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Creating value

To create long term value we focus on understanding our stakeholders’ needs. Our business model is centred around our core skills converting vital resources into valuable outputs.

This simplified version of our business model is based on the framework of the International Integrated Reporting Council (IIRC).

The inputs that enable us to do what we do

Improving our customers’ financial wellbeing

Careful financial management to maintain a strong balance sheet

Attracting, retaining and supporting our talented people

Creating a positive impact for society and communities

 

Our core skills

Our core skills are vital to generating value within our business model




What we do

We help people carry the risks that they cannot bear alone, and we charge a premium for accepting those risks. To pay out claims and benefits to our customers, we invest in different asset classes such as government and corporate bonds, stocks, and other types of investments.

How this helps create value

When investing our assets, our priority is to provide the best risk adjusted returns, consistent with matching our assets and liabilities. The asset and liability management process is integral in ensuring adequate liability for policyholder obligations. Additionally, we believe that value can be achieved by integrating environmental, social, and governance (ESG) factors in our investment and active ownership processes.

What we do differently

We invest most of our assets, as well as our own capital (together called proprietary assets) through our asset management business, NN Investment Partners. We match our asset portfolio to
our liabilities with optimal strategic asset allocation and by limiting any mismatches to an acceptable degree. Our portfolio managers are provided with in-house research and information that helps them identify attractive investment opportunities.

What we do

Underwriting and product development are essential to the insurance business. Underwriting capabilities are essential in understanding, managing, and pricing risks. Our underwriters evaluate\ the physical and moral risk exposures of prospective businesses and clients. Together with our actuarial department, our underwriters determine the price of premiums to charge in order to insure our customers.

How this helps create value

Underwriting creates value by ensuring that NN Group accepts risk exposures within acceptable limits. This is done by improving the predictability of claims. The expertise of our underwriters also allows us to create value by finding optimal solutions for our customers by developing innovative insurance products that are priced properly and fairly.

What we do differently

We offer a comprehensive range of transparent value-for-money products than can be effectively risk managed over the expected life of the contract. Our underwriters perform a variety of roles. Their expertise allows them to be strategically involved in areas such as innovation, product development, and customer experience. This demonstrates how we are moving away from the traditional process of underwriting to a more data driven business model.

What we do

Data analytics is not only used to identify, assess, and calculate risks, but also to create personal and relevant products and services for our customers. By using it to identify our customers’ needs and demands, we improve our product designs, allowing us to stay relevant in a changing and competitive industry. It increases customer satisfaction and decreases costs. Our models are only used for our own commercial and communication purposes, and we always respect the privacy of our customers.

How this helps create value

The ability to identify and respond to the unique needs of our customers directly affects how we interact with them, and in turn improves our customer experience. By analysing large data sets of customer behaviour, we can make predictive models that benefit both customers and NN Group. Besides personalising our product offerings, we can, for example, also predict the number of customers calling our call centre, which enables us to tailor our service offering.

What we do differently

To further improve our data analytics skills, we started the Advanced Analytics Lab in the Netherlands. This lab analyses opportunities and threats that can be solved using machine learning. The lab works for our Dutch business units, NN Group, NN Re and NN Investment Partners. Outside the Netherlands, we run a Customer Intelligence programme to significantly increase our data analytics capabilities.

What we do

Risk taking is integral to the business model for insurance, asset management, and banking organisations like NN Group. Through our Risk Management practices, we seek to meet our obligations to customers and creditors, manage our capital efficiently and comply with applicable laws and regulations.

How this helps create value

Risk Management is at the core of our value creation process. We protect the financial and capital value of NN Group by employing our risk activities to limit falling short on our long term business objectives. We do not try to predict the future, but rather manage potential risk. This encompasses all risks to all business objectives. We are clear and transparent throughout the organisation for the benefit of management and stakeholders alike.

What we do differently

Our risk philosophy, called ‘Active Risk Management’, is built around four components: strategy, assessment, control, and monitoring. We assess the effectiveness of our philosophy twice a year using Risk Culture Dashboards. We work systematically, aim for completeness and document what we do. Each risk analysis performed is communicated to relevant management.

  

The outputs we realised and the outcomes we aim to achieve

Improving our customers’ financial wellbeing

Enabling an appropriate return for our investors through our financial management

Empowering our talented people

Creating a positive impact for society and communities

 

Primary Sustainable Development Goals

Our initial selection of SDGs which was the result of an internal mapping exercise and a stakeholder dialogue:
- Decent work and economic growth
- Responsible consumption and production

Download the full visualisation of our business model