Aberdeen Group Plc · LSE:ABDN
Aberdeen — Standard Life — Debt Investor Presentation (March 2003)
30 slides from Aberdeen's debt investor presentation, March 2003
Slide 1: 2002 Results Presentation to Subordinated Debt Investors
2002 Results Presentation to Subordinated Debt Investors March 2003
Slide 2: Presenters: Group Finance Director and Group Treasurer
John Hylands John Cummins Group Finance Director Group Treasurer
Slide 3: Agenda
Agenda Standard Life Overview Business Overview Financial Performance Questions & Answers Standard Life Overview
Slide 4: Standard Life Overview
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Slide 5: Standard Life Overview
Standard Life Overview Largest mutual life assurance company in Europe Largest life and pensions provider in the UK (2002 Annual Premium Equivalent*) Leading IFA-based life and pensions company in the UK Strong position in the Canadian life and healthcare insurance market Strong franchise in the UK,
Slide 6: Standard Life's Strengths
Standard Life’s Strengths Commitment to mutuality and financial strength Rated ‘double A’ with stable outlook by both Moody’s and Standard & Poor’s Over 5 million customers and 14,000 employees worldwide Well placed to meet UK regulatory challenges Market leading standards of customer service Single
Slide 7: Summarised Group Structure
Summarised Group Structure The Standard Life Assurance Company Irish Branch UK Branch German Branch Canadian Branch UK Subsidiaries International Canadian Subsidiaries Subsidiaries Standard Life Investments Standard Life Bank Prosperity – Spain S. L. Assurance Company Standard Life Healthcare S.L. A
Slide 8: Gross Premiums 2002
Gross Premiums 2002 €bn 60 48.6 50 44.4 40 29.0 28.8 30 25.6 17.7 17.6 16.4 20 12.8 7.4 4.6 10 0 i ial ife AX A ING eral viva nt O N L CN P t hur L& G e nt Ge n A u de AEG ard n ter ovid Pr ta n d Wi Pr S n ds e Fri Notes: Source: 2002 Annual Results press releases Based on gross premium (life insur
Slide 9: Strategy
Strategy Core competence in the UK, Canadian and Irish life and pensions markets Focus on organic growth rather than large acquisitions Consolidate number 1 position in the UK life and pensions market Expansion into asset management, retail banking and international markets Commitment to mutuality a
Slide 10: Business Overview
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Slide 11: UK Life & Pensions Business
UK Life & Pensions Business Products Group & individual pensions Bonds and savings Annuities Life and protection Distribution 92% - Independent Financial Advisers 5% - Direct employed sales force 3% - Internet/telemarketing Market Share 17.6% UK IFA market share in 2002 (10.4% in 1999) -ABI statisti
Slide 12: Canadian Business
Canadian Business Products Group and individual defined contribution pensions Group and individual life assurance Healthcare Distribution Predominantly intermediaries Market Share Canadian life and healthcare market share of over 6% (2001 sales) Canadian group pensions market share of over 20% (2001
Slide 13: European Business
European Business Products Ireland - Life assurance and pensions Germany/ Austria - Individual long term savings Spain - Life assurance, pensions and general insurance France – Plan to launch a French branch during 2004 Distribution Independent insurance brokers (Ireland) Independent insurance broke
Slide 14: Other Businesses
Other Businesses Standard Life Healthcare Standard Life Investments Standard Life Bank Products Private healthcare Corporate Pensions Individual/ Retail Deposit insurance Segregated Funds Accounts Mutual Funds Business Saving Accounts Private Equity Residential Prime Mortgages Money Market Distribut
Slide 15: Group Income 1995-2002 (£m)
Group Income 1995-2002 (£m) 14,000 12,000 Banking 10,000 Healthcare 8,000 Investment 6,000 Life & Pensions 4,000 2,000 0 1995 1996 1997 1998 1999 2000 2001 2002 Predominantly life & pensions and investment business Steady growth from 1995-2000 Strong growth from 2000 driven by significantly higher m
Slide 16: New Business 2002
New Business 2002 Primary focus has remained on core UK and Canadian markets Europe 4% Asia 1% Canada 14% UK 81% Life & pensions new business premiums + investment sales
Slide 17: New Business 1995-2002 (£m)
New Business 1995-2002 (£m) 12,000 Asia 10,000 Europe 8,000 Canada 6,000 UK 4,000 2,000 0 1995 1996 1997 1998 1999 2000 2001 2002 Historic position in the UK, Canada and Ireland supported by more recent operations in Germany, Austria and Spain Also joint ventures with local partners in India, German
Slide 18: Financial Performance
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Slide 19: Key Financials
Key Financials Industry Average Year end (15 Nov) 1997 1998 1999 2000 2001 2002 2001* Total group new £3,105m £3,590m £4,129m £5,162m £8,339m £10,320m business Group Annual £631m £716m £873m £983m £1,571m £1,819m Premium Equivalent Acquisition expense 52.8% 54.2% 51.5% 47.8% 45.2% 47.9% 79.9% ratio
Slide 20: Insurance New Business Premiums In 2002
Insurance New Business Premiums In 2002 Year to Year to Year to Nov 2000 Nov 2001 Nov 2002 £m £m £m UK 2,983 5,770 7,357 Canada 1,020 1,061 859 Ireland 141 237 273 Germany 51 83 113 Spain 21 19 23 Asia - 1 3 Total 4,216 7,171 8,628
Slide 21: Non-linked Assets £51bn
Non-linked Assets £51bn Cash & Other 8% Property 10% Equities 37% Fixed Interest 41% Mortgages 4% Comprises the assets backing the Main Fund as at November 2002
Slide 22: Policy Performance
Policy Performance With-Profit Endowment With-Profit Personal Pension 10 Years Rank 20 Years Rank 10 Years Rank 20 Years Rank Standard Life 1 1 1 1 Scottish Widows 10 7 7 10 Scottish Equitable 2 5 8 6 Scottish Amicable 3 6 3 5 Prudential 6 3 5 9 Legal & General 4 8 10 8 Friends Provident 8 4 2 4 Cle
Slide 23: Strong Solvency…
Strong Solvency… 1997 1998 1999 2000 2001 2002 A Total long-term admissible 50,923 57,919 65,997 70,491 67,682 64,550 assets (£m) B Total Liabilities (£m) 41,250 48,031 54,769 59,979 62,269 62,807 C Available Assets (£m) 9,673 9,888 11,228 10,512 5,413 4,213 * D Required minimum margin (£m) 1,455 1,
Slide 24: A Key Regulatory Development
A Key Regulatory Development Companies’ financial reports currently show a realistic (market)valuation of assets set alongside less realistic values of liabilities/mathematical reserves.
Slide 25: A Key Regulatory Development
A Key Regulatory Development In a conference speech last month, John Tiner, FSA managing director, said that: – Mathematical reserves are a deliberate overestimation of contractual liabilities – For many firms, the degree of overestimation increases as equity values fall – The FSA intends to change
Slide 26: A Key Regulatory Development
A Key Regulatory Development Not all companies will benefit from this change. For those that do benefit, their liabilities and RMM will fall and their available assets will rise. This will result in an increase in their cover ratio.
Slide 27: View from the Rating Agencies
View from the Rating Agencies Following industry wide reviews, ratings have been reduced in recent months Standard & Poor’s – Insurance Financial Strength: AA (stable outlook) – Subordinated Issue Rating: A+ (stable outlook) – “…Standard Life’s financial strength remains very strong, based on its ex
Slide 28: Summary
Summary Standard Life is well positioned in these challenging times: Excellent credit standing – ‘Double A’ rating with stable outlook – Maintenance of financial strength as a strategic objective Strong franchise – UK: leading IFA-based life & pensions provider – Canada: strong position in the life
Slide 29: Questions & Answers
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Slide 30: 2002 Results Presentation March 2003
2002 Results Presentation March 2003
Standard Life — Debt Investor Presentation (March 2003) on 6ix