As we look back at the evolution of our share price in 2015, this was an exceptional year. The Ageas share gained more than 45% over the course of the year, making it the best performing insurance stock in Europe and topping the STOXX Insurance Index. It was a year of true value creation. Over the course of the year, an additional EUR 3 billion in value was created, making Ageas a company with a market cap of almost EUR 10 billion.
Market capitalisation of almost
Our total shareholders return for the year, including the reinvestment of the dividend, amounted to 52.12% compared to a 7.4% average return in the Euro STOXX 50. And this was also the year that our share price exceeded the EUR 40 mark for the first time in Ageas’s history, ending the year at EUR 42.80.
Alongside a solid first half performance, we announced our 5th consecutive share buy-back programme in as many years for EUR 250 million. We also increased our dividend by 11% in 2015, with a pay-out ratio of 45%, in line with our dividend policy.
Investors recognise our progress
The evolution of the share price and the key events that impacted upon the share can be seen in the graph. And as you can see, 2015 was a busy year for the Group, and one in which we saw a number of positive developments against our Vision 2015 strategy. This was clearly acknowledged by the investment community at various points in the year.
Ageas's share price evolution over 2015
For instance, we delivered on our promise to invest in the growth markets of Asia, by announcing the start-up of a new life insurance joint venture in the Philippines alongside EastWest Bank. We also launched a new life insurance venture in Vietnam together with Military Bank and our partner in Thailand Muang Thai Life Assurance.
We made progress in strengthening our position in a core market, announcing exclusive negotiations to acquire AXA’s Portuguese insurance operations, while adding a direct distribution channel.
The announced sale of Hong Kong Life for EUR 1.2 billion ticked a number of different boxes within the Vision 2015 strategy, and again investors acknowledged the strategic and financial logic in this significant transaction. First of all, it was ROE enhancing, it improved our business mix towards Non-Life activities, and it resulted in a larger share of insurance capital being invested in emerging markets.
The 2015 Investor Day in London was a particularly important gathering. It provided a launch pad for our new 3-year strategy − Ambition 2018 − and it was also the perfect platform for announcing our approach towards SolvencyII. Ambition 2018 allowed us to sharpen our strategic choices and financial targets, including a refined ROE target of 11-13%.
In anticipation of SolvencyII, which went live in January 2016, we published SolvencyII numbers which are comfortably above the Ageas Insurance SolvencyII target of 175%. We also highlighted quality and sustainability as the hallmarks of our approach, meaning no aggressive leverage and high-quality Own Funds without any material reliance on transitional measures. Even after severe stress tests, Ageas is adequately capitalised, and the National Bank of Belgium formally approved the SolvencyII partial internal model for Non-Life at the end of the year.
2015 was a remarkable year for the company, and one in which we brought Vision 2015 to a successful conclusion, while announcing the birth of our new 3-year strategy: Ambition 2018. This is a natural evolution that allows us to move forward on the basis of consistency and continuity with a new set of targets to deliver in the future.
Delivering shareholder value
Ageas believes in the importance of creating long-term value for its shareholders. As we look back at the past four years, we are proud that we have delivered on that promise. Our share price has evolved positively, increasing in value by 257%. And our total shareholder returns increased 348%, reflecting the pay-out of EUR 1.3 billion in dividend payments to shareholders and a capital reduction. In addition, we concluded four consecutive share buy-outs totalling EUR 900 million.