Net profit Achmea declines 27% to €344 million
- Net result declined due to goodwill impairments for pension services and health insurance
- Operational profit increased to €536 million, among others through lower expenses
- Good result Non-life Netherlands despite major fires and storm damage
- Structural result Basic Health Netherlands stable
- Solvency remains strong at 202%
- Previously launched initiatives result in further cost reduction of 5%
Willem van Duin, chairman of the Executive Board:
“Achmea is writing a new episode in its history through its ‘Acceleration & Innovation’ programme. We will be accelerating customer focus and cost savings, as well as renewing and digitising our processes and services. We operate in a sector undergoing change and aim to make this transformation in order to maintain our identity in the future: an insurer with cooperative roots and strong brands, one that keeps in touch with its customers by using the latest technologies. Unfortunately, over the next three years we have to reduce our workforce by approximately 4,000 employees, who will be actively involved in and informed on all developments relating to the workforce reduction. This far-reaching reorganisation will already start to take effect this year, and will have an impact on virtually all our employees. We will take the utmost care of the interests of those affected, in close cooperation with among others the Central Works Council.
Our net profit in 2013 dropped by more than a quarter to €344 million. Our result was strongly affected by goodwill impairments on our pension services and health business, since we are expecting profits from these businesses to be permanently lower than previously assumed. Operationally our profit increased by 4% to €536 million, among other things because we lowered our expenses further. Our profit in the Non-life business improved due to a variety of factors, including measures to restore profitability in our Income Protection business. Several major fires and the recent storms that affected the Netherlands in October and December caused damage to our customers and ended up affecting our profit. The structural result in our Health operations decreased because we maintained basic health insurance premiums in 2013 at the same level as in 2012 while the increase in healthcare expenses continued.
Although previously launched initiatives resulted in a cost reduction of 5% in the past year, we are not yet satisfied with the rate at which the reductions are being implemented. Our cost levels remain too high and our insurance business has been underperforming in terms of profits. In addition, our result for 2013 included a number of non-recurring items. This highlights the importance of the ‘Acceleration & Innovation programme’, which will allow us to continue investing in new digital solutions for our customers, keep our customer satisfaction at high levels and maintain a sound financial position in the long term. The change programme will result in a structural reduction in our operating expenses by €450 million by the end of 2016, which means we are increasing our previous cost-saving target.”
(Click here to see the webcast of the press conference.)
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