Strong operating capital generation and business performance driving increased returns to shareholder
• Continued strong business performance with full-year operating capital generation (OCG) rising 13% (excluding the asset management business that was sold in 2022) to EUR 1.9 billion in 2023, exceeding 2025 target of EUR 1.8 billion ahead of plan
• Increased OCG target to EUR 1.9 billion and free cash flow target of EUR 1.6 billion in 2025
• NN Group Solvency II ratio remains robust at 197% from 201% at 30 June 2023; unit-linked settlement agreement and attractive longevity deals have reduced the risk profile of the balance sheet
• Consequently, 15% step-up of 2023 total dividend to EUR 3.20 per share; structural increase of annual share buyback programme to EUR 300 million
• Full-year operating result was EUR 2.5 billion; full-year net result was EUR 1.2 billion
Solid business performance across the group
• Record net inflows of EUR 2.3 billion at our defined contribution pension business in 2023
• Continued growth momentum in Europe with higher sales in Central and Eastern Europe, most notably strong value of new business in Czech Republic, Poland and Hungary, despite macroeconomic uncertainties
• Continued strong and favourable business performance in Netherlands Non-life; combined ratio of 92.6%
• Banking continued to benefit from higher interest result
• Value of new business was EUR 330 million in 2023 versus EUR 432 million in 2022, reflecting lower sales in Japan
Consistent execution of strategy; progress in customer satisfaction and responsible investment
• Customer satisfaction scores continue upward trend with International Insurance business scoring above market average NPS-r; refined strategy to accelerate our digital transformation
• Employee engagement at 7.8, showing resilience in competitive labour market
• Continued progress in responsible investment with EUR 10.8 billion total investments in climate solutions by the end of 2023 and a 10% reduction of greenhouse gas (GHG) emissions of our corporate investment portfolio versus 2021 levels
Statement of David Knibbe, CEO
'Today we are reporting strong results for the second half and full-year of 2023, driven by a solid performance despite the volatile macroeconomic and geopolitical environment. Full-year operating capital generation (OCG) rose 13% on a like-for-like basis to EUR 1.9 billion, exceeding our 2025 target of EUR 1.8 billion ahead of plan. This reflects increased contributions from Netherlands Non-life, Banking, the segment Other and Insurance Europe. Netherlands Non-life reported a continued strong and favourable business performance, while Insurance Europe and Banking benefitted from higher rates. This helped to offset a lower contribution from Netherlands Life which was mainly driven by the financial markets. While business growth is expected to return to normalised levels, we continue to expect underlying growth in the coming years. We have therefore increased our OCG target for 2025 to EUR 1.9 billion.
The strong results reflect the consistent execution of our strategy that focuses on our customers, employees and role in society. Customer satisfaction scores improved, driven by our customer engagement and digitalisation efforts. Our International business scored an above market average relational net promoter score, with strong underlying improvements in Belgium, Czech Republic, Japan and Poland. To further increase operational efficiencies and improve the customer experience in the coming years, we recently refined our strategy with a focus on accelerating our digital transformation through the use of data and artificial intelligence (AI).
We continued to support the transition towards a low-carbon economy. On the investment side, we invested a total amount of EUR 10.8 billion in climate solutions, such as certified green buildings and renewable energy. We also reported a 10% reduction of greenhouse gas emissions in our corporate investment portfolio, moving us towards our goal of a 25% reduction by 2025 versus 2021 levels. On the insurance side, our Dutch Non-life business increasingly focuses on offering sustainable damage repair to our customers. This means we offer repair instead of complete replacement, where possible using circular materials and implementing measures such as offering customers the opportunity to upgrade their windows with insulated glass.
We took important steps to further optimise and de-risk our balance sheet, with two attractive longevity reinsurance transactions in December 2023 and a final settlement agreement on unit-linked life insurance products at the start of 2024.
Our strong business performance and balance sheet give us confidence in further growing our free cash flow (FCF), resulting in an FCF target of EUR 1.6 billion by 2025. This enables a step up of the proposed final dividend to EUR 2.08 per share, bringing the total dividend for 2023 to EUR 3.20 per share, an increase of 15% compared to 2022. We also announce a structural increase of our annual share buyback programme to an amount of EUR 300 million. From this higher base, we confirm our commitment of a progressive dividend per share, an annual share buyback of at least EUR 300 million and additional excess capital to be returned to shareholders unless used for value-creating opportunities.
Looking ahead, we are well-positioned to continue creating sustainable long-term value for our stakeholders. We would like to thank our customers and shareholders for their ongoing trust and loyalty, and our colleagues for their commitment in servicing our customers and other stakeholders.'
Press release:
https://www.nn-group.com/news/nn-group-reports-strong-business-and-financial-performance-and-increases-targets/
• Continued strong business performance with full-year operating capital generation (OCG) rising 13% (excluding the asset management business that was sold in 2022) to EUR 1.9 billion in 2023, exceeding 2025 target of EUR 1.8 billion ahead of plan
• Increased OCG target to EUR 1.9 billion and free cash flow target of EUR 1.6 billion in 2025
• NN Group Solvency II ratio remains robust at 197% from 201% at 30 June 2023; unit-linked settlement agreement and attractive longevity deals have reduced the risk profile of the balance sheet
• Consequently, 15% step-up of 2023 total dividend to EUR 3.20 per share; structural increase of annual share buyback programme to EUR 300 million
• Full-year operating result was EUR 2.5 billion; full-year net result was EUR 1.2 billion
Solid business performance across the group
• Record net inflows of EUR 2.3 billion at our defined contribution pension business in 2023
• Continued growth momentum in Europe with higher sales in Central and Eastern Europe, most notably strong value of new business in Czech Republic, Poland and Hungary, despite macroeconomic uncertainties
• Continued strong and favourable business performance in Netherlands Non-life; combined ratio of 92.6%
• Banking continued to benefit from higher interest result
• Value of new business was EUR 330 million in 2023 versus EUR 432 million in 2022, reflecting lower sales in Japan
Consistent execution of strategy; progress in customer satisfaction and responsible investment
• Customer satisfaction scores continue upward trend with International Insurance business scoring above market average NPS-r; refined strategy to accelerate our digital transformation
• Employee engagement at 7.8, showing resilience in competitive labour market
• Continued progress in responsible investment with EUR 10.8 billion total investments in climate solutions by the end of 2023 and a 10% reduction of greenhouse gas (GHG) emissions of our corporate investment portfolio versus 2021 levels
Statement of David Knibbe, CEO
'Today we are reporting strong results for the second half and full-year of 2023, driven by a solid performance despite the volatile macroeconomic and geopolitical environment. Full-year operating capital generation (OCG) rose 13% on a like-for-like basis to EUR 1.9 billion, exceeding our 2025 target of EUR 1.8 billion ahead of plan. This reflects increased contributions from Netherlands Non-life, Banking, the segment Other and Insurance Europe. Netherlands Non-life reported a continued strong and favourable business performance, while Insurance Europe and Banking benefitted from higher rates. This helped to offset a lower contribution from Netherlands Life which was mainly driven by the financial markets. While business growth is expected to return to normalised levels, we continue to expect underlying growth in the coming years. We have therefore increased our OCG target for 2025 to EUR 1.9 billion.
The strong results reflect the consistent execution of our strategy that focuses on our customers, employees and role in society. Customer satisfaction scores improved, driven by our customer engagement and digitalisation efforts. Our International business scored an above market average relational net promoter score, with strong underlying improvements in Belgium, Czech Republic, Japan and Poland. To further increase operational efficiencies and improve the customer experience in the coming years, we recently refined our strategy with a focus on accelerating our digital transformation through the use of data and artificial intelligence (AI).
We continued to support the transition towards a low-carbon economy. On the investment side, we invested a total amount of EUR 10.8 billion in climate solutions, such as certified green buildings and renewable energy. We also reported a 10% reduction of greenhouse gas emissions in our corporate investment portfolio, moving us towards our goal of a 25% reduction by 2025 versus 2021 levels. On the insurance side, our Dutch Non-life business increasingly focuses on offering sustainable damage repair to our customers. This means we offer repair instead of complete replacement, where possible using circular materials and implementing measures such as offering customers the opportunity to upgrade their windows with insulated glass.
We took important steps to further optimise and de-risk our balance sheet, with two attractive longevity reinsurance transactions in December 2023 and a final settlement agreement on unit-linked life insurance products at the start of 2024.
Our strong business performance and balance sheet give us confidence in further growing our free cash flow (FCF), resulting in an FCF target of EUR 1.6 billion by 2025. This enables a step up of the proposed final dividend to EUR 2.08 per share, bringing the total dividend for 2023 to EUR 3.20 per share, an increase of 15% compared to 2022. We also announce a structural increase of our annual share buyback programme to an amount of EUR 300 million. From this higher base, we confirm our commitment of a progressive dividend per share, an annual share buyback of at least EUR 300 million and additional excess capital to be returned to shareholders unless used for value-creating opportunities.
Looking ahead, we are well-positioned to continue creating sustainable long-term value for our stakeholders. We would like to thank our customers and shareholders for their ongoing trust and loyalty, and our colleagues for their commitment in servicing our customers and other stakeholders.'
Press release:
https://www.nn-group.com/news/nn-group-reports-strong-business-and-financial-performance-and-increases-targets/
