Utrecht,
26
February
2014
|
00:00
Europe/Amsterdam

a.s.r. ready for forthcoming privatization

Annual results 2013

Summary

a.s.r. further improved its performance in 2013. Dividend of € 99 million proposed, a 12% increase. Net result for 2013 amounted to € 281 million. In the reporting period, new, easy to understand and low-cost products were introduced to suit customers’ needs. Operating expenses were down 7%. The margin in the Non-Life segment was sound, with a combined ratio of 96.5% (excluding the provision for WGA-ER). Results in the Life segment showed strong improvement. At 268%, the solvency ratio continued to be robust. a.s.r. is ready for the forthcoming privatization.

Customers and sustainability

  • a.s.r. introduced a new low-cost Non-Life insurance package.
  • De Amersfoortse introduced the new ´Werknemers Pensioen´ (Employee Pension).
  • Ditzo won the Customer Centric DNA Award for the most customer-oriented insurance company.
  • De Amersfoortse strengthened its market leadership in occupational disability insurance.
  • Through Ditzo and De Amersfoortse, a.s.r. solidified its position in the health insurance market with more than 300,000 customers.
  • The ‘Doodgaanendoorgaan.nl’ website was launched, offering practical information regarding funerals.
  • Sales of new WelThuis mortgages rose to € 1,411 million (2012: € 839 million); a.s.r. doubled market share to 4%.
  • a.s.r. was awarded the BREEAM Excellent certificate for the renovated head office.
  • a.s.r. is recognized as a sustainable investor, ranking third in studies carried out by VBDO and ‘Eerlijke Verzekeringswijzer.’

Net result for 2013 at € 281 million; proposed dividend of € 99 million, 12% increase

  • a.s.r. proposes to distribute € 99 million in dividend, against € 88 million in 2012.
  • Net result for 2013 at € 281 million (2012: reported € 255 million, excluding IAS19R restatement of € +61 million).
  • Due to measures taken in the Non-Life segment, the net result in this segment, excluding a provision for WGA-ER (Return to work of the partially disabled – own risk), increased by 13% to € 142 million, with a combined ratio of 96.5%. The additional WGA-ER provision amounted to € 137 million in 2013 (2012: € 67 million).
  • In the Life segment, the net result rose to € 367 million (2012: € 275 million), which was mainly attributable to lower costs and higher investment returns.

Operating expenses dropped for the fifth consecutive year; down 7% in 2013 to € 547 million

  • Operating expenses fell by 7% to € 547 million in 2013 (2012: € 587 million) particularly due to a reduction of FTEs from 4,088 FTEs at year-end 2012 to 3,789 FTEs at year-end 2013.
  • The cost-premium ratio of the insurance business increased by 0.4%-point on a comparable basis to 10.9%, due to a drop in premium income.

Solvency ratio continues to be robust at 268%

  • The DNB solvency ratio was 268% at year-end 2013.
  • Total Equity was up 13%, rising to € 3,015 million (2012: € 2,663 million).

Market developments and measures to improve profitability caused a drop in premium income to € 3,923 million

  • In the Non-Life segment, premium income amounted to € 2,392 million, a 4% drop compared to 2012 (€ 2,487 million) due, in particular, to focus on improving profitability.
  • Premium income in the Life segment was down 12% to € 1,666 million (2012: € 1,891 million), mainly attributable to falling demand for life insurance products and the choice of value over volume. Sales of new single premium policies declined by 28% to € 245 million and regular premiums decreased by 8% to € 1,421 million.

Jos Baeten, CEO: 'We made significant progress in 2013. Our customers and other stakeholders experience our new direction. We again introduced new, easy to understand products, adjusted existing products in response to customer feedback and took steps to further improve our customer services. As a result, a.s.r. is now in a better position to help customers insure risks that they cannot bear themselves and help them build assets for the future.

Falling consumer spending and an increase in the number of business closures reduced premium income. Nevertheless, we again managed to post a profit in 2013. Due to strict cost discipline we reduced our operating expenses to an even lower level in 2013 (-7%), which allows us to offer customers well-priced products. The deliberate decision of value over volume has led to lower premium income in some market segments, resulting in a 4% drop in premium income in the Non-Life segment and a 12% drop in the Life segment. At 268%, our solvency ratio remained strong, providing assurance to our customers.

In addition to offering competitive prices, a.s.r. believes strongly in investing in long-term relationships with customers and independent brokers by offering high-quality and transparent products and services that truly meet customer demands. Our motto 'Helping by Doing' is also reflected in other initiatives. A good example of such an initiative in 2013 was the Feyenoord/Blijdorp campaign to support the Rotterdam Zoo. In addition, we were able to support a number of independent brokers by assisting them in setting up local media campaigns. We ended the year with an initiative by Ditzo, which entailed the donation of one million euros, that was originally intended to fund a television and radio campaign for health insurance policies, to the Antoni van Leeuwenhoek Hospital. That money will now fund cancer research.

In 2013, the renovation of our office building at the Archimedeslaan in Utrecht took shape. The renovation is part of a.s.r.’s plans for a sustainable future, as well as leading to lower housing costs. We are proud to have been awarded the BREEAM Excellent certificate, which we received as confirmation that our office will meet the highest sustainability requirements for existing buildings.

It will become clear in 2014 how and when a.s.r. will return to the private market. We are ready, as Minister of Finance Dijsselbloem announced in his letter to the Dutch Parliament in August 2013. Irrespective of what privatization will look like, we will continue to focus on our chosen strategy. This means that, in the coming years, we will carry on adjusting our organization and allowing consumers and businesses to insure risks at the right price or entrust their asset building to us.

In 2013, a.s.r.’s customer focus notably improved. Costs were reduced even further. Our solvency ratio and balance sheet are robust, and our insurance business is developing well. These results are a reflection of our chosen strategy. We are looking forward to returning this sound business with excellent perspectives, to the private market.’

a.s.r. key figures (in millions of euros)

2013

2012

Reported

 

 

Net result

281

255

Return on equity

10.6%

10.4%

Dividend proposal

99

88

 

 

 

After change in accounting policies under IAS19R (1)

 

 

Net result

281

316

Return on equity

 

10.6%

14.1%

 

 

 

Gross premiums written

3,923

4,290

Operating expenses

(547)

(587)

Provision for restructuring expenses

(24)

(30)

Cost-premium ratio, insurance business

10.9%

10.2%

Combined ratio, Non-Life (including additional WGA-ER provision)

104.6%

99.2%

New insurance policies sold, Life (APE)

65

87

 

31 December 2013

31 December 2012

Total equity (including revaluation of real estate)

3,799

3,537

DNB solvency ratio

268%

293%

Total number of internal FTEs

3,789

4,088

Notes to a.s.r. key figures

(1) In 2013, a change in accounting policies was implemented in relation to the recognition of the a.s.r. pension plan (IAS19R), as a result of which the comparative figures for 2012 of the Other segment were restated. This also affected the consolidated figures for 2012. This change has an accounting effect on the net result, operating expenses and Total Equity, as well as impacting return on equity. This press release discloses the figures for 2012 after restatement unless stated otherwise. For more details, see page 13.

  • The net result represents the result attributable to holders of equity instruments.
  • Return on equity is calculated as net result attributable to shareholders divided by average total IFRS equity attributable to shareholders.
  • At 31 December 2013, the unrealized revaluation of real estate within Total Equity was down to € 784 million (year-end 2012: € 874 million) due, in part, to sales.

Dividend proposal

The Executive Board intends to distribute € 99 million in dividend on ordinary shares. Similar to last year, this represents 40% of the net result attributable to shareholders.