Full Year 2023 Ageas SA Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Farquhar Murray - Autonomous - Analyst : Good morning, all. Just three questions from me. Firstly, just in terms of the combined ratio performance, I mean looking quite solid. I just wondered if you could walk us through maybe the undiscounted dynamic you would have for this year at full year 2024 between tariff increases and ultimately, claims inflation. I'm presuming claims inflation must moderate this year. And then the other thing that would be helpful if you could just walk us through the discounting benefit that was 3.5 percentage points this year. I just wondered if you could give us a sense of where that would stabilize out maybe into full year 2024, 2025. And then the second set of questions is really just around the cash number; the EUR350 million that you flagged. Obviously, half of that is earmarked for TPP. I just wondered with regards to the remainder whether you can outline the order of preference between additional investments and shareholder remuneration and perhaps give us a sense of when you might make a decision on one or the other this year. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 28, 2024 / 8:30AM, AGES.BR - Full Year 2023 Ageas SA Earnings Call

Question: Farquhar Murray - Autonomous - Analyst : And then with regards the cash?

Question: Farquhar Murray - Autonomous - Analyst : Okay, great. Much appreciate.

Question: David Barma - Bank of America - Analyst : Good morning. Thanks for taking my question. The first one is on non-Life both in the UK and Belgium. So, yeah, the European Non-Life segment was very strong. You have a target for the UK, but it's obviously very hard to the track it. Could you help us with -- by giving us the combined ratio for the UK in 2023, please? And then on Belgium, if I look on an underlying and non-discounted basis, the loss ratio deteriorated by quite a bit in the second half of 2023 compared with the last two years. Can you explain a little bit what's going on there in terms of underlying performance, please? And then, lastly on cash remittances from China. So with interest rates down further in China, the local result will presumably be quite bad for some time. So how should we think about the ability of typing to continue remitting similar amounts in 2024 and 2025? Should we not worry so much about the payout now that the solvency position is fixed? If you have any color on that please? Thank you.

Question: David Barma - Bank of America - Analyst : Do you expect them to move to an IFRS 13 payout when China makes the transition? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 28, 2024 / 8:30AM, AGES.BR - Full Year 2023 Ageas SA Earnings Call

Question: David Barma - Bank of America - Analyst : Thank you.

Question: Michael Huttner - Berenberg - Analyst : Good morning. Thank you. I had two questions. One, can you give maybe an outlook for 2024 in all the main metrics? That would be so helpful. And then on the cash -- I'll ask it a different way. So you reiterated the guidance of EUR750 million to EUR800 million for the current year, which is lovely. So this is 2024. Can you give a feel -- and I know it's a little bit early but to the extent that you do you have a lot of visibility on the UK and Portugal and Belgium so your consolidated cash sources. Can you give a bit of visibility on the potential cash guidance for 2025? The reason, I ask because I think it might be one of the factors you weigh up when you make a decision in May, June or whenever for potential buyback. And then the last question is, I did speak to your wonderful IR team but maybe you can give a little bit more color even there on the Real Estate and what's happening in terms of valuation and rental income and realized gains. Thank you.

Question: Michael Huttner - Berenberg - Analyst : Very helpful. Thank you.

Question: Iain Pearce - Exane BNB Paribas - Analyst : Good morning, everyone. Thanks for taking my question. The first one was just on the bond reclassification that helped Asian solvency. Could you just give us a little bit more detail around what this is and what the benefit was? And also, is there scope for further reclassifications that could help the solvency, because I guess this will show up in the TPL solvency numbers? The second one was just around, a bit more detail on the Life new business environment. Obviously it seems quite challenged in H1 a bit better in H2. Particularly around the unit-linked outlook in Belgium and Portugal, that would be very useful. Thank you.

Question: Iain Pearce - Exane BNB Paribas - Analyst : Perfect. Thank you. If I could just come back on the reclassification. So all the unrealized gains that you sort of flagged at the Investor Day are now appearing in the solvency number. Just to clarify that. And then will this have any effect on solvency sensitivities going forward? I know you don't disclose them but would you think that the solvency sensitivity would now be bigger or less as a result of putting this into -- as a result of this reclassification?

Question: Iain Pearce - Exane BNB Paribas - Analyst : Thank you.

Question: Iain Pearce - Exane BNB Paribas - Analyst : Thank you very much.

Question: Anthony Yang - Goldman Sachs - Analyst : Hi, good morning and thank you for taking my questions. The first one is on Belgium. I think in 2022, you disclosed a slide disclosing the guaranteed interest rates and the fixed income yield. And the spread in 2022, it was roughly I think 160 bps. Maybe could you give us an update on how that has moved in 2023? And then the second question is again on the net capital gains. I think you had a normalized run rate of EUR80 million to EUR100 million in Belgium. Can I check if that's still the same? Thank you.

Question: Anthony Yang - Goldman Sachs - Analyst : Thanks so much.

Question: Farooq Hanif - JPMorgan - Analyst : Everybody, thank you very much. Firstly, on some detailed questions on the numbers in Asia. I noticed that the short-term Asia Life result has improved in the second half. Are we now over the worst when it comes to health claims? And continuing on that also you've got a very high return on surplus assets in Asia which I was surprised by given your comments on investment returns. Could you comment on that and where you see that number going forward? And then secondly on -- in the non-Life business clearly due to pricing and volume growth you've seen very high top-line growth. I mean what are you feeling like for 2024 on top-line growth? For example, are you still being able to put in quite high pricing in your key markets? Thank you.

Question: Farooq Hanif - JPMorgan - Analyst : Thank you very much.

Question: Benoit Petrarque - Kepler Cheuvreux - Analyst : Yes, good morning. Just a few questions left on my side. So on the combined ratio for '24, so what do you have in mind? You were at 93.3% in the full year. I guess, it remains quite good in the UK in '24; maybe a bit up in Belgium. So what is the overall equation for '24 in terms of combined ratio? And also taking into account the recent interest rate let's say development and the forward curve trending lower by year-end '24. On the net operating guidance I was just wondering, how much capital gains you have in mind for '24? And do you expect the real estate cap gains to pick up from a weaker '23? And on (technical difficulty) potential so, how much minimum holding cash do you have in mind currently? That will be useful to assess the buyback potential. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 28, 2024 / 8:30AM, AGES.BR - Full Year 2023 Ageas SA Earnings Call And just finally I think one of your main shareholder has been rumored to be selling a large stake. And I was wondering if you had any contact with them. Thank you.

Question: Benoit Petrarque - Kepler Cheuvreux - Analyst : Just a short follow-up on the discount effect. Do you have a bit of a sensitivity to us on, if the ECB will be cutting rates say 100 bps and if the swap rates will come down accordingly? I mean, can you help us to get a view on how does that play for the discount benefit in '24?

Question: Benoit Petrarque - Kepler Cheuvreux - Analyst : Thank you very much.

Question: Ashik Musaddi - Morgan Stanley - Analyst : Thank you, and good morning, Hans. Just a couple of questions. So, I mean given that we are talking about potential buyback to be announced at the mid this year, is it fair to say that there is nothing -- not much in the pipeline from an M&A perspective? Or would you say that okay, I mean M&A, still ongoing process. You have a lot of debt facility still good cash balance. So how should we think about that? Or is it M&A not really on the table at the moment? Any sort of it? That's the first question. And second question is I mean how should we think about China earnings going forward? Now, clearly last year there were some sales hiccup, but that's been absorbed now. And you mentioned that things have started picking up again. Capital has been sorted out. So I don't think there is much issue with respect to not growing because of capital. So, how should we think about the earnings projection in Asia going forward? I mean, should we go back to the low double-digit growth in earnings in Asia? Or are there still some headwinds such as interest rates equity markets like uncertain capital gains et cetera? Thank you.

Question: Ashik Musaddi - Morgan Stanley - Analyst : Very clear. Thank you. Thanks, Filip.