The full-year 2019 operating result increased by 10.3% to EUR 1,794 million at the end of 2019, which benefited from a total of EUR 38 million of private equity and special dividends and other non-recurring items. The increase mainly reflects improved underwriting results at Netherlands Non-life and higher results at Japan Life.
The operating result of Insurance Europe decreased to EUR 69 million from EUR 72 million in the fourth quarter of 2018, mainly due to higher administrative expenses as well as lower pension fees in Romania, partly offset by favourable mortality and morbidity results in Belgium.
NN FY2019 (12 months) figures, y-o-y changes
- Operating result: EUR 1,794 million (+10.3%), of which:
- Netherlands Life: EUR 922 million (-5.2%)
- Netherlands Non-life: EUR 203 million (+115.8%)
- Insurance Europe: EUR 283 million (+4.3%)
- Japan Life: EUR 218 million (+30.5%)
- Asset Management: EUR 161 million (+3.9%)
- Banking: EUR 152 million (+16.5%)
- Result before tax: EUR 2,429 million (+46.6%)
- Net result: EUR 1,962 million (+75.7%)
- Gross premium income: EUR 14,508 million (+9.3%)
- New sales life insurance (APE): EUR 1,741 million (+6.2%)
- Value of new business: EUR 358 million (-8.3%)
- Total administrative expenses: EUR 2,076 million (-1.9%)
- Cost/income ratio: 28.6% (-1.0 pp.)
- Combined ratio: 95.4% (-4.0 pp.)
- Net operating ROE: 9.0% (+0.1 pp.)
- Net operating result: EUR 1,339 million (+11.1%)
The administrative expenses of the business units in the scope of the cost reduction target decreased by EUR 36 million in the fourth quarter of 2019, bringing the expense base down to EUR 1,610 million on a last 12-months basis. Total cost reductions achieved to date amount to EUR 360 million compared with the full-year 2016 administrative expense base of EUR 1,970 million.
The result before tax was EUR 338 million in the fourth quarter of 2019 (4Q2018: EUR (384) million), which included a EUR 852 million impairment of goodwill related to Delta Lloyd Life, lower revaluations, partly offset by a higher market and other impacts as well as a higher operating result. The full-year 2019 result before tax increased to EUR 2,429 million (+46.6%), which included the impairment of the goodwill, while 2019 reflects a higher operating result, lower amortization of acquisition intangibles and lower special items, partly offset by lower non-operating items.
The net result was EUR 329 million in the fourth quarter of 2019 (4Q2018: EUR (533) million). The effective tax rate in the fourth quarter of 2019 was 1.6%. The full-year 2019 net result was EUR 1,962 million (+75.7%). The effective tax rate for the full-year 2019 was 18.3%.
Total new sales (APE) at NN Group decreased to EUR 263 million in the fourth quarter of 2019 at constant currencies (-35.3%), mainly due to lower sales at Japan Life, partly offset by higher sales at Insurance Europe driven by higher pension and protection sales across the region. In 2019, total new sales were EUR 1,741 million at constant currencies (+4.8%), driven by higher sales at Netherlands Life and Insurance Europe, partly offset by lower sales at Japan Life.
The value of new business in 2019 amounted to EUR 358 million (-8.3%), reflecting lower sales at Japan Life, partly compensated by an improved business mix and higher life and pension sales at Insurance Europe.
The net operating ROE of NN Group increased to 8.6% compared with 6.9% in the fourth quarter of 2018, reflecting a higher net operating result. The full-year 2019 net operating ROE was broadly stable at 9.0%.
David Knibbe, CEO of NN Group, said:
"NN Group's financial performance was strong in the fourth quarter with the operating result 25% higher compared with the same quarter last year. (...) In April, we will celebrate the 175th anniversary of Nationale-Nederlanden and the founding of our predecessor 'De Nederlanden van 1845'. During all these years, we have been dedicated to meeting and exceeding our customers' expectations. Based on this foundation we are further sharpening our strategy, investing in growth and in the transformation of our businesses, with the aim to create long-term value for our customers and other stakeholders. We will present our new plans at the Capital Markets Day on 24 June."
More financial information about NN Group can be found at nn-group.com/Investors/Quarterly-results.htm