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Strong operating performance continues to drive financial results in first six months.
The operating result rose by 28.8% to € 385 million in H1, with all business units contributing positively. Operating result of the Non-life segment was up 71.0% to € 106 million; Life segment up 14.6% to € 314 million.
Strong Solvency II ratio and robust balance sheet
Commercially sound results: increase in gross written premiums in Non-life segment and new mandates for Asset Management
Jos Baeten, CEO: ‘Following our strong first quarter, I am proud to say that we also turned in a very good performance in the second quarter with a solid capital generation. The rise in the operating result in the first half of the year by nearly 29% to € 385 million was attributable to the efforts of all business units. As the operating return on equity is over 17%, we are clearly making profitable use of our capital.
Our Solvency II ratio, based on the standard formula, remains solid at 194%. The increase by 5%-points in the first six months of this year is the figure after absorption of the repurchase of shares and the expansion of the market risk budget. The continued increase in Solvency II capital reflects our sound insurance results, higher investment yields and the favourable state of the financial markets.
In the first half of the year, the Dutch State successfully reduced its equity interest in a.s.r. to circa 20% in three steps. We supported this process by repurchasing own shares for a total of € 153 million in two transactions. In order to best facilitate the full privatization, we consider, on top of our earlier commitment, to buy back an additional amount of circa € 100 million own shares if the Dutch State should decide to undertake a final placement of its remaining equity interest in the second half of this year. Including dividend, the total distribution to shareholders would in such case amount to approximately € 440 million in 2017. This intention is dependent on the then prevailing market conditions and undiminished strong solvency.
Our ‘value-over-volume’ focus is reflected, for example, in the excellent combined ratio of the Non-life segment. Although various factors, including the mild winter weather, have had a favourable effect on the combined ratio, the underlying result is better than the target figure and reflects our underwriting skill and discipline in minimizing costs. Nonetheless, the market remains competitive and we will have to remain alert to the evolving needs of clients and market trends. The improved results of the Life segment are attributable to higher direct investment returns thanks to adjustments to our asset mix and increased release of gains realized in previous years.
I am pleased to report increased sales of P&C policies The interest in our Non-life ‘voordeelpakket’ remains high. The number of the ‘Vernieuwd Voordeel’ packages sold increased by 33% compared to the first half year in 2016. We have also achieved success with our asset management and real estate property funds in winning institutional mandates. Our financial solidity gives our clients the confidence that we will be able to meet our obligations and enables us to continue developing products tailored to their needs.’
Key figures (€ million, unless per share or expressed as a percentage) |
H1 2017 |
H1 2016 restated1 |
Change (%) |
Operating result2 |
385 |
299 |
28.8% |
Operating return on equity3 |
17.4% |
14.9% |
2.5%-p |
Profit/(loss) for the period (on IFRS basis) |
397 |
381 |
4.2% |
Return on equity |
19.2% |
20.9% |
-1.7%-p |
Gross written premiums |
2,233 |
2,667 |
-16.3% |
Operating expenses |
-283 |
-284 |
-0.4% |
Combined ratio (Non-life segment) |
93.6% |
96.4% |
-2.8%-p |
New production (Life segment (APE)) |
26 |
81 |
-67.9% |
|
|
|
|
|
30 June 2017 |
31 Dec. 2016 |
Change (%) |
Total equity |
4,835 |
4,471 |
8.1% |
Total equity attributable to shareholders |
4,144 |
3,780 |
9.6% |
Solvency II ratio (standard formula) |
194% |
189% |
5%-p |
Financial leverage |
23.5% |
25.2% |
-1.7%-p |
Cash position at holding level |
202 |
354 |
-42.9% |
Number of FTEs (internal) |
3,481 |
3,461 |
0.6% |
|
|
||
|
H1 2017 |
H1 2016 restated |
Change (%) |
Operating earnings per share4 |
1.85 |
1.38 |
34.1% |
Ordinary earnings per share (on IFRS basis)5 |
2.70 |
2.54 |
6.3% |
Number of shares issued and outstanding at end of period (m) |
147.0 |
150.0 |
- |
Weighted average number of issued and outstanding shares (m) |
146.9 |
150.0 |
- |
Further explanatory notes
Financial calendar 2017
Publications
29 November: Trading Update Q3 2017
The figures contained in this press release have not been audited.