Asr Nederland N.v. · EURONEXT:ASRNL
Asr Nederland — Q2 2024 Earnings Presentation
36 slides from Asr Nederland's earnings presentation, Aug 21, 2024
Slide 1: Q2 2024 earnings presentation
UPDATEN TEXT & DESIGN 21 August 2024
Slide 2: Strong financial performance and robust solvency position
Strong financial performance and robust solvency position • Robust Solvency II ratio increased to 181% reflecting strong OCC Organic capital creation Solvency II ratio • Pro forma SII ratio of 196% including impact of Knab transaction1 and redemption Solvency II of the remaining part of the 2014 5%
Slide 3: Value creation for all stakeholders and compelling ESG credentials
Value creation for all stakeholders and compelling ESG credentials Non-financial targets1 Sustainable reputation Sustainable employer Gender diversity Sustainable investor Sustainable investor Public recognition sustainable Employee engagement 2 Gender diversity in management 3 Carbon footprint redu
Slide 4: Integration is well on track with key milestones achieved
Integration is well on track with key milestones achieved Key milestones 2024 2025-2026 • Completion of P&C and Disability policy migrations and • Expand partial internal model (PIM) to a.s.r. Life (end 2025) integration of operating activities. Legal merger completed (end • Complete all data and po
Slide 5: Non-life segment delivering on both profitability and growth
Non-life segment delivering on both profitability and growth Operating result (in €m) Premiums received (in €m) Premiums received OISR1 P&C OIFR2 Disability • Strong organic premium growth in both P&C and Disability +24.0% +16.6% (+4.6%) and inorganic growth through the addition of Aegon NL Other 23
Slide 6: Life segment higher operating result and good commercial momentum
Life segment higher operating result and good commercial momentum Operating result (in €m) DC inflow (in €m) Operating result OISR1 OIFR2 • Operating result increased by € 182m primarily related to the +58.6% Other +80.5% addition of Aegon NL: 492 1,292 • Increase in operating insurance service resu
Slide 7: Strong uplift fee-based business driven by Aegon mortgage business
Strong uplift fee-based business driven by Aegon mortgage business Operating result AM (in €m) • Operating result of the Asset Management segment increased mainly as result of the addition of Aegon NL (mortgage business) partly offset by the transfer of mortgage and private debt funds to 143.8% Aego
Slide 8: Solvency and capital position
Solvency and capital position Ewout Hollegien, CFO 8
Slide 9: Robust Solvency comfortably in entrepreneurial zone
Robust Solvency comfortably in entrepreneurial zone • Solvency II ratio at a robust level of 181% after a 4%-p deduction for the interim dividend (€ 244m) • Strong organic capital creation of € 658m, equal to -2% 196% 10%-p of Solvency ratio OCC: • Impact of market & operational movements (-4%-p) 10
Slide 10: OCC better aligned with free cash flow and IFRS17
OCC better aligned with free cash flow and IFRS17 Remapping – enhances insight in sources of capital generation Updated methodology – close alignment with free cash flow • Clear split in capital generated from business operations, financial markets • Reduction of non-cash components (e.g. group leve
Slide 11: Higher OCC driven by solid business performance and Aegon NL
Higher OCC driven by solid business performance and Aegon NL OCC (in €m) OCC components (in €m) OCC • OCC increased by 59% to € 658m driven by organic growth +58.9% 157 658 and the contribution of Aegon NL 658 325 • Finance capital generation (€ 325m) is the largest contributor to the OCC driven by
Slide 12: Diversified and robust investment portfolio
Diversified and robust investment portfolio Investment portfolio € 80.3bn Fixed income portfolio € 37.8bn Total portfolio • Total investments decreased to € 80.3bn (FY23: € 82.4bn1) 6% Fixed income 4% Governments primarily reflecting revaluations in higher interest rate 4% Mortgages Financials envir
Slide 13: 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 RT1 T2+T3 Headroom € 1,144m € 794m 455 2,034 959 11,857 8,409 Stable Outlook Unrestricted Tier 1 Restricted Tier 1 Tier 2 Tier 3 Eligible Own Funds Financial leverage (in %) Interest
Slide 14: Robust holding cash: ample capacity at entities to remit
Robust holding cash: ample capacity at entities to remit HoldCo liquidity (in €m) HoldCo liquidity • HoldCo liquidity buffer stood at € 558m per HY 2024 to fund holding expenses and interim -342 dividend 494 700 • Cash needs amply covered by OCC of -28 -266 558 underlying entities which represents f
Slide 15: Wrap-up
Wrap-up Jos Baeten, CEO 15
Slide 16: Key messages
Key messages Solid performance in all business segments bolstered by the contribution of Aegon NL; OCC on trajectory to achieve medium term target of € 1.35bn in 2026 Strong commercial results driven by both organic and inorganic growth. Delivering on short term growth targets and a solid base for m
Slide 17: IR contact details
UPDATEN Text & Design IR contact details Email: ir@asr.nl Tel: +31 (0)30 257 86 00 17
Slide 18: Appendix
Appendix
Slide 19: Appendices
Appendices A. Financial ratios L. Details of fixed income portfolio B. Combined ratio per product line M. Details of credits and alternative fixed income portfolio C. Segment Life: operating result & technical provisions N. Credit rating government bond portfolio D. CSM overview O. Credit rating cre
Slide 20: A. Financial ratios
A. Financial ratios Net result (in €m) Operating result (in €m) ROE Operating ROE 346 12.3% 677 13.1% 13.4% 460 -70 -2.4% HY 2023 HY 2024 HY 2023 HY 2024 HY 2023 HY 2024 HY 2023 HY 2024 Combined ratio Non-life1 Solvency II ratio Total IFRS equity (in €m) Financial leverage 92.4% 91.8% 176% 181% 9,37
Slide 21: B. Combined ratio per product line
B. Combined ratio per product line HY 2023 HY 2024 Net insurance contract revenue (in €m) 826 995 Claims ratio 55.1% 57.7% Property & Casualty (P&C) Expense ratio 8.4% 8.7% Commission ratio 27.2% 25.7% Combined ratio 90.7% 92.2% Net insurance contract revenue (in €m) 761 1,037 Claims ratio 73.6% 72.
Slide 22: C. Segment Life: operating result & technical provisions
C. Segment Life: operating result & technical provisions Operating result segment Life (in €m) IFRS 17 technical provision Life € 97bn (FY 2023: € 98bn) HY 2023 HY 2024 delta Release of CSM 49 167 118 Release of RA 47 90 42 5% Experience variance 29 -68 -97 10% Pension DB Losses on new business -4 -
Slide 23: D. CSM overview
D. CSM overview CSM development Life (in €m) CSM Life Annualised • Total accretion of Life CSM consists of annuities production and the interest run-off: 5-6% accretion. No impact from indexation in funeral portfolio in 2024 Total CSM accretion: € 78m • Net positive impact from several changes in es
Slide 24: E. Calculation of operating ROE
E. Calculation of operating ROE (in €m) FY 2022 HY 20231 FY 2023 HY 2024 Operating result (before tax) – annualised 920 1,354 Minus: Tax effect (25.8%) -237 -349 Operating result (net of taxes) – annualised 683 1,004 Equity attributable to shareholder 5,146 5,320 8,339 8,115 Minus: Unrealised gains
Slide 25: F. IFRS profit per segment
F. IFRS profit per segment Non- Non- Operating Investment Operating Investment investment IFRS profit investment IFRS profit result related result related related (pre-tax) related (pre-tax) (pre-tax) incidentals (pre-tax) incidentals incidentals incidentals HY 2023 (in €m) HY 2024 (in €m) Non-life
Slide 26: G. IFRS equity and Solvency II EOF
G. IFRS equity and Solvency II EOF IFRS equity (in €m) Solvency II eligible own funds1 (in €m) 11,578 11,857 455 529 9,283 2,993 2,907 1,126 7,192 7,441 1,004 6,177 1,837 1,004 8,115 8,142 8,409 6,170 5,146 5,604 18 27 43 FY 2022 FY 2023 HY 2024 FY 2022 FY 2023 HY 2024 Hybrids Non-Controlling intere
Slide 27: H. Sensitivities Solvency II ratio
H. Sensitivities Solvency II ratio Total impact expressed as % of group solvency ratio +1 0 0 181% -1 -1 -1 -2 SII ratio -4 (%) -5 -7 -8 VA Sovereign Corporate Interest Interest Interest Equities Equities Real estate Mortgage Inflation -10bps spread credit spread +50bps -50bps steepening1 -20% +20%
Slide 28: I. Sensitivities Solvency II ratio – UFR
I. Sensitivities Solvency II ratio – UFR Solvency II ratio (‘stock’) • Current level of the UFR set by EIOPA is at 3.30% • EIOPA announced to keep the level of the UFR at 177% 179% 181% 163% 170% 3.30% for 20251 • Lowering the UFR would lead to lower ‘stock’ of capital but would increase organic cap
Slide 29: J. UFR drag methodology
J. UFR drag methodology Development of 20Y EUR swap1 (in %) • The absolute value of the UFR benefit depends on the level of the UFR combined with the current level and shape of the 3.5 interest rate curve 3.0 • The UFR benefit amortises over time. This is called the UFR 2.5 drag and is included as a
Slide 30: K. Investment portfolio
K. Investment portfolio Assets (in €bn, fair value) Delta % of total • Decrease in fixed income reflects higher FY 2023 HY 2024 interest rates Fixed income1 37.6 36.9 -0.8 46% • Derivatives and collateral cash decreased due to lower fixed income valuation Derivatives 2.1 0.9 -1.2 1% • Growth in equi
Slide 31: L. Details of fixed income portfolio
L. Details of fixed income portfolio • The core of the fixed income portfolio consists of AAA and AA government Mortgages (in €m) FY 2023 HY 2024 Delta % of total bonds, with selective peripheral sovereign exposure NHG 5,977 6,131 3% 23% • Government exposure to the Netherlands and Germany decreased
Slide 32: M. Details of credits and alternative fixed income portfolio
M. Details of credits and alternative fixed income portfolio Comments on credits and alternative fixed income portfolio Credits (in €m) FY 2023 HY 2024 Delta % of total • Lower valuation of structured portfolio as result of higher interest rates Automotive 304 350 15% 7% primarily compensated by the
Slide 33: N. Credit rating government bond portfolio
N. Credit rating government bond portfolio Market value government bonds (in €m) 0-1 1-2 2-3 3-5 5-10 10-20 20-30 30+ Total ∆ FY 23 % of total AAA 203 93 115 289 524 4,735 2,696 235 8,890 -2,292 51% AA 463 72 50 158 742 895 2,922 2,336 7,638 978 44% A 4 5 28 41 344 9 307 124 862 252 5% BBB 29 14 20
Slide 34: O. Credit rating credits and alternative fixed income portfolio
O. Credit rating credits and alternative fixed income portfolio Market value credits (in €m) 0-1 1-2 2-3 3-5 5-10 10-20 20-30 30+ Total ∆ FY 23 % of total AAA 411 758 1,657 302 56 410 0 0 3,594 -6 22% AA 283 79 233 142 382 84 0 1 1,204 -78 7% A 691 482 564 1,376 1,351 558 88 3 5,113 -86 31% BBB 946
Slide 35: P. Details of equities and real estate portfolio
P. Details of equities and real estate portfolio Real estate (in €m) FY 2023 HY 2024 Delta Equity1 (in €m) FY 2023 HY 2024 Delta Residential 2,347 2,355 0% Equity 2,318 2,583 11% Offices 211 219 4% Equity Funds1 271 233 -14% Retail 142 142 0% Private Equity1 471 489 4% Rural 207 217 5% Mezzanine 213
Slide 36: Disclaimer
Disclaimer Cautionary note regarding forward-looking statements principal intermediaries or partnerships; (7) the unavailability and/or unaffordability of reinsurance; (8) deteriorations in the financial soundness of customers, suppliers or financial institutions, countries/states and/or other count