NN Group reports 2Q16 results
(Thomson Reuters ONE) -
Capital position remains strong; lower operating result
· Operating result ongoing business of EUR 321 million versus EUR 488
million in 2Q15; the current quarter was impacted by higher claims at
Netherlands Non-life due to severe storms, while the second quarter of last year
was supported by a private equity dividend and a significantly higher technical
margin in Netherlands Life
· Net result of EUR 335 million versus EUR 392 million in 2Q15
reflecting a lower operating result and negative hedge results in Japan Closed
Block VA due to market volatility, partly offset by higher non-operating items
· Progress on cost savings in the Netherlands, bringing the annual
expense base down to EUR 786 million
· Solvency II ratio increased to 252% from 241% at 1Q16 as positive
market impacts were only partly offset by deductions for the EUR 500 million
share buyback programme and the 2016 interim dividend
· Holding company cash capital increased to EUR 2.3 billion driven by
dividends from almost all segments
· Interim dividend 2016 of EUR 0.60 per ordinary share or approximately
EUR 195 million
Statement of Lard Friese, CEO
'With a Solvency II ratio of 252% and a cash capital position of EUR 2.3
billion, NN Group's capital position remained strong and resilient during the
second quarter of 2016, allowing us to weather severe market volatility and pay
an interim dividend in line with our dividend policy.
Our businesses were however impacted by market conditions and low interest
rates, reducing the investment income of our insurance businesses. Extraordinary
developments in recent months, including the result of the 'Brexit' referendum,
impacted global financial markets. The asset management environment remains
difficult due to ongoing market turmoil, resulting in continued de-risking by
clients and pressure on fees.
Our Non-life combined ratio was impacted by severe storms in the Netherlands in
the Property and Casualty business, which was only partly compensated by a
favourable claims development in the Disability & Accident portfolio. Regulatory
changes, such as the tax on assets in Poland introduced in February 2016,
impacted the operating result of Insurance Europe. We are closely following the
Polish government's plans to further reform the pension system.
Amidst these challenging conditions, new sales of life insurance products held
up well compared with the same quarter last year. The execution of our cost
saving plans is well underway, and NN Bank is showing robust growth in mortgages
and savings, reporting a solid net inflow of retail saving deposits in the first
six months of this year.
Going forward, we will continue to focus on the execution of our strategy,
delivering excellent service to our customers making our operations more
efficient and effective, and pursuing growth in selected European markets and
Japan.'
NN Group key figures
In EUR million 2Q16 2Q15 Change 6M16 6M15 Change
----------------------------------------------------------------------
Operating result ongoing business 321 488 -34.1% 626 792 -21.0%
Net result 335 392 -14.6% 605 877 -31.0%
Net operating ROE 8.6% 14.9% 8.6% 11.8%
Solvency II ratio(1)) 252% 252%
Note: All footnotes are included on page 27
Quarterly Business Update
NN Group's strong financial position in the first half of 2016 reflects the
resilience of its businesses in an environment which continues to be
characterised by low interest rates and market volatility. This provides a solid
foundation for executing the strategy, which is to deliver an excellent customer
experience based on transparent products and services and long-term
relationships. NN Group aims to help people secure their financial futures, and
is committed to delivering products and services that are easy to understand and
meet customers' lifetime needs.
Transparent products and services
NN Hungary successfully launched a new accident insurance product which has been
well received by both customers and tied agents. The product offers financial
support and unique medical and assistance services that are crucial for faster
recovery after an accident.
Our Czech business unit launched NN ?ivot, an insurance product covering a wide
range of risks including death, illnesses, long-term disability and
hospitalisation. Japan Life launched a new COLI critical illness product to help
ensure business continuity when SME owners fall ill.
In the Netherlands, Nationale-Nederlanden helps SME companies to understand the
implications of a new 'Return to Work' regulation for partially disabled
employees (WGA Flex), also offering them solutions. Non-life's continued focus
on customer centricity and transparent customer communication resulted in higher
customer loyalty as measured by its increasing Net Promotor Scores. Furthermore,
Netherlands Life is strengthening its commercial position by developing new
features for group pension schemes, allowing participants to invest additional
contributions during their working life ('Bijsparen'), or to keep investing
after their retirement ('Doorbeleggen').
Capturing growth
The fundamental need of people to protect themselves against uncertainties will
continue to drive growth in the insurance industry over the long term. For
example, NN Life in Romania launched an innovative private health insurance
solution in their market, insuring the financial future of a customer's family
should unexpected medical situations arise.
In Spain, Nationale-Nederlanden recently launched a suite of Growing Guarantee
savings products, which are less capital intensive, while guaranteeing our
customers their investment with an upward potential. Movir, which offers
individual disability insurance to business professionals in the Netherlands,
successfully launched a campaign to inform clients about the option to align
their individual disability insurance to their pension age, resulting in
additional recurring premium income. NN Bank continues to grow its customer
base, attracting almost 8,000 new clients in the second quarter. Through cross-
selling efforts, another 4,500 insurance customers became clients of NN Bank. In
the second quarter, NN Bank grew its mortgage portfolio from EUR 10.9 billion to
EUR 11.4 billion and its customer savings from EUR 8.6 billion to EUR 9.3
billion.
Multi-access distribution
NN Group serves its customers through multiple channels, comprising tied agents,
bancassurance partners, brokers and direct channels. Bancassurance COLI sales in
Japan increased by 54% compared with the same quarter in 2015, excluding
currency effects, driven by the expansion of the bank distribution network.
The acquisition of Notus Financial Advisors, a leading financial broker in
Poland, which was announced in the second quarter, was completed in July 2016.
The acquisition will further strengthen and diversify the distribution network
of Nationale-Nederlanden Poland.
Effective and efficient operations
NN Group aims to make its processes as efficient and effective as possible
across all segments, and is sharpening its client focus tailored by type and
country, making the organisation more agile. For example, during the severe
storm and flooding in Belgium this quarter, an NN Mobile Office was used to help
customers settle their claims. This temporary office and the service provided
were highly valued by customers.
In the Netherlands, the strategy is centred around providing digital, personal
and relevant services with the aim of enhancing customer experience. Nationale-
Nederlanden has combined various individual customer communication channels,
making it easier for clients to communicate with the company, while reducing
costs at the same time. New functionalities are continually being implemented to
meet the growing customer demand for 24/7 services and solutions, while at the
same time wanting to be recognised and treated as an individual customer. For
example, customers logging into the NN portal receive a personal message
alerting them when the fixed rate period of their mortgage will end within four
months.
Our asset manager, NN Investment Partners, is making good progress with its
'focus, simplify and optimise' initiatives. The fund rationalisation project is
well on track. Investment boutiques have been aligned with growth opportunities,
capturing economies of scale in the product portfolios.
Innovation
By investing in innovation, NN Group aims to improve customer satisfaction,
intuitive interaction and efficiency at the same time. NN Group announced in
July that it entered into a three-year partnership with StartupBootcamp, a
growth accelerator, which helps fintech start-ups expand into full-grown
businesses. The programme aims to increase the speed of innovation and
strengthen customer centricity. In addition to providing financial support,
NN Group will offer professional assistance to fintech start-ups by providing
employee mentors. Also, through internships, our employees are given the
opportunity to gain insights and hands-on experience in fintech product
innovation.
Furthermore, Sparklab (NN Non-life's innovation lab) introduced its 'Ab Concept'
in the Dutch market. This is a pilot in which prevention services are combined
with residents' participation and new technology, with the aim of increasing
safety in residential areas.
NN's broker in Turkey, Sigorta Cini, is executing a 'clicks & bricks' strategy,
enabling the company to become a 'top 3' online aggregator.
NN Group believes that mind-set is crucial in creating businesses that nurture
innovation. In order to further foster this mind-set, all NN Life managers have
participated in a programme focusing on stimulating innovation, entrepreneurship
and accountable leadership.
Other events
In the second quarter of 2016, NN Group became a constituent of the FTSE4Good
Index Series. This inclusion demonstrates that the company has met stringent
environmental, social and governance criteria, and is well positioned to
capitalise on the benefits of responsible business practice.
NN Group's sport sponsorship policy focuses on running, an activity that unites
different generations and is accessible to everyone. This way we want to
contribute to people's health and wellbeing. NN Group has been the main sponsor
of large running events across Europe and in Japan, including marathons in
Athens and Rotterdam, and the San Silvestre race in Madrid, Spain. This quarter,
NN Group was the official sponsor of the 2016 European Athletics Championships,
the largest sports event in the Netherlands in 2016.
NN Group Profile
NN Group is an international insurance and asset management company, active in
more than 18 countries, with a strong presence in a number of European countries
and Japan. With around 11,500 employees the group offers retirement services,
insurance, investments and banking to more than 15 million customers. NN Group
includes Nationale-Nederlanden, NN and NN Investment Partners. NN Group is
listed on Euronext Amsterdam (NN).
Investor conference call and webcast
Lard Friese and Delfin Rueda will host an analyst and investor conference call
to discuss the 2Q16 results at 10.00 am CET on Thursday 18 August 2016. 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.
Press call
Lard Friese and Delfin Rueda will host a press call to discuss the 2Q16 results,
which will be held at 12.00 pm CET on Thursday 18 August 2016. Journalists can
join the press call at +31 (0)20 531 5863.
Financial calendar
· Publication 3Q16 results: 17 · Annual General Meeting: 1 June 2017
November 2016 · Publication 2Q17 results: 17 August
· Publication 4Q16 results: 16 2017
February 2017 · Publication 3Q17 results: 16
· Publication 1Q17 results: 18 May November 2017
2017
Contact information
---------------------------------- ----------------------------------
Press enquiries Investor enquiries
Saskia Kranendonk Investor Relations
+31 62 568 3835 +31 88 663 5464
saskia.kranendonk(at)nn-group.com investor.relations(at)nn-group.com
---------------------------------- ----------------------------------
Additional information on www.nn-group.com
· NN Group 2Q16 Financial Supplement, NN Group 2Q16 Analyst Presentation
and NN Group 2Q16 Condensed consolidated interim financial information
· 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 NN Group N.V. condensed consolidated interim
financial information for the period ended 30 June 2016. 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) 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, (13) changes in the policies 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 us 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 and (18) the other risks and
uncertainties detailed in the Risk Factors section 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.
Press Release 2Q2016:
http://hugin.info/160538/R/2035848/758312.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: NN Group NV via GlobeNewswire
[HUG#2035848]
Unternehmensinformation / Kurzprofil:
Datum: 18.08.2016 - 06:57 Uhr
Sprache: Deutsch
News-ID 489817
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