Athora Netherlands Annual Results 2022
30 March 2023 | 08:00
Strong Solvency II ratio of 205%
Good strategic progress to become a fully focused pension provider
Financial Results
- Net Underlying Result of EUR 413 million (2021: EUR 302 million) primarily due to higher investment income, driven by the repositioning of the asset portfolio.
- Gross premiums of EUR 1,763 million increased by 2% compared to 2021 when excluding the impact of buy-out contracts thanks to growth in pension premiums.
- Increase of 7% in pension premiums evidences success against our strategy to grow in this market.
- Zwitserleven PPI continued to grow with deposits increasing by 23% to EUR 320 million.
- The Net Result IFRS for continuing operations of -/- EUR 928 million (2021: -/- EUR 27 million) was negatively impacted by the change in market value of investments from higher interest rates, spread widening and the strengthening of expense provisions.
Solvency
- 2022 Solvency II ratio increased to 205% (YE21: 180%) for Athora Netherlands NV, driven by strong Operating Capital Generation (OCG), the positive impact of market movements in combination with management actions.
- 2022 Solvency II ratio of 207% (YE21: 180%) for SRLEV.
Strategic Progress
- Athora Netherlands’ strategy to further grow as a leading pension insurer, offering sustainable pensions to our customers, was supported by three previously announced transactions. An agreement was reached with Willis Towers Watson (WTW) to acquire their EUR 1.1 billion Premium Pension Institution (PPI) in the Netherlands. Furthermore, it was agreed to acquire the EUR 0.3 billion 2nd pillar pension portfolio of Onderlinge 's-Gravenhage. Finally, the pension entitlements of Stichting Pensioenfonds A.C. Nielsen were transferred to Zwitserleven.
- In January 2023, the Executive Committee of Athora Netherlands was established with all functions represented, to support strategic delivery by enhancing the efficiency and effectiveness of our governance.
Jan de Pooter, CEO of the Executive Committee of Athora Netherlands:
“2022 has been a volatile and uncertain period for the world and the economic environment. While the impact of Covid on society gradually decreased during the year, the war in Ukraine has inflicted a large humanitarian toll but also led to an energy and food crisis. The related jump in inflation caused monetary authorities to adapt their policies with a substantial impact on financial markets.
In this volatile environment, Athora Netherlands was nonetheless able to make good progress with the execution of its Ambition 2025 strategy in terms of commercial growth, results evolution and organisational development. We implemented a new functional organisation at the beginning of the year, facilitating our ambition to become a simplified and efficient company that is well suited to our pension-focused growth strategy. In addition, we were able to attract great talent to strengthen our senior management team. Our successful investment strategy allowed us to continuously offer compelling returns to our customers.
Our business developed favourably in 2022. Zwitserleven, as a leading provider of solutions for pension needs, was able to deliver solid growth in pension premiums, excluding the impact of lower single premiums from pension buy-outs, which can vary from year to year. We benefitted from high renewal rates and welcomed a number of large new customers. The increased volume in our accumulation business was partly offset by a small decrease in decumulation due to lower market values of expiring capitals. During the year, we successfully launched a new annuity product to address the growing need of customers to guarantee part of their pension income with the rest of the pension income remaining dependent on the performance of financial markets. We continued to service our valued customers in the Life Service Business under the Reaal label, where we saw a strong performance in Direct Annuity sales.
In the IG&H Performance Monitor, which measures the satisfaction of intermediaries, we improved our overall performance score and relative position in the market.
The announced acquisition of the WTW sponsored Pension Premium Institution (PPI) will further strengthen our position in the market for DC pensions, adding scale in accumulation and an important avenue for increasing future decumulation sales. This is the first acquisition that Athora Netherlands has made in many years and is a clear signal of our commitment to become a leading player in the Dutch pensions market.
We were also successful in the market for pension fund buy-outs in 2022. This demonstrates our strength to provide the best solutions for pension funds facing complex challenges in their pension schemes ahead of the upcoming pension reform while offering a good home for their participants. Our success is based on our ability and commitment to deliver, in a sustainable way, the highest benefits for the participants in combination with a broad set of solutions with a strong service track record. We continue to invest in our pension fund buy-out capabilities.
One of the levers of our strategy is to increase our investment income through the repositioning of part of our investment portfolio towards higher yielding assets, offering better risk-return characteristics. These efforts combined with cost containment underpinned the positive development in the Net Underlying Result and the Operating Capital Generation during 2022.
Our Solvency II ratio improved to 205% by year-end 2022 from 180% at year-end 2021, reflecting strong operating capital generation and the positive impact of market movements in combination with management actions. The strengthening of our financial position and commercial position was recognised by Fitch who for the second successive year upgraded the ratings of Athora Netherlands to ‘A’ with a Stable outlook. Our capital position provides comfort to our customers and forms a solid and sustainable platform to further develop our business.
We continue to strive to be one of the most sustainable insurers in the Netherlands. We launched a dedicated sustainability department coordinating and consolidating all our efforts in this important domain. Under the Zwitserleven brand, we started a campaign to further highlight our commitment to a better world and we launched various initiatives that illustrate our role in society. As an insurer with a sizeable investment portfolio we make a real impact on the world around us. As an example, we recently offered an empty office building to the municipality of Alkmaar to temporarily accommodate about 300 Ukrainian refugees. In addition our employees have contributed to multiple initiatives through the “Stichting Samen voor Later” that benefitted society at large.
I am proud on our performance in 2022 and would like to thank our customers and business partners for their continued trust. A special thanks goes to our valued employees for their relentless support in the realisation of the transformation of our company. I look forward to build on the solid foundation and positive momentum to become one of the leading pension solutions provider in the Netherlands.”
Publication Annual Reports & Solvency and Financial Condition Report
Today, Athora Netherlands also published its Annual Report Athora Netherlands N.V. 2022, the Annual Reports 2022 of SRLEV N.V., Proteq Levensverzekeringen N.V. and the Solvency and Financial Condition Report (SFCR) 2022 of Athora Netherlands N.V. All these documents can be downloaded at www.athora.nl/investors