ASR Nederland N : a.s.r. achieves a good operating result and higher customer satisfaction over first six months of 2020

Utrecht, 26 August 2020, 07.00am CET

a.s.r. achieves a good operating result and higher customer satisfaction over first six months of 2020

Strong financial performance, diversification of activities limits impact of COVID-19 in HY 2020

• Operating result is € 446 million, slightly down compared to the exceptionally strong performance last year (HY 2019: € 464 million1), reflecting an increase in Holding cost, which includes higher interest expense.
• Impact of COVID-19 is neutral on aggregate; a favourable effect on P&C was mostly offset by a negative effect on Disability and to a lesser extent on Life.
• Operating return on equity is 14.8%, above the '12-14%' target.
• Operating costs rose by 10.7% to € 337 million (HY 2019: € 304 million), mainly due to additional costs of acquired activities.
• Combined ratio is 92.9%2, better than the '94-96%' target.
• Operating result of the Non-life segment remains stable at € 124 million (HY 2019: € 123 million). Contribution of Loyalis and lower claims in P&C, offset mainly by higher claims and higher provisions in Disability.
• Operating result of the Life segment fell slightly by € 9 million to € 361 million, despite € 25 million impact from COVID-19 via financial markets.
• Net IFRS result decreased to € 233 million (HY 2019: € 540 million) due to lower indirect investment income
  (€ -168 million) and an impairment of goodwill in the Life segment (€ -90 million), which are primarily COVID-19 related, as well as lower 'other incidental' result reflecting the purchase gain on Loyalis in 2019 (€ 88 million).
• Regular interim dividend of € 0.76 per share, equal to 40% of the originally proposed dividend for 2019.

Robust solvency and strong balance sheet with ample financial flexibility

• Solvency II ratio (standard formula) as at 30 June 2020 stands at 199%3, this is after 8%-point deduction for the special dividend (€ 166 million), the regular interim dividend (€ 105 million) and the buyback of own shares (€ 75 million). The Solvency II ratio as at 31 December 2019 stood at 194%.
• Organic capital creation is € 298 million (HY 2019: € 299 million). Despite higher depreciation of the ultimate forward rate (UFR drag) due to lower interest rates, OCC remained fairly stable driven by the solid performance of the business segments.
• Unrestricted Tier 1 capital is up by € 347 million to € 6.1 billion, equal to 75% of the own funds. The total headroom for additional hybrid capital is € 1.5 billion.
• The financial leverage ratio is 28.4%, well below the limit of a maximum of 35%.
• Liquidity position of the holding is € 608 million, in line with policy.

Solid commercial results

• Customer satisfaction (NPS) rose, despite all employees working from home, by 3 points to 47, better than the target of >44.
• Gross written premiums in the Non-life segment rose by 18.8%, to € 2,128 million. The organic growth of Disability and P&C combined was 6.9% and is well above the target of 3-5% growth of premiums.
• Gross written premiums in the Life segment are up by 18.8%, to € 1,009 million (HY 2019: € 849 million). The increase reflects the 42% growth in Pension DC ('Werknemers Pensioen') and the contribution of Loyalis which more than compensate the drop in Pension DB. Individual life and Funeral remained reasonably stable.
• Assets under management for third parties rose to € 21.2 billion (31 December 2019: € 20.7 billion), driven by the growth in the ASR Hypotheekfonds, partly offset by outflows in other funds.
• Mortgage origination of € 2.3 billion in the first half of this year, up 84% compared to € 1.3 billion last year.

• Comparative figures have been restated for an adjustment in the definition of the operating result.
  2 P&C and Disability.
  3 Excluding financial institutions.

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Disciplined execution of the strategy

• Today, a.s.r. announces the acquisition of 50% stake in Brand New Day Premiepensioeninstelling N.V. (IORP) and the sale of a.s.r.'s 10% stake in Brand New Day Houdstermaatschappij N.V. for a net consideration of € 51 million. a.s.r. already owned 50% of IORP and now becomes the sole owner. Both transactions are subject to the relevant regulatory approvals.
• On 4 August, a.s.r. announced the resumption of the dividend distribution and the share buyback programme, which were temporarily postponed.

Chairman of the Executive Board and CEO Jos Baeten: 'I am satisfied with a.s.r.'s results for the first six months of 2020. Our operating result is only € 18 million lower than the record operating result of the first half of 2019,

our solvency increased to 199% and our organic capital creation remained strong at € 298 million. The impact of COVID-19 on this has been limited so far. In the Non-life segment we have seen that a favourable effect on claims in P&C has more than offset the negative impact on Disability. In the Life segment, there is only limited impact from lower direct investment income from dividends and rental income, while COVID-19 had hardly any impact on our mortality result, whereby, compared the prior years, we observed excess mortality at the beginning of the outbreak, which was offset by lower mortality towards the end of the second quarter. In addition, we see that the net IFRS result is significantly lower than last year, amongst others due to the uncertainty and volatility in the financial markets as a result of the COVID-19 crisis which leads to more negative revaluations and impairments in the investment portfolio, as well as an impairment of goodwill.

Our services to customers and intermediaries remained at high level. This has helped to increase customer satisfaction in recent months. The Net Promoter Score rose, despite the fact that all employees have been working from home, by 3 points to 47, which is well above our medium term target of >44. This is shown by the commercial results over the past six months. We are of course grateful for our customers' loyalty. In the Non-life segment our gross written premiums rose considerably and the organic growth of 6.9% was well above our target of 3-5%. The Life business also saw an increase in turnover, mainly due to the growth of the 'Werknemers Pensioen', but also due to contributions from, for example, Loyalis. In addition, fee income increased at Asset Management, mainly due to the mortgage fund. Turnover also rose in the Distribution and Services segment.

In the first six months, we also achieved good results in other areas that we are developing on the basis of our strategy. At the end of last year, for example, we launched our a.s.r. Vitality health programme, where we now have 16,000 paying participants who have remained active during the COVID-19 crisis.

Part of our strategy remains to grow both organically and through targeted acquisitions. Today we announce that we will expand our 50% stake in Brand New Day Premiepensioeninstelling N.V. (IORP) to 100%. After we started this IORP together with Brand New Day 9 years ago, this is a terrific step in further strengthening our position in the Dutch DC pension market, where we will obtain a 15% market share, adding approximately 5,800 employers as customer.

Based on the various market scenarios of the Netherlands Bureau for Economic Policy Analysis (CPB), published in the first quarter, we too have calculated scenarios on the impact of COVID-19 on our results and capital position. Looking at our results for the first six months, the actual effects on the operating result have so far been limited. However, this is no reason to be unconditionally optimistic. What the ultimate effect of COVID-19 on our results will be, is impossible to predict exactly right now. This depends, among other things, on how long and to what extent the COVID-19 crisis will continue and on a number of uncertain external factors, such as developments on the financial markets. Our expectation remains that we will not meet the record performance of 2019 and that our full year operating result may land around the midpoint of the levels of 2018 and 2019.

The good results in the first six months are also due to the flexibility of our employees, who, despite the abrupt switch to working completely from home, have been able to further strengthen the relationship with our customers and our intermediaries. We are also proud when we look at the performance of our IT&C department, which ensured that some 4,000 colleagues were able to switch seamlessly from one day to the next to all the applications necessary for service provision in the online environment.

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In addition, we conclude that the motivation and vitality of our employees have so far not suffered from the COVID-19 crisis. Every week, we use a so-called Mood Monitor to measure the mood of our a.s.r. colleagues. An average score between 7 and 8 proves that 'the new normal' has been accepted among everyone. And although we still work predominantly from home, a rising number of colleagues are returning to the office.

COVID-19 has disrupted the world and exposed the vulnerabilities of our current economy and society. With the Green Recovery Statement, which we co-signed, we are looking to the future, to recovery. As a business community, we take responsibility and make choices to build a sustainable and inclusive Netherlands, a country with a sustainable economy and a society in which every individual counts and feels free to participate.

Finally, I would like to express my gratitude to our shareholders. Confidence in a.s.r. has remained, having previously responded to the call from the Dutch Central Bank not to pay dividend or buyback shares until further notice. Now that that advice has been withdrawn, and after careful consideration, we have decided to proceed with our dividend distribution and share buyback programme and, together with all our stakeholders, face the future with confidence'.

Key figures

(in € millions, unless per share or expressed as a percentage)		HY 2020		HY 2019		Delta (%)
Operating result1		446		464		-3.9%
Operating return on equity2		14.8%		17.0%		-2.2%-p
Profit/(loss) for the period attributable to holders of equity instruments		233		540		-56.9%
Return on equity		8.0%		22.2%		-14.2%-p
Gross written premiums		2,978		2,576		15.6%
Operating expenses		-337		-304		10.7%
Combined ratio (P&C and Disability)		92.9%		93.5%		-0.7%-p
New business (Life segment (APE))	66	40	65.0%
		HY 2020		FY 2019		Delta (%)
Total equity		6,309		6,093		3.5%
Total equity attributable to shareholders		5,303		5,089		4.2%
Solvency II (standard formula) after dividend3		199%		194%		5%-p
Financial leverage		28.4%		29.2%		-0.8%-p
Liquidity position at holding level		608		458		33.0%
Number of FTEs (internal)	3,934	3,906	0.7%
		HY 2020		HY 2019		Delta (%)
Operating result per share4		2.25		2.30		-2.2%
Dividend (interim) per share		0.76		0.70		8.6%
Number of shares issued and outstanding at end of period (m)		138.7		141.0		-1.6%
Weighted average number of issued and outstanding shares (m)		139.6		141.0		-1.0%

• Operating result is calculated by adjusting profit before tax for continuing operations reported in accordance with IFRS, as adjusted for the changes in accounting policies and for the following: i) investment related: investment income of an incidental nature (including capital gains and losses, impairments and fair value changes) on financial instruments for own account, net of applicable shadow accounting and net of additional provisions recognised for realised gains and losses on financial assets backing the insurance liabilities ('compensation of realised capital gains') impact; ii) incidental Items: 1. model- and methodological changes with a substantial impact; 2. results of non-core operations; and 3. other non-recurring or one-off items, which are not directly related to the core business and/or ongoing business of the Group, restructuring costs, regulatory costs not related to business activities, changes in the own pension arrangements and expenses related to M&A activities and start-ups.

• The operating return on equity is calculated by dividing the operating result before tax after deduction of interest on hybrid assets and taxes (tax rate: 25%) by the annual average equity attributable to shareholders after deduction of the reserve for unrealised profits and losses and the equity for real estate development (operating activities in 'run-off') and a.s.r. bank.

• Exclusive of financial institutions.

• The operating result per share is calculated by dividing the operating result before tax after deduction of interest on hybrid assets and taxes (tax rate: 25%) by the weighted average number of outstanding shares.

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Financial calendar

Interim dividend and Special dividend

26 August 2020

31 August 2020

01 September 2020

04 September 2020

Announcement interim dividend

Ex-interim dividend (€ 0,76) + Ex-special dividend (€ 1,20)

Dividend record date

Dividend payment interim HY 2020 + Special

The figures in this press release have not been audited nor reviewed by an external independent auditor.

Media Relations	Investor Relations
Rosanne de Boer
T: [phone]	T: [phone]
E: [e-mail]	E: [e-mail]
www.asrnederland.nl	www.asrnl.com

Publication of the financial figures on 26 August 2020 at 7.00am. Conference call for financial market parties (in English) at 10.30am. For more information, go to www.asrnl.com.

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About a.s.r.

ASR Nederland N.V. (a.s.r.) ranks among the top 3 insurers in the Netherlands. a.s.r. offers products and services in the fields of insurance, pensions and mortgages for consumers, self-employed persons and companies. In addition, a.s.r. is active as an asset manager for third parties. a.s.r. is listed on Euronext Amsterdam and is included in the AEX Index. For more information, please visit www.asrnl.com.

This press release contains price-sensitive information and therefore insider knowledge within the meaning of Article 7 of the Market Abuse Regulation.

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