The scenes are of a day in the life of the papiermâché, woodpaste, cardboard and plastiline figures around the tree on the town’s square.
A graduate of the Ecole supérieure d’arts appliqués Duperré, Géraldine expresses her colourful talent through sculpture and the creation of bright, lyrical objects.
CNP Assurances—France’s leading personal insurance company—partners 14 million people at each stage in their life and their projects.
The Group designs and manages insurance products offering innovative solutions to policyholders’ needs in the areas of savings, pensions and personal risk insurance. As an expert in these areas, CNP Assurances is contributing actively to the debate on key issues facing society in France and the rest of Europe, including future funding of pensions, necessary developments in the area of health insurance and the financing of long-term care for the elderly.
Outside France, CNP Assurances has been present for a number of years in Italy, Argentina and Portugal. In 2001, the Group acquired a 50.75% stake in the Brazilian insurance company Caixa Seguros and obtained a licence to write life insurance business in China.
The single currency opens up considerable new horizons for the financial markets, and the insurance market in particular. The switch to the euro, a tremendous step for Europe, was achieved in troubled times. Even prior to September 11, the US economy was sluggish and the Japanese economy was stuck in the doldrums. Although Europe fared somewhat better, economic growth fell short of expectations.
Solid fundamentals In 2001, the French personal insurance market contracted by 7%. CNP Assurances fared better than its competitors. Net profit for the year
A commitment to sustainable development As a responsible corporate citizen, CNP Assurances is contributing actively to the debate on key issues linked to its business, including necessary changes to the health insurance system, the future funding of pensions, the financing of long-term care for the elderly, work/life balance and the need to control unemployment. Promoting sustainable development forms part and parcel of CNP Assurances’ business, partnering 14 million people in their projects and protecting them against life’s risks. All these actions bear witness to the group’s values, embodied in a comprehensive range of high quality products designed to meet the evolving needs of the population.
A resilient performance Our managed assets rose by approximately 9%, 2 points more than the growth rate for the French savings market. Similarly, the 3.6% decline in savings premium income was significantly less than the 8% fall observed in the market as a whole. Our prudent investment policy—with equities representing a very reasonable 20% of the portfolio—helped to shelter managed assets from the effects of falling share prices and at the end of the year, we still had unrealised gains of nearly EUR 10 billion in stock.
Our own shares nevertheless traded at a significant discount to embedded value, which came to EUR 43.5 per share at 31 December 2001. The probable reason for this is that certain investors tend to lump our company in with insurers whose results are highly vulnerable to changes in share prices, when in fact our own exposure is very limited. In the group insurance market, during late 2001 and early 2002 we renewed three of our main loan insurance partnerships, with the Savings Banks, Cofidis and Covefi and with Crédit Immobilier de France. In the personal risk market, the new supplementary health insurance contract distributed by La Poste has got off to a very good start. In an evolving environment, our partnerships with mutual insurers also yielded strong business momentum. We have recently extended our contract with Mutuelle de la Fonction publique and, more generally, we hope to remain present in these markets and play a full part in the ongoing changes. Lastly, during the year we demonstrated our commitment to the financial guaranty, assistance and local services markets by setting up CNP Caution and Filassistance International, and acquiring L’Age d’Or Expansion.
Significant development on the international scene With the acquisition of 50.75% of Caixa Seguros, one of Brazil’s leading bancassurance companies, we have established a firm foothold in a country which represents almost half the South American personal insurance market.
We will be the exclusive partners of Caixa Econômica Federal (CEF) in Brazil for the next 20 years. We also have a longstanding presence in Argentine. A provision has been booked to cover the impairment in value of our investment caused by the worsening economic and financial situation; however, the assets managed by our local affiliate are limited and the impact of the provision on our balance sheet and results is not material. In China, our recently-obtained licence to write insurance business provides an opportunity to tap the substantial growth potential offered by this booming market. The development model is the same as that deployed in Brazil, focusing on bancassurance, and we are currently in contact with several potential partners. At the start of 2001, we promised the market a 12% increase in recurring net profit. We have achieved this target, ending the year with recurring net profit up 12.2% (or 14.2% excluding Brazil) thanks to the commitment of our staff, the quality of our product offering, the development of the business, rigourous asset management and first class partnerships with distribution networks. This achievement testifies to the quality of CNP Assurances’ strategy and financial management.
Recurring net profit excluding exceptional items and based on the new accounting standards
Excluding Brazil, recurring net profit before exceptional items was EUR 537.5 million, up 14.2%.
Turnover contracted by 3.1%, excluding Brazil, in a French market down 7%.
Unrealised capital gains (EUR 9.66bn, including EUR 5.1bn in gains on equities), although down on 31 December 2000 (EUR 13.02bn) and 30 June 2001 (EUR 10.8bn), demonstrate the resilience of the CNP Assurances portfolios in the face of a downturn in the equities market.
Excluding Brazil, the value of new business was EUR 0.63 per share. The decline stems from lower sales of unit-linked products, which accounted for 16% of savings business, as against 31% in 2000.
The market in 2001: the second best performance ever 2000 was a year of exceptional growth in personal insurance in France, due mainly to the high volume of transfers from bank-type PEPs to life insurance products. 2001 saw the market slip back 7% from this record high, but this was nonetheless the second best performance ever.
EUR 84.8 billion. Poor stock market yields encouraged savers to turn their backs on unit-linked products, leading to a 40% decline in this market, while the non-unit-linked market grew by 16%.
Personal insurance market – France Market growth over the last ten years
CNP Assurances commissioned Sofres, the market survey specialist, to conduct a survey of 710 people to find out how they feel about savings and personal risk products and what they expect from these products.
As of the beginning of 2002, life insurance was still the most popular investment product in France.
This proportion rises to almost two-thirds (65%) for well-off pensioners and almost three-quarters (71%) for the very well-off, with portfolios worth
The outlook for the life insurance market in 2002 is generally good
■ 13% of people who do not currently have a life insurance policy say they hope to take a policy out in 2002.
invested in savings products and at the year-end, life insurance accounted for 20% of the financial assets of French households.
A changing world environment The worldwide insurance industry was reshaped by two major events in 2001.
the capital paid out in the case of death of the policyholder. The capital goes directly to the beneficiaries named in the policy and is not included in the general estate of the deceased, unless it is clear from the size of the premiums that the policy was taken out for the purpose of depriving certain heirs of their share in the inheritance.
CNP Assurances’ savings offer encompasses three product categories. Term or variable premium non-unit-linked products offer a guaranteed rate of return and a capital guarantee. The return is generally based on bond yields. Unit-linked products allow savers to choose between a range of investments offered by the insurer, including equities, bonds, unit trusts and non-trading property companies. Only the number of units acquired is guaranteed, not the value of the units. Lastly, combination products allow savers to invest in both non-unit-linked and unit-linked products under a single contract.
Main savings Network Individual/ Non-unit linked/ 2001 2001 products group unit-linked turnover* managed assets*
CNP Assurances’ partnership with La Poste has been given fresh impetus by the success of GMO, which has already won over more than one and a half million customers. In 2001, contracts with a unit-linked component rose to 57% of the total from 48% at end-2000.
During 2001, the range of products distributed by the French Treasury network was further enhanced with the addition of two new products. Trésor Epargne, a combination product, now includes a unit-linked offer eligible for inclusion in PEP portfolios. Trésor Capitalisation, an endowment contract with no front-end fees, represents the latest addition to the range.
Since the beginning of 2002, a new “scoop” option has been added to Trésor Epargne, which automatically transfers gains from one fund and reinvests them in another fund. Trésor Prévoyance, a comprehensive personal risk product, will shortly include long-term care insurance.
For companies, CNP Assurances has developed a comprehensive range of compulsory and voluntary-
Under certain contracts, policyholders earn pension “points” each time a regular or top-up premium is paid. Other contracts provide for the payment of regular premiums indexed each year to the value of the pension “point” used to determine benefits under the Agirc government-sponsored pension scheme. These are with-profits contracts offering a guaranteed minimum rate of return. Immediate annuity products provide for the payment of life annuities that vary depending on the amount of capital paid in and the age of the insured when the contract is taken out. Examples include Certival, distributed by the French Treasury, Revenus Pluriel Ecureuil, distributed by the Savings Banks and Viagèrys, distributed by the Post Office.
In the area of personal pensions, the Group offers long-term savings products which allow policyholders to receive additional income on retirement, while enjoying the tax benefits associated with life insurance products. In the area of civil service pensions, CNP Assurances leads the group of insurers responsible for managing Préfon, a voluntary-participation defined benefit scheme. For the self-employed, CNP Assurances offers “Loi Madelin” pension products. These products allow the policyholder to receive a regular income after retirement and the premiums are tax deductible.
Personal risk insurance—which also includes health insurance and loan insurance—takes over where national insurance systems leave off, protecting policyholders and their families from the risks of day-to-day life, including death, accident, temporary or permanent disability or the loss of autonomy. Individual and group supplementary health insurance policies cover medical costs not reimbursed by the Social Security system.
Through its Carrés Bleus subsidiary, CNP Assurances was the first French insurer to develop an original service offer for policyholders taking out supplementary health insurance. Carrés Bleus provides these policyholders with health insurance information services, including information on medical conditions and their treatment, disease prevention measures, advice on the cost of dental work, optical products, etc.
half of 2001, CNP Assurances acquired L’Age d’Or Services, France’s leading private network of local service providers, with around 100 facilities. Its operations, which are being extended through franchising to the whole country, encompass an array of services for elderly, dependent and handicapped people, including mobility assistance, help on return from hospital, home shopping deliveries, meal and medicine deliveries, outings and leisure activities. L’Age d’Or Services has become the preferred partner of Filassistance International for local services throughout France.
48.2%-owned by this State-controlled bank. Its life and non-life offerings are marketed by Caixa Vida Capitalizaçào and Caixa Vide e Previdencia, in the rapidly growing savings and pensions markets.
The group also writes loan insurance covering CEF’s public and private market home loan business.
is a State-owned financial institution that offers lending and deposit-taking services to retail customers, as well as acting as a financial intermediary for State-controlled utilities and the State, for welfare payments. These activities mean that it is in contact with a very large proportion of the Brazilian population, including the more than 70 million contributors to the workers’ social fund, the 16 million plus holders of deposit accounts, etc. It has a very strong brand image throughout the country.
Opportunities exist to boost Caixa Seguros’ profitability by increasing the proportion of premiums retained by the group, creating renewed impetus within the sales networks, improving risk selection and raising the internal rate of return generated by group companies. Profitability will also be enhanced by transferring CNP Assurances’ expertise in the areas of loan insurance, life insurance and pension funds, the three businesses that offer the strongest medium-term growth potential in Brazil. In 2002, new products will be launched, representing additional growth drivers.
Pensions: group and individual pension contracts for which premiums are tax-deductible within the limit of 12% of taxable income (Previnvest). Personal risk insurance: various products providing for a lump sum payment in the case of death or permanent disability (term whole life insurance) (AP Bilhetes, Vidazul, Via Em Grupo).
Loan insurance (Hipotecario): these contracts cover the balance outstanding on home loans in the case of death or permanent disability and the cost of repairs in the case of damage to the policyholder’s home (combined life-non life product).
Tremendous opportunities in China On 25 September 2001, CNP Assurances obtained a licence to write life insurance in the People’s Republic of China. The granting of this licence is the outcome of a process begun in early 1998 with the opening of a representation office in Beijing. The work by CNP Assurances down the years has enabled the Group to imprint its brand image on both the Chinese side, with the Insurance Control Commission, the Social Security, Construction and Post Office Ministries, local insurers and bankers, and the French and European side, with the French embassy, the European Chamber of Commerce, and the French Insurance Federation (FFSA) whose representatives in China work out of CNP Assurances’ Beijing office. CNP Assurances has adapted its strategy to local conditions and customs, focusing on bancassurance and home loan insurance. This two-sided approach positions the Group firmly in step with the Chinese government’s concerns and sets it apart from other foreign insurers which are unable to rival CNP’s reputation in these areas. Various initiatives have been launched with a view to establishing a 50/50 joint venture with a Chinese partner, a process which looks set to take at least 18 months due to the complex regulatory requirements. The opening up of the Chinese market represents a tremendous opportunity, since the local insurance market is still in its infancy. Two figures illustrate the low takeup of life insurance in China which had only one insurance company just fifteen years ago: in a country with 1.3 billion inhabitants the life market is estimated at a mere EUR 15 billion. The market expanded by 14.5% in 2000 and is expected to grow at an average rate of 12% per year over the next five years.
China market growth estimated at per year over the next five years
Premium income in Argentina surged 50.6% in 2001 to EUR 14.5 million. Assets managed by CNP Assurances Compania de Seguros de Vida SA total EUR 20 million.
To take account of the impact of the financial crisis in Argentina, a EUR 18 million provision was recorded in CNP Assurances’ accounts to cover asset impairments, together with a EUR 10 million translation adjustment to net assets.
Despite the impact on profit of the floods that hit Portugal at the start of the year, the two companies succeeded in improving their ROE to a level on a par with that achieved by the CNP Assurances Group as a whole.
Used for a number of years by British and American insurance industry analysts, embedded value corresponds to the sum of revalued net assets and the discounted present value of future earnings streams from in-force business, less the cost of the capital needed to comply with solvency margin requirements. It completes the annual snapshot provided by analyses of profits and return on equity (ROE) and is now published by nearly all insurance companies in the United Kingdom and some European companies. As in previous years, the CNP Assurances Group’s embedded value in 2001 was calculated on the basis of a detailed analysis of all in-force business. The calculations are performed with the assistance of B & W Deloitte (formerly Bacon & Woodrow), who certify the methods used and the results. The information is rounded out by the disclosure of the main assumptions and sensitivities, the value of new business and the corresponding margin. As well as contributing to CNP Assurances’ drive to achieve greater financial transparency, embedded value also represents a valuable internal management indicator and is used to direct
■ Value of new business: discounted present value of future earnings streams from business written during the year less the cost of the capital needed to comply with solvency margin requirements. ■ Goodwill: multiple of the value of new business. The multiple depends on the growth outlook. ■ Appraisal value: embedded value + goodwill.
investment towards areas that will create the most value for shareholders.
Embedded value at 31 December 2001 43.5 accounting standards, which added EUR 1.7 to NAV per share in 2001; • the reduction in the French corporate income tax rate to 35.4% in 2001 from 36.4% the previous year. Embedded value (EV) at 31 December 2001 was EUR 5,970 million, representing EUR 43.5 per share versus
EUR 43.4 at year-end 2000. Excluding the effect of the Brazilian acquisition, embedded value per share stood at EUR 46.1, up 6%. The value of new business written in 2001 came to EUR 119 million or EUR 0.87 per share, 5% down on the 2000 value of EUR 0.92 per share. Excluding Brazil, the value of new business totalled EUR 86 million or EUR 0.63 per share. The decline in France was attributable to lower sales of unit-linked contracts, which accounted for 16% of premium income versus 31% in 2000.
CNP Assurances share performance The CNP Assurances share price closed at EUR 35.70 on 28 December 2001, a fall of 16.4% compared with the 29 December 2000 closing price of EUR 42.69, representing the 2000 high. The Group’s stock market capitalisation as of 28 December 2001 was EUR 4.9 billion.
01/01 01/02 01/03 01/04 01/05 01/06 01/07 01/08 01/09 01/10 01/11 01/12 01/01 01/02 01/03 26/04
The biggest gain was recorded after the 11 March announcement of the Group’s 2001 results, which demonstrated CNP Assurances’ ability to achieve steady earnings growth even in unfavourable stock market conditions and the resilience of its embedded value, as well as the announcement of the Group’s 2002 growth targets of 5% for premium income and 10% for net profit before non-recurring items.
Ownership structure With 37%, Caisses des dépôts et consignations is CNP Assurances’ reference shareholder. La Poste and Caisse d’Epargne have combined their interests of 18% each in a joint company, Sopassure, which is 50.1%owned by La Poste and 49.9% by the Caisse d’Epargne Group. Sopassure has become CNP Assurances’ second largest shareholder, with 36%. Shares held by the public represent 24%, a percentage that is set to rise to 26% in October 2002 when all the shares held by other partners are added to the free float. The State’s interest is 1%. The shareholders’ pact is set to end in January 2004.
CNP Assurances share data 1 January 2001 to 26 April 2002
Getting to know shareholders and listening to their views Since 1998, CNP Assurances has been organising an increasing number of events to allow it to exchange views with its individual shareholders. These include the Annual General Meeting in Paris, naturally, but also meetings held several times per year in major cities in the presence of company management. Two such meetings are scheduled in 2002, in Nice and Lyon. In addition to these traditional meetings, the shareholder relations department is organising several shareholder events in 2002 in conjunction with other major listed companies. All these events are an opportunity to present the company’s results and its development strategy to shareholders. They also give shareholders a chance to discuss issues directly with company management. Ten stock market initiation sessions are also organised in various cities throughout France each year.
When it was first floated on the stock market, CNP Assurances had to begin complying with various obligations with respect to its financial communications. Financial information must be transparent, it must be published at regular intervals and made available to all shareholders at the same time. The communications programmes developed by the shareholder relations department go beyond simply paying lip service to these obligations, by actively seeking
Shareholder loyalty initiatives… The Shareholders’ Club, set up in 2000, now has 19,000 members. The Club’s services include special privileges and periodic offers. Privileges draw on the competencies developed internally by CNP Assurances and include free access to the telephone hub of Carrés Bleus, CNP Assurances’ health insurance subsidiary which offers analyses of optical and dental care estimates, as well as other healthcare advice, an asset management advisory service which, apart from general advice, provides personalised studies, stock market initiation sessions and a telephone assistance service 290,000 individual shareholders, including members of the Shareholders’ Club 290,000 individual shareholders
In early 2002, Euroclear France (formerly Sicovam) conducted an annual survey of holders of bearer shares at the request of CNP Assurances, to determine the composition of its institutional and individual shareholder bases. As of 1 February 2002, CNP had almost 290,000 individual shareholders.
CNP Assurances contributes to sustainable development through its operations, corporate philanthropy activities and its underlying mission. The Group is committed to acting as a responsible corporate citizen, by adhering to its core values day-in day-out.
A responsible corporate citizen For many years, CNP Assurances’ development strategy and investment policy have been aimed at providing policyholders with attractive rates of return and delivering steady growth in profits for shareholders. As a personal insurance provider, CNP Assurances offers policyholders and their families protection against current and future risks in the form of insurance or savings. For over a century its products have been helping people to pass on their accumulated wealth to their children, an important aspect of the batonpassing process between generations. CNP Assurances allies growth with respect for life-enhancing values. This implicit commitment can be clearly seen in its corporate philanthropy activities, promotion of codes of ethics, sustainable forestry management and investment in various ethical funds.
CNP Assurances is France’s leading owner of woodland with 54,257 hectares spread over 212 forests. New forestry legislation, which became law on 9 July 2001, calls upon owners to manage their forests in a sustainable way to ensure that they fulfil their economic, ecological and social functions now and in the future, as recommended at the European conferences in Helsinki and Lisbon. At the same time, “eco-certification” programmes are being developed to provide consumers with full information about the origin of wood. This labelling system indicates whether the wood comes from sustainably managed forests or not. Société forestière de la Caisse des dépôts et consignations’ management of CNP Assurances’ forests largely meets these requirements. Within this framework, CNP has approved a sustainable development charter which formally lays down the management commitments given by Société forestière for its forests.
New accounting developments The new standards applicable to the consolidated financial statements of insurance companies introduced in Government order dated 17 January 2001 were adopted with effect from 1 January 2001.
book value of positions valued according to Article R.332-20 of the Code is greater than their aggregate market value. This requirement concerns equities, unit trusts and property.
In EUR millions Shareholders’ equity Net profit Net profit before Net profit Net profit before Group share at 1 January 2001 2000 non-recurring items 2000 2001 non-recurring items 2001
To the Shareholders The Executive Board has presented the 2001 financial statements and its report on the activities of the Company and the Group over the year.
During the year, the Executive Board kept us regularly informed about the activities and development of the Group and we performed the controls and verifications that we considered necessary to fully exercise our oversight role.
CORPORATE GOVERNANCE CNP Assurances’ management structure, with an Executive Board and a Supervisory Board, represents a mode of governance which effectively segregates executive functions from supervisory functions, in the best interests of all stakeholders, including management, shareholders and employees.
The committees of the Supervisory Board The Supervisory Board cannot deal with all matters falling within its terms of reference at full meetings of the Board. It has therefore set up two specialist committees to examine in detail the matters submitted to the Board for approval or review: the Remunerations Committee, established in 1993, and the Audit Committee established in early 2000.
These committees, which have both a financial and strategic remit, are responsible for reviewing specific issues and reporting on them to the Supervisory Board. Each committee issues proposals, recommendations and observations within its field of competence. From the outset, they have provided essential support to the Supervisory Board in the fulfilment of its stewardship role.
Each year both committees draw up an annual report on their activities and the conclusions reached.
The Audit Committee’s missions and responsibilities have encouraged it to analyse the Company’s current and future activities as well as its ability to meet the goals of sustainable development. A key focus of these reviews was the measures taken by the Company to effectively control the related risks.
The various changes in presentation of the financial statements introduced in the new standards had no impact on consolidated earnings, because the majority had been implemented in advance by the Company.
The Audit Committee took the initiative of reviewing and reporting to the Supervisory Board on the CNP Assurances Group’s management of its equity portfolio and the related risks.
For all of these reasons, unrealised gains are an essential factor behind the Company’s competitiveness, leading the Audit Committee to check the appropriateness of the Group’s decision-making processes regarding the portfolio.
The investment strategy, which is mainly based on the results of asset/liability simulations, must allow the Group to fulfil its commitments to policyholders whatever the circumstances and it should also optimise asset allocation and performance. The simulations are carried out internally but always in conjunction with the Company’s financial partners, in particular CDC IXIS AM, within the committees set up for this purpose.
The 2001 acquisition of a 50.75% interest in Caixa Seguros, the leading player in the Brazilian loan insurance market, was a decisive step in the CNP Group’s international development.
The Supervisory Board noted from the regular reports prepared by the Executive Board that in its relations with Caixa Seguros, the Company has struck an appropriate balance between excessive centralisation of decision-making powers and insufficiently-controlled decentralised powers.
The Supervisory Board considers that the business plan is underpinned by risk management systems which accurately factor in the Group’s exposure to unfavourable developments and the resources needed to act to reduce this exposure.
• The Remunerations Committee was also called upon to make recommendations concerning the allocation, among the members of the Supervisory Board and the censors, of the fees awarded by the Annual General Meeting of 6 June 2000.
In connection with the transfers and sales by CNCEP of shares in Ecureuil Vie, owned jointly with CNP Assurances, and Eulia, the joint holding company set up by CNCEP and Caisse des dépôts et consignations, on 18 December 2001, the CNP Supervisory Board authorised the signature of two addenda to agreements: – the addendum to the CNP Assurances/Caisse d’Epargne Group framework agreement, and
The motivation and dynamism of the French Treasury network fuelled a 15% increase in turnover generated by this partner compared with 2000.
The Supervisory Board observed that these issues, which contribute to financing external growth, were undertaken under financial conditions advantageous to the Company.
On 28 May 2001, CNP Assurances completed the acquisition of the entire capital of L’Age d’Or Expansion. The services offered by L’Age d’Or Expansion, which include mobility assistance, round-the-clock assistance and assistance to the elderly, were considered by the Supervisory Board to represent a high-quality addition to the Long-Term Care and Assistance offering that CNP has been building over the last two years to breathe fresh life into its product range, alongside CNP’s joint subsidiary with AZUR-GMF Assistance.
The Supervisory Board has taken a close interest in the measures taken by the Executive Board to optimise allocation of resources devoted to this acquisition and to the new unit’s organisational and working methods.
Two major agreements were also signed in early 2002: – a five-year agreement with CIF (Crédit Immobilier de France), strengthening the close partnership between our two companies, and
At the Annual General Meeting of 4 June 2002, shareholders will be asked to re-elect six members of the CNP Assurances Supervisory Board and one censor, whose periods of office terminate on this date. A vote will also be called to elect two new members to the Supervisory Board.
Among the draft resolutions to be presented to the Annual General Meeting, the Executive Board has included a stock option plan be put to the vote by shareholders.
In accordance with its stewardship tasks, the Supervisory Board informs the company’s shareholders of its observations on the Executive Board’s management and the annual financial statements.
As part of our control and oversight role, we review the quarterly, interim and annual results with the members of senior management, along with the Group’s situation and strategic development.
This structure avoids the confusion of roles existing in companies with a Board of Directors, between the Chairman and Chief Executive Officer—who acts in an executive capacity—and the Board of Directors which appoints him.
Our two-tier management structure is in full compliance with the principles of good corporate governance, and also with the new standards introduced in the Act of 15 May 2001, that are designed to balance and segregate powers in limited companies. Consequently, CNP Assurances will not have to amend its articles of association to reflect the provisions of the new law.
The Audit Committee reviews the audit programmes of the external Auditors, the results of their audits, their recommendations and the action taken for their implementation. It also assessed the effectiveness of the work performed by the internal auditors, as well as the quality of the system of internal control, especially risk measurement, monitoring and management systems, on the basis of Company documents and reports.
At its instigation, the Audit Committee also examined the CNP group’s equity portfolio management policy and performed a special review of the Préfon scheme.
The Committee focused in particular on the various components of net profit and the Group’s policy concerning policyholder dividends. It obtained assurance that the amount attributable to policyholders was correctly determined, by reviewing the management of technical reserves, the treatment of unrealised gains and the management of the Company’s equity portfolios.
The Audit Committee noted that realised gains accounted for around 10% of net profit for the six month period. This is a very low percentage compared with competitors, testifying to CNP Assurances’ resilience in fluctuating markets.
Unrealised capital gains also serve to protect against the risk of falling equity markets, avoiding the need to set funds aside in a liquidity risks reserve.
The Supervisory Board has recommended that local intelligence processes be set up so that the Executive Board can anticipate significant macro-economic, political and international changes and respond to these developments without delay.
The Remunerations Committee met once in 2001 to draft proposals concerning the definition of indicators and objectives to be applied to determine the remuneration of members of the Executive Board.
In March 2002, the Committee issued a recommendation that fees should be allocated to the Supervisory Board members and the censors based on their attendance rate at meetings of the Supervisory Board and the specialist committees. This recommendation was approved by the Supervisory Board.
Regulated agreements The Supervisory Board is also responsible for authorising agreements involving directors submitted by the Executive Board.
The Board was informed that a third addendum relative to the Commission Agreement between Ecureuil Vie and the Caisse d’Epargne Group was submitted to the same authorisation procedure by the Ecureuil Vie Board of Directors and the CNCEP Supervisory Board. The purpose of these three addenda was to ensure that CNCEP and Eulia jointly guarantee the fulfilment of CNCEP’s obligations under the main agreements.
CNP Assurances issued subordinated notes worth EUR 400 million in total in 2001 in several tranches.
Loan insurance is an important sector for CNP Assurances, and one in which the Company is ranked no. 1. The four biggest loan insurance customers, by size, are: Crédit Agricole, the Caisse d’Epargne Group, Crédit Immobilier de France and Cofidis. The Supervisory Board was informed that the outcome of negotiations with the Caisse d’Epargne Group was that 26 Savings Banks in mainland France had chosen CNP to meet their loan insurance needs.
The purpose of this major workstream is to increase the efficiency of services to the Company’s networks and customers by allocating IT budgets more effectively. An important aspect of this new project is to limit the potential impact on systems of the Bull risk.
The Supervisory Board has been kept fully informed by the Executive Board of all matters relating to the Group’s strategic development and earnings performance.
The Supervisory Board *Subject to approval at the Annual General Meeting of 4 June 2002.
January 2001: launch of businessowners’ insurance for clients of the Hervet banking group
January 2001: Mutuelle Nationale des Caisses d’Epargne opts for Carrés Bleus
Health insurance policies written by the Savings Banks Group’s mutual insurance company (MNCE) and reinsured by CNP Assurances now include Carrés Bleus services, adding Savings Bank employees and their families—representing 100,000 people—to the ranks of Carrés Bleus subscribers.
The CNP Assurances Group’s aim is to meet the needs of partners and clients by offering them high quality financial guaranty insurance products covering property loans and statutory liability.
This acquisition, which marks CNP Assurances’ entry into the Brazilian market, is in line with the Group’s policy of establishing strategic alliances in international markets where CNP can gain leading positions. South America has been identified as a core growth area for the Group. CNP Assurances has been present in Argentina since 1995 and this major investment in Brazil is further proof of the Group’s confidence in the region’s medium- and long-term growth potential.
The 50.75% stake in Caixa Seguros was acquired from Funcef, the Caixa Group’s employee
Report of the Executive Board To the Annual General Meeting of 4 June 2002
pension fund, for BRL 1,065 million. CNP Assurances has also signed a 20-year marketing agreement with CEF.
Caixa Seguros is the market leader in loan insurance and a major player in both the life and non-life markets. Its recently launched supplementary pension business (previdência) is operated by a 99%-owned subsidiary, Caixa Previdência.
CNP Assurances life insurance products won several awards handed out by Le Revenu magazine, in the following categories: – Unit-linked (dynamic—more than 14 funds) category: gold medal awarded to Ascendo; – Non-unit-linked category: gold medal awarded to Initiatives Plus, silver medal awarded to Ascendo, bronze medals awarded to GMO Poste Avenir and Initiatives Transmission; – Diversified funds (from 6 to 14 funds) category: gold medal awarded to GMO Poste Avenir; – Unit-linked (diversified funds) category: silver medal awarded to Nuances.
The CNP Group also picked up awards recognising the quality of its investment funds. At the Victoires des Sicav 2000 ceremony organised by La Tribune, a financial newspaper, and Standard & Poor’s Fund Services, the Group won the prize for the best Sicav fund over one year awarded to sponsors of less than ten funds. In the medium-term euro bonds category, prizes were awarded to two of the Group’s Sicav funds—CNP Assur Capi (over five years) and CNP Moyen Terme (over ten years).
April 2001: launch of Filassistance International, an assistance company offering local services
Following their framework co-operation and partnership agreement signed in February 2000, the CNP Assurances and AZUR-GMF groups have set up a 50/50 joint venture, Filassistance International.
Filassistance International, which is licensed to operate as an insurance company and is governed by the Insurance Code, offers clients a comprehensive range of assistance services. The offer is uniquely relevant, addressing such current needs as healthcare, long-term care and the risks of day-to-day life. Filassistance International’s mission is to accompany clients at any age of their life, providing everyday assistance that goes beyond dealing with emergency situations, and to offer them its expertise in the area of assistance and local services, providing vital support on a day-in day-out basis.
Filassistance International will exploit the synergies created by pooling AZUR-GMF’s and CNP Assurances’ professional know-how and expertise.
The notes qualify as quasi-equity and are taken into account for the purpose of calculating the Group’s solvency margin.
At the Annual General Meeting of 6 June 2001 (fifth resolution), shareholders renewed the authorisation given to the Executive Board to issue bonds and other debt securities. Under the terms of this authorisation, the Executive Board can now raise up to EUR 2 billion to finance development projects and strengthen the Group’s solvency margin.
May 2001: new agreement signed with Trésor public In June 2000, the Ministry of the Economy, Finance and Industry approved a two-year extension of the partnership agreement between the Trésor public and CNP Assurances, on equivalent financial terms. The new expiry date is 31 December 2004.
A new agreement confirming and extending the commitments given in the third development plan, and also regulating the distribution of CNP life insurance products by the French Treasury network, was signed on 4 May 2001.
June 2001: acquisition of L’Age d’Or Expansion, a local services provider CNP Assurances has given shape to its development strategy in the field of personal services and strengthened its positioning in the long-term care market. After setting up Filassistance, an assistance company owned jointly with AZUR-GMF which was licensed by the Commission de contrôle des assurances in January, the Group acquired a majority interest in L’Age d’Or Expansion, a local services provider.
June 2001: launch of the Gespré Europe healthcare management platform Gespré Europe, the Strasbourg-based healthcare management platform created jointly by
The new company uses its own technical and human resources. Around thirty people currently manage the Complétys Santé platform. Additional staff will be taken on in the second half of the year to keep pace with the phased roll-out of Complétys Santé which will be offered to clients of the French Post Office throughout France by the end of the year.
September 2001: launch of a new unit-linked product in the Savings Banks network
September 2001: licence obtained in China On 25 September 2001, CNP Assurances obtained a licence to write insurance business in China.
Convinced that China is fertile ground for life insurance over the long term, CNP Assurances has opted to distribute products mainly through branch networks, bringing to bear the wealth of experience acquired in France.
In compliance with local regulations, a Chinese partner is being sought to set up a joint venture.
The agreement strengthens both CNP Assurances’ position in personal insurance and its links with the Caisses d’Epargne Group, a major partner.
November 2001: launch of cnpcourtage.com website This pioneering Internet-based service provides insurance brokers with a complete set of selling aids for promoting sales of group health and personal risk insurance products to SMEs.
The new selling tool meets brokers’ essential requirements, namely the preservation of their autonomy in respect of the design of offers and fast-response capacity vis-à-vis potential clients. Other sales facilitators are online pricing and the swift formulation of service proposals bearing brokers’ logos.
The cnpcourtage.com website also has the advantage of being multi-functional. Product offers are personalised and each broker works with a product range suited to its strategy for the target segment. Both brokers and potential clients have access to an extensive array of online resources —documentation, commercial proposals and advice—on which to base their decisions. Summaries of tax and legal implications are also provided, and brokers can create an Internet site for each SME and organise web conferences.
At the beginning of each year, each policyholder receives an updated savings statement, together with a tax form. The process, involving nearly 20 million printed pages and six million mailings, is a means of communicating more extensively with policyholders.
It is an opportunity, for example, for a general introduction to new commercial offers that are destined to be more finely targeted and segmented based on investment portfolio structure. Plans are also under way to communicate more frequently with policyholders from 2002, starting with half-yearly statements for large policies.
CNP Assurances became the first insurance company in France to provide healthcare information to supplementary health insurance policyholders via a call centre dubbed Carrés Bleus.
Since its inception, Carrés Bleus, a subsidiary of CNP Assurances, has been committed to making healthcare information available to policyholders via all communication channels —telephone, fax, mail and the Internet.
Carrés Bleus aims to communicate constructively with a varied audience. Three sections of the website are designated specifically for policyholders benefiting from Carrés Bleus services, Carrés Bleus partner-opticians and the general public.
There is also a specific space, complete with secure access, for local authorities that are clients of Carrés Bleus. Access is tailored to the options selected by each local authority and policyholders enjoy the services taken out by the local authority to which they belong. Pages may be viewed solely by members of the local authority concerned, which has a free hand with regard to the information displayed.
In 2001, Carrés Bleus established a partnership with 1,200 opticians throughout France, who have their own space on the website. Each optician has an identifier and password, and can access all site functionalities, documentation concerning the partnership with Carrés Bleus (terms and conditions, optical products ranges, sales add-ons, quotes, etc.) and health information in the field of eye care. Partner-opticians can communicate with each other on Carrés Bleus Vision, their online bulletin board.
There is also an optional geopositioning tool for locating the nearest dentist or optician (notably from among those affiliated with Carrés Bleus). Internet users may further consult the information concerning them stored in the Carrés Bleus database.
Given the more demanding minimum capital adequacy ratio applied to banks and other financial institutions (8% of risk-weighted assets), these players are turning to insurers to provide solutions for managing their obligations. The idea is to replace conventional products by financial guaranty solutions for both corporate and personal loans.
Most governments responded to the economic slowdown by implementing counter-cyclical budgetary policies that weakened public finances. The USA now faces the prospect of a budget deficit for the first time in four years.
Long-term interest rates followed a more uneven pattern in 2001. Although they remained virtually stable over the 12 months (at close to 5% in both Europe and the USA), a high degree of volatility was experienced during the year. The turmoil on stock markets triggered a capital flight into government bonds. Ten-year rates reached a trough in early November, before starting to recover at the end of the year as equities returned to favour with investors heartened by the prospect of a rapid economic recovery in the USA.
Thus, although the downward trend in short rates was unfavourable to liquid savings products bearing interest at market rates, a measure of relief was apparently provided by the turmoil on financial markets, which prompted a retrenchment into the safest investments. Annualised growth in term deposits (for periods up to two years) was roughly 20% and over 15% for money-market funds across the board.
– a 1.4 point decline due to lower transfers from Livret A passbook savings accounts,
CNP ASSURANCES GROUP PREMIUM INCOME CNP Assurances consolidated premium income for 2001 amounted to EUR 17,290 million.
Based on a comparable Group structure, excluding Brazil, premium income for the year amounted to EUR 16,983.1 million. This was 3.1% lower than in 2000. However, CNP Assurances comfortably outperformed the market, which contracted by 7% in 2001 to EUR 92.6 billion (source: FFSA).
Similarly, the 3.6% decline in Savings premium income was significantly less than the 8% fall observed in the market as a whole.
Excluding Caixa Seguros (consolidated during the second half of 2001), changes in annual premium income were as follows.
Savings premium income dipped 3.8% in 2001 (including a 4.4% decline based on a comparable Group structure). Caixa Seguros (Brazil) contributed EUR 90 million to the total.
CNP Assurances, in common with other market players, was adversely affected by: – the sharp drop in transfers from bank-type PEP savings accounts, which contributed only EUR 190 million to premium income in 2001, compared with EUR 478 million in 2000; and
– a 1.8 point decline due to lower transfers from bank-type PEP savings accounts,
*Global was consolidated from the second quarter of 1999 and Caixa Seguros from the third quarter of 2001. **The EUR 12 million reported under “Other” in 1999 has been transferred to “Savings” (EUR 11 million) and “Personal risk” (EUR 1 million).
Pensions premium income climbed 7%, including organic growth of 1.7%. Caixa Seguros (Brazil) contributed EUR 58.5 million to the total. In France, the modest rise in Pensions premium income was the net result of two opposing trends: – sales of individual pension products declined by a further 12%, due mainly to lower sales by the Savings Banks network; – sales of group products increased by 8%, primarily reflecting robust sales to companies, mutual insurance companies and local authorities.
Personal risk premium income climbed 6.3%, including organic growth of 2%. Caixa Seguros (Brazil) contributed EUR 32.9 million to the total. In France, sales of individual personal risk policies rose 7%, helped by the promotional campaign launched by the French Post Office at the end of the third quarter and the build-up of sales by the Savings Banks network. In addition, during 2001 CNP Assurances started selling individual personal risk products in connection with its partnerships with banking institutions in the area of loan insurance.
Loan Insurance premium income rose 9.7% or 4.5% based on a comparable Group structure. Caixa Seguros (Brazil) contributed EUR 69.6 million to the total. In France, strong market growth offset the increase from 35% to 42% of Prédica’s participation rate as co-insurer for Crédit Agricole business, effective from 2001. On 1 February 2002, CNP Assurances announced that it had renewed its partnership with Cofidis in the area of consumer loan insurance, through 2010, and on 5 February, the renewal through 2006 of the home loan insurance partnership with Crédit Immobilier de France was announced. Previously, in October 2001, CNP Assurances had announced the renewal of the partnership with Caisses d’Epargne.
Health Insurance premium income declined by 10.8%. The Complétys Santé health insurance product is now distributed by Assurposte throughout France. The product’s contribution to premium income is still relatively limited, however, due to the gradual build-up of new contracts.
Property Damage Insurance premium income rose 84%, including 15% growth in Portugal. Caixa Seguros (Brazil) contributed EUR 56.3 million to the total.
The breakdown by class of insurance shows a marked swing towards group insurance, triggered by the decline in sales of individual savings products since the beginning of 2001.
Other new money boosted premium income by 4.5 points. The increase was partly attributable to the success of the “Odyssée” promotional campaign focusing on Initiatives Transmission, which ran from mid-May through to December. Lastly, sales of unit-linked products contracted by 40.3% to EUR 924 million, representing 16.6% of Savings premium income generated by the Savings Banks network. A major marketing campaign has been undertaken to build sales of the new Nuances 3D unit-linked product launched in early October.
Premium income generated by the French Treasury grew by 15.1% to EUR 1,442.3 million. This excellent performance was attributable primarily to a transfer of funds from bank accounts, the French Treasury having stopped offering banking services at the end of 2001. Sales of unit-linked products, representing 14.4% of total Savings premium income generated by the network, in the amount of EUR 197 million, contracted by 47% compared with 2000.
International operations The Portuguese subsidiaries (Global and Global Vida) and the Group’s operations in Argentina and Brazil contributed EUR 456 million to premium income for 2001. This represented an increase of 272% compared with 2000, including organic growth of 21.6%.
In Portugal, premium income generated by Global and Global Vida totalled EUR 133.2 million, up 18.6% on 2000. For the first time, personal insurance premium income represented over 50% of the total.
Savings Pensions Personal Loan Health Property Total In EUR millions risk insurance insurance damage
Argentina and Others 14.5 – 1.4 – – – 15.9 1 – Caixa Seguros was consolidated in the second half of 2001.
BRL millions Market segment 2nd half 2001 2nd half 2000 Change (provisional classification)
Personal risk 65.68 57.72 +13.8% Loan insurance 139.24 127.97 +8.8% Non-life 112.62 89.83 +25.4%
Acquisition and administrative expenses, which include commissions paid to referral agents, increased by 5.9% (6%, excluding Brazil). Commissions, representing 68% of this item, rose by 2.3%, as growth in assets under management more than offset the fall in premium income.
Excluding Brazil, total administrative expenses analysed by function in the profit and loss account increased by 3.4% to EUR 445.6 million. In addition to business acquisition and administrative costs, this amount includes claims handling and investment management expenses, as well as other underwriting expenses.
Consolidated shareholders’ equity grew by 11.2% to EUR 4,399.2 million at 31 December 2001 from EUR 3,957.6 million one year earlier.
SOLVENCY MARGIN The minimum solvency margin required under French insurance regulations is covered 2.9 times, taking into account unrealised gains and subordinated debt, and setting aside the Brazilian operations. Excluding unrealised gains, the coverage rate is 109%.
CHANGE IN CONSOLIDATED INVESTMENTS AND PORTFOLIO MANAGEMENT At 31 December 2001, the Group’s total investment portfolio had a book value of
EUR 135.8 billion (EUR 135.1 billion excluding Brazil). The book value of the investment portfolio rose by 8.9% (8.4% excluding Brazil) between 31 December 2000 and the 2001 year-end. The estimated market value, including unrealised gains of EUR 9.6 billion, was EUR 145.4 billion.
Based on book values, the investment structure was largely unchanged. Bonds accounted for 76% of the year-end portfolio, equities 19%, property 3% and other investments 2%.
PREMIUM INCOME In individual insurance, the sharp 58% decline in sales of unit-linked policies was offset by growing demand for non-unit-linked products. Growth in premium income from group policies was driven by the sale of major pension and early-retirement policies.
Demand remained strong for Poste Avenir, both as a stand-alone product and as an underlying investment for the Garantie Multi-Options (GMO) unit-linked product.
The change in premium income from the whole-life insurance component of loan insurance reflects the fact that CNP Assurances acts as co-insurer for loan insurance written for Crédit Agricole. Growth in premium income from group pension business was attributable to higher sales of group pension products.
Ecureuil Vie’s premium income contracted by 11% to EUR 5,709 million. Sales of Initiatives Transmissions remained strong, generating premium income of EUR 3.6 billion. The new Nuances 3D unit-linked product was favourably received by the market, but failed to overcome the general loss of enthusiasm for unit-linked products among savers.
Net profit for the year stood at EUR 99.1 million, an increase of 18.2% on 2000.
CNP IAM contributed EUR 1,193.8 million to consolidated premium income and EUR 33.5 million to consolidated net profit.
A. Tools and procedures to forecast changes in outstanding commitments and their coverage The CNP Group has established management information systems designed to ensure that it fulfils the commitments given to shareholders. These commitments fall into two broad categories: – to increase return on equity,
These management information systems: – roll down Group objectives to the level of the individual businesses; – track the progress made by each business in meeting these objectives, in order to allow any corrective action to be taken on a timely basis; – analyse the components of profit, embedded value and new business.
Budgets and business plans provide the basis for analysing the components of profit, assessing forecast profitability and measuring the impact of product decisions on future profits.
The results of the detailed analyses are consolidated by type of risk according to a central scenario based on the assumption that conditions in the financial markets will remain stable and that the Group will hold onto its market shares. Alternative scenarios are also used, to assess the sensitivity of earnings to changes in premium income, conditions on the financial markets and policyholder behaviour.
B. Characteristics of commitments towards policyholders CNP Assurances’ commitments towards policyholders differ depending on the type of policy: Savings products: primarily financial commitments
Savings products fall into two broad categories: • Non-unit-linked products offering a guaranteed rate of return plus dividends. The yield guarantee may be given for a fixed period (generally, 8 to 10 years) or for the remaining lifetime of the insured. At the request of the client, the insurer is required to pay out the guaranteed capital, regardless of the prevailing market conditions.
– contracts offering a higher fixed rate of return (generally 75% of the TME rate) over a maximum of eight years,
The key method of managing commitments related to savings products consists of match funding liabilities with assets of the same duration.
The CNP Group has drawn up risk selection and reinsurance policies and monitors statistical data concerning insured populations and related loss ratios.
Based on the results obtained, the level of technical reserves is considered adequate.
C. Coverage of commitments The CNP Group’s investment strategy for each portfolio is based largely on the results of asset/liability simulations. One of the key requirements of the investment strategy is to ensure that CNP is able to fulfil its commitments towards policyholders at all times, while also optimising asset allocation and investment performance.
2 – Equities risk The Insurance Code requires insurers to set up a liquidity risk reserve if the aggregate market value of positions valued according to article R. 332.20 of the Code is less than their book value. This rule mainly applies to equities, mutual funds and property investments.
Assuming that the prices of all the equities and equity fund units held in the portfolio tracked the CAC 40 index, as of 31 December 2001, CNP Assurances had sufficient unrealised gains to withstand a fall in the CAC 40 index to 3,432 points (representing the “break-even point”). Ecureuil Vie had sufficient unrealised gains to withstand a fall in the index to 4,043 points. Including property assets, the CAC 40 would have to fall even further before CNP Assurances would be required to set funds aside in a liquidity risks reserve.
Asset/liability simulations are carried out using proprietary software that takes into account the specific characteristics of the life insurance business. The simulations are based on a certain number of typical interest rate scenarios. In addition, a large number of scenarios are generated at random to measure the statistical dispersion of results.
2 – Exposure to an increase in interest rates The CNP Group actively manages the exposure of both assets and liabilities to an increase in interest rates.
– Unit-linked policies include contractual clauses limiting or banning transfers between portfolios in the case of an unfavourable change in market conditions.
– The duration and level of yield guarantees is limited—through the development of products offering guaranteed yields adjusted at annual intervals—thereby allowing asset managers to reduce the weighting of long-term bonds in the portfolios managed.
In the case of a sharp rise in interest rates, to above certain trigger points, the hedges acquired by CNP would generate additional revenues corresponding to the difference between the trigger rate and actual long-term interest rates on the financial markets, thereby improving the profitability of the hedged assets.
– property damage (including damage to buildings used in the business, investment property, information systems hardware and software),
The cover taken out and the level of self-insurance are determined according to the type of business, the size and the claims experience of the main Group entities.
The new agreement testifies to the three partners’ commitment to offering COFIDIS and Banque COVEFI customers a high level of protection against the financial consequences arising from the incidents of daily life, including unemployment, temporary and permanent disability and death.
It provides the framework for the continuation of a successful partnership built on synergies, and also for an extension of the partners’ joint operations.
CIFD, the parent company of the Crédit Immobilier de France Group, and CNP Assurances have signed a new five-year partnership agreement in the area of loan insurance, covering the period from 1 January 2002 to 31 December 2006.
CNP offers the Crédit Immobilier de France network and its customers a comprehensive range of insurance products, with the shared aim of offering the best possible cover at the lowest cost.
The partnership with these three mutual insurers, with a total of 70,000 members, represents annual premium income of EUR 36 million. The products are subsidised by the government, making them particularly attractive to war veterans and the renewal of the partnership opens up promising development prospects for the Companies partnership centre, in the area of long-term care insurance as well as in other areas.
Through its partner networks, CNP Assurances is building sales of personal risk products, including supplementary health insurance, whole-life insurance and emergency assistance products. These products will help to refresh the client age pyramid and help the networks to develop long-term insurance relationships with their clients. They also provide an opportunity for CNP to extend to individual insurance products the expertise acquired in the area of group insurance.
CNP Assurances entered the Brazilian market in July 2001 and is now focusing on deploying its expertise to develop its local subsidiary, Caixa Seguros, alongside the Caixa Econômica Federal network, the second largest banking network in a high potential market.
The Group’s financial goals include further increasing embedded value, achieving 10% growth in consolidated net profit before non-recurring items in 2002 and maintaining a similar rate in the years to come.
For the first time this year, shareholders will be asked to formally approve the consolidated financial statements for the year ended 31 December 2001.
The financial statements of the Company and the Group for the year ended 31, December 2001, the review of CNP Assurances’ financial position, business and results for the year and the other information prescribed by law are presented in a “reference document” that has been filed with the Stock Exchange authorities (“COB”).
The Company accounts show a net profit for the year of EUR 573,915,502.82 versus EUR 323,641,390.52 in 2000. Including unappropriated income brought forward from 2000, in the amount of EUR 161,997.84, total profit to be appropriated amounts to EUR 574,077,500.66.
The recommended dividend represents a payout rate of 36%. The dividend will be paid in cash as from 7 June 2002.
The new agreements described in the Auditors’ special report, which were authorised in 2001 by the Supervisory Board, consist of housekeeping addenda to the framework agreement between CNP Assurances and the Caisse d’Epargne Group and the service agreement between CNP Assurances and Ecureuil Vie. They concern the transfer of shares in Ecureuil Vie by CNCEP to Compagnie Financière Eulia, the holding company set up jointly by Caisse des dépôts and the Caisse d’Epargne Group.
Election or re-election of eight members of the Supervisory Board and renewal of the appointment of one of the censors (6th to 14th resolutions)
• Antonio Borges (Vice-Chairman and Managing Director of Goldman Sachs International).
The Supervisory Board will then elect a Chairman and Vice Chairman, and renew the appointment of the members of the Executive Board whose term also expires at the Annual General Meeting.
Renewal of the authorisation given to the Executive Board to trade in the Company’s shares. Maximum purchase price and minimum resale price: EUR 651 and EUR 15 (15th resolution)
The purpose of this resolution, tabled at each Annual General Meeting, is to renew the eighteen month authorisation given to the Executive Board by the shareholders at the 6 June 2001 Annual General Meeting, to buy back the Company’s shares. The resolution sets the maximum purchase price at EUR 651 per share and the minimum resale price at EUR 15. The authorisation is designed to allow the Company to implement the share buyback programme described in the information memorandum approved by the French Stock Exchange authorities (“COB”).
Share buybacks would be carried out primarily to stabilise the Company’s share price, as allowed under stock market regulations.
The Executive Board is seeking a 38-month authorisation to grant stock options exercisable for shares representing no more than 0.3% of the company’s capital. The options would be exercisable within a maximum of six years from the date of grant. The option plan would be governed by articles L. 225-177 et seq. of the Commercial Code.
The option exercise price would be set at an amount equal to 95% of the average prices quoted for the Company’s shares over the 20 trading days preceding the date of grant (options exercisable for newly-issued shares) or 95% of the average price paid for the CNP Assurances shares held by the Company for allocation on exercise of the options (options exercisable for existing shares), in accordance with articles L. 225-208 and L. 2205-209 of the Commercial Code.
No option grants would be made during the ten trading days preceding and following publication of the annual financial statements of the Company and the Group.
The Auditors have prepared a special report on the proposed establishment of stock option plans, as requried by article L. 226177 of the Commercial Code and article 174-19 of the Decree of 23 March 1967. This report will be read out at the Special General Meeting.
New authorisation to be given to the Executive Board to carry out employee rights issues (17th resolution)
In connection with the introduction of new French legislation governing employee savings plans, the Company has reviewed the opportunities available to enhance the plans put in place within the CNP Assurances Group.
The authorisation to carry out employee rights issues, coupled with the stock option plans referred to above, would provide the Company with share-based incentive plans that will help to promote staff loyalty, while reaping the full benefits of the newly-introduced exemptions from corporate income tax and payroll taxes.
The 17th resolution amends and replaces the earlier authorisation given to the Executive Board at the Special General Meeting of 6 June 2000 to issue shares to participants in the CNP Group employee savings plan. The main changes are as follows.
– For employee rights issues carried out under a voluntary employee savings plan (“PPESV” plan), the maximum discount will be increased to 30%.
The following amendments are based on the provisions of the “NRE” Act of 15 May 2001: – Insertion of clauses allowing the Company to identify holders of bearer shares carrying voting rights at General Meetings, by obtaining from the bank or broker acting on behalf of nonresident shareholders full information about the ultimate holders of the shares, including their name, nationality and the number of shares held (articles 11.1 and 34.3).
– Insertion of a stipulation requiring the consolidated financial statements to be presented to the Annual General Meeting for approval (articles 20.4 and 35.2).
– Amendment setting the maximum number of members of the Supervisory Board at 18 (article 22.1).
– Insertion of a clause allowing the Supervisory Board to hold certain meetings by videoconference, subject to compliance with the applicable laws and regulations (articles 26.2 and 26.3).
– Insertion of a clause allowing shareholders to participate in and vote at General Meetings by videoconference or by any other telecommunication medium allowing shareholders to be identified, subject to compliance with the applicable laws and regulations (article 34.4).
Lastly, following the incorporation of the French Companies Act into the new Commercial Code, all references to the Companies Act made in the Articles of Association need to be replaced with the corresponding references of the Commercial Code.
Ownership structure The following shareholders owned over 5% of the Company’s capital as of
Caisse des dépôts et consignations 50,582,880 36.88% 37.05% Sopassure (holding company owned jointly by La Poste and the Caisse d’Epargne Group) 49,191,783 35.87% 35.95%
of certain personal objectives set at the beginning of each year. The total remuneration package of Executive Board members is set by the Supervisory Board based on the recommendations of the Remunerations Committee.
The total remuneration paid to members of the Executive Board in 2001—in respect of their executive functions and as officers of the Company—was as follows: Gilles Benoist, President: EUR 370,6271 including variable remuneration2 of EUR 77,749
Jean-Pierre Walbaum3: EUR 175,9401 including variable remuneration2 of EUR 0 1 - Gross taxable remuneration. 2 - Variable remuneration for 2000 paid in 2001. 3 - Jean-Pierre Walbaum joined the Executive Board on 15 March 2001.
– Fees allocated to members designated by Sopassure: Martin Vial1, 2, Patrick Werner, Séverin Cabannes, Daniel Caille, Charles Milhaud2 and Philippe Wahl1: EUR 85,400, paid in full to Sopassure.
– Fees allocated to the representative of Compagnie suisse de réassurances, Michel Liès: EUR 9,150, paid in full to Compagnie suisse de réassurances.
– Fees allocated to Jean-Baptiste Le Corre: EUR 3,050, paid in full to MGEN.
– Fees allocated to Jean-Jacques Doaré: EUR 15,250, paid in full to the CNP EmployeeShareholder Association (ADPA-CNP).
The Chairman of the Supervisory Board, Edmond Alphandéry1, 2, does not receive any directors’ fees. His remuneration in respect of his functions with CNP Assurances and CNP International amounts to EUR 152,448.15.
The fees awarded by shareholders to the Supervisory Board represent attendance fees and their payment depends on the attendance rate of members of the Supervisory Board at meetings of the Board and its specialist committees, where applicable.
Censors Fees awarded to the censors for 2001 were as follows: Jean Lecointre: EUR 12,200; Bernard Comolet: EUR 15,250; Jean-Louis de Mourgues: EUR 15,250.
Directorships and functions within the CNP Group (controlled companies within the meaning of art. L. 233-16 of the Commercial Code)
– CNP Caution (SA): permanent representative of CNP Assurances on the Board of Directors
Representative of CNP Assurances legal manager, of: • Société Foncière de la CNP (SCI) • Société civile du 136, rue de Rennes (SCI) • Société civile immobilière de la CNP (SCI) • Société immobilière de construction et d’acquisition de la CNP-SICAC (SCI) • CNP Immobilier (SCI) • Compagnie immobilière de la CNP-CIMO (SCI) • Vendôme Europe (SCI)
– Gimar Finance (SCA): permanent representative of CNP Assurances on the Supervisory Board
• Member of the Executive Committee of the Caisse des dépôts Group
Jean-Paul MARCHETTI – CNP Assurances (French public limited company): member of the Executive Board –
– CNP International (SA): permanent representative of CNP Assurances on the Board of Directors
– Investissement Trésor Vie (SA): permanent representative of CNP Assurances on the Board of Directors
– Assurposte (SA): permanent representative of CNP Assurances on the Board of Directors
– Filassistance International (SA): permanent representative of CNP Assurances on the Board of Directors
– SOGESTOP G (SA): permanent representative of CNP Assurances on the Board of Directors
“Fondé de pouvoirs” (legal representative) of: • CIMO (SCI) • SCI de la CNP (SCI) • SICAC (SCI) • Société foncière de la CNP (SCI) • Société civile du 136, rue de Rennes (SCI)
– Locindus (French public limited company): permanent representative of CNP Assurances on the Supervisory Board
– CDC IXIS Italia Holding (SA): member of the Supervisory Board
– Société forestière de la CDC (SA): permanent representative of CNP IAM on the Board of Directors
– CNP Assur Pierre (Sicav): Chairman of the Board of Directors
– GPM Assurances (SA): member of the Supervisory Board (up to 5 October 2001)
– CNP Caution (SA): permanent representative of CNP IAM on the Board of Directors
– SOGESTOP I (SA): permanent representative of CNP IAM on the Board of Directors
– Gespré (SA): permanent representative of CNP Assurances on the Board of Directors
– France Secours International Assistance (SA): permanent representative of CNP IAM on the Supervisory Board
Representative of CNP IAM joint legal manager, of: • La Daille Soleil (SC) • Belle Plagne (SC) • Méribel Soleil (SCI) • Avoriaz Soleil (SCI) • Alpe-d’Huez Soleil (SC)
– CEGI (SA) (Cie Européenne de Garanties Immobilières): permanent representative of Financière CEGI on the Board of Directors
– Surassur (Luxembourg): permanent representative of SOGECCEF on the Board of Directors
– CNP Assurances (French public limited company): permanent representative of Sopassure on the Supervisory Board
– Libertés et solidarité (Sicav investment fund): Chairman of the Board of Directors
– CNP Assurances (French public limited company): permanent representative of CDC on the Supervisory Board
– Club Méditerranée (French public limited company): member of the Supervisory Board
– CDC Finance-CDC IXIS (SA): President of the Executive Board – Director, Central Functions
– Sogeposte (SA): permanent representative of CDC Finance-CDC IXIS on the Supervisory Board
– CDC IXIS Capital Markets (SA): Chairman of the Supervisory Board
– CDC IXIS Securities (SA): permanent representative of CDC Finance-CDC IXIS on the Supervisory Board
– CDC IXIS Asset Management (SA): Vice-Chairman of the Supervisory Board, permanent representative of CDC Finance-CDC IXIS on the Supervisory Board
– CDC IXIS Private Equity (SA): permanent representative of CDC Finance-CDC IXIS on the Board of Directors
– CDC IXIS Immo (SA): permanent representative of CDC Finance-CDC IXIS on the Supervisory Board
– SPID (SA): permanent representative of CDC Finance-CDC IXIS on the Board of Directors
– CNCEP (SA): permanent representative of CDC on the Supervisory Board
– CDC IXIS Financial Guaranty Holding (SA): permanent representative of la CDC on the Supervisory Board
– CDC RD (SA): permanent representative of Sodeve on the Board of Directors (up to December 2001)
– CDC Holding Finance (SA): Chairman of the Board of Directors
– CDC Finance CDC IXIS (SA): member of the Executive Board, Managing Director, Director CDC Support and Management
– CDC IXIS Capital Markets (SA): Vice-Chairman of the Supervisory Board
– CDC IXIS Financial Guaranty Holding (SA): permanent representative of CDC FinanceCDC IXIS on the Supervisory Board
– CDC IXIS Financial Guaranty Europe (SA): permanent representative of CDC IXIS Financial Guaranty on the Supervisory Board since
– CDC IXIS Asset Management (SA): Chairman of the Supervisory Board
– CDC IXIS AM Deutschland (SA) (Germany): director (up to 30 January 2002)
– CDC IXIS Private Capital Management (SA): Vice-Chairman of the Supervisory Board
– CDC IXIS Italia Holding (SA): Vice-Chairman of the Supervisory Board
– Ecureuil Gestion (SA): permanent representative of CDC Finance-CDC IXIS on the Supervisory Board
– Efiposte Gestion (SA): permanent representative of Efiposte (SA) on the Supervisory Board
– Crédit Logement CL (SA): permanent representative of La Poste on the Board of Directors
– Elanciel Euro Poste (Sicav investment fund): Chairman of the Board of Directors
– Sté de participation Provence Alpes Corse et Réunion: Chairman of the Board of Directors
– Holassure (SA): permanent representative of CNCEP on the Board of Directors
– Banque des îles Saint-Pierre-et-Miquelon: permanent representative of SPPACR on the Board of Directors
– Banque de la Réunion: permanent representative of SPPACR on the Board of Directors
Philippe WAHL – CNCEP (SA): Managing Director and member of the Executive Board
– CNP Assurances (French public limited company): member of the Supervisory Board
– Ecureuil Assurances IARD (SA): Chairman of the Board of Directors
– Ecureuil Gestion (SA): Chairman and member of the Supervisory Board
– CDC IXIS Asset Management (SA): permanent representative of CNCEP on the Supervisory Board
– Alliance Entreprendre: permanent representative of Ecureuil Participation on the Board of Directors
– The Mercantile & Generali Re Insurance Co. Ltd (UK): director
Alexandre LAMFALUSSY – CNP Assurances (French public limited company): member of the Supervisory Board
Jean-Jacques DOARÉ – CNP Assurances (French public limited company): member of the Supervisory Board
Bernard COMOLET – Caisse d’Epargne Ile-de-France Paris (SA): President of the Executive Board
– SOGECCEF (SA): permanent representative of CE Ile-de-France on the Board of Directors
– Groupement d’achats des Caisses d’Epargne (SA): permanent representative of CE Ile-de-France Paris on the Board of Directors
– Ecureuil Dynamique (Sicav investment fund): Chairman of the Board of Directors
– Le Livret Portefeuille (Sicav investment fund): permanent representative of CNCEP on the Board of Directors
– BP Obli Première (Sicav investment fund): Chairman of the Board of Directors
CNP Assurances has been publishing its embedded value since the autumn of 1999. The calculations are performed with the assistance of B & W Deloitte, who certifies the methods used and the results. The embedded value of an insurance business corresponds to the sum of revalued net assets (NAV) and the discounted present value of in-force business, less the cost of the capital representing the solvency margin.
The main assumptions used in 2000 were as follows: – bond yield: 5% OAT; – equities yield: 7% (dividends plus capital gains); – discount rate: 8.2%; – 25% of the solvency margin covered by subordinated debt; – treatment of top-up premiums: primarily included in new business; – operating expenses: increase in unit costs in line with inflation (1.5% per year); – corporate income tax rate: 36.4% in 2001, 35.4% in 2002; – tax credits: 15%.
Consolidated financial statements Consolidated balance sheet 31/12/01 31/12/2000 31/12/1999 31/12/2000 31/12/1999 In EUR millions Pro forma Pro forma Published Published
Investments held by other Group companies 12,598.6 12,474.1 8,197.2 12,474.1 8,197.2 Investments in associated companies 642.2 604.6 583.1 Assets held to cover linked liabilities 187.3 176.2 44.5 391.3 257.5 Total investments 135,780.0 124,663.3 110,352.3 124,442.2 110,148.0
Reinsurers’ share of technical reserves 3,261.9 2,868.2 2,473.6 2,868.2 2,473.6 Debtors resulting from insurance and reinsurance transactions 1,943.0 1,485.0 1,814.6 Cash at bank 160.8 259.2 194.1 Other debtors 739.6 476.3 318.6 1,958.7 2,132.3 Other assets 179.3 134.0 137.6 389.8 331.9
Consolidated profit and loss account 31/12/01 31/12/00 31/12/99 31/12/00 31/12/99 Life Non-life Other Total Pro forma Pro forma Published Published
Reinsurance result (1.9) (9.2) (11.1) (7.4) (11.0) 19.8 14.9 Expenses from other businesses (21.5) (21.5) (15.1) (16.3)
Operating profit 738.9 32.1 17.9 788.9 766.2 683.4 666.9 580.4 Other income and expenses (0.1) (3.4) (0.2) Exceptional items 2.6 0.2 10.5 (3.0) 10.6 Corporate income tax (116.6) (173.2) (125.5) (168.8) (122.4) Net profit of fully-consolidated companies 674.8 589.8 568.2 495.1 468.6 Income from associated companies 10.0 7.8 2.3 21.3 14.3 Amortisation of goodwill (16.2) (7.0) (7.0) (7.0) (7.0) Consolidated net profit before minority interests 668.6 590.6 563.5 509.4 475.9 Minority interests 84.3 62.7 58.5 42.8 40.7
Note to the consolidated financial statements NOTE 1 - SIGNIFICANT EVENTS OF THE YEAR
The acquisition was completed on 6 July 2001 at a price of EUR 537.2 million, and the company has been consolidated since 1 July 2001.
As from April 2001, CNP Assurances carried out several subordinate debt issues raising a total of EUR 400 million. The subordinated notes are quoted on the Luxembourg market.
A EUR 18 million provision has been recorded for impairment in value of assets under management, to take account of the possible consequences of the financial crisis in Argentina.
1.7 – Impact on the 2001 tax charge of the rollover of exceptional gains realised in prior years
The difference between the “normal” capital gains planned to be realised in 1999 and 2000 and total realised gains, including the exceptional profit derived from the sale of shares in connection with tender offers, was treated as non-recurring profit in the accounts for those years.
Deferred taxes resulting from the roll over of these exceptional gains were originally provided for at the standard rate. In 2001, the provision was adjusted to reflect the fact that the gains now qualify for taxation at a reduced rate. The resulting tax benefit of EUR 56 million has been recorded in the 2001 financial statements as a non-recurring profit. The impact of these exceptional gains in 1999, 2000 and 2001 on the consolidated financial statements can be summarised as follows: NOTE 2 - NEW CONSOLIDATION STANDARDS The new standards applicable to the consolidated financial statements of insurance companies introduced in Government order dated 17 January 2001 have been adopted with effect from
– the capitalisation reserve, which was previously shown under technical reserves, is now included in shareholders’ equity and movements on the reserve are eliminated from the profit and loss account.
The consolidated financial statements include all companies that are at least 20%-owned by CNP Assurances (Note 4.1), with the exception of entities whose shares are held in investment portfolios qualified as admissible assets or assets held to cover linked liabilities and that are not material in relation to the Group as a whole. The main non-consolidated entities are investment funds and partnerships set up to hold and manage rental properties.
All consolidated companies have a 31 December year-end, with the exception of the Argentinean companies whose financial year ends on 30 September.
Outward and inward reinsurance transactions are recorded and eliminated in the Underwriting Year.
3.2 – SHAREHOLDERS’ EQUITY Amounts credited directly to shareholders’ equity in application of tax rules or insurance accounting standards are treated as follows.
– The capitalisation reserve, which was reclassified under technical reserves between 1992 and 2000, is now maintained in shareholders’ equity.
– The above restatements have no impact on the amounts attributable to policyholders or on the calculation of deferred taxes.
Exceptionally, the provisions for permanent impairment in value set up in 1995 in application of the new insurance accounting standards (Decree of 8 June 1994 and Government order of 20 June 1994) were charged to reserves at 1 January 1995, in accordance with the recommendations of the French National Accounting Board (Conseil national de la Comptabilité).
– Investments intended to cover linked liabilities are marked to market at each period end and the corresponding technical reserves are adjusted accordingly. The mark-to-market method is also applied in the consolidated financial statements.
– Quoted securities are valued at their closing price on the last trading day of the year.
– Units in SICAV and FCP investment funds are valued at the last published selling price for the year.
– Properties and shares in unquoted property companies are valued based on five-yearly independent valuations performed by a firm of surveyors recognised by the regulatory authorities (Commission de Contrôle des Assurances). In the period between two five-yearly valuations, realisable values are estimated annually by a firm of surveyors.
• Properties acquired since 1 January 1982: residential and office properties are depreciated over a period of 50 years and warehouses are depreciated over 15 years.
• Provisions are booked to cover the cost of major repairs in accordance with the estimates contained in the ten-year plan drawn up when the property is delivered or at the end of the previous ten-year period.
• The characteristics of the investment no longer correspond to market demand with the result that the rate of return is permanently impaired.
Premiums and discounts, corresponding to the positive or negative difference between the redemption price of securities and their cost excluding accrued interest at the date of acquisition, are amortised over the residual life of the securities (Decree of 28 December 1991). This method is applied to all portfolios. Amortisation is calculated by the yield-to-maturity method for fixed rate securities and by the straight-line method for floating rate securities.
A provision is booked at the period end in cases where there is a risk that the issuer of the securities will be unable to honour its commitments in terms of either the payment of interest or the repayment of principal.
Capital gains and losses on sales of investments are calculated by the FIFO method applied as if all investments were held in the same portfolio, in accordance with insurance accounting standards.
Capital gains and losses on shares sold in connection with public tender offers are calculated by reference to either: – the bidder’s average share price for the period between the date on which the offer is launched and the date on which the target’s shares are exchanged for shares in the bidder, or
Transactions denominated in foreign currencies are converted into euro at the year-end exchange rate. Conversion gains and losses are netted off and a provision is recorded for any net conversion loss.
The CNP Group uses various financial instruments traded over-the-counter or on organised markets, for the sole purpose of hedging its commitments. The cost of these instruments is amortised over the life of the underlying assets.
– Premiums not yet written on group policies including whole-life cover are recorded in the profit and loss account based on an estimate of the portion of the premium earned during the period.
– Premium income is adjusted to exclude the estimated amount of cancelled premiums, the final amount of which is determined following a review of premiums written and not yet written. Premium cancellations are estimated for the main products based on the cancellation rate observed over the previous year.
Mathematical reserves for investment insurance contracts correspond to the difference between the present value of the respective commitments of the insurer and the insured.
Life premium reserves are recorded on the basis of a discount rate that is equal to or less than a conservative estimate of the future yield on the related admissible assets.
A reserve is booked to cover policy administration expenses not covered by the premium loading or by deductions from investment income made in accordance with the policy terms.
Mathematical reserves for unit-linked policies are determined based on the value of the underlying portfolios. Unrealised capital gains and losses arising from the mark-to-market of the underlying investments are recorded in the profit and loss account in order to neutralise the impact of movements in mathematical reserves.
3.5 – DISABILITY, ACCIDENT AND HEALTH INSURANCE Premium income is stated net of taxes and cancelled premiums.
– changes in unearned premium reserves (corresponding to the portion of written premiums not earned during the period).
An escalating risks reserve is booked to cover timing differences between the insured period and the “financing” period, corresponding to the period of payment of the related insurance premiums.
3.7 – ACQUISITION COSTS AND OPERATING EXPENSES Underwriting expenses are accounted for in accordance with cost accounting principles: – claims handling and benefit payment expenses include the costs of the departments responsible for settling claims and endowments, processing surrenders and paying annuities; – business acquisition costs include all selling, logistics and administrative expenses incurred in connection with the writing of new business; – administrative expenses include all routine costs of managing in-force business; – investment expenses include internal and external portfolio management costs, as well as interest and other financial expenses; – other underwriting expenses correspond to overheads that cannot be allocated on a rational basis to the other cost accounting sections.
Expenses are accounted for and allocated as follows: – operating expenses are initially accounted for by type before being re-allocated according to cost accounting principles; – expenses that relate directly to a cost accounting section are allocated in full to the section concerned.
CNP Assurances files a consolidated tax return with eleven of its subsidiaries, CNP IAM, Préviposte, Investissement Trésor Vie (ITV), CNP International, CNP Caution, Sogestop C, Sogestop H, Sogestop G, Carrés Bleus, Prévimut and Cicoge SA (a property investment company).
Deferred taxes are recognised for temporary differences between the book value of assets and liabilities and their tax basis.
Deferred tax assets and liabilities expected to reverse in the same period and governed by similar tax rules are netted off at the level of each taxable entity or tax group.
Deferred tax assets corresponding to tax loss carryforwards are not recognised unless their recovery is considered highly probable. Net deferred tax assets are not recognised unless their recovery is considered reasonably possible. Net deferred tax assets that are not expected to be recovered in the foreseeable future are not recognised.
Name Consolidation Country % voting % Business Siren No method* rights interest
CNP IAM IG France 100.00% 100.00% Insurance 383 024 189 CNP International IG France 100.00% 100.00% Reinsurance 348 768 698 Investissement Trésor Vie IG France 100.00% 100.00% Insurance 347 932 436 Préviposte IG France 100.00% 100.00% Insurance 341 736 916 Sicac IG France 100.00% 100.00% Property 323 707 968 CNP Immobilier IG France 100.00% 100.00% Property 380 371 591 Assurbail IG France 99.07% 99.07% Property Leasing 338 767 148 CNP Seguros de Vida IG Argentina 76.47% 76.47% Insurance Global IG Portugal 75.74% 75.74% Insurance Global Vida IG Portugal 73.90% 73.90% Insurance Caixa Seguros** IG Brazil 50.75% 50.75% Insurance Caixa Assessoria** IG Brazil 99.99% 50.74% Services Caixa Vida e Previdência s/a** IG Brazil 99.00% 50.24% Insurance Ecureuil vie IG France 50.00% 50.00% Insurance 348 798 828 Caixa Capitalização s/a** IG Brazil 51.00% 25.88% Insurance Assurposte IP France 50.00% 50.00% Insurance 419 901 269 Provincia Seguros de Vida EQ Argentina 40.00% 40.00% Insurance Prévisol Seguros de Vida EQ Argentina 29.87% 29.87% Insurance Prévisol AFPJ EQ Argentina 29.84% 29.84% Insurance Prévisol Seguros de Retiro EQ Argentina 29.82% 29.82% Insurance CDC IXIS Asset Management EQ France 20.00% 20.00% Finance Co. 329 450 738 Carivita EQ Italy 20.00% 20.00% Insurance *F: Full method.
Breakdown of Caixa Seguros acquisition cost: Total in CNP 50.75% EURm equity
Value of acquired in-force business 99.5 Related tax -33.8 Value of acquired in-force business, net of tax 65.7 33.3
Caixa Seguros goodwill 351.8 *The breakdown of the acquisition cost may be adjusted in 2002.
% Book value Contribution to Contribution to In EUR millions interest of shares consolidated net assets consolidated net profit
INVESTISSEMENT TRESOR VIE 100.00% 22.4 19.3 1.7 PREVIPOSTE 100.00% 125.8 158.7 53.9 SCI CNP IMMOBILIER 100.00% 0.8 (13.8) 1.4 SCI SICAC 100.00% 5.1 22.3 3.3 Proportionaly-consolidated companies
Value of acquired in-force business Caixa Seguros (Brazil) in-force business 99.5 (8.4) (2.7) 88.4
Non-life investments 3,320.1 4,318.4 Life investments 131,817.7 140,383.0 Other businesses 642.2 736.2
Net book value represents cost less provisions for impairment in value, amortisation of premiums and discounts on securities carried at amortised cost and depreciation of property.
Realisation of these gains will give rise to certain entitlements, including for policyholders, and the gains may also be taxable.
The market value of properties has been determined on the basis of valuations performed by independent surveyors, as required under insurance regulations.
The unrealised gains and losses shown in the above tables include minority interests.
Property 2,204.0 1,784.1 1,479.1 Property (unit-linked portfolio) 557.1 492.0 471.4 Property 2,761.1 2,276.1 1,950.5 Equities and equivalents 13,700.9 12,876.2 10,298.7 Convertible bonds 294.4 205.2 194.7 Non-voting loan stock 56.4 56.4 69.3 Variable income securities (unit-linked portfolio) 10,918.6 10,939.3 6,672.2 Fixed income securities (unit-linked portfolio) 24,970.3 24,077.1 17,234.9 Bonds and bond funds 92,206.9 81,017.4 76,038.4 Money-market securities 2,771.9 5,931.7 5,349.6 Asset-backed securities 691.0 220.0 285.1 Fixed income securities (unit-linked portfolio) 1,122.9 1,042.8 1,053.6 Term loans and deposits 1,491.7 1,393.8 1,644.7 Money-market funds 2,855.2 2,470.2 2,239.8 Other assets 393.3 311.0 278.5 Bonds and other fixed income securities 101,532.9 92,386.9 86,889.7 Securities 126,503.2 116,464.0 104,124.6 Investments in non-consolidated companies 61.7 33.3 17.6 Repurchase agreements 2,304.4 1,757.5 420.5 Investments in associated companies 187.3 176.2 44.5 Other investments 2,553.4 1,967.0 482.6
Property 611.2 438.1 400.5 Property (unit-linked portfolio) Property 611.2 438.1 400.5 Equities and equivalents 4,251.6 7,905.8 8,956.4 Convertible bonds 29.9 71.4 95.2 Non-voting loan stock 9.2 9.3 16.0 Variable income securities (unit-linked portfolio) Fixed income securities (unit-linked portfolio) 4,290.7 7,986.5 9,067.6 Bonds and bond funds 3,193.0 2,488.2 2,651.9 Money-market securities 153.5 137.6 172.8 Asset-backed securities 6.2 1.4 4.6 Fixed income securities (unit-linked portfolio) Term loans and deposits Money-market funds 36.9 26.5 8.8 Other assets (11.8) 0.2 Bonds and other fixed income securities 3,377.8 2,653.7 2,838.3 Securities 7,668.5 10,640.2 11,905.9 Investments in non-consolidated companies Repurchase agreements 279.1 504.5 240.7 Investments in associated companies 6.5 Other investments 285.6 504.5 240.7
Property 434.9 388.9 354.2 Property (unit-linked portfolio) Property 434.9 388.9 354.2 Equities and equivalents 11.7 9.1 8.4 Convertible bonds Non-voting loan stock Variable income securities (unit-linked portfolio) Fixed income securities (unit-linked portfolio) 11.7 9.1 8.4 Bonds and bond funds 5.0 26.6 19.1 Money-market securities (7.6) 3.4 Asset-backed securities Fixed income securities (unit-linked portfolio) Term loans and deposits 190.6 187.6 198.0 Money-market funds Other assets Bonds and other fixed income securities 195.6 206.6 220.5 Securities 207.3 215.7 228.9 Investments in non-consolidated companies Repurchase agreements Investments in associated companies Other investments
Property 93.9 95.1 97.9 Property (unit-linked portfolio) Property 93.9 95.1 97.9 Equities and equivalents 0.1 Convertible bonds Non-voting loan stock Variable income securities (unit-linked portfolio) Fixed income securities (unit-linked portfolio) 0.1 Bonds and bond funds Money-market securities Asset-backed securities Fixed income securities (unit-linked portfolio) Term loans and deposits Money-market funds Other assets Bonds and other fixed income securities Securities 0.1 Investments in non-consolidated companies Repurchase agreements Investments in associated companies Other investments
8.1 – Breakdown of insurance and reinsurance debtors 112 Consolidated financial statements
Unearned premium and unexpired risk reserves 5.1 4.5 3.8 Life premium reserves 2,801.4 2,488.9 2,197.8
Policyholders’ surplus reserve 58.5 42.9 23.3 Other technical reserves 370.6 310.0 235.7
Earned premiums not yet written 1,833.0 1,411.7 1,699.7 Other insurance debtors 66.0 36.5 84.0
Policyholders’ surplus reserve 56.1 41.0 23.3 Other technical reserves 370.6 310.0 235.7
LIFE Earned premiums not yet written 1,305.0 997.0 1,300.6 Other insurance debtors 51.3 24.2 68.2
Shareholders’ equity attributable to the Group *The recommended dividend for 2001 amounts to EUR 1.39. The 2000 and 1999 dividends amounted to EUR 1.08 and EUR 0.88 respectively. No dividends are paid on treasury shares.
Changes in shareholders’ equity are based on pro forma shareholders’ equity at 31 December 2000. The adjustments made to published consolidated shareholders’ equity at 31 December 2000 to obtain pro forma shareholders’ equity presented according to the new format are shown in Note 28.
– Change in capital 25.9 (25.9) – Impact of revaluations (4.0) (4.0) (4.0)
Shareholders’ equity attributable to the Group *The 2000 dividend amounted to EUR 1.08 per share. No dividends are paid on treasury shares.
Changes in shareholders’ equity are based on pro forma shareholders’ equity at 31 December 1999. The adjustments made to published consolidated shareholders’ equity at 31 December 1999 to obtain pro forma shareholders’ equity presented according to the new format are shown in Note 29.
– Change in capital 1.7 10.2 11.9 – Impact of revaluations 0.7 0.7 0.7
The increase in deferred taxes is due to the significant gains recorded on shares sold in connection with share-for-share tender offers which will be taxed when the shares received in exchange are sold.
Other provisions for liabilities and charges correspond primarily to provisions for claims and litigation and employee length-of-service awards.
Policyholders’ surplus reserve 262.0 250.5 221.7 Other technical reserves 3,280.4 3,138.2 2,889.6
Earned premiums 1,142.4 1,108.2 1,040.5 Earned premium 1,154.4 1,109.2 1,039.4 Change in unearned premiums (12.0) (1.1) 1.1
Investment income allocated to the technical account 171.4 274.6 340.3 Other underwriting income 0.5 1.8 0.3 Claims expenses (996.8) (977.8) (936.3)
Paid claims and claims handling expenses (973.5) (987.9) (829.5) Change in claims reserves (23.3) 10.1 (106.9)
In EUR millions 31/12/01 31/12/00 31/12/99 2a. Loan guarantees 2b. Securities and other assets purchased under resale agreements 2c. Other commitments related to securities, assets or income 387.0 396.3 848.0 2d. Other commitments given 243.3 173.9 271.5
Employee profit-sharing (6.0) (9.0) (4.7) Investment income transferred to the non-technical account 234.1 238.3 227.1
Turnover 24.0 15.9 20.1 Other operating revenue 7.3 Purchases (0.2) Personnel costs (including profit-sharing) (2.2) (2.1) (2.1) Other operating expenses (10.3) (3.2) (2.9) Taxes other than on income (0.7) (0.6) (0.2) Depreciation and provision expense (8.3) (9.1) (11.1)
20.2 – Premium income by partnership centre The following table presents the breakdown of premium income by partnership centre.
20.4 – Premium income by company Premium income breaks down as follows by company.
Other investment income and expenses primarily correspond to the amortisation of premiums and discounts on fixed income securities, calculated by the yield-to-maturity method.
Other income and expenses correspond to the EUR 18 million provision set aside to cover risks in Argentina, offset by the reversal of provisions for tax reassessments relating to prior years which have been abandoned.
Consolidated profit before non-recurring items and tax and charges to capitalisation reserve 628.4 Theoretical tax charge 228.7 Tax rate differential* (42.1) Tax impact of rollover relief on capital gains (70.0)
Consolidated balance sheet previous format Changes Presentation 31/12/2000 31/12/00 of method changes
Assets 10.1 Investments (non-unit-linked) 109,819.4 1,757.4 Assets held to cover linked liabilities 12,474.1
Liabilities and shareholders’ equity Shareholders’ equity 3,347.6 567.8 Minority interests 590.7 106.2 Subordinated debt 449.6 Gross technical reserves 110,469.6 (674.0) (6.0) Technical reserves for linked liabilities 12,474.1 Provisions for liabilities and charges 298.2 (0.0) Other creditors 4,663.3 (3,662.2)
Liabilities and shareholders’ equity 42.2 3,957.6 Shareholders’ equity 2.1 699.0 Minority interests 449.6 Subordinated debt 109,789.6 Gross technical reserves 12,474.1 Technical reserves for linked liabilities 2.7 300.9 Provisions for liabilities and charges 1,001.1 Liabilities resulting from insurance and reinsurance transactions 2,400.0 Debt securities 8.3 44.1 Bank loans 182.5 1,408.6 Other liabilities 87.5 Deferred income and accrued expenses 20.9 Foreign currency conversion gain
Non-life technical account Changes Presentation previous format 31/12/2000 31/12/00 of method changes
Life technical account Changes Presentation previous format 31/12/2000 31/12/00 of method changes
Acquisition costs and administrative expenses (1,028.9) 0.0 2.0 Other underwriting income and expenses (26.5) (9.5) Other underwriting income 9.5 Reinsurance result 3.6
Employee profit-sharing (9.0) Investment income transferred from the technical account 196.3 42.0
(155.3) 1,108.2 Earned premiums 0.8 (2.6) 274.6 Allocated investment income 73.5 22.1 Change in other technical reserves 68.3 (198.5) Policyholder dividends 0.1 38.4 (187.7) Acquisition costs and administrative expenses (0.3) Other underwriting income and expenses 1.8 Other underwriting income (16.2) Reinsurance result
(9.0) Employee profit-sharing Investment income transferred 238.3 from the technical account 4.5 0.0 658.0 Life operating profit
Other assets 331.9 (194.2) Accrued income and prepaid expenses 2,387.8 (8.1)
Changes in Consolidated balance sheet new format Group structure 31/12/1999 31/12/1999
Liabilities and shareholders’ equity 26.7 3,542.3 Shareholders’ equity 2.0 579.2 Minority interests 449.6 Subordinated debt 101,584.6 Gross technical reserves 8,197.2 Technical reserves for linked liabilities 2.1 255.2 Provisions for liabilities and charges 757.1 Liabilities resulting from insurance and reinsurance transactions 567.6 Debt securities 167.5 481.4 Bank loans 16.8 1,255.9 Other liabilities (0.2) 80.8 Deferred income and accrued expenses 16.2 Foreign currency conversion gain
Gross premium income 15,827.1 (0.0) Allocated investment income 7,740.1 (1,369.8) Investment income transferred to the non-technical account (185.8) 185.8 Mark-to-market gains on assets held to cover linked liabilities 1,195.0 Mark-to-market losses on assets held to cover linked liabilities (52.0) Other underwriting income 6.6 Claims expenses (7,206.9) (0.0) (0.1) Change in technical reserves (9,366.9) 82.7 (64.0)
Policyholder dividends (5,476.0) 0.0 62.7 Acquisition costs and administrative expenses (951.1) 0.0 1.2 Other underwriting income and expenses (45.1) (6.7) Reinsurance result 3.7
Employee profit-sharing (4.7) Investment income transferred 185.8 41.3 from the technical account
Change in Non-life technical account Group structure Ceded business 31/12/1999 Pro forma new format 31/12/1999
(136.3) 1,040.5 Earned premiums (0.8) 340.3 Allocated investment income 0.3 Other underwriting income 6.6 (936.3) Paid claims and change in claims reserves 59.9 (117.5) Change in other technical reserves 42.8 (150.3) Policyholder dividends 38.3 (158.9) Acquisition costs and administrative expenses
Mark-to-market losses on assets (52.0) held to cover linked liabilities 6.6 Other underwriting income 85.2 (7,121.8) Claims expenses 135.9 (9,212.3) Change in life premium reserves and other technical reserves 107.9 (5,305.4) Policyholder dividends 41.6 (908.3) Acquisition costs and administrative expenses
(4.7) Employee profit-sharing 227.1 Investment income transferred from the technical account 0.8 0.0 603.7 Life operating profit
We conducted our audit in accordance with French generally accepted auditing standards. Those standards require that we plan and perform our audits to obtain reasonable assurance that the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made in the preparation of the financial statements, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view of the consolidated assets and liabilities and financial position of CNP Assurances and its subsidiaries at December 31, 2001 and the consolidated results of operations for the year then ended, in accordance with French generally accepted accounting principles.
We also verified the information concerning the Group given in the Report of the Executive Board, in accordance with the professional standards applied in France. We have no comments to make concerning the fairness of this information and its consistency with the consolidated financial statements.
Deferred income and accrued expenses 614,606.7 594,945.9 501,051.4 Foreign currency conversion gains 20,994.3 22,944.6 16,252.0
Assets 2a. Loan guarantees 2b. Securities and other assets purchased under resale agreements 117,174.1 139,170.4 59.7 2c. Other commitments related to securities 264,468.5 257,091.9 491.5 2d. Other commitments given 243,314.6 173,941.9 476.8 3. Securities lodged as collateral by reinsurers 3,182,680.7 2,777,100.2 2,536.0
Earned premiums 14,453.1 24,875.0 34,893.9 Investment income transferred to the technical account 3,528.3 3,824.3 7,610.5 Other underwriting income Paid claims and change in claims reserves (7,037.7) (81,257.9) (41,873.1) Change in other technical reserves (12,250.8) 59,417.2 4,972.9 Policyholder dividends Acquisition costs and administrative expenses (117.8) Other underwriting expenses Change in claims equalisation reserve 3,545.6 (3,545.5)
Premiums 9,016,465.0 8,937,103.0 8,465,237.6 Investment income 3,843,565.9 4,032,005.4 3,652,451.8 Mark-to-market gains on assets held to cover linked liabilities 984,899.1 827,944.2 899,537.2 Other underwriting income 8,958.8 7,805.8 4,209.7 Paid benefits and claims (4,687,464.4) (4,392,911.0) (4,033,290.3) Change in life premium reserves and other technical reserves (2,474,018.5) (3,913,108.6) (4,940,582.7)
Subsidiaries and affiliates Head office Capital Reserves Total Book and retained assets value of % Loans Turnover Profit Dividends
A - Investments with a gross carrying value in excess of 1% of CNP Assurances’ share capital
CICOGE 4, pl. Raoul-Dautry - 75015 37,320 81,627 ND 178,510 100.00% — 11,833 14,704 11,530
CNP IAM 4, pl. Raoul-Dautry - 75015 30,500 387,072 4,594,259 245,595 100.00% — 1,191,839 21,157 0
CNP INTERNATIONAL 4, pl. Raoul-Dautry - 75015 22,875 6,582 99,284 23,325 100.00% — 69,434 2,777 1,418
SCI DE LA CNP 4, pl. Raoul-Dautry - 75015 59,711 31,928 93,476 115,112 100.00% — 3,650 1,876 0
CDC IXIS ITALIA HOLDING 56, rue de Lille - 75007 324,000 ND ND 32,468 10.00% — ND ND 0
GPM ASSURANCES 34, bd de Courcelles - 75017 15,550 1,486 157,234 5,197 33.37% — 26,123 248 0
French affiliates — — — 15,159 — 70,913 — — —
Foreign affiliates — — — 55,318 — — — — —
French subsidiaries — — — 1,827,196 — 138,497 — — —
Foreign subsidiaries — — — 618,501 — 10 — — —
French affiliates — — — 288,273 — 191,207 — — —
Foreign affiliates — — — 76,845 — 16,751 — — —
Earnings per share (in EUR) Profit before tax, depreciation, amortisation and provisions 4.34 3.30 3.34 3.01 2.55
On the extracts from the CNP Assurances statutory financial statements for the years ended 31 December 2001, 2000 and 1999
Year ended 31 December 2001 (free translation of a French language original)
In our capacity as statutory auditors of your Company, we present below our report on regulated agreements.
1 – Agreements authorised during the year Pursuant to article L. 225-88 of the French Commercial Code and article R. 332-7 of the French Insurance Code, we have been duly notified of the agreements for which the prior approval of your Supervisory Board is required.
It does not fall within the scope of our assignment to ascertain the existence of such agreements but rather, on the basis of the information that was supplied to us, to inform you the shareholders of the relevant features of those agreements of which we were informed. It is not our responsibility to express an opinion on the utility or merits of such agreements. Pursuant to article 117 of the French Decree of 23 March 1967, you are asked to form an opinion on the relevance of such agreements for the purpose of approving them.
On 28 June 1995, CNP Assurances and CNCEP signed a Framework Agreement defining the terms of their cooperation in the individual life insurance and savings market through Ecureuil Vie, a joint subsidiary set up in 1988. This agreement was amended through the signature of an addendum on 14 December 2000.
The addendum to the agreement covered by this report was approved by the Supervisory Board on 18 December 2001. It concerns the transfer of Ecureuil Vie shares by CNCEP to Compagnie Financière Eulia (a holding company owned jointly by Caisse des dépôts and the Caisse d’Epargne Group), and has no direct impact on the financial statements of CNP Assurances.
The addendum places on record the replacement on the Board of Directors of Ecureuil Vie, of CNCEP-designated directors by directors designated by Compagnie financière Eulia. Under the terms of the addendum, CNCEP and Eulia jointly guarantee the fulfillment of CNCEP’s obligations under the Framework Agreement.
On 28 June 1995, CNP and CENCEP—renamed CNCEP—signed a Framework Agreement setting out the terms of their partnership in the area of life insurance and savings products, conducted through Ecureuil Vie.
The financial terms of the Framework Agreement are set out in two secondary agreements, including a Service Agreement between CNP Assurances and Ecureuil Vie, which describes the services to be performed by CNP Assurances with respect to the administrative management of the policies written by Ecureuil Vie and the corresponding remuneration.
This new addendum to the Service Agreement covered by this report was approved by the Supervisory Board on 18 December 2001. It concerns the transfer of Ecureuil Vie shares by CNCEP to Compagnie financière Eulia (a holding company owned jointly by Caisse des dépôts and the Caisse d’Epargne Group), and has no direct impact on the financial statements of CNP Assurances.
2 – Agreements approved in prior years which remained in force during the year In application of the French Decree of 23 March 1967 and article R. 332-7 of the French
Addendum to the agreement between CNP Assurances and Caisse Nationale des Caisses d’Epargne et de Prévoyance (CNCEP)
On 28 June 1995, CNP Assurances and CNCEP signed a Framework Agreement defining the terms of their cooperation in the individual life insurance and savings market through Ecureuil Vie, a joint subsidiary set up in 1988. This agreement was amended through the signature of an addendum on 14 December 2000. The financial terms of the Framework Agreement are specified in two secondary agreements.
– A Service Agreement between CNP Assurances and Ecureuil Vie, which specifies the services to be performed by CNP Assurances with respect to the administrative management of the policies written by Ecureuil Vie and the corresponding remuneration, and therefore deal with the financial arrangements between CNP Assurances and Ecureuil Vie.
The main changes to the original Framework Agreement—which do not have any direct impact on CNP Assurances’ financial statements—can be summarised as follows: – the Framework Agreement has been extended for a period of five years from 1 January 2000,
The financial impact on CNP Assurances of the Service Agreement with Ecureuil Vie is summarised below.
This agreement specifies the method to be used to determine the remuneration paid to CNP Assurances for the administrative management of Ecureuil Vie savings and pension products.
This addendum was signed for a period of 5 years, effective from 1 January 2000.
In 2001, CNP Assurances received fees of EUR 70.4 million under the Service Agreement.
Partnership agreement between CNP Assurances, Dexia Crédit Local de France (Dexia CLF) and Sofca
The agreement sets out the methods to be used to share management expenses and to determine the remuneration to be received by each partner, based on their respective tasks and the level of underwriting profit on the business written.
The amounts recorded in CNP Assurances’ accounts in 2000 in respect of this agreement are as follows: – working capital advance of EUR 6.8 million,
CNP Assurances underwrote a perpetual subordinated notes issue carried out by Ecureuil Vie on 15 December 1999. The aggregate face value of the notes, all of which were acquired by CNP Assurances, was EUR 103 million (FRF 674 million).
The interest rate on the notes is 5.595% per year. It is adjustable every ten years at the option of the issuer, on the basis defined in the issue agreement.
Annual interest payments are made only in cases where Ecureuil Vie’s financial statements for the year ended immediately prior to the interest payment date show a book profit. Failing that, or if the amount of book profit is not sufficient, settlement of the unpaid fraction of the interest will be deferred. Deferred interest will bear interest at the nominal annual rate for the period plus 3%.
Interest received by CNP Assurances in 2001 amounted to EUR 5.7 million.
CDC Asset Management Europe receives a fee for its management services, determined as follows: – fixed annual fee per portfolio (except for portfolios invested exclusively in mutual fund units),
– variable fee calculated at a declining rate based on the value of assets under management, with different rates applying according to the type of securities held.
Fees paid by CNP Assurances in respect of 2001 amounted to EUR 11.4 million.
Registered in Paris under no. 341 737 062 APE business identifier code: 660 A
c) Date of incorporation, term The origins of the Company date back to 1850 when Caisses Nationales d’Assurances was founded. CNP Assurances was created in 1959 as a public sector company. It was transformed into a société anonyme on 16 July 1992. It has a 99-year term expiring on 15 July 2086.
d) Corporate purpose The Company’s purpose is to write life insurance and bodily injury insurance business and to hold majority interests in insurance companies.
h) General Meetings of Shareholders To be entitled to attend General Meetings in person or be represented by proxy, holders of bearer shares are required to obtain from the bank or broker that manages their share account a certificate stating that their shares have been placed in a blocked account preventing their sale up to the date of the meeting. This certificate must be delivered to the Company at least five days prior to the date of the meeting.
Shareholders who are unable to attend the meeting in person may give proxy to their spouse or another shareholder or vote by correspondence. Alternatively, they may return the signed form of proxy to the Company without naming a person to represent them. In this case, they will be considered as having given proxy to the Chairman of the meeting who will vote in favour of all resolutions tabled by the Executive Board.
a) Share capital, par value of the shares The Company’s share capital at 31 December 2001 amounted to EUR 548,510,832 divided into 137,127,708 ordinary shares with a par value of EUR 4.
b) c) Financial authorisations The financial authorisations sought by the Executive Board at the Annual General Meeting of 4 June 2002 can be summarised as follows: Employee rights issue (17th resolution)
Five-year authorisation to issue up to EUR 10 million worth of shares to the management and employees of the Group who participate in a CNP Group Employee Savings Plan. The shares may be offered to employees at a 20% discount to the market price, or a 30% discount in the case of shares acquired through a voluntary employee savings plan (“PPESV” plan). The Executive Board may also decide to issue bonus shares to employees to be paid up by the Company or in lieu of the
38-month authorisation to grant stock options to management and key employees, or all employees, of the Group. The options will be exercisable for shares at a 5% discount to market price on the date of grant (or a 5% discount to the average price paid for the shares held in treasury for allocation on exercise of the options). The total number of options granted will not be exercisable for shares representing more than 0.3% of CNP Assurances’ capital. The exercise period will end at the latest six years after the date of grant.
Renewal of the authorisation given at the 2001 Annual General Meeting to carry out a share buyback programme covered by an information memorandum approved by the French Stock Exchange authorities (COB).
The number of CNP Assurances shares that may be held by the Company at any given time will be limited to 10% of the capital. The maximum purchase price of the shares will be set at EUR 55 and the minimum sale price at EUR 15.
1 January 1992 Shares issued in payment for assets 28,500,000 FRF 2,850,000,0001 FRF 4,243,612,960 acquired from CNP EPIC (credit to reserve accounts)
23 April 1993 Issuance of shares for cash 3,170,000 FRF 317,000,0001 FRF 538,900,000 27 October 1994 4-for-1 stock-split 126,880,000 FRF 3,172,000,0002 –
2 – Par value of FRF 25. 3 – Par value of EUR 4.
In October 2000, the signatories of the agreement submitted to the Conseil des Marchés Financiers a plan to reorganise their interests in CNP Assurances, as follows: – acquisition by the Caisse d’Epargne Group of 5.5% of CNP Assurances’ capital from Caisse des dépôts (3%), La Poste (2%) and the French State
• On 23 April 1993, CNP Assurances issued 3,170,000 new shares to Caisse d’Epargne.
• Up to 22 September 1998 the French State, Caisse des dépôts et consignations, La Poste and the Caisse d’Epargne Group together held 99.88% of CNP Assurances’ capital and consequently jointly controlled the Company. Their respective interests were 42.38%,
• Following the transfer of CNP Assurances to the private sector, the French State continued to hold 2.24% of the Company’s capital. A total of 61% of CNP Assurances’ capital is still in the hands of public sector shareholders, including the interests held by Caisse des dépôts et consignations and La Poste.
• Using the authorisation given at the Extraordinary General Meeting of 18 September 1998, the Executive Board decided on the same day to increase the Company’s capital by FRF 245,098,050 to FRF 3,417,098,050, through the issuance of 9,803,922 shares with a par value of FRF 25. The new shares were issued at a price of FRF 153, including a premium of FRF 128, and are in the same class as existing shares. The issue price was determined by reference to the prices at which the shares held by the French State were sold to private sector shareholders and the price spread of FRF 149 to FRF 153 set by the Ministry of the Economy for the CNP Assurances initial public offering.
• On 25 September 2000, the Executive Board decided to use the authorisation given at the Annual General Meeting of 6 June 2000 to carry out an employee rights issue. A total of 443,786 new FRF 25 par value shares were issued on 15 December 2000, ranking pari passu with existing shares. The issue proceeds totalled EUR 11,999,973.44 (FRF 78,714,665.78), including FRF 11,094,650 credited to the capital account and FRF 67,620,015.78 to the share premium account. At 31 December 2000, employees and former employees of the Company held a total of 1,207,896 including shares held through Group savings plans.
• On 19 December 2000, the main shareholders of CNP Assurances—Caisse des dépôts et consignations, La Poste, Caisse d’Epargne Group and the French State—decided to reorganise their interests. The process was completed on 5 January 2001, at which point the respective 18% interests of La Poste and the Caisse d’Epargne Group were held by a joint holding company, Sopassure, which thus owns 36% of the capital of CNP Assurances, the interest of Caisse des dépôts stood at 37% versus 40% prior to the reorganisation and the interest of the French State came to 1.2% versus 1.7%.
• The Executive Board used the authorisation given at the Annual General Meeting of 6 June 2000, to convert the share capital into euros by converting the par value of the shares and rounding up the converted amount to the nearest whole number of euro. The resulting capital increase—from FRF 3,428,192,700 to EUR 548,510,832, divided into 137,127,708 ordinary shares with a par value of EUR 4—was paid up by capitalising reserves.
h) Exceptional events, claims and litigation To the best of the Company’s knowledge, no exceptional events, claims or litigation are in progress or pending that would be likely to have a material impact on the business, results of operations or financial condition of the Company or the Group.
i) Disclosures of interests None of the interests held by CNP Assurances in its portfolios exceeded any legal or statutory disclosure thresholds in 2001.
Earnings per share FRF 13.18 FRF 20.88 FRF 22.32 EUR 4.26 Gross dividend per share FRF 6.30 EUR 1.32 EUR 1.62 EUR 2.085
Number of shares with dividend rights 136,683,922 136,683,922 137,127,708 137,127,708 *Recommended dividend, subject to approval at the 4 June 2002 Annual General Meeting.
Supervisory Board (Subject to approval at the Annual General Meeting of 4 June 2002)
Isabelle Bouillot, deputy Managing Director of Caisse des dépôts et consignations. Elected 18 September 1998.
Robert Allemon, Banking advisor at CDC Ixis. Elected 6 June 2001.
Philippe Wahl, Managing Director of CNCEP. Appointed by the Supervisory Board on 17 January 2001, appointment ratified at the General Meeting of 6 June 2001, re-elected
Jean Bassères, Director General, Public Accounts, Ministry of the Economy, Finance and Industry, representing the French State. Appointed by Government order on 17 August 1998. Appointed by the Supervisory Board on 18 August 1998, appointment ratified at the General Meeting of 18 September 1998. Re-elected 4 June 2002.
Alexandre Lamfalussy, professor at the Louvain Institute of European Studies, Belgium. Elected 6 June 2000
Jean-Jacques Doaré, Chairman of the Supervisory Board of the CNP Assurances corporate mutual fund. Elected 3 June 1999
Jean Lecointre, honorary Vice-President of the Paris Chamber of Commerce and Industry. Elected 9 December 1992, re-elected 30 June 1997 and 4 June 2002.
Bernard Comolet, President of the Executive Board of Caisse d’Epargne Ile-de-France Paris, elected 18 September 1998.
Statement by the person responsible for the reference document “To the best of our knowledge, the information disclosed in this reference document is correct.
Persons responsible for the audit of the accounts Auditors of CNP Assurances
KPMG-Audit and Calan Ramolino & Associés were also auditors of Caisse Nationale de Prévoyance for the years 1988 to 1991.
KPMG - Audit, 1992 AGM to approve the 2003 KPMG Audit, Department of KPMG SA financial statements 1, cours Valmy, 92923 Paris-La Défense Cedex, represented by Christian Henry and Régis Tribout Substitute: Gérard Rivière 1992 AGM to approve the 2003 financial statements
Calan Ramolino & Associés, 1992 AGM to approve the 2003 191, avenue Charles-de-Gaulle, financial statements 92200 Neuilly-sur-Seine, represented by Etienne Jacquemin and Jean-Claude Lemaire Substitute: Gilles de Calan 1992 AGM to approve the 2003 financial statements
In our capacity as statutory auditors of CNP Assurances and as required by Commission des Opérations de Bourse regulation COB 98-01, we have examined in accordance with French professional standards the information about the financial position and the historical accounts included in this reference document.
This reference document is the responsibility of Gilles Benoist, President of the Executive Board. Our responsibility is to express an opinion on the fairness of the information about the financial position and the accounts contained in this reference document.
Our procedures, which were performed in accordance with French professional standards, consisted of assessing the fairness of the information about the financial position and the accounts and verifying that this information agrees with the audited financial statements, reading the other information contained in the reference document in order to identify any material inconsistencies with the information about the financial position and the accounts, and reporting any manifestly incorrect information that came to our attention, based on our overall knowledge of the Company, as acquired during our audit.
We also audited the financial statements of the Company for the years 1999 to 2001 and the consolidated financial statements for the years 1999 to 2000, as approved by the Executive Board. Our audits were performed in accordance with auditing standards generally accepted in France. Our reports on these consolidated financial statements did not contain any qualifications or emphasis of matter.
We audited the 2001 consolidated financial statements, as approved by the Executive Board, in accordance with auditing standards generally accepted in France. Our report did not contain any qualifications but included an emphasis of matter drawing shareholders’ attention to the notes to the consolidated financial statements referring to the adoption of standard CRC 2000-05 and describing the resulting change in accounting method.
Concerning the embedded value information, we obtained assurance that this information was consistent with the conclusions of the report issued by the independent actuary, BW Deloitte, on 11 March 2002, on the review of the calculations performed by CNP Assurances.
Person responsible for financial information: Jean-Paul Marchetti, Member of the Executive Board 4, place Raoul-Dautry, 75716 Paris Cedex 15
Documents concerning the Company may be consulted at: The Company’s headquarters: 4, place Raoul-Dautry, 75716 Paris Cedex 15
Pages 1.1 Name and function of the person responsible for the reference document 150-153 1.2 Statement by the person responsible for the reference document 150-153 1.3 Name and address of the Auditors 151 3.1 General information about the Company 142-143 3.2 General information about the Company’s capital 144-147 3.3 Ownership structure 145 3.4 Market for the Company’s shares 38-39 4.1 Presentation of the Company and the Group 1-44 4.3 Exceptional events, claims and litigation 147 4.4 Number of employees 29-30, 136 4.7 Issuer risks 68-72 5.1 Financial statements of the Company and the Group 90-137 6.1 Supervisory Board and Executive Board 148-149 6.2 Directors’ interests 149 7.1 Recent developments 53-59
This reference document was filed with the Commission des Opérations de Bourse on 2 May 2002, in accordance with regulation COB 98-01/95-01. It may not be used in connection with a financial transaction unless it is accompanied by an Information Memorandum approved by the Commission des Opérations de Bourse.
To find out more Press releases, share prices, annual reports, key figures and more… CNP Assurances’ corporate web site www.cnp.fr offers visitors an up-to-the-minute review of the latest news about the Group. CNP Assurances also offers telephone and e-mail information services for shareholders, investors and analysts.
On-line information The Group’s corporate web site www.cnp.fr provides complete information for shareholders, investors and financial analysts.
The “Financial Info” and “Shareholders” sections of the Group’s corporate web site (www.cnp.fr) provide complete, downloadable information about CNP Assurances’ financial performance in French and English, including: ● the share price; ● key figures; ● financial press releases; ● the annual and interim reports; ● presentations made to financial analysts; ● a summary of the Annual General