NATIXIS - 2018 Registration document and annual financial report

OVERVIEW OF THE FISCAL YEAR Management report at December 31, 2018

Insurance 4.2.2.3

2018

2017 pro forma

Change +7.6% +2.1% +15.8%

(in millions of euros)

Net revenues

790

734

Expenses

(448)

(439)

Gross operating income Provision for credit losses

342

295

0

0

Pre-tax profit

356

308

+15.7%

Cost/income ratio

56.7%

59.8%

Shareholders' equity (average)

848

863

4

ROE

29.0%

22.1%

In 2018, sales of personal protection and casualty insurance were particularly buoyant, while life insurance maintained a strong position. With €9.6 billion in direct business premiums, life insurance inflows increased 1% compared with 2017, keeping the business robust despite a persistently low interest rate environment, higher inflation and financial market volatility at year-end. The business grew 60% in two years thanks to the deployment of the Caisse d’Epargne offering. Premiums on unit-linked assets totaled €3.2 billion (-4%) and made up 33% of total gross inflows, down 2 points year-on-year and 5 points higher than the market average at end-December. Inflows invested in the euro fund totaled €6.4 billion, up 3%. Premiums on personal protection and payment protection insurance (€886 million) continued to increase at a steady pace (+8%). Payment protection insurance maintained a growth rate of 6% without any material impact from the Bourquin amendment. The non-life insurance portfolio grew by 5% to 5.8 million policies. Earned premiums on the Banque Populaire and Caisse d’Epargne networks gained 7% to reach €1,482 million. The automotive and multi-risk home insurance business saw 9% and 7% growth respectively. Net revenues for Insurance businesses totaled €790 million, up 8% compared with 2017, resulting from:

7% net revenue growth in life insurance, propelled by the a increase in assets under management (+10%), driven in turn by the roll-out of the offer on the Caisse d’Epargne network. Despite the persistently low interest rate environment in 2018, lower bond yields were offset through the diversification of investment sources (private placements or the direct funding of the economy); 8% net revenue growth in personal protection insurance and in a payment protection insurance, reflecting the resilience of the business; 6% net revenue growth in property & casualty insurance: a claims remained under control despite the impact of extreme weather events and an exceptionally high volume of large automotive insurance claims. The combined ratio stood at 91.2%, an improvement on 2017. Operating expenses edged up 2% to €448 million. The increase in expenses, which remained below net revenue growth (+8%), reflects the cost of developing the businesses and implementing the New Dimension plan’s strategic ambitions: deployment of a new multi-site, multi-brand customer relationship model in personal insurance (Move#2018); ongoing strategic non-life insurance projects (#Innove2020, Purple#Care and #Pop’Timiz) and the wind-down of the Assurément#2016 and Impulse initiatives. Gross operating income rose 15.8% to €342 million. At 29.0%, the division's ROE improved by 6.9 points compared with 2017.

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Natixis Registration Document 2018