We continue our journey as a standalone company. In February, ING Group further reduced its stake in NN Group to 54.6%. As part of this transaction, we took the opportunity to complete a EUR 200 million share buy-back. Another important milestone was NN Group`s inclusion in the AEX index. Furthermore, the rebranding of our businesses from ING to NN is underway, creating a recognisable identity for our customers and other stakeholders, supported by a clear promise: `You matter`.
In April we celebrated our 170th anniversary. Building on our strong heritage we will continue to keep a sharp eye on our strategic direction and a clear focus on executing our strategy."
NN Group key figures
| In EUR million | 1Q15 | 1Q14 | Change |
| | | | |
| Operating result ongoing business | 304 | 295 | 3.1% |
| Net result | 485 | -215 | |
| Net operating ROE | 8.7% | 9.9% | |
| IGD Solvency I ratio | 335% | 245% | |
| New sales life insurance (APE) | 498 | 439 | 13.4% |
| Investment Management AuM (end of period, in EUR billion) | 203 | 168 | 20.8% |
Strategy and business highlights
NN Group`s strategy is to deliver an excellent customer experience, based on great service and long-term relationships. We aim to achieve this by offering transparent products and services that serve customers` lifetime needs. We do this by making our multi-access distribution network available to customers wherever and whenever they want, and by maintaining effective operations that deliver excellent customer service.
Netherlands Life
In the Netherlands Life segment, the focus is on reducing expenses and gradually shifting to higher-yielding assets, such as mortgages and loans, in order to compensate the negative impact of lower interest rates on the investment margin. Furthermore, NN Life aims to benefit from its strong position in the pension market and to capture growth opportunities especially in the area of defined contribution pension plans, as well as selectively participating in pension fund buy-outs. In the first quarter of 2015, a large company pension fund transferred its accumulated pension benefits to NN Life, which contributed to the increased new sales (APE) in this segment. In the first quarter a new pension application, `Mijn Pensioencoach` was successfully introduced. This application allows customers to get real-time information about their pension on their smartphone.
Netherlands Non-life
Netherlands Non-life aims to improve underwriting performance and to expand in specific market segments where there are clear opportunities for profitable growth. The operating result increased, mainly driven by positive recovery experience in Disability & Accident (D&A) and improved underwriting results in Motor. The combined ratio remained stable at 100.2%. Nationale-Nederlanden expanded its prevention programme by initiating a pilot called `Rij Wijzer` for professional drivers. This programme uses smart technology to help professional drivers improve their driving behaviour and as a result reduce the risk of damages. In the first quarter, Movir (which offers individual disability insurance to medical and business professionals) was awarded the title of `Best income insurer` by the association of independent financial advisors. Movir scored higher than other insurers on all aspects, including customer focused claims handling and the expertise of employees. In the first quarter of 2015, Movir launched a new D&A insurance product, called Flexible&Certain (`Soepel&Zeker`), which complements its current D&A offering and is tailored to a new target group, the independent professionals.
Insurance Europe
Insurance Europe is moving its business mix towards protection products and repositioning its savings and retirement products for the low interest rate environment. New sales (APE) were stable compared with the first quarter of 2014, excluding currency effects. Lower pension sales in Turkey were compensated by higher life protection sales, mainly in Spain (protection sales were up 40.0% driven by a large group contract and 11.3% excluding this contract). In Spain, the pension fund Nationale-Nederlanden Europa was awarded for its good and consistent financial performance by "Expansión", one of the country`s leading financial newspapers. NN Insurance Hungary launched a new modular protection and health insurance product. This product offers value added medical assistance services and can be easily adapted to customer`s individual needs.
Japan Life
In the first quarter of 2015, Japan Life continued to execute its channel diversification strategy. Three new banks started distributing COLI products, bringing the total number of bancassurance partners in Japan to 43 as of 31 March 2015. Bancassurance COLI sales increased by 15% compared with the same period a year ago. The productivity of independent agents remained strong, supported by the continuous enhancement of internal capabilities such as stronger training and sales tools. New sales (APE) were broadly at the same level as in the first quarter of 2014, excluding currency effects.
Investment Management
Assets under Management increased to EUR 203 billion driven by strong market performance in the first quarter of 2015. Investment Management aims to grow its third-party business by following a tailored approach for each client segment. For the retail business, Investment Management plans to protect and further expand its leading position and continues to develop a more distinct range of equity products. Investment Management continues to invest in building and broadening its capabilities, for instance by enhancing the processes supporting higher-margin products. Investment Management has received two Lipper Fund Awards 2015 for its real estate equity funds in the Netherlands. The Lipper Fund Awards programme by Thomson Reuters recognises funds that have excelled in delivering consistently strong risk-adjusted performance over several years.
NN Bank
NN Bank`s mortgage portfolio increased to EUR 8.6 billion from EUR 7.9 billion at the beginning of the year. This increase is the result of further growth of new production and the transfer of ING Bank mortgages, partly offset by the sale of mortgages to NN Life and NN Non-life. In March, the comparison site Independer awarded Nationale-Nederlanden the title of best mortgage advisor (`Beste thuisadviseur 2015`). The award was based on the highest customer satisfaction score, which was measured between 1 March 2014 and 1 March 2015. Customer deposits (internet savings and bank annuities) also continued to grow steadily, totalling EUR 7.7 billion at the end of the first quarter. Furthermore, NN Bank completed its first public Residential Mortgage Backed Securitisation transaction, raising EUR 650 million in funding from investors. With this transaction, NN Bank has attracted new long-term funding, leading to a further diversification of its funding profile.
Rebranding from ING to NN
In the first quarter, we started to rebrand our businesses from ING to the NN brand. The majority of our international insurance businesses have been rebranded from ING to NN or Nationale-Nederlanden. ING Investment Management changed its name to NN Investment Partners in April, and at the same time rebranded all investment funds to NN. Across Insurance Europe and Japan local brand campaigns were launched highlighting the name change and the new brand promise `You matter`. Our life and pension business in Turkey was the first to start with the rebranding to NN in February. In the Netherlands, our insurance business will keep the Nationale-Nederlanden name while the logo has been updated to align with the new NN brand. In 2015 and 2016, NN Group expects to incur total rebranding expenses of approximately EUR 135 million, which will be reported as special items and of which EUR 20 million was recorded in the first quarter of 2015.
NN started its running sponsorship
In the first quarter, NN Group officially started its running sponsorship with two major running events in the Netherlands, including the 35th edition of the NN Marathon Rotterdam. This marathon is well known for its fast times, professional organisation and almost 1 million enthusiastic supporters along the route. This running sponsorship will help NN Group to enhance awareness of the newly launched NN brand. In the years to come, NN`s objective is to support more running activities in some of its other key markets.
Solvency II
NN Group intends to apply for the usage of a Partial Internal Model for NN Group and the insurance entities in the Netherlands. The outcome of the application process remains subject to significant uncertainties, including the final interpretations of the Solvency II regulations and the regulatory approval process.
Share repurchase to neutralise stock dividend
NN Group has proposed a dividend of EUR 0.57 per ordinary share over the second half of 2014 subject to approval of the Annual General Meeting on 28 May 2015. The final dividend will be paid in cash or ordinary shares at the election of the shareholder. In order to neutralise the dilutive effect of the stock dividend on earnings per ordinary share, NN Group has reached an agreement with ING Group, subject to certain conditions, to repurchase ordinary shares from ING Group equal to the number of shares that NN Group will issue as stock dividend at a price similar to the price used to calculate the stock fraction for the stock dividend. NN Group and ING Group have also agreed to enter into similar transactions to neutralise the dilutive effect of future stock dividends by NN Group, subject to certain conditions and as long as ING Group holds shares in NN Group.
Unit-linked products in the Netherlands
Nationale-Nederlanden continues to reach out to customers to encourage them to carefully assess their unit-linked products in order to find an appropriate solution on an individual basis. On 29 April the European Court of Justice issued its ruling on a principal legal question with respect to information provision requirements related to unit-linked products. The European Court affirmed the position of Nationale-Nederlanden that the information requirements prescribed by the European Directive may be extended by additional information requirements included in national law, provided that these requirements are necessary for the policyholder to understand the essential characteristics of the commitment and are clear, accurate and foreseeable. Nationale-Nederlanden is of the opinion that general principles of Dutch law that are used as a legal basis in Dutch proceedings do not meet these criteria and that additional information requirements cannot be imposed retroactively. The Dutch courts must take the European Court`s ruling into account in individual Dutch legal proceedings. The ruling does not change earlier statements and conclusions disclosed by NN Group in relation to unit-linked products.
NN Group Profile
NN Group is an insurance and investment management company with a strong, predominantly European presence in more than 18 countries. With around 12,000 employees the group offers retirement services, insurance, investments and banking to more than 15 million customers. NN Group includes Nationale-Nederlanden, NN (formerly known as ING Insurance) and NN Investment Partners (formerly known as ING Investment Management). NN Group is listed on Euronext Amsterdam (NN).
Press call
Lard Friese and Delfin Rueda will host a press call to discuss the 1Q15 results at 09.30am CET on Thursday 7 May 2015. Journalists can join the press call via + 31 20 531 5863.
Investor conference call and webcast
Lard Friese and Delfin Rueda will host an analyst and investor conference call to discuss the 1Q15 results at 10:30am CET on Thursday 7 May 2015. Members of the investment community can join the conference call at +31 20 531 5865 (NL), +44 203 365 3210 (UK), +1 866 349 6093 (US) or follow the webcast on www.nn-group.com.
Financial calendar
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Annual General Meeting: Thursday 28 May 2015
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Publication 2Q15 results: Wednesday 5 August 2015 (provisional)
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Publication 3Q15 results: Wednesday 4 November 2015 (provisional)
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Capital Markets Event: Thursday 19 November 2015 (provisional)
Contact information
| Press enquiries
Ingeborg Klunder
+31 20 541 6526
mediarelations@nn-group.com | | Investor enquiries
Investor Relations
+31 20 541 5464
investor.relations@nn-group.com |
Additional information on www.nn-group.com
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NN Group 1Q15 Financial Supplement and NN Group 1Q15 Analyst Presentation
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Photos of NN Group executives, buildings and events are available for download at Flickr
Important legal information
NN Group`s Consolidated annual accounts are prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS-EU") and with Part 9 of Book 2 on the Dutch Civil Code.
In preparing the financial information in this document, the same accounting principles are applied as in the 2014 NN Group Consolidated annual accounts.
All figures in this document are unaudited. Small differences are possible in the tables due to rounding. Certain of the statements contained herein are not historical facts, including, without limitation, certain statements made of future expectations and other forward-looking statements that are based on management`s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation: (1) changes in general economic conditions, in particular economic conditions in NN Group`s core markets, (2) changes in performance of financial markets, including developing markets, (3) consequences of a potential (partial) break-up of the euro, (4) the implementation of the EC Restructuring Plan, (5) changes in the availability of, and costs associated with, sources of liquidity as well as conditions in the credit markets generally, (6) the frequency and severity of insured loss events, (7) changes affecting mortality and morbidity levels and trends, (8) changes affecting persistency levels, (9) changes affecting interest rate levels, (10) changes affecting currency exchange rates, (11) changes in investor, customer and policyholder behaviour, (12) changes in general competitive factors, (13) changes in laws and regulations, (14) changes in the policies of governments and/or regulatory authorities, (15) conclusions with regard to accounting assumptions and methodologies, (16) changes in ownership that could affect the future availability to us of net operating loss, net capital and built-in loss carry forwards, (17) changes in credit and financial strength ratings, (18) NN Group`s ability to achieve projected operational synergies and (19) the other risks and uncertainties detailed in the Risk Factors section contained in recent public disclosures made by NN Group and/or related to NN Group.
Any forward-looking statements made by or on behalf of NN Group speak only as of the date they are made, and, NN Group assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for any other reason. This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities.
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Source: NN Group NV via GlobeNewswire
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