EuroBusinessMedia (EBM) : CNP Assurances, France’s largest life insurer, reports earnings for 2008. Gilles Benoist welcome. You are the CEO of CNP Assurances. What are your key take-aways from this set of results?
Gilles Benoist (GB) : To be sincere, I could say that I’m cautiously optimistic for the following reasons. First, despite the bad market in France, going down by more than 10%, we’ve almost reached €30 billion in new premiums. More important, as far as net premiums are concerned, we have achieved 25% market share, with a net collect of a little more than €7 billion. And, of course, that means that we have increased our assets under management by a little more than 5% and this is the main driver of the increase in our results. In fact, last year we dared to give the market guidance. This guidance was on our recurring operating profit, before gains, and we dared to say that it would increase by more than 10%. And the increase was 13%. Of course, we have suffered as everybody from the crisis, and this is visible through the 40% decrease in our net result after all the impairments and market value of portfolios. But this result is still positive: more than €730 million.
EBM : Considering the difficult environment last year, today’s earnings release seems to indicate that CNP Assurances was more resilient than some of its peers in 2008. Is there something specific about CNP that would explain this?
GB : Yes. First of all, we stay in our business. We don’t try to go into new areas where we don’t have any expertise. Second point, we concentrate on very prudent and sophisticated asset liability management. We try to limit all the possibilities and the risks, and we demonstrated that already, some years ago; just remember the crisis of 2002. Third, we tried to put the pressure on costs, and different types of costs. We have dared to lower by 50 basis points the interest given to our customers on bond support, in agreement with our networks, to spare money and not to spend the provisions that can allow us to resist the crisis. We made special plans to decrease the costs of CNP during 2008. And don’t forget our distribution costs are variable costs. And, last but not least, we want to innovate in products, and create new generations of products to follow the new needs of the customers. The best example is the new generation of bond products in Italy, so perhaps that’s one of the reasons for our real resilience.
EBM : There seems to be a discernable trend of flight to safety among savers and investors. On the whole, would you say that this is more of a risk, or more of an opportunity for CNP?
GB: It’s clearly more of an opportunity for CNP. Now the real question that is in the minds of the customers is not exactly the rate of interest given to these customers, but I would say the existence in fifteen years of this beloved company. And so, it’s very important to have the solidity - I would say quite the eternity - and with the kind of shareholders we have, and among them Caisse des Depots and Postal Bank, being public shareholders, I think we have this image, that is a good image.
Of course, it’s important also to have very strong links and long links with our networks. Don’t forget that our distribution agreements go on to the beginning of 2016.
Third, of course, we must conceive the new products adapted to the crisis. It’s clear that customers are avoiding unit-linked and we must give them good generations of bond contracts, such as we have in Italy, and these contracts have satisfactory margins for CNP.
EBM : And finally, what would you say is your game plan for 2009?
GB : Well, despite the crisis, we want not only to stay as the leader, but to increase our share of the market. Of course, we will be - as we were in the past - very prudent in our financial policy and asset / liability management. Of course, we will focus on increasing our reserves, and protecting our margins by lowering our costs.
EBM : Gilles Benoist, CEO of CNP Assurances, thank you very much.
GB : Thank you.
