NN Group posts strong 1Q15 results
(Thomson Reuters ONE) -
Net result and capital position further improved
* 1Q15 operating result ongoing business of EUR 304 million, up 3.1% from
1Q14, supported by the expense reduction programme in the Netherlands and
lower debt funding costs
* Net result improved to EUR 485 million versus net loss of EUR 215 million in
1Q14, supported by a capital gain on an equity investment, whereas 1Q14
included a EUR 541 million charge related to the company's employee pension
plan in the Netherlands
* Cumulative costs savings in the Netherlands of EUR 164 million compared with
2013; EUR 22 million realised in 1Q15
* Strong capital position: IGD ratio up at 335% supported by market movements;
holding company cash capital stable at EUR 1.4 billion
* New sales (APE) EUR 498 million, up 10.9% from 1Q14 at constant currencies,
driven by a pension buy-out in the Netherlands
* AuM at Investment Management increased to EUR 203 billion, driven by market
appreciation
* Rebranding from ING to NN started in 1Q15
Statement of Lard Friese, CEO
"We are pleased with the strong performance that we are presenting today, which
underscores our focus on delivering on our strategic objectives. The operating
result from the ongoing business for the first quarter increased 3% to
EUR 304 million. We are well on track with our expense reduction programme in
the Netherlands, having already realised EUR 164 million of savings compared
with our target of an absolute EUR 200 million cost reduction by the end of
2016. At the same time, lower funding costs also contributed to the improved
results. Overall, new sales were up almost 11% this quarter. We completed a
pension buy-out in the Netherlands, which substantially increased our new sales.
Bancassurance sales in Japan grew further in line with our channel
diversification strategy.
All in all, it was a good start of the year. However, there are areas where we
want to further improve. In our Non-life business in the Netherlands, we are
continuing with our management actions in order to bring down the combined ratio
from slightly above 100% in order to achieve our target of 97% or lower by
2018. Growth in Insurance Europe has been held back by headwinds in the region,
and therefore we are shifting our focus to promising growth areas such as
protection products. Our asset manager had good inflows of assets in third-party
mandates this quarter. We will continue our investments aimed at strengthening
our capabilities in order to attract third-party assets going forward. It goes
without saying that we remain focused on achieving our targets for all our
operating segments.
We continue our journey as a standalone company. In February, ING Group further
reduced its stake in NN Group to 54.6%. As part of this transaction, we took the
opportunity to complete a EUR 200 million share buy-back. Another important
milestone was NN Group's inclusion in the AEX index. Furthermore, the rebranding
of our businesses from ING to NN is underway, creating a recognisable identity
for our customers and other stakeholders, supported by a clear promise: 'You
matter'.
In April we celebrated our 170th anniversary. Building on our strong heritage we
will continue to keep a sharp eye on our strategic direction and a clear focus
on executing our strategy."
NN Group key figures
In EUR million 1Q15 1Q14 Change
---------------------------------------------------------------------------
Operating result ongoing business 304 295 3.1%
Net result 485 -215
Net operating ROE 8.7% 9.9%
IGD Solvency I ratio 335% 245%
New sales life insurance (APE) 498 439 13.4%
Investment Management AuM (end of period, in EUR billion) 203 168 20.8%
Strategy and business highlights
NN Group's strategy is to deliver an excellent customer experience, based on
great service and long-term relationships. We aim to achieve this by offering
transparent products and services that serve customers' lifetime needs. We do
this by making our multi-access distribution network available to customers
wherever and whenever they want, and by maintaining effective operations that
deliver excellent customer service.
Netherlands Life
In the Netherlands Life segment, the focus is on reducing expenses and gradually
shifting to higher-yielding assets, such as mortgages and loans, in order to
compensate the negative impact of lower interest rates on the investment margin.
Furthermore, NN Life aims to benefit from its strong position in the pension
market and to capture growth opportunities especially in the area of defined
contribution pension plans, as well as selectively participating in pension fund
buy-outs. In the first quarter of 2015, a large company pension fund transferred
its accumulated pension benefits to NN Life, which contributed to the increased
new sales (APE) in this segment. In the first quarter a new pension application,
'Mijn Pensioencoach' was successfully introduced. This application allows
customers to get real-time information about their pension on their smartphone.
Netherlands Non-life
Netherlands Non-life aims to improve underwriting performance and to expand in
specific market segments where there are clear opportunities for profitable
growth. The operating result increased, mainly driven by positive recovery
experience in Disability & Accident (D&A) and improved underwriting results in
Motor. The combined ratio remained stable at 100.2%. Nationale-Nederlanden
expanded its prevention programme by initiating a pilot called 'Rij Wijzer' for
professional drivers. This programme uses smart technology to help professional
drivers improve their driving behaviour and as a result reduce the risk of
damages. In the first quarter, Movir (which offers individual disability
insurance to medical and business professionals) was awarded the title of 'Best
income insurer' by the association of independent financial advisors. Movir
scored higher than other insurers on all aspects, including customer focused
claims handling and the expertise of employees. In the first quarter of 2015,
Movir launched a new D&A insurance product, called Flexible&Certain
('Soepel&Zeker'), which complements its current D&A offering and is tailored to
a new target group, the independent professionals.
Insurance Europe
Insurance Europe is moving its business mix towards protection products and
repositioning its savings and retirement products for the low interest rate
environment. New sales (APE) were stable compared with the first quarter of
2014, excluding currency effects. Lower pension sales in Turkey were compensated
by higher life protection sales, mainly in Spain (protection sales were up
40.0% driven by a large group contract and 11.3% excluding this contract). In
Spain, the pension fund Nationale-Nederlanden Europa was awarded for its good
and consistent financial performance by "Expansión", one of the country's
leading financial newspapers. NN Insurance Hungary launched a new modular
protection and health insurance product. This product offers value added medical
assistance services and can be easily adapted to customer's individual needs.
Japan Life
In the first quarter of 2015, Japan Life continued to execute its channel
diversification strategy. Three new banks started distributing COLI products,
bringing the total number of bancassurance partners in Japan to 43 as of
31 March 2015. Bancassurance COLI sales increased by 15% compared with the same
period a year ago. The productivity of independent agents remained strong,
supported by the continuous enhancement of internal capabilities such as
stronger training and sales tools. New sales (APE) were broadly at the same
level as in the first quarter of 2014, excluding currency effects.
Investment Management
Assets under Management increased to EUR 203 billion driven by strong market
performance in the first quarter of 2015. Investment Management aims to grow its
third-party business by following a tailored approach for each client segment.
For the retail business, Investment Management plans to protect and further
expand its leading position and continues to develop a more distinct range of
equity products. Investment Management continues to invest in building and
broadening its capabilities, for instance by enhancing the processes supporting
higher-margin products. Investment Management has received two Lipper Fund
Awards 2015 for its real estate equity funds in the Netherlands. The Lipper Fund
Awards programme by Thomson Reuters recognises funds that have excelled in
delivering consistently strong risk-adjusted performance over several years.
NN Bank
NN Bank's mortgage portfolio increased to EUR 8.6 billion from EUR 7.9 billion
at the beginning of the year. This increase is the result of further growth of
new production and the transfer of ING Bank mortgages, partly offset by the sale
of mortgages to NN Life and NN Non-life. In March, the comparison site
Independer awarded Nationale-Nederlanden the title of best mortgage advisor
('Beste thuisadviseur 2015'). The award was based on the highest customer
satisfaction score, which was measured between 1 March 2014 and 1 March 2015.
Customer deposits (internet savings and bank annuities) also continued to grow
steadily, totalling EUR 7.7 billion at the end of the first quarter.
Furthermore, NN Bank completed its first public Residential Mortgage Backed
Securitisation transaction, raising EUR 650 million in funding from investors.
With this transaction, NN Bank has attracted new long-term funding, leading to a
further diversification of its funding profile.
Rebranding from ING to NN
In the first quarter, we started to rebrand our businesses from ING to the NN
brand. The majority of our international insurance businesses have been
rebranded from ING to NN or Nationale-Nederlanden. ING Investment Management
changed its name to NN Investment Partners in April, and at the same time
rebranded all investment funds to NN. Across Insurance Europe and Japan local
brand campaigns were launched highlighting the name change and the new brand
promise 'You matter'. Our life and pension business in Turkey was the first to
start with the rebranding to NN in February. In the Netherlands, our insurance
business will keep the Nationale-Nederlanden name while the logo has been
updated to align with the new NN brand. In 2015 and 2016, NN Group expects to
incur total rebranding expenses of approximately EUR 135 million, which will be
reported as special items and of which EUR 20 million was recorded in the first
quarter of 2015.
NN started its running sponsorship
In the first quarter, NN Group officially started its running sponsorship with
two major running events in the Netherlands, including the 35th edition of the
NN Marathon Rotterdam. This marathon is well known for its fast times,
professional organisation and almost 1 million enthusiastic supporters along the
route. This running sponsorship will help NN Group to enhance awareness of the
newly launched NN brand. In the years to come, NN's objective is to support more
running activities in some of its other key markets.
Solvency II
NN Group intends to apply for the usage of a Partial Internal Model for NN Group
and the insurance entities in the Netherlands. The outcome of the application
process remains subject to significant uncertainties, including the final
interpretations of the Solvency II regulations and the regulatory approval
process.
Share repurchase to neutralise stock dividend
NN Group has proposed a dividend of EUR 0.57 per ordinary share over the second
half of 2014 subject to approval of the Annual General Meeting on 28 May 2015.
The final dividend will be paid in cash or ordinary shares at the election of
the shareholder. In order to neutralise the dilutive effect of the stock
dividend on earnings per ordinary share, NN Group has reached an agreement with
ING Group, subject to certain conditions, to repurchase ordinary shares from ING
Group equal to the number of shares that NN Group will issue as stock dividend
at a price similar to the price used to calculate the stock fraction for the
stock dividend. NN Group and ING Group have also agreed to enter into similar
transactions to neutralise the dilutive effect of future stock dividends by NN
Group, subject to certain conditions and as long as ING Group holds shares in NN
Group.
Unit-linked products in the Netherlands
Nationale-Nederlanden continues to reach out to customers to encourage them to
carefully assess their unit-linked products in order to find an appropriate
solution on an individual basis. On 29 April the European Court of Justice
issued its ruling on a principal legal question with respect to information
provision requirements related to unit-linked products. The European Court
affirmed the position of Nationale-Nederlanden that the information requirements
prescribed by the European Directive may be extended by additional information
requirements included in national law, provided that these requirements are
necessary for the policyholder to understand the essential characteristics of
the commitment and are clear, accurate and foreseeable. Nationale-Nederlanden is
of the opinion that general principles of Dutch law that are used as a legal
basis in Dutch proceedings do not meet these criteria and that additional
information requirements cannot be imposed retroactively. The Dutch courts must
take the European Court's ruling into account in individual Dutch legal
proceedings. The ruling does not change earlier statements and conclusions
disclosed by NN Group in relation to unit-linked products.
NN Group Profile
NN Group is an insurance and investment management company with a strong,
predominantly European presence in more than 18 countries. With around 12,000
employees the group offers retirement services, insurance, investments and
banking to more than 15 million customers. NN Group includes Nationale-
Nederlanden, NN (formerly known as ING Insurance) and NN Investment Partners
(formerly known as ING Investment Management). NN Group is listed on Euronext
Amsterdam (NN).
Press call
Lard Friese and Delfin Rueda will host a press call to discuss the 1Q15 results
at 09.30am CET on Thursday 7 May 2015. Journalists can join the press call via +
31 20 531 5863.
Investor conference call and webcast
Lard Friese and Delfin Rueda will host an analyst and investor conference call
to discuss the 1Q15 results at 10:30am CET on Thursday 7 May 2015. 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.
Financial calendar
* Annual General Meeting: Thursday 28 May 2015
* Publication 2Q15 results: Wednesday 5 August 2015 (provisional)
* Publication 3Q15 results: Wednesday 4 November 2015 (provisional)
* Capital Markets Event: Thursday 19 November 2015 (provisional)
Contact information
------------------------------- ----------------------------------
Press enquiries Investor enquiries
Ingeborg Klunder Investor Relations
+31 20 541 6526 +31 20 541 5464
mediarelations(at)nn-group.com investor.relations(at)nn-group.com
------------------------------- ----------------------------------
Additional information on www.nn-group.com
* NN Group 1Q15 Financial Supplement and NN Group 1Q15 Analyst Presentation
* Photos of NN Group executives, buildings and events are available for
download at Flickr
Important legal information
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 on the Dutch Civil Code.
In preparing the financial information in this document, the same accounting
principles are applied as in the 2014 NN Group Consolidated annual accounts.
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, (4) the
implementation of the EC Restructuring Plan, (5) changes in the availability of,
and costs associated with, sources of liquidity as well as conditions in the
credit markets generally, (6) the frequency and severity of insured loss events,
(7) changes affecting mortality and morbidity levels and trends, (8) changes
affecting persistency levels, (9) changes affecting interest rate levels, (10)
changes affecting currency exchange rates, (11) changes in investor, customer
and policyholder behaviour, (12) changes in general competitive factors, (13)
changes in laws and regulations, (14) changes in the policies of governments
and/or regulatory authorities, (15) conclusions with regard to accounting
assumptions and methodologies, (16) changes in ownership that could affect the
future availability to us of net operating loss, net capital and built-in loss
carry forwards, (17) changes in credit and financial strength ratings, (18) NN
Group's ability to achieve projected operational synergies and (19) the other
risks and uncertainties detailed in the Risk Factors section contained in recent
public disclosures made by NN Group and/or related to 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.
Download the full Press Release:
http://hugin.info/160538/R/1919536/687390.pdf
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(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: NN Group NV via GlobeNewswire
[HUG#1919536]
Unternehmensinformation / Kurzprofil:
Datum: 07.05.2015 - 07:03 Uhr
Sprache: Deutsch
News-ID 391606
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