EuroBusiness Media (EBM): Groupama, one of the largest mutual insurance groups in Europe, has just published its results for the first half of 2009. Helman le Pas de Sécheval, welcome.
Helman le Pas de Sécheval (HPS): Welcome.
EBM: You are Groupama’s Chief Financial Officer. What are your comments on your first-half results?
HPS: These results have inevitably been affected by the storms at the start of the year, but otherwise they’ve been very good. The group has continued to achieve sustained business growth, with a 4.5% rate of organic growth, rising to 8.4% if you include the acquisitions made in the second half of 2008. This business growth has been driven by our activities in France, notably our individual savings and retirement business, whose net inflows rose by +75% on last year, well above a market rise of +19%. The net impact of storms on the group’s results amounted to €135 million, but this net result remained largely profitable at €166 million. Finally, the group has strengthened its solid financial position by increasing its shareholder’s equity by 8% and by improving its solvency margin by six points at 128%.
EBM: All the same, your solvency margin remains tight. What can you tell us on this subject?
HPS: Following the financial market crisis in the wake of the bankruptcy of Lehman Brothers, we paid a tribute by reporting our lowest regulatory solvency margin at the end of 2008, while remaining well above the regulatory requirement. On June 30, although the markets were marginally lower than at the start of the year, our regulatory solvency ratio improved by six points to 128%. And obviously Groupama is benefiting from the rebound that the market has experienced since June 30: by the way, on August 21, our regulatory solvency ratio would amount to 173%. Frankly, Groupama isn’t worried about its solvency.
EBM: What are your priorities for the end of the year?
HPS: The end of 2008 and the first half of 2009 featured very great efforts to integrate our recently acquired entities and to streamline our operational platforms. In the second half of 2009, we’re going to continue this merger programme at the same pace in order to generate maximum synergies at group level. The second priority will be to continue implementing our business investment plans: advertising campaign (with Cerise, Amaguiz, Iker Casillas in Spain), our urban distribution network, the hiring of more sales people. We’ve been reaping the benefits of these business investments for several months, as shown by the results we are publishing today.
EBM: Are you satisfied with your recent acquisitions? Are you planning to make any more acquisitions in the near future?
HPS: We had suspended acquisitions pending a rise in our solvency to even higher levels and the easing of access to both bank and financial market funding. We’re very satisfied with our recent acquisitions. It’s true that, in the geographical areas concerned, the social safety net is not so reliable and the countries have been suffering more from the crisis than France. In these countries, our revenues have declined. However, apart from Spain, none of them was affected by the storm that occurred at the start of the year, and the contribution of international subsidaries to the group’s net profit has risen by 16% compared with the first half of 2008. As soon as we complete all the ongoing mergers by the end of this year, we’ll benefit from competitive operational platforms and positions in each of the markets in which we operate. This will enable us to leverage these countries’ long-term growth potential, once the crisis is over.
EBM: Finally, there’s been a lot of talk about a partnership between La Banque Postale and Groupama in property and casualty insurance. What can you tell us about the status of this project?
HPS: Allow me to say once again how satisfied we are that La Banque Postale has selected Groupama as its partner, given the very stiff competition we had to face from some of the largest insurance companies in France. This partnership is now being finalised. What’s important from Groupama’s point of view is that it will give us access to the only distribution channel we don’t have in France: the bancassurance network. Furthermore, La Banque Postale has the largest bank distribution network in France, with 7,000 points of sale and 29 million customers. The terms and conditions of the partnership will be announced by the end of the year. However, I can already say that it will be an innovative partnership. And I’d like to take this opportunity to tell you how committed Groupama is to innovation and the development of powerful new distribution channels, as also shown by the very successful launch of Amaguiz.com, our Internet dedicated brand and subsidiary.
EBM: Helman le Pas de Sécheval, Chief Financial Officer of Groupama, thank you.
HPS: Thank you.
