, with premium income rising by 12.3% as reported and 32.0% like-for-like. New business value amounted to €138 million, down 3% as reported but up 8% like-for-like. New business margin was eroded slightly by the outperformance of savings/pensions products.

In Europe excluding France, premium income rose by 4.6% to €3.6 billion. The new business margin stood at 18.3% and new business value came to €54 million. With the business model undergoing rapid change, the year saw an improvement in the product mix led by 34.8% growth in unit-linked sales and a 149.1% rise in personal risk/protection premiums reflecting the contribution of newly acquired CNP Santander Insurance. Unit-linked contracts and personal risk/protection business accounted for over 70% of premium income generated in the region in 2015, vs. 48% the previous year.

The Group’s new business margin stood at 14.5% in 2015, an increase of 0.8 points compared with 2014 that was attributable to product mix improvements in France and in Europe excluding France with the first-time consolidation of CNP Santander Insurance.

Average technical reserves (excluding deferred participation) increased by 3.1% to €316.9 billion in 2015.

2. 2015 annual results

Net insurance revenue stood at €2,514 million for the year, up 0.4% vs. 2014(3)** (7.5% like-for-like).

In France, net insurance revenue was 4.6% higher at €1,386 million, reflecting dynamic performances across all segments.

In Latin America, net insurance revenue contracted by 4.1% to €921 million, due to unfavourable exchange rates. Excluding the currency effect, the like-for-like change was an increase of 12.6%.

In Europe excluding France, net insurance revenue fell by 5.2%, reflecting the non-recurring impact of the changes in consolidation scope that took place in 2015 (sale of CNP BVP, first-time consolidation of CNP Santander Insurance and relaunch of CNP Partners).

Revenues from own funds portfolios were more or less stable at €774 million (up 4.6% like-for-like).

Total revenue for the year came to €3,288 million, an increase of 0.3% as reported and 6.8% like-for-like.

Administrative expenses remained under control, with the 3.0% increase* vs. 2014 mainly due to the cost of financing investments in digital solutions

In France, the cost/income ratio continued to improve, falling to 43.0% from 44.2% in 2014. An operational excellence programme was launched in France with the aim of achieving a €60 million reduction in the cost base on a full year basis by 2018.

In Latin America, costs remained stable in euros, excluding the investment in the digital company.

In Europe excluding France, the 3.1% rise in administrative expenses reflected changes in scope of consolidation and marketing investments relating to the CNP Partners brand.

At €2,426 million, EBIT was down by a slight 0.6% as reported but was up 7.7% like-for-like.

Attributable net profit came to €1,130 million, an increase of 4.7% as reported and 10.7% like-for-like.

A cash dividend of €0.77 per share will be recommended at the Annual General Meeting to be held on 28 April 2016.

Operating free cash flow (excluding subordinated debt) amounted to €955 million or €1.39 per share, up 8.4%.

Attributable equity at 31 December 2015 stood at €17,113 million.

MCEV© totalled €19,243 million at end-2015, or €28.0 per share, up 13.2% compared with the value at end-2014 after dividend. The increase reflected the 13% rise in adjusted net asset value and the 14% gain in the value of in-force business.

The Solvency II coverage ratio was 192% at 31 December 2015.

During its meeting on 16 February 2016, the Board of Directors also authorised the signature of the final agreements covering implementation of the renewed partnership with La Banque Postale for a period of ten years, in accordance with the terms of the preliminary memorandum of understanding announced on 10 December 2015.

On the basis of the information provided above and in line with the Group’s strategy, CNP Assurances’ objective is to deliver average organic EBIT growth of at least 5% per year over three years.