Investor Presentaiton
Appendix
Insurance
Strategy
Results
Reported Embedded value⁹1, $bn
Key financial metrics
Adjusted income statement, $m
FY20
FY19
FY18
8%
CAGR
Net operating income
1,977
2,720
2,020
Of which: Net interest income (NII)
2,408
2,308
2,217
15.4
13.9
12.2
12.2
Of which: market impacts
102
127
(334)
ECL
(92)
(86)
(1)
Operating expenses
(509)
(497)
(462)
FY17
Share of profit in associates and JVs
1
43
Profit before tax
1,377
2,180
31
1,588
FY18
Reported ANP and VNB, $m
FY19
FY20
ANP
VNB
VNB margin
Memo: distribution income*
801
1,041
1,040
33%
34%
36%
34%
Financial highlights:
◆ Strong growth in EV91 (8% CAGR) since FY17; reflecting consistent
VNB generation and margins; FY20 ROEV of 7.4% (2019: 13.3%)
Adjusted revenue of $2.0bn, down 27% vs. FY19, from lower sales
due to the global impact of the Covid-19 outbreak, including border
closures
3,252
3,382
2,805
2,307
919
1,117 1,225
776
FY17
FY18
◆ Distribution revenue of $0.8bn, down 23% as a result of lower sales
vs. FY19
Manufacturing operating expenses of $0.5bn, up 2% vs. FY19
Limited adverse short term Covid-19 effects on policy lapses,
morbidity/mortality and other assumptions
FY20 VNB by region
86%
FY19
FY20
3% 4%
7%
Strategic delivery in 2020:
Announced agreement to acquire the remaining 50%
equity interest in HSBC Life China, subject to regulatory
approvals
◆ Launched HSBC Pinnacle (our digital wealth planning
and insurance services) and obtained a FinTech licence
in China
Launched HSBC Life Well+: core retail Health &
Wellbeing proposition; and Benefits+: B2B2C employee
benefits and Wellness platform in Hong Kong
UK Life Protection sales reached 44k policies (+89% PY)
◆ Launched new core platform in Mexico
◆ Pivoted to remote customer engagement in all markets
Strong momentum for future growth:
◆ Hong Kong insurance market share of 19.2% 39, (incl.
Hang Seng) up from 12.8% at FY16
◆ HK: Life Insurance Company of the Year Award 92;
Seven Bloomberg Awards including Brand of the year and
Bancassurance of the Year 93
UK: Ranked #3 in Onshore Investment Bond, with 11.0%
market share 94 (AUM of $1.5bn)
*Distribution income (HSBC Life and partnerships) through HSBC bank channels
Hong Kong
Europe
Other Asia
LATAM
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