Lack of Transparency Continues to Hurt Ageas

We think Ageas is lacking a clear direction and proven strategy. Ageas is present in Belgium, United Kingdom and Continental Europe, and Asia as well as running its own reinsurance operation. Tack on to that the importance of the business' asset management, you are essentially left with a business that has five divisions. This is simply too many, in our opinion. Insurance is a complex suite of products and the historical approach has been one of diversification. However, what we frequently see within primary insurers, and in particular multilines, with increasing diversification these businesses become a Jack of all trades and a master of none. We understand that this approach to diversification is highly important with the reinsurance end. With exposure to large and lumpy losses these businesses will want to ensure that during those times they have more steady and reliable sources of income. But for primary insurers much of this tail risk is indemnified and this leaves managerial attention a crucial input for shareholder outcomes. What we tend to find within this and in particular within smaller multilines is that this diversification leads to a dilution of expertise and thus a dilution of dominance in their chose fields.