The decline in revenues in France eased to 12.6% in the third quarter, with revenues coming in at €5,340.1 million, including €149 million in Fourgous transfers, compared with €6,111.9 million in the same period of 2007, which included €612 million in Fourgous transfers. Premium income in France for the first nine months totalled €17,659.5 million, down 16.2% from the year-earlier period. This decline stemmed from the savings segment, down 21.3%, as the other segments continued to grow at a satisfactory pace.

Transfers from non-unit-linked contracts to combined unit-linked/non-unit-linked contracts (Fourgous transfers) slowed to €567 million in the first nine months of 2008 from €2,111 million in the same period last year. Excluding these transfers, premium income in France was down 9.9%, well ahead of the 15% contraction in the bancassurance segment.

Payouts declined by 6% on a reported basis, but rose 8.5% excluding the impact of Fourgous transfers, an increase that was nevertheless below the 9% seen in the French market overall. After deducting payouts, net new savings and pensions money amounted to €5.0 billion.

Held back by stock market conditions, unit-linked sales fell 44.9% to €1,828.7 million, tracking the 42% decline in the French market. Unit-linked sales by the three distribution networks represented 12.8% of their total insurance sales in the first nine moths of 2008.

• La Banque Postale

Premium income generated by La Banque Postale in the first nine months amounted to €7,286.4 million, down 21.7% from €9,306.6 million in the year-earlier period. The decline was mainly due to the lower volume of Fourgous transfers, which amounted to €314 million versus €1,551 million in the first nine months of 2007. Excluding Fourgous transfers, premium income generated by the network was down 10.1%, representing a significantly better performance than that of the French bancassurance sector as a whole.

The sales campaign for the flagship Ascendo, GMO and Vivaccio contracts launched on 1 September helped to reverse the trend, with strong growth in premium income over the month.

La Banque Postale is also renewing its line-up with the new Cachemire life insurance contract, introduced on 3 November 2008.

• Savings Banks

The Savings Banks generated premium income of €6,828.6 million in the first nine months of 2008, down 18% from the €8,332.3 million recorded in the same period of 2007. Excluding Fourgous transfers, the decline was 16.5%. Personal risk business showed steady growth, with a 4% increase in premium income. Unit-linked contracts represented 17.4% of the network's total insurance sales, on a par with the rate observed in the first half. Marketing campaigns publicising promotional rates were launched on 15 September and are scheduled to continue through the fourth quarter.

•  CNP Trésor

CNP Trésor reported premium income of €523.8 million in the first nine months, a decrease of 17.2% from the year-earlier period. The decline was primarily attributable to a sharp slowdown in Fourgous transfers, which fell by 90% to €12 million from €120 million in the first nine months of 2007. Excluding Fourgous transfers, premium income generated by the network was down by just 0.1%, a very good performance in the current French life insurance market.

•  Financial Institutions

Premium income from financial institutions rose by a strong 7.5% to €1,089 million in the first nine months, reflecting sustained demand for loan insurance.

• Companies and Local Authorities

Premium income from the Companies and Local Authorities partnership centre amounted to €1,198 million, an increase of 3.9% over the first nine months of 2007. Business remained brisk in the personal risk and pensions segments, and payments to the supplementary pensions institutions (Institutions de Retraites Supplémentaires or IRS) should drive strong momentum in the fourth quarter. 

•  Mutual Insurers

The Mutual Insurance partnership centre delivered strong growth of 16.5% (to €668 million) thanks to two major contracts finalised in late September. A number of other contracts are in the pipeline and may be signed before the end of the year.

International operations

New money from operations outside France amounted to €3,205.2 million, a decline of 15.8%. Under IFRS, premium income was down by 31.5%, due to the accounting treatment of the new Italian products.

• Europe

Ø       Italy – CNP Vita

The Italian life insurance market contracted by 20% in the first eight months, led by a 44% fall in the unit-linked segment that was attributable to savers' preference for less risky, more liquid products that offer a better return. At the same time, banks are actively encouraging clients to invest in bank-type savings products, which boost their deposit base, rather than life insurance.

In this environment, CNP Vita reported premium income of €1,433 million in the first nine months, down 42%. This sharp decline was in line with the 37% downturn among the major bancassurance networks. Up until 2007, CNP Vita and its main bancassurance rivals offered guaranteed unit-linked and index-linked products, but their launch was no longer possible in the market conditions of 2008. CNP Vita recently rounded out its line-up with Unigarantito, a non-unit-linked product that should meet the expectations of clients who previously purchased index-linked contracts.

The favourable effect of contract maturities (down 71% compared with September 2007) offset the business slowdown, resulting in net new money of €398 million compared with €307 million in the first nine months of 2007.

CNP Vita Premium Income – First Nine Months of 2008

•  Latin America

Ø       Brazil – Caixa Seguros

Caixa Seguros reported premium income of BRL 3,707.0 million for the first nine months, up 35.3% in local currency and 35.9% in euros, in a Brazilian market that grew 14% (excluding health insurance) in the first eight months of the year.

• Savings premium income rose 3.4% under French GAAP.
• The pensions business surged by 69%.
• Loan insurance business expanded by more than 20% thanks to strong growth in the volume of home loans extended by the Caixa Economica Federal network. The increase in interest rates that began in April had no impact on demand for home loans during the period.

2. General business environment

2.1 Financial market environment in the first nine months

The stock market lost 28.2% in the first nine months of the year, with the CAC 40 index falling to 4032 points. The economic and financial crisis deepened, with unemployment rising to 8% in France, 7.5% in the euro zone in August and 6.1% in the United States in September.

To keep credit from drying up, the world’s major central banks made massive injections of liquidity into the money markets. The Federal Reserve lowered the Fed Funds rate from 4.25% to 2% between 22 January and 30 April to shore up the US economy, while the European Central Bank raised its benchmark rate from 4% to 4.25% on 3 July to fight inflation. The Fed Funds rate now stands at 1%, while the ECB benchmark rate is 3.25%.

In the bond market, the 10-year OAT rate settled at 4.259% on 30 September after reaching a high of 4.839% on 19 June on fears of an inflationary spiral. In all, it declined by 20 bps over nine months. Over the same period, the 3-month Euribor rose 59 bps to 5.277%.

On the currency markets, the euro lost 2.84% against the dollar, declining to $1.4303 on 30 September.

Financial market indicators at 30 September 2008

2.2 Regulatory and tax environment

• Financing for the Revenu de Solidarité Active (RSA)

The RSA, which allows unemployed people taking on lower-paid jobs to continue to receive some benefits, will be financed by a 1.1% tax on unearned income (income from life insurance contracts, dividends, capital gains and property income).

• Economic Modernization Act (LME) of 4 August 2008

The Loi de Modernisation de l’Economie (LME) allows the government to take numerous measures that affect life insurance:

• The obligation to confirm insurance advice in writing will be extended to include insurance companies' in-house teams of insurance advisors. 
• Ethical guidelines approved by the Ministry of the Economy will be implemented.
• Insurance companies will have greater oversight of advertising by distributors.
• Legislation covering supplementary pensions will be updated.

• 2003 Fillon Act

Under the 2003 Fillon Act, supplementary pension providers in France are required to file for certification as an employee benefits institution or merge with an existing employee benefits institution. This Act came into effect in 2008 after a transition period.

3. Significant events of the third quarter

• July 2008: Strategic partnership with Marfin Popular Bank

CNP Assurances (CNP) and Marfin Popular Bank (MPB) signed a long-term partnership agreement for the development of insurance and pension sales by MPB’s banking networks in Greece and Cyprus.

• August 2008: Publication of the first-half 2008 results

CNP Assurances released its first-half results on 27 August 2008. Reported net profit was stable despite the effects of the financial crisis. Average insurance and financial liabilities rose by a strong 6.3% and continued to represent the main driver of earnings growth. Solvency capital at 30 June 2008 represented 1.85 times the regulatory minimum in total and 1.20 times excluding unrealised gains (based on Solvency I). Embedded value at 30 June stood at an estimated €75.1 per share, up slightly on 31 December 2007.

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Concerning the full-year outlook, in light of the quality of its operating indicators and solid underlying fundamentals, CNP Assurances is confident in its ability to report a 10% increase in recurring profit before fair value adjustments to financial assets, representing the equivalent of operating profit.

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Disclaimer

Some of the statements contained in this press release may be forward-looking statements referring to projections, future events, trends or objectives which, by their very nature, involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated in such statements by reason of factors such as changes in general economic conditions and conditions in the financial markets, legal or regulatory decisions or changes, changes in the frequency and amount of insured claims, particularly as a result of changes in mortality and morbidity rates, changes in surrender rates, interest rates, foreign exchange rates, the competitive environment, the policies of foreign central banks or governments, legal proceedings, the effects of acquisitions and the integration of newly-acquired businesses, and general factors affecting competition.

Further information regarding factors which may cause results to differ materially from those projected in forward looking statements is included in CNP Assurances’ filings with the Autorité des Marchés Financiers. CNP Assurances does not undertake to update any forward-looking statements presented herein to take into account any new information, future event or other factors.

• Consolidated premium income by partnership centre
• Premium income by business segment
• Premium income (unit-linked sales)

Premium income for the first nine months of 2008

• Consolidated premium income by partnership centre
• Premium income (unit-linked sales)
• Premium income by country
• Premium income by insurance category
• Premium income by country and market segment
• Caixa Seguros (Brazil) premium income
• CNP Vita premium income
• Fourgous transfers