a.s.r. releases Q1 2020 trading update ahead of AGM today

• Operating result amounted to € 184 million (Q1 2019: € 208 million) which include € 13 million of claims related to the storm in February and € 18 million negative impact from COVID-19 of which € 12 million due to an addition to unit-linked reserves and € 6 million in Disability.

• Combined ratio for P&C and Disability remained strong at 94.7% (Q1 2019: 94.3%), the increase in claims in disability by € 6 million due to COVID-19 is partly offset by a strong combined ratio of P&C despite the February storm.

• Gross written premium amounted to € 1,839 million, an increase of 18.3% compared to the first quarter last year; organic growth of P&C and Disability amounted to 7.6%.

• Solvency II ratio amounted to approximately 235% at 31 March 2020 on standard formula (FY 2019: 194%), primarily driven by the significant increase in the volatility adjustment (VA) to 46 basis points. This ratio includes the future payment of the postponed 2019 final dividend and the buyback of own shares for a total amount of € 75 million (of which circa € 50 million has already been executed).

• Too early to make a realistic and credible assessment of what the full impact of the COVID-19 crisis will be on a.s.r.’s business and financial performance.

• Limited impact from the COVID-19 crisis in first quarter of this year.

• Operating result for the full year 2020 is expected to ease off from the record year of 2019 towards the level of 2018.

• Based on today’s knowledge no need to adjust the medium term target (2021) for organic capital creation.
  

Given these effects on our businesses, we would expect an adverse impact on our operating earnings in the running year. Our earlier guidance for 2020 was that it would prove difficult to match the record performance of 2019, and while it remains uncertain, we currently believe that the operating result for this year will be closer to the result of 2018. At the same time, our organic capital generation is holding up well and based on today’s knowledge there is no need to change our 2021 medium term target of € 500 million at this point in time.

We continue to run our company with a strong balance sheet to protect the interests of policyholders and to safeguard our dividend paying capability. Our Solvency II ratio remained solid since FY 2019, with the increase to approximately 235% at the end of the first quarter which eased off in April primarily by the EIOPA volatility adjustment. It remains our current intention to pay the remainder of the 2019 dividend and resume the share buyback program in the second half of 2020 in line with our existing dividend policy and when appropriate given the developments of COVID-19.'