Nn Group N.v. · EURONEXT:NN
Nn — Investor Day (November 2021)
44 slides from Nn's investor day presentation, Nov 25, 2021
Slide 1: Investor & analyst deep-dive webinar
Investor & analyst deep-dive webinar 25 November 2021
Slide 2: Introducing today’s presenters
Introducing today’s presenters Driving growth in Winning in the changing Attractive growing businesses Insurance International Dutch pensions market David Knibbe Fabian Rupprecht Leon van Riet CEO and chair of the Executive Board and CEO International Insurance and Member CEO Netherlands Life & Pens
Slide 3: Attractive growing businesses
Attractive growing businesses David Knibbe CEO NN Group Investor deep-dive – November 2021
Slide 4: Today’s key messages
Today’s key messages On track to achieve Group • Good progress towards meeting OCG1 and FCF2 targets in 2023 financial and non-financial • Ongoing focus to reach ambitious targets for customers, employees and targets society Attractive opportunities for • Businesses well positioned to benefit from l
Slide 5: Investor proposition: long-term growth and cash
Investor proposition: long-term growth and cash Resilient balance sheet Strong and growing cash Profitable growth in flow in the Netherlands attractive markets Our commitment Resilient, mid single-digit annual growth of OCG over time Excellent customer experience Non-financial targets Engaged employ
Slide 6: Operating capital generation
Organic business performance supports long-term OCG growth Long-term mid single- digit annual OCG Long-term OCG growth drivers Growth expectations growth1 Insurance • Underpenetration of insurance, Well on track to reach EUR 1.5bn International GDP growth, and increasing awareness Mid to high OCG ta
Slide 7: Focus on solutions to meet the evolving needs of customers
Focus on solutions to meet the evolving needs of customers Long-term market trends Examples of growth initiatives around sustainability and customer engagement underpin growth ambitions • Sustainable mortgage offering • Continuing GDP growth1 • Increased customer engagement through solutions-based p
Slide 8: Long-term OCG growth translates into growing FCF and capital return to shareholders
Long-term OCG growth translates into growing FCF and capital return to shareholders • Long-term mid single-digit annual OCG growth based on Dividend per share (DPS) (EUR, CAGR in %) organic business performance • FCF expected to be in a range around OCG over time 9% 2.33 • Disciplined capital deploy
Slide 9: Key takeaways
Key takeaways On track to achieve Group financial and non-financial targets in 2023 Attractive opportunities for organic growth underpinned by long-term market trends Strong outlook for long-term OCG growth; additional OCG uplift achieved from active portfolio management decisions Disciplined capita
Slide 10: Driving growth in Insurance International
Driving growth in Insurance International Fabian Rupprecht CEO International Insurance Investor deep-dive – November 2021
Slide 11: Strong and sustainable long-term growth in Insurance International
Strong and sustainable long-term growth in Insurance International Active in attractive • Active in markets with mid to high single-digit growth rates, upside from growth markets increased awareness and low insurance penetration in Insurance Europe • Strong track record of double-digit VNB1 growth s
Slide 12: Insurance Europe Japan Life
1 2 Insurance Europe Japan Life
Slide 13: Active in attractive European markets with clear opportunities to grow
Active in attractive European markets with clear opportunities to grow Total GDP per capita (2019, USDbn) and expected GDP growth rate (CAGR in %, 2021-2026)1 Attractive growth markets 10% • Active in markets showing strong expected 8% Turkey Romania Poland GDP growth of ~6% per annum1 GDP growth ra
Slide 14: Strong long-term OCG growth driven by new business contribution
Strong long-term OCG growth driven by new business contribution Expected OCG development (EURm) Well on track to reach OCG target in 2023 • Supported by strong business performance Mid to high single-digit annual OCG growth in the long term Mid to high single-digit long-term annual OCG growth expect
Slide 15: Relationship VNB and OCG in Europe explained
Relationship VNB and OCG in Europe explained VNB of SII entities flows into OCG NB contribution over time Growth of OCG new business contribution over time in line with VNB growth OCG NB contribution as % of VNB ~100% • Over the contract period, the OCG NB contribution equals the VNB of Solvency II
Slide 16: We will continue to deliver strong VNB growth in the future
We will continue to deliver strong VNB growth in the future Double-digit VNB growth since 2015 (CAGR in %, EURm) VNB growth trend expected to continue • Above average GDP growth in our markets, bundled with upside in life insurance penetration 14% 204 • Customer-focused strategy: 183 168 1 Further g
Slide 17: Further growth in attractive protection products, building on early mover advantage
1 Further growth in attractive protection products, building on early mover advantage Focus on attractive protection segment Supported by rising customer needs Taking actions to enhance future growth (VNB, CAGR in %, 2015-2020) (Total Life GWP in CEE3, EURbn, CAGR in %) • Technical capabilities to s
Slide 18: Being the preferred partner for third-party distributors
2 Being the preferred partner for third-party distributors Diversified distribution footprint Strong relationships with >15 Preferred partner for brokers in selected (VNB, 2020) bancassurance partners across Europe1 markets 5% bancassurance • Strong broker business, mainly in Czech 15% Republic, Slo
Slide 19: Leveraging and growing our customer base through own channels
3 Leveraging and growing our customer base through own channels 1 2 3 4 Pillars Leverage data and build Maximise lead generation Fully integrate digital and Increase relevance by capabilities and conversion physical channels extending product offer • Migration to cloud-based • Increase digital leads
Slide 20: Leveraging and growing our customer base through own channels
3 Leveraging and growing our customer base through own channels 1 Increasing value of +200% Securing strong VNB per agent growth data use cases 5 15 going forward (VNB per agent, CAGR in %) (VNB1, EURm) 2019 2021E 2 30% 24% Growing new sales 18% 2021E 15% from leads 8% 3% 2018 +16% (% of TA APE from
Slide 21: Insurance Europe Japan Life
1 2 Insurance Europe Japan Life
Slide 22: NN Life Japan active in large COLI market
NN Life Japan active in large COLI market Strong position in growing niche market (Number of SMEs) Serving the needs of SMEs Total COLI1 market ~2.5m SMEs • Clear needs around disability and death specific to SMEs (business continuity, inheritance, family business transition) – covered by Income and
Slide 23: Strong recovery after tax rule change in 2019 and Covid-19
Strong recovery after tax rule change in 2019 and Covid-19 Sales volumes up from increased activity in fully Resulting in strong VNB development (VNB, EURm) renewed product suite ... (APE, EURm) 195 92 113 134 70 2H19 1H20 2H20 1H21 2023E 44 27 … and higher margins following less competition after 1
Slide 24: Relationship of VNB and OCG in Japan explained
Relationship of VNB and OCG in Japan explained After recovery, sustained VNB growth … VNB growth translates into mid to high single-digit OCG growth (VNB, EURm) Sustained VNB growth Ahead of plan to reach in the long term over time VNB target in 2023 • Sales create high initial new business strain i
Slide 25: NN Japan is well positioned to capture further growth
NN Japan is well positioned to capture further growth Shifting the company towards protection (VNB, EURm) Continue agent activation with best-in-industry training Financial Solutions and sales support (Agent NPS) Protection 17 159 148 79 85 77 25 4 54 67 50 36 45 23 2015 2016 2017 2018 2019 2020 202
Slide 26: Focus on data to accelerate our SME customer base
Focus on data to accelerate our SME customer base 1 2 3 4 Leverage data and build Maximise SME lead Making underwriting Engagement platforms for Pillars capabilities generation and conversion frictionless SMEs • Developing new automation • Internally developing • Specialised knowledge on • Increasin
Slide 27: Strong and sustainable long-term growth in Insurance International
Strong and sustainable long-term growth in Insurance International Active in attractive • Active in markets with mid to high single-digit growth rates, upside from growth markets increased awareness and low insurance penetration in Insurance Europe • Strong track record of double-digit VNB1 growth s
Slide 28: Appendices
Appendices
Slide 29: We are active in 9 countries in Insurance Europe
We are active in 9 countries in Insurance Europe Belgium Poland1 Spain • Life protection market share of 15% • Life protection market share of 6% • #10 in Life • #5 in Life (7%); #13 in Non-life • #3 in Life (12%); #1 in P2 pensions (26%) 1 • ~2,100 tied agents • ~1.3m life customers • ~3,050 tied a
Slide 30: Key financial metrics
Key financial metrics Operating Capital Generation (EURm) Value New Business (EURm) Remittances1 (EURm) Insurance Europe Insurance Europe Insurance Europe 182 130 135 135 127 125 121 119 108 96 99 84 63 20 14 1H19 2H19 1H20 2H20 1H21 1H19 2H19 1H20 2H20 1H21 1H19 2H19 1H20 2H20 1H21 Japan Life Japan
Slide 31: Winning in the changing Dutch pensions market
Winning in the changing Dutch pensions market Leon van Riet CEO Netherlands Life & Pensions Investor deep-dive – November 2021
Slide 32: Sustainable OCG with potential upside
Sustainable OCG with potential upside Dutch life is an attractive market with opportunities for growth Long-term sustainable OCG expected from in-force portfolio and growth in defined contribution pensions (DC) Pole position in growing DC market: well positioned market leader, strong propositions an
Slide 33: Market leader in Dutch life
Market leader in Dutch life Key highlights Market shares Dutch group life market1 • Market leader in Dutch life and pensions NN ABN Amro PPI • ~40% market share in group life1 Aegon Allianz ~40% ASR Others • Largest in-force customer base and broad distribution Athora • Increasing customer2 and advi
Slide 34: Dutch life is a sustainable growth market
Dutch life is a sustainable growth market OCG development Netherlands Life1 Confident in reaching the 2023 OCG target • Higher investment returns from shift to higher-yielding assets and lower UFR drag Operating capital generation Sustainable OCG • Broadly stable OCG from in-force book as run-off of
Slide 35: Current Dutch pension system explained
Current Dutch pension system explained Dutch pension system Pillar 2 employer Pillar 2 pension market consists of three different segments pension market (AuM)2 • Industry-wide pension funds have mandatory participation if employer is Insurers active in such industry (e.g., civil servants, healthcar
Slide 36: Pillar 2 pension reform doubles addressable market with opportunities for buyouts and coming service
Pillar 2 pension reform doubles addressable market with opportunities for buyouts and coming service New pension agreement reached in 2020 Dutch pension reform expected to lead to reduction of number of • Final legislation expected in 20221, followed by a 5-year phase-in corporate pension funds2 109
Slide 37: Well positioned to benefit from changing pension landscape
Well positioned to benefit from changing pension landscape One-stop shop in response to customer preferences gives Robust position to capture opportunities in group pension flexibility for past and coming service pension solutions market • Multiple options in an evolving market • Track record of inn
Slide 38: Strong offerings in growing DC market
Strong offerings in growing DC market 1,2 Market leader in growing group pensions market (DC and DB) Winning in DC (EURbn) • NN offers two DC propositions: insured DC as well as PPI 5.0 5.0 5.1 5.4 6.0 • Targeting different market segments, but product features and 4 benefits are similar for custome
Slide 39: Growing scale to further increase OCG contribution from DC
Growing scale to further increase OCG contribution from DC Scale contributes to cost efficiency in a highly price-sensitive Balanced combination of revenue sources market Source Accumulation Decumulation • Today DC business is profitable; increasing scale as well as Investment spread efficiency expe
Slide 40: Key takeaways
Key takeaways Dutch life is an attractive market with opportunities for growth Long-term sustainable OCG expected from in-force portfolio and growth in DC Pole position in growing DC market: well positioned market leader, strong propositions and excellent relationships with distribution partners Pen
Slide 41: Appendix
Appendix
Slide 42: Key financial metrics
Key financial metrics 1 Operating capital generation (EURm) Operating result (EURm) Remittances (EURm) 441 524 500 520 520 395 494 480 376 450 330 397 410 404 266 1H19 2H19 1H20 2H20 1H21 1H19 2H19 1H20 2H20 1H21 1H19 2H19 1H20 2H20 1H21 1. Includes interest on subordinated loans provided by the hol
Slide 43: Important legal information
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 of the Dutch Civil Code. In preparing the financial information in this document, the
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