VIVAT Publishes Interim Results 2019
Resilient performance while preparing for new ownership
Solvency II ratio impacted by decrease of volatility adjustment
- Net Underlying Result improved to EUR 161 million (1H18: EUR 115 million), driven by higher investment income (interest rate derivatives and re-risking) and improved claims ratio of P&C
- Gross premium income (excluding pension fund buy-outs) down 4% as a result of the shrinking individual life market. Premium income for Life Corporate and Property & Casualty was stable
- Total operating costs remained stable compared to the first half of 2018
- Combined ratio improved to 96.0% reflecting an improved claims ratio (1H18: 100.9%)
- Net Result IFRS increased to EUR 279 million (1H18: -/- EUR 173 million), driven by a release of the Liability Adequacy Test (LAT) shortfall primarily as a result of market movements, partly offset by the decrease in the Ultimate Forward Rate (UFR)
- Solvency II ratio (standard model) of VIVAT NV decreased to 151% (YE18: 192%) mainly as a result of a sharp decrease of the Volatility Adjustment (VA) and a decrease in interest rates
- Solvency II ratio (standard model) of SRLEV NV decreased to 145% (YE18: 188%)
- Liquidity position holding at EUR 526 million (YE18: EUR 535 million)
- Re-risking on track, sovereign investment exposure decreased to 52% in the investment portfolio (57% YE18), direct investment income improved by 7%
- Anbang has reached a conditional agreement on the sale of VIVAT NV to Athora with a follow-on sale of the P&C business to NN Group. High level integration and migration preparations have started. Closing expected in the first quarter of 2020, subject to certain conditions such as the receipt of relevant regulatory approvals and antitrust clearance
- The sustainable investment policy of VIVAT again received a high rating from the Association of Investors for Sustainable Development (VBDO)
Ron van Oijen, Chairman of VIVAT’s Executive Board:
“During the first half year of 2019, we continued to deliver on our strategic priorities and were informed by our shareholder Anbang that it reached a conditional agreement on the sale of VIVAT to Athora with a follow-on sale of the P&C business NN Group. The Executive Board of VIVAT is supportive of this transaction. High-level preparations for the integration and migration have started. The transaction is conditional upon regulatory approvals and antitrust clearance, and is expected to be completed in the first quarter of 2020.
In the first half of 2019, VIVAT showed a resilient performance. The Net Underlying Result as well as the Net Result IFRS were up significantly compared to the first half of 2018, costs remained stable and we kept strong commercial positions in Pensions and P&C, our focus markets. This was supported by a high retention rate of 87% at Life Corporate, new inflow in the Zwitserleven PPI and 10% commercial growth at P&C on a like-for-like basis. Also we saw an improvement of the combined ratio due to a further reduced claims ratio. The ongoing efforts in optimising the investment portfolio resulted in a higher investment income.
While VIVAT’s capital generation was positive in the first half of 2019, the Solvency II ratio of 151% was impacted by a sharp decrease of the Volatility Adjustment (VA) and lower interest rates.
In the first half of 2019, VIVAT has started a number of new initiatives and kept focusing on innovation. Under the brand name Reaal, P&C introduced a liability insurance for SMEs and entered into an agreement with the largest ‘self-employed without personnel’-network in the Netherlands to offer disability insurance. Individual Life introduced term life insurances for first time home owners and seniors under the brand name Reaal. Life Corporate launched the MijnZwitserleven-portal in which all pension participants of Zwitserleven can find detailed information on their pension accrual and can make changes accordingly. Dier & Zorg, our pet insurer, saw an increase of new business of 55% after a successful advertising campaign.
In the field of sustainability, VIVAT continued to put effort in the Sustainable Development Goals. The sustainable investment policy of VIVAT was once again awarded by a high rating from the Association of Investors for Sustainable Development (VBDO). ACTIAM saw the inaugural launch of their Luxembourg Fund and saw growing demand for its new Global Equity Impact strategy.
In the first half of 2019, we saw an increase in the Net Promotor Score (NPS) which underpins the continuous efforts of our motivated and dedicated employees to put customer interest first. Our customers can expect that the high service level will be continued going forward.”
For the full press release about the Interim Results please download the pdf below.