Reimagining the future

In this year’s annual message to stakeholders, newly appointed Hans De Cuyper, CEO Ageas and Bart De Smet, Chairman Ageas reflect on the highlights of the year 2020. A year that will be forever marked in the history books by an event no one predicted, but one that challenged every one of us to reset our personal and professional lives. Our purpose as a Group is to be a supporter of the lives of our stakeholders, and never has this had more meaning or been more tested than in the past year. 

Reimagining the future

Perhaps we should start by asking what lessons we can draw from the year of the pandemic?

Bart: We learned many things. That nothing in life is certain. But also, and more importantly, that nothing is impossible. The global pandemic showed us that the world is a lot more fragile than we realised. However, as human beings we are remarkably resilient when responding to seemingly insurmountable challenges. And each of us relies on others to support our lives more than we thought. 

Hans: This year has also confirmed that we must continue to constantly look to the future and ask ourselves “what if”… and take steps to future-proof ourselves. There have of course been moments of great sadness for many but also so many examples of hope for the future. As we reflect on this, it feels like we are documenting history and we will be telling the story of 2020 to future generations for years to come. It is quite a story.

As a business specifically, how did Ageas react?

Hans: I am proud to say that we were there for all our stakeholders. The health and mental wellbeing of our employees was naturally top of mind from the outset, and we did everything possible to help ease their transition to remote working. We continued to service our customers. Moreover, our insurance companies temporarily extended or adapted their insurance coverage, for instance for patients, medical staff, volunteers… And we took measures to support the economy and the sectors most impacted by the crisis.

Bart: We also delivered practical support well beyond insurance including to those most vulnerable in society, the lonely, and those most at risk or in need of help. For instance, when the pandemic struck China, Ageas donated 22,000 masks and 1,800 protective suits to medical staff in Wuhan and Hubei province. Inversely our Chinese partners sent 30,000 masks to hospitals in Italy and Spain heavily impacted by COVID-19 a few weeks later.

Hans: We also provided financial support to stimulate medical research around COVID-19 vaccines and anti-viral treatments. And there were many more initiatives from our local operating entities to help surmount the economic impact of the pandemic on the ground and to improve people’s physical and mental wellbeing… The list is long. We look back with pride at what was done, and grateful for the heroes out there. Our people truly CARED, living the values we espouse as a Group.

How were you able to maintain business as usual in this difficult year?

Bart: By staying focused and being responsive. Sometimes doing things differently but still getting them done. There are a lot of people who rely on us, so we had to find a way. We learned that adaptability, flexibility, and agility are key to being able to do this. 

Hans: 2020 is the second year of our 3-year strategic plan Connect21 and it was important that we kept our minds firmly focused on our strategic goals and targets. We are very grateful to our people and our partners for their determination and commitment to maintaining our connection with customers. Together we kept the engine running, ensuring of course the health and safety of our employees came first by putting in place the right environment that allowed people to work from home and to return to the office in a safe and secure way where and whenever possible.  

How would you describe the performance of the company in 2020?

Bart: Our businesses have put in a strong performance in the second year of Connect21. They delivered continued sustainable profitable growth, benefitting more than ever from the geographic diversification, our well-balanced product portfolio and prudent management. In real terms our Life and Non-Life businesses reacted in different ways. While the financial markets weighed in on our Life performance, the measures to contain the spread of the virus had a positive impact on our Non-Life results with lower claims frequency. We were also able to benefit from sharing experiences between Asia and Europe. In the context of the pandemic things were moving at a different pace around the world, and we were able to benefit from these different experiences.

Hans: Despite the context, 2020 was a year with excellent results. Our top line revenue on a 100% basis decreased only marginally compared to 2019, thanks to a strong recovery in China and Singapore among other things. Taking into account that everywhere our distribution is mainly “customer facing”, through agents, brokers and bancassurance, we can be proud of the performance and dedication of our sales teams in serving our customers at all times.

We closed the year with a Group result of EUR 1.141 billion, of which EUR 960 million Insurance Net Profit. The Group result benefited from the successful Fresh transaction with EUR 332 million exceptional capital gains. Despite 170 million less realised capital gains supporting the insurance result, our Life margins remained stable. Our strong Non-Life operational performance lead to an excellent Combined Ratio of 91.3%. The company’s results, balance sheet and Solvency position remained resilient and strong going into 2021. We can be proud of the way we navigated through a very challenging 2020.

In 2020 we made some important strategic moves. What is the significance of these deals for Ageas?

Bart: In 2020, we decided to take a stake in Taiping Reinsurance, allowing us to diversify our product portfolio and to reinforce our longstanding partnership with its parent company China Taiping. We also decided to divest our stake in our UK joint venture Tesco Underwriting, allowing us to focus on our core business in the UK and to concentrate our efforts on further developing the broker and direct business. This also provided us with an opportunity to crystallise the value that has been created in past years. And at the end of the year, we confirmed our confidence in the potential of our Indian Life insurance JV by acquiring an additional 23% stake, becoming the largest shareholder of the company.

Has Ageas delivered against its Connect21 targets?

Hans: Our strong operational performance ended the year within guidance. Our balance sheet remained strong as we built on a comfortable cash position and stable solvency margin, allowing us to deliver a dividend for our shareholders. And we responded to the regulator’s concerns about the extra-ordinary market circumstances. In an open dialogue and based on our strong capital position, we decided to postpone the payment of the full dividend until the special shareholders meeting in the autumn. And in line with the Group’s M&A guidance, the share buy-back programme was suspended in response to the sizeable transaction with Taiping Reinsurance. 

We are confident we will reach our Connect21 targets by the end of our three-year strategic cycle. We are not there yet but we are working hard to get there. 

How did the financial community respond to our performance?

Bart: The vast majority of analysts that report on Ageas gave a positive or neutral recommendation. The success of the placement of subordinated debt of EUR 500 million and the fact that our financial ratings improved, reflects confidence by the investment community in the future of our company, our resilience, and our ability to deliver.

Last year you set out a strong commitment to the UN SDG’s, have you made progress?

Hans: We did indeed make a serious commitment to these goals through initiatives and products that provide solutions to a number of societal challenges from health and an ageing population, to mobility and climate change. The Principles of Responsible Investments (PRI) are fully embedded in our long-term approach to how we invest. This year we conducted our first materiality assessment, and the learnings from this important and comprehensive work will be important for our future strategic plans. The assessment also helps us to deliver on our promise of greater transparency to stakeholders around sustainability. This year we also endorsed other initiatives, like the UNEP FI Principles of Sustainable Insurance (PSI) (a United Nations ESG Programme Finance Initiative) for instance. And we endorsed the Business for Nature initiative, underscoring our engagement to the sustainability cause. Corporate sustainability is integral to who we are as a Group and will become even more important in the future.  

Bart: Indeed, we made strong progress, and ESG remains an ongoing priority long term, as we still have some way to go in that area. One of our key goals was to create more transparency and to improve our public disclosures of the different sustainability (ESG) aspects in the interests of our investors but also the wider public. We are proud that this was recognised in 2020 through higher ESG-ratings and substantial certifications linked to our investments. 

Is Ageas ready for the future?

Bart: Being future proof is very important. But there is no such thing as certainty in life or in business – this year has proven that. As a Group however we do look well beyond a three-year horizon to try to ensure we remain future proof. We owe that to our stakeholders. Our Think2030 initiative allows us to continually scan long term trends likely to impact our stakeholders across every aspect of life, leveraging a combination of human and AI. This initiative was further strengthened in scope in 2020 and will be put to good use in our future strategic planning exercises. Forewarned is forearmed as they say.  

Are new things emerging on the horizon due to COVID-19?

Hans: The horizon will continue to change, and we will need to stay alert. For sure recent events have accelerated many of the key trends we have previously identified, and accelerated also our action plan in certain domains, including trends around the Future of Work where a new normal has emerged. Customer behaviours were already changing, but the growing reliance on digital technologies is reshaping customer expectations faster than ever. We constantly question ourselves to ensure we stay relevant and this will continue to be a feature as we begin preparing our strategic approach post Connect21.

This year also saw changes at the top, with a new leadership team emerging – what reflections do you have on this?

Hans: My predecessor, Bart De Smet, has been appointed Chairman of the Group, after what can only be described as a remarkable record over more than 10 years. Under his leadership most legacies related to the past have been resolved and Ageas gained the strategic and financial flexibility to write its own future. 

I look forward to continuing to deliver the kind of performance expected from our teams. And to seeing how we can go even further. 

We also welcomed in 2020 two new highly experienced people within the Management Committee, leveraging the great talent we have within the Group. Heidi Delobelle was appointed CEO Belgium and Ant Middle took up the role of CEO UK.   

At the level of the Executive Committee, we appointed Managing Directors for Europe and Asia. This gives our two main regions a seat at the table at the Group level. And it further increases the exchange of expertise between regions, entities, and with our partners. 

As you have taken on the new role of Chairman in recent months, any special reflections Bart?

Bart: Firstly, I should say a big thank you to our outgoing Chairman Jozef De Mey who devoted so many years of service to the Group as both Chairman and in key executive roles. He was one of the key architects of our expansion into Asia. I handed over the keys of the door to Hans with huge confidence that he will do a great job as CEO. We have known each other for a long time, and I know the Group is in safe hands. While directionally I believe we are on the right lines, I would also be somewhat disappointed if nothing at all changes at Ageas. So, I look forward to seeing the changes Hans will make to build the company still further in the future, with the support and strong commitment of our many thousands of employees in Europe and Asia. 

Any final words, Hans?

Hans: Two in fact. Thank you. 

In what has been an exceptional year we are grateful to our people, our partners, our customers, and shareholders for their loyal support. We learned that by working together we can achieve great things and we can make a difference. Ageas this year celebrated 10 years as a brand. For one so young, we think it has a lot of achievements under its belt – but it is not about what we did yesterday or even what we have done today, but more about what we will do tomorrow that counts and is the most exciting. Our company has been part of society for almost two centuries. Through good times and bad, we have witnessed many societal challenges and seen a lot of progress. We have always embraced change, remembering that our role remains a constant: to deliver against the ever-evolving needs of our customers and stakeholders.

2020 brought unexpected challenges, tomorrow there could be more, but we are ready and excited to see what the future brings.

Recommended reads:

- “20 leadership lessons from my career”: Bart De Smet shares his learnings as a leader, especially during times of crisis.

- “Ten years of Ageas means ten years of looking ahead. Especially in times of Corona.”: Bart De Smet about the shifts he expects to see in our sector over the next ten years.

- “The economy of hope”: Bart De Smet’s essay on our last line of defence in extraordinary times.