NN Group reports 3Q17 results
(Thomson Reuters ONE) -
Strong performance of the combined group; Solvency II ratio at 204%
* Operating result ongoing business increased to EUR 431 million from EUR 319
million in 3Q16, driven by improved results at most segments, the
contribution of Delta Lloyd of EUR 51 million and EUR 32 million non-
recurring benefits in the segment Other, partly offset by lower results at
Netherlands Non-life
* Net result of EUR 734 million versus EUR 436 million in 3Q16, reflecting the
improved operating result and higher capital gains
* Ongoing expense reduction at Netherlands Life, Netherlands Non-life, Asset
Management, the segment Other and Belgium, of EUR 86 million in the first
nine months of 2017
* Solvency II ratio of NN Group increased to 204% from 196% at 2Q17,
reflecting operating return and positive market impacts
* Holding company cash capital increased to EUR 1,789 million reflecting EUR
332 million of dividends received from subsidiaries
Statement of Lard Friese, CEO
'We are pleased to report another strong set of results for NN Group for the
third quarter of 2017. This is the second quarter in which the results of Delta
Lloyd have been included in our company's overall performance, after the
acquisition of the company in April this year. Apart from the Non-life business,
all our businesses performed well. Japan Life and Insurance Europe in particular
reported a healthy increase in earnings and continue to achieve strong growth in
sales.
At the same time, we continue to strive for efficiency, as reflected in further
cost savings of EUR 64 million in the quarter. Our balance sheet remains robust,
with a Solvency II ratio of 204% and cash capital position of EUR 1.8 billion.
We will redeem EUR 575 million of senior notes which mature tomorrow. Together
with the transaction we concluded with Fonds NutsOHRA in April, we will have
reduced our financial leverage by approximately EUR 1 billion.
As a financial company with a significant economic footprint, we want to
contribute to society; among other things by further integrating ethical, social
and environmental components into our core strategy. As of September, NN Group
is included in the Dow Jones Sustainability Indices, for both World and Europe.
This means NN Group now ranks among the top 10% of the insurance industry group
with regard to its sustainability performance.
The integration of the Delta Lloyd and NN operations in the Netherlands and
Belgium is progressing well. In the Netherlands, we reached agreements with the
trade unions and the Works Councils on the Reorganisation Framework and the
guiding principles for integration, that facilitate further implementation of
the integration plans. Another important step forward as a combined group was
the start of the brand transformation from Delta Lloyd to NN. Furthermore, to
optimally serve our customers, new product offers are being developed by the
combined front offices. We also reached out to intermediaries on multiple
occasions to personally share and explain the rationale and the benefits of the
combined group. With the integration process well on its way, we will continue
to shape the future strategy of the combined group, and we look forward to
sharing the progress we are making on these fronts at our Capital Markets Day on
30 November.'
NN Group key figures
In EUR million 3Q17 3Q16 Change 9M17 9M16 Change
---------------------------------------------------------------------------
Operating result ongoing business(1)) 431 319 35.1% 1,241 945 31.3%
Net result 734 436 68.5% 1,410 1,041 35.4%
Net operating ROE(1)9)22)) 10.6% 8.1% 10.8% 8.4%
3Q17 2Q17 3Q16
Solvency II ratio2) 204% 196% 236%
Note: All footnotes are included on page 27
Quarterly Business Update
NN Groups robust financial position 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 that meet
customers' lifetime needs.
Transparent products and services
This quarter, two new innovative home insurance products were launched.
Nationale-Nederlanden Spain launched 'Mihogar Seguro'. This is a flexible
product offering modular coverage including the repair of electrical appliances,
services related to travel assistance and services related to pets (for example
telephone counselling or access to veterinary centres). In total, more than 60%
of these policies sold include such additional coverage. The Non-life business
in the Netherlands launched a flexible home insurance product, in which the
customer can choose specific insurance coverage in a more granular way to fit
their personal needs.
Since the third quarter, NN Bank in the Netherlands has been offering mortgage
solutions for the self-employed. These mortgages are available for entrepreneurs
who have been self-employed for over a year and less than three years.
In September, the liability insurance products of OHRA and ABN AMRO Insurance,
as well as the legal insurance products of Nationale-Nederlanden and ABN AMRO
Insurance were awarded a five-star rating by MoneyView, which collects
information about financial products and makes them transparent and comparable.
Capturing growth
NN's leading position in the area of Defined Contribution (DC) in the Dutch
pension market was further strengthened by contract renewals in a broad range of
sectors, and new sales in the SME and Corporate markets, an example is SGS, a
multinational with over 90,000 employees worldwide, which chose NN's insured DC-
product. The general pension fund 'De Nationale APF' signed contracts with two
new clients, Unisys and AFM, resulting in a total of approximately EUR 1 billion
in assets under management as of January 2018.
The banking business - NN Bank and Delta Lloyd Bank - continued to grow their
mortgage business in the third quarter adding EUR 0.4 billion to reach a
combined mortgage portfolio of EUR 17.8 billion. To address its ongoing funding
needs and to further diversify its sources of funding, NN Bank successfully
issued a EUR 500 million conditional pass-through covered bond in October under
its covered bond programme. The bonds were placed with a broad range of
institutional investors and will help NN Bank to further grow its business.
In the third quarter of 2017, the sale of protection products at Insurance
Europe grew by 47.9% across the region compared with the same quarter in 2016.
In Turkey, a new law came into effect on 1 January 2017, under which all
employees under the age of 45 will be enrolled in a new compulsory pension
scheme, managed by a pension company to be selected by their employers. NN Hayat
ve Emeklilik successfully introduced a pension product to meet this new demand,
capturing around 7% market share. To support the product's introduction, an
online peer-to-peer referral model was developed by our innovation lab
'Sparklab' in Turkey to acquire new pension customers through third parties such
as accountants, HR companies and payroll companies.
Multi-access distribution
Nationale-Nederlanden in the Netherlands took further steps in the omni-channel
approach. Online chat and co-browse technology has been implemented in our
digital environment, creating ease of use for our customers and intermediaries.
NN Group serves its customers through multiple channels, comprising tied agents,
bancassurance partners, brokers and direct channels. Bancassurance COLI sales
for Japan Life increased by 30% at constant currencies, compared with the third
quarter of 2016, despite increasing competition. Higher bank activation and the
expansion of the bank distribution network to 73 partners as of the end of
September 2017, compared with 61 partners a year earlier, were key drivers for
the increase in sales. Furthermore, Sumitomo Life started offering NN Life
Japan's COLI products from the beginning of April 2017, contributing more than
10% of Japan Life's total sales this quarter.
NN Hellas in Greece renewed its bancassurance agreement with Piraeus Bank for
the coming 10 years, with the possibility of a further five-year extension.
Piraeus Bank, the leading bank in Greece, will continue to offer NN Hellas' life
and health products to its customers.
In September 2017 Nationale-Nederlanden Poland introduced a new Payment
Protection Insurance product specifically geared to both retail and entrepreneur
customers of ING Bank Slaski. The product offered to retail customers consists
of both life and non-life insurance. The product for small businesses, 'Safe
business', provides loan payment protection in the event that the owner is
incapacitated for work.
In November NN Hayat ve Emeklilik in Turkey entered into a strategic partnership
with Hesapkurdu.com, the leading online loan aggregator for mortgages and
consumer loans in the Turkish market.
Effective and efficient operations
NN Group is committed to making its processes as efficient and effective as
possible. The Dutch life business has started an automation project, called Robo
for Life. Currently, seven robotic systems have been implemented in four
different streams; Pay-outs, Start Pension & Decease, Divorce and Value
Transfer. This has resulted in a decrease in operational costs and an
improvement in customer service levels.
NN in Belgium launched Medic(at)Home, a medical acceptance process for mortgage-
linked Term Life insurance, which allows customers to complete the medical
questionnaire entirely online, on any device (laptop, smartphone, tablet),
guaranteeing a smooth service. So far, more than 80% of customers have chosen to
file their medical acceptance online, using the NN Portal. NN is analysing how
Medic(at)Home can be further rolled out for other life protection products with
banking partners and in the broker channel in other markets.
In Hungary NN introduced the 'Green Lane' project which automates and digitises
the underwriting and issuance of insurance policies. This includes real-time
straight-through processing and enables multichannel access for customers. This
is a significant step forward from the current 11 day issuance process, saves
costs and allows quicker payment of commissions.
Innovation
NN International Insurance has developed a tool to support sales agents in their
daily activities, the Smart Agent Mobile App, which is currently being piloted
in Greece. The app supports agents by providing them with up-to-date information
on customers and prospects, an overview of open tasks, and their personal
performance. The app is integrated with NN systems and phone functionalities
allowing agents to easily connect with customers and prospects and to deliver
better customer experience.
The Non-life business in the Netherlands recently introduced a new car
insurance: 'Roxo', developed together with Independer, a Dutch comparison site
for financial products, and which uses machine learning to calculate risk
premiums.
Other
ESG & Sustainability remains an area of focus for NN Investment Partners (NN IP)
and has been performing well across the different asset classes. NNIP's
Sustainable & Impact Equity funds, the Green Bonds & Sustainable Credit offering
as well as the Sustainable Multi-Asset solutions have seen overall positive net
flows.
Furthermore, NNIP recently developed an innovative approach for assessing the
Sustainable Development Goals (SDGs) exposure of companies and for investing
according to the SDGs. The United Nations SDGs offer a solid path to value
creation for society and shareholders: investing in a better world while
achieving healthy financial returns. This new approach helps NNIP and its
clients contribute to this as well.
NN Group Profile
NN Group is an international insurance and asset management company, active in
18 countries, with a strong presence in a number of European countries and
Japan. With all our employees the Group offers retirement services, pensions,
insurance, investments and banking to approximately 17 million customers. NN
Group's main brands are Nationale-Nederlanden, NN, Delta Lloyd, NN Investment
Partners, ABN AMRO Insurance, Movir, AZL, BeFrank and OHRA. 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 3Q17 results at 10.00 am CET on Thursday 16 November 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 call
Lard Friese and Delfin Rueda will host a press call to discuss the 3Q17 results,
which will be held at 07.30 am CET on Thursday 16 November 2017. Journalists can
join the press call at +31 (0)20 531 5863.
Financial calendar
* Capital Markets Day: 30 November * Publication 1Q18 results: 17 May
2017 2018
* Publication 4Q17 results: 15 * Publication 2Q18 results: 16
February 2018 August 2018
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 3Q17 Financial Supplement, NN Group 3Q17 Analyst Presentation
* NN Group 30 September 2017 Condensed consolidated interim financial
information
* Photos of NN Group executives, buildings and events are available for
download at Flickr
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 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 2017.
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.
NN_Group_Press_Release_3Q17:
http://hugin.info/160538/R/2150194/825309.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: 16.11.2017 - 07:00 Uhr
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