Asr Nederland N.v. · EURONEXT:ASRNL
Asr Nederland — H1 2023 Earnings Presentation
39 slides from Asr Nederland's earnings presentation, Aug 30, 2023
Slide 1: Half-year results 2023 analyst conference call
2023 Haltf-year results Analyst conference call 30 August 2023 Jos Baeten, CEO Ewout Hollegien, CFO de nederlandse verzekerings maatschappij voor alle verzekeringen
Slide 2: Strong financial performance and robust solvency position
Strong financial performance and robust solvency position • Operating result increased € 6m to € 460m driven by favorable results in Life, Non-life and stable Organic capital Operating result Solvency II (SF)1 fee-business. More than compensating for higher creation hybrid expenses • Solvency II rat
Slide 3: Value creation for all stakeholders and compelling ESG credentials
Value creation for all stakeholders and compelling ESG credentials Non-financial KPI’s Sustainable insurer Sustainable employer Sustainableinvestor Sustainable investor 1 Carbon Sustainable investor footprint reduction Public recognition sustainable insurer Employee engagement to workforce Carbon fo
Slide 4: Creating a leading insurer in the Netherlands
Creating a leading insurer in the Netherlands • The transaction with Aegon to combine a.s.r. and Aegon Nederland was completed on 4 July 2023 • a.s.r. issued new shares to Aegon in July as part of the total consideration • With the completion of the transaction the Supervisory Board (SB) of a.s.r ha
Slide 5: Non-life segment higher operating result and portfolio growth
Non-life segment higher operating result and portfolio growth Operating result1 (in €m) Premiums received (in €m) • Strong premium growth in P&C and Disability as result Health of higher sales volumes and tariff adjustments Disability +5.4% +18.9% P&C • Operating result increase (€ 10m) driven mostl
Slide 6: Life segment increase of operating result driven by finance result
Life segment increase of operating result driven by finance result Operating result (in €m) Operating insurance service result (in €m) • Higher DC inflow of product ‘Werknemers Pensioen’ (16%) and ‘Doenpensioen’ (6%) due to organic Operating insurance service result CSM release Experience variance p
Slide 7: Fee-business reflects solid operational performance
Fee-business reflects solid operational performance Operating result Asset Management1 Operating result Distribution and Services Operating result Holding and Other (in €m) (in €m) (in €m) +6.2% -12.9% 19 21 17 15 -53 -75 HY 2022 HY 2023 HY 2022 HY 2023 HY 2022 HY 2023 • The operating result of Asse
Slide 8: Solvency and capital position
Solvency and capital position Ewout Hollegien, CFO 8
Slide 9: Robust Solvency HY 2023
Robust Solvency HY 2023 • Solvency II ratio1 at a robust level of 215% after a 7%-p deduction for the interim dividend (€ 228m) OCC 12.2%-p, € 414m • Strong organic capital creation of € 414m or 12.2%-p 0% 4% • Impact of market & operational movements -12% reflects higher equity markets, spread 8% w
Slide 10: OCC development HY 2023
OCC development HY 2023 OCC development (in €m) Business capital generation (€ -51m) 428 38 414 • Higher contribution from P&C and a lower contribution from Disability and Health -51 -1 • Increased hybrid costs (€ 26m) due to € 1bn Tier 1 bond issue in November 2022 Release of capital (€ -1m) OCC HY
Slide 11: Diversified and robust investment portfolio
Diversified and robust investment portfolio Investment portfolio € 39.9 bn (in %) Investment portfolio development (in bn) • Diversified and robust investment portfolio with skew to quality FY2022 39.7 1% Fixed income • A decrease in exposure of the fixed income portfolio 6% Derivatives Fixed income
Slide 12: Balance sheet offers a strong foundation for combined companies
Balance sheet offers a strong foundation for combined companies Eligible Own Funds and SII headroom1 (in €m) S&P IFS rating RT1 T2+T3 Headroom RT1/T2/T3 € 880m € 225m 70 1,391 454 7,253 5,338 Stable Outlook Unrestricted Tier 1 Restricted Tier 1 Tier 2 Tier 3 Eligible Own Funds Financial leverage 2 (
Slide 13: Strong solvency and cash in support of successful deal closing
Strong solvency and cash in support of successful deal closing HoldCo liquidity (in €m) • HoldCo liquidity at 30 June 2023 stood at € 2.7bn to fund the cash consideration 2,655 -216 45 (€ 2.26bn) of Aegon transaction early July 2,142 713 -29 • Cash upstream from Life and Non-life as part of transact
Slide 14: IFRS 17 highlights
Supplement with background and comparable IFRS 17 highlights figures on the IFRS 17 transition is available on the a.s.r. website Ewout Hollegien, CFO Please see: https://www.asrnl.com/investorrelations /investor-presentations 14
Slide 15: Key methodology choices
Key methodology choices • Current choices for a.s.r. standalone, harmonisation of IFRS 17 methodology with Aegon NL could lead to changes • Solvency II alignment – Improves comparability • Assets – FVTPL, except FV-OCI for equity investments. No hedge accounting applied for insurance segments Measur
Slide 16: CSM development
CSM development CSM bridge (in €m) • CSM increased 7.8% to € 1,972m . CSM increase in HY 2023 is mainly due to the addition of new profitable production € 173m (FY 2022: € 71m) • Disability: € 108m NB CSM shows strong profitability, reflecting increased market 73 interest rates and improved pricing.
Slide 17: Operating result vs OCC
Operating result vs OCC Bridge FY 2022 IFRS 17 operating result to OCC – illustrative view • Figures in the bridge are meant to give an illustrative view for educational purposes • Operating result definition under IFRS 17 is more aligned to Solvency II OCC compared to IFRS 4 • Different interest ra
Slide 18: Wrap-up
a. Wrap-up Jos Baeten, CEO s.r.
Slide 19: Strong foundation for creating a leading insurer in the Netherlands
Strong foundation for creating a leading insurer in the Netherlands Transaction to combine a.s.r. and Aegon Dutch businesses completed. Integration initiated Solid performance reflected by increased profitability and solid contribution from all business segments Continuing strong balance sheet also
Slide 20: IR contact details
IR contact details Email: ir@asr.nl Tel: +31 (0)30 257 86 00 20
Slide 21: Appendix
Appendix
Slide 22: Appendices
Appendices A. Financial ratios L. Details of Corporates, Financials and Alternative B. Combined ratio per product line fixed income portfolio M. Fixed Income portfolio Government credit rating C. Calculation of operating ROE N. Fixed Income portfolio Corporates, Financials and D. IFRS profit vs. ope
Slide 23: A. Financial ratios
A. Financial ratios Net result (in €m) Operating result (in €m) ROE Operating ROE 346 12.4% 454 460 12.0% 13.5% -1,512 -56.1% HY 2022 HY 2023 HY 2022 HY 2023 HY 2022 HY 2023 HY 2022 HY 2023 Combined ratio Non-life Solvency II ratio1 Total equity (in €m) Financial leverage2 93.4% 94.9% 221% 215% 6,13
Slide 24: B. Combined ratio per product line
B. Combined ratio per product line HY 2022 FY 2022 HY 2023 Net insurance contract revenue (in €m) 795 1,607 826 Claims ratio 58.3% 56.6% 55.1% Property & Casualty Expense ratio 8.5% 8.5% 8.4% Commission ratio 27.4% 27.4% 27.2% Combined ratio 94.2% 92.5% 90.7% Net insurance contract revenue (in €m) 7
Slide 25: C. Calculation of operating ROE
C. Calculation of operating ROE (in €m) HY 2022 FY 2022 HY 2023 Operating result (before tax, annualised) 908 920 Tax effect (25.8%) 234 237 Operating result (net of taxes, annualised) 673 683 (in €m) 1 Jan 20221 HY 2022 FY 2022 HY 2023 Equity attributable to shareholders 6,170 4,771 5,105 5,279 Min
Slide 26: D. IFRS profit vs. operating result per segment
D. IFRS profit vs. operating result per segment Non- Non- IFRS Investment Operating IFRS Investment Operating investment investment profit related result profit related result related related (pre-tax) incidentals (pre-tax) (pre-tax) incidentals (pre-tax) incidentals incidentals HY 2022 (in €m) HY 2
Slide 27: 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) 8,270 7,441 7,369 7,192 2,061 1,004 6,300 6,136 1,837 1,845 1,004 1,004 6,170 6,209 5,279 5,605 5,524 5,105 18 27 17 FY 2021 FY 2022 HY 2023 1-Jan-22 FY 2022 HY 2023 Hybrids Non-Cont
Slide 28: F. SCR movements in HY 2023
F. SCR movements1 in HY 2023 (in €m) FY 2022 3,307 SCR decreases in SCR increases in Market risk 75 Market risk: Market risk: • Spread risk • Interest rate risk Counterparty default risk 132 • Property risk • Equity risk Insurance risk Life: • Currency risk Insurance risk Life 44 • Catastrophe risk
Slide 29: G. Sensitivities Solvency II ratio
G. Sensitivities Solvency II ratio Total impact expressed as % of group solvency ratio (based on SII numbers excluding financial institutions) +4 215% -1 -1 -2 -2 SII ratio -4 (%) -7 -6 -7 -8 -10 VA Sovereign Corporate Interest Interest Interest Equities Equities Real estate Mortgage Inflation -10bp
Slide 30: H. Sensitivities Solvency II ratio – UFR
H. Sensitivities Solvency II ratio – UFR Solvency II ratio (‘stock’) • For 2024 EIOPA intends to set UFR at the level of 3.30%¹. Current level is 3.45% 193% 202% 209% 213% 215% • Lowering the UFR would lead to lower ‘stock’ of capital but would increase organic capital creation (‘flow’) because of r
Slide 31: I. UFR drag methodology of Solvency II
I. UFR drag methodology of Solvency II • 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 o
Slide 32: J. Investment portfolio
J. Investment portfolio • A decrease in the exposure to the fixed income Assets (in €bn, fair value) FY 2022 HY 2023 Delta % of total portfolio was mainly due to expiring short term government bonds which released liquidity and Fixed income1 20.7 19.2 -1.5 48% will be used for the Aegon deal Derivat
Slide 33: 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 2022 HY 2022 Delta % of total with selective peripheral sovereign exposure NHG 2,229 2,347 5% 24% LtMV <55% 3,017 2,727 -11% 28% • A decrease in value of the fixed income
Slide 34: L. Details of Corporates, Financials and Alternative fixed income portfolio
L. Details of Corporates, Financials and Alternative fixed income portfolio Comments on Corporates, Financials and Alternative fixed income Credits (in €m) FY 2022 HY 2023 Delta % of total portfolio Automotive 250 230 -8% 8% • Structured and Credit portfolio stable Basic industry 265 284 7% 10% Port
Slide 35: 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 327 36 75 182 320 940 993 749 3,622 -1,248 45% AA 299 39 77 65 369 430 1,016 1,585 3,881 66 48% A 116 12 19 50 215 85 6 7 510 -238 6% BBB 18 - 28 - 41
Slide 36: N. Corporates, Financials and Alternative fixed income credit rating
N. Corporates, Financials and Alternative fixed income credit rating Market value credits (in €m) 0-1 1-2 2-3 3-5 5-10 10-20 20-30 30+ Total Delta1 % of total AAA 312 15 1 23 47 379 - - 777 160 9% AA 29 46 43 166 152 122 0 1 599 -224 6% A 104 413 370 923 1,360 326 13 4 3,514 188 39% BBB 361 572 531
Slide 37: O. Details of equities and real estate portfolio
O. Details of equities and real estate portfolio Highlights Equity (in €m) FY 2022 HY 2023 Delta Real estate Equities • Total exposure to Equity increased, primarily driven by higher equity markets Equity 1,778 2,077 17% • Continuation of the active hedging policy for the illiquid part of the portfo
Slide 38: P. Calculation of asset leverage
P. Calculation of asset leverage Risky assets (€m) FY 2022 HY 2023 Equities 2,307 2,460 Preference shares 297 190 Real estate 2,857 2,700 Renewables 251 243 BB bonds or below 236 239 Fixed income funds (not rated & high yield) 152 139 Private loan funds (not rated & high yield) 862 772 Mortgages wit
Slide 39: Disclaimer
Disclaimer Cautionary note regarding forward-looking statements institutions, countries/states and/or other counterparties; (9) technological developments; (10) changes in the implementation and execution of ICT systems or outsourcing; (11) changes in the availability of, and costs associated with,