a.s.r. is the label for private individuals. Its key values are: helping people, taking action and avoiding waste. These values have evolved from the values of its predecessors: the fi nancially sound AMEV, the socially responsible ASR and the no-nonsense approach of Stad Rotterdam. Volume is important in the non-life and health insurance markets. That is why a.s.r. has defi ned a target group that is as broad as possible, with a focus on the middle segment, where it is already strongly represented. Its positioning in this broad target group sets a.s.r. apart as the Dutch insurance company for all insurance products.
De Amersfoortse is the brand for business owners, transforming it from an income protection insurer to the insurer for Dutch businesses. In due course, the income protection and health insurance proposition will be expanded to include pensions and non-life business products. De Amersfoortse’s products and services are sold only through intermediaries.
• Increase in net result to € 255 million (2011: € 212 million) • Cost-premium ratio insurance business stable at 10.2% • Non-Life combined ratio at 99.2% (2011: 95.0%) • DNB solvency including prescribed Ultimate Forward Rate
At Health insurance, early 2012 again revealed great mobility. Nearly one million consumers switched health insurers. Relatively inexpensive online labels such as Ditzo saw the highest level of growth. Plans to transfer the administration of exceptional medical expenses (Dutch acronym: AWBZ) to health insurers were put on hold because of the fall of the Dutch Cabinet. In 2012, steps were taken to increase policy excess and assign more responsibilities to health insurers. Basic coverage is increasingly being stripped down and many customers are raising their policy excess.
Key fi gures of Life segment (in millions of euros) 2012 2011
An Own Risk and [Solvency] Assessment (ORSA), which forms part of the Solvency II rules, is performed on an annual basis. The ORSA is an integrated risk management instrument that is designed to verify whether a.s.r. can maintain its solvency, even when times are tough. It assesses all material risks, whether they are fi nancial or non-fi nancial. As part of the ORSA, the impact of the risks identifi ed in the Control Risk Self-Assessment (CRSA) on the capital requirement for the coming fi ve years was estimated. The ORSA is also geared towards the future, allowing a.s.r. to take preventative action before imminent risks actually occur. As in 2011, a.s.r. also took part in the ORSA rehearsal of the Dutch Central Bank (DNB) in 2012.
Customer-focused insuring The goal is to serve customers well. Customers know right away whether or not services have been designed with their needs and expectations in mind. a.s.r.: 1. provides easy-to-understand and objective information; 2. responds within the agreed deadlines; 3. uses customer satisfaction surveys to help improve its services; and 4. has a quality assurance policy that centres around customer interests.
As a supporter of the ‘Talent to the Top’ Charter, a.s.r. is committed to appointing women to management positions and keeping them there. This illustrates the value that a.s.r. attaches to a diverse organization. The Executive Board has been active in driving this forward and several initiatives have been taken, including extra places on trainee and management development programmes, an intensive mentoring programme and a special focus on women when fi lling vacancies for management positions.
For instance, some employees participated in national volunteering day NL.DOET by doing some tidying and sorting work for the Kringloop Utrecht thrift store. Another group accompanied senior citizens on a visit to a performance of the opera Orfeo ed Euridice in the gardens of Soestdijk Palace. Almost 50 employees helped out with primary school children in the form of a special lesson teaching them about money and making them more fi nancially literate. More than 150 employees took part in a sporting event for charity. Whether running, cycling, ice-skating, boxing or spinning, they raised money for Children’s Cancer Fund KiKa, War Child and Kromme Rijnstreek hospice.
Education and evaluation With a view to lifelong learning, two sessions were organized for the members of the Supervisory Board. The fi rst session was about driving on value and applying RARORAC while the second took an in-depth look at the theory and practice of the Own Risk and Solvency Assessment (ORSA).
In November, Margot Scheltema reported her appointment as of 1 January 2013 as a deputy member of the Enterprise Division of the Amsterdam Court of Appeal. There were no reports of potential confl icts of interest involving the other supervisory directors. The Supervisory Board has been able to discharge its duties fully independently.
Net increase/decrease in amounts due from and to banks 168 1,719
ASR Nederland N.V. and its group companies (“a.s.r.” or “the group”) have a total of 4,088 FTE’s internal employees (2011: 4,264) and is a.s.r. a leading insurance company in the Netherlands. In 2012 a.s.r. sold insurance products under the following labels: a.s.r., De Amersfoortse, Ardanta, Europeesche Verzekeringen and Ditzo.
Balance sheet 31 December 2012 As reported Changes as a result of IAS 19
Critical accounting estimates and assumptions relate to: • the recoverable amount of impaired assets; • the fair value of unlisted fi nancial instruments; • the estimated useful life and residual value of property, plant and equipment, investment property, and intangible assets; • the measurement of capitalized deferred acquisition costs; • the measurement of liabilities arising from insurance contracts; • actuarial assumptions used for measuring employee benefi t obligations; • when forming provisions, the required estimate of existing obligations arising from past events.
Re a. Financial assets at fair value through profi t and loss include: 1. fi nancial assets classifi ed as held for trading. These fi nancial assets include derivatives that do not qualify for hedge accounting (see chapter 2.21); and 2. fi nancial assets, designated by a.s.r. as carried at fair value through profi t and loss. This option is available whenever: a. it eliminates or signifi cantly reduces a measurement inconsistency that would otherwise arise from measuring assets or liabilities on different bases (accounting mismatch); or b. a.s.r. manages a group of fi nancial instruments (assets, liabilities or both) on the basis of fair value in accordance with a documented risk management or investment strategy; c. the fi nancial assets contain one or more embedded derivatives and a.s.r. does not separate the derivative from the host contract.
Liability Adequacy Test non-life The Liability Adequacy Test (LAT) is performed at each reporting date to asses the adequacy of insurance liabilities for non life.
ASR Levensverzekering N.V., an insurance company and a group entity, is the administrator of the post-employment benefi t plans. ASR Levensverzekering N.V. holds the investments that are meant to cover the employee benefi t obligation. However, in accordance with IFRS they do not qualify as plan assets in the consolidated fi nancial statements.
3.5.4 Currency risk Currency risk arises from the sensitivity of assets and liabilities to changes in the level or volatility of foreign exchange rates.
Foreign currency exposure in millions of Euros: 3.5.5 Spread risk Spread risk arises from the sensitivity of the value of assets and liabilities to changes in the level of credit spreads on the relevant risk-free interest rates. Spread risk relates to several types of assets: • fi xed-income investments; • deposits; • savings-linked mortgage loans.
Because a.s.r. Health Care is a small insurer, its results are strongly infl uenced by the results of other health insurers, and it has limited information at its disposal for assessing these uncertainties. Aside from the uncertainties mentioned above, a.s.r. knew great growth in its health portfolio, particularly due to the introduction of health insurance via Ditzo. No claims history for this group is available.
• Other liability: this involves third-party liability insurance for both private individuals and businesses.
The results of a.s.r.’s basic health insurance (“Basisverzekering”) include an estimate related to the expected settlement because of equalization (“vereveningsmethodiek”). The estimate is made by internal actuaries per years based on the latest updated health information for the Netherlands. At the end of the fi rst quarter, a.s.r. monitors if the right assumptions are used. The fi nal settlement is recognized three years after the end of the fi nancial year.
The overall adequacy of the liabilities arising from insurance contracts as at 31 December 2012 has been confi rmed by internal actuaries and certifi ed by external actuaries.
The CRSA/MCS process uncovers a.s.r.’s principal risk priorities. Any progress on the mitigating actions is reported to and monitored by the a.s.r. Risk Committee.
104 a.s.r. 2012 annual report Financial Statements 4 Capital and liquidity management 4.1 Capital management 4.1.1 Capital management objectives The group is committed to maintaining a strong capital position so as to be a robust insurer for its policyholders and other shareholders. The objective is to maintain a solvency level that is well above the regulator’s minimum requirement (Solvency I). Stress tests are performed for principal risks. An additional objective is to achieve a combination of a capital position and risk profi le that is at least in line with an ‘A’ rating.
Equity attributable to holders of equity instruments 687 2,672 -990 - 2,369
110 a.s.r. 2012 annual report Financial Statements 5.3 Segmented income statement 2012 Non-life Life Other Eliminations Total
Share of profi t/(loss) of associates and joint ventures - 10 -19 - -9
Profi t attributable to holders of equity instruments 145 135 -68 - 212
Allocated gain (loss) on investments – to technical result 1,829 360
For the calculation of the expense ratio a total of € 23 million (2011: € 13 million) of restructuring provision expenses and internal investment costs have been eliminated.
Deltafort Beleggingen I B.V., a 50% joint venture, participates in the ordinary and preference shares of Ahold N.V., and has its registered offi ce in the Netherlands. a.s.r. retains the rights to its specifi c investments – contributed at the start of the arrangement - and the related income.
Financial Statements a.s.r. 2012 annual report 127 11.1 Investments available for sale
The fair value of the interest rate contracts using this method form the basis for the amount of collateral that is exchanged between a.s.r. and its counterparties in accordance with the underlying contracts.
Debt certifi cates covered by other assets 12 - - 12
Subscribed and paid-up capital: - Ordinary shares; 200,000 at a par value of EUR 500 100 100
Hybrid Tier 1 instrument 7.25% fi xed interest 30 september 2019
Amounts in the balance sheet: At 31 december Other post-employment benefi ts
Experience adjustments to qualifying investments, gain (loss) - - - - - - - - - -
As % of qualifying investments as at 31 December - - - - - - - - - -
Of the provisions, an amount of € 23 million falls due within one year (2011: € 11 million).
156 a.s.r. 2012 annual report Financial Statements 23 Due to banks
160 a.s.r. 2012 annual report Financial Statements 27 Investment income 27.1 Total investment income
The table below shows a breakdown of investment income per category: The table below breaks down interest income per category: The effective interest rate method has been applied to an amount of € 921 million of the interest income from fi nancial assets not classifi ed as stated at fair value through profi t and loss (2011: € 979 million).
Acquisition costs can be broken down as follows: The table below is a summary of impairments: Due to the credit and fi nancial crises, impairments have been applied to equities, corporate bonds, associates and joint ventures, mortgage loans and investment property. Further impairments in 2012 related to goodwill and property plant & equipment.
The income tax expense can be broken down as follows: The table below shows a reconciliation of the expected income tax expense with the actual income tax expense. The expected income tax expense was determined by linking up profi t before tax to the tax rate in the Netherlands. In 2012, this rate was 25.0% (2011: 25.0%). The enacted tax rate for 2013 will be 25.0%.
The group regularly enters into transactions with related parties during the conduct of its business. These transactions mainly involve loans, deposits, commissions and reinsurance contracts, and are conducted on terms equivalent to those that prevail in arm’s lenght transactions.
**** Term of service as executive director ended on 15 September 2011 and became chairman of ASR Bank.
Lo n g -t er m va ri a b le re m u n er a ti on
11. Borrowings The residual term to maturity of the borrowings from group companies amounting to € 30 million (2011: € 30 million) is 19 months (2011: 36 months). The average interest rate
1 These are companies for which a statement of joint and several liability under section 403, Book 2 of the Netherlands Civil Code has been issued.
Insurance contracts A contract under which one party (a.s.r.) accepts signifi cant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specifi ed uncertain future event adversely affects the policyholder.
Value in use Value in use is the present value of the future cash fl ows expected to be derived from an asset or cash-generating unit.