Asr Nederland N.v. · EURONEXT:ASRNL
Asr Nederland — FY2021 Earnings Presentation
43 slides from Asr Nederland's earnings presentation, Feb 23, 2022
Slide 1: 2021 full-year results
2021 full-year results ANALYST CONFERENCE CALL 23 February 2022 Jos Baeten, CEO Ewout Hollegien, CFO
Slide 2: Strong financial performance across all segments in 2021
Strong financial performance across all segments in 2021 • Operating result increased by € 136m (15.4%), reflecting improved performance in all segments Operating result Solvency II (SF)1 Dividend per share • OCC increased by € 94m (18.8%) to € 594m, driven by solid business performance and higher i
Slide 3: Strong delivery against ambitious medium-term targets
Strong delivery against ambitious medium-term targets Solvency II ratio >160% Organic capital creation >€ 500m Operating return on equity 12-14% Meeting customer needs >44 (standard formula) by 2021 (NPS) by 2021 194% 199% 196% 594 15.1% 15.3% 16.3% 44 49 49 501 500 2019 2020 2021 2019 2020 2021 201
Slide 4: Sustainable value creation for all stakeholders is key to a.s.r.
Sustainable value creation for all stakeholders is key to a.s.r. Customer – Best financial service provider Society – Positive impact on society and environment • Products and services with better than average market NPS-r • Financial self-reliance and inclusiveness • Leveraging on strong franchise
Slide 5: 2021 COVID-19 update
2021 COVID-19 update • Clients in need were offered customised solutions, including payment arrangements. Limited number of bankruptcies and arrears within our customer base Customers • Excellent customer satisfaction, illustrated by a stable NPS-c of 49 during the pandemic, well above the medium-te
Slide 6: Non-life: strong increase in operating result and continued organic growth
Non-life: strong increase in operating result and continued organic growth Operating result (in €m) GWP - P&C & Disability (in €m) • Non-life operating result up by € 84m, reflecting lower claims in Disability and profitable organic growth in all Disability +34.9% +5.2% business lines P&C 325 2,892
Slide 7: Life: higher operating result driven by investment margin
Life: higher operating result driven by investment margin Operating result (in €m) Investment margin (in €m) • Operating result of Life segment increased by € 33m to € 763m as a result of higher investment margin, Investment margin Technical result and Other Direct investment income Required interes
Slide 8: Fee-based businesses: solid growth of operating result
Fee-based businesses: solid growth of operating result Operating result Asset Management1 Operating result Distribution and Services1 Operating result Holding and Other (in €m) (in €m) (in €m) +14.2% +9.2% 36 28 31 25 -130 -143 2020 2021 2020 2021 2020 2021 • Fee-based businesses operating result am
Slide 9: Significant step-up in capital distributions
Significant step-up in capital distributions € 2.42 DPS € 75m SBB • 18.6% increase compared to 2020 • Starts on 24 February 2022 and will • 2021 dividend as base for end on 24 May 2022 at the latest progressive dividend going forward • Intention ≥€ 100m annually for plan period 2022 - 2024 9
Slide 10: Solvency and capital position
Solvency and capital position Ewout Hollegien, CFO 10
Slide 11: Solvency II ratio movements in 2021
Solvency II ratio movements in 2021 • Solvency II ratio remained robust at 196% after deduction of the interim dividend (€ 111m), the final dividend (€ 217m) and the OCC 14%-pts, € 594m executed SBB in 2021 (€ 75m) • OCC increased by € 94m to € 594m, mainly 4% -5% due to improved performance in the
Slide 12: OCC development driven by improved business performance
OCC development driven by improved business performance OCC development (in €m) Business capital generation (€ +70m) 26 594 70 -2 • Increased performance in the Non-life segment including one-off COVID-19 benefit, partly offset by reserve strengthening 500 • Higher investment returns from optimisati
Slide 13: Robust investment portfolio
Robust investment portfolio Investment portfolio € 50.8bn1,2 (in %) • Diversified and robust investment portfolio with skew to quality 6% Government • High quality fixed income portfolio with limited -2% 10% 25% Credits exposure to BBB rates government bonds and Mortgages predominantly investment gr
Slide 14: Strong balance sheet with ample flexibility
Strong balance sheet with ample flexibility Eligible Own Funds and SII headroom (in €m) S&P IFS rating RT1 T2+T3 Headroom RT1/T2/T3 € 1,014m € 550m 1,543 518 A A 8,189 6,127 Unrestricted Tier 1 Restricted Tier 1 Tier 2 Tier 3 Eligible Own Funds 2020 2021 Financial leverage (IFRS) Double leverage (IF
Slide 15: Strong solvency and cash support our businesses and dividends
Strong solvency and cash support our businesses and dividends HoldCo liquidity (in €m) • HoldCo liquidity at 31 December 2021 stood at € 525m, in line with a.s.r.’s policy of maintaining capital at operating entities -360 and only upstream to cover dividends, 700 -75 coupons and other Holding expens
Slide 16: Strong track record in capital return to shareholders
Strong track record in capital return to shareholders Ample capital return since IPO (in €m) (in €m) Operating result 858 885 1,021 Total of € 2.0bn IFRS based Dividend base1 595 628 730 485 Dividend pay-out ratio 45% 45% 45% 404 342 357 752 255 752 752 245 111 Ordinary dividend (in €m) 267 282 329
Slide 17: Wrap-up
a. Wrap-up Jos Baeten, CEO s.r.
Slide 18: Key take-aways
Key take-aways Best ever result to date, driven by strong performance in all segments and achieving all our financial medium-term targets Robust balance sheet and solvency with ample financial flexibility and strong organic capital creation Proposed full year dividend of € 2.42 per share, 18.6% upli
Slide 19: Appendix
Appendix
Slide 20: 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 21: A. Financial ratios
A. Financial ratios Net result (in €m) Operating result (in €m) ROE Operating ROE1 942 1,021 15.3% 15.3% 16.3% 885 11.7% 657 2020 2021 2020 2021 2020 2021 2020 2021 Combined ratio2 Solvency II ratio3 Total equity (in €m) Financial leverage 93.6% 91.8% 199% 196% 7,385 28.3% 6,313 24.8% 2020 2021 2020
Slide 22: B. Combined ratio per product line
B. Combined ratio per product line 2020 2021 Net earned premiums (in €m) 1,492 1,531 Claims ratio 58.2% 57.5% Property & Casualty Expense ratio 8.1% 8.2% Commission ratio 26.2% 26.2% Combined ratio 92.5% 91.9% Net earned premiums (in €m) 1,182 1,280 Claims ratio 77.4% 73.9% Disability Expense ratio
Slide 23: C. Calculation of operating ROE
C. Calculation of operating ROE (in €m) 2019 2020 2021 Operating result (before tax, annualised) 858 885 1,021 Minus: Interest on hybrid instruments through equity1 60 48 48 Operating result after hybrid costs (before tax, annualised) 798 837 973 Tax effect (25% tax rate) 203 209 243 Operating resul
Slide 24: 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 2020 (in €m) 2021 (in €m) Non-life 261 38 -18 241 357 54 -22 325 Life 747 139 -122 730 981 208 11 763 Asset Ma
Slide 25: 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 8,189 7,828 1,004 6,313 6,925 2,060 6,093 2,061 2,039 5,479 1,004 1,004 1,546 1,001 6,381 5,309 6,213 6,127 5,089 5,789 5,379 4,478 2018 2019 2020 2021 2018 2019 2020 H1
Slide 26: F. SCR movements in 2021
F. SCR movements in 2021 (in €m) 2020 4,159 SCR decreases in SCR increases in Market risk 155 Market risk: Market risk: • Interest rate risk • Equity risk Counterparty default risk -18 • Currency risk • Real estate risk • Spread risk Counterparty default risk Insurance risk Life -181 Insurance risk
Slide 27: G. Sensitivities Solvency II ratio
G. Sensitivities Solvency II ratio Total impact expressed as % of group solvency ratio +5 +6 0 196% -2 -2 SII ratio -3 (%) -5 -6 -7 -10 -11 VA Sovereign Corporate Interest Interest Interest Equities Equities Real estate Mortgage Inflation -10bps spread credit spread +50bps -50bps steepening -20% + 2
Slide 28: H. Sensitivities Solvency II ratio – to UFR
H. Sensitivities Solvency II ratio – to UFR Solvency II ratio (‘stock’) • EIOPA intends to lower the UFR towards the current target of 3.45%¹ in steps of 192% 196% max. 15bps per annum 170% 182% 158% • Lowering the UFR would lead to lower ‘stock’ of capital but would increase organic capital creatio
Slide 29: I. UFR drag methodology and sensitivity
I. UFR drag methodology and sensitivity • The absolute value of the UFR benefit in Solvency II Own Funds and therefore the unwind of the benefit (UFR drag) 20Y EUR SWAP (in %) 0.8 depends on; 0.6 • The current level of interest rates and 0.4 • The shape of the curve • UFR benefit amortised over time
Slide 30: J. Investment portfolio
J. Investment portfolio • Decrease in fixed income was mainly due to Assets (in €bn, fair value) 2020 2021 Delta1 % of total market effects, largely driven by rates movements Fixed income 35.2 32.2 -3.0 63% • An increase in real estate portfolio as a result of Equities 2.7 3.0 0.2 6% investments in
Slide 31: 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) 2020 2021 Delta % of total with selective peripheral sovereign exposure and investment grade NHG 3,278 3,539 8.0% 30% corporate bonds LtMV <55% 1,645 2,418 47.0% 20% • The d
Slide 32: L. Details of Corporates and Financial bond portfolio
L. Details of Corporates and Financial bond portfolio Comments on Corporates portfolio Corporates portfolio (in €m) 2020 2021 Delta % of total • The decrease of € 532m in the Financials portfolio was mostly due to Automotive 488 459 -29 4% changes in valuation as a results of increased interest rate
Slide 33: 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 597 237 60 362 883 1,541 2,236 107 6,024 -941 48% AA 480 94 149 165 825 815 932 1,721 5,183 -377 41% A 136 33 60 68 245 21 11 14 587 6 5% BBB 241 204 1
Slide 34: 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 664 96 15 15 78 131 0 0 999 295 8% AA 153 145 88 181 292 81 1 0 942 -174 8% A 743 762 623 1,000 1,544 313 3 0 4,989 -239 41% BBB 1,007 704 8
Slide 35: O. Details of equities and real estate portfolio
O. Details of equities and real estate portfolio Highlights Equities (in €m) 2020 2021 Delta Equities • Total exposure to equities increased by € 249m primarily driven by higher equity markets Equities 2,288 2,554 11.6% • Continuation of the active hedging policy for the illiquid part of the portfol
Slide 36: P. Calculation of asset leverage
P. Calculation of asset leverage Risky assets (€m) 2020 2021 Equities 2,736 2,985 Real estate1 2,601 2,927 BB bonds or below 350 250 Preference shares 316 311 Fixed income funds (not-rated & high yield) 333 643 Mortgages with LtMV >110% 20 7 Total risky assets 6,357 7,123 Unrestricted Tier 1 6,326 6
Slide 37: 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 2021 2018 2019 2020 2021 Reserves – 2021 (€ 48.1bn) (Un)realised reserves development (in
Slide 38: R. Life segment investment contribution
R. Life segment investment contribution (in €m) H2 2018 H1 2019 H2 2019 H1 2020 H2 2020 H1 2021 H2 2021 Direct investment income1 519 535 527 562 528 550 534 Amortisation of realised gains 159 161 137 132 145 144 156 reserve Total investment contribution 678 696 664 694 673 694 690 Required interest
Slide 39: 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 40: T. Medium term group targets (2022 – 2024)
T. Medium term group targets (2022 – 2024) Core Group targets1 Organic capital Operating return Solvency II ratio Dividend2 Share buyback3 creation on equity (standard formula) >160% € 1.7-1.8bn 12-14% Progressive ≥€ 100m Substantial capital for entrepreneurship Cumulative 2022-2024 Per annum Low-mi
Slide 41: U. Medium term non-financial objectives (2022 – 2024)
U. Medium term non-financial objectives (2022 – 2024) Targets for the period 2022 - 20241 Sustainable Sustainable Sustainable Sustainable Sustainable insurer insurer employer investor investor Net Promoter Score Public recognition as a Employee engagement Carbon footprint reduction Impact investment
Slide 42: IR contact details
IR contact details Email: ir@asr.nl Tel: +31 (0)30 257 86 00 42
Slide 43: 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