Tough Year For NN Group, But Holding Steady

The latest financial statement from NN Group;

Strong financial and commercial performance; cost reduction target achieved

• Operating result increased to EUR 963 million from EUR 881 million in the second half of 2019, mainly driven by a higher investment margin and lower administrative expenses at Netherlands Life; Full-year 2020 operating result of EUR 1,889 million, up 5.3% on 2019
• Operating capital generation of EUR 450 million versus EUR 653 million in the second half of 2019, reflecting the negative impact of lower interest rates; Full-year 2020 operating capital generation of EUR 993 million, compared with EUR 1,349 million in 2019
• Limited negative impact of Covid-19 on operating result of around EUR 23 million in the second half of 2020, bringing the full-year 2020 impact to EUR 53 million
• Net result of EUR 1,317 million, up from EUR 844 million in the second half of 2019; Full-year 2020 net result of EUR 1,904 million versus EUR 1,962 million in 2019
• Further cost reductions of EUR 23 million in the second half of 2020; total cost reductions of EUR 404 million versus the full-year 2016 administrative expense base, thereby achieving the cost reduction target
• Value of new business of EUR 144 million, up 17.9% from the second half of 2019, mainly driven by the recovery in sales of COLI products in Japan Life

Focus on all stakeholders; high employee engagement and increased ESG-integrated Assets under Management

• Customer satisfaction remained broadly stable amidst the pandemic, with 4 of our businesses scoring an above market average Net Promotor Score
• Employee engagement increased substantially with an overall score of 7.9, up from 7.4 in 2019
• ESG-integrated Assets under Management increased to 74% from 68% in 2019

Resilient balance sheet; delivering on our commitment to attractive capital returns to shareholders

• NN Group Solvency II ratio of 210% versus 221% at 30 June 2020, mainly reflecting the inclusion of NN Bank in the Group Solvency II calculations as of the end of 2020 and the deduction of the proposed 2020 final dividend, partly offset by operating capital generation
• Cash capital position at the holding decreased to EUR 1,170 million in the second half of 2020, reflecting capital flows to shareholders and remittances from subsidiaries
• 2020 final dividend proposal of EUR 1.47 per ordinary share or approximately EUR 456 million, bringing the pro forma total 2020 dividend to EUR 2.33 per ordinary share, up 7.9% on 20191)
• New share buyback programme of EUR 250 million announced in line with dividend policy

Statement of David Knibbe, CEO

‘In 2020 we delivered a strong financial and commercial performance, even though it clearly was an unprecedented year, marked by the Covid-19 pandemic and various other economic, political and regulatory developments. These circumstances impacted people and societies, and are reshaping markets, industries and companies – which requires adaptability and resilience from us all. When designing our new strategy in the first half of the year, we took these changes into account as much as possible. It is our aim to pursue long-term value creation, based on the belief that a focus on the well-being of customers and employees is in the end beneficial for all our stakeholder groups.

For our employees, we want to create an inclusive and inspiring working environment, which stimulates agility, efficiency and transformation. Last year, our people demonstrated proactivity and flexibility in giving unwavering attention to our customers in a difficult change environment. This has also proven to be a strong accelerator for the transformation journey we embarked on, of becoming more customer centric and data driven. Thanks to the efforts of our colleagues, who were mostly working remotely, we were able to continue to go the extra mile for our customers. We were for example able to provide payment holidays for insurance premiums and mortgages to customers facing financial difficulties, and temporary coverage of delivery services for businesses that normally do not deliver products.

Also, we supported the communities in which we live and work, for example by computer donations, enabling children to home school. Besides supporting customers to navigate today’s challenges, we also want to help by giving them the confidence to look and plan ahead. This way, insurers can make an important contribution to economic recovery, a goal we are very committed to support.”