Asr Nederland N.v. · EURONEXT:ASRNL
Asr Nederland — Q4 2022 Earnings Presentation
40 slides from Asr Nederland's earnings presentation, Feb 22, 2023
Slide 1: a.s.r. Q4 2022 results presentation
de nederlandse verzekerings maatschappij voor alle verzekeringen Ce de sha @/ 22 February 2023
Slide 2: Strong financial performance continued in 2022
Strong financial performance continued in 2022 • Operating result increased by € 30m (3.0%), reflecting strong operational performance Operating result Solvency II (SF)3 Dividend per share • OCC increased by € 59m (9.9%) to € 653m, driven by business performance, higher interest rates and investment
Slide 3: Strong delivery against ambitious medium-term targets
Strong delivery against ambitious medium-term targets Core Group realisation versus target (2022-2024)1 Organic capital Operating return Solvency II ratio Dividend2 Share buyback creation on equity2 (standard formula) 222% € 653m 12.8% 12% Halted due to transaction with >160% Substantial € 1.7-1.8bn
Slide 4: Value creation for all stakeholders and compelling ESG credentials
Value creation for all stakeholders and compelling ESG credentials Non-financial realisation versus target (2022 − 2024)1 Sustainable Sustainableinsurer insurer Sustainable Sustainable insurer insurer Sustainable Sustainableemployer employer Sustainable Sustainableinvestor investor3 Sustainable Sust
Slide 5: Clear progress and on track for 1st of July closing at the earliest
Clear progress and on track for 1st of July closing at the earliest • a.s.r. and Aegon are working closely together to the fulfillment of conditions for the completion of the transaction • Transaction financing largely secured with issue of new shares and launch of new hybrid capital instrument • Tr
Slide 6: Non-life: strong organic growth while maintaining robust COR
Non-life: strong organic growth while maintaining robust COR Operating result (in €m) GWP - P&C & Disability (in €m) • Non-life operating result up by € 3m due to solid P&C underwriting results, mainly in Disability, partly offset by Disability +1.0% Health +9.1% 325 • Organic growth1 is 9.1%, excee
Slide 7: Life: higher operating result driven by technical result
Life: higher operating result driven by technical result Operating result (in €m) Investment margin (in €m) • Operating result of Life segment increased by 1.9% (€ 15m) to € 768m as a result of higher technical result, Investment margin Technical result and Other Direct investment income Required in
Slide 8: Fee-based businesses: growth in Asset Management
Fee-based businesses: growth in Asset Management Operating result fee-based businesses • Fee-based businesses operating result stable at € 64m compared to previous year (in €m) • Operating result in Asset Management increased € 3m (7.6%), despite negative Asset Management Distribution and Services i
Slide 9: Solvency and capital position
Solvency and capital position Ewout Hollegien, CFO 9
Slide 10: Solvency II ratio movements in 2022
Solvency II ratio movements1 in 2022 • Solvency II ratio at robust level of 222%2 including deduction of dividend OCC 17%-pts, € 653m 222% (total € -385m) and SBB (€ -75m) and 218% capital raise (€ 586m) 2% -3% 6% 16% • OCC increased by € 59m to € 653m. -12% Strong business performance is reflected
Slide 11: OCC development driven by improved business performance
OCC development driven by improved business performance OCC development (in €m) Business capital generation (€ +49m) • Increased performance in Disability and Life 49 101 653 segments partly offset by normalisation of claims in 594 P&C and adverse claim development in Health • Higher investment retu
Slide 12: Robust investment portfolio with solid mortgage book
Robust investment portfolio with solid mortgage book Investment portfolio € 39.4 bn1 (in %) a.s.r. net mortgage spread2 (%) • Diversified and robust investment portfolio with skew to quality 6% Government 1.6% • Positive revaluations in real estate, reflecting the 3% 24% Credits 1.4% quality and div
Slide 13: Robust and diversified real estate portfolio with strong focus on quality
Robust and diversified real estate portfolio with strong focus on quality Real estate portfolio € 5.1 bn1 (in %) Real Estate vacancy rates2 (in %) • Well diversified Real estate portfolio and high-quality assets: Q4 2021 Q4 2022 • Rural; a.s.r. is the second largest land-owner in NL 11% +2.0%-p 16%
Slide 14: Solid balance sheet provides ample financial flexibility
Solid balance sheet provides ample financial flexibility Eligible Own Funds and SII headroom1 (in €m) S&P IFS rating Headroom RT1/T2/T3 Unrestricted Tier 1 RT1 T2+T3 € 926m € 269m 1,385 452 7,346 5,509 Stable Outlook Unrestricted Tier 1 Restricted Tier 1 Tier 2 Tier 3 Eligible Own Funds Financial le
Slide 15: Solvency and cash supports execution of transaction and dividends
Solvency and cash supports execution of transaction and dividends HoldCo liquidity (in €m) • HoldCo liquidity at 31 December 2022 2,142 stood at € 2.1bn • The HoldCo liquidity includes proceeds of 988 new shares (€ 586m) and issued Tier 2 hybrid capital instrument (€ 988m1) -75 720 -346 • The HoldCo
Slide 16: Wrap-up
a. Wrap-up Jos Baeten, CEO s.r.
Slide 17: Key take-aways
Key take-aways Ongoing strong performance with higher operational results in most business segments Combination of a.s.r. and Aegon NL creating a leading insurer, expected to deliver € 185m run-rate cost synergies Well on track for closing transaction 1 July 2023 at the earliest Continued growth in
Slide 18: Appendix
Appendix
Slide 19: Appendices
Appendices A. Financial ratios K. Details of fixed-income portfolio B. Combined ratio per product line L. Details of Corporates and Financials bond portfolio C. Calculation of operating ROE M. Fixed Income portfolio Government credit rating D. IFRS profit vs. operating result per segment N. Fixed In
Slide 20: A. Financial ratios
A. Financial ratios Net result (in €m) Operating result (in €m) ROE1 Operating ROE1 942 1,009 1,039 15.3% 16.1% 733 11.3% 12.8% 2021 2022 2021 2022 2021 2022 2021 2022 Combined ratio2 Solvency II ratio3 Total equity (in €m) Financial leverage1 91.8% 91.7% 222% 7,385 6,753 34.8% 196% 24.8% 2021 2022
Slide 21: B. Combined ratio per product line
B. Combined ratio per product line 2021 2022 Net earned premiums (in €m) 1,531 1,584 Claims ratio 57.5% 59.3% Property & Casualty Expense ratio 8.2% 8.3% Commission ratio 26.2% 26.3% Combined ratio 91.9% 93.9% Net earned premiums (in €m) 1,280 1,455 Claims ratio 73.9% 72.2% Disability Expense ratio
Slide 22: C. Calculation of operating ROE
C. Calculation of operating ROE (in €m) 2020 2021 2022 Operating result (before tax)1 885 1,009 1,039 Minus: Interest on hybrid instruments through equity2 48 48 48 Operating result after hybrid costs (before tax) 837 961 991 Tax effect (as of 2022 25.8% tax rate (was 25.0%)) 209 240 256 Operating r
Slide 23: D. IFRS profit vs. operating result per segment
D. IFRS profit vs. operating result per segment IFRS profit Investment Operating IFRS profit Investment Operating Incidentals Incidentals before tax related result before tax related result 20211 (in €m) 2022 (in €m) Non-life 357 57 -22 322 87 -127 -112 325 Life 981 217 11 754 1,023 187 68 768 Asset
Slide 24: E. IFRS equity and Solvency II EOF multi-year development
E. IFRS equity and Solvency II EOF multi-year development IFRS equity (in €m) Solvency II Eligible Own Funds1 (in €m) 7,385 8,273 8,188 7,828 1,004 6,753 7,346 6,313 6,925 2,060 6,093 1,004 2,061 2,039 5,479 1,004 1,837 1,004 1,546 1,001 6,381 5,749 6,213 6,127 5,089 5,309 5,789 5,379 5,509 4,478 20
Slide 25: F. SCR movements in 2022
F. SCR movements in 2022 (in €m) FY 2021 4,185 SCR decreases in SCR increases in Market risk -935 Market risk: Market risk: • Interest rate risk • Currency risk Counterparty default risk -155 • Equity risk • Real Estate risk Insurance risk Life: Insurance risk Life -271 • Spread risk • Lapse risk •
Slide 26: G. Sensitivities Solvency II ratio
G. Sensitivities Solvency II ratio +3 222% -1 -1 -2 -2 SII ratio (%) -6 -7 -8 -8 -9 -11 VA Sovereign Corporate Interest Interest Interest Equities Equities Real estate Mortgage Inflation -10bps spread credit spread +50bps -50bps steepening -20% + 20% -10% spread +30bps +50bps +75bps 10 bps¹ +50bps E
Slide 27: H. Sensitivities Solvency II ratio – UFR
H. Sensitivities Solvency II ratio – UFR Solvency II ratio (‘stock’) • For 2023 EIOPA intends to keep the UFR at the current target of 3.45%¹ 205% 215% 220% 222% • Lowering the UFR would lead to lower 194% ‘stock’ of capital but would increase organic capital creation (‘flow’) because of reduced UFR
Slide 28: I. UFR drag methodology
I. UFR drag methodology • The absolute value of the UFR benefit in Solvency II Own 20Y EUR SWAP1 (in %) Funds and therefore the unwind of the benefit (UFR drag) 3.5 depends on; 3.0 • The current level of interest rates and 2.5 2.0 • The shape of the curve 1.5 • UFR benefit amortised over time, resul
Slide 29: J. Investment portfolio
J. Investment portfolio • Decrease in fixed income was mainly due to Assets (in €bn, fair value) FY 2021 FY 2022 Delta1 % of total market effects, largely driven by strong increase in interest rates Fixed income 32.2 20.2 -12.0 51% • Exposure to equities decreased, mainly related Equities 3.0 2.5 -0
Slide 30: K. Details of fixed-income portfolio
K. Details of fixed-income portfolio • The core of the FI portfolio consists of AAA and AA government bonds, Mortgages (in €m) FY 2021 FY 2022 Delta % of total with selective peripheral sovereign exposure NHG 3,539 2,229 -37.0% 23% • A decrease in value of the fixed income portfolio was mainly due t
Slide 31: L. Details of Corporates and Financials bond portfolio
L. Details of Corporates and Financials bond portfolio Comments on Corporates and Financials portfolio Corporates portfolio (in €m) FY 2021 FY 2022 Delta % of total • The decrease of € 2.3bn was mostly due to changes in valuation as a result Automotive 459 248 -211 2% of increased interest rates, ac
Slide 32: M. Fixed Income portfolio Government credit rating
M. Fixed Income portfolio Government credit rating Market value governments (in €m) 0-1 1-2 2-3 3-5 5-10 10-20 20-30 30+ Total Delta1 % of total AAA 1,624 47 79 204 456 1,291 713 413 4,827 -1,197 50% AA 366 65 81 105 516 537 894 1,211 3,775 -1,408 39% A 416 15 21 46 224 11 6 7 745 158 8% BBB 191 1 3
Slide 33: N. Fixed Income portfolio Corporates and Financials credit rating
N. Fixed Income portfolio Corporates and Financials credit rating Market value credits (in €m) 0-1 1-2 2-3 3-5 5-10 10-20 20-30 30+ Total Delta2 % of total AAA 478 13 1 25 48 115 0 0 681 -318 7% AA 355 43 43 166 111 60 0 0 777 -165 8% A 521 352 403 675 1,115 222 2 0 3,291 -1,698 36% BBB 1,354 562 48
Slide 34: O. Details of equities and real estate portfolio
O. Details of equities and real estate portfolio Highlights Equities (in €m) FY 2021 FY 2022 Delta Equities • Total exposure to Equity decreased, primarily driven by lower equity markets Equities 2,554 2,061 -19.3% • Continuation of the active hedging policy for the illiquid part of the portfolio Pr
Slide 35: P. Calculation of asset leverage
P. Calculation of asset leverage Risky assets (€m) FY 2021 FY 2022 Equities 2,985 2,490 Real estate 2,809 2,857 Renewables 118 251 BB bonds or below 250 319 Preference shares 311 297 Fixed income funds (not-rated & high yield) 643 640 Mortgages with LtMV >110% 7 1 Total risky assets 7,123 6,856 Unre
Slide 36: Q. Life segment book development
Q. Life segment book development Life reserves development (in €bn) Life reserves (in €bn) Individual Pensions Funeral Reserves Excl. (un)realised gains reserve 30 52 25 48 20 44 15 40 10 36 5 32 0 2019 2020 2021 2022 2019 2020 2021 2022 Reserves – FY 2022 (€ 37.5bn) (Un)realised reserves developmen
Slide 37: R. Life segment investment contribution
R. Life segment investment contribution (in €m) H1 2020 H2 2020 H1 2021 H2 2021 H1 2022 H2 2022 Direct investment income1 562 528 543 531 556 547 Amortisation of realised gains 132 145 144 156 149 107 reserve Total investment contribution 694 673 687 687 705 654 Required interest on liabilities2 -37
Slide 38: S. Track record in solid investment margin
S. Track record in solid investment margin Investment margin (rhs) vs. basic nominal Life provision (lhs) (in €m) • Investment margin has been stable to slightly growing in the past years • Additional margin realised by optimising exposure to illiquidity premium (e.g. mortgages) 2.4% 2.2% 2.3% 2.5%
Slide 39: IR calendar 2023 and contact details
IR calendar 2023 14 & 15 March 2023 Morgan Stanley Conference, London IR contact details 22 March 2023 Publication Annual Report 2022 27 March 2023 HSBC Conference, San Francisco Email: ir@asr.nl 31 May 2023 Annual General Meeting Tel: +31 (0)30 257 86 00 2 June / 8 June 2023 Ex-dividend date / paym
Slide 40: Disclaimer
Disclaimer Cautionary note regarding forward-looking statements outsourcing; (11) changes in the availability of, and costs associated with, sources of liquidity; (12) consequences of a potential (partial) termination of the European currency: the Euro or the European Union; (13) changes in the freq