EuroBusiness Media (EBM): Groupama, one of the largest mutual insurance groups in Europe, has just published its results for 2008. Jean Azéma, welcome!
Jean Azéma (JA): Bonjour!
EBM: To begin with, could you comment on Groupama’s performance in 2008, generated, as everyone knows, generated in a general financial markets crisis?
JA: First, I think Groupama’s results for 2008 are very reassuring. Why? Because, in spite of the quite logical and unsurprising decline in net income due to the financial market crisis, they show we have an extremely strong financial base. In addition, our sales growth rate in 2008 was quite remarkable at +9.2% and our operating income rose by over 50%. These very good results were not due to luck or chance, but were the fruit of the policy we implemented based on the strategy of developing the business both in France and abroad.
EBM: What were the highlights of 2008 for Groupama?
JA: To answer this question, I think we have to consider what we achieved both at home and abroad. In France, we continued to invest in our urban distribution network in the greater Paris area, that is, in a new concept of sales outlets to market insurance products and services. We also invested in a new marketing brand, amaguiz.com, which is a specialist internet brand dedicated to insurance products and services distributed only via this channel. With 10,000 contracts sold within a few months of its launch, this company has unquestionably got off to a successful start. We’re going to continue to innovate in the coming years, notably by using amaguiz.com to distribute both home and health insurance, and probably savings products as well at some time in the future. Abroad, the highlights of 2008 were a number of company acquisitions in central Europe, Hungary and Rumania, as well as a partnership with OTP, a very large bank, covering the whole of this region. We also made another acquisition in Turkey by taking over Güven, which is being integrated into Başak Groupama. Finally, we bought a 35% stake in the capital of STAR Tunisie, the largest Tunisian insurance company. To sum up, in 2008, we invested in our distribution network, product innovation and international acquisitions.
EBM: In 2008, issues such as “toxic” assets, “complex” products and the “Madoff fraud” highlighted the need to strengthen risk control in financial institutions. What can you say about Groupama’s exposure to such risks in 2008?
JA: We have no exposure whatsoever to “toxic” assets in the United States. We have exposure to a few securitisation products in Europe, but they all have satisfactory ratings: indeed, 85% of them are rated A and above, so they’re not a cause for concern. Our gross exposure to the Madoff fraud amounts to 8 million euros, that is, a net exposure after tax of around 5 million, which is extremely limited. Why and how did we manage to avoid these problems? Well, mainly because, in investment matters, our decision-making process is conducted, entity by entity and at group level, through financial committees, which decide which products we invest in, and, equally important, which intermediaries we use. Furthermore, in 2008, we beefed up our risk control system in order to prevent such mishaps from occurring.
EBM: You mentioned international development just now. Could you tell us more about your international development in 2008, and your ambitions for international expansion?
JA: In 2008, the group’s international sales grew by 39%. This was due to acquisitions, of course, but also to the very high rates of organic growth achieved by the various companies that were part of the group prior to these acquisitions. Thus, we can talk of extremely strong development, boosted by acquisitions. The newly acquired companies will now have to be integrated and consolidated within the group. In 2008, our sales outside France were worth around 4 billion euros. In 2009, we’ll continue to consolidate these entities with a view to developing them in the coming years.
EBM: What is your guidance and outlook for 2009? And beyond this year, are you still as well positioned as before to fulfil your ambition of being one of the top 10 European insurance companies in 2012?
JA: In 2009, we intend to focus on our companies’ organic growth in France and abroad by integrating all the subsidiaries we’ve acquired over these last two years, as I’ve just said. We also intend to generate even more synergies in France and abroad, but also within the scope of the group as a whole, notably regarding information systems, reinsurance and finance. Our third objective will be to continue mobilising all of the group’s human resources, that is, to marshal the combined forces of the men and women who work for this group to fulfil our aims. As confirmed by the Board, our strategy has not changed: our main aim is still to be one of Europe’s top 10 insurance companies by 2012.
EBM: Jean Azéma, CEO of Groupama, thank you very much.
JA: I thank you too.
