Netherlands: Premium income up 12% to €7.5 billion

Netherlands: Premium income up 12% to €7.5 billion

Net result -€153 million

Delta Lloyd Group’s capital position remains solid: Solvency 190%

Delta Lloyd Group highlights in 2008

* Significant increase in premium income, especially from large pension contracts
* Negative net result of €153 million
* Positive operating result of €142 million
* Solvency ratio: 190%
* Total return on investment portfolio: -0,9%
* Successful ABN AMRO Insurance joint venture continued
* Sound risk management gives Delta Lloyd Group and its customers assurance in the current crisis

Executive board chairman Niek Hoek of Delta Lloyd Group: “Delta Lloyd Group ended a difficult 2008 with a net loss of €153 million, including a gross adverse impact of €158 million for the compensation agreed with consumer organisations on individual unit-linked insurance policies. We are satisfied that the negative effects could be minimised through active risk management. Along with our commercial strength and solid financial position, this offers a good starting point for 2009.”

Delta Lloyd Group’s commercial performance continued to be strong in 2008. Gross premium income rose by 12% to €7.5 billion, almost entirely driven by organic growth. All sectors contributed to this: Life (+12%), General (+10%) and Health (+15%). Nevertheless, the increase in large group pension contracts was remarkable. More and more of large companies are choosing the pension assurance that Delta Lloyd Group can offer its customers.

In 2008, Delta Lloyd Group’s profitability was severely dampened by the effects of the credit crisis. The operating result was 68% lower at €142 million. Due to the fair value measurement of investments and the resulting compulsory write-downs of unrealised market value losses on the investment portfolio, the IFRS-based net result before tax was -€153 million. The falling equity markets, in particular, led to impairments on equities, bonds and loans totalling €976 million, while the widening credit spreads had a negative effect of €1,119 million on the fixed income portfolio. Against this, protection of the investment portfolio through equity hedges and swaptions on fixed income securities had a positive effect of €1,252 million on the result.

The maximisation of costs agreed with consumer organisations for individual unit-linked insurance policies will cost Delta Lloyd €410 million, including a maximum of €30 million to be contributed to a special fund for distressed customers. The compensation depressed the result by €158 million in the year under review.

Active risk management and a transparent investment policy ensured that Delta Lloyd Group’s solvency remained strong at 190% at the end of 2008. Standard & Poor’s reaffirmed Delta Lloyd’s AA- (stable outlook) at the end of October.

Comments are closed.