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

Bianca Tetteroo, Chair of the Executive Board:

Today we present the results over the first half of 2022. A period in which a lot happened in the world around us. The war in Ukraine has been going on for almost six months and a solution is not expected any time soon. The economic conditions are challenging. The first half of the year there was high inflation, a rapid rise in interest rates on the capital markets and falling share prices. In addition, the pressure in the healthcare sector remains high due to Covid-19 catch-up care, the labour market is tight, and we increasingly face extreme weather conditions. All these circumstances also had an effect on our business operations and financial results in the first half of the year. In addition, further development of the financial markets, inflation and interest rates provide uncertainty for our financial results in the second half of the year. 
 

Results first half year 

The result for the first half of 2022 is €115 million. This is lower than the result for the same period last year (€362 million). Investment income is €170 million lower than in the first half of 2021 due to the development of the financial markets. In addition, there is a lower result on our health insurance business, partly due to higher healthcare costs as care is fully restarted and because there is no longer an additional contribution from the Covid-19 catastrophe scheme. 

The underlying insurance result, on the other hand, is at a good level and is supported by broad portfolio growth, again showing commercial growth in Health, Non-Life, Retirement Services and our International activities. As a result, our premium income grew by more than €1 billion. 

Portfolio growth, combined with lower operating expenses and a good underwriting result, helped us to absorb more than €100 million in claims (after reinsurance) from the February storms and further improved the combined ratio of our Property & Casualty business to 92.0%. 

Pension & Life experienced a significantly lower investment result due to the effects of increased interest rates and lower share prices. In line with our strategy, no new insurance contracts are concluded in our pension portfolios and therefore the decrease in premium income is the result of the run-off of the portfolio. Cost reduction initiatives and earlier IT investments have resulted in cost reductions in line with our targets and decline of the portfolio. 

In Retirement Services there is a lower result. Especially Achmea Bank reported a lower result due to rising interest rates, which had a negative impact on the interest margin and a lower valuation of part of the mortgage portfolio. Income of Syntrus Achmea Real Estate & Finance, Achmea Investment Management and Achmea Pension Services increased by €14 million, among others due to new pension fund clients and price development of real estate. Total assets under management at Achmea Investment Management and Syntrus Achmea Real Estate & Finance declined to €201 billion, despite the addition of several new pension funds, due to lower valuations as a result of increased interest and development of the financial markets. 

At International, strong premium growth of 14% was realised. Despite this growth, the result decreased. In Greece and Slovakia, the result is lower due to higher claims through calamities and a lower contribution to health care. In addition, at Group level, we have made an impairment of the remaining intangible assets for our activities in Turkey given the economic developments and hyperinflation. 
 

Strong position 

We are well on our way to realising our strategy ‘The Sum of Us’. Our solid capital position gives us room for continuous investment in growth and customer service, and in helping to solve societal issues. To achieve our goals, we operate as one Achmea. We will strengthen the synergies within the company, optimise our balance sheet, continue to invest in the development of our committed employees, and achieve economies of scale in the areas of data and technology, innovative solutions and indirect costs. 

In addition to growth opportunities in Health and Non-Life, we see plenty of opportunities in Retirement Services. In early May, we announced the acquisition of ABN AMRO's premium pension institution. In doing so, we capitalise on the opportunities offered by the new pension agreement and to strengthen our position in the employer market with our Retirement Services. We support our institutional clients in the transition to the new pension system with both asset management solutions and pension services. With new, innovative products and solutions, we continue to improve services to our millions of clients. In addition, we are further expanding our international activities with a focus on organic growth in the direct distribution channels, additional targeted acquisitions and the roll-out of InShared in Germany. 

Our position to realise our strategic ambitions is and will remain as strong as ever. Despite market developments, the Group's solvency remains robust at 200%. In terms of market position and customer satisfaction, we remain in the top tier, and we are also well regarded as an employer in various surveys. Employees and customers value our initiatives to make ourselves and society more sustainable. 
 

Achmea stands for Sustainable Living Together 

Together with our customers, Vereniging Achmea, Rabobank and other strategic partners, we work on solutions to societal challenges in the areas of health, living and working, mobility and income for today and tomorrow. This is how we create sustainable value for customers, employees, the company and society. We are doing this, for example, in the housing market by developing life-proof housing, such as the large De Nieuwe Sint Jacob residential complex in Amsterdam, which we opened in April. In twenty years' time, there will be twice as many people in the Netherlands aged 75 or over. To continue to meet the need for care and housing, customisation is a must. This requires about 500,000 new life-course resistant homes. Making homes life-course resistant can reduce the pressure on (informal) care and improve the flow on the housing market. From our expertise in real estate, health care and pensions, we work together with partners to find solutions. 

Achmea has strong climate ambitions. We are on our way to a climate neutral business in 2030, climate neutral investments in 2040 and climate neutral products and services in 2050. The gross CO2 footprint of our business operations in the first half of 2022 amounts to 10,7 kton and is considerably lower than the target. In the first half year, Achmea improved its score on the Eerlijke Verzekeringswijzer (“Fair Insurance Guide”) to 7.4 and thus maintained its top-3 position. In the area of biodiversity, we are committed to investing in the environment in and around our premises, such as the Apeldoorn campus, and Achmea Investment Management actively promotes the preservation and improvement of biodiversity through its own investment funds. 
 

Many thanks to our customers and employees 

Although Covid-19 is unfortunately not yet behind us, we were fortunately able to go to the office more often in the past six months. It gives energy to meet each other more often in person again. 

I am proud of all our employees for all their efforts in the past period. I am particularly proud of my colleagues who have put in a lot of extra hours in order to settle the more than 80,000 storm damage claims as quickly as possible. Of course, I would also like to thank our customers for their understanding when it sometimes took a bit longer to settle these claims and for their continued trust in our services.