Annual Report April 2013

Transcription

1 Annual Report April 2013

2 Table of contents 1. Report of the Executive Board 1.1. Profile 1.2. Highlights 1.3. Chairman s letter 1.4. Strategy Strategic pillars SWOT analyse Scenarios Rising to the challenge Corporate competences 1.5. Key Figures Objectives Ten year summary 1.6. Delta Lloyd in Segments Life General Insurance Bank Asset Management Other 1.8. Embedded Value 1.9. The Delta Lloyd share Aviva sell down AGM and calendar Dividend The Delta Lloyd share in The outlook for Case: BeFrank Case: Meet and tweet Case: Faith 2. Report of the Supervisory Board 2.1. Supervision requirements 2.2. Key issues in Membership 2.4. Meetings 2.5. Committees 2.6. Practices and procedures 2.7. Evaluation 2.8. Financial statements and profit appropriation 2.9. A word of thanks Delta Lloyd Group Annual Report 2012

3 3. Good governance 3.1. Corporate governance Supervisory Board Executive board Codes Articles of Association Capital and shares Voting rights Dividend Issuance of shares Preemptive rights Depositary receipts Repurchase of shares Transfer of shares, transfer restrictions and notification of repurchase of shares Amendments of the Articles of Association, Legal merger or demerger General Meetings of Shareholders Notice, agenda items Admission to the general meeting Resolutions Powers of the general meeting Meeting of holders of preference shares Strategic Investment Agreement Fonds NutsOhra Protective measures Works Council Corporate Governance statement Directive on Takeover bid 3.2. Risk management Governance Risk processes and systems Risk culture Risk taxonomy Capital model Capital developments Equity and solvency demonstrates financial strength Ratings Management statement under Financial Supervision Act 3.5. In Control Statement 3.6. Case: Specialising in risk 3.7. Case: Prepared for today and tomorrow 4. Sustainability 4.1. Sustainability strategy Sustainability highlights Sustainability pillars Governance and policy Benchmarks and indices Results in Delta Lloyd Group Annual Report 2012

4 Dilemmas in Putting our customers first Transparency of products and services Customer satisfaction Complaints Reputation of Delta Lloyd Group 4.3. Integrity Compliance governance Fraud prevention Responsible asset management Promoting a sustainable chain 4.4. Community involvement Donations and sponsorships Taking community action Affiliations and UN commitments Supporting research 4.5. Good employment practices Enhancing development and performance Employer of choice Compensation and benefits Diversity Health and vitality 4.6. Environment Climate change Energy Mobility Raw material use Waste 4.7. Reporting Reporting principles Global Reporting Initiativeindex United Nations principles Assurance report 4.8. Case: Sporting chance 4.9. Case: Investing in democracy Case: Woman test pensions Financial statements Consolidated Financial statements Consolidated balance sheet Consolidated income statement Consolidated statement of comprehensive income Consolidated statement of changes in equity Consolidated cash flow statement Accounting policies (A) Basis of presentation (B) Use of assumptions and estimates (C) Consolidation principles (D) Foreign currency translation 197 Delta Lloyd Group Annual Report 2012

5 (E) Product classification (F) Income and expenses relating to insurance contracts (G) Income and expenses relating to investment contracts (H) Fee and commission income and expenses (I) Net investment income (J) Acquisition costs (K) Contracts with discretionary participation features (L) Insurance contract provisions (M) Investment contract liabilities (N) Reinsurance (O) Intangible assets (P) Property and equipment (Q) Investment property (R) Inventory of real estate projects (S) Impairment of nonfinancial assets (T) Derecognition ans offset of financial assets and financial liabilities (U) Financial investments (V) Derivative financial instruments (W) Loans and receivables (X) Deferred acquisition costs (Y) Cash and cash equivalents (Z) Borrowings (AA) Share capital (AB) Earnings per share (AC) Leases (AD) Provisions for other liabilities and contingent liabilities (AE) Employee benefits (AF) Income taxes (AG) Discontinued operations and assets held for sale (AH) Segment information (AI) Off balance sheet commitments Notes to the consolidated financial statements (1) Risk management (2) Capital management (3) Segment information (4) Subsidiaries (5) Discontinued operations and assets held for sale (6) Details of income (7) Details of expenses (8) Exchange rates (9) Employee information (10) Remuneration of directors and the Supervisory Board (11) Tax expense (12) Goodwill (13) AVIF and other intangible assets (14) Deferred acquisition costs (15) Property and equipment (16) Investment property (17) Associates and joint ventures 304 Delta Lloyd Group Annual Report 2012

6 (18) Financial investments (19) Investments at policyholders risk (20) Securitised mortgages and related assets (21) Inventory of real estate projects (22) Receivables and other financial assets (23) Share capital (24) Earnings per share (25) Revaluation reserves (26) Retained earnings (27) Insurance liabilities (28) Reinsurance assets (29) Investment contract liabilities (30) Effect of changes in assumptions and estimates on provisions for insurance and investment contracts (31) Pension obligations (32) Provisions for other liabilities (33) Tax assets and liabilities (34) Borrowings (35) Financial liabilities (36) Other liabilities (37) Contingent liabilities and other risk factors (38) Offbalance sheet positions (39) Fair value of financial assets and liabilities (40) Transferred financial assets (41) Assets under management (42) Related party transactions (43) Subsequent events Seperate financial statements Notes to the seperate financial statements Accounting policies (I) Goodwill (II) Participating interests (III) Investments (IV) Receivables (V) Equity (VI) Provisions (VII) Subordinated debt (VIII) Longterm borrowings (IX) Other liabilities (X) Related party transactions (XI) Offbalance sheet commitments (XII) Employee information (XIII) Audit fees Other information Dividends and appropriation of profits Independent auditor s report Delta Lloyd Group Annual Report 2012

7 6. General information 6.1. Glossary 6.2. Abbreviations 6.3. Disclaimer Delta Lloyd Group Annual Report 2012

8 Report of the Executive Board 1. Report of the Executive Board 1.1. Profile Delta Lloyd Group Our mission and ambition Delta Lloyd Group offers financial security. We meet the demands and needs of our customers and of society. We deliver clear, reliable and contemporary solutions that create value for our customers, shareholders and employees. We aim to increase our market share in the Netherlands and Belgium, driven by a solid financial position, a strong longterm focus and advanced risk management. In the medium term, we aim to be a topthree insurer in the Netherlands and among the top five in Belgium. We have specific goals for corporate social responsibility, with a particular focus on integrity, customer interest, community involvement, good employment practices and the environment. Delta Lloyd Group Annual Report

9 Report of the Executive Board Our businesses Executive Board Corporate staff ABN AMRO Commercial Verzekeringen division Delta Lloyd Life IT & Services Delta Lloyd Delta Lloyd General Bank Delta Lloyd Asset Management Delta Lloyd Life Belgium Delta Lloyd Joint venture Germany Life Insurance We focus on group pensions but also offer a wide range of life insurance products through the intermediary distribution channel. We sell life insurance under the ABN AMRO Verzekeringen brand through our joint venture with ABN AMRO Bank in the Netherlands. OHRA sells life insurance products directly, mainly to individual customers. In Belgium, we sell individual and group life insurance under the Delta Lloyd brand, distributed through intermediaries and our own network of bank branches and tied agents. BeFrank, our joint venture with BinckBank and the first PPI in the Dutch market, offers innovative pension products at a very low cost. General Insurance We offer a broad range of general insurance products, principally in the Netherlands, to both retail and corporate customers. The products are distributed through intermediaries, brokers, pools and underwriting agents (Delta Lloyd), bank branches and online (ABN AMRO Verzekeringen) and online and other direct distribution channels (primarily OHRA). Delta Lloyd serves various niches, such as pleasure craft, wind farms, and technical installations and production facilities. Bank Our Dutch banking activities focus on mortgage and banksparen products. These are distributed through our sales channels. In Belgium, we offer a comprehensive range of products and services through our own bank branches and independent agents. In the Netherlands, Amstelhuys (a whollyowned subsidiary of Delta Lloyd NV), is the originator of the majority of the residential mortgage portfolio and a funding vehicle. Asset Management This segment comprises the activities of Delta Lloyd Asset Management (including Cyrte Investments) and the asset management activities of various lines of business. Our product offering includes a range of investment funds for institutional and retail customers (via Dutch retail banks) and discretionary mandates for institutional customers. The remaining investments involve thirdparty institutional and retail assets. Certain other business lines of Delta Lloyd Group also manage assets. Delta Lloyd Group Annual Report

10 Report of the Executive Board 1.2. Highlights IFRS result Marked to market 1,495 m NAPI Market leadership consolidated 401 m Combined ratio Embedded Value On target Group european 97.9% 16% change since +0.9pp change since 15% 4,004 m Operational result Efficiency After tax and noncontrolling interests Successful cost savings 404 m 16% change since Shareholder return Regulatory Solvency Optimising operational return on equity +0.1 pp Regulatrory solvency insurance entities 10.5% change since 212% +6pp change since 782 m S&P rating A rating for Life and General Insurance reconfirmed IGD group solvency Key issues in 2012 BIS ratio Financial strength Agenda of supervisory board Further improving our solvency position 177% +3pp change since u Business objectives u Risk management u Sustainability change since A 13.9% +1.8pp change since Founding signatory Bronze class award Quality label Founding signatory of UN principles of sustainable insurance (PSI) Delta Lloyd among top 10 insurers sustainability leaders Quality label retained for all labels, three years in a row UNEP PSI RobecoSAM DJSI KKV RRR Delta Lloyd Group Annual Report

11 Report of the Executive Board 1.3. Executive Board chairman s message Looking back on 2012, there is little doubt it was a challenging year for the financial services sector, dominated as it was by economic uncertainty. Markets were volatile and consumers were reluctant to spend. However, the biggest impact on our business activities was from interest rates, which fell to alltime lows. As we value our Life provisions at current market yields, something that is rarely seen in the industry, this resulted in considerably higher provisions for our policyholders. The strong decline in interest rates impacted our shareholders funds and our results. We seem to have entered a phase of prolonged low interest rates. However, our commercial approach and our commitment to transparency and prudence position us well for the future. We took swift and pragmatic action where necessary in This included terminating lossmaking underwriting in the international marine business and our gradual withdrawal from the Dutch partial disability insurance market (WGA ER). We also realised further cost savings as part of our ongoing costreduction programme and lowered our risk profile. The completion of Aviva s divestment from Delta Lloyd Group, and the strong demand from investors for Delta Lloyd shares, reflect broader confidence in our resilience and potential. Putting customers first From a business perspective, we consolidated our market leadership in Life new business and benefited from several large new contracts in Our pipeline remains well filled. The implementation of revised IAS19 rules for pension schemes should see the Dutch pension transfer market improve further particularly if interest rates continue to rise. We also saw growth in the defined contribution market via BeFrank, the first premium pension institution (PPI) in the Dutch market. Much of our progress was due to having robust and diversified multiple distribution channels. We further strengthened our distribution during the year by signing new agreements with Deutsche Bank in the Netherlands and CRELAN (Landbouwkrediet/Centea) in Belgium, while we deepened our insurance joint venture with ABN AMRO Bank. This commercial progress shows our approach of offering simple, innovative and transparent products is what customers want. It is central to our approach: we do everything possible to meet customers needs and put our customers first. We believe we are on the right path. Others agree: according to consultancy firm IG&H, Delta Lloyd was the best pension insurance provider in the Netherlands in terms of customer service in For this, I wish to thank our staff. It is their dedication and commitment that make Delta Lloyd a frontrunner in customer service. Delta Lloyd Group Annual Report

12 Report of the Executive Board Working for a better society We put our financial expertise to work for society through the Delta Lloyd Group Foundation. We activated more than 600 volunteering jobs in 2012, taking part in projects to educate adults and children on money matters, reducing poverty and debt prevention. In 2012, we became one of the founding signatories of the new Principles of Sustainable Insurance. We identify strongly with the 10 principles of the United Nations Global Compact to encourage sustainable business practices, which blend seamlessly with our own vision of sustainable business. Our efforts in this area were recognised by the Dow Jones Sustainability Index, which in its 2012 assessment of our sustainability performance rated Delta Lloyd as a topscoring company in the insurance sector. This moves us a step closer towards inclusion in this leading sustainability index. Political developments Markets are greatly influenced by political developments, and it is hard to predict what lies ahead for In the Netherlands, we anticipate the housing market will deteriorate further as a result of government measures to be introduced this year. In our view, the government should be doing more to improve consumer spending. The cumulative effect of measures taken, although directionally right, has dented consumer confidence. While we don t dispute that the Dutch housing market is ready for change, in our view the reforms should be introduced in a way that keeps disposable income at a sound level and limits the risk of homeowners falling into negative equity. A further concern is ever stricter regulatory requirements, which in the short term could affect lending to our customers and harm the housing market. As it is, we were cautious about providing new mortgages in 2012, and volumes declined by 60%. This was in line with market volumes in the Netherlands and our commercial strategy to aim for low risk mortgages and margins above volume. We are closely following developments in pension reform which will also impact Delta Lloyd when they take effect in As yet, not all the proposals have been finalised. They include reducing the pension build up from 2.1% in 2014 to 1.75% in For our customers it will become much more difficult to build up a reasonable pension. Having a smaller than expected pension reserve to draw from could affect the financial security of people who are counting on their pension at retirement. And the question is: who benefits from the money saved? Will it go to the pension schemes to improve coverage ratios, or to consumers so they have more cash to spend in the short term? Independent future In January 2013, Aviva sold its remaining stake in Delta Lloyd, a welcome development that puts us firmly on course to pursue our strategy as an independent company. We obtained a cross listing in Belgium and have been included in the BEL20 index, signalling the importance of the Belgian market as our second home market. We have a single goal: to offer our customers security, now and in the future. We believe we are well positioned to do this, and to benefit from a future pickup in market conditions, unlocking further value in the Dutch and Belgian life and pensions markets both in 2013 and beyond. Niek Hoek Chairman of the Executive Board Delta Lloyd Group Annual Report

13 Report of the Executive Board 1.4. Strategy Delta Lloyd s mission is to offer financial security. We meet the demands and needs of our customers and society. We deliver clear, reliable and contemporary solutions that create value for our customers, shareholders and employees. This mission statement is the core of our Future Secured strategy Strategic pillars Our strategy rests on five pillars: Certainty: We want to be the most solid and trustworthy provider of financial services. This is how we contribute to a sustainable and certain future for all stakeholders. It is the essence of putting customer interest first. Distribution power: We employ distribution opportunities and use our knowledge to connect with our customers and our distribution partners in the ever more mobile market place. We develop innovative products that are tailored to fit customer needs. Simplicity: Easy to understand products, transparent communications and simple processes all lead to better customer service and minimise costs. We strive for more efficient processes, products, organisation and communication. We aim to supply the most transparent products and services. Expertise: Knowledge is core to our business and essential to improving innovation and competitiveness. This requires high professionalism within our organisation. We want to be regarded as competent and trustworthy, and to be the financial service provider of choice. Our core values: Respect is at the heart of how we do business. Honourable, approachable and working together are the three values that guide everything we do, give direction to our policy and determine our corporate culture and identity. We simply want to do the right thing in business and deliver sustainable value. What is good for our customers is good for all our stakeholders and for us as a company. Delta Lloyd Group Annual Report

14 Report of the Executive Board Future Secured Creating value for our customers, shareholders and employees Certainty Distribution Simplicity Expertise Core Values Most solid and Employing Efficiency in Regarded as Respect at the The financial Honourable Approachable Working together trustworthy provider of financial services Contributing to a sustainable and certain future for all stakeholders distribution opportunities and knowledge to connect with customers and distribution partners Developing new processes, products, organisation and communication Most transparent products and services competent and trustworthy service provider of (first) choice heart of how we conduct business solutions that fit customer needs SWOT analysis Myriad external factors affect our business and guide our strategy. These can be economic, political or social developments. That is why we continually assess and update our strengths and weaknesses against the opportunities and threats we face. This SWOT (strengths, weaknesses, opportunities and threats) analysis helps us anticipate developments and their impact on our business. Delta Lloyd Group Annual Report

15 Report of the Executive Board SWOT Analysis Strengths Multichannel, Multilabel distribution Stronglyimproving customer satisfaction Dominant position in NL and growing presence in BE "Keurmerk Verzekeren" quality hallmark for all labels Prudent risk management (wellhedged interest rate and equity risks) Financial transparency (almost fully markedtomarket balance sheet) Successful long term partnerships / joint ventures Dedicated and competent employees Opportunities Transfer of company pension funds due to better pricing environment New parties / functions in distribution chain Need for security and assurance due to financial crisis Emergence of affinity groups / social media Embedding ESG principles in business model Weaknesses Insufficient chain integration Complex ICT infrastructure Risk and return monitoring per product Limited geographical presence Threats Acquisition of profitable new business difficult Ageing is leading to changes for mortgages / insurance (Longevity) Organic growth difficult in saturated markets Changed legislation / regulations for life, pension and mortgages market Changing financial market environment (political, economic, margin pressure) impact long term profitability and business model More specialised providers in pensions market Severe pricing pressure in markets Mapping out the future To act upon and mitigate the uncertainties in our business environment, Delta Lloyd uses the principle of scenario thinking to guide our strategy. This allows us to look at the full implications of diverse future scenarios from various perspectives over a period of 15 years. It gives us greater understanding of the forces driving the dynamics of our future environment. By analysing future markets, exploring new customer preferences and designing organisations for the future, managers can identify major changes at an early stage. In addition, Delta Lloyd can make the necessary choices to remain successful in the near future as well as in the long term. To meet our shortterm development environment, scenario thinking is embedded in our management and control process. From scenario analyses to a management and control process Delta Lloyd Group Annual Report

16 Report of the Executive Board Scenario analysis (every 5 years) Implications to Delta Lloyd strategy (every 5 years) Regular review Plan process (annually) Management incentive plan (annually) Quarterly reporting Monthly reporting Delta Lloyd has used scenario thinking at all levels of the organisation since Longterm scenarios developed in and have proven their value in helping us to shape and refine our strategy. The 2004 scenario focused on a boundless world, where institutional and international boundaries decreased and room for new ambition became available. The great divide showed a world with limitations, implying more pressure on transparency and increased growth in internet sales. Scenarios 2004 (scope ) Boundless world versus The great divide Main findings Internet simplifies comparison of products leading to commoditisation and pressure on prices Shift of power to consumers and fee advisors Increasing pressure on cost control Demand of clients on tailormade products at lowest possible price Technological developments accelerate product life cycles, demanding a shorter timetomarket Surviving in the market forces the choice between niche or mass Continuous volatile markets Strategic action: focus, price pressure and sharing In the 2009 scenario, fragmentation, economic problems escalate, heralding prolonged periods of global stagnation. Social contrasts widen and political coalitions disintegrate, while at the same time Delta Lloyd Group Annual Report

17 Report of the Executive Board vital virtual communities emerge. In the new balances scenario, sustainability and respect are the prevailing global trends, giving new parties and initiatives the scope to develop their full potential. Scenarios 2009 (scope ) Fragmentation versus New balances Main findings Growing diversity in preferences, needs and risk profiles of clients Demand for simplicity, flexibility, transparency, accompanied by increasing regulation Clients demand more tailormade products, whereas commoditising products and service should decrease costs Fierce competition and differentiation; entrance new market players with increasing internet and doityourself products Strategic action: simplicity is key Rising to the challenge Simplification of our organisation, processes, systems and communication translated into harmonised products for our customers, optimised margins and cost savings. Creating transparent products and services is key. With Delta Lloyds cost savings program, we were able to further decrease our operational expenses by 7% in Introducing the Vreemde Talen campaign for example, lead to focus on creating more transparent and understandable financial products. Better customer knowledge by creating a groupwide customer database. Through constantly collecting, comparing and analysing customer data, we can develop and offer attractive, successful products tailored to specific customer groups. This is increasingly done centrally for all labels and distribution channels and for all customer groups, from individuals to large corporate clients. Gaining more insight into the application of modern communication techniques and channels, such as social media, is also important in this connection. Standard products for modular propositions by combining own brands and white labels into semicustomised propositions in all distribution channels. Based on smart price and risk differentiation, as well as thorough customer knowledge, the propositions will be attractive to both customers and Delta Lloyd. Cocreation with customers will play an increasing role in product development. One of the achievement within this area is the creation of BeFrank, the first premium pension institution in the Netherlands, together with BinckBank. Focus on position in the value chain by achieving economies of scale while simultaneously applying detailed differentiation by customer type. This is done using a variety of business models, distribution channels and customer approaches, a joint back office and the same modular standard products. In addition, we continue to develop new productmarket combinations, which can serve as white labels alongside our existing brands. And we continue to look for acquisition opportunities. Delta Lloyd Group Annual Report

18 Report of the Executive Board Reinforce multichannel distribution by anticipating and acting on opportunities offered by the changing market environment. In this context, we will seek to reinforce multichannel distribution of online sales, businesstobusiness and white label sales through retail, franchise chains and internet platforms. For example online sales via the Delta Lloyd, OHRA and ABN AMRO Verzekeringen brands and white label sales via the retail and (lowcost) franchise chains and internet platforms. Strength in marketing by focusing on sales. The intelligent collation of customer and market knowledge is a precondition for being able to compete with new entrants. Innovation as a driver of growth by investing in the development of groupwide innovation capabilities. This enables Delta Lloyd to act rapidly and flexibly in developing new products and business models. Partner of top intermediaries, even though total turnover via intermediaries in the market is declining. Professional providers of more complex advisory products and intermediaries that can distinguish themselves in the online market will retain a strong market position. Delta Lloyd aims to benefit from the growth potential among established and new intermediaries by entering into alliances and investing in such partners. Expansion through acquisition and recruitment. To expand our business, Delta Lloyd uses acquisitions, joint ventures and recruits top specialists in attractive and promising niches. In 2012 for example, Delta Lloyd acquired the intermediary activities for commercial SME insurance business from ABN AMRO Bank. Growth in pensions in the businesstobusiness markets and the Life market. We want to expand Delta Lloyd s share in these markets on the strength of our highquality asset management and our distinctive pension and risk management knowledge. In 2012, Delta Lloyd reached first place in the National Performance Research Pension Insurers of consultancy firm IG&H. Also, Delta Lloyd agreed on a 30 year exclusive distribution agreement with Deutsche Bank for the sale of Pension and Individual Life Insurance products. BeFrank will be the exclusive partner for the premium pension institution. Expansion in Belgium, primarily through bank distribution and growth in the Life Insurance market. Our primary focus is on pensions and personal life insurance. In December 2012, an agreement was reached on the sale of the General Insurance portfolio to Fidea. Furthermore, an exclusive distribution deal was signed for life insurance in Belgium through the CRELAN (Landbouwkrediet/Centea) branches. Growth in asset management through specialised investment boutiques. Superior knowledge of specific niches and companies offers attractive opportunities to outperform in asset management. We aim to strengthen our position in attractive investment niches, initially by targeting the sustainability sector, and further expanding the European Participation Fund. Organisational agility. Delta Lloyd has a single infrastructure for all our labels and distribution channels, with the attendant economies of scale for new business, service and expertise. This enables our labels to concentrate fully on marketing, sales and distribution. The economies of scale are also used for product innovation to develop attractive, affordable and profitable products with a short time to market. Agility is a decisive factor, also in the implementation. Human resources. The challenges we face demand teams that are more diverse and flexible, and people who thrive on diversity. This calls for an environment that stimulates people to get the best out of themselves, and rewards them accordingly. Drawing on our core values, we Delta Lloyd Group Annual Report

19 Report of the Executive Board want to be an attractive employer for innovative employees who are eager to learn, aware of the needs of today s world and have an entrepreneurial spirit: people who are creative, expert and get the job done Corporate competences To transform these scenarios into a longterm strategy and shortterm goals requires certain competences. Delta Lloyd has a track record in risk management, asset management, multichannel distribution and nichespecific knowledge and expertise. It is crucial that we maintain, and wherever possible, raise that level of excellence. In addition, we have identified four more competences that are essential for the successful implementation of our growth strategy. Developing these is a top priority. They are: Innovative power; Customerfocused culture; A balanced and broadly compiled set of simple modular standard products; and Price and risk differentiation. Other competences necessary to achieve our growth ambition are: operational excellence and process management, human resource management, level of automation, cost level and efficiency, power of execution, knowledge of virtual technologies and culture, time to market, marketing competence, transparency and customer knowledge. Delta Lloyd Group Annual Report

20 Report of the Executive Board 1.5. Key figures Key figures (in millions of euros, unless otherwise stated) Gross written premiums¹ Operating expenses Operational result after tax and noncontrolling interests² Result (IFRS) after tax and noncontrolling interests Internal rate of return of new life sales COR Shareholders' funds after noncontrolling interests IGD Group solvency Regulatory solvency insurance entities Group European Embedded Value Life European Embedded Value , ,495 8% 97.9% 2, % 212% 4,004 4,210 5, % 97.0% 3, % 206% 4,696 4,890 Change 13% 7% 16% n.m. 1pp 0.9pp 40% 3pp 6pp 15% 14% 1) Excluding terminated and runoff activities 2) operational result restated, see explanation in note Information per segment Operational and financial objectives Operational and Financial objectives Business performance Internal rate of return Combined ratio across the cycle Efficiency Operating expenses (in millions of euros) Profitability Operational return on equity Annual growth of net operational result Capital IGD Group solvency Result 2012 Objective % 97.9% 9% 98% 782 < % 16% 812% 3% 177% >160175% Ten year summary Delta Lloyd Group Annual Report