NN Group, 1H2019: operating result increased by 11.3% y-o-y despite the lower result of 2Q2019

For the first half-year of 2019, NN Group's operating result amounted to EUR 914 million, 11.3% higher than the same period of the previous year operating result. The y-o-y increase includes the impact of January 2018 storm, amounting EUR 89 million.

The first six months of 2019 benefited from a total of EUR 67 million of private equity dividends and non-recurring items (1H2018: EUR 70 million). Excluding these items, the increase mainly reflects higher results at Japan Life and Netherlands Non-life, partly offset by a lower result at Netherlands Life.

1H2019 figures (vs. 1H2018) - unaudited

  • Operating result: EUR 914 million (+11.3%), of which:
    • Netherlands: EUR 608 million (+10.1%)
    • Europe: EUR 140 million (+4.1%)
    • Japan: EUR 118 million (+26.3%)
    • Asset Management: EUR 76 million (-7.4%)
    • Banking: EUR 60 million (-13.0%)
    • Other: EUR -88 million (1H2018: EUR -110 million)
  • Net result: EUR 1,118 million (+29.6%)
  • Gross premium income: EUR 7,819 million (+5.1%)
  • Life insurance APE:EUR 1,188 million (+31.4%)
  • Value of new business (VNB): EUR 236 million (+15.4%)
  • Net investment result: EUR 53 million (+5.1%)
  • Cost/income ratio: 27.8% (-1.0 pp.)
  • Combined ratio (Netherlands): 96.8% (-5.4 pp.)
  • Solvency II ratio: 210% (-16 pp.)

Taken separately, the second quarter of 2019 operating result shrunk by 12.3%, to EUR 445 million (2Q2019: EUR 508 million); the reason for this reduction y-o-y was influenced by the EUR 69 million of private equity dividends and non-recurring items, from which the company benefited in previous year.

For the second quarter of 2019 only, the operating result of NN Europe increased to EUR 82 million (+28.6%), which included a non-recurring item of EUR -5 million in Belgium. The second quarter reflects a EUR 6 million non-recurring benefit, an improved technical margin, higher performance fees in Slovakia, and a limited positive contribution from the acquired Czech and Slovak businesses. The operating result was partly offset by lower pension fees in Romania.

In the first six months of 2019, total new sales (APE) amounted to EUR 1,188 million (+31.4%), driven by higher sales in all insurance units. Netherlands Life business reflects a higher volume of group pension contracts, Japan Life sales increased in the first quarter 2019 driven by strong sales efforts and customer expectations of a revision of tax rules for COLI products. In addition, higher sales in Insurance Europe reflect higher life and pension sales and acquisitions.

In the first six months of 2019, the value of new business (VNB) increased to EUR 236 million (% y-o-y), mainly driven by an improved business mix and higher sales in Insurance Europe, as well as higher sales at Japan Life in the first quarter 2019.

The net result of the first six months of 2019 increased to EUR 1,118 million (1H2018: EUR 862 million), reflecting the higher results before tax. The net operating ROE in the first six months of 2019 was 9.4% (1H2018: 9.5%), mainly due to higher equity.

More information about NN Group performance in the first half of 2019 can be found on the group's website.

Netherlands-based NN Group is present in 18 countries, predominantly in Europe. In CEE/SEE/CIS regions surveyed by XPRIMM, NN is active in 8 markets - Bulgaria, Czechia, Greece, Hungary, Poland, Romania, Slovakia and Turkey.

Source: NN-Group.com

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