NN Group reports 4Q16 and 2016 results
(Thomson Reuters ONE) -
4Q16 operating result up 13%; Solvency II ratio at 241%
* 4Q16 operating result ongoing business of EUR 282 million, up 12.6% from
4Q15, reflecting a higher investment margin at Netherlands Life, higher fees
and premium-based revenues at Insurance Europe and improved results at NN
Bank and the reinsurance business, partly offset by unfavourable claims
experience at Netherlands Non-life
* Full-year 2016 operating result decreased to EUR 1,227 million from EUR
1,435 million in 2015 which benefited from higher private equity dividends
and a significantly higher technical margin in Netherlands Life, while 2016
was impacted by severe storms at Netherlands Non-life
* Net result of EUR 148 million, down 58.9% from 4Q15 mainly due to lower non-
operating items and negative results on divestments. Full-year 2016 net
result down to EUR 1,189 million from EUR 1,565 million in 2015
* Further costs savings in the Netherlands bringing the expense base down to
EUR 761 million
* Robust commercial momentum in the quarter, with APE up 12.0% at constant
currencies in the insurance businesses, net third party inflows of EUR 1
billion at Asset Management and mortgage production of EUR 0.9 billion at NN
Bank. Full year VNB of EUR 214 million, up 6.4% from 2015
* Strong capital position: Solvency II ratio increased from 236% to 241% at
the end of 4Q16, reflecting market impacts, the reversal of the EUR 333
million suspended share buyback and the deduction of the proposed final
2016 dividend of EUR 307 million
* Holding company cash capital higher at EUR 2,489 million, driven by
dividends received from subsidiaries, partly offset by capital injections
and share buybacks
* Final 2016 dividend proposal of EUR 0.95 per ordinary share, or
approximately EUR 307 million in total, bringing the full-year 2016 dividend
to EUR 1.55 per ordinary share
Statement of Lard Friese, CEO
'2016 was an eventful and important year for NN Group, a year in which we made
considerable steps. We invested in accelerating change and innovating our
customer experience, and worked on new and improved products and services. In
April, ING completed its divestment of NN Group. We were able to maintain a
strong capital position, making us well-positioned to weather volatile markets.
This strong financial position allowed us to take an important step in bringing
consolidation to the Dutch insurance and asset management markets and to
announce an intended offer for the outstanding shares of Delta Lloyd in October
2016. After a period of constructive interactions, on 23 December we announced
that the Boards of NN Group and Delta Lloyd reached an agreement on a
recommended public offer with the aim to combine Delta Lloyd with the Dutch and
Belgian activities of NN Group. Early February we launched the offer for all
issued and outstanding ordinary shares in Delta Lloyd at EUR 5.40 per share and
announced that we increased our stake in Delta Lloyd to 8.0% of ordinary shares.
This transaction represents a significant step in our journey to build a
profitable business for the future, and to strengthen our leading position in
the Netherlands and Belgium.
NN Group reported a healthy operating result in the fourth quarter of 2016. Most
of our businesses are making steady progress in delivering on their strategic
targets. The Netherlands units achieved a further reduction in their cost base,
which is targeted to be reduced to EUR 685 million by the end of 2018, ahead of
the reduction that was expected to be achieved in 2016. Our European and
Japanese insurance businesses reported higher sales as a result of the
successful launch of new products, while the total value of new business
increased for the full year, despite lower interest rates. NN Bank continues to
generate considerable growth in the mortgage and savings markets and our asset
manager, NN Investment Partners, again attracted net inflows of third-party
assets in the fourth quarter. There is still more work to do, for example in
bringing down the combined ratio of our Non-life business.
Our Solvency II and cash capital positions remain robust, at 241% and EUR 2,489
million respectively. We will propose a final 2016 dividend of EUR 0.95 per
ordinary share at our Annual General Meeting of Shareholders on 1 June 2017.
Together with the interim dividend paid in September 2016, this represents a
pay-out ratio of around 51% of the 2016 full-year net operating result of the
ongoing business. In January 2017, we successfully refinanced part of our
outstanding debt and allowing us to repay the final tranche of hybrid debt to
ING.
Looking ahead, ongoing uncertainty with regard to economic growth, macro
developments, and potential political shifts are likely to impact the financial
markets in 2017. Irrespective of these developments, we are committed to
delivering an excellent customer service, innovating our products and further
improving our businesses. The progress we made in these areas in 2016 is
reflected in our employee engagement and Net Promotor Scores. This strong
foundation enables us to further shape our ambition of creating a company that
truly matters in the lives of our stakeholders.'
NN Group key figures
In EUR million 4Q16 4Q15 Change FY16 FY15 Change
----------------------------------------------------------------------
Operating result ongoing business 282 250 12.6% 1,227 1,435 -14.5%
Net result 148 360 -58.9% 1,189 1,565 -24.0%
Net operating ROE 7.2% 7.5% 8.1% 10.8%
Solvency II ratio(1)) 241% 239% 241% 239%
Note: All footnotes are included on page 28
Quarterly Business Update
NN Group's robust financial position in 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
company's 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
In the Dutch pension market, NN maintained its leading position in 2016. This
was acknowledged by the Dutch magazine Management Team, which ranked Nationale-
Nederlanden as the best pension provider in the Netherlands for the third year
in a row. Moreover, the Dutch pension business introduced new features to
further improve its product proposition, for example the 'additional savings'
option for its Defined Contribution product which allows customers to increase
their individual savings to secure future income. In Poland, the cooperation
with Notus started and the Polish flagship product, a protection and investment
proposition, was tailored for customers of Notus and launched in the fourth
quarter.
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. NN Group
adapts its businesses to capture this growth potential. In the fourth quarter of
2016, the sale of protection products grew 11% across Europe compared with the
same quarter in 2015, with Romania, Turkey and Belgium as the largest
contributors. In Turkey, a new law entered into force on 1 January 2017, under
which all employees under the age of 45 will be enrolled in a new compulsory
pension scheme while their employers can select a pension company. NN Hayat ve
Emeklilik successfully introduced a new pension product to meet this new demand.
In the fourth quarter of 2016, total sales at Japan Life increased by 23%,
excluding currency effects, driven by the sales of the COLI critical illness
product launched in July. Bancassurance sales grew 37%, at constant currency,
compared to the same quarter of 2015. This was driven by higher bank activation
and the expansion of the bank distribution network, bringing the total to 61
banking partners at the end of 2016.
At the beginning of 2016, NN Romania launched the first health insurance on the
local market. At the end of December 2016, over 10,000 clients contracted health
insurance from NN, 50% more than initially expected for the first year.
In the Netherlands, NN Bank grew its mortgage portfolio by EUR 2.2 billion to
EUR 12.7 billion in 2016. During that same period its customer savings grew by
the same amount to EUR 10.2 billion. In the Dutch market, bank savings are
increasingly replacing Life annuities, and NN Bank has established a strong
position in this market. Movir, which offers individual disability insurance to
self-employed workers in the Netherlands, successfully launched a campaign to
inform medical specialists about their renewed product offering, which
complements the existing disability insurance (AOV).
The fourth quarter also saw positive developments in the area of securing new
contracts as NN Investment Partners was selected to become the fiduciary manager
of assets under administration (AuA) for two large Dutch pension funds for a
total amount of EUR 4.8 billion. In addition to this, NN Group's general pension
fund 'De Nationale APF', secured its first client.
Multi-access distribution
NN Group serves its customers through multiple channels, comprising tied agents,
bancassurance partners, brokers and direct channels. It is our aim to achieve
profitable growth through multi-access distribution. In line with this strategy,
our insurance company in the Czech Republic entered into a strategic partnership
with Moneta Money Bank. This enables NN Czech to reach a larger number of
customers and provide products to meet their protection and pension savings
needs. Moneta Bank extended its product offering with NN's term life insurance
and pension savings products.
In the Netherlands, the website NN.nl continues to attract an increasing number
of visitors, and over 90% of NN Bank's new customer savings is generated through
this online channel.
Effective and efficient operations
NN Group aims to make its processes as efficient and effective as possible. The
businesses in the Netherlands continue to implement efficiency initiatives. For
example, the pension business in the Netherlands established a system which
links to salary package software from HR benefits companies, improving
administrative efficiency for both customers and NN Life. In addition, NN Life
entered into a strategic partnership to outsource business processes and IT for
the individual life closed book. Furthermore, in line with the retail strategy
in the Netherlands, several new products were made available on the online
distribution channel 'My NN' and in the NN app. Also the Dutch Non-life business
remains focused on increasing efficiency, for example by sending close to a
million documents to the digital mailbox of intermediaries, instead of in
hardcopy. Moreover, NN Bank extended digital tooling and self-service processes,
providing customers with insight and options to make adjustments to their
products. One example is a track and trace system for mortgage applications.
Japan Life is introducing self-compliance and medical self-service tools
improving our service and reducing administrative efforts. In Belgium, a Home &
Family portal was created, where customers are able to modify their Building,
Contents, Theft and Family insurance, request certificates or file a claim
online. This reduces manual work and delivery time and increases the self-
reliance of the customer. After the introduction of tablets for our sales force
in Poland in the third quarter of 2016, 90% of the new business applications
were fully automated, resulting in efficiency gains and improving customers'
experiences and communications.
Innovation
As part of our ambition to enhance the quality of advice and service to
customers, improve staff productivity, and create cross-sell, upsell and
retention opportunities, NN Life Japan launched a one-stop intuitive service
platform for agents in December 2016, which will help strengthen relationships
with distributors. Furthermore, NN's broker in Turkey, Sigorta Cini, is
operating from 25 'insurance shops' across the country, and is the second most
visited online aggregator in Turkey with more than 1 million unique visits
annually. Improvements in website functionality and investments in search
marketing has helped NN in Turkey to reach out to more online customers looking
for price comparison.
The Non-life business in the Netherlands launched several initiatives to
increase safety for retail and SME customers. In November, Sparklab (the
innovation lab of NN Non-life) launched the Dutch Cyber Collective. This
association is supporting SMEs to reduce cybercrime. Other examples include a
safety check for children's bikes in schoolyards in The Hague and the 'Safest
Street of the Netherlands' ('Veiligste straat van Nederland').
Other events
In 2016, NN launched a new campaign 'It's different when it's yours',
celebrating the uniqueness of our individual customers. In the coming months,
the new campaign will be launched in many NN countries. It focuses on those
moments in life we all experience, yet we all experience differently. NN is
proud to help millions of individuals, families, homes and businesses every day,
and we are well aware that the family, home or business of each individual
customer matters most to him or her.
As part of our commitment to considering environmental, social and governance
aspects in our investment decisions, during 2016 experts from NN and NN
Investment Partners contributed to a report called 'Building Highways to SDG
Investing'. With this report, a group of 17 financial institutions including NN
Group, invited the Dutch government and Central Bank to continue to make a
concerted effort in cooperation with the financial sector in support of the
Sustainable Development Goals (SDGs). Adopted by the United Nations, these goals
relate to climate, poverty, health care, education, and other societal
challenges.
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 4Q16 results at 09.30 am CET on Thursday 16 February 2017.
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 lunch
Lard Friese and Delfin Rueda will host a press lunch to discuss the 4Q16
results, which will be held at 11.30 am CET on Thursday 16 February 2017.
Financial calendar
* Publication 1Q17 results: 18 May * Publication 2Q17 results: 17
2017 August 2017
* Annual General Meeting: 1 June * Publication 3Q17 results: 16
2017 November 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 4Q16 Financial Supplement, NN Group 4Q16 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 NN Group N.V. condensed consolidated interim
accounts for the period ended 30 September 2016. The Annual Accounts for 2016
are in progress and may be subject to adjustments from subsequent events.
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.
NN_Group_Press_Release_4Q16:
http://hugin.info/160538/R/2079248/782785.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: NN Group NV via GlobeNewswire
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Datum: 16.02.2017 - 07:00 Uhr
Sprache: Deutsch
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