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15 Aug 2019 - 07:00 CET

NN Group reports 2Q19 results

  • Operating result of EUR 445 million versus EUR 508 million in 2Q18, reflecting lower private equity dividends at Netherlands Life and lower results of the reinsurance business, partly offset by improved results at Insurance Europe, Netherlands Non-life and Japan Life
  • Net result of EUR 606 million, up from EUR 463 million in 2Q18
  • Total cost reductions achieved to date of EUR 306 million versus the full-year 2016 administrative expense base
  • Value of new business (VNB) for 6M19 up 15.4% to EUR 236 million driven by Insurance Europe and Japan Life;
  • Total new sales (APE) of EUR 243 million, down 32.5% from 2Q18 at constant currencies
  • Solvency II ratio of 210% down from 213% at the end of 1Q19, reflecting movements in credit spreads and the deduction of the 2019 interim dividend, partly offset by operating capital generation
  • Holding company cash capital of EUR 2,220 million, including EUR 558 million dividends received from subsidiaries in all segments
  • 2019 interim dividend of EUR 0.76 per ordinary share or approximately EUR 252 million

Delfin Rueda, CFO of NN Group: ‘NN Group has today reported an operating result of EUR 445 million for the second quarter of 2019. We see continued improvement in the performance of Netherlands Non-life, with a combined ratio of 95.8% for this quarter. Insurance Europe and Japan Life also posted higher results. Conversely, private equity dividends at Netherlands Life were lower than a year ago and the reinsurance business received higher claims. We continue to focus on enhancing the efficiency of the organisation, with total expense reductions to date of the units in scope of the integration of EUR 306 million compared with the 2016 full-year administrative expense base. We are committed to reducing the cost base by EUR 400 million by the end of 2020, however we don’t expect expense reductions to be linear going forward as some units are incurring costs to support their growth and to make necessary investments.

The value of new business increased 15% in the first six months of this year, mainly driven by an improved business mix and higher life and pension sales in Europe, as well as higher sales in Japan in the first quarter of the year.

Our capital position remains strong with a cash capital position of EUR 2,220 million at the end of the second quarter and a Solvency II ratio of 210%, after deduction of the interim dividend announced today of EUR 0.76 per ordinary share to be paid in September.

The announcement in June to acquire VIVAT Non-life represents a next step in strengthening the Non-life business in the Netherlands, as scale is essential to deliver attractive and sustainable customer propositions in this competitive market in the long term.

As part of our efforts to support the Paris Agreement on climate change, we implemented a coal policy. By placing investment restrictions on thermal coal mining companies and intensifying our dialogue with power generation companies, we aim to accelerate the transition to a low-carbon economy.

Earlier this week we announced the intended appointment of David Knibbe as CEO of NN Group, as successor for Lard Friese who has stepped down from this role, effective 12 August 2019. We are convinced that David, currently CEO of our Netherlands businesses, is the right person to lead NN Group during the next phase of its journey. Following this change in the leadership we have decided to reschedule the Capital Markets Update to mid-2020.

Last month we celebrated our fifth anniversary as a standalone company. Together with our 15,000 employees, we have guided NN Group from the IPO in July 2014 to the company it is today. NN is well-positioned for the future and fully committed to helping our customers secure their financial futures.’

(download the full Press Release)

Business update

Our business is built on a solid foundation of purpose, values and brand attributes, which, combined with a strong focus on our strategic priorities, enables us to create long-term value. This is how we deliver on our ambition to be a company that truly matters in the lives of our stakeholders.

Strategic developments

NN Group is strengthening its Non-life activities with the announcement to acquire VIVAT’s Non-life business in June. Furthermore, NN announced the acquisition of Human Capital Services (HCS) in July, a company focused on services and solutions for sustainable employability. HCS is entering into a strategic partnership with Otherside at Work, an organisation that develops software in the field of occupational health and social security. In addition to this, NN also acquired a minority interest in Otherside. These transactions strengthen Nationale-Nederlanden’s positions in sustainable employability services.

NN Investment Partners (NN IP) formalised its long-term partnership with ING Bank Śląski in Poland in July after receiving regulatory approval. Under this partnership, ING Bank Śląski has acquired a 45% stake in NN IP in Poland, and will distribute NN funds to the Polish retail market through its extensive branch network.

Customers

NN Life Japan is adjusting its product portfolio to meet the requirements of the new tax rules and was the first to launch renewed COLI products in July. In addition the continued focus of NN Japan Life on the sale of protection products resulted in a 30% growth in protection VNB during the first six months of 2019.

OHRA launched Clixx, an insurance for borrowed cars which can be taken out for just one day with a maximum of 30 days. In May, NN Hellas in Greece launched a new growing guarantee product ‘Smart Move’ which is offered through the bancassurance channel. This product allows customers to build up a long-term investment through regular payments, instead of by providing initial capital. NN IP takes an active approach to Responsible Investing. In April 2019, it launched a new short-duration green bond fund, which contributes to the United Nations’ Sustainable Development Goals (SDGs).

Sustainability

NN wants to have a positive impact on society, for example by contributing to the transition towards a low carbon economy. Together with approximately 50 other representatives, NN Group signed the financial sector commitment to the Dutch Climate agreement, which aims to reduce greenhouse gas emissions by 49% by 2030 (compared with 1990 levels). In addition, NN and the social enterprise Plastic Whale joined forces to fight plastic waste by raising awareness.

Sponsoring, Events and Awards

Spanish economic newspaper Expansión and Allfunds named the joint Nationale-Nederlanden and NN Investment Partners Europa Pension Fund one of the best pension funds of 2018 in the category ‘Pension Funds- Multi-Asset Moderate’. Furthermore, a number of NN IP funds achieved recognition in the second quarter: amongst others, the NN (L) Green Bond was awarded Best Global Aggregate Bond Fund at the GFSI Swiss Sustainable Awards in June. The ABN AMRO Verzekeringen legal assistance insurance was named best product by Dutch consumer organisation ‘De Consumentenbond’ and its travel insurance given a five star rating by MoneyView. The NN North Sea Jazz Festival took place in Rotterdam from 12 to 14 July, the second edition with NN as the title sponsor. The 75,000 visitors to NN North Sea Jazz could also enjoy photography by Ed van der Elsken at the 'Lust for life' popup exhibition, a collaboration between Nationale-Nederlanden and the Nederlands Fotomuseum.

People

On 29 May 2019, Jan Holsboer stepped down as chair of the Supervisory Board of NN Group N.V., and was succeeded by David Cole. Furthermore, as part of the ongoing integration of Delta Lloyd, the separate Collective Labour Agreements of Delta Lloyd and NN have been harmonised into one new agreement. In addition, NN IP was recognised for its achievements in diversity and inclusion with the ‘Golden Pump’ award, an award given by the association of Women in Institutional Pensions in the Netherlands.

(download the full Press Release)

Analyst and investor call

Delfin Rueda (CFO) and Jan-Hendrik Erasmus (CRO) will host an analyst and investor conference call to discuss the 2Q19 results at 10:30 am CET on Thursday 15 August 2019. Members of the investment community can join the conference call at +31 20 531 5865 (NL), +44 203 365 3210 (UK), +1 866 349 6093 (US) or follow the webcast on www.nn-group.com/investors.

Press call

Delfin Rueda (CFO) and Jan-Hendrik Erasmus (CRO) will host a press call to discuss the 2Q19 results, which will be held at 07:45 am CET on Thursday 15 August 2019. Journalists can join the press call at +31 20 531 5863 (NL).

Financial calendar          

  • Publication 3Q19 results: 14 November 2019
  • Publication 4Q19 results: 13 February 2020

Additional information

  • NN Group profile

    NN Group is an international financial services company, active in 18 countries, with a strong presence in a number of European countries and Japan. With all its employees, the Group provides retirement services, pensions, insurance, investments and banking to approximately 17 million customers. NN Group includes Nationale-Nederlanden, NN, NN Investment Partners, ABN AMRO Insurance, Movir, AZL, BeFrank and OHRA. NN Group is listed on Euronext Amsterdam (NN).
  • Important legal information

    Elements of this press release contain or may contain information about NN Group N.V. within the meaning of Article 7(1) to (4) of EU Regulation No 596/ 2014 (Market Abuse Regulation). NN Group’s Consolidated Annual Accounts are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (“IFRS-EU”) and with Part 9 of Book 2 of the Dutch Civil Code. In preparing the financial information in this document, the same accounting principles are applied as in the NN Group N.V. Condensed consolidated interim financial information for the period ended 30 June 2019.

    All figures in this document are unaudited. Small differences are possible in the tables due to rounding. Certain of the statements contained herein are not historical facts, including, without limitation, certain statements made of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation: (1) changes in general economic conditions, in particular economic conditions in NN Group’s core markets, (2) changes in performance of financial markets, including developing markets, (3) consequences of a potential (partial) break-up of the euro or European Union countries leaving the European Union, (4) changes in the availability of, and costs associated with, sources of liquidity as well as conditions in the credit markets generally, (5) the frequency and severity of insured loss events, (6) changes affecting mortality and morbidity levels and trends, (7) changes affecting persistency levels, (8) changes affecting interest rate levels, (9) changes affecting currency exchange rates, (10) changes in investor, customer and policyholder behaviour, (11) changes in general competitive factors, (12) changes in laws and regulations and the interpretation and application thereof, (13) changes in the policies and actions of governments and/or regulatory authorities, (14) conclusions with regard to accounting assumptions and methodologies, (15) changes in ownership that could affect the future availability to NN Group of net operating loss, net capital and built-in loss carry forwards, (16) changes in credit and financial strength ratings, (17) NN Group’s ability to achieve projected operational synergies, (18) catastrophes and terrorist-related events, (19) adverse developments in legal and other proceedings and (20) the other risks and uncertainties contained in recent public disclosures made by NN Group.

     Any forward-looking statements made by or on behalf of NN Group speak only as of the date they are made, and, NN Group assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for any other reason.

    This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities.

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