NN Group to execute legal mergers of Life and Non-life entities in the Netherlands
As part of the legal restructuring process, which was announced on 15 November 2018, NN Group today announces that it has obtained approval from De Nederlandsche Bank (DNB), the Dutch supervisory authority, to execute the legal mergers of Delta Lloyd Levensverzekering N.V. (Delta Lloyd Life) into Nationale-Nederlanden Levensverzekering Maatschappij N.V. (NN Life) and Delta Lloyd Schadeverzekering N.V. (Delta Lloyd Non-life) into Nationale-Nederlanden Schadeverzekering Maatschappij N.V. (NN Non-life). The legal mergers will become effective on 1 January 2019. As a result, NN Non-life will assume all assets and liabilities of Delta Lloyd Non-life, and NN Life will assume all assets and liabilities of Delta Lloyd Life, including its subordinated notes of EUR 500 million. NN Life and NN Non-life intend to have a credit rating from Standard & Poor’s on completion of the legal mergers.
Lard Friese, CEO of NN Group: ‘I am proud that, in less than two years, our continued focus on the restructuring and integration of Delta Lloyd into NN Group will result in the mergers of our largest entities in the Netherlands. This milestone is another step towards the full integration of the businesses by the end of 2020. The new, more effective and efficient structure aligns with our strong commitment to our customers. We are well positioned to respond to customers’ changing needs and the shifting environment in which we operate.’
As the integration of NN Life and Delta Lloyd Life has progressed further with the approval of the legal merger, the two businesses will be combined into one cash generating unit, being the segment Netherlands Life, for the purpose of goodwill impairment testing. The IFRS equity of Delta Lloyd Life at the acquisition date reflected assets and liabilities at fair value. Whilst most assets in the combined Netherlands Life segment are also reflected at fair value, most of the NN Life insurance liabilities are recognised at historical locked-in assumptions in IFRS. As a result, the IFRS book value of the combined Netherlands Life segment will be higher than the fair value of its assets and liabilities, resulting in an elimination of the goodwill for Delta Lloyd Life of EUR 852 million through a charge in the IFRS profit and loss account of NN Group in the fourth quarter of 2018. This charge will not affect the operating result and does not have an economic or Solvency II impact.
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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.
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