Cost savings boost NN Group’s Q3 results
Dutch insurer NN Group enjoyed an increase in its profits in the third quarter of 2018 partly boosted by further cost savings as a result of its 2017 acquisition of Delta Lloyd.
The insurer made a net profit of €788 million, a 7.3 percent increase compared with the same period a year earlier. For the first nine months of the year, it has now made a net profit of €1.4 billion, a 17 percent increase on the year before.
Its operating result in the third quarter was €463 million, up 7.4% from 3Q17, which it said reflected an improved underwriting performance in its Netherlands non-life unit, higher dividends at Netherlands Life, as well as lower expenses. For the first nine months, its operating result has reached €1.2 billion, a 3.4 percent increase on a year earlier.
It said its results were boosted by further cost reductions of €33 million in 3Q18, bringing total cost reductions achieved to date to €269 million since its acquisition of Delta Lloyd.
Lard Friese, its CEO, said: “We look back on a quarter in which our business performed well, and we again delivered a solid set of results. The 7 percent increase in the operating result was supported by an improved underwriting performance in both the D&A and P&C portfolios of Netherlands non-life and higher dividends at Netherlands Life, as well as lower expenses.
“The non-life results have shown gradual improvement over the past few quarters, and in the third quarter benefited from favourable claims experience. However, claims experience is volatile by nature, and we will continue to implement measures in order to structurally improve the combined ratio. New sales in the third quarter were down on last year at Netherlands Life as well as Japan Life, which continues to see intensifying competition in the COLI market. Additionally, new sales at Insurance Europe were impacted by currency effects and adverse economic conditions in Turkey.
“Our continued focus on the successful integration of Delta Lloyd and on increasing efficiency is reflected in further cost savings of €33 million at the units in scope of the integration, bringing total cost reductions to €269 million compared with the 2016 full-year administrative expense base.
“Our balance sheet remained strong with a Solvency II ratio of 239 percent, and a cash capital position of €1.9 billion at the end of the third quarter.
“As an international financial services company, we aim to create long-term value, and we want to contribute to society by further integrating environmental, social and governance (ESG) criteria into our decision making. To this end, we recently strengthened our responsible investment approach and restricted investments in companies involved in oil sands production and controversial pipelines, given the related concerns around human rights and environmental pollution. NN Group was again included in the Dow Jones Sustainability Indices (DJSI), both in the World and Europe index.
“This quarter's performance confirms that we are progressing well in executing our strategy, which focuses on successfully integrating Delta Lloyd, further improving performance, accelerating the transformation of the business model and continuing to allocate capital rationally. This will ensure a sustainable business for tomorrow, helping people secure their financial futures.”
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