With the customer in mind
Creating value for all our stakeholders
Each year we look back at our performance
... and each year we judge it against the expectations of our stakeholders as well as the high standards we set for ourselves. We ask ourselves the question, have we done enough? We never forget that shareholders are one of our most important stakeholders. Year after year in choosing to invest in our company they are placing their confidence and trust in Ageas to deliver long term sustainable growth and competitive returns based on doing the right things. That’s the pledge we made as part of Ambition 2018, and that’s the commitment we make to investors.
In 2017 we met our financial targets and we delivered a strong return for shareholders as evidenced by our proposed dividend for 2017 of EUR 2.10. Ageas has also launched its seventh successive share buy-back programme in seven years.
Proposed gross cash dividend
Teaming up with the right partners and having the support of our thousands of employees enabled us to do the right thing for our customers and to deliver to shareholders. This resulted in a strong insurance performance in 2017. Belgium remains a solid contributor to the results, while the Asian markets continue to grow and deliver thanks to successful sales campaigns, continued channel development, and a strategic shift towards a more profitable product mix. The inclusion of Ageas Seguros in Portugal has provided a further boost to our results, while the divestment of our Italian Non-Life-business demonstrates that we carry out our strategy in a disciplined manner.
We never forget that shareholders are one of our most important stakeholders
But we are also facing some challenges, not least in the UK, where along with the rest of the industry we felt the full impact of the discount rate review. Nevertheless we are seeing improvement in our underlying performance in this highly competitive market and count on improved results in the coming years.
We encountered some delay in the Fortis Settlement which required us to further work on the terms of the agreement. On December 12th we introduced an amended proposal, which we are confident takes into account the Court’s main concerns, whilst offering a fair and balanced solution for all affected by the past events. We expect a decision in the second quarter of 2018. As we look to 2018, we will continue to focus our attention on bringing the legacy issues to a satisfactory close in the interests of all former and current shareholders. With no further impediments anticipated, we hope to move forward without further delay.
Shareholders should and do expect us to create value year after year in a consistent way. We haven’t disappointed. Ageas is today the third highest value creating insurance company in the world, according to a Boston Consulting Group report, based on share price gains and dividend yield in the past five years. This remarkable achievement is the culmination of many years of hard work and focus. It reflects solid growth and Ageas’s evolution into a profitable and successful insurance company post financial crisis. Over the last five years Ageas‘s annual value creation has averaged 31%.
Later in 2018, we will announce a new 3-year strategic plan with revised financial targets, and a continued strong focus on our stakeholders, including our shareholders. As a stakeholder-driven insurance company, our success is a reflection of how ALL stakeholders value their relationship with us over the long term. And whilst financial targets may be revised, that base commitment remains a constant in all future plans.
Jozef De Mey
Peace of mind in numbers
2017 was a year in which our core insurance businesses delivered a strong operating performance driving the Group result to a historic high. It was also a year in which the Group continued to demonstrate good progress against its Ambition 2018 targets.
In a continuously changing economic environment with customer needs and expectations influencing our business, we achieved excellent results both in Life and Non-Life with Belgium, Continental Europe and Asia delivering excellent operating performances. Our UK operations, although still affected by the Ogden discount rate review, showed encouraging progress in what has been a transitional year for the UK business. In Non-Life, the good performances especially in Belgium and Continental Europe allowed us to do much better than the combined ratio target set out as part of our Ambition 2018.Inflows continued to increase and our robust balance sheet is underpinned by a solvency level, ahead of the Ambition 2018 target, and supported by a solid net cash position.
Insurance net result
Based on these excellent results and confident in our capacity to generate cash, Ageas will propose to shareholders a gross cash dividend of EUR 2.10 per share or a 24% increase compared to the regular 2016 dividend.
Thanks to our 39 million customers
As an insurer it is our role is to help people
It is our role is to help people at every stage of their life to mitigate risks related to property, casualty, life, health or pensions. In 2017 more than 39 million customers put their trust in Ageas to do just that. We helped many of them achieve their personal ambitions. For others we provided peace of mind during difficult moments in their lives. To create the right solutions for our customers we listened to what they told us, we improved the dialogue, and we acted on what we heard.
As we look back at 2017 we are reaching more customers than ever before. We officially launched Troo in the Philippines and more recently our new joint venture in Vietnam provided us with an opportunity to introduce the world of Ageas to a new audience. In Portugal, Ageas Seguros has after just one year established itself as a well-recognised and well respected insurance brand.
Innovation as a driving force
Innovation was an important driver in our 2017 performance leading to some creative and impactful solutions from custom-made products like Elastic in the UK, new mobile applications in Asia spanning motor renewals and travel insurance and additional app based services in Belgium supporting home insurance. As we anticipated, digitisation is proving to be a major catalyst of change and our decision to make an investment in new technologies and skills has proven to be the right call.
2017 was also the year of Artificial Intelligence and robotics, with activations across many markets resulting in improved customer service and efficiency. And as we look at new technologies longer term Ageas is actively involved with the international B3i Blockchain initiative and B-Hive in Belgium to help meet the needs of customers in the future.
Through Ambition 2018 we reinforced our commitment to being close to the customer. That’s why we have started to measure customer centricity for the first time across the entire Group against some key customer metrics. At every customer touch point we try to add value, do better, and anticipate future customer needs, and we share what we learn across the Group.
In 2017 employees embraced the innovation challenge. Invited to think out of the box employees were challenged to come up with ways to improve the status quo or to design something unique. A group wide contest led to more than 350 individual ideas from brand new innovations, to ideas on process improvements and communications.
At every customer touch point we try to add value, do better, and anticipate future customer needs
As Ambition 2018 reaches its climax, we are wasting no time in thinking about life beyond 2018. Later this year we will set out our ambition for the coming three years. Connect 21 will be a natural evolution from Vision 2015 and Ambition 2018, but with a renewed look at choices and targets reflecting where we are, where we want to be, what we have learned, and what we need to do to deliver for all stakeholders over the next three years and beyond.
Why Connect 21?
It was the obvious choice as we look to connect more closely with our different stakeholders. We are connecting the dots between different countries, regions, functions and channels. We are connecting with the digital world to provide innovative solutions to our customers. And we are connecting also to a world outside of our own sector allowing us to adapt to new innovations that could change the world of insurance.
Our primary goal is to stay relevant and attractive to all stakeholders
As we look to the future, customer needs will continue to evolve influenced by many different factors, and for sure customer expectations will also rise. That’s how it should be, and that’s the ongoing challenge we are prepared to meet. Our primary goal is to stay relevant and attractive to all stakeholders never forgetting that they have a choice.
Bart De Smet
Belgian top performance and ready to service future customer needs
AG Insurance delivered one of its strongest business performances
2017 has seen AG Insurance deliver one of its strongest business performances in its history. It was also a year in which the company put to work its digital capabilities in order to reinvigorate and reinvent the customer journey in Belgium.
Simply put, it is helping us to get closer to our customers. By using new digital techniques, AG Insurance is building the online presence of its distribution partners, transforming the claims management experience, and exploring new markets and new products that meet the ever evolving needs of the customer.
Feeling and filling the need
In 2017 a new partnership with SightCall led to a “first” in the Belgian market. This new home insurance app-based solution, connecting customers directly to the claims expert via smartphone or tablet, incorporates software that allows customers to upload their own photos and videos in the event of small claims. AG Insurance can connect, assess remotely, make an offer, settle and pay without any delay.
Our digital expertise has also helped the development of new innovative products such as award-winning Yongo which harnesses the power and influence of social media to promote a learn-save-grow approach through a flexible digital savings plan for children.
Our continued strong business performance allows us to innovate and strengthen the bond with our customers and distribution partners.
Vivay, designed in partnership with target customer groups, provides an innovative response to an important family protection gap. Previously uncovered risks linked to premature mortality, cancer, disability or unemployement, ranging from recurring bills, the cost of study, rent, and childcare, are covered through this new flexible product.
My Global Benefits, which was successfully launched in 2016 as a platform for employees of corporate clients to have online access to their pension status also benefited from a digital upgrade. Today employees who use this service not only gain 24/7 access to their latest pension statement, but from this year, also comprehensive information on their healthcare cover.
As a forward focused insurer, AG Insurance is constantly looking to identify emerging risks, modernising the portfolio as needed. The introduction of an Omnimobility product is an example of this, as is the extension of cover to existing products such as car and home insurance to allow our customers to safely participate in the shared economy for instance home policies that also cover Airbnb and Pack Car sharing.
From customer to performance
And while digital has played an important role in the ambition to get closer to the customer, the strong performance reported in 2017 also reflects strong discipline around the bottom line that translated to a combined ratio of 91%. After some tough profitability measures taken in past years, Non-Life returned to growth and is well positioned to meet the Ambition 2018 targets. In the Life business the doubling of volumes in Unit Linked products helped compensate for the lower inflows in Guaranteed products. We also expect further growth in long term retirement savings based on planned government initiatives to stimulate the private pensions markets. As for our real estate business, it continued to be an important contributor to investment returns in Belgium.
The outlook across both Life and Non-Life looks positive and we expect further growth in 2018 across all segments. The digital (r)evolution will continue its momentum and this will include the extensive work currently being piloted in the areas of robotics, which over time will increase the quality and availability of service to our customers. We will do everything in our power to ensure we continue to deliver a strong operational performance. We started by building a strong backbone which provided us with a platform for growth. Moving forward it is about maintaining discipline and continuing to innovate the customer journey of the future.
Hans De Cuyper
Business discipline twinned with an innovative push towards the customer in the UK
Underlying performance continued to improve
Arguably, the most significant event in 2017 for the UK insurance sector was the sudden and unexpectedly severe reduction by the UK government to the Personal Injury Discount Rate (often referred to as the Ogden rate).
Overnight, the cost of unsettled claims increased by some EUR 8 billion, with a direct impact on Ageas of around EUR 200 million. Not surprisingly insurers increased their premiums to compensate for the change. The UK government carried out a consultation before summer on how the rate should be set in the future, by whom and when. The consultation reported in September proposing a new methodology and draft legislation which, if passed, would result in a Discount rate considered fair to claimants and consumers alike. As of late 2017 there is no clarity as to when this legislation may be debated in Parliament, but we remain hopeful that it will progress in 2018 to a satisfactory conclusion.
As we look at events beyond the Discount rate, the underlying performance and evolution of Ageas in the UK has continued to improve with encouraging momentum both in operational efficiency and progress in getting closer to the customer. Performance improvements reflect among other things: disciplined pricing and underwriting and a thorough portfolio review. From an expense perspective we are seeing the business benefit of tough decisions made in the past, including the closure of our Glasgow operation announced in late 2016.
A strategic approach reflecting customer needs
The continued roll out of the Ageas Way sits at the heart of our efforts to improve the ease by which our customers interact with us and with it our operational efficiency. By consciously looking at each core process from the perspective of the customers we can focus on what really adds value and stop everything that does not.
As an insurer we are in business to support the customer, and as such a significant amount of work has been done towards better understanding and improving the customer journey.
From start to finish the service was excellent.
Mr K. Griffiths
Policyholder Rias car/home insurance
By listening to what our customers are telling us and by working with them directly we are well placed to identify what works and what still needs to be improved.
Investment in artificial intelligence and process automation is also an area of focus. We are investing in the automation of routine processes through Robotics with the benefit of 24/7 service and increased accuracy. Artificial Intelligence is being applied to our Motor business to enhance accuracy and speed of response. Working in partnership with “Tractable” we are now able to check recommendations on car repairs within 3 minutes of uploading an image.
As an insurer we are in business to support the customer
Being close to the customer also means being where our customers need us to be. In the UK market this means participating competitively through the aggregator channel. We have been working hard to ensure we are well placed to compete through this channel by continuously improving our capabilities in pricing, underwriting and antifraud processes. This will remain an area of special focus in 2018.
We expect the outlook to remain challenging in 2018. There remains a lot of uncertainty in what is a highly competitive and fragmented market. But we will build on the momentum of 2017, focusing on further improvements in our operational efficiency which ultimately flows through to the customer.
CEO United Kingdom
Where customer satisfaction meets operational excellence
Exceptional performance across Continental Europe
Across Continental Europe, which performed exceptionally in 2017, our main focus was on operational excellence, and this goes hand in hand with customer satisfaction.
With the integration of the Portuguese Ageas Seguros successfully completed, focus turned to ways of improving the customer experience and expanding technical capabilities. Also in 2017 we took the decision to divest our Italian Non-Life business.
Make it easy
In Portugal efforts are underway to explore every conceivable touch point with the customer with the end goal of making their life easier. Eighty different customer journeys were mapped out, and, one step at a time, the business has been learning, adapting and enhancing what it does. The positive trend of the net Promoter scores proves that the steps being taken are appreciated by our customers.
Operational excellence goes hand in hand with customer satisfaction
Many tactics have been employed to get closer to the customer. A 24 hour Hackathon with teams from Ageas alongside students from Nova School of Business & Economics challenged participants to think disruptively about insurance topics, from how to make health insurance more relevant in the life of millennials, to how not to die of boredom while addressing life and death insurance.
Médis is working closely with the Portuguese association of pharmacies, representing a network of 2,800 pharmacies, so that the adequate services can be given to our customers.
During the devastating fires in Portugal in 2017, Ageas proved again how close it is to its customers. Ageas organised itself to provide rapid response to the requests of clients, agents and employees including a simplified claims management process achieved by sending the Claims team directly into the field. “Being where our customers need us to be” translated to a physical relocation of staff to the affected regions.
To improve operational efficiency Ageas is also moving away from paper-based communications in favour of online. For customers that opt for online communications 1 euro is donated to the foundation allowing us to fulfil our social role in society.
2017 saw the launch of Healthcare City focused on Fintechs. From 240 cases presented, 40 were analysed and 10 start-ups have been launched.
In Turkey where Aksigorta is one of the best performing companies, the investment in technical and professional skills has provided a tangible competitive advantage. In the bancassurance channel progress was made in better client segmentation. And to meet the demands of this young, dynamic and highly competitive market, the development of mobile solutions continued to be a priority.
In France the move towards full digitisation in the broker environment saw positive returns with a healthy growth in volumes, and work also got underway on a B2C proposition.
A clear course
For the future we will continue to look for ways to integrate digitisation and specifically the use of artificial intelligence in our insurance propositions and operations. We expect brand recognition in Portugal to continue to grow thanks to innovative marketing initiatives. And we want to be the reference point for healthcare, the connected and digitised world, and for elderly. Our new “Silver” initiative will take a holistic approach to the challenges that go along with the trend of aging population.
We want to be the reference point for healthcare, the connected and digitised world, and for elderly
The main focus will continue to be on operational excellence and to further improve the customer experience, with a clear objective in mind: to constantly surprise.
CEO Continental Europe
Strong growth momentum and extended customer reach in Asia
Another strong year
2017 was another strong year for our operations in Asia where the customers have been front and centre. We continued to expand our customer reach, particularly in China, but we have also made good progress in newly launched greenfield operations in Vietnam and the Philippines.
Innovation including enhancements to our digital capabilities, and data analytics to help better understand customer needs, allowed us to further improve and tailor our product offering. These efforts are enabling us to deliver against Ambition 2018, whilst strengthening our relationship with the customer.
Continuing to expand and deliver
Looking back at 2017, exceptional sales across the agency and bank channel helped drive another remarkable year in China which also reflects the success of campaigns to shift from single premium to more profitable regular premium products.
To increase its customer reach, China Taiping Life recruited more than 150,000 new agents taking the total to 410,000, around 15% of the total growth in agents across the market. This was part of a conscious effort to balance the bancassurance and agency channels, and was achieved whilst maintaining overall high productivity and persistency levels.
Also in 2017 we signed a Strategic Cooperation Agreement with China Taiping allowing the partnership to explore new initiatives and opportunities in the future.
Innovation and data analytics allowed us to further improve and tailor our product offering
Thailand, an increasingly competitive market, enjoyed another strong year driven in particular by the bancassurance channel. Muang Thai Life was named Asia’s Life Company of the Year for the 2nd time reflecting its success in getting closer to the customer, and a number of new innovations that have emerged through Muang Thai’s new innovation centre, Fuschia.
A tie up with “Health at Home” which serves customers by providing medical assistance at home following a period of hospitalisation is aiding recovery and helping families in the process. In the same context of a shift in health insurance from curative to preventative care, ThaiDNA, a wellness focused DNA analysis is another complimentary service offered to selected customers of Muang Thai.
Our new joint venture in Vietnam, now active in both the bank and agency channels, is showing very positive results. Along with the Philippines, another greenfield operation, both entities have exceeded business plans.
Malaysia and India both saw stronger growth in the bank channel, and our move into Singapore alongside our Malaysian partner is already working well.
Data deep dive
Across the region our investment in data analytics is gaining real momentum. In Malaysia we are using analytics to explore new ways of improving motor renewals and across the region we are applying what we learn to how we generate leads in the bancassurance environment.
Working as knowledge brokers in the regional office, we are supporting partners across the region to help build their capabilities which among other things enables greater personalisation to customers.
The way forward
As we look forward, the outlook remains positive. We are reaching more customers than ever before. And whilst there continues to be economic uncertainty in some markets, the strong platform we have established will allow us to continue to deliver for the customer and the Group.
The strong platform we have established will allow us to continue to deliver for the customer
We will look at new market opportunities and in-market expansion with existing partnerships. We welcome proactive regulatory reform geared to delivering value to the customer and the enforcement of robust professional sales practices. Momentum around data analytics will continue to deliver further applications in 2018, and we anticipate a real growth in digital capabilities in the coming 12 months.
A drive towards zero
Improve the safety of Britain's roads
71 people die or are seriously injured on the UK’s roads every single day. As the third largest motor insurer in the UK, Ageas is only too aware of the impact of these crashes. We see the devastating effect on people involved, their friends and families, and all those who have to deal with the aftermath.
While our customers can be confident that if they are in an accident, large or small, we will be there to support them, we also believe we have a broader responsibility to do what we can to reduce the chance of them being in a crash in the first place.
With this in mind we teamed up with the Road Safety Foundation in 2012 and have since been campaigning with them to improve the safety of Britain’s roads. We believe that road crash deaths in the UK must, and can be moved towards zero.
A role beyond insurance
Ageas in Portugal plays an active role in society beyond insurance. Volunteering, entrepreneurship and social innovation are the drivers that steer the actions of the Ageas Foundation.
In 2017 this translated to 198 initiatives, 730 volunteers and more than 5,300 hours in the areas of health, education, employability and social inclusion.
104,538 students enjoy a new school
The street store with heart
IDBI Federal Life supports "Street Store" initiative
When IDBI Federal Life decided to throw its support behind the “Street Store” initiative in Mumbai it did so with the strong conviction that every person has a right to basic necessities in life. It was a perfect reflection of IDBI’s brand philosophy. Street Store initiatives have been tried and tested successfully around the world, but this was a first for Mumbai. The Street Store concept provides a rent-free, premises-free, pop-up clothing store for the homeless and a platform to donate and receive clothing for those less fortunate in society and in need.
Items are collected, processed and then displayed in an eclectic store where people can browse and choose what they want. These pop up stores include cardboard stands designed to mimic the “aisles” in a shop with imprinted clothes hanger prints doubling as fashion displays seen in commercial shops.
More than 2000 people benefitted from this local community initiative.
An elastic approach to insurance
Elastic, a new online home insurance product
The launch of Elastic, a new online B2C household product was designed in conjunction with the customer. This innovative approach to home insurance puts the customer in control.
The features of this product are a direct response to the concerns and frustrations highlighted by customers of home insurance. A monthly product with no fees or charges for amendments, Elastic allows customers to decide their own level of cover against each major household risks. It offers full personalisation which means customers are not paying for cover they do not want or need.
Save now, invest for later
Our digital expertise has also helped the development of new innovative products such as award-winning Yongo which harnesses the power and influence of social media to promote a learn-save-grow approach through a flexible digital savings plan for children.
What particularly appealed to us in the approach of AG is the concept itself: far beyond the scope of its activities, AG has adopted a role in educating young people about money. And this objective is in line with our concerns.
Director of the ‘Ligue des Familles’
The perfect travel companion
Have a good trip with Etiqa
Etiqa Insurance Singapore first insurer in South East Asia to offer Travel Insurance with automatic “Real Time Flight Delay” claim payments. This innovative feature is a key offering within Etiqa’s ePROTECT online travel insurance.
When flights are on time, customers receive a message from Etiqa saying, “Have a good trip”. Should there be a delay of over 3 hours; a proactive message is sent explaining that Etiqa has approved their travel delay claim.
Thanks to customers and to hard work!
A five star company
Ageas Seguros picked up the prestigious Cinco Estrelas (five star) award for top brands in Portugal from U-Scoot for being best in class on brand, products and services level.
Thanks to the hard work of Ageas Seguros’s employees throughout the year brand awareness also grew positively to 38%, a remarkable achievement for a brand that is just 20 months old.