Full Year 2024 Ageas SA Earnings Call Transcript

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

Question: David Barma - Bank of America - Analyst : Good morning and thanks for taking my questions. Firstly, I wanted to ask about P&C in Belgium and I guess a two-part question there. Firstly, if you could explain a little bit the deterioration in the attritional loss ratio in the second half? It seems to have picked up quite a bit in the second half of '24. And then if you can add to that, a few comments on the competitive dynamics right now in the Belgium P&C market? And then secondly, on Asia, also a two-part question, I guess, on Asia. Firstly, is just to be sure, should we expect the tax rates to be back to normal from the start of 2025? And then on the cash guidance you've given for 2025, how much is Asia meant to represent in that? Thank you.

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

Question: Anthony Yang - The Goldman Sachs Group Inc - Analyst : Hi, good morning. Thank you for taking my questions. Actually, the first one, just a follow-up on the cash guidance. So if I were to think about it by segment, I see that China's cash is actually lower year-on-year in 2024 versus 2023. Given the low interest rate in China, should we expect that trend to continue in 2025? Yeah, that's question one. Maybe I will ask a question two later.

Question: Anthony Yang - The Goldman Sachs Group Inc - Analyst : Question is still focused on China. Can you give some color on what is the asset liability duration gap in Taiping Life? And also, could you give some color on the development speed of the cost of liability of in-force book versus the investment income yield in Taiping Life? Thank you. 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 27, 2025 / 9:30AM, AGES.BR - Full Year 2024 Ageas SA Earnings Call

Question: Anthony Yang - The Goldman Sachs Group Inc - Analyst : Thank you.

Question: Michael Huttner - Berenberg - Analyst : Thank you. It was still on China. Your -- I was actually surprised in the operating -- in the operating capital generation slide, there's a EUR1.3 billion figure, which is markets. And that's -- and the comment is it comes from interest rates in China. But I thought lower interest rates creates pressure, so I would have expected this to be negative, and it's a positive. Could you possibly help us understand this, that would be very helpful. And my second question is still on China. What if interest rates stayed now forever at the current level, which is at 1.8%. What would be the local solvency? And how would we deal with it? Would you have to put in money to prop it up like may be prudent?

Question: Michael Huttner - Berenberg - Analyst : Understand. And what would solvency be if you marked everything on a market-consistent basis today? I mean, would you have --

Question: Michael Huttner - Berenberg - Analyst : I know this is very helpful. But can you split it out at all?

Question: Michael Huttner - Berenberg - Analyst : Yes. Wait. Right. I'm on slide 20.

Question: Michael Huttner - Berenberg - Analyst : So just to understand, the comprehensive equity is what I would say, mark-to-market on everything? And the available capital, you have the lag on the liabilities. Okay.

Question: Michael Huttner - Berenberg - Analyst : Okay. And the difference between the two is this EUR4 billion. That's really helpful. Thank you. 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 27, 2025 / 9:30AM, AGES.BR - Full Year 2024 Ageas SA Earnings Call

Question: Farquhar Murray - Autonomous Research - Analyst : Morning, all. Just two questions, if I may. Firstly, on the net operating profit guidance of EUR1.3 billion for full year '25. I mean, that's arguably about 5% year-on-year and maybe the lower end of the rounding if we're looking at the 6% to 8% EPS target. So I just wondered more broadly on how you're feeling in terms of confidence on that? And then more specifically, just coming back to China, Chinese rates are down about 20 bps since the September CMD. I just wondered how much of a headwind that would be in terms of the EPS target? And then secondly, a little closer to home, back to Belgium. I just wondered if you could comment on the business implications you see from the new Belgium government so far and perhaps more importantly, where there are still uncertainties what you're looking to see in terms of clarifications? Thanks.

Question: Farquhar Murray - Autonomous Research - Analyst : Thanks.

Question: Michele Ballatore - Keefe, Bruyette & Woods Inc - Analyst : Yes. Good morning and thank you for taking my question. So more focus on the solvency, especially the movements in the second half on the required capital, which were particularly positive in the second half for the Solvency II Pillar 2. And on the other hand, were negative in the non-Solvency II scope. So I'm referring to the operational movements in the required capital. And also if you can give some details about the model changes that generally in second half had a positive effect? Thank you.

Question: Michele Ballatore - Keefe, Bruyette & Woods Inc - Analyst : Thank you very much.

Question: Alessia Magni - Barclays - Analyst : Hi, good morning. Thanks for taking my questions. I had a question on reinsurance. So net operating results in 2H was very strong. So I would like if you can give us a little more color on the main drivers and also what we should expect for coming quarters? Also, I can see that protection combined ratio was very strong at 69% in 2H, so should we -- is there any particular one-off? Or should we think that's the sustainable level going forward? Thank you very much.

Question: Alessia Magni - Barclays - Analyst : Thank you very much.

Question: Jason Kalamboussis - ING - Analyst : Yes. Good morning. A couple of things. The first, a bit the elephant in the room, I mean, BNP Paribas has increased their stake to above 15%. 2%, 1.85%, I think, is technical, but still. I'm trying to understand what the game is versus the 25% stake they have in AG Insurance. And presumably, if you can answer, if you could tell us if you would accept any lowering of your stake in AG Insurance or if your intention is firmly to stay where you are? The second question is around a bit more follow-up questions. I didn't touch on the model changes on Solvency II. So you had 4% that was in the first year and 4% in the -- sorry, in the first half and 4% in the second half. So is it 4% in Belgium in the first half and 4% model changes positive in the second half? And also, should we expect more of that in next year? And then on market movements, you had minus 6% decrease in the second half, what are the key elements behind it. And the final question is around the operating capital generation, the capital consumption, you are at EUR66 million. You very well highlighted towards what the reasons were behind the fall. Are there any actions that you are aware now, that would make that number change and in which direction for 2025? Thank you very much.

Question: Jason Kalamboussis - ING - Analyst : Thank you very much.

Question: Michael Huttner - Berenberg - Analyst : Thank you so much for this opportunity. And I really want to know how conservative your guidance is for 2025? I don't know how best to ask it, but I thought one way would be to say, well, can you maybe discuss the -- or help us with the assumptions you made on the Reinsurance, where you kind of assume everything is normalizing. So to me, that would be a negative. And maybe I would take that to be a sign of conservatism. But -- and similarly on the cash. As you know, I quite like to be able to say, well, the company was conservative and the numbers are really much better? Thank you.

Question: Michael Huttner - Berenberg - Analyst : And just as a reminder, where is the tax now? I'm sorry, I haven't worked it out for --

Question: Michael Huttner - Berenberg - Analyst : Excellent. Thank you so much.

Question: David Barma - Bank of America - Analyst : Hello, again. I just had one last follow-up, please, on the expense ratio in non-life, which has been getting better almost every period in the last few years and the second half was again very good. Now, is there any big mix effects in there that we need to be aware of or any special effect really that you can mention to help us model this -- the expense ratio going forward? Thank you.

Question: Anthony Yang - The Goldman Sachs Group Inc - Analyst : Thank you for taking my follow up questions. The firstly is, can I ask what are you observing in terms of new business sales in China year-to-date, including any comments on the new business mix as well, like par versus non-par products? And the second follow-up is you mentioned the re-risking in China. Could you give us more color on that, please? Thank you.

Question: Anthony Yang - The Goldman Sachs Group Inc - Analyst : Thank you ver much.

Question: Farquhar Murray - Autonomous Research - Analyst : Apologies, just a very brief follow-up from me, both on Belgium Life. Firstly, could you just quantify the size of the kind of catch-up element on bodily injury you mentioned there? And then secondly, how significant is that to pricing in terms of the movements you're putting through this year? Thanks.

Question: Farquhar Murray - Autonomous Research - Analyst : Okay. Many thanks.