AXA: Japan & Asia Pacific Region
Philippe DonnetGroup Regional CEO Japan & Asia Pacific
UBS Conference - March 26, 2007
UBS Conference – March 26, 2007 2
This presentation contains “forward-looking statements” which involve risks and uncertainties. These statements include, but are not limited to, statements that are predictions of or indicate future strategy, forecasts, events, trends, plans or objectives (including statements herein with respect to our Ambition 2012 project and the objectives, financial and other, associated with that project). Many of the forward-looking statements are derived from operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are based upon information available to us on the date of this presentation. Forward-looking statements used herein include such statements as defined under US federal securities laws.
Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties and can be affected by numerous factors that could cause actual results and our strategy, forecasts, plans and objectives to differ materially from those expressed or implied in the forward looking statements (or from past results). These risks and uncertainties include, without limitation, the risk that the Winterthur businesses will not be integrated successfully; the risk of unforeseen events occurring resulting in certain of our strategies, forecasts, plans and/or objectives becoming unrealistic or unattainable; and the risk of future catastrophic events (including possible future pandemic and/or weather-related catastrophic events and/or terrorist related incidents), economic and market developments, legislative developments, regulatory actions or investigations, as well as litigations and /or other proceedings. We caution you that the foregoing list of factors does not contain all of the material factors that are important in considering the forward-looking statements; please refer to our Annual Report on Form 20-F and Document de Référence for the year ended December 31, 2005, for a description of certain important factors, risks and uncertainties that may affect our business.
We undertake no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise.
Cautionary statements concerning forward-looking statements
UBS Conference – March 26, 2007 3
1 : Introducing AXA Group
2 : An increasing presence in Japan and Asia Pacific
3 : Strategy and organization to achieve profitable growth
4 : Focus on specific countries
5 : Conclusion
Table of contents
UBS Conference – March 26, 2007 4
AXA Group has a clear and stable strategic vision …
Financial Protection
Global Reach
Multi-distribution
Open Architecture
Life & Savings, Property & Casualty, Asset Management
Europe, USA & Asia-Pacific
Balance between proprietary & non-proprietary networks
Mix of in-house & external funds
UBS Conference – March 26, 2007 5
1.060.88
0.61
0.380.34
2002 2003 2004 2005 2006
4,010
3,337
2,637
2,0351,687
2002 2003 2004 2005 2006
Underlying EarningsEuro million
2002-2003 in French GAAP, IFRS since 2004
AXA 2012
CAGR 2002-06: +24%
DividendEuro per share
CAGR 2002-06: +33%
3.42% 3.46%3.29%2.28%2.75%Yield 2006 dividend to be proposed at May 14, 2007 Shareholders’ Meeting
…delivering strong and steady earnings growth and sustained dividend growth…
UBS Conference – March 26, 2007 6
…in order to achieve the challenge of Ambition 2012
In order to materialize our Ambition 2012 plan, we have set targets that
we will reach if we succeed in leveraging our global platform …
x2
x3
Revenues
Underlying earnings/
share
Targets
2004 2012
AMBITION 2012
UBS Conference – March 26, 2007 7
1 : Introducing AXA Group
2 : An increasing presence in Japan and Asia Pacific
3 : Strategy and organization to achieve profitable growth
4 : Focus on specific countries
5 : Conclusion
Table of contents
UBS Conference – March 26, 2007 8
India
Korea
JapanHongKongAustralia
Taiwan
Malaysia
FranceSingapore
$ 40,000
$ 30,000
$ 20,000
$ 10,000
$00 2 4 6 8 10 12 14 16
Room for Growth
DevelopingStage
MatureStage
Insurance Premium (life & non-life) as a % of GDP
GDP per Capita (USD)
US
UK
Thailand
VietnamIndonesia
PhilippinesChina
(Size of Country Circles is proportional to “Premium Volume of Country”)
Source: Swiss Re (Sigma No5/2006), IMF websiteNote: Life & Savings are unbundled in the Australian market
The Japan and Asia Pacific region possesses high potential for AXA – combining strong economic growth and attractive demographics
UBS Conference – March 26, 2007 9
AXA has a strong and growing presence in all key markets in the Japan & Asia Pacific region
LIFEJV with Krungthai BankPremiums: €76m
LIFEJV with Bharti since 2006
LIFEJV with Affin to acquire Tahan Life
LIFEJV with MinmetalsPremiums: €48 m 15.6% stake in Taikang
LIFEPremiums: €1.1bn
LIFEPremiums: €167m LIFE
JV with Tempo Group & PT Bank MandiriPremiums: €110m
LIFEJV with Metrobank GroupPremiums: €141m
LIFEPremiums: €5.0bn
China
Thailand
Indonesia
Philippines
Singapore
HongKong
Malaysia
Japan
India
Australia
New Zealand
Korea
• AXA Asia P&C figures as of 2006 – unaudited and based on statutory figures
LIFEPremiums: €346m
(Financial Protection in-force annual premium)
LIFEPremiums: €88m(Financial Protection in-force annual premium)
P&CJV with UOB & TiscoPremiums: €28m
P&CSince Winterthuracquisition (2006)
P&CPremiums: €73m
P&CPremiums: €158m
P&CJV with Affin HoldingsPremiums: €57m
P&CPremiums: €94m
P&CJV with PT Arya MitraPremiums: €13m
P&CAcquisition of Kyobo Auto (2007)Premiums: €278m
UBS Conference – March 26, 2007 10
Japan & Asia Pacific’s Life & Savings operations already deliver a significant share of Group revenues & earnings…
15% 19%36%
L&S Revenues L&S UnderlyingEarnings
New BusinessValue
Japan &Asia Pacificcontributionfor 2006
€ 50.5bn € 2.3bn € 1.5bn
UBS Conference – March 26, 2007 11
Annual PremiumEquivalent (APE)
NBV/APEMargin
New Business Value(NBV)
Euro billion Euro million
+4.4pt+11% +22%
1.091.17
455
537
41.7%
46.1%
2005 2006 2005 2006 2005 2006
× =
…while value of new business bodes extremely well for future earnings
UBS Conference – March 26, 2007 12
Growth of P&C operations in Asia (including Japan) is also a driver of the Group’s ambitious targets
Gross Written PremiumsEuro million
Net IncomeEuro million
Note: Unaudited, based on statutory figures.
CAGR+8% 422391338316305
2002 2003 2004 2005 2006
3236
26
(1)(13)
2002 2003 2004 2005 2006
UBS Conference – March 26, 2007 13
1 : Introducing AXA Group
2 : An increasing presence in Japan and Asia Pacific
3 : Strategy and organization to achieve profitable growth
4 : Focus on specific countries
5 : Conclusion
Table of contents
UBS Conference – March 26, 2007 14
Philippe DonnetGroup Regional CEOAXA Japan & Asia Pacific
Andrew PennGroup Chief ExecutiveAXA Asia Pacific Holdings
Paul SampsonCEOAXA Life Japan
Mark PearsonRegional Chief Executive, LifeAXA Asia Pacific Holdings
Frédéric de CourtoisRegional P&C CEOJapan & Asia-Pacific
Management: A strong management team delivering growth in the region
Platform: Life in Asia
Platform: P&C in Asia
Platform: Direct in Japan & Korea
Platform: Life in Australia & NZ Platform: Life in Japan
Platform: Life in Asia
UBS Conference – March 26, 2007 15
Management objectives: Key initiatives to deliver Ambition 2012 in the region
With the support of our 15,000+ employees in the region, our focus is to strengthen further AXA’s presence in Japan & Asia-Pacific through:
Attaining superior organic growth
Delivering strong profitability results
Building distribution partnershipsand joint ventures
Attracting quality local management talent
Developing regional platforms
Capturing bolt-on acquisition opportunities
UBS Conference – March 26, 2007 16
Japan
Regionalized strategy: Leveraging the platforms of the 5 key business units to maximize synergies and increase scale
AXA Japan & Asia Pacific
Japan Asia Pacific
AXA JapanDirect P&C
AXA Australia &New Zealand Life AXA Asia P&CAXA Japan Life AXA Asia Life
AXA APH
To compete in all parts of the financial
protection and wealth management
value chain
To achieve a top 5 position in each of our markets by the time they enter the
‘growth’ phase
To be the recognized market
leader and insurer of choice in our target segments of retail,
health, and commercial
business
To be the leading player in the P&C
direct market
AustraliaNew Zealand
Hong KongSingaporePhilippinesIndonesiaThailandChina IndiaMalaysia
Hong KongSingaporeMalaysiaThailandIndonesiaIndiaChina
JapanKorea
To be recognized as one of the leading industry players in
protection, wealth & retirement planning
to our valued customers
UBS Conference – March 26, 2007 17
1 : Introducing AXA Group
2 : An increasing presence in Japan and Asia Pacific
3 : Strategy and organization to achieve profitable growth
4 : Focus on specific countries
5 : Conclusion
Table of contents
UBS Conference – March 26, 2007 18
Japan, our largest contributor in the region: From turnaround to accelerating growth at AXA Life Japan
1,2241,537
2002 2006
135
431
2002 2006
2002-2006 (€ million)
(102)
256
2002 2006
Build significant
share in our core business
Deliver attractive
solutions to our customers and
distributors
Equip the company with committed and
motivated people
NB APEProfits
Distribution expansion
Champion solutions
Employee engagement++ = Profitable
growth
Drastic Turnaround Preparing for accelerating growth to 20123 + 1 strategic missions to drive our Ambition J
Net Profits
NBV
Value of business in-force*
No. 1 Medical share2x SME clientsTop 3 in BancassuranceBest-in-classproductivity
+ Winterthur acquisition
DifferentiationAdopting to changing customer needs
Development of our peopleCommitment
* 2002 : traditional EV - 2006 : EEV
UBS Conference – March 26, 2007 19
50
64
83
2004 2005 2006
Australia and New Zealand Life: continuing strong growth
Strong growth inunderlying earnings
32
42
51
2004 2005 2006
Product manufacturing
Asset
managem
ent
Products
Platforms
Adviser
services
Integrating and supporting
Advice
€ Mil
Strong growth infunds under management€ Bil CAGR
26%
CAGR29%
UBS Conference – March 26, 2007 20
Hong Kong Life: Combination of organic growth & acquisitions driving strong growth in new business & earnings
100
7562
2004 2005 2006
CAGR27%
Strong growth inAPE€ Mil
Accelerate profitable growth utilising multi-channel distributionBe at the forefront as Hong Kong moves towards wealth management
GROWTH STRATEGY
MLC Hong Kong– Successfully completed integration– Annualized cost savings of HK$136M,
ahead of targetWinterthur Hong Kong (proposed)
– Increasing market share and further expanding multi-channel distribution
– Expanding presence in the unit-linked segment
BOLT-ON ACQUISITIONS
111
84
60
2004 2005 2006
CAGR36%
Strong growth inunderlying earnings€ Mil
UBS Conference – March 26, 2007 21
Combined
The Winterthur acquisition further increases our size and reach in Japan & Asia Pacific
AXA Combined
Hong Kong: LifeExpanding LifeLife Premiums:
AXA Combined
Japan: LifeExpanding LifeLife Premiums:
AXA
Market-Entry (P&C)P&C Premiums:
0 €8.4Mn
€11.8MAXA Combined
Indonesia: P&CExpanding P&CP&C Premiums:
€29.1M
€5.02Bn
€1.03Bn €1.37Bn
€4.45Bn
China: P&C
China: Life15.6% of Taikang
UBS Conference – March 26, 2007 22
Entering the Indian market: partnership with Bharti, a leading & fast growing corporate group in India
JV agreement between AXA and Bharti
Shareholding in the JV: AXA 26% / Bharti 74%
AXA has day-to-day management control
Exclusive distribution agreement with Bharti Airtel, providing AXA with access to a customer base of over 20 million customers -expected to grow to 50 million by 2010
Partnership is being extended to P&C and asset management
Asset ManagementP&CLife &
Savings
UBS Conference – March 26, 2007 23
Strategic acquisition in South Korea: Acquiring Kyobo Auto to enter Asia’s 2nd largest P&C insurance market
STRATEGYEntering Asia’s 2nd largest P&C marketBuilding a large direct platform to be leveraged in AsiaEconomy of scale: marketing, technical, IT, financeBest practice sharing: call center management, Internet marketing, IT
RESULTSAXA is now the No. 1 direct motor insurer in Korea
AXA now services over 1,300,000 direct clients in Japan and Korea
OPPORTUNITYRight timing for acquisition Leading direct motor insurer30+% market share of direct motor market in Korea€ 278 Million of Revenues800,000 clients
Acquiring75% of
Kyobo AutoInsurance
+ KOREA
= P&C DIRECT
UBS Conference – March 26, 2007 24
1 : Introducing AXA Group
2 : An increasing presence in Japan and Asia Pacific
3 : Strategy and organization to achieve profitable growth
4 : Focus on specific countries
5 : Conclusion
Table of contents
UBS Conference – March 26, 2007 25
Our ambition is to continue to expand in high growth markets of Japan & Asia-Pacific
Markets in the region have attractive long-term fundamentals
Our strong track record in terms of top-line and NBV growth bodes well for the future
AXA is well-positioned for organic growth, new market entries, and bolt-on acquisition opportunities
AXA’s balanced portfolio of operations in Europe, US, and Japan & Asia Pacific is instrumental to the success of Ambition
2012 and beyond