Nn Group N.v. · EURONEXT:NN
Nn — Investor Day (November 2015)
26 slides from Nn's investor day presentation, Nov 19, 2015
Slide 1: NN Group Insurance International
NN Group Insurance International Robin Spencer, CEO International Insurance Capital Markets Day 19 November 2015
Slide 2: Portfolio of mature and developing international markets
Portfolio of mature and developing international markets International businesses Japan Leading player in • Organically built Corporate Owned Life • Trusted brand Insurance (COLI)2 Top 3 positions in • Large and professional distribution channels CEE1 life insurance • Cash generative and pensions In
Slide 3: Strong contribution to NN Group results
Strong contribution to NN Group results Operating Result Net Remittances Value New Business International 9M15: EUR 281 mln International 9M15: EUR 367 mln International 9M15: EUR 154 mln 24% of NN Group ongoing business1 36% of NN Group net remittances 96% of NN Group VNB (EUR mln) (EUR mln) (EUR m
Slide 4: Managing businesses for value
Managing businesses for value Return on Equity 9M15 International Businesses1 30% 25% Returns above Cost of Returns below Cost of 20% Capital Capital 15% ROE International Portfolio: ~10%⁵ 10% 5% 0% Hungary⁴ Czech Republic² Slovakia Poland Romania Bulgaria³ Japan Life Spain Luxembourg Belgium Greece
Slide 5: Insurance Europe
Insurance Europe au
Slide 6: Insurance Europe has a strong footprint
Insurance Europe has a strong footprint Top 3 positions1 in CEE Strong market positions life insurance and pensions Significant distribution power via tied agents and banks Businesses rebranded in 1H15 Excellent customer experience EUR 15 bln pensions asset under management Subscale in some markets
Slide 7: Showing early signs of turnaround
Showing early signs of turnaround Target: Mid single digit Net remittances1 Improve return on equity2 Grow Value New Business operating result growth (EUR mln) (EUR mln) (EUR mln) +10% +43% 142 75 135 148 9.8% 101 52 8.5% 9M14 9M15 9M14 9M15 9M14 9M15 9M14 9M15 • Disciplined cost, product and capita
Slide 8: Driving long-term value focusing on 4 strategic themes
Driving long-term value focusing on 4 strategic themes 1 2 Disciplined capital allocation at a Driving high quality distribution, with portfolio and product level ongoing focus on efficiency and quality 3 4 Growing through innovation in our Focus on delivering excellent customer markets experience A
Slide 9: Optimising our product propositions
1 Optimising our product propositions 1H15: 93 propositions1 Number of propositions VNB Total: 97 Total: 93 20 16 Positive VNB 44 Zero/Marginal VNB 26 51 Negative VNB 33 FY14 1H15 Value of New Business per Product Proposition • Analysing and managing our business by individual product propositions t
Slide 10: Improving VNB despite low interest rates
1 Improving VNB despite low interest rates VNB Development Improvements in products and distribution (EUR mln) have led to higher VNB +43% • VNB Margin¹ improved from 2.3% to 3.0% • Payback² period shortened from 9 years to 8 years • Business mix improvements: shift to protection 38 and capital ligh
Slide 11: Leveraging high quality distribution
2 Leveraging high quality distribution Strategic partnerships with Professional financial advisors Selective cooperation with 10 banks brokers 35% of APE (up 2%) 42% of APE (up 2%) 21% of APE (down 4%) Digital sales and servicing tools Customer intelligence, data analytics Improving productivity APE
Slide 12: Growing through innovation in our markets
3 Growing through innovation in our markets • NN has history of product innovation: right propositions tailored for local markets • NN Hungary regained #1 position, market share up from 15.6% to 19.0%¹, and grew new business by 10%¹ • Synergies across Europe – MCPPI: Sales grew 14%² in Spain; Greece
Slide 13: Improving Customer Experience
4 Improving Customer Experience • Relational NPS ahead of competitors • Retention rate improvements 2013 versus 2014 • Digitalisation: 82% decrease in new business processing costs in Spain with paperless sales Digitalisation Net Promoter Score (NPS) in relation to main competitors – Source: NN Grou
Slide 14: Strategic focus on profitable growth
Strategic focus on profitable growth Strategic Focus Next 24 months 1 Disciplined capital allocation at a portfolio • Turnaround low return businesses and product level • Release capital from back books Driving high quality distribution, with ongoing • Capitalise on significant Tied Agent Network 2
Slide 15: Japan Life
Japan Life 15
Slide 16: NN Life Japan built a large COLI business
NN Life Japan built a large COLI business Japanese Life Market1: EUR 21 bln COLI segment¹: EUR 4.5 bln Known for product innovation and superior service Long-lasting distribution relationships Leading COLI player High barriers to entry EUR 10 bln Life Reserves 67,000 SME customers Pressure on invest
Slide 17: Profitable, value creating and cash generative
Profitable, value creating and cash generative Target: Cash generative Improve return on equity2 Writing Profitable New Low-mid single digit Business1 operating result growth1 (EUR mln) (EUR mln) (VNB, EUR mln) 0% -1% 132 132 79 78 90 9.8% 74 9.6% 9M14 9M15 9M14 9M15 9M14 9M15 9M14 9M15 • Significan
Slide 18: Product and distribution diversification strategy
Product and distribution diversification strategy Distribution Diversification: Business Diversification: Expand Bancassurance COLI Expand COLI Protection APE 9M131 APE 9M151 VNB 9M131 VNB 9M151 6% 10% 13% 20% 90% 87% 80% 94% Bancassurance COLI Protection Independent Agencies COLI Financial Solution
Slide 19: Strategic focus on profitable growth
Strategic focus on profitable growth Strategic Focus Next 24 months • Move to more profitable products 1 Disciplined capital allocation at product level • Diversify towards protection 2 Driving high quality distribution, with ongoing • Continue to expand bancassurance focus on efficiency and quality
Slide 20: Japan Closed Block VA
Japan Closed Block VA 20
Slide 21: Japan Closed Block VA continues to release cash
Japan Closed Block VA continues to release cash ~90% expected to have matured by end 2019 Liabilities are actively managed and hedged (EUR bln) +56 (166) +170 +44 +21 (53) 0.5 0.5 0.6 0.7 -0.1 -0.1 hedge result -0.7 -0.7 EUR mln -1.5 -1.7 Asset Liability -2.4 -2.4 2010 2011 2012 2013 2014 9M15 • Por
Slide 22: Key takeaways
Key takeaways Insurance Europe 1 Organically built businesses leveraging significant distribution platform 2 Grow profitability through disciplined capital allocation Japan Life 3 Top 3 player in large, structurally attractive COLI segment Focused on driving Value New Business through product innova
Slide 23: Appendix: Insurance Europe leveraging on distribution platform
1 Appendix: Insurance Europe leveraging on distribution platform
Slide 24: Insurance Europe leveraging on distribution platform
1 Insurance Europe leveraging on distribution platform Romania Czech Republic Slovak Republic Poland Hungary Position Life: #1 Position Life: #4 Position Life: #7 Position Life: #6 Position Life: #1 # of TAs: 1,419 # of TAs: 552 # of TAs: 348 # of TAs: 1,685 # of TAs: 1,111 ING Bank ING Bank 4 BA pa
Slide 25: 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 on the Dutch Civil Code. In preparing the financial information in this document, the
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