The net loss was 444 million euros in the last six months of 2022, compared to a profit of almost 1.9 billion euros in the same period of the previous year. Operating profit fell more than 17% to 760 million euros. This is partly because NN sold its asset management division. In addition, the life insurance business in the Netherlands and Japan and the European business underperformed compared to the same period a year earlier.
Capital generation
Knibbe is pleased with NN’s ability to generate capital, which is good for the reserves the insurer has to maintain. Compared to the second half of 2021, NN has raised more capital through its insurance and mortgage lending businesses. This also caused an important measure of insurers’ financial health, the Solvency II ratio, to rise slightly to 197% at the end of last year. At the end of June it was still 196%.
The most important goal is capital generation, says Knibbe. “We are now just above 1.7 billion euros and have issued a new target of 1.8 billion for 2025, because we expect our capital generation to increase.”
The insurer also announces a new share buyback program. In the coming period, the company wants to buy back 250 million euros of treasury shares to reward shareholders.
Further sales growth
CEO David Knibbe expects the finance group to show further revenue growth, despite the fact that consumers may spend less due to high inflation.
“Higher prices and lower disposable incomes could lead to some pressure on turnover in Europe in the short term,” says Knibbe. But over the long term, he expects structural demand for insurance products to translate into revenue growth. People still want to protect themselves from all kinds of risks, according to the CEO. According to him, the current economic situation does not mean that NN customers are experiencing more payment problems than before.
MetLife activity
Knibbe also points to the fact that the acquired MetLife businesses in Poland and Greece have already generated additional revenue in the second half of last year. Despite the cooling of the Dutch real estate market, NN also maintained its market share in the mortgage sector. From July to December, new mortgages were disbursed for a total of 3.8 billion euro.