Annual results A solid foundation for Acceleration & Innovation Willem van Duin Chairman of the Executive Board

Transcription

1 Annual results 2013 A solid foundation for Acceleration & Innovation Willem van Duin Chairman of the Executive Board Huub Arendse Chief Financial Officer 4 March 2014

2 Contents General overview Group results Group developments Acceleration & Innovation Financial overview Results by segment Capital position and solvency Investments Questions & Answers 2 Achmea annual results 2013

3 Solid financial foundation for Acceleration & Innovation Net profit down 27% at 344 million, mainly due to a 232 million goodwill impairments on pension services and health insurance Operational result up 4% at 536 million. Financial position remains strong with solvency ratio of 202%. Costs down 5%; cost-reduction target sharpened. Acceleration & Innovation programme will lead to better online services for our customers, competitive costs and a responsible return. 3 Achmea annual results 2013

4 Group developments in 2013 Customers Good market positions maintained, with strong brands and high customer satisfaction. Continuing to put customer interests first. Further strengthening of Achmea s cooperative identity, together with Vereniging Achmea and brands. Rabobank and brokers Continuing success of cooperation with Rabobank; promising start in Australia. Cooperation with brokers strengthened by Avéro Achmea initiative The Value of Advice. Employees Employee engagement and motivation at high level. Achmea is highest rated financial services provider in NRC Handelsblad s Best Employer survey. Shareholders and capital providers Streamlining of businesses continues; operations in Bulgaria, Romania and Ireland divested. Capital position further strengthened by successful transactions; confirmation of good capital-market access. 4 Achmea annual results 2013

5 2013 results: net profit declined due to goodwill impairments Key figures Net profit Operational result Written premiums 20,233 20,445 Gross operating expenses 2,660 2,787 Solvency ratio of insurance entities (IGD) 202% 212% Net profit of 344 million despite goodwill impairments of 232 million on pension services and health insurance. Operational result up 4% to 536 million due to around 130 million reduction in operating expenses. Written premiums stable, growth in core health and non-life insurance activities despite shrinking market. Gross operating expenses down 5% due to complexity reduction, standardisation of processes and lower IT expenses. Cost reductions create room for future investments in innovation of products and processes. Financial position remains strong, with a solvency ratio of 202% including effects of downgrading of France and UFR (Ultimate Forward Rate) method. 5 Achmea annual results 2013

6 All Dutch insurance entities contributed to result Profit before tax Non-life Health* Basic Supplementary Pension & Life * Structural result Dutch Non-life result increased Several major fires and bad storms in October and December resulted in losses for our customers and impacted our result. Actions to restore profitability on WGA income protection insurance successful. Increased share of shrinking non-life insurance market. Dutch Health result lower Structural result health insurance declined because our premiums were not increased in 2013 and healthcare costs continued to rise. Part of our incidental health insurance result of 208 million has enabled our brands to reduce premiums in Dutch Pension & Life result declined Interest-rate developments lead to lower result in Further cost reductions achieved. 6 Achmea annual results 2013

7 Acceleration & Innovation; a new episode for Achmea Results 2013 provide a solid financial foundation. Good starting position with a cooperative identity, strong brands with high customer satisfaction and a strong market position. Acceleration in customer focus and cost saving and Innovation in processes and online services to customers. Changes in anticipation of fast-changing customer requirements. 7 Achmea annual results 2013

8 Changing customer behaviour: acceleration in digitisation Percentage of sales per medium (number of sales): Online on the rise 80 Private insurance 80 Health insurance Online In person via an adviser By telephone By mail Via employer * Source: market research GFK TOF tracker (2013) 8 Achmea annual results 2013

9 Acceleration & Innovation; a new episode for Achmea Results 2013 provide a solid financial foundation. Good starting position with a cooperative identity, strong brands with high customer satisfaction and a strong market position. Acceleration in customer focus and cost saving and Innovation in processes and online services to customers. Changes in anticipation of fast-changing customer requirements. The reduction of around 4,000 jobs over three years is serious but unavoidable. Achmea Transfer Centre will support employees in finding new jobs. Due care will be taken to promote the interests of the staff, in constructive dialogue with unions and works councils. The aim of Acceleration & Innovation is to enable us to continue working on innovative solutions for our customers, continue achieving a high level of customer satisfaction and maintain our long-term financial health. 9 Achmea annual results 2013

10 Acceleration & Innovation, our management agenda Customer driven Changes for employees Redesign of distribution organisations Investments in online services of our brands Investment in sustainable employability via training and support Flexible employment terms for even better customer service Customer s voice a permanent factor in our business operations Customer driven Good employership is key Responsible return Greater commercial effectiveness through dynamic pricing Sharper pricing and tighter revenue management Responsible return Medewerkers Employees Competitive costs Competitive costs Further reduce complexity in IT and migrate to generic IT systems Cost-reduction target now 450 million in savings by yearend Achmea annual results 2013

11 Contents General overview Group results Group developments Acceleration & Innovation Financial overview Results by segment Capital position and solvency Investments Questions & Answers 11 Achmea annual results 2013

12 Good starting position for Acceleration & Innovation 344 Net profit 469 Operational result (in million) Gross written premiums 20,233 20,445 Net profit 344 million despite goodwill impairments of 232 million on pension services and health insurance. Operational result 4% higher at 536 million Written premiums stable, higher in health and non-life insurance despite shrinking market. Gross operating expenses 2,660 Solvency ratio (%) 2, ,702 Total equity 10,483 Gross operating expenses down 5% due to complexity reduction, standardisation of processes and lower IT expenses. Financial position remains strong, with an IGD solvency ratio of 202% Total equity 7% lower due to repayment and repurchase of capital instruments and application of IAS 19R to pension obligations. 12 Achmea annual results 2013

13 Non-life: operating performance still strong in a highly competitive market Gross written premiums 604 P&C Income protection 3,172 3, , , Combined ratio (%) Non-life insurance Claims ratio Cost ratio Result before tax 2013 Combined ratio (%) Income protection insurance Claims ratio Cost ratio Property & Casualty insurance Higher written premiums in shrinking market translates into larger market share. Large losses suffered by business customers reimbursed after four serious industrial fires ( 45 million) and October and December storms ( 74 million). Consistently strong operating performance results in further reduction in cost ratio. Income protection insurance Successful action on WGA (group occupational disability) portfolio to restore profitability. Limited additional increase in provision, due mainly to statutory increase in state retirement age Achmea annual results 2013

14 Health: lower structural result on basic health insurance Gross written premiums Basic Supplementary 13,235 13,105 1,410 1, Structural result 352 Basic health insurance Written premiums lower due to customers opting for higher voluntary deductibles and a fall in the number of policyholders; reduction in written premiums compensated by contribution from the health expenses settlement fund. 11,825 11,571 Structural result was stable over 2013; premiums remained unchanged despite higher healthcare expenditure Combined ratio (%) Basic health insurance* Claims ratio Cost ratio Combined ratio (%) Supplementary health insurance Claims ratio Cost ratio Supplementary health insurance Written premiums lower as customers took less supplementary cover, especially for physiotherapy and dental care. Goodwill impairment of 90 million; future results lower than previously estimated due to increased competition and changing customer behaviour Higher incidental result of 208 million enabling us to reduce basic health insurance premiums for customers by an average of 100 per policy in * Based on structural results 14 Achmea annual results 2013

15 Pension & Life: lower result due to interest-rate movements Gross written premiums Pension Life 2,593 1,463 2,944 1, Result before tax 383 Pension & Life insurance Lower written premiums due to stalling housing and mortgage markets, competition from bank saving products and lower pension indexations. Result adversely affected by interest rate movements, including convergence of UFR curve and zero swap curve. 1, VNB* 1, VNB margin* (%) Gross operating expenses 15% lower due to sustained focus on efficiency; operating expenses down 3%. Administration costs further reduced for separate closed life insurance portfolio, while maintaining high quality of service. Investments in implementation of new legislation and regulations VNB margin adversely affected by further investments in new production. * Value of new business, not including mortgage production (part of banking activities) 15 Achmea annual results 2013

16 International and banking activities International activities Gross written premiums up 1%, despite adverse foreign-exchange effects and divestments. Modest positive contribution of 2 million (2012: -78 million). Profitability restored by focus on profit over revenue growth. Result in 2012 seriously affected by non-recurring charges and divestment costs. Improved operational performance, operating expenses down 14%. Progress made in streamlining the non-core activities in our portfolio. Commercial cooperation with Rabobank also successful at international level: sales of first non-life policies to agricultural customers in Australia. Banking activities Higher bank interest margin offset by investments in service quality and in implementation of new legislation and regulations including SEPA. Increased loan-loss provision due to further decline in collateral on several large mortgages. Core Tier-1 ratio of our banking activities increased from 14.2% to 16.3%. 16 Achmea annual results 2013

17 Syntrus Achmea and holding company activities Syntrus Achmea Syntrus Achmea represents a strategic complement to the activities of Achmea Group. Assets under management increased by 6.3 billion in 2013 to 70.0 billion. Goodwill impairment of 142 million; results lower than previously estimated due to disappointing growth in assets under management, lower management fees and continuing difficult conditions on the Dutch property market. Holding company activities This segment includes the combined results of Shared Service Centres, strategic associates and activities at holding company level such as IT costs, premises, P&O, Risk & Compliance and Internal Audit. Higher costs due to centralisation of IT projects, less on-charging of costs of holding company activities and higher pension charges. 17 Achmea annual results 2013

18 Strong financial position maintained Changes in equity 10, /12/2012 Net result Dividend Purchase of hybrids Revaluation FX movements IAS19 Changes in solvency 212% -9% -2% -3% -7% 10% -7% Total equity falls to 9,702 million. Repayment of 358 million of Tier 1 capital instruments. Successful issue of 500 million of Tier 2 capital instruments. Adjusted for UFR method and downgrading of France, IGD solvency ratio rose to 199% (2012: 193%). 9,702 Equity 31/12/2013 Lower adjustment of intangible assets 9% Surplus (Wft) NL life entities -11% Subordinated loans Changes in solvency requirements 12% 2% Other changes -2% 31/12/ % 18 Achmea annual results 2013

19 Overview of our investment portfolio 10% 6% 22% 2% Total investment portfolio ( 44.8 billion) 4% 3% 2% 3% 8% 82% Fixed-interest by type ( 36.7 billion) 1% 1% 8% 48% Fixed-interest Deposits Derivatives Equities Alternative investments Property Government bonds Government-related bonds Loans and mortgages Asset-backed securities Covered bonds Corporate bonds Convertible bonds Fixed-income funds 31% 12% Direct property portfolio ( 1.2 billion) 4% 29% 36% Fixed-interest by rating ( 36.7 billion) 12% 20% 2% 2% 52% Residential Offices Retail Other AAA AA A BBB <BBB Geen rating Investment portfolio at own risk and expense worth 44.8 billion. Over 80% of the investment portfolio is in fixed-interest securities. Continuing shift from government bonds to corporate bonds and asset-backed securities. Our property portfolio was worth 1.5 billion at the end of 2013 (2012: 1.6 billion) or 3% of our total investment portfolio. 19 Achmea jaarresultaten 2013

20 Solid foundation for Acceleration & Innovation Net profit down 27% at 344 million, mainly due to a 232 million goodwill impairments on pension services and health insurance. Operational result up 4% at 536 million. Financial position remains strong with solvency ratio of 202%. Costs down 5%; cost-reduction target tightened. Acceleration & Innovation programme will lead to better online services for our customers, competitive costs and a responsible return. 20 Achmea annual results 2013

21 Annual results 2013 A solid foundation for Acceleration & Innovation

22 Contact details Stefan Kloet Bastiaan Postma Media Relations Investor Relations +31 (0) (0) Achmea annual results 2013