Transition of a.s.r. on track as results improve
Interim results 2013
Focus on customer interests and sustainability
- Best customer satisfaction rating (Net Promoter Score) since 2009.
- Launch of a.s.r.’s new positioning by supporting Rotterdam zoo Diergaarde Blijdorp with very successful Olli campaign.
- Customers familiarized with advisors through dozens of local advisors’ campaigns.
- Introduction of updated Voordeelpakket insurance package tailored to current customer needs.
- More and more customers choose a.s.r.’s WelThuis Hypotheek (mortgage).
- Sustainable renovation of a.s.r. offices (certified BREEAM Excellent) well underway, initial results visible.
Net result up 5% to € 110 million (H1 2012: € 105 million)
- In the Non-life segment, the impact of the tough economic conditions is becoming increasingly visible. Net result of the non-life business fell to € 6 million (H1 2012: € 42 million), largely as a result of a rise in the combined ratio to 104.0% (H1 2012: 100.6%; year-end 2012: 99.2%).
- The rise in the combined ratio was chiefly due to policyholders covered by the WGA (Dutch Return to Work (Partially Disabled) Regulations) claiming occupational disability benefits for longer periods than anticipated, the overrepresentation of fully, but not permanently, unfit policyholders within this category, and the lack of reassessment on a sector-wide basis. Disregarding the impact of WGA policy excess insurance, a.s.r.’s combined ratio for H1 2013 would have been below 100%.
- Net result of the Life segment increased to € 165 million (H1 2012: € 122 million), largely as a result of lower operating expenses and improved investment income in the first six months of this year.
Solvency ratio solid at 283%
- The Ultimate Forward Rate (UFR) has been included in the calculation of the DNB solvency ratio since mid-2012. At 30 June 2013, the DNB solvency ratio calculated on this basis stood at 283%. At year-end 2012, this stood at 293%.
- The DNB solvency ratio (exclusive of the UFR) increased from 231% at year-end 2012 to 249% at 30 June 2013.
- The downgrade of France in July this year is estimated to have a negative effect of some 20 percentage points on the DNB solvency ratio. This effect has not been factored into the solvency figures at 30 June 2013.
Premium income at € 2,345 million, down 5% on H1 2012 (€ 2,457 million)
- Despite the prolonged economic downturn and the focus on improving returns, premium income in the Non-life segment stood at € 1,410 million, which is largely unchanged compared to H1 2012 (€ 1,430 million).
- The Life segment achieved € 1,013 million in premium income, down 8% on the same period last year (€ 1,104 million). During the period under review, confronted with a contracting life insurance market, a.s.r. continued to prefer returns over volume, particularly with single premium policies.
Fall in operating expenses by 3% to € 276 million
- On balance, operating expenses fell by 3% to € 276 million (H1 2012: € 284 million).
- a.s.r. continues to work on a good balance between improving efficiency, saving costs and investing.
- The cost-premium ratio of the insurance business amounted to 9.9% for H1 2013 (H1 2012: 9.4%).
- The number of FTEs fell by 7% to 3,812 (year-end 2012: 4,088 FTEs).
Jos Baeten, CEO: ’The insurance sector is an industry in transition, characterized by a contracting market and changing customer behaviour. a.s.r. is anticipating this transition with our refined positioning, formulated in mid-2012, and by simplifying our product offering and reducing costs.
We achieved positive results in the first half of 2013. Despite the poor state of the economy, during the first six months a.s.r. achieved a higher profit and a further structural reduction in costs. Solvency remained strong, providing vital assurance for our customers.
a.s.r. is an insurer that is going back to the basics of insurance, which means helping people and organizations. We don’t talk about it much, we just do it. That is how we play a useful role in Dutch society. In this context, we developed a number of concrete initiatives during the first half of 2013. These initiatives included the development of the Feyenoord/Blijdorp campaign, in which a.s.r. provided support to Diergaarde Blijdorp, the Rotterdam zoo, in the form of a shirt sponsorship deal and Olli, a plush elephant. In addition, we helped advisors to raise their profile in their immediate surroundings by means of local media campaigns. We also focus on helping others within our organization. Customers should immediately talk to the right person at a.s.r., when they contact us with a query. With this in mind, we reorganized our contact centres so that we can deal with matters effectively, the first time customers contact us.
Our most recent Net Promoter Score is the highest score we have achieved since we first measured it in 2009. This means that increasing numbers of clients are recommending a.s.r. to their family, friends, colleagues or business partners. Among insurers, a.s.r. is ranked fourth, according to the Net Promoter Score. This score shows that, while we have not yet reached the desired level, we are on the right track.
With regard to the Non-life business, consumers appreciate our updated Voordeelpakket insurance package since its introduction. More and more of our existing customers are switching to the new package, and new customers are coming forward. To us, this demonstrates that the package meets a demand in the market. The contraction of the life market, in combination with persistently low interest rates, continues to be a matter of concern. In this market, the conscious decision to opt for returns over revenue has consequences for a.s.r.’s sales volumes. In the mortgage market, we see that the WelThuis Hypotheek (mortgage) responds to customers’ need for a transparent, accessible product. Thanks to a sharp increase in the number of mortgage loans concluded, during the first six months of 2013 a.s.r. rose from the ninth place to the sixth place in the top ten list of Dutch mortgage lenders. In the savings market as well, a.s.r. offers products that meet the wishes of customers, including an online savings account.
The insurance sector is in transition, and a.s.r. is in transition. a.s.r. aims to be a different kind of insurer. An insurer that genuinely puts customers first. An insurer that takes care of customers, society, the environment, our employees and the premiums customers entrust to us, with sustainability in mind. For example, the sustainable renovation of our office at the Archimedeslaan in Utrecht, will lead to a substantial reduction in accommodation costs and visibly show the shape of the new a.s.r.’