NN Group reports strong operating capital generation and solid business results for first half of 2022

12 augustus 2022

Strong capital generation reflecting solid business performance

• NN Group’s operating capital generation increased to EUR 899 million from EUR 780 million in the first half of 2021, reflecting a higher contribution from Netherlands Life, Japan Life and Insurance Europe partly offset by a lower contribution from Banking, Netherlands Non-life and the sale of NN Investment Partners (NN IP)

• Operating result of EUR 983 million versus EUR 1,119 million in the first half of 2021, mainly reflecting the impact of the February storm in the Netherlands and the sale of NN IP

• Net result of EUR 2,006 million, up from EUR 1,414 million in the first half of 2021, largely driven by the gain on the sale of NN IP

Good commercial momentum

• Value of new business of EUR 254 million, up 5% from the first half of 2021, primarily due to higher sales at Netherlands Life

• NN Bank and Woonnu originated EUR 4.9 billion of new mortgages in the first half of 2022

• Net inflows of EUR 0.9 billion in the Defined Contribution pension business in the Netherlands

Resilient balance sheet; delivering attractive capital returns to shareholders

• NN Group Solvency II ratio decreased to 196% versus 213% at 31 December 2021, mainly reflecting the deduction of capital flows to shareholders and the negative impact of market movements, partly offset by operating capital generation

• Cash capital position at the holding increased to EUR 2,467 million from EUR 1,998 million at 31 December 2021, reflecting the proceeds from the sale of NN IP and free cash flow to the holding, partly offset by capital flows to shareholders, repayment of senior debt and amounts paid for acquisitions

• 2022 interim dividend of EUR 1.00 per ordinary share or approximately EUR 294 million

Continued focus on customers, employees and society

• Customer satisfaction: 4 of our businesses scoring an above market average Net Promoter Score

• Women in senior management positions increased to 39%, reflecting an extended scope of the target group to further improve on our gender diversity ambition

• Target to invest an additional EUR 6 billion in climate solutions by 2030, EUR 625 million committed

Statement of David Knibbe, CEO

‘Today we are reporting strong capital generation for the first half of 2022, and we are on track to deliver on our financial and other strategic targets. These results were achieved against the backdrop of a turbulent period with major geopolitical developments and the resulting impact on the macro-economic environment, such as the sharp rise in inflation as well as significant volatility in financial markets. The impact of this turbulence on our business performance has been limited, demonstrated by the strong increase of capital generation, mainly driven by the Dutch life business as well as our international insurance businesses. The market volatility did impact our Solvency II ratio, specifically the widening of Dutch mortgage spreads and lower equity markets. Our Solvency II ratio decreased from 213% to 196% at 30 June 2022 as the strong operating capital generation of EUR 899 million in the first half of the year was offset by the deduction of the interim dividend and the EUR 1 billion share buybacks that we are currently executing, as well as the impact of market movements. At the same time our capital generation and investment returns are expected to continue to benefit from this higher spread environment and current interest rate levels.

In the first half of 2022, we continued to focus on our customers, employees and society, as measured against the non-financial targets of our strategy. We are there for our customers when it matters most. In the Netherlands, we supported them throughout the severe February storm. We increased our customer service capacity, enabling us to adequately handle the increased number of claims, while we also provided tips on how to prevent damage to properties. Further improving our customer experience continues to be a key priority.

The ongoing conflict in Ukraine has had severe humanitarian consequences in the region. As a large insurer active in Central and Eastern Europe, NN has provided multiple forms of support to help those affected. For example, we recently extended our core offering to provide medical care services to refugees in Poland, Slovakia and Hungary. The direct impact of the conflict on our business activities in the region continues to be limited.

As part of our ambition to achieve a net-zero proprietary investment portfolio by 2050, we aim to invest an additional amount of at least EUR 6 billion in climate solutions by 2030. Together with CBRE Investment Management, we launched a Positive Impact Programmatic Venture with the aim to build sustainable and affordable housing in the Netherlands.

Source: NN