Operational result increased by € 165 million due to higher insurance service
result at Non-Life, improved investment results and growth in interest margin at Retirement Services

Bianca Tetteroo, Chair of Achmea’s Executive Board: “Today we present the results over the first half of 2023 and show strong growth in both premium income and result. Financial markets were less volatile than in 2022, which led to an improvement in the return on our investments. The social and economic context in which we operate nevertheless remains dynamic and uncertain, partly because of the high rate of inflation and increasingly frequent extreme weather conditions. We have recently seen many examples of this in Europe. There are also challenges in the field of healthcare, pensions and the housing market that we are working on based on our purpose 'Sustainable Living Together'. Together with healthcare providers and local governments, we are working to further improve regional healthcare on the basis of the Integral Care Agreement (“Integraal Zorgakkoord”). Extremely important, in this way we keep healthcare accessible and affordable. By building more lifetime homes, we respond to the changing housing needs as a result of an ageing society. This also relieves some of the burden on the healthcare system. And on 1 July, the Future Pensions Act came into force. Together with our customers, we started with the implementation.

Increase in operational result

The operational result over the first six months is € 405 million. This is € 165 million (+69%) higher than last year. The operational result at Non-Life increased by € 61 million. The total cost of claims was lower than last year as the first six months of 2023 saw no major natural catastrophy events in the Netherlands, in contrast to February’s storm in 2022. However, we do see a substantial growth in the number of claims due to increased traffic intensity. The cost of repairing damage is also increasing as a result of inflation. The combined ratio remains strong at 91.3%. The operational result of the Health business improved by € 67 million. The result of Retirement Services improved to € 10 million. Interest income improved at Achmea Bank, which forms part of Retirement Services. Mortgage margins increased and the mortgage portfolio grew in the first six months. Underlying trends at Pension & Life are in line with our expectations. The operational result decreased to € 134 million, partly due to the higher indexation on pension contracts from the service book. The operational result at International improved versus last year with € 34 million and, supported by further premium growth, came out at break-even. Finally, there was also an improvement in the operational result on our reinsurance activities of € 37 million owing to the absence of large calamities in the first six months.

Revenue growth

Premiums grew by € 1.5 billion (+8%) to € 19.9 billion. Premiums at Non-Life increased by 4%, mainly due to growth in the commercial segment. At Health, premiums increased by 7% due to higher premiums and a higher equalisation fund contribution. At International, there was the strongest premium growth (+41%) as a result of inflation and customer growth. At Retirement Services, assets under management increased by 6% to € 206 billion driven by inflow of new clients and market value developments. Achmea Bank's mortgage volume grew by € 1 billion. In light of our growth strategy on mortgages, we announced a partnership with Munt Hypotheken in April. We expect to provide approximately € 1.5 billion in additional mortgages with Munt over the next three years. A concerning development is that fewer and fewer people take out term life insurance when initiating or renewing a mortgage. In the longer term, this can lead to distressing situations.

High customer satisfaction and focus on efficiency 

The NPS scores for our brands remain high. Customers value our (digital) services in which we continue to invest. This includes investment in a new IT platform that provides a solid basis for transitioning to the new pension system together with our customers.

Expenses increased significantly by 11% compared to last year. On the one hand this was caused by inflation and business growth. On the other hand, there are strategic investments, higher personnel costs and costs to comply with legislation. Also in the past six months we invested in our Customer Due Diligence programme. On the back of the increasing expenses a focus on efficiency and cost control remains key.

Solvency robust

The solvency ratio stood at 195% at the end of June. This is still robust, yet lower than it was six months ago (year-end 2022: 209%). The decrease is caused by a sharp increase in healthcare costs and a higher net retention on our own reinsurance. 
Our reinsurance cover was renewed as of 1 July this year. We are seeing higher premiums and altered terms and conditions, partly in response to the global increase in climate-related claims and inflation. This does not only impact the net retention in our reinsurance cover but also has an impact on the cost of our insurance products.

Working together on sustainability

At Achmea we look at three aspects when it comes to climate change: prevention, adaptation and insurability. For these three aspects we work on solutions together with our customers, the Dutch Association of Insurers (“Verbond van Verzekeraars”) and the government. Our employees made their own pleasant contribution to sustainability in the first six months of the year. Since 1 January 2023, all our employees have a climate budget of € 2,500 for making their own living environment more sustainable. More than half of the 12,000 Achmea employees in the Netherlands already used this budget in the first half of this year. We are also making it easier for our customers to improve the sustainability of their homes. From May this year, for example, Centraal Beheer customers receive a discount on their mortgage rate for a green loan component used for making their home more sustainable. At group level, in February Achmea invested € 55 million in two wind farms via the newly-launched Climate Infrastructure Fund.

Realising sufficient lifetime homes

In June, we presented the strategic ambitions and new name of Achmea Real Estate. We have solid growth plans and the development of lifetime homes plays a key role in this ambition. The ageing population means that in the long term the Netherlands requires an additional 450,000 homes of this type. Our goal is for 10% of these to be achieved by Achmea. 

Thank you to our customers, partners and employees

We succeeded in moving in the right direction in the first six months of the year and did so together with our customers, partners and employees who I want to thank for their contribution and trust in Achmea."

Group results

The Tier 2 Notes will be issued under Achmea B.V.’s € 5 billion Debt Issuance Programme (more information on https://www.achmea.nl/en/investors/debt-information). Barclays, HSBC, ING, Deutsche Bank and BNP Paribas are appointed as Joint Lead Managers.

The expected rating of the forthcoming Tier 2 Notes issuance is BBB- by S&P and BBB by Fitch. The intended issuance is expected in the near future, dependent on market conditions.

Relevant stabilization regulations, including FCA/ ICMA stabilization apply. The target market is MiFID II professionals and Eligible Counterparties only (all distribution channels). No EU/UK PRIIPs key information document (KID) has been prepared as these instruments are not available to retail in the EEA and UK.

Investor Relations                                                    
Hans Duine                                    
06 - 8210 5097                        
hans.duine@achmea.nl

Achmea disagrees with the Dutch tax authority on the fiscal treatment in The Netherlands of the compensation received for the divestment of its shareholding in PZU, in the years 2009 en 2010. The agreement with the Polish government at the time resulted in total proceeds for Achmea of 4.2 billion euros. The disagreement with the Dutch tax authority is regarding the tax treatment on the amount received of 1.2 billion euros. Achmea is of the opinion that this amount should be exempted from Dutch corporate tax. The court has ruled that of the amount received of approximately 1.2 billion euros, an amount of 248 million euros is exempted from corporate tax.

Achmea is in the process of analysing the ruling by the Court en will decide at a later moment whether it will file an appeal with the Dutch Supreme Court. The impact of the increase of the provision will be accounted for in the results over the first half of this year.

The agreement with Aviva was announced in November 2017 and is in line with Achmea’s international growth strategy. It has resulted in an improvement of both Achmea’s solvency and liquidity positions.

As a result Achmea realizes total net cash proceeds of approximately 225 million euros consisting of direct proceeds of the sale and dividend payments collected prior to the transaction. The IFRS results of the transaction have been accounted for in 2017.

RECORDINGS OF THE PRESENTATIONS ARE AVAILABLE HERE 

The three presentation, will illustrate that Achmea is well on track with the realization of its strategy and financial ambitions until 2020. Central to our strategy are continued investments in the service to customers, innovation and the development of services in addition to our insurance propositions. With our multi-brand-strategy we are active across all distribution channels and we are market leader in the growing channels of bancassurance, direct and online. Our efficient and scalable IT-infrastructure also offers us opportunities for further international growth. With the execution of our strategy we contribute to a healthy, safe and future proof society.

As a cooperative insurer our solid financial position forms the foundation of all our activities. Both our operational result as well as our free capital generation develop positively, also as a result of earlier implemented improvement measures. In the interest of all our stakeholders, we aim to maintain our robust solvency position and expect to realize further growth of our results in all our segments.

The documents of all presentations are available at the column on the right side of this page.

The recently announced agreement on the sale of Friends First Life Assurance Company results in an improvement of the group’s solvency and liquidity position, part of which Achmea will use for the benefit of its shareholders.

The buyback of the shares is expected to be finalized by the end of March.

As a result of the sale, Achmea expects to realize total net cash proceeds of approximately 220 million euros, consisting of direct proceeds of the sale of 130 million euros paid by Aviva, dividend payments collected prior to the transaction and a variable completion consideration adjustment amount linked to Friends First’s Net Asset Value, which Achmea expects to receive on finalization of the transaction. The transaction is expected to result in a net IFRS loss on disposal of about 35 million euros for the group, which will be accounted for in 2017.
In addition, Achmea expects to also realise a net cash remittance of an additional 20 million euros as a result of the liquidation of the remaining Irish legal entities.

Willem van Duin, chairman of the Executive Board of Achmea: “Achmea has had for some time a strategic focus on non-life and health insurance distributed through the growing direct, online and banking channels. Friends First is a healthy and growing life and pension insurance activity in Ireland, but its activities no longer matched those of the core competencies of our group. We’re very pleased to have found a suitable new parent company for Friends First and its employees, after a careful selection process where we weighed the interests of all stakeholders involved, such as customers, brokers and especially those of the employees at Friends First.

Tom Browne, Chief Executive Officer at Friends First Life: “While Friends First has enjoyed strong business growth in the last few years, we believe joining Aviva is a really positive step for our company, given Aviva’s own strong life business growth in Ireland and its objective to become a market leader. We are now looking forward to working with the Aviva Ireland team in creating a market leading life & pensions business in the Irish market, with Friends First’s expertise in the areas of investment funds, income protection and group risk enabling Aviva Ireland to offer a truly comprehensive product range. I would like to thank all staff at Friends First for their continued efforts to deliver the best service and products to our brokers and policyholders.”

Van Haaften has extensive knowledge of the international finance and insurance sector and was until recently active as CFO of Graydon Holding N.V. Before that Van Haaften worked among others for Aviva in France for four years and before that he was active for three years for Aviva in the United Kingdom. He also worked for Delta Lloyd in Belgium for over six years.

Uco Vegter, managing director of Achmea International, is pleased with the appointment of Van Haaften. “Caspar has a robust financial background and has already worked in Turkey, among others for the British insurer Aviva. He is accustomed with Turkish culture and is also known as someone who fosters innovation in the financial sector. He has a good fit with our ambitions and with those of our Turkish colleagues. I wish Caspar lots of success in his role as the new CFO van Eureko Sigorta.”

As of October 1st the Executive Team of Eureko Sigorta consists of Can Akın Çağlar (General Manager), Caspar van Haaften (Chief Financial Officer), İbrahim Süha Çele, İsmet Güngör and İlker Arabacı.

The SFCR report is available on this page as a download.

Achmea has appointed René Scholten as Chief Financial Officer (CFO) of its Slovakian insurance company Union, pending regulatory approval. On May 1st 2017, Scholten will succeed Ryan Florijn, who held the position of CFO at Union for three years.  Until recently, Scholten was a member of the board and CFO at NN Hellas, insurer NN Group’s Greek insurance operation. Before his assignment to NN Hellas in 2012, Scholten held several leadership roles in finance. In The Netherlands he was active at NN for over five years and before that he worked for more than eleven years at Swiss Life’s Dutch life insurance company Zwitserleven.

Uco Vegter, managing director of Achmea International, is pleased to announce René Scholten as the new CFO for Union. “René has an extensive financial background and I am looking forward to seeing him further strengthening Union. Ryan contributed much to getting Union through a challenging period and I am grateful for his valued contribution. I wish René lots of success in his role as the new CFO of Union.”

As of May 1st 2017 the board of management of Union will consist of Michal Špaňár (Chief Executive Officer), René Scholten (Chief Financial Officer), Elena Májeková, Tomáš Kalivoda and Jozef Koma.

In the past two years, Achmea has already contributed around €800 million towards the limiting of the increase in healthcare premiums. By offering health care premiums below cost price, more than €1.2 billion from reserves has been reimbursed to customers. Structurally offering healthcare insurance below cost price is not sustainable, as healthcare insurers must maintain adequate reserves in the interests of their policyholders. Steep increases in premiums are therefore inevitable in the future.

The Annual General Meeting of Shareholders, held on 20 April 2016, adopted the financial statements and granted discharge to the Executive Board and Supervisory Board. The AGM also resolved to declare a dividend on the ordinary shares totalling €146.7 million, equivalent to 45% of the net profit attributable to shareholders, and to pay a dividend on the preference shares of 5.5% of the paid-in amount of these shares.

Annual reporting is an important opportunity for Achmea to reinforce the strong ties with its stakeholders. Stakeholders include our customers, our employees, business and other partners and shareholders. In our annual report we provide a complete overview of our organisation, showing the connections between our strategy, our governance and the social and economic context in which we operate.

Social trends and the dialogue with our stakeholders form the basis for the main topics of Achmea's reporting. In partnership with our internal and external stakeholders in 2015 we have highlighted those themes which they find particularly relevant for Achmea. New developments relating to care and to the work-life balance demand new solutions if we are to continue helping our customers and strengthening society. Our stakeholders see it as a duty of ours to make a contribution to a healthier, safer and more future-proof society.

The report is structured according to the six dimensions of our strategy map. It thus provides an insight into how our company performs from six different perspectives: as regards our customers, our staff, our business and other partners and society at large and from the perspective of our processes and financial performance. The report is in accordance with the IIRC framework and the core option of GRI G4 of the Global Reporting Initiative (GRI).

Further details regarding Achmea's strategy will be disclosed along with other information at the Capital Markets Day on 26 May 2016.

Willem van Duin, chairman of the Executive Board of Achmea: “It’s good to see that the group’s solid financial position is also reflected under Solvency II. A solid financial position is a prerequisite for the long-term fulfilment of the commitments we have made to our customers. Achmea’s partial internal model for Non-life insurance risk has been approved by among others the Dutch central bank for use for prudential purposes. Using the partial internal model provides Achmea with even better insights in its risks, allowing for better risk management and improved protection of the interests of our customers.”

Further details on the Solvency II capital position will be provided at our Capital Markets Day on May 26.

Willem van Duin, Chairman of the Executive Board:

“Achmea achieved a net profit of €386 million in 2015. The result improved by lower expenses across the full breath of the company. Postive developments at our Pension and Life, Banking and International activities and higher investment results contributed to a higher result. Our result was strongly influenced by the €481 million allocation of our result to mitigate the premium increase of our health insurance policies for our customers. Major storms caused a great deal of damage to our customers.Compensation for storm damage has reduced our result by more than €120 million. Premiums remain stable around €20 billion. We used our market leadership in non-life and health insurance to make the best possible products for our customers.

Our solvency remained high at 210%, as a result of which our customers can depend on us being able to meet our obligations in the future. We obtained approval for use of a partial internal model for non-life insurance under Solvency II. This provides an even better protection of the interests of our policy holders.

We made great progress at Achmea with our Acceleration & Innovation programme. Many initiatives have had an immediate impact on the customers of our brands, such as improved apps or more extensive online services. Other steps are perhaps less visible, but are also vital to improving our services. With the foundation of the Centraal Beheer General Pension Fund (APF), we continue to position ourselves strongly in the pensions market. In line with this strategy, we have also concentrated the asset management activities to create Achmea Investment Management. With more than €100 billion in managed assets, one of the largest institutional asset manager of The Netherlands was created.

In the third year of our Acceleration & Innovation change programme, Achmea will be moving to the next phase. We are maintaining the course we set, and will be finishing off the current programme this year. At the same time, we are accelerating in specific areas, in order to continually respond to the changing needs of our customers. For instance, we are further streamlining our organisation in line with the market chains Non-life, Health and Pension. This enables us to reduce complexity and increase the commercial strength of our brands.

I would like to thank all our employees and the Central Works Council for their great commitment and dedication. I would also like to thank all our other stakeholders: our business partners – particularly Rabobank – shareholders and customers. Solid cooperation with all our stakeholders is the only way we can remain of value in the future, both to our customers and to society at large.”

(Watch the webcast of the press conference.) 

The partial internal model will be used by the Dutch Non-life and reinsurance entities and Greek subsidiary Interamerican Property and Casualty Insurance Company SA for the calculation of Non-life and Disability (Health SLT) underwriting risk.
Achmea intends to extend the scope of the internal model with internal models for Health underwriting risk (Health NSLT) and market risk.

Model results

Achmea calculates the solvency position with respect to the approved partial internal model, the target partial internal model (including internal models for Health NSLT underwriting risk and market risk) and the standard formula. The results per Q2-2015 are as follows:

Please note that these results are based on the interpretation of the Solvency II regulations and the status of the models as of 30 June 2015. It is expected that the results of the models as of year end 2015 will be influenced by further interpretation of the Solvency II regulations, including the treatment of taxes (application of the LAC DT), the provision for insufficient premiums for Health (€ 470 million) and further improvements of the models.

Achmea will allocate €470 million to limit the increase in health insurance premiums. This will be charged to the 2015 result. The amount is expected to be offset to a significant extent by the incidental result for 2015, thanks to an improvement in the equalisation result on hospital care and mental health care relating to previous years.

Willem van Duin, Chairman of the Executive Board:

“Over the first six months of this year Achmea posted a net profit of €272 million. Net profit improved as a result of lower operational expenses, higher investment results and an incidental positive result in the health insurance segment.The operational result has doubled from €142 to €285 million, which demonstrates that we are on the right track in terms of the underlying business. All our insurance activities contributed to the improved result. Our international business also achieved better results. Storms in the first half of this year caused considerable damages to our customers’ property and impacted our result by €25 million.

Our financial position remains as robust as ever and our customers can count on us continuing to be a reliable financial partner in the future. Our solvency ratio for insurance entities has increased by 10 percentage points to 225% since the end of last year.

Achmea sets the tone in the Pension market and has decided to establish a General Pension Fund. Centraal Beheer provides us with a sound starting position in this market. In line with this, we also concentrate the operational asset management activities within our group. The new segment, Achmea Investment Management, manages over €71 billion for several pension funds and for Achmea itself.

At the same time we have a continued focus on innovation. Company-wide , more than 150 new initiatives were put in motion, both in the service to our customers and our business. On the one hand we are renewing our service to customers and on the other we are standardizing and automating our processes and systems.

Acceleration & Innovation also includes cutting costs by a total of €450 million with the necessary reduction of the number of jobs by about 4,000 by the end of 2016. With a reduction of costs of over €200 million since the start of the change programme at the end of 2013 and of the number of jobs by 2,100, we are on schedule to meet these targets. In addition to innovation, the focus on costs and return will continue to be important in order to offer our customers insurance products at the most competitive prices.”

Achmea has obtained prior approval of the Dutch Central Bank for the optional redemption of these securities.

More information can be found on our website: www.achmea.nl/en. 

As part of the Capital Markets Day, an announcement will be made that Achmea is on track with the implementation of the ‘Acceleration & Innovation’ programme of change. It will also be announced that the pro forma solvency ratio for the group as at year-end 2014, taking into account capital market transactions in February 2015, was 208%.

The presentations can be found on the right side of this page.

The videos of the presentations can be found here.

Achmea’s annual report is an important way of strengthening ties with our stakeholders: our customers, employees, (business) partners and shareholders. The aim of our annual report is to provide a comprehensive overview of our organization, demonstrating the links between our strategy, governance and the social and economic context in which we operate.

The report is organized along the six dimensions of our strategy map. In this way, the report provides insights in how our business is performing from a customer, societal, employee, (business) partner, process and financial perspective.

Click here for the annual report.

Willem van Duin, Chairman of the Executive Board:

“With our change program Acceleration & Innovation we significantly increased the pace of innovation across our company. We recently completed the first year of our three-year change programme, Acceleration & Innovation, which is designed to become a more customer-driven, effective and competitive organisation.

With a great number of new, mostly online, initiatives, we continuously improve our service to our customers. For one, they can contact us next to through the telephone, also via chat and apps, and report claims with their smartphone. In addition, we actively assist our customers online through ‘co-browsing’ and use a growing number of digital resources to keep them informed.

Furthermore, on a growing number of our websites for our brands, customers can rate our services directly. Our brands released various apps for our customers to easily manage their insurance businesses. This way, we develop innovative new solutions for our customers and maintain high levels of customer satisfaction.

We ended the 2014 financial year with a net profit of €16 million. Reorganisation expenses of €239 million and goodwill impairments of €143 million strongly impacted our net profit. Our operational result declined to €388 million (2013: €542 million). One of the reasons for this is that we allocated €335 million of our results to keep health insurance premiums for our customers practically equal in 2015. Our gross written premiums remained stable around €20 billion, while our Property & Casualty insurance business managed to grow in a shrinking market.

Our solvency increased to 215% and we maintained the A+ credit rating for our insurance entities with S&P, which demonstrates that we continue to be a solid financial partner to our customers and other stakeholders. Two recent financing transactions in beginning of this year, would have had a positive effect on our pro forma solvency ratio of 13 percentage points.

We reduced our operational expenses by €143 million in 2014 and are on track to achieve our target of reducing our costs by €450 million by the end of 2016. We are also on schedule with the inevitable reduction of around 4,000 FTEs within our organisation. In 2014 the number of jobs at Achmea in The Netherlands was reduced by some 1,200, whereby we made every effort to protect our employees’ interests as carefully as possible. We will continue to drive our Acceleration & Innovation program forward. This will enable us to maintain who we are: a cooperative insurer with very strong brands that communicate with their customers in a modern way.”

(Watch the webcast of the press conference.)

Achmea announced that it has accepted tenders in the principal amount and for a purchaseprice set out in the table below.

Final acceptance amount: €229,800,000
Purchase price: 101.500%

The purchase price, together with accrued interest, will be paid to noteholders whose Noteshave been accepted for purchase by Achmea on the Settlement Date. Settlement is expected on 5 February, 2015.

Achmea hereby announces that (i) the New Financing Condition has been satisfied and (ii) it hasaccepted tenders for purchase €229,800,000 in aggregate principal amount of the Notes inaccordance with the terms and conditions of the Invitation. All validly tendered Notes that werereceived by the Tender Agent by the Invitation Deadline have been accepted for purchase in fullwithout pro-ration.

More information can be found on our website: www.achmea.com.

The Notes are priced at 355 basis points above the 10-years midswap rate. The coupon on the Notes equals 4.25%. The Notes will be listed on the Irish Stock Exchange in Dublin, Ireland. The Notes are rated BBB by Standard & Poor’s (based on Achmea B.V.’s A- counterparty credit rating) and were placed by a syndicate of banks comprising of Barclays, Deutsche Bank, JP Morgan, Rabobank and Royal Bank of Scotland. Settlement of the Notes is expected at 4 February, 2015.

More information can be found on our website: www.achmea.com

Achmea announced the company-wide change program “Acceleration & Innovation” at the end of December 2013. The program aims to offer better online services to customers and to make Achmea a more customerdriven, effective and competitive organization. The change program will result in a structural reduction in operating expenses by €450 million by the end of 2016 and the elimination of approximately 4,000 jobs at our company.

Various steps have been taken over the past year so as to be able to continue to invest in new solutions for our customers, maintain the current high level of customer satisfaction, and to continue to be a financially healthy company in the future. Based on a specific management agenda, a large number of new initiatives that benefit our customers have been realized or set in motion. Our brands introduced numerous innovations in the services they provide to their customers, and input from our customers has been incorporated more directly into our operational management by establishing Member Councils for each of our brands. In addition, our operational costs were reduced by approximately €100 million in 2014 and the number of jobs decreased by approximately 1,000.

As part of the change program, a more detailed and specific overview has been produced of the restructurings scheduled for 2015 and 2016. In that context, an addition to the restructuring provision of approximately €150 million will be accounted for in the second half of 2014. Together with this additional dotation in the second half of 2014, total restructuring costs for 2014 amount to approximately €230 million. Primarily as a result of €143 million in previously communicated impairments of goodwill and other intangibles in the first half of 2014 and the restructuring expenses related to Acceleration & Innovation, a net result around break-even is expected over 2014 (2013: €344 million net result).

Following recent publications by EIOPA, in relation to Own Funds, Achmea believes there is an increased likelihood that the Notes may not qualify as outright Tier 2 under Solvency II when adopted and may, instead, be subject to transitional provisions which are currently envisaged to provide 100% eligibility as Tier 2 capital for up to 10 years from the start of the Solvency II regime as of 1 January 2016.

Under the terms of the Notes, such regulatory treatment would constitute a Capital Disqualification Event and provide Achmea with an option to redeem the Notes at par (plus any interest accrued to the date of redemption), subject to regulatory approval.

In the event that the Notes become subject to transitional provisions and a Capital Disqualification Event occurs but the Notes still maintain 100% recognition as Tier 2 capital, Achmea hereby irrevocably waives its right to exercise this option to call the Notes vis-à-vis all relevant current and future noteholders ahead of its first scheduled optional redemption date in April 2023 for as long as the Notes maintain 100% recognition as Tier 2 capital. In other cases the option will remain in full force and effect and is not waived.

Achmea believes the above clarifications should remove any uncertainty around the Notes and further wishes to maintain open lines of communication with debt investors on this point.

​Willem van Duin, Chairman of the Executive Board:

“We have made progress in a large number of areas over the past six months through our change programme, Acceleration & Innovation, which we launched in late 2013. Several initiatives designed to provide even better services to customers, particularly online, are currently underway or have already been completed. We have also integrated our direct and brokerage distribution organisations, which will enable us to serve customers even better within a less complex organisation. Operating expenses fell by 3%; this reduction represents an essential part of our change programme. Achmea’s inevitable workforce reduction is on schedule, where the interests of the employees concerned are naturally very carefully considered.

The operational result increased during the first six months of the year – to €142 million – thanks to greater profitability across virtually our entire insurance business. The net result was affected by a number of factors, including a €143 million write-down of goodwill for pension services provider Syntrus Achmea and the Russian-based insurance company Oranta. We also incurred €45 million in expenses in connection with our company-wide reorganisation. These items contributed to the €58 million net loss.

However, despite this loss our financial position has remained solid, with the solvency ratio increasing to 217%. The confirmation of Standard & Poor’s A+ credit rating for our insurance entities demonstrates that we are and remain a reliable financial partner for both customers and other stakeholders.

Although the first results of Acceleration & Innovation are promising, the significance of our change programme will remain substantial in the coming years. Achmea will become a more customer-driven, dynamic and competitive organisation, and we will make every effort to achieve our objectives. Costs must be further reduced, and we will continue to work on developing online services. We are implementing these measures so as to be able to continue to invest in new digital solutions for our customers, maintain the current high rate of customer satisfaction, and remain a financially healthy company in the future.”

Award May 2014
In 2012 The Slovak Republic decided to introduce a ‘unitary system’ featuring a single state-owned health insurance company. The existing private health insurance companies were to be taken over or, when their owners proved unwilling to sell, expropriated. The Slovak parliament approved a ‘roadmap’ with a timetable in November 2012. According to this timetable the ‘unitary’ state-owned health insurance company was to become operational on 1 January 2014 or, in case expropriation were required to get control over the private health insurance companies, 1 July 2014. Relevant legislation was to be enacted as of 1 May 2013. Faced with the imminent threat of expropriation, Achmea sought to protect its legitimate ownership rights by initiating an international arbitration procedure on the basis of the Dutch-Slovak Bilateral Investment Treaty. The (ad hoc) International Arbitration Tribunal presented its award on jurisdiction and admissibility on 20 May 2014. By that time the Slovak plans to take over or expropriate private health insurance companies had been shelved. In the absence of any expropriation act or any form of expropriation the Tribunal could take no other decision than to close the case and to declare that it had no jurisdiction. In the interest of transparency Achmea decided to disclose the award. (See downloads at the right.) 

Transparency regarding all aspects of our operations is therefore more important than ever. We want to show how we serve our eight million customers in the best possible way, what strategy we pursue with that aim in mind, the progress we make and also what the payback is for us.

This year we are taking a further step towards greater transparency. From now on, we will publish an integrated annual report covering both our financial results and societal achievements and demonstrating how we add value for our customers, our employees, our business partners and our shareholders.

Click here for the annual report.

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.)

See also videographic (140 seconds):

​Achmea chose Syntrus Achmea following a selection process in which quality of service, risk management  and good investment performance were key criteria. Syntrus Achmea has proven that it can achieve good returns within the chosen risk profile. Both parties operate on the same cooperative principles.

Interim results 2013 at a glance

• Achmea posts net result of € 123 million
• Result realised in challenging economic and market conditions
• Clear focus on costs delivered stable gross operating expenses, despite higher pension charges, investments in compliance with new regulation and ongoing complexity reduction
• Robust financial position maintained, solid solvency ratio of 204% (IGD)
• New initiatives rolled out to better serve our customers’ interests

​The Notes have a maturity of 6 years (maturity date is 19 June 2019). The Notes are priced at 95 basis points above the 6-years midswap rate. The coupon on the Notes equals 1.5%. The Notes will be listed on SIX Swiss exchange.

​The transaction received broad interest primarily from European institutional investors with an order-book that was almost six times oversubscribed.

​We succeeded in delivering a solid net profit of €453 million in 2012, despite the ongoing challenging economic conditions. Our business units across the Group returned satisfactory results. Our structurally prudent risk policy, appropriate for a cooperative insurer, contributed significantly to our ability to maintain a strong capital position and, consequently, retain our good credit rating. As a company, we can be proud of this achievement.

Willem van Duin, Chairman of the Executive Board, will discuss the overall group strategy and ambitions, and prospects in our main markets. After that, Jeroen van Breda Vriesman, board member responsible for the Health business will elaborate on the dynamics of this regulated sector and our business model as the market leader. Lastly, Gerard van Olphen, Vice-Chairman of the Executive Board and CFO, will discuss our latest views on Solvency II.

The presentations will include these brief comments on Eureko's performance in Q1 2011:

• Eureko's operating performance - Good start to the year
• Capital position and solvency remain strong
• No major issues in Ireland and Greece
• Low exposure to GIIPS countries

The Analyst day can be followed via a live webcast on www.eureko.com.
The presentations will be available on the website of Eureko today as
from 12.00 CET.

Besides these gratifying results we have made satisfactory progress of a number of issues. These include the unit-linked settlement in the Netherlands and a reduction in both organisational and structural complexity. Through 2010, we made progress on many strategic components. For example, we have been successful in reducing structural costs by €268 million in the past two years. We are confident that we will meet the target of €300 million end 2011. SENS, our customer-oriented improvement programme, has now been implemented in all business units in the Netherlands.

In 2011, we aim to further build on what we have already achieved. The aim is an efficient customer-oriented, lean organisation with clear propositions for our customers. By reinforcing our cooperative identity and the membership policy in cooperation with major shareholder Vereniging Achmea, we will firmly put our customers at the centre of everything we do.

All Achmea Bank staff who are directly connected with this portfolio will transfer to De Lage Landen. The parties expect to complete the transaction by 1 March 2011, subject to regulatory consent. Until then, Achmea Bank and De Lage Landen will work closely together to ensure the smoothest possible transition.

Jan Kusters, Chief Commercial Officer of De Lage Landen: ‘We are very pleased with the acquisition of this portfolio, which will strengthen our position in the consumer loan market. Existing customers of Achmea Bank will be given detailed information on this transfer as soon as possible. A high standard of service and excellent credit terms are our priorities.’

Jurgen Stegmann, interim Chairman of Achmea Bank: ‘Consumer credit ceased to be a core business for our parent company Achmea some time ago. We are pleased to have found a good home for our portfolio in De Lage Landen, in the best interests of both customers and staff.’

The agreement between Achmea and the interest groups is an extension of the arrangement reached with Achmea in May 2009, which was based on the recommendations of the Dutch Financial Services Ombudsman. Notable elements of the present agreement are the timing of compensation payments to c ustomers and the arrangement covering hybrid products (unit-linked products that allow customers to switch between saving and investment). Achmea is earmarking an additional sum of €65 million for this agreement. This is on top of the compensation payments of €315 million announced in May 2009, making the total amount involved €380 million.

Immediate payment
Under the agreement, Achmea will charge a maximum of between 2.35% and 3.3% in respect of expenses each year (see annex). Our customers will receive compensation if it is found that the expenses actually deducted for their policies exceed this maximum figure. Achmea will calculate the amount of compensation due up to maturity of the policy. Achmea will be the first major insurance company to start making payments as soon as 2011 instead of waiting for policies to mature. The compensation will be added immediately to the value of the policy and will therefore appreciate in line with the other investments.

The Achmea arrangement has also been extended to include hybrid life products. These are insurance policies which accrue value through a combination of investing (variable return) and saving (fixed return). The maximum expenses charged by Achmea on the investment component will be 3.3%, with a maximum of 1.25% per annum on the savings component. If the sum of the excess cost of the investment component and the savings component exceeds the norm, we will reimburse the excess costs.

Scope 
Vary from a few euros to a few hundred euros. There will be no compensation for lost investment income. In some cases, c ustomers will get a revised policy with a more attractive expense schedule for future years.

Clarity
There has some discussion concerning the transparency of the expenses relating to unitlinked products and the amounts charged. Achmea has therefore conducted a critical review of its own products and related cost levels. ‘It is important that we now have this satisfactory agreement in place. It provides clarity for our customers,’ says Chairman of the Executive Board Willem van Duin. ‘We are going significantly further than other insurers. For instance, as the first major insurance company to do so, Achmea will now be paying compensation as quickly as possible and not waiting until insurance-linked policies mature. This is what our customers asked for. We accept our esponsibility, but realize that the compensation will not make up for the disappointing investment results of the last few years.’

Special arrangements
A special support scheme has been agreed by Achmea for exceptional or distressing situations. Customers who through exceptional personal circumstances were forced to surrender their unit-linked policies may in certain cases be able to claim under this scheme.

Customer communication
Custumers will be able to find information on the websites of the various Achmea labels concerned. No action is required on the part of policyholders with a current unit-linked product. They will shortly receive more information by mail explaining the arrangement in greater detail. Policies which have already matured or which have been surrendered are also covered by the present arrangement, provided they ran for longer than five years. We will advise the customers concerned how they can make a claim through notices placed in national newspapers as well as information posted on our websites.

-----------------------------------------------------------------------------------------

Annex to press release ‘Achmea reaches agreement on unit-linked policies’
In line with the Recommendations of the Dutch Financial Services Ombudsman, the Achmea arrangement provides for a maximum deduction in respect of expenses over the life of a policy.

Achmea has defined four categories, with maximum expense limits of between 2.35% and 2.85% per annum on the value of policies (categories 1–3), with a fourth category involving an expense uplift of 0.45%:

• Category I: 2.85% for unit-linked policies with a gross premium of less than €1,200 in the first year of the policy or a single premium of less than €12,000.
• Category 2: 2.45% for unit-linked policies with a gross premium of €1,200 or more in the first year of the policy or a single premium of €12,000 or more, except for products falling into category 3.
• Category 3: 2.35% for unit-linked policies with a term of at least 30 years and a gross premium of more than €2,000 in the first year of the policy or a single premium of €20,000 or more.
• Category 4: 0.45% expense uplift for the above three categories of unit-linked policies with a guarantee of 3% or more on net fund return (fund return less total expense ratio)

For unit-linked policies with a fund value of more than €100,000, the expenses will be limited to 1.5% per annum on the value of the policy in excess of €100,000. For fund values up to and including €100,000, the above limits apply.In the case of the hybrid products, we will charge 1.25% on the savings component, with expenses on the investment component charged that the above rates.

About Achmea
Achmea is the largest insurance company in the Netherlands and is the parent company of strong brands like Avéro Achmea, Centraal Beheer Achmea, FBTO, Interpolis, Zilveren Kruis Achmea and Agis. Achmea is not a listed company and has a cooperative background. The company aims to strike a balance between the interests of c ustomers, distribution partners, employees and shareholders. Achmea is part of Eureko, a company active in eight other European countries in addition to its home market of the Netherlands.

There was also a modest increase in total premium income in the first half-year, to just over €10.7 billion. Higher premium income from Health and Non-life business was offset by lower premium income from Life business. Total equity and the solvency ratio, important measures of financial strength, continued to improve over the reporting period, reflecting further progress in Eureko’s financial position.

Efficiency and customer focus
Despite the limited growth in the market, there are enough opportunities to maintain our profitability, not least by raising operational efficiency and reducing costs. Our cost-reduction programmes progressed as planned in the first half-year, yielding economies of scale.

We continued in the first half of 2010 to implement the measures we had previously announced. The proposed reduction of 2,500 full-time equivalents is proceeding as planned and, by the end of the period, we had achieved a reduction of some 1,900 FTEs, with few compulsory redundancies.

While part of the sizeable loss over 2008 can be attributed to the global financial crisis, it was also evident that, at operational level, improvements were necessary. Eureko benefited from the economic recovery that started tentatively in early 2009 and picked up during the year.

At the same time, we also saw the first positive results of our own structural changes. At year-end 2009, we are reporting a net profit of € 1.4 billion compared to a negative result of € 2.1 billion over 2008, helped by the stabilisation of financial markets and further supported by the financial compensation following our settlement on PZU.

We certainly did not enter the Polish market thinking we would leave it a decade later. However, the financially acceptable exit, after years of fruitless negotiations, ultimately proved to be in the best future interests of our Group.

The receipt of the dividend is the trigger for Eureko formally to end the arbitration procedure based on the Treaty on the Encouragement and Reciprocal Protection of Investments between the Republic of Poland and the Kingdom of the Netherlands. This arbitration procedure had been suspended since May 2009 when Eureko and the Ministry of State Treasury started confidential negotiations.

Both parties regard this dividend payment as the first step of the Settlement Agreement reached on 1 October 2009. Subsequently, an Extraordinary Shareholder Meeting is scheduled for 2 December 2009, to decide on the Initial Public Offering (IPO) and on changes in the Articles of Association of PZU.

For further information, please contact:

Dutch and International media:
Bert Rensen, Press Officer Eureko
Phone: +31 65 163 57 28
Email: bert.rensen@achmea.nl

Polish Media:
Agata Strzalkowska, Compress
Phone: +48 60 930 14 35
Email: AStrzalkowska@compress.com.pl

Investor Relations:
Sandra van Gils, Investor Relations Manager Eureko
Phone: +31 61 362 84 23
Email: sandra.van.gils@eureko.cc

About Eureko
Eureko is an unlisted leading insurance group that besides its home country The Netherlands, is also active in ten other European countries. Our core business is insurance – life, non-life and health – and services relating to pensions. Building on our cooperative roots, Eureko’s mission is to achieve balanced value creation for all stakeholders: customers, distribution partners, shareholders and employees. Over 2008 Eureko realised gross written premiums of almost 20 billion euros with about 25,000 employees.

Economic developments in the first half of 2009 resulted in a net profit of € 115 million. A modest decline compared to € 124 million in the same period last year but, compared to the significant loss in the second half of 2008, we see this result as encouraging.

Eureko continues to hold a direct shareholding and voting interest of 2.52% in BCP, equal to the shareholding of BCP in Eureko. Eureko and BCP will continue to develop joint business initiatives in complementary European domains.

The reduction, which took place through gradual disposals, is in line with Eureko’s earlier announced strategy of de-risking. Eureko maintains limited exposure to the share price performance of BCP on 348,943,260 shares through cash-settled derivative instruments.

For further information, please contact:

Investors and analysts
Investor Relations Manager Eureko
Sandra van Gils, +31 (0)6 136 284 23
sandra.van.gils@eureko.cc

Media
Press Officer Eureko
Stefan Kloet, +31 (0)6 12 22 36 57
stefan.kloet@eureko.cc