ASR Nederland N.V. · EURONEXT:ASRNL
ASR Nederland — Investor Presentation (October 2015)
46 slides from ASR Nederland's investor presentation, October 2015
Slide 1: a.s.r. investor presentation
a.s.r. investor presentation September – October 2015
Slide 2: a.s.r. overview
a.s.r. overview Diversified Netherlands based composite insurance group with leading positions in profitable market segments Well known brands in the Dutch market with a corporate history dating back to 1720 Strategy focused on customer value creation, cost control and a solid financial framew
Slide 3: Table of contents
Table of contents Company introduction 4 Segmental business performance 12 Key investment considerations 19 Key take-aways 28 Appendices 31 A1: further financial information 32 A2: further general information 37 A3: investment portfolio breakdown 40 A4: company structure and executive & supervisory
Slide 4: Company introduction
voor alle verzekeringen Company introduction
Slide 5: Introduction to a.s.r.
Introduction to a.s.r. a.s.r profile Key financials1 (€m) • a.s.r. is a multiple insurance company with a long history and has the number 4 position in the Dutch market by GWP. As a purely Dutch 2011 2012 2013 2014 H1-14 H1-15 player, a.s.r. is represented in all major insurance segments for retail
Slide 6: Market position a.s.r.
Market position a.s.r. Executive Board market shares 2014 Disability P&C Life CEO Jos Baeten 11% 22% 12% (1958) 20% 4% 22% other other Achmea 9% Aegon 7% a.s.r. 34% other a.s.r. CFO 7% Delta L. Delta L. 9% Achmea Nat. Nat.Ned. 13% Ned. Chris Figee Goudse 19% 19% a.s.r. (1972) 11% Nat. Reaal 5% 8% De
Slide 7: Key figures H1 (as per June 2015)
Key figures H1 (as per June 2015) Net result (€m) Operating result (€m) DNB Solvency I ratio +132% 397 +27% 280 297% +12%-p 221 285% 171 * H1 2014 H1 2015 H1 2014 H1 2015 Dec. 2014 June 2015 ROE Operating ROE Solvency II ratio 23.7% (standard model) +13.5%-p +2.8%-p +10%-p circa 185% 15.8% 13.0% cir
Slide 8: a.s.r. shows strong performance and capitalisation versus peers
a.s.r. shows strong performance and capitalisation versus peers 297% 306% Solvency I 225% Average: 225% 206% % 179% 136% a.s.r. Achmea Aegon Delta Lloyd NN Group SNS 185% Average: 169% 169% Solvency II 155% % n.m. n.m. n.m. a.s.r. Achmea Aegon Delta Lloyd NN Group SNS 111% 108% Non life 99% 97% 100%
Slide 9: Group strategy
Group strategy a.s.r.’s strategy focuses on customer value creation, cost control and a solid financial framework • Focus on retail customers, self-employed and SME • Simple and transparent products with efficient processes, high level of straight-through Customer processing (STP) focus • Excellent
Slide 10: a.s.r. investment highlights
a.s.r. investment highlights Disciplined underwriting and delivery Strong free capital generation focused franchise, realising predictable (operating) earnings and robust dividend • Organic free cash generation (after holding and hybrid costs) over 2 times dividends flows 1. a.s.r. has a well-divers
Slide 11: Strategy is supported by recent M&A transactions
Strategy is supported by recent M&A transactions De Eendragt adds a.s.r. acquires De Eendragt volume / scale to a.s.r.'s Pensions a.s.r. acquired 100% of the shares in De Eendragt. a.s.r. has the ambition to further shore up its position in the pension market. One way pensions business from Almost c
Slide 12: Segmental business performance
Segmental business performance 12
Slide 13: Strong development of net result and operating result
Strong development of net result and operating result Net result (€m) Operating result (before tax) (€m) H1 2014 H1 2015 H1 2014 H1 2015 Non-life 92 Non-life 122 Non-life 101 Non-life 114 Life 172 Life 351 Life 165 Life 223 Banking & asset Banking & asset 4 4 management management Banking & asset Ba
Slide 14: Non-life segment: increasing operating result due to improving claims handling
Non-life segment: increasing operating result due to improving claims handling process and lower operating expenses Combined ratio below 100% for all non-life product lines Operating result (€m) Gross written premiums (€m) • Operating result increased due to improved underwriting result and lower co
Slide 15: Non-life segment: absolute return style profit due to underwriting performance
Non-life segment: absolute return style profit due to underwriting performance across the cycle Combined ratio 100.3% 98.9% 99.2% 96.5% * 94.9% 93.7% 92.5% FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 H1 2014 H1 2015 * Excluding WGA-ER impact; including WGA-ER impact combined ratio FY 2013: 104.6% GDP gr
Slide 16: Life segment: operating result and GWP improved
Life segment: operating result and GWP improved Operating result (€m) New production (€m APE) • Operating result increased € 57 million to € 222 million due to lower additions to technical provisions 28 • Decrease in new production (APE) in 222 Single line with market developments and due, 6 in part
Slide 17: Top position strengthened in funeral insurance
Top position strengthened in funeral insurance a.s.r. and AXENT combine the lowest cost per policy in the market 25 . Competitor 4 . cost per policy (EUR) 20 Competitor 1 15 10 . . Competitor 3 Competitor 2 5 . 0 AXENT . a.s.r. 0 500 1000 1500 2000 2500 3000 3500 4000 4500 # of policies (x1,000) 17
Slide 18: Non-Insurance activities
Non-Insurance activities With the effect of 1 January 2015, a.s.r. changed its segment Other into four separate non-insurance segments Banking and asset management • Net result remained stable at € 4 million in the first half of 2015 compared to the first half of 2014 • Operating result before tax d
Slide 19: Key investment considerations
Key investment considerations 19
Slide 20: Consistently strong financial performance
Consistently strong financial performance Cost reduction – operating Profitability – net results (€ mln) Solvency (%) expenses (€ mln) CAGR: -3.0% 450 300 300 400 250 250 350 300 200 200 250 150 308 150 293 285 284 297 279 271 264 273 200 381 397 2931 230 100 150 281 100 255 100 212 171* 50 50 50 0
Slide 21: Solvency continually robust
Solvency continually robust DNB solvency I 300% H1 FY 15 300 H1 FY c.185% * c.135% 12 H1 H1 14 12 c.175% 14 c.135%c.145% 13 280 c.160% FY DNB Solvency 293 297 13 260 2931 284 c.150% 250% I ratio 268 240 FY 2012 FY 2013 FY 2014 H1 2014 H1 2015 1 Since 2012 including UFR Solvency II 200% (midpoint est
Slide 22: a.s.r. remains well capitalised and strong under Solvency I & II
a.s.r. remains well capitalised and strong under Solvency I & II Total IFRS equity (€ m) DNB Solvency I capital (€ m) Solvency II capital (€ bn) Available capital Required capital SCR, Standard model c. 185% 4,053 3,709 @160% Hybrid 701 5,107 701 @140% Net result 397 SI required Adjustments 1,054 42
Slide 23: a.s.r. in a context regarding Solvency I
a.s.r . in a context regarding Solvency I Strong capital base and ability to transform capital into earnings a.s.r. is able to maintain a strong Solvency I a.s.r. is able to deliver high return on large ratio combined with a well positioned capital bases investment portfolio 100% 16,0% 14,0% % of no
Slide 24: a.s.r.'s financial risk indicators remain at a strong level
a.s.r.’s financial risk indicators remain at a strong level Financial leverage ICR • Hybrid capacity headroom more than € 1 billion 23.9% * 24.5x 22.0% 10.1x * 2014 H1 2015 H1 2014 H1 2015 Double leverage S&P holding rating 121% * 118% BBB+ BBB+ 2014 H1 2015 2014 H1 2015 * Restated due to accounting
Slide 25: a.s.r. financial ratio's
a.s.r. financial ratio’s Net result (€m) Operating result ROE Operating ROE €397m €280m 23.7% 15.8% €221m 13.0% €171m * 10.2% * H1 2014 H1 2015 H1 2014 H1 2015 H1 2014 H1 2015 H1 2014 H1 2015 DNB solvency I Solvency II (standard) Total equity Financial leverage 297% c.175% c.185% €4,053m 285% €3,709
Slide 26: Strong and well-diversified investment portfolio
Strong and well-diversified investment portfolio Assets (€ billion, fair value) * June 2015 Dec. 2014 Composition investment portfolio June 2015 Fixed income 22.8 24.1 Fixed income 1% Equities 2.0 2.0 17% Equities Real estate Real estate 2.8 3.0 Mortgages / Loans 8% Other Mortgages / other loans 5.8
Slide 27: Strong and Stable Credit Ratings
Strong and Stable Credit Ratings Entity Grade Outlook ASR Levensverzekering N.V. A Stable ASR Schadeverzekering N.V. A Stable ASR Nederland N.V. (holdco) BBB+ Stable Business Risk Profile: Strong Financial Risk Profile: Strong Other Factors “ • Strong competitive position owing to “• Very strong cap
Slide 28: Key take-aways
as de nederlandse verzekerings maatschappij voor alle verzekeringen Key take-aways 28
Slide 29: a.s.r. investment highlights
a.s.r. investment highlights Disciplined underwriting and delivery Strong free capital generation focused franchise, realising predictable (operating) earnings and robust dividend • Organic free cash generation (after holding and hybrid costs) over 2 times dividends with further future upside flows
Slide 30: Contact details
Contact details Investor Relations [email protected] Barth Scholten T +31 (0)30 257 8661 30
Slide 31: Appendices
as de nederlandse verzekerings maatschappij voor alle verzekeringen Appendices 31
Slide 32: A1: further financial information
A1: further financial information 32
Slide 33: Strong increase in Operating result
Strong increase in Operating result Operating result: profit before tax adjusted for (i) investment income of an incidental nature (including realized capital gains, impairment losses and realized and unrealized changes in value) and (ii) incidental items not relating to ordinary activities as a res
Slide 34: Operating result per segment
Operating result per segment Operating result: profit before tax adjusted for (i) investment income of an incidental nature (including realized capital gains, impairment losses and realized and unrealized changes in value) and (ii) incidental items not relating to ordinary activities as a result of
Slide 35: Continued containment of underlying cost base
Continued containment of underlying cost base Operating expenses (€m)* Number of internal employees (FTEs) (exclusive of provision for restructuring expenses) CAGR: -3.0% CAGR: -4.6% 308 279 264 273 271 4,264 7 4,088 3,789 266 3,513 3,532 138 H1 3,394 2011 2012 2013 2014 2015 Dec. 2011 Dec. 2012 Dec
Slide 36: Calculation of the combined ratio
Calculation of the combined ratio (€ million) H1 2015 H1 2014 Source interim report 2015 Net insurance premiums Non-life 1,115 1,152 page 24-25 Net insurance claims and benefits -808 -855 page 24-25 Compensation capital gains (Disability) 11 18 additional disclosure Interest accrual on provisions (D
Slide 37: A2: further general information
A2: further general information 37
Slide 38: a.s.r. history
a.s.r. history • 1720: creation of ‘Maatschappij van Assurantie, Discontering en Beleening der Stad • Merger ASR Group • Foundation of Fortis Rotterdam Anno and Fortis AMEV by a.o. Amev and • Rebranding 1720’ into VSB Bank into a.s.r. Fortis ASR 1720 1962 1990 2000 2008 2009 Becoming the new a.s.r.
Slide 39: Diversified, multichannel approach to distribution, underpinned by well-known brand names
Diversified, multichannel approach to distribution, underpinned by well-known brand names Overall distribution strategy and brands • a.s.r. has a strong position in the Dutch market and an extensive distribution platform based on its broker channel • In the SME segment distribution mainly takes plac
Slide 40: A3: investment portfolio breakdown
A3: investment portfolio breakdown 40
Slide 41: Stable and high-quality fixed-income portfolio in changing interest rate environment
Stable and high-quality fixed-income portfolio in changing interest rate environment Key highlights Mortgages June 2015 Dec. 2014 Delta (€m, book value) * • Value fixed income portfolio decreased due to higher interest rates and LtFV < 75% 974 965 1% widened spreads LtFV < 100% 561 565 -1% • Reducti
Slide 42: Reduction in equity portfolio and stable performance real estate portfolio
Reduction in equity portfolio and stable performance real estate portfolio Key highlights Equities (€m) * June 2015 Dec. 2014 Delta Equities 1,643 1,745 -6% • Equities Sale of equities to reduce market risk, as portfolio increased in value beyond risk tolerance levels. Equity portfolio remained at €
Slide 43: A4: company structure and executive & supervisory board
A4: company structure and executive & supervisory board 43
Slide 44: Company structure
Company structure Condensed legal company structure NLFI* 100% Notes: * Nederland Financial Investments 1 Licensed insurance company, segment non-life 2 Licensed insurance company, segment life 3 Licensed bank/investment institution, segment banking & asset management 44
Slide 45: Executive and Supervisory Boards
Executive and Supervisory Boards Executive Board Supervisory Board J.P.M. (Jos) Baeten (1958) Dr. C. (Kick) van der Pol (1949) CEO Chairman Responsibilities: Human resources, Marketing, Integrity, Audit, Chairman of the a.s.r. nederland Supervisory Board and member Legal, Communication and Business
Slide 46: Disclaimer
Disclaimer Cautionary note regarding forward-looking statements Certain statements in this presentation that are not historical facts are “forward-looking statemtents”. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends
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