Here are the latest financials from Netherlands based NN Group, with the key highlights being as follows;
- 4Q19 operating result increased to EUR 428 million from EUR 343 million in 4Q18, reflecting improved results at almost all segments; Full-year 2019 operating result of EUR 1,794 million, up 10.3% from 2018
- 4Q19 net result of EUR 329 million versus EUR -533 million in 4Q18 which included a goodwill impairment; Full-year 2019 net result of EUR 1,962 million versus EUR 1,117 million in 2018
- Further cost savings of EUR 36 million in 4Q19, bringing total cost reductions to EUR 360 million versus the full-year 2016 administrative expense base
- Full-year 2019 value of new business of EUR 358 million, down 8.3% from 2018, reflecting lower sales in Japan due to a tax change, partly offset by an improved business mix and higher life and pension sales at Insurance Europe
- 2019 final dividend proposal of EUR 1.40 per ordinary share (EUR 448 million), bringing the full-year 2019 dividend to EUR 2.16 per ordinary share (EUR 698 million)
- Share buyback programme of EUR 250 million to be completed within 12 months, anticipated to commence on 2 March 2020
- Updated dividend policy consisting of a progressive dividend per share and a recurring annual share buyback of at least EUR 250 million
Statement of David Knibbe, CEO commented;
‘NN Group’s financial performance was strong in the fourth quarter with the operating result 25% higher compared with the same quarter last year. The full-year 2019 operating result was up by 10% on 2018 with most segments contributing. The measures we are taking to improve the profitability of the Non-life business are bearing fruit, demonstrated by the full-year combined ratio of 95.4% compared with 99.4% in 2018. We have made additional efficiency gains by further reducing the cost base of the units in the scope of the integration by EUR 36 million in the fourth quarter, bringing total cost savings to date to EUR 360 million.
Customer satisfaction improved during the year, with the Group Net Promoter Score increasing 5 points from -1 in 2018 to +4. Motivated and engaged colleagues are key to providing an excellent customer service and this is reflected in a higher employee engagement score of 7.4 compared with 7.1 in 2018.
New sales at Insurance Europe and Netherlands Life were up in 2019, while sales in Japan were impacted by the new tax rules for COLI (Corporate-Owned Life Insurance) products. Total value of new business in 2019 was down 8% on 2018, reflecting the lower sales in Japan, partly offset by 21% growth in Europe. NN Bank originated a record amount of EUR 8 billion in mortgages in 2019. The total Assets under Management at our asset manager increased by EUR 30 billion in 2019 to EUR 276 billion, driven by positive market performance.
During the year we continued to strengthen our distribution and customer platforms, including through new strategic partnerships. The acquisition of Human Capital Services (HCS) in the Netherlands reinforced our position with regard to sustainable employability, and supports the broader shift from insurance products to service solutions. The announced acquisition of VIVAT Non-life will further strengthen our market position in the Non-life segment in the Netherlands. Our balance sheet remains strong, with a Solvency II ratio of 218% after deducting the final dividend, and a cash capital position of close to EUR 2 billion at the end of 2019.
We will propose a 2019 final dividend of EUR 1.40 per ordinary share at our annual general meeting of shareholders on 28 May 2020, which brings the full-year 2019 dividend per ordinary share to EUR 2.16, up almost 14% from 2018.
NN Group has a track record of distributing excess capital to shareholders. Our approach to this has not changed. We have today announced a new share buyback programme of EUR 250 million, anticipated to commence on 2 March 2020, which will be completed within 12 months. This decision takes into account the fact that we expect cash outflows in 2020 relating to the acquisition of Vivat Non-life and the repayment of maturing senior debt which we intend not to refinance.
In April, we will celebrate the 175th anniversary of Nationale-Nederlanden and the founding of our predecessor ‘De Nederlanden van 1845’. During all these years, we have been dedicated to meeting and exceeding our customers’ expectations. Based on this foundation we are further sharpening our strategy, investing in growth and in the transformation of our businesses, with the aim to create long-term value for our customers and other stakeholders. We will present our new plans at the Capital Markets Day on 24 June.’
New Products, Tailored to Individual National Markets – EU Isn’t Just One Single Market After All
The International insurance business launched new products in several markets to increase its service offering to customers. Nationale-Nederlanden in Spain launched Contigo Futuro, a financial product and tool that helps customers reaching their personal savings goals. Environmental, social and corporate governance criteria are being applied to the investments made via the tool. In addition, Contigo Futuro includes a protection rider that waives premiums if the customer suffers permanent disability.
NN in Turkey launched a health insurance that covers the surcharges for medical services from private medical institutions that are contracted by the state Social Security system. This product results from government efforts to relieve overcrowded public hospitals and is sold via agents and joint ventures.
NN in Hungary announced plans to introduce payment protection insurance, home insurance and travel insurance products in 2020 and 2021. In addition, NN Slovakia launched NN Partner, a new risk life insurance product. The basic component is death coverage with a guaranteed sum, plus a traffic accident death benefit. Additional riders can cover death, disability, illnesses and accidents. NN Partner has been available via most brokers since 1 October 2019.
NN wants to offer its customers personal and relevant products and services. To this end, Nationale-Nederlanden in the Netherlands introduced Smart Move, a personalised digital checklist for customers who are moving house detailing the actions needed before, during and after the move. Customers have the option to outsource multiple tasks and book them directly. Together with Tango, an operator of unmanned petrol stations, we started a pilot for car insurance allowing owners to just pay for kilometres driven while being insured at all times.
Tango Car Insurance is modelled on the Nationale-Nederlanden’s Bundelz concept which was developed in our SparkLab innovation lab.
We also saw strong growth in our health insurance business, with more than 60,000 new customers welcomed by OHRA Zorg and NN Zorg for the new 2020 policy year.