Asr Nederland N.v. · EURONEXT:ASRNL
Asr Nederland — H1 2021 Earnings Presentation
42 slides from Asr Nederland's earnings presentation, Aug 25, 2021
Slide 1: 2021 half-year results
2021 half-year results Jos Baeten, CEO Annemiek van Melick, CFO ANALYST CONFERENCE CALL 25 August 2021
Slide 2: Strong operational performance and robust solvency in H1 2021
Strong operational performance and robust solvency in H1 2021 • Operating result increased by € 90m (+20.2%), Operating result Solvency II (SF)2 Interim DPS driven by improvements in all segments • OCC increased by € 74m to € 372m due to € 536m 197% € 0.82 strong business performance in Non-life, hi
Slide 3: Delivering on sustainable value creation for all stakeholders
Delivering on sustainable value creation for all stakeholders Financial self-reliance Vitality and Climate change and inclusiveness (sustainable) employability and energy transition Non-financial targets for the 2019 − 2021 period Meeting customer needs Sustainable investments Sustainable investment
Slide 4: Solid progress in executing our strategy in H1 2021
Solid progress in executing our strategy in H1 2021 Portfolio matrix A Non-life business domains with growth potential C Asset management related growth business • Combination of Loyalis, Veherex and Vitality partnership1 strengthens • Assets under Management (‘AuM’) for third parties increased by €
Slide 5: Non-life: Strong operating result and organic growth
Non-life: Strong operating result and organic growth • Non-life operating result increased by € 55m, driven by an Operating result (in €m) Gross written premiums (in €m) improvement of claims in Disability and strong organic growth Health +44.8% Disability • COVID-19 related effects had an indicativ
Slide 6: Life: solid operating result and strong growth in Pensions DC
Life: solid operating result and strong growth in Pensions DC Operating result (in €m) Investment margin (in €m) • Operating result of Life segment increased by Investment margin Technical result and Other Direct investment income € 18m to € 379m Result on costs Amortised realised gains Required int
Slide 7: Operating result fee-based businesses delivering on ambitious targets
Operating result fee-based businesses delivering on ambitious targets Operating result Asset Management1 Operating result Distribution and Services Operating result Holding and Other (in €m) (in €m) (in €m) +19.5% +23.1% 17 16 15 13 -56 -67 H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 • Fee-based
Slide 8: Solid track record in rational capital management
Solid track record in rational capital management • Interim dividend of € 0.82 per share, up from € 0.76 last year, equals 40% of the regular dividend for 2020, in line with dividend policy • Dividend policy: pay-out ratio of 45-55% of the net operating result attributable to shareholders (i.e. net
Slide 9: Solvency and capital position
Solvency and capital position Annemiek van Melick, CFO 99
Slide 10: Solvency II: high quality balance sheet
Solvency II: high quality balance sheet SII Eligible Own Funds (in €m) 197% • Solvency II ratio 197% based on standard formula (FY 2020: 199%) 1,563 0 8,158 • Unrestricted Tier 1 capital represents 74% of total own 6,069 526 funds and 147% of SCR • Ample headroom available within SII framework: - RT
Slide 11: Solvency II ratio movements in H1 2021
Solvency II ratio movements in H1 2021 • Solvency II ratio remained robust at 197% OCC 9.0%-pts, € 372m after € 75m SBB executed in H1 2021 and € 111m interim dividend (202% before capital distributions) 3% -2% • Strong organic capital creation of € 372m -5% or 9.0%-pts of required capital (H1 2020:
Slide 12: OCC development driven by improved business performance
OCC development driven by improved business performance OCC H1 2021 130 Business Capital Generation (€ +58m) 372 • Increased performance in the Non-life segment 341 -99 • Higher excess investment returns due to shift to higher yielding assets • Improved operating result in fee-based businesses Busin
Slide 13: Strong balance sheet with ample financial flexibility
Strong balance sheet with ample financial flexibility Financial flexibility (in €m) Solvency II composition (in %-pts) Market risk as % of total BSCR¹ Hybrids Unrestricted T1 197% Soft limit 44% 44% 50% 991 502 38% 8,158 13% 2,089 Tier 3 147% Tier 2 6,069 Restricted Tier 1 Unrestricted Tier 1 EOF RT
Slide 14: Robust solvency and cash supports our businesses and dividends
Robust solvency and cash supports our businesses and dividends HoldCo liquidity (in €m) • HoldCo liquidity at H1 2021 stood at € 456m, in line with a.s.r’s policy of -248 maintaining capital at operating companies 356 and only upstream to cover the dividends, 502 -75 coupons and other Holding expens
Slide 15: Wrap-up
>» Wrap-up Jos Baeten, CEO a.s.fr. 15
Slide 16: Key take-aways
Key take-aways Higher operating result and OCC driven by strong performance in all segments Strong balance sheet, resilient solvency with ample financial flexibility Solid progress in executing our strategy, on track to achieving medium-term targets High customer satisfaction, solid commercial resul
Slide 17: Appendices
Appendices a.s.fr. 17
Slide 18: Appendices
Appendices A. Financial ratios L. Details of Corporates and Financials bond portfolio B. Combined ratio per product line M. Fixed Income portfolio Government credit rating C. Calculation of operating ROE N. Fixed Income portfolio Corporates and Financials credit rating D. IFRS profit vs. operating r
Slide 19: A. Financial ratios
A. Financial ratios Net result (in €m) Operating result (in €m) ROE (in %) Operating ROE1 (in %) 454 536 15.4% 17.8% 446 15.0% 233 8.0% H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 Combined ratio2 (in %) Solvency II3 (in %) Total equity (in €m) Financial leverage (in %) 92.9% 90.2
Slide 20: B. Combined ratio per product line
B. Combined ratio per product line H1 2020 H1 2021 Net earned premiums (in €m) 743 752 Claims ratio 53.7% 54.1% Property & Casualty Expense ratio 7.7% 8.2% Commission ratio 26.3% 26.3% Combined ratio 87.8% 88.6% Net earned premiums (in €m) 585 637 Claims ratio 81.5% 74.5% Disability Expense ratio 8.
Slide 21: C. Calculation of operating ROE
C. Calculation of operating ROE (in €m) H1 2020² H1 2021 Operating result (before tax, annualised) 891 1,072 Minus: Interest on hybrid instruments through equity1 48 48 Operating result after hybrid costs (before tax, annualised) 843 1,024 Tax effect (25% tax rate) 211 256 Operating result after hyb
Slide 22: 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 H1 2020 (in €m) H1 2021 (in €m) Non-life 112 -6 -6 124 169 1 -11 179 Life 236 -2 -123 361 399 19 1 379 Asset M
Slide 23: 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) 6,899 8,273 8,158 7,828 6,313 6,093 1,004 6,924 2,060 2,089 5,479 1,004 2,039 1,004 1,546 1,001 5,895 5,089 5,309 6,213 6,069 5,789 4,478 5,379 2018 2019 2020 H1 2021 2018 2019 2020
Slide 24: F. SCR movement in H1 2021
F. SCR movement in H1 2021 (in €m) FY 2020 4,159 SCR decreases in SCR increases in Market risk -9 Market risk: Market risk: • Real estate risk • Equity risk Counterparty default risk 32 • Interest rate risk • Currency risk • Spread risk Counterparty default risk Insurance risk Life -84 Insurance ris
Slide 25: G. Sensitivities Solvency II ratio
G. Sensitivities Solvency II ratio 17 7 8 6 3 0 0 1 0 1 197%1 -2 -1 -1 0 -3 -3 -5 -6 -6 -7 -8 -9 -11 -9 -10 >180%: threshold additional -11 -11 capital distribution VA -10bps Sovereign Corporate Interest Interest Interest Equities -20% Real estate Mortgage spread credit spread +50bps -50bps steepeni
Slide 26: H. Sensitivities Solvency II ratio – to UFR
H. Sensitivities Solvency II ratio – to UFR Solvency II ratio (‘stock’) (in %) • EIOPA intends to lower the UFR towards the 194% 197% current target of 3.45%¹ in steps of max. 15bps 183% 158% 171% per annum • Lowering the UFR would lead to lower ‘stock’ of capital but would increase organic capital
Slide 27: I. UFR drag methodology
I. UFR drag methodology 1.4 UFR benefit amortized over time 20Y EUR SWAP (in %) • The absolute value of the UFR benefit in Solvency II Own Funds and therefore the 1.2 unwind of the benefit (UFR drag) depends on; 1.0 o The current level of interest rates and 0.8 o The shape of the curve 0.6 0.4 • UFR
Slide 28: J. Investment portfolio
J. Investment portfolio • Decrease in fixed income was mainly due to Assets (in €bn, fair value) FY 2020 H1 2021 Delta1 % of total market effects, largely driven by rates movements Fixed income 35.2 32.2 -2.9 63% • A small increase in real estate portfolio as a Equities 2.7 3.0 0.3 6% result of inve
Slide 29: 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 2020 H1 2021 Delta % of total with selective peripheral sovereign exposure and A-rating corporate bonds NHG 3,278 3,379 3.1% 31% LtMV < 55% 1,645 1,951 18.6% 18% • The de
Slide 30: L. Details of Corporates and Financials bond portfolio
L. Details of Corporates and Financials bond portfolio Comments on Corporates portfolio Corporates portfolio (in €m) FY 2020 H1 2021 Delta % of total • The decrease of € 372m in the Financials portfolio was mostly due to Automotive 488 489 1 4% changes in valuation as a results of increased interest
Slide 31: 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 714 254 147 287 1,025 1,480 2,421 152 6,479 -485 49% AA 581 102 194 223 995 944 871 1,355 5,267 -293 40% A 114 30 70 83 216 21 0 14 548 -34 4% BBB 217
Slide 32: 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 450 34 30 30 98 129 0 0 770 65 7% AA 89 195 184 180 329 95 1 0 1,072 -44 9% A 641 760 595 1,013 1,602 314 9 0 4,933 -294 42% BBB 644 600 722
Slide 33: O. Details of equities and real estate portfolio
O. Details of equities and real estate portfolio Highlights Equities (in €m) FY 2020 H1 2021 Delta • Total exposure to equities increased by € 362m due to rising stock markets Equities • Continuation of the active hedging policy for the illiquid part of the portfolio Equities 2,288 2,650 15.8% Priva
Slide 34: P. Calculation of asset leverage
P. Calculation of asset leverage Risky assets (€m) FY 2020 H1 2021 Equities 2,736 3,047 Real estate1 2,601 2,627 BB bonds or below 350 229 Preference shares 316 315 Fixed income funds (not rated & high yield) 333 551 Mortgages with LtMV >110% 20 17 Total risky assets 6,357 6,786 Unrestricted Tier 1
Slide 35: 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 55 25 50 20 15 45 10 40 5 0 35 2018 2019 2020 H1 2021 2018 2019 2020 H1 2021 Reserves – H1 2021 (€ 48bn) (Un)realised reserves developme
Slide 36: R. Life segment investment contribution
R. Life segment investment contribution (in €m) H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H2 2020 H1 2021 Direct investment income1 529 519 535 527 562 528 550 Amortisation of realised gains 155 159 161 137 132 145 144 reserve Total investment contribution 684 678 696 664 694 673 694 Required interest
Slide 37: S. Recognition in ESG benchmarks and ratings
S. Recognition in ESG benchmarks and ratings Worldinsurance World insuranceranking: ranking:##10 1 World Worldinsurance insuranceranking: ranking:##10 4 European insurance ranking: # 5 10.0 82 82 14.7 61 #1 Dutch Association of Investors for Sustainable Dev. BBB C C (Prime) #1 Scale: CCC – AAA Scale
Slide 38: T. Medium term group targets (2019 – 2021)
T. Medium term group targets (2019 – 2021) Targets for the 2019 − 20211 period Solvency II Operating return on equity Dividend pay-out ratio (Standard formula) (% of net operating result after hybrid expenses2) > 160% 12-14% 45-55% Substantial capital for Per annum Ambition to offer a stable to grow
Slide 39: U. Medium-term business targets (2019 – 2021)
U. Medium-term business targets (2019 – 2021) Targets for the 2019 − 20211 period Non-life Life operating result Fee-based businesses, operating result2 (P&C and Disability) (€ million) 94-96% Stable € 40 million Combined ratio Compared to 5% growth € 633 million in 2017 per annum thereafter Non-lif
Slide 40: V. Medium term non-financial objectives (2019 – 2021)
V. Medium term non-financial objectives (2019 – 2021) Targets for the 2019 − 20211 period Meeting customer needs Sustainable investments Employee contribution to local society (Net promoter score) (in no. of hours) Carbon footprint: % measured of 95% > 44 investment portfolio +5% € 1.2bn Impact by 2
Slide 41: IR contact details
IR contact details Email: ir@asr.nl Tel: +31 (0)30 257 86 00 41 41
Slide 42: 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