1. Impact of low rates environment on Insurance

2. 1
Natixis Assurances: who are we? Natixis Assurances supports Groupe BPCE’s ambitions in the insurance sector
Through its subsidiaries, Natixis Assurances designs, underwrites and manages the policies distributed by the BP and CE networks1 to their private and professional customers
Natixis Assurances is the single insurance platform for Groupe BPCE
Natixis Assurances is structured into two major business lines:
Life and Personal Protection fully incorporated in 2016
Property & Casualty operated through two different business models
Natixis Assurances
Life and Personal
Protection Insurance
P&C Insurance
100%
100%
50%
BPCE Vie
BPCE Prévoyance
Natixis Life (Luxembourg)
BPCE Assurances
(in-house management)
BPCE IARD
(operationally outsourced to MAAF)
Life Insurance
Personal Protection
Loans Insurance
Motor Insurance
Health
Household Insurance
Personal Accident Insurance
Legal Protection
Professional Multi-Risk Insurance
(1) Banques Populaires and Caisses d’Epargne

3. Natixis Assurances: who are we? A fast growing insurer in France2
Natixis Assurances: who are we? A fast growing insurer in France
Premium Income (€bn)
Net revenues breakdown
CAGR 13-17
Total=  €11.7 bn
Market
CAGR 13-17
Total =  € 733 mln
+50%
2017
+2.6%
Natixis Assurances ranks among the TOP 10 insurers in France
P&C
Total =  €4.2 bn
+27%
Life and Personal Protection
+2.2%
P&C
Life and Personal Protection (direct business)
P&C
Life and Personal Protection
Market shares (%)1
Life Insurance
Motor Insurance
Households Insurance
x2.5
x4.3 x3
(1) Direct Business , Source: FFA

4. 3
Stake #1: secure operating result generation through business mix diversification
Life Insurance
(financial margin based on AuM)
P&C
(lesser weight of financial results)
Maintain a diversified business mix to limit exposure to Life business
Reinforce technical discipline in P&C to compensate for the contraction of financial results
Focus on higher margin products & customer segments

5. Reduction of guarantees but what about customers expectations?4
Stake #2: secure operating result generation through reduction of guarantees in Life insurance
Secure financial margin through reduced profit sharing… A solution as long as the inflation remains limited…
Reduction of guarantees but what about customers expectations?
TME: taux moyen des emprunts d’Etat – Average French Treasury rate
MGR: maximum authorized minimum guaranteed rate, defined as a % of TME for Euro denominated funds

6. 5
Stake #3: secure operating result generation through diversification of investments
Transformation of Insurance asset portfolios to:
Limit dilution of financial results (70% to 80% of investments in bonds)
Diversify asset classes (e.g. real assets / private debt)
…while limiting the increase of embedded risks
Contraction of financial results  The end of the era of Euro denominated funds (0% guaranteed rate)
Life insurers need to prepare for a paradigm shift?

7. Stake #4: secure solvency through risk reduction & adapted models6
Stake #4: secure solvency through risk reduction & adapted models
Promote unit linked (UL) to transfer the risk to customers and reduce capital requirements
Limit ALM mismatch and capital requirements
Limit net collection to limit new cash to be invested?
Net collection: cash in (premiums) – cash out (lapses + death benefits + terms)

8. Stake #5: secure solvency through risk reduction & adapted models7
Stake #5: secure solvency through risk reduction & adapted models
Strong headwinds from regulation: prudential Solvency 2 (2016) and financial IFRS 17 (2022?)
NAV :=
Assets – Liab.
Assets
Liabilities
Fair value of assets (investments)
Best estimate of liabilities
Balance sheet in fair value and risk based capital requirements (SCR) built as instantaneous NAV sensitivities to predefined risk factors:
0% minimum guaranteed rate has became ‘capital costly’
Market risk within SCR  80% of total SCR for Life companies
Strong impact of model selection in Insurance fair value: reserves (best estimates) based on stochastic valuations thus very sensitive to:
parameters (ESG / behavioral assumptions)
« management rules »: SAA, profit sharing, etc.
Need to adapt models to new low rate environment