Revision risk manifests itself exclusively in the disability insurance portfolio. Revision risk is the risk of loss, or of adverse change in the value of insurance liabilities resulting from fluctuations in the level, trend, or volatility of the revision rates applied to annuities, due to changes in the legal environment or in the state of health of the person insured.
Insurance contracts on behalf of policyholders 31 December 2015 31 December 2014 31 December 2013
No guaranteed return 1,996 1,765 2,287 5.3.6.2 Life insurance portfolio The life insurance portfolio of a.s.r. is diverse. The portfolio can be divided into two main product types: individual life (including funeral insurance) and group life. The insurance contracts are sold primarily to retail and wholesale clients through intermediaries.
Life insurance liabilities The technical provision is based on the premium calculation at the time the contract is issued. The probability of death is based on past experience and on expected future developments in mortality rates. Additional liabilities are arranged in case of unfavourable trends following the issue date (e.g. increased life expectancy).
Without profit-sharing 4,481 1,827 1,578 Contractual profit-sharing (and interest margin participation) 7,109 8,276 5,780 Discretionary profit-sharing 0 0 0
A life insurance product provides an entitlement to a benefit at the time of death of the insured and/or a benefit at a
For contracts that guarantee benefits during a policyholder’s lifetime, longevity risk is mainly a trend risk. The adequacy of insurance liabilities is measured using information gathered from the most recent published mortality table of the Actuarial Society of the Netherlands published in 2014, ‘Prognosetafel AG2014’. This recent table contains the latest available data on mortality trends for the Dutch population.
Life catastrophe risk measures the impact of a sudden one-year increase of the mortality rates on the financial position of a.s.r. In general, catastrophe risk diversifies well with other risks.
Disability risk In a.s.r.’s life insurance portfolio, disability risk is limited. It relates to additional cover for disability risk on life insurance policies such as premium waivers. a.s.r.’s exposure to disability risk lies mainly in disability insurance which pays out a fixed amount, reimburses losses (e.g. loss of income), or pays for expenses of medical treatment related to certain illness or disability events.
The provision for each life insurance contract equals at least the surrender value or the paid-up value of the contract. As a result no direct loss from lapses are recognized in the financial statements. Although a lapse does not lead to a direct loss in the statement of income, due to the surrender value requirement underlying the provision, a lapse might lead to a loss of future profits.
Drivers of lapse risk include the state of the economy, the financial position of the policyholder, the financial strength of the insurer, the reputation of the insurer and fiscal policy. Also, changes in tax laws and regulations can affect lapse behaviour, particularly when the tax treatment of their products affects the attractiveness of these products for customers.
Pricing is based on profit capacity calculations. The necessary price to cover the risks is calculated. The risk are quantified on the basis of best estimate assumptions of mortality rates, surrenders, expenses and interest rates.
These are schemes under which staff is awarded pension benefits upon retirement. The main risks for these plans are interest rate, longevity and inflation risk. A description of the plans, assumptions, sensitivities and disclosure related to the post-employment benefits plans is included in chapter 5.17.
Operational risk is the risk of losses resulting from inadequate or failing internal processes, persons and systems, or from external events (including legal risk).The main areas where operational risks are incurred are operations, IT, outsourcing, integrity and legal issues.
Strategic risk Risk priorities The Executive Board of a.s.r. decides annually on the most important risk priorities. The definition of risk priorities is the result of both a bottom-up and top down process. Bottom up through the results of the Control Risk Self Assessments of the business units, top down through the results of a strategic risk analysis with the board. Risk Management reports the actual status of the risk priorities and progress made on the defined actions to the a.s.r. Risk Committee on a quarterly basis.
Own Risk and Solvency Assessment a.s.r. conducts an own risk and solvency assessment (ORSA) at both group and legal entity level each year or more frequently if required by significant changes in a.s.r.’s risk profile. The ORSA is a tool for risk and capital management. In this assessment, strategic risks are transposed into scenarios. In these scenario’s the impact on the balance sheet, the solvency position and the income statement is simulated. Management actions are defined in order to mitigate the impact of risks modelled in the various scenarios.
Control Risk Self-Assessment Under supervision of Group Risk Management, a Control Risk Self-Assessment (CRSA) is conducted annually for all a.s.r. business lines and staff departments to identify risks that have an impact on the achievement of the organization’s strategic objectives. Following this assessment, each department prepares a report outlining all identified key risks and actions taken to mitigate these risks. This report and the mitigating actions are authorized by the management teams of the business units and the Executive Board. Senior Management signs the Management in Control Statement (MCS) each year which is based on the CRSA. Progress made on the mitigating actions as defined in the CRSA is monitored on a quarterly basis in the Business Risk Committees and reported to the NonFinancial Risk Committee.
Operational risk Management in control a.s.r. has developed a Management in Control framework that entails the most important risks for a.s.r.’s operating activities. It is a tool that is used to improve the efficiency and effectiveness of a.s.r.´s operating processes. This framework includes operational (including IT), financial reporting and compliance risks and controls and ensures the reliability, accuracy, timeliness, and quality of our internal and external reporting processes. Identified risks need to be managed within the stated risk appetite ambition. Key controls are periodically tested for operational effectiveness and reported to the Business Risk Committee and Non-Financial Risk Committee on a quarterly basis. Group Risk Management reviews the quality of the Management in Control Frameworks of all business lines on a continuous basis to ensure a sufficient level of internal control.
Operational losses a.s.r. has a process in place for reporting losses in excess of € 5,000 (five thousand) to the Group Risk Management department. Losses below this level are reported within the business unit. The causes of losses and lessons learned are evaluated, which can result in enhancements to our Management in Control framework. Losses are reported to the Non-Financial Risk Committee.
Business Continuity Management and contingency planning Critical processes and activities are identified, including the resources needed to establish similar activities at a remote location. The continuity of the activities and the recovery of systems supporting critical activities is regularly tested. Crisis teams have been established and are trained every year to deal with any type of catastrophe. The objective of the training is to give the teams insight into how they function and help them do their job in case of an emergency. The training also clarifies the roles, duties and responsibilities of the members of the crisis teams.
Group Risk Management, Integrity and Juridical Affairs participate in the product approval committee (PARP). All these departments evaluate if risks in newly developed products are sufficiently addressed. New products need to be developed in a way that they are cost efficient, reliable, useful and secure. New products also need to have a strategic fit with a.s.r.’s mission to be a solid and trustful insurer. Also the risks of existing products are evaluated, as requested by the PARP as a result of product reviews.
The group has entered into a limited number of cash flow hedges, for which it applies hedge accounting to hedge some of its interest rate risk in the Real Estate Development segment. These hedging transactions, only hedge risk on a limited number of separate property development contracts. Under IFRS, derivatives are measured at fair value in the balance sheet and any changes in the fair value are recognized through profit and loss. In the event that changes in the fair value of hedged risks are not recognized through profit and loss, an accounting mismatch occurs, making the results more volatile. In these
The solvency ratio including UFR as reported to the regulator increased from 285% to 305%. The available solvency increased by € 591 million. Amongst others, this is a result of positive return on equities, an increase of the value of the mortgages due to a decrease in the discounting spread, new issued subordinated liabilities and the acquisition of De Eendragt and Axent. The adjustment of models and non-economic assumptions had a negative impact on available solvency. The required solvency increased by € 81 million, mainly as a result from the acquisition of De Eendragt and Axent.
The regulator has prescribed application of the UFR to the discounting curve since 30 June 2012. As a result, the forward interest rates converge to a level of 4.2%. This has an impact of 91%-point (2014: 81%-point, 2013: 32%-point) on the regulatory solvency ratio. With respect to 2014 this impact has increased because of the acquisition of De Eendragt and Axent. Since the assumption of the UFR is artificial and might be too optimistic, a.s.r. also evaluates its solvency position without applying the UFR to the discounting curve. The next table shows the reconciliation of the available solvency to IFRS equity.
The group is committed to maintaining a strong capital position in order to be a robust insurer for its policyholders and other stakeholders. The objective is to maintain a solvency level that is within the limits as defined in the risk appetite statements and in line with the solvency targets. Sensitivities are periodically performed for principal risks and annual stress tests are performed to test a.s.r.’s robustness to withstand moderate to severe scenarios. An additional objective is to achieve a combination of a capital position and a risk profile that is at least in line with a single A Standard & Poor’s rating.
Standard & Poor’s confirmed the single A rating of ASR Levensverzekering N.V. and ASR Schadeverzekering N.V. on 7 July 2015.
ASR NL Beleggingsbeheer N.V.3 1 Registered non-life insurance companies 2 Registered life insurance companies 3 Other WFT registered companies (included in the segments Bank and Asset Management and Distribution and Services)
activities related to distribution of insurance contracts and includes the financial intermediary business of PoliService B.V., Van Kampen Groep Holding B.V. (with effect from 22 January 2015), Dutch ID B.V. (with effect from 19 November 2015) and B.V. Nederlandse Hulpverleningsorganisatie SOS International (discontinued operations and as per January 2016 these activities are sold); • The Holding and Other segment consists primarily of the holding activities of ASR Nederland N.V. (including the group related activities), other holding and intermediate holding companies and the activities of ASR Deelnemingen N.V.; • The Real Estate Development segment (continuing and discontinued operations) consists of the activities where property development occurs. These activities are performed in ASR Vastgoed Ontwikkeling N.V. and ASR Vastgoed Projecten B.V.
Segment information has been prepared in accordance with the accounting principles used for the preparation of a.s.r.’s consolidated financial statements (as described in chapter 5.2).
Investments on behalf of policyholders - 7,924 - - - - - 7,924
Equity attributable to holders of equity instruments 1,130 3,669 82 53 -655 - -4 4,275
Liabilities arising from insurance contracts 4,513 28,201 - - - - -2,141 30,573 Liabilities arising from insurance contracts on behalf of policyholders - 9,997 - - - - - 9,997
Liabilities relating to assets held for sale - - - 5 - 33 - 38
5.5.2 Segmented balance sheet (continued) As at 31 December 2014 Insurance Non Insurance
Liabilities arising from insurance contracts 4,571 25,806 - - - - -2,151 28,226 Liabilities arising from insurance contracts on behalf of policyholders - 9,779 - - - - - 9,779
Investments on behalf of policyholders - 7,705 - - - - - 7,705
Equity attributable to holders of equity instruments 972 3,191 24 10 -552 33 -3 3,675
The comparative figures for 2014 and 2013 have been restated as a result of the change in accounting policies (see chapter 5.2.1) and due to the change in the identified segments.
Fair value gains and losses 24 896 - - 1 - 1 922 Result on investments on behalf of policyholders - 559 - - - - - 559
Share of profit/(loss) of associates and joint ventures - - - - 1 - - 1
Profit attributable to non-controlling interests - -1 - - - -3 1 -3
Property, plant and equipment Impairment - -1 - - - - - -1
Associates and joint ventures Impairment - - - - -3 - - -3 Investments available for sale Impairment -2 -11 - - - - - -13
Change in provision for unearned premiums -4 - - - - - - -4
Share of profit/(loss) of associates and joint ventures - 5 - - - -1 - 4
Insurance claims and benefits recovered from reinsurers 92 8 - - - - - 100 Net insurance claims and benefits -1,659 -3,604 - - - - 166 -5,097
Discontinued operations Profit (loss) from discontinued operations net of tax - - - 1 - -6 - -5
Fair value gains and losses -26 328 - - 2 - - 304 Result on investments on behalf of policyholders - 767 - - - - - 767
The comparative figures for 2014 and 2013 have been restated as a result of the change in accounting policies (see chapter 5.2.1) and due to the change in the identified segments and discontinued operations of a part of the Real Estate Development segment and SOS International (Distribution and Services segment).
Property, plant and equipment Impairment - -24 - - - - - -24
Associates and joint ventures Impairment - - - - -5 - - -5 Investments available for sale Impairment -1 -20 - - - - - -21
The technical result includes insurance premiums, allocated investment income less insurance costs (claims), distribution costs and operating expenses. Income from investments includes rentals, interest income, dividends and revaluations. Realized gains and losses relate to financial assets classified as available for sale and investment property, as well as gains and losses on financial assets recognized at fair value through profit and loss.
Investment income less investment expenses is allocated to the non-life and life products on the basis of the investment portfolio that covers the insurance contracts for the product in question.
Gains or losses on the sale of investments relate to the realized total revaluation of investment property and financial assets available for sale, to the extent that these cannot be allocated to the different non-life and life products. These gains or losses are recorded in profit or loss.
The non-technical result includes income from investments that have been allocated to equity and the general provisions, as well as a number of specific results not allocated to insurance activities.
Gross premiums written 2,350 2,359 2,392 Change in provision for unearned premiums 16 -4 1 Gross insurance premiums 2,366 2,355 2,393
Restructuring provision expense -15 -14 -11 Technical result – before proceeds (loss) from sales of investments 124 121 -102
Gross premiums written 1,828 1,543 1,666 Change in provision for unearned premiums - - Gross insurance premiums 1,828 1,543 1,666
The gross written premiums increased 18% to € 1,828 million in 2015, mainly resulting from the increase of single life premiums in the pension portfolio. In December 2015 a.s.r. entered into a strategic partnership for the reinsurance of part of a.s.r.’s pension portfolio. The reinsured sum involved is € 201 million. The overall impact on the net insurance premiums remains limited with 5%.
(90%) as a result of improved results on investments (€ 165 million) and some non-recurring items. The decrease in profit before tax in 2014 compared to 2013 resulted from several non-recurring charges, including the impairment on VOBA (€ 93 million).
The Non-life segment combined ratio can be broken down as follows: 5.5.5 Technical result Non-life insurance per business line
Technical result 1 Including change in liabilities arising from insurance obligations.
Adjustments: - Compensation capital gains (Disability) 18 39 16 - Interest accrual on privisions (Disability) 62 62 58
5.6 Fair value of assets and liabilities 5.6.1 Recurring fair value measurement of financial assets and liabilities
The breakdown of financial assets and liabilities measured at fair value (recurring basis) in accordance with the level of fair value hierarchy, is as follows: Fair value based on quoted prices in an active market
Debt certificates covered by mortgage 260 - - 260 Debt certificates covered by other assets 110 - - 110
Investments on behalf of policyholders Government bonds 1,215 - - 1,215
Debt certificates covered by mortgage 375 - - 375 Debt certificates covered by other assets 156 - - 156
Investments at fair value through profit and loss Unlisted equities - - 61 61
Fair value not based on observable market data 31 December 2013 Level 1 Level 2 Level 3 Total fair value
Fair value of financial assets classified as fair value through profit and loss 2015 2014 2013
Total revaluations of investments, held at year-end, recognized in the income statement 14 13 6
Fair value of financial assets classified as available for sale 2015 2014 2013
Amounts due to customers and due to banks presented as level 1 primarily comprise savings and cash collateral received.
The breakdown of the Investment property and land and buildings for own use in accordance with the fair value hierarchy, as explained in accounting policy C, is as follows: Fair value based on quoted prices in an active market
The property portfolio is classified as a level 3 ‘not measured on the basis of market observable market data’. Non-observable market inputs are used in the valuation methods, in addition to the observable market inputs. The fair value measurement is based on valuations by independent professional appraisers. These valuations have been performed for the entire portfolio of investment property and buildings for own use. Independent professional appraisers use reference transactions of comparable properties, in combination with the DCF and income capitalization method, to determine the fair value of the property. The reference transactions of comparable objects are generally based on observable data consisting of the land register ‘Kadaster’ and the rural land price monitor as published by the Dutch Government ‘Grondprijsmonitor’ in an active property market.
The movements in investment property measured at fair value (recurring basis) that are categorized within level 3 are presented in chapter 5.9 Investment property, 5.8 Property, plant and equipment and 5.6.1 Recurring fair value measurement of financial assets and liabilities.
Investments on behalf of policyholders: investment property 205 DCF 18,784,241 mean 9.2% -5% -0 11 21
Furthermore the goodwill, previously recognized amounting to € 1 million, relating to B.V. Nederlandse Hulpverleningsorganisatie – SOS International, has been fully impaired as a result of the pending sale and the classification as held for sale and discontinued operations.
The results of the annual goodwill impairment test are as follows: Segment Life The goodwill impairment test was conducted at the segment Life level as CGU. The result of the goodwill impairment test, using the multiples methodology, shows an excess recoverable value over the book value. No goodwill impairment was recognized.
Segment Distribution and Services The goodwill test was performed on step 1, using multiples, as well as step 2, to validate the outcomes of the first step.
The first step as described above indicates that there is an excess of recoverable amount over book value for all CGU’s to which goodwill has been allocated (buffer). The outcome of the second step confirmed the result in the first step.
Management believes that any reasonable possible change in the key assumptions on which the other cash-generating units recoverable amounts are based would not cause the carrying amounts to exceed their recoverable amounts.
Value of Business Acquired (VOBA) VOBA mainly relates to the acquisition of Amersfoortse Stad Rotterdam. At year-end 2015, the remaining amortization period of VOBA is 15 years and the average amortization for the next 5 years will be € 11 million per year. In 2014, an impairment has been recognized of € 93 million relating to the Amersfoortse Stad Rotterdam unit linked portfolio given the structural market developments in the life portfolios containing unit-linked policies.
5.8 Property, plant and equipment Property, plant and equipment can be broken down as follows: Land and buildings for own use 155 131 85
Changes in the composition of the group 2 3 5 - -
Gross carrying amount as at 31 December 254 196 450 424 385 Accumulated depreciation as at 31 December -81 -166 -247 -241 -240 Accumulated impairments as at 31 December -18 -19 -37 -43 -48 Net carrying value as at 31 December 155 11 166 140 97
5.9 Investment property The following table shows the movement in investment property measured at fair value: Changes in value of investments, realized / unrealized gains and losses: - Fair value gains and losses 58 25 -75
Transferred between investments on behalf of policyholders and investment property 27 -31 3 Transferred from property, plant and equipment 10 8 Transferred from other assets - -2 -1
In 2015, a further tranche in ASR Dutch Prime Retail Fund (DPRF) was transferred by a.s.r. to institutional investors thereby further reducing a.s.r.’s property exposure to 41% (2014: 56%; 2013: 58%). In 2015, the first four tranches in ASR Dutch Core Residential Fund (DCRF) were transferred by a.s.r. to institutional investors thereby further reducing a.s.r.’s property exposure from 100% to 80%.
Investment property amounting to € 1,240 million (2014: €1,483 million; 2013: € 1,461 million) is held by the ASR Dutch Prime Retail Fund and ASR Dutch Core Residential Fund which are governed under fund agreements.
Proceeds from the sale of investment properties and rental incomes are recognized as investment income. For details, see chapter 5.24. In 2015, rentals amounted to € 124 million (2014: € 133 million; 2013: € 138 million).
Direct operating expenses arising from investment property amounted to € 28 million (2014: € 24 million; 2013: € 25 million). The increase is the result of higher operating and appraisal costs. Given the low vacancy level, virtually all direct operating expenses relate to investment properties generating rental income. Direct operating expenses of investment property are classified as operating expenses.
Some participating interests in which a.s.r. has an interest of less than 20% qualify as associates, because a.s.r. has significant influence as a result of contractual agreements.
Profit and loss from continuing operations -1 30 29 -18 4 -14 -5 1 -4
In 2015, loans to associates and joint ventures amounted to € 10 million (2014: € 5 million; 2013: € 14 million). These loans are classified as Related party transactions (see chapter 5.33).
5.11 Financial assets and derivatives Financial assets and derivatives can be broken down as follows: Investments Available for sale (chapter 5.11.1) 24,930 22,849 19,571 Investments at fair value through profit and loss (chapter 5.11.2) 133 114 117
Impairment of investments available for sale The following table is a breakdown of impairments of investments available for sale: Increase in impairments through profit and loss -13 -34 -21 Release of impairments through profit and loss 27 41 53 Reversal of impairments due to disposal 63 41 87 Translation differences and other adjustments - 4 -25
Changes in investments at fair value through profit and loss: Revaluation through profit and loss 12 505 517 Transfer between investments on behalf of policyholders and investment property 18 -45 -27 Exchange rate differences - 12 12
Changes in investments at fair value through profit and loss: Revaluation through profit and loss 14 769 783 Transfer between investments on behalf of policyholders and investment property -17 48 31 Exchange rate differences - 13 13
Changes in investments at fair value through profit and loss: Revaluation through profit and loss 3 704 707 Transfer between investments on behalf of policyholders and investment property - -3 -3 Exchange rate differences - -9 -9
Equities and bonds are lent in exchange for a fee, with collateral obtained as security. At the end of 2015, the value of the securities lent was € 6,228 million (2014: € 7,937 million; 2013: € 7,052 million) with the collateral furnished as security representing a value of € 8,191 million (2014: € 9,805 million; 2013: € 8,840 million) consisting of mortgage loans and corporate and government bonds.
Loans and receivables measured at amortized cost can be broken down as follows: Government and public sector 205 214 223
Interest-bearing deposits - 62 76 Loans and advances 3,112 3,023 2,853
The increase in the mortgage loans is primarily due to the increased sales of the ‘WelThuis Hypotheek’ in 2015.
Derivatives in a cash flow hedging relationship Interest rate contracts - - 4 - - 61 - 2 91
To mitigate interest rate risk a.s.r. entered into forward starting swaps by combining receiver and payer swaps. The notional amounts of both receiver and payer swaps are included in the total notional amounts of foreign exchange contracts.
The cash flows in connection with interest rate contracts included in derivatives in a cash flow hedging relationship ends in 2016. No cash flow hedges became ineffective in 2015. No amounts were transferred from the cash flow hedging reserve to the income statement 2015.
Due from banks 1,444 571 754 Due from banks falling due within three months 1,184 2,564 767
Deferred tax assets 516 247 14 Deferred tax liabilities - - -
Deferred taxes are formed for differences between the carrying amount of assets and liabilities and their tax base at the enacted tax rate, taking into account tax-exempt components. The enacted and current tax rate of 25.0% (2014: 25.0%; 2013: 25.0%) is applied when calculating deferred tax.
Write-down of deferred tax assets - - - - 1 January 2014 Changes recognized in profit and loss
Total other assets 711 737 718 1 January 2013 Changes recognized in profit and loss
Share capital can be broken down as follows: Authorized capital: - Ordinary shares; 1,000,000 at a par value of EUR 500 500 500 500 Of which: unsubscribed shares -400 -400 -400
Gross unrealized gains and losses 2,166 5 - - - 2,171
Tax related to shadow accounting 319 - - - - 319 Unrealized gains and losses related to segregated investment pools -68 - - - - -68 Tax related to segregated investment pools 17 - - - - 17
Gross unrealized gains and losses 3,043 - - - - 3,043
Tax related to shadow accounting 164 - - - - 164 Unrealized gains and losses related to segregated investment pools -58 - - - - -58 Tax related to segregated investment pools 15 - - - - 15
In addition to offering a guaranteed element, also life insurance contracts have been entered which entitle policyholders to additional benefits (see accounting policy J, chapter 5.2). Expected claims for additional benefits under these insurance contracts with discretionary participation features (DPF) are included in the DPF reserve. This reserve is recognized as a component of the unrealized gains and losses recorded in equity.
Rate Undated Subordinated securities for an amount of € 497 million; • Buy-back offer of hybrid Tier 1 instruments at a fixed tender offer price amounting to € 278 million (including additional interest on redemption amounting to € 63 million); • Redemption of hybrid Tier 1 instruments variable interest (3-month Euribor + 2.3%) and hybrid Tier 1 instruments 6.25% fixed interest amounting to € 96 million.
The combination of transactions further optimized the Group’s capital structure for upcoming Solvency II regulations, enhancing the strong capital position of the Group and phasing-out the guarantee structure provided by ASR Levensverzekering N.V., a group company. Transaction costs related to the capital optimization amount to € 2 million.
Regular interest Hybrid Tier 1 instrument variable interest (3-month Euribor + 2.3%) - 2,205 2,174 Hybrid Tier 1 instrument 6.25% fixed interest - 771 771 Hybrid Tier 1 instrument 10% fixed interest 19,246 38,631 38,631 Hybrid Tier 1 instrument 7.25% fixed interest 1,231 2,731 2,731 Hybrid Tier 2 instrument 5% fixed interest 25,000 - Total regular interest 45,477 44,338 44,307
Interest (as a result of early redemption) Hybrid Tier 1 instrument 10% fixed interest - 60,624 Hybrid Tier 1 instrument 7.25% fixed interest - 3,523 Total interest (as a result of early redemption) - 64,147 -
The negative non-controlling interest relates to property development projects where non-controlling shareholders have committed to increase capital when required.
The earnings per share as calculated below are based on the number of shares at year-end (basic earnings per share). As a.s.r. had no potential shares, basic and diluted earnings per share are equal. Net profit in the following table is after tax and noncontrolling interests.
Movements in non-controlling interests can be broken down as follows: Share of total comprehensive income 3 -2 -5
Weighted average number of ordinary shares in issue 200,000 200,000 200,000 Basic earnings per ordinary share from continuing operations (in euros) 2,965 1,735 1,075 Basic earnings per ordinary share from discontinued operations (in euros) -130 -25 -5 Basic earnings per ordinary share (in euros) 2,835 1,710 1,070 5.15 Subordinated liabilities
On 22 September 2015, a.s.r. issued € 500 million subordinated liabilities in the form of Tier 2 notes, first callable on 29 September 2025, and maturing on 29 September 2045. The coupon is fixed at 5.125% and paid annually on 29 September with a step up at the first call date.
Insurance contracts with retained exposure can be broken down as follows: Gross Of which reinsurance 31 December 2015 31 December 2014 31 December 2013 31 December 2015 31 December 2014 31 December 2013
Provision for claims (including IBNR) 4,110 4,152 3,826 406 409 402
Total liabilities arising from insurance contracts 30,573 28,226 23,893 611 419 407
Changes in provision for unearned premiums -16 4 -1 -6 6 -34
Changes in provision for claims 1,745 1,750 1,923 79 92 96 Changes in shadow accounting through equity -73 235 -102 - - -
Changes in liabilities arising from Life insurance contracts can be broken down as follows: Gross Of which insurance
Changes in the composition of the group 3,168 - - - - -
Provision for discretionary profit-sharing, bonuses and discounts At 1 January 7 9 10 - - Profit -sharing, bonuses and discounts granted in the financial year -1 -2 -1 - - Changes in the composition of the group 2 - - - - -
In December 2015 a.s.r. entered into a strategic partnership for the reinsurance of part of a.s.r.’s pension portfolio. The
The table below is a ten-year summary of movements in gross cumulative claims in connection with the non-life portfolio for the period from 2006 to 2015.
At year-end: Gross outstanding claims liabilities (including IBNR) 61 113 164 231 274 287 348 423 485 1,015 3,401 Claim liabilities prior years 417 Other claim liabilities 39 Shadow accounting 253
At year-end: Gross outstanding claims liabilities (including IBNR) 55 104 134 193 268 318 340 410 530 1,048 3,400 Claim liabilities prior years 392 Other claim liabilities 34 Shadow accounting 326
Liabilities arising from insurance contracts on behalf of policyholders also include liabilities where conversions and switches have occurred in the insurance contract administration. The insurance contract continues to be classified as an insurance contract on behalf of policyholders. The insurance contract still meets the definition of an insurance contract on behalf of policyholders and therefore continues to be included in the insurance contracts on behalf of policyholders administration. However, as a result of the conversion and switches, liabilities arising from insurance contracts on behalf of policyholders amounting to € 2,054 million (2014: € 1,803 million; 2013: € 1,282 million) are - in the classification and subsequent presentation - not backed directly with investments on behalf of policyholders. The related investments are included and presented in investments (available for sale) and loans and receivables.
Total claims liabilities 3,826 5.16.3 Liabilities arising from insurance contracts on behalf of policyholders
Movements in liabilities arising from insurance contracts on behalf of policyholders can be broken down as follows: Effect of fair value changes related to financial assets 496 781 672
Changes in 2014 a.s.r. has harmonized the (inflation) indexation in its postemployment benefit plan for both employees and former employees in 2014. This has resulted in the foundation of a separate account to fund future inflation indexation based on the consumer price index, maximized to 3%, by investing € 285 million in a dedicated separate account administrated by ASR Levensverzekering N.V. The sole purpose of the separate account is to provide indexation when the proceeds of the existing investments backing the pension plan are insufficient to meet the indexation.
Furthermore, the following changes took take place with effect from 1 January 2015, for employees primarily in order to comply with pension and tax legislation, which have therefore already
Included in income statement - Current service cost, contributions by employer 44 34 39
Employees account for 24% (2014: 25%; 2013: 23%) of the DBO and 38% (2014: 38%; 2013: 41%) of the DBO relates to former employees currently receiving pension benefits.
As per 31 December 2015 the duration of the defined benefit obligation was 18 years (2014: 19 years; 2013: 17 years).
The change in other assumptions amounts to € 88 million (2014: € 163 million; 2013: € 107 million) due to a change in indexation percentage of former employees.
Experience adjustments are actuarial gains and losses that have arisen due to differences between actuarial assumptions. The following table provides information about experience adjustments with respect to qualifying plan assets and the defined benefit obligation: Experience adjustments to qualifying investments, gain (loss) -2 - As % of qualifying investments as at 31 December - - Experienced adjustments to defined benefit obligation, loss (gain) 16 13 14 As a % of liabilities as at 31 December 0.6% 0.4% 0.6%
Assumptions The principal actuarial assumptions and parameters at year-end were as follows: Future salary increases (including price inflation and merit) 1.4% 1.2% 1.5% Future pension increases (including price inflation) 1.9% 1.5% 1.8%
Plan assets The pensions related to other group companies which have been acquired in 2015, are administered and guaranteed by a number of insurance companies outside of the group. As such the plan assets recognized relate to the insurance contracts and amount to € 21 million (2014: € 0 million; 2013 € 0 million).
Non qualifying plan assets The portfolio of global investments (non-qualifying assets) held by ASR Levensverzekering N.V. to cover the employee benefit expense can be broken down as follows: Asset category 31 December 2015 31 December 2014 31 December 2013
The non-qualifying assets managed by a group company are not taken into account in measuring the net defined benefit obligation. At year-end 2015, the fair value of these assets amounted to € 2,419 million (2014: € 2,409 million; 2013: € 1,915 million), which includes the separate account to fund future inflation indexation amounting to € 306 million (31 December 2014: € 292 million; 31 December 2013: nil).
For the non-qualifying assets backing the post-employment benefit plans, a.s.r. has drawn up general guidelines for asset mix based on criteria such as geographical location and ratings. To ensure the investment guidelines remains in line with the conditions of post-employment benefit obligations, a.s.r. regularly performs Asset Liability Management (ALM) studies. Transactions in the non-qualifying assets are done within the guidelines. As the post-employment benefit plans are a liability on group level, the underlying insurance and market risks are in scope of a.s.r.’s risk policies. (see chapter 5.3). The overall interest-rate risk of the group is managed using interestrate swaps and swaptions (see chapter 5.3.4.1). These swaps and swaptions have not been allocated directly to the postemployment benefit obligations; neither are they included as part of the fair value of the non-qualifying assets managed by the group company.
As an employer, a.s.r. is expected to pay contributions for pension plans and other post-employment benefits in the coming financial year amounting to € 111 million (excluding the positive effect of the investment income) and € 0.2 million respectively.
The other post-employment benefits defined plans consist of personnel arrangements for financial products (such as mortgages and health insurance), which remain in place after retirement.
The table below shows movements in the defined benefit obligation: Defined benefit obligation at 1 January 29 15 21
Included in income statement Current service cost, contributions by employer - - 1 Past service cost - 18 -
Remeasurement of liabilities included in OCI Discount rate change -1 1 -1 Other assumptions change -1 -3 -3
Defined benefit obligation at 31 December 28 29 15 Specified as follows: Experience adjustments are actuarial gains and losses that have arisen due to differences between actuarial assumptions. The following table provides information about experience adjustments with respect to qualifying plan assets and the defined benefit obligation: Experience adjustments to qualifying investments, gain (loss) - - As % of qualifying investments as at 31 December - - Experienced adjustments to defined benefit obligation, loss (gain) - 3 3 As a % of liabilities as at 31 December 1.7% 10.3% 21.5%
Future mortgage interest (in connection with grantable discounts) 2.5% 2.8% 3.5%
In the calculation of the defined benefit obligation the: • discount rate is determined based on the return (zero coupon rate) of high-quality corporate bonds (AA rating) and the duration of the pension obligation. The discount rate methodology is based on the IBoxx € Corporates AA 10+ curve; • most recent mortality table ‘AG Prognosetafel 2014’ is used, including the CVS 2005-2014 table.
All methods used for determining the DBO and assumptions are consistent with those applied in 2014.
Other long-term employee benefits consist of the employer’s share of liabilities arising from long-service benefits. The table below shows the changes in these liabilities: Net liability as at 1 January 7 6 10
Net liability as at 31 December 12 7 6 Specified as follows: The underlying assumptions are as follows: Actuarial year-end assumptions 31 December 2015 31 December 2014 31 December 2013
The provisions were created for: • tax and legal issues; • staff restructuring expenses; • retention of disability risk instead of insuring it with UWV
The provision for tax and legal issues is based on best estimates available at year-end, making allowance for expert opinions. The timing of the outflow of resources related to these provisions is uncertain because of the unpredictability of the outcome and the time required for the settlement of disputes.
5.23 Gross insurance premiums The table below shows the composition of gross insurance premiums: Total Premiums non-life and life 2015 2014 2013
Life insurance contracts retained exposure 1,172 818 898 Life insurance contracts on behalf of policyholders 570 610 633 Total life insurance contracts 1,742 1,428 1,531
Individual Non-recurring premiums written 96 116 104 Periodic premiums written 455 452 471
On behalf of policyholders Group Non-recurring premiums written 30 24 21 Periodic premiums written 246 253 233
Individual Non-recurring premiums written 4 4 4 Periodic premiums written 290 329 375
Interest income includes € 15 million (2014: € 18 million; 2013: € 31 million) in interest received on impaired fixed-income securities.
Dividend and other investment income per category can be broken down as follows: Dividend and other investment income 235 232 240
The table below breaks down interest income per category: Interest income from receivables due from credit institutions 153 149 148 Interest income from investments 502 532 575 Interest income from amounts due from customers 255 248 223 Interest income from trade receivables and derivatives 212 253 309 Other interest income 3 18 5
The table below shows a breakdown of realized gains and losses per category: Group companies, associates and joint ventures
Fair value gains and losses per category can be broken down as follows: Realized gains and losses on derivatives 747 512 380 Unrealized gains and losses on derivatives -1,181 2,483 -1,335 Unrealized gains and losses on investment property and property for own use 138 32 -44 Financial assets at fair value through profit and loss 40 28 -21 Other fair value gains and losses -1 -3 1 Additions to Insurance liabilities due to shadow accounting (chapter 5.16) 1,179 -2,487 1,323
In 2014 and 2013 the item Other income included past service cost related to the amendment to the a.s.r. post–employment benefit plans amounting to respectively € 60 million and € 27 million.
5.27 Net insurance claims and benefits Net insurance claims and benefits can be summarized as follows: Total Non-life and Life 2015 2014 2013
Insurance claims and benefits -5,541 -5,197 -5,113 Insurance claims and benefits recovered from reinsurers 291 100 110
Change in provision for outstanding claims -31 -92 -217 Amortization of VOBA (chapter 5.7) - - -1 Insurance claims and benefits -1,745 -1,751 -1,923
Changes in liabilities arising from insurance contracts on behalf of policyholders -156 -798 -86 Amortization of VOBA (chapter 5.7) -14 -19 -19 Insurance claims and benefits -3,796 -3,446 -3,190
Other short-term employee benefits -6 -6 8 Total cost of own staff -293 -290 -289
Cost of external staff -79 -62 -58 Consultancy costs and fees -99 -73 -75 Marketing, advertising and public relations expenses -16 -8 -21 Technology and system costs -48 -46 -39 Amortization of other intangible assets (chapter 5.7) -1 -1 Depreciation of property, plant and equipment (chapter 5.8) -10 -9 -9 Other operating expenses -29 -35 -38
Reversal of collateralized debt obligations 25 30 18 Reversal of impairments on bonds 1 11 35
5.29 Impairments The table below is a summary of impairments: Property, plant and equipment (chapter 5.8) 5 3 -21 Associates and joint ventures (chapter 5.10) -3 - -5 Investments available for sale (chapter 5.11.1) 14 7 32 Loans and receivables (chapter 5.11.3) 13 -18 -42
Changes in impairments of investments available for sale can be broken down as follows:
Deferred tax for financial year 271 78 257 Previously unrecognized tax losses, tax credits and other temporary differences that reduce deferred tax expense - 4 Total deferred tax 271 82 257
Profit before tax 780 534 317 Current tax rates 25% 25% 25%
The profit is almost entirely earned and taxable in the Netherlands. The effective income tax rate is 19% (2014: 20%; 2013: 23%).
Adjustments for taxes due on previous financial years amounting to € 36 million (2014: € 7 million; 2013: € 4 million), is mainly related to foreign withholding taxes and a release of a provision relating to income derived from investment on behalf of policyholders to which the participation exemption was applied.
5.33 Related party transactions A related party is a person or entity that has significant influence over another entity, or has the ability to affect the financial and operating policies of the other party. Parties related to a.s.r. include NLFI and the Dutch State with control, associates, joint ventures, members of the Executive Board, members of the Supervisory Board, close family members of any person referred to above, entities controlled or significantly influenced by any person referred to above and any other affiliated entity. a.s.r. has applied the partial exemption for government-related entities.
The remuneration of the a.s.r. Executive Board and Supervisory Board are described in chapter 5.34 (Remuneration of the a.s.r. Executive Board and Supervisory Board).
NLFI holds a total voting interest of 100% in a.s.r. As sole holder of all issued exchangeable depositary receipts, the Dutch State holds an equal indirect interest in a.s.r. NLFI is responsible for managing the shares and exercising all rights associated with these shares under Dutch law, including voting rights. However, material or principal decisions require the prior approval of the Dutch Minister of Finance, who will also be able to provide binding voting instructions with respect to such decisions. NLFI’s objectives exclude disposing of or encumbering the shares, except pursuant to an authorization from and on behalf of the Dutch Minister of Finance.
Mortgage loans to the Executive Board can be broken down as follows: Amounts in € thousands Outstanding Average interest % Settlement
These mortgage loans held by the members of the Executive Board have been issued based on current employee conditions. The normal employee conditions include limits and thresholds to the amounts that qualify for a personnel interest-rate discount. For mortgage loans higher than € 340 thousand arm’s length conditions apply.
The insurance contracts held by the members of the Executive Board are subject to the normal employee conditions.
The annual remuneration for members of the a.s.r. Supervisory Board is as follows: 1 The amount as a committee member also includes remuneration for services as supervisory Board member of ASR Bank N.V. amounting to € 4,000 per annum per Supervisory Board member.
Total 1 The fixed employee benefits of the three ordinary board members are similar and amounts to € 405k in 2015. Variations arise as a result of the fiscal treatment of lease cars depending on the price and private use of the car.
2 No additional pension rights have been disbursed to the board members in 2015. The increase in annual pension expenses is attributable to a decrease in interest rates. The calculation of the annual pension expenses are based on the total granted pension rights during the term of service at a.s.r. Further changes in the cost of pension benefits are mainly the result of the impact of age, term of service, gender and age differentiated disability, mortality and other actuarial assumptions. The pension costs include pensions and VPL.
The total assets and total income for the year ending 31 December 2014 of De Eendragt as published in its consolidated financial statements amounted to € 1,823 million and € 44 million respectively. De Eendragt is consolidated within the Life segment as of 17 July 2015.
Investments on behalf of policyholders 74 74 Loans and receivables 5 5 Deferred tax assets 110 5 Other assets 5 21 Cash and cash equivalents 43 42 Total assets 3,531 3,441
Consideration paid -170 Acquired cash and cash equivalents 41 Increase/(decrease) in cash and cash equivalents through acquisition -129
As a result the impact of both acquisitions on the Life segment balance sheet and income statement for the period ended 31 December 2015 is € 3,556 million and € 7 million loss respectively.
Van Kampen Group Holding BV In January 2015, ASR Deelnemingen N.V. acquired 100% of the shares of Van Kampen Groep Holding B.V. and its subsidiaries (VKG). VKG handles the administration for more than half of all insurance intermediaries in the Netherlands. VKG supports both the consultant and insurers as a financial service or full-service provider with 137 employees.
5.36 Discontinued operations and assets held for sale and related liabilities At the end of 2015 the real estate development activities were legally divided into ASR Vastgoed Ontwikkeling N.V. and ASR Vastgoed Projecten B.V. The Executive Board has decided to look for a strategic buyer for the discontinued part and therefore classify most of its real estate development business as ‘held for sale’. The activities undertaken by ASR Vastgoed Ontwikkeling N.V. were considered as discontinued operations and the activities of ASR Vastgoed Projecten B.V. are partially considered as continuing and partially as discontinuing activities. With this in mind, the discontinuing operations are recognized as held for sale in the balance sheet. As a consequence, the financial results of the discontinuing real estate development business are disclosed in condensed form in the income statement. Its financial performance is not part of the profit before tax from continuing operations.
As part of a drive to focus more on core activities, B.V. Nederlandse Hulpverleningsorganisatie-SOS International is classified as ‘discontinued operations’ in 2015. As a consequence, the financial results of SOS International are disclosed in condensed form in the income statement. With this in mind, the operations are recognized as held for sale in the balance sheet. Its financial performance is not part of the profit before tax from continuing operations.
The results of the discontinued operations are as follows: Over the course of the next three years, an amount of € 1 million per year, will be paid related to the acquisition of Dutch ID.
Result before tax -33 -5 -1 Income tax (expense)/gain 7 - -
As at 31 December 2015, the assets and liabilities held for sale can be summarized as follows: Intangible assets 1 Associates and joint ventures 8 Loans and receivables 17 Deferred tax assets 7 Other assets 42 Cash and cash equivalents 3 Total assets held for sale 78
Provisions 12 Borrowings 11 Deferred tax liabilities 1 Other liabilities 14 Total liabilities relating to assets held for sale 38
An impairment loss of € 29 million writing down the carrying amount of the disposal group to its fair value less cost to sell has been included in the discontinued operation total expenses. The related income tax gain is € 7 million.
The group is a respondent in a number of claims, or a potential claim, disputes and legal proceedings arising from the normal conduct of business. With respect to the potential claim, giving the timing and complexity, it is currently not possible to reliably estimate a provision.
Provisions are formed for such occurrences if, in management’s opinion and after consultation with its legal advisors, a.s.r. is likely to have to make payments and the payable amount can be estimated with sufficient reliability. The costs of the compensation scheme for unit-linked insurance contracts have been fully recognized in the financial statements based on management’s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognized in the liabilities arising from insurance contracts and legal provisions (see chapter 5.16).
Investment obligations and guarantees to third parties for a total amount of € 422 million (2014: € 429 million; 2013: € 465 million) have been issued for real estate development projects and the acquisition of property. Those guarantees were issued by principals for the execution of projects for the benefit of clients.
The table below breaks down the commitments for noncancellable operating leases as at 31 December: No later than 3 months 1 1 1 Later than 3 months and no later than 1 year 3 3 4 Later than 1 year and no later than 5 years 9 6 7
Other commitments have been entered into primarily for facility and ICT contract related to an amount of € 78 million (2014: € 27 million; 2013: € 23 million).
The table below breaks down the expected future rental income on investment property lease as at 31 December: No later than 1 year 112 110 107 Later than 1 year and no later than 5 years 311 279 260
The financial statements for 2015 were approved by the Supervisory Board on 4 April 2016 and will be presented to the Annual General Meeting of Shareholders for adoption. The Executive Board released the financial statements for publication on 14 April 2016.
Total equity attributable to shareholders 3,574 3,028 3,160 Other equity instruments 701 701 515 Equity attributable to holders of equity instruments 4,275 3,729 3,675
Share of profit/(loss) of group companies 611 452 262 Other income and expenses after tax -10 -29 -15
a.s.r. has made voluntary changes in its accounting policies for investment property, property for own use and deferred acquisition costs (DAC) as of 1 January 2015. The DNB solvency ratio and Solvency II ratio remain unchanged following these voluntary changes. In accordance with IFRS the changes in accounting policy for investment property and DAC are applied retrospectively whereby the 2014 and 2013 comparative figures are restated. The change for property for own use is applied prospectively as a revaluation with effect from 1 January 2015 and the 2014 comparative figures are not restated. The change in accounting policy results in an increase of total equity as at 31 December 2014 of € 682 million (2013: € 642 million) after tax from € 3,047 million (2013: € 3,033 million) to € 3,729 million (2013: € 3,675 million). See chapter 5.2.1 for further details regarding the changes in accounting policies.
Additions to capital 183 69 153 Share of profit 611 452 262
5.40.3.7 Other receivables The other receivables are including receivables from group companies. The receivables from group companies includes the receivable with respect to non-qualifying plan assets (see chapter 5.17) administered by ASR Levensverzekering N.V. amounting to € 2,525 million (2014: € 2,510 million; 2013: € 2,031 million) including the separate account to fund future inflation indexation amounting to € 306 million as at 31 December 2015 (2014: € 292 million). The remaining portion of the receivables from group companies is payable on demand.
Remeasurement of post employment benefit obligation - - -527 - - -527 - -527
Discretionary interest on other equity instruments - - - - -108 -108 - -108 Issue of other equity instruments - - - - - - 186 186 Cost of issue of other equity instruments - - - - -2 -2 - -2 Change in reserves required by law - - - 21 -21 - - Tax relating to interest on other equity instruments - - - - 27 27 - 27
Discretionary interest on other equity instruments - - - - -45 -45 - -45 Change in reserves required by law - - - 43 -43 - - Tax relating to interest on other equity instruments - - - - 11 11 - 11
Total employee benefits 2,945 3,123 2,426 5.40.3.11 Other provisions The table below shows movements in provisions: Utilized in course of year -9 -31 -23
5.40.3.12 Subordinated liabilities Subordinated liabilities can be broken down as follows (see chapter 5.15 for further details).
5.40.3.13 Borrowings In 2014, the borrowings from group companies was settled in accordance with the normal terms of the borrowing. The average interest rate was in 2014: 3.8% (2013: 3.8%).
The debts to group companies contain short term debts which are immediately collectable and deposits due to group companies with an interest-rate ranging between 2.4% and 2.7%. The maturities of the deposits range between 9 and 12 months.
There is no significant difference between the carrying amount of € 20 million (2014: € 29 million; 2013: € 182 million) debt to group companies and the fair value of these liabilities.
Interest expense on debts to group companies in 2015 and 2014 are less than € 0.1 million (2013: € 0.2 million).
5.40.3.15 Due to banks In 2015 the due to banks was settled. In 2014 due to banks contained € 250 million, with a maturity of 1 year and an interest rate of 1-month Euribor + 0.6%.
There is no significant difference between the carrying amount of € 0 million (2014: € 250 million; 2013: € 0 million) due to banks and the fair value of these liabilities.
There is no significant difference between the carrying amount of € 207 million (2014: € 331 million; 2013: € 425 million) other liabilities and the fair value of these liabilities.
5.40.3.17 Auditor’s fees With reference to Section 2:382a(1) and (2) of the Netherlands Civil Code, the following fees for the financial years 2015, 2014 and 2013 have been charged by KPMG Accountants N.V. to the Company, its subsidiaries and other consolidated entities.
• Fees for audit engagements: these include fees paid for the audit of the consolidated and company financial statements, quarterly reports and other reports; • Fees for non-audit services: these include fees for support and advisory services provided during acquisitions.
A breakdown of these fees is provided below: Audit of the financial statements 2,318 1,871 1,706 Other audit engagements 684 732 839 Other non-audit services - - 98
A statement of joint and several liability under section 403, Book 2 of the Netherlands Civil Code has been issued by ASR Nederland N.V. for the companies identified in chapter 5.39 List of principal group companies and associates.
Investment obligations and guarantees ASR Nederland N.V. has issued guarantees to third parties for a total amount of € 314 million (2014: € 333 million, 2013: € 328 million) for real estate development projects.
The company financial statements comprise: 1 the company balance sheet as at 31 December 2015; 2 the company income statement for the year then ended; and 3 the notes comprising a summary of the significant accounting policies and other explanatory information.
We are independent of ASR Nederland N.V. in accordance with the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA).
Scope of the group audit ASR Nederland N.V. is head of a group of entities. The financial information of this group is included in the consolidated financial statements of ASR Nederland N.V.
We included all insurance and bank entities in the audit scope for consolidation purposes, resulting in a coverage of 99% of total assets and 99% of profit before tax.
We have:  used the work of other auditors performing specific audit procedures regarding the Liabilities arising from insurance contracts at entity Axent NabestaandenZorg N.V.;  performed specific audit procedures regarding the Liabilities arising from insurance contracts at entity De Eendragt Pensioen N.V.
The group audit team provided instructions to other auditor’s, covering the significant audit areas, including the relevant risks of material misstatement, and set out the information required to be reported back to the group audit team. The findings and observations as reported were discussed in more detail and file reviews were performed for the most significant group entities. By performing the procedures mentioned above at group entities, together with additional procedures at group level, we have been able to obtain sufficient and appropriate audit evidence about the group’s financial information to provide an opinion about the financial statements.
Description The calculation of the Liabilities arising from insurance contracts and the related Liability Adequacy Test (LAT) is complex and highly judgmental and is based on assumptions which are affected by (future) economic, demographic and political conditions. The assumptions used relate to risks regarding interest, mortality, longevity, morbidity, catastrophe, lapse and expense. Also the cost compensation for unit-linked insurance contracts impacts the valuation of the Liabilities arising from insurance contracts and the related LAT. Furthermore, the valuation of the Liabilities arising from insurance contracts is affected by and sensitive to government regulations, in particular regarding the claims from workers’ compensations insurance (WGA-ER) and in the healthcare insurance domain.
Our observation We found that the assumptions used and related estimates resulted in a cautious valuation of Liabilities arising from insurance contracts.
Description The company applies shadow accounting in its financial reporting as disclosed in note 5.2.2.J. As a result (un)realized results on fixed income investments, interest derivatives and inflation rate swaps, held to reduce the interest risk and inflation risk in the Liabilities arising from insurance contracts, are not recognized in Equity or Income but are transferred to the Liabilities arising from insurance contracts. Shadow accounting is complex, requires significant Executive Board’s judgment regarding results that apply for shadow accounting and has a significant impact on the Liabilities arising from insurance contracts. The company has comprehensive procedures and internal controls in place to determine the shadow accounting. In relation to shadow accounting also the impact on the provisioning for Employee benefits is of importance. In the financial statements, the company is accounting for Employee benefits based on IAS19 as disclosed in note 5.2.2.L. The underlying pension contract for own employees is administrated by the consolidated group company ASR Levensverzekering N.V. which results in a not qualifying plan asset according to IAS19. However, due to the overlay interest hedging strategy of the company, swaps and swaptions are not specifically allocated to the pension contract for own employees. Therefore the (un)realized gains and losses from swaps and swaptions as a whole are accounted for in Liabilities arising from insurance contracts, based on the shadow accounting policy of the company, whereas the impact of changes in interest rates on the provisioning for Employee benefits based on IAS19 is part of actuarial gains and losses that are recognized in equity (see note 5.17.1).
Our response We tested the internal controls regarding the accounting of the (un)realized results on the fixed income investments, interest derivatives and inflation rate swaps, held to reduce the interest risk and inflation risk in the Liabilities arising from insurance contracts and relating shadow accounting adjustments including the appropriate elimination of impairment results on the fixed income investments that do not apply for shadow accounting. Furthermore we tested the application of shadow accounting by checking the reconciliations between (un)realized results on swaps and swaptions and the relating shadow accounting adjustment in the Liabilities arising from insurance contracts and the accounting on the provisioning for Employee benefits based on IAS 19.
Description The company invests in various asset classes, of which 79% is carried at fair value in the balance sheet. The breakdown of financial assets and liabilities measured at fair value into their fair value hierarchy is disclosed in note 5.6.1. As disclosed in note 5.2.1, in 2015 the company changed its accounting principles for Investment property and Property for own use also to fair value (see also note 5.6.3). Fair value measurement can be a subjective area, especially for areas of the market reliant on model based valuations (Level 2 and Level 3) or with weak liquidity and price discovery. Valuation techniques for real estate, private equity investments and for non-listed bonds, equities or derivatives can be subjective in nature and involve various assumptions regarding pricing factors. The use of different valuation techniques and assumptions could produce significantly different estimates of fair value. The associated risk management disclosure is dependent on high quality interpretation of the available data. The valuation of investments require significant Executive Board’s judgment. The company has comprehensive procedures and internal controls in place to determine the valuation of the investments.
Description The company engaged in several acquisitions during the financial year. Acquisitions have been disclosed in note 5.35. The accounting treatment for Acquisitions is complex and requires significant Executive Board’s judgment regarding: - the timing of obtaining control; - adjustments to the fair value of assets and liabilities acquired as part of the acquisition and the fair valuation of previously unrecognised identifiable intangible assets, including goodwill (purchase price allocation); - subsequent consideration of impairment of these assets. The company has used several financial and legal experts to determine the valuation of the asset and liabilities acquired and the accounting treatment for those acquisitions.
Our response We assessed the timing of obtaining control by testing the analysis made by the company based on the underlying contractual arrangements. We tested the fair value of tangible assets and liabilities acquired including the adjustments to fair value made on initial recognition to adhere to the company’s accounting policies. For the calculation of Liabilities arising from insurance contracts we made use of the work of external actuaries. Furthermore we tested the calculation of goodwill as the difference between the fair value of the assets and liabilities and the consideration paid. We assessed the adequacy of the disclosure on the acquisitions as set out in note 5.35.
Our observation We found that the acquisitions have been accounted in accordance with IFRS 3.
Responsibilities of the Executive Board and the Supervisory Board for the financial statements The Executive Board is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and with Part 9 of Book 2 of the Netherlands Civil Code and for the preparation of the Report of the Executive Board in accordance with Part 9 of Book 2 of the Netherlands Civil Code. Furthermore, the Executive Board is responsible for such internal control as
As part of the preparation of the financial statements, the Executive Board is responsible for assessing the company’s ability to continue as a going concern. Based on the financial reporting framework mentioned, the Executive Board should prepare the financial statements using the going concern basis of accounting unless the Executive Board either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. The Executive Board should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going concern in the financial statements.
The Supervisory Board is responsible for overseeing the company’s financial reporting process.
Our responsibilities for the audit of financial statements Our objective is to plan and perform the audit to obtain sufficient and appropriate audit evidence for our opinion. Our audit has been performed with a high, but not absolute, level of assurance, which means we may not have detected all errors and fraud. For a further description of our responsibilities in respect of an audit of financial statements we refer to the website of the professional body for accountants in the Netherlands (NBA) www.nba.nl/standardtexts-auditorsreport.
 We report that the Report of the Executive Board, to the extent we can assess, is consistent with the financial statements.
6.3 Other equity interests For notes to equity interests in associates and joint ventures see chapter 5.11. The list of equitiy interests required under Sections 379 and 414, Book 2 of the Netherlands Civil Code has been filed with the Trade Register of the Chamber of Commerce in Utrecht.
6.4 Provisions of the Articles of Association regarding profit appropriation Article 21 of the Articles of Association reads as follows: 1. The Company may distribute any profit to shareholders and other persons entitled to profits only if its net assets exceed the sum of the paid and called-up portion of its capital plus the reserves that must be maintained by law.
4. With respect to the provisions of paragraph 1, the AGM shall have the right, either on the recommendation of the Executive Board and subject to the approval of the Supervisory Board or on its own initiative, to charge distributions to the distributable part of the net assets.
7. When calculating the profit, the shares held by the Company on which no dividend is distributed to the Company pursuant to paragraph 5 shall be disregarded.
2015 annual report Other information 8. Dividends shall be released for payment on a date determined by the Executive Board; this date shall not fall any later than on the fifth working day following the date of the dividend resolution. If the matter involves the distribution of an interim dividend, this day shall not fall any later than on the tenth working day following the date of the dividend resolution.
As a trusted partner, a.s.r. offers transparent insurance solutions to its customers while creating sustainable and stable value for its stakeholders. a.s.r. translates this mission into prioritization of simple and transparent products, clear communication and fair treatment of customers. a.s.r. believes that an ingrained belief in service and employee skills will promote connections between a.s.r.’s employees, independent advisors and clients and will ensure alignment of interests with a.s.r.’s success and with society as a whole.
In 2015, the Working Group developed out the sustainability policy and the sustainability performance, and assigned responsibilities within the organization. An internal survey shows that, although a.s.r. employees are proud of the organization’s sustainability initiatives, they are not always sufficiently aware of them and they do not always recognize the interrelationships between these initiatives. To improve this, messages about sustainability initiatives will place more focus on these interrelationships and their link with the sustainability policy. In addition, a separate sustainability icon has been developed for each priority; this icon is used in every internal message about a specific priority.
People Employees are encouraged to make the most of their potential. By connecting with customers, the business and HR, each employee becomes an a.s.r. ambassador, both within and outside a.s.r.
Investment a.s.r. takes ownership by making allowance in its investment policy for ethical and sustainability criteria. Aspects reviewed by a.s.r. include human rights, working conditions, corruption and environmental issues.
Society Helping people by taking action. Sustainability also encompasses being involved in the community. a.s.r. invests in a wide range of community initiatives, for instance by undertaking aid campaigns and projects.
Schematic representation of how each priority makes a sustainable contribution to the a.s.r. strategy.
Investments • Further tweaking of sustainable investment policy • a.s.r. best-in-class in surveys conducted by Dutch Association of Investors for Sustainable Development (VBDO) and Fair Insurance Guide • a.s.r. makes real estate investments more sustainable • a.s.r. actively exercises its voting rights as a shareholder in order to highlight sustainable investing
Society • More than 1,000 employees take part in a.s.r. Foundation activities • a.s.r. helps LEF to encourage financial self-reliance in young people • a.s.r. colleagues involved in Money Week • a.s.r. signed UNPSI, UN GLOBAL COMPACT; reporting based on standard GRI
In its strategy, a.s.r. describes how it sees its role as a sustainable market player, making allowance for the socially relevant role that a.s.r. wants to play as an insurance company.
By measuring the KPIs periodically and adjusting them where needed based on measured parameters, a.s.r. seeks to achieve its sustainability targets.
1 For more information about the investment policy, see chapter 7.4.
2 The lower energy and natural gas consumption was partly due to the shut-down of part of the building (Archimedeslaan 10 in Utrecht) because of the renovation, but includes consumption during the building works of 6,666 m3 of natural gas and 312,272 kWh of electricity.
3 People Engagement Engagement score A higher engagement score than in 2014 (49.5%)
All a.s.r. REIM residential properties awarded an average energy efficiency rating of C
a.s.r. also interacts frequently with intermediaries, social partners, regulators and public bodies. Trends in society and the dialogue with stakeholders form the basis for identifying key themes to be reported. Input from stakeholders has been used to define what they consider to be the 20 most relevant and important themes: these have been included in the materiality matrix. A trend in society qualifies as material if it is relevant to the stakeholders and could have a significant impact on a.s.r. The greater the impact of the theme on both society and a.s.r.’s operations, results and strategy, the greater the materiality of the development. In order to remain relevant as an organization and execute our strategy, a.s.r. makes sure that these trends are reflected in its operations and management procedures. For the materiality matrix, see page 21.
Fund 8. Pensions - Executive pension scheme 9. Pensions - Process of managing the new
Employee Pension product (Werknemers Pensioen) with focus on actuarial and financial processes 10. Pensions - Outsourcing back-office activities to Infosys
Offering security to customers is what lies at the heart of our business. Customers need to be able to rely on a.s.r. meeting its financial obligations because a.s.r. enters into long-term liabilities such as pension contracts. That is why sustainable financial robustness is essential and one of our top priorities.
See chapter 7.4.7 for specific sustainability initiatives taken by a.s.r. Real Estate.
7.2.1 Transparent products and product descriptions a.s.r. is continuously looking to improve the processes that are in place to help customers, for instance by assisting unit-linked policyholders and by simplifying the product offering. a.s.r. is constantly making sure that prospective and existing customers can access and understand the information it provides.
The customer information improvement plan outlines the steps that a.s.r. is taking to make information more accessible and easy-to-read. Realized by rewriting style guides and offering training courses in language level B1/customer-friendly information. The various rules of conduct for sustainability in actions and habits also contribute to this.
PARP is about embracing the philosophy that a.s.r. as an organization endeavours to offer high-quality products that are relevant to customers and profitable for a.s.r. New a.s.r. propositions go through the PARP process, which ensures that they are developed in such a way as to meet the needs of customers and square with customer centricity in a number of different scenarios. A key aspect is that a proposition is geared to the needs of the target group. The duty of care and the provision of information are also part of the process. Existing products undergo a modified process. They are evaluated based on a risk assessment. Products that are no longer offered are evaluated too, using today’s set of standards. Products are also tested for their cost effectiveness, usefulness, safety and reliability. In addition, the relevance of a product or service’s coverage, costs and benefits is reviewed and it is evaluated whether these aspects have been explained in a clear and understandable manner. If not, the product is adjusted accordingly.
Customer surveys Over the past few years, a.s.r. has gained extensive knowledge and experience from qualitative reading tests. For this reason, a.s.r. now only tests messages that are completely new, such as terms and conditions in an entirely new lay-out, and highimpact messages or communications with a high compliance risk. In addition, other messages are increasingly tested by online customer panels. This also gives a.s.r. an impression of the readability and acceptance of less complex or lowerimpact messages. The outcome can be used to make changes where needed. Besides qualitative reading tests, a.s.r. conducts various other customer surveys. These are listed below.
Satisfaction survey Map out customer satisfaction level with a.s.r. online savings Bank
Loyalty test Map out needs of existing occupational disability policyholders and increase their loyalty
Evaluation tests Evaluate how a.s.r. products are rated. In 2015: opinion of business owners about health insurance proposition
The following product improvements were implemented in 2015: a.s.r. – VVP Woonhuis- en Inboedelverzekering The revamped Woonhuis- en Inboedelverzekering (residential premises and household contents insurance) is a sustainable solution that ties in with the changing insurance needs of customers. Customers are increasingly sharing their possessions, renting out their property through Airbnb and owning more and more mobile devices. In addition to offering broad basic coverage, this revamped policy provides various forms of optional coverage that meet the needs of customers today, including: • Coverage for temporary rental through such channels as
2015 annual report Sustainability a.s.r. – VVP Rechtsbijstandverzekering This new modular legal assistance insurance policy replaces the two separate Basic and Comprehensive legal assistance polices in the revamped Voordeelpakket package. Customers can now put together their own legal assistance policy based on modules, so that they only insure and pay for what they need.
De Amersfoortse combines occupational disability and health insurance in a single policy De Amersfoortse has offered the Doorgaanverzekering health insurance policy since November 2015. This policy combines comprehensive occupational disability insurance for business owners with a free-choice health insurance policy, additional coverage for the business owner’s family, including for childcare, domestic help, caregivers or cancer counselling, and the support of a personal health insurance expert, who can answer questions and make arrangements for the policyholder. The Doorgaanverzekering policy is available to both existing and new customers.
Ardanta – One brand, one story The various Ardanta websites were redesigned and integrated in September 2015. This contributes to a better positioning of the practical guide to death and dying and helps to deliver on the brand promise of ‘rest & peace’.
Ardanta – Advice is key Contrary to what is customary in the market, Ardanta has chosen to provide advice to customers rather than educating them. Our advisors are certified asset-building experts.
The Customer-Oriented Insurance Quality Mark (Dutch acronym: KKV) is a mark of the quality of service and customer focus of insurers. When an insurer holds this quality mark, customers can count on receiving clear information, insurance that meets their needs and a first-rate service. The quality mark allows insurance companies to demonstrate that customer focus is truly top-of-mind for them and that they are audited for being customer-friendly. The a.s.r., De Amersfoortse, Ditzo and Europeesche Verzekeringen labels have all been awarded the quality mark. After the most recent survey by the Dutch Insurance Review Agency at the end of 2014, these labels were awarded the quality mark for another two years. From 2015 onwards, the surveys will be conducted periodically throughout the year. This allows the Dutch Insurance Review Agency to continuously monitor the performance of all labels rather than once every two years. For more information, please log on to www.keurmerkverzekeraars.nl (in Dutch).
Ardanta does not carry the Customer-Oriented Insurance Quality Mark. It did start to develop various initiatives in 2015 to offer better client service, including featuring customer journeys such as ‘Being a Customer’ and ‘Surviving Dependant’.
One of the tools used by a.s.r. to gauge how customers feel about its products and services is the Net Promoter Score (NPS). NPS is the outcome of the answer to the following question: “How likely is it that you would recommend [type of policy] offered by [insurer] to your family, friends or colleagues?” Or “to colleagues or business partners”, in a B2B setting. a.s.r. measures its NPS because customer appreciation is a key priority in its strategy.
7.2.5 Complaints management a.s.r. has a Complaints Management Team, which monitors that all complaints are handled in a consistent manner and ensures that complaints are managed accordingly. Individual complaints are handled locally in the various product and business lines.
a.s.r. continued to professionalize its complaints handling procedures in 2015 with a view to providing even better customer service. Particular strides were made in the area of interview techniques, by offering complaints handlers customized courses in the form of telephone training, negotiation skills training, mediation and courses to identify the root causes of customer complaints. Once they have identified these root causes, complaints handlers can suggest improvements.
Flexibility and employability are important concepts going forward. With this in mind, employees are expected to take ownership of their own career. a.s.r. invests in the sustainable employability of its employees, harnessing developments in the market, competitive conditions and technology.
To utilize people’s full potential, managers need to have the right management style and skills. For this reason, leadership development will be one of the priorities of the HR policy in 2016.
Owing in part to the introduction of the Dutch Participation Act, a.s.r. developed a policy in 2015 that is designed to hire a set number of people with an occupational impairment every year; these people are referred to as ‘a.s.r.’s exceptional talents´. By 2026, at least 70 positions of 25.5 hours per week (about 45 FTEs) need to have been filled by people with an occupational impairment. On 31 December 2015, six young people with an occupational impairment had been hired. a.s.r. is exploring options in other business lines as well. A Participation Desk has recently been created to assign lowskilled workers with an occupational impairment to jobs in various business lines. Highly educated persons with an occupational disability are recruited through special channels; they are given preference over equally suitable candidates who do not have an occupational impairment. The target for 2016 is: to hire 13 employees who come under the target group of the Participation Act.
Women at the top a.s.r. also monitors the intake, progression and retention of women in management positions. It proactively tries to hire women in management positions. The ratio of women on the Executive Board and the Supervisory Board of a.s.r. at year-end 2015 was 25% and 33%, respectively.
The a.s.r. Code of Conduct describes what a.s.r. stands for as a business and what conduct and behaviour it expects from its employees. The Code addresses the responsibility employees have for the environment in which they work and live. It forms a guideline for actions and decisions, and helps to perform duties properly, and with due care and integrity. a.s.r. has also undertaken to adhere to the rules of conduct governing the sector (such as the Dutch Code of Conduct for Insurers and the Dutch Banking Code).
To limit the risk that a.s.r. hires persons who can cause physical, financial or reputational harm to a.s.r., its customers or other business relations, everyone working at or for a.s.r., including suppliers and intermediaries, is expected to undergo an advance integrity screening.
The engagement score rose to 53.5% in 2015, a 4%-point rise on 2014. Employees indicated that they know why a.s.r. has made it its priority to treat customers fairly (52.2% score this a 9 or 10). Employees have also said that they are given the opportunity to treat customers fairly (7.3), that their managers actively encourage them to do so (7.2) and that they are making an extra effort to treat customers fairly (8.3).
Healthy and fit employees are more versatile in the labour market, which benefits both themselves and a.s.r. That is why a.s.r. is actively concerned with vitality, for instance by having in place an appropriate occupational health and safety policy, having regard to mental and physical health issues, providing sports facilities and offering healthy choices in the cafeteria.
Through The New World of Work and the provision of convenience services, a.s.r. tries to contribute to a healthy work/ life balance of its employees. a.s.r. also offers (online) courses in the areas of time management, workload structuring and stress prevention.
Sustainable employability involves ensuring that employees can continue to participate as long and as fully as possible in the labour market while retaining their vitality. An important precondition is that they are highly motivated and have the right skills and training. a.s.r. contributes to this by offering them opportunities to develop themselves and improve their labour market prospects, both at a.s.r. and elsewhere. All a.s.r. employees are entitled to support for increasing their sustainable employability; they can ask to receive career counselling and choose from a wide range of workshops and courses.
During the annual employee survey, an inventory is made of the employee base by discussing the performance and potential of managers and employees and entering them in a matrix. The senior management review was revamped in 2015 in that the matrix was adjusted; rather than reviewing a select group of staff, all employees were discussed by their line managers and at least one more manager within their own business line (four-eye principle). An HR officer was also involved in the review. The results of the review serve as input for strategic capacity planning. Thanks to the new approach, the process has become simpler and more transparent; it is easier to benchmark performance and potential, and more convenient to link up follow-up actions.
Talent Development Programme for talents and driving forces in Scale 9 to 15 384 participants in TDP; 1,257 plotted participants
D e v e lo p m e n t p o te n ti a l
Job classification system a.s.r. took a step-by-step approach to implementing a new job classification system in 2015. The last business lines migrated to this new system at the end of December 2015. As a result, the old system of more than 1,000 individual job descriptions was transformed into a system with nine job families and 32 subfamilies. The new system is simple and clear. The descriptions are aimed at the deliverables associated with the duties that come with a particular role. The new system enables comparison between roles and their demands and gives employees an insight into the career progression pathway within their own job family.
Recruitment & Selection a.s.r. has a base of broadly employable and flexible employees because it encourages mobility and sustainability in the organization. It gives priority to internal candidates when filling vacancies. All vacancies are posted on the internal vacancy database before being advertized externally, for instance on the corporate website www.werkenbijasr.nl. The ‘Mijn vacatures’ (my vacancies) tool in the vacancy database allows employees to perform a pointed search of suitable vacancies. All vacancies that meet the search profile are automatically forwarded to the employee’s mailbox.
The job board www.werkenbijasr.nl was overhauled in 2015. The structure of the website is now based on target groups, the application process is more welcoming and greater use is being made of social media. All these adjustments are designed to improve the recruitment process and help a.s.r. to recruit top talents.
The following changes were made to the pay-and-benefits package in 2015: • the pension scheme was modified in various respects on 1 January: the accrual rate was lowered from 1.90% to 1.875% and the retirement age was raised from 65 to 67; • employees have no longer qualified for an interest rate rebate on mortgages since 1 January 2015; as of the same date, employees have been expected to pay for advisory services relating to mortgages and life insurance policies; • an additional training budget of 1% of the wage-bill was set aside for sustainable employability.
In October-November 2015, the Works Council and HR joined hands in performing a survey of how employees rate their pay-and-benefits package: the preference scan. All employees received a personal invitation to take part in their scan and share which pay and benefits they rate highly and why. The survey not only addressed pay and benefits offered by a.s.r. at present, but also looked at benefits that a.s.r. might consider offering in the future. HR and the Works Council will use the outcome of the scan to evaluate the current pay-and-benefits package. The ultimate goal is to create a sustainable and futureproof pay-and-benefits package that meets the needs of the employee base.
Facilitating sustainable employability a.s.r. will work to improve its employees’ sustainable employability in 2016 as well. HR will do so by creating more awareness, intensifying its collaboration with the business, professionalizing counselling programmes and improving the course curriculum.
Social innovation refers to new ways of working in organizations such that a person’s productivity at work and their quality of life is improved. This is also known as ‘working smarter’. Given that culture, leadership and conduct make up 75% of social innovation, leadership development has been classified as a priority in the HR policy in 2016.
HR and the Works Council will engage in a dialogue in 2016 to put together a contemporary pay-and-benefits package. Rather than discussing and negotiating each individual provision, HR and the Works Council will jointly consider the package as a whole and formulate sustainable and future-proof pay and benefits in a concerted effort. The outcome of the preference scan performed in 2015 will also serve as input for the composition of the pay-and-benefits package of the future.
The effective date of the new term of office of the Works Council and its subcommittees was 1 March 2015. With a team of experienced and less experienced employee representatives, the Works Council took on the challenge of creating an effective employee representation body within a.s.r.
The Works Council kicked off with an initial training in 2015, in which the mission of the Works Council was defined as follows: to create a balance between serving company interests and employee interests, and engender commitment and support for this mission within a.s.r. In its actions, the Works Council wants to proactively exercise influence on the interests of a.s.r. and serve its stakeholders as best as possible. That is why the mission comes with the following objective: connecting a.s.r.! This objective was then fleshed out into three core values for the Works Council: • We are accessible Our support base is important. We are visible and accessible to colleagues. We are open to giving and receiving feedback. We work on the basis of trust and actively include colleagues in what we do.
• We form a useful counterweight We think in opportunities and solutions, are critical and think outside the box where needed.
It became apparent early in 2015 that a.s.r. had decided not to issue a binding bid for VIVAT. The Works Council, which was closely involved in this process, fully supported the conclusions that were eventually drawn. As a result of this decision the dualtrack approach was back on the table. On 28 January 2016 the Lower House of Dutch Parliament agreed with the governements plan to initiate the selling process for a.s.r. The Minister asked NLFI and a.s.r. to start preparing for an IPO, so that privatiziation will become an option from the first half of 2016.
The changes in the insurance sector and the labour market continued at full force in 2015. As in previous years, the Works Council and its various subcommittees were involved in a number of drastic decisions affecting many a.s.r. employees. They reflect the fact that the employee representation body is concerned with both the interests of the company and those of the employee base, no matter how difficult some decisions might be. That said, a.s.r. is in good shape as an insurance company. It has an extremely robust financial position with a focus on offering customer service excellence. And although there is always room for improvements in customer service, a.s.r. is happy to say that she is actually in a position to deliver on its promises. Its financially sound position also allowed a.s.r. to acquire a number of companies in 2015. The employee representation body also had a say in these acquisition processes.
Works Council in 2016 2016 may turn out to be a historic year now that a.s.r. is en route to a potential privatization. The Works Council supports of this course of action. Based on its role, the primary focus of the Works Council will be on the interests of the company, the employee base and relevant stakeholders, although it goes without saying that customer interests will be a key aspect as well. For this reason, the Works Council wants to see a.s.r. continue to shape its role as a socially relevant insurance company in its strategy.
The Works Council continually takes a critical view of the effectiveness of the employee representation body. The insurance market will continue to change. This means it is important for the members of the Works Council and its subcommittees to have the right knowledge and skills to serve as a true sparring partner to the executive. In addition, it is crucial that employee representation duties are organized as efficiently as possible (striking a proper balance between effort and deliverables). In the Works Council’s previous term of office, a start was made on evaluating the current employee representation model. The Works Council will continue this process in 2016; it will decide to improve the model where possible.
2015 annual report Sustainability 7.4 Investor a.s.r. formalized its Socially Responsible Investment (SRI) policy in 2007. Since then the policy has evolved over time to capture the progress of the market and changes in society. The a.s.r. SRI policy describes the ethical and sustainability criteria that are applied to all a.s.r. investments, covering internal investments in government bonds and corporates (through equities and corporate bonds), as well as externally managed portfolios. The full a.s.r. SRI policy has been posted on www.asrnl.com.
a.s.r. seeks to play a prominent role in sustainable business practices in the financial sector. As an insurance company, investor and employer and as a committed member of society, a.s.r. is always looking for the right balance between people, planet and profit. During 2015, a.s.r. took further steps to contribute to this objective. Within the broad a.s.r. social responsibility programme, a new governance body dedicated to responsible investment was appointed to address the increasing demands and ensure progress in a.s.r. SRI policy and implementation. Among other projects, a.s.r. will increase its efforts with regard to engagement, transparency and accountability.
The a.s.r. SRI policy has been integrated into the investment practice by way of: 7.4.1 Exclusion criteria for countries and companies 7.4.2 ESG integration for best-in-class investments 7.4.3 Engagement 7.4.4 Impact investments 7.4.5 Voting 7.4.6 External recognition 7.4.1 Exclusion criteria for countries and companies a.s.r. pursues a strict exclusion policy based on controversial activities that is applied to the entire internally managed portfolio, for both countries and companies. Among others, this policy covers producers of controversial or offensive weapons, nuclear energy (if a company’s revenues are for more than 50% coming from nuclear related activities), gambling and tobacco. a.s.r. also requires businesses to comply with international conventions on human rights and labour rights, and applies criteria relating to gender equality, freedom of union, exclusion of child labour, indigenous people’s rights, etc.
With regard to investments in sovereign debt, a.s.r. has excluded 72 countries that are poor performers in the annual report of Freedom in the World or achieved a low score on the Corruption Perceptions Index.
analysis as being involved in controversial activities is intended to encourage it to behave more sustainably. If this does not reach a positive conclusion, this will result in the exclusion of the company from the investment portfolio. a.s.r.’s engagement for the purposes of influence in 2015 resulted in the continuation of our relationship with ENI, with which a.s.r. is in the process of discussing its activities to resolve, compensate and prevent environmental and human rights breaches in Nigeria and Kazakhstan. In addition, a.s.r is undertaking a project to increase the engagement efforts for next year.
• Public engagement In 2015, a.s.r. participated in various industry initiatives to promote sustainability and sustainable investments within the sector. a.s.r. hosted two round tables together with the Dutch Association of Investors for Sustainable Development (VBDO) under the headlines of ‘Impact investing & measurement’ and ‘Positioning sustainability’. a.s.r. also participated in a broad dialogue organized by the Social and Economic Council (SER) together with the Dutch Association of Insurers to discuss the suitability of an IMVO sector covenant and with the Dutch Central Bank to discuss the potential implications of a carbon bubble; a.s.r. also provided input for academic research and publications on various sustainability topics, such as natural capital, impact investing and engagement practices.
The right to vote is an essential part of an effective corporate governance system. We exercised this right whenever relevant. a.s.r.’s voting policy (www.asrnl.com) has been developed in accordance with the Dutch Corporate Governance Code and a.s.r.’s SRI policy. This policy applies to all internally managed and exchange-traded equities. In 2015, this resulted in a.s.r. exercising its voting rights in nearly 81% of shareholder meetings held by equity investments.
The voting accountability report provides a semi-annual review of how a.s.r. exercised its voting rights at shareholder meetings. The full report for 2015 is also available from www.asrnl.com.
In November 2015, the Fair Insurance Guide (FIG) published the fourth report on the sustainability policies of the Dutch insurance sector. The FIG is an initiative of Friends of the Earth Netherlands (Milieudefensie), the Dutch Society for the Protection of Animals (Dierenbescherming), PAX, Oxfam Novib, Amnesty International and the FNV trade union (www.eerlijkeverzekeringswijzer.nl). The Fair Insurance Guide has benchmarked life insurers for their policies in the area of sustainable investment since 2013. Of the ten largest life insurance companies in the Netherlands, a.s.r. is ranked first in the Fair Insurance Guide in terms of sustainable investment policy. a.s.r. scored a 10 out of 10 for its policies on weapons and bonuses. The Fair Insurance Guide awarded a.s.r. a score of 9 for its policies on human rights, health issues and the manufacturing industry. The aim of FIG is to encourage insurers to make their investment policy more sustainable and to
261a.s.r. 2015 annual report Sustainability optimize sustainability policy implementation. This has resulted in a number of helpful suggestions that a.s.r. has used to challenge stakeholders and to tweak its policy.
The implementation of the SRI policy is assessed by the FIG via specific case studies. In May 2015, the FIG published a study on controversial weapons, in which a.s.r. was referred to as one of the two positive exceptions within the Dutch insurance sector.
2015 was the first year in which a.s.r. was included in the report Don’t Bank on the Bomb issued by PAX, which assesses financial institutions for their involvement with nuclear weapons. a.s.r. was immediately inducted into their Hall of Fame. A similar study was carried out in relation to cluster ammunition, for which a.s.r. was inducted into the Hall of Fame for the second year.
All residential properties of the ASR Dutch Core Residential Fund (ASR DCRF) have received energy efficiency ratings; their average energy performance coefficient is 1.6 (energy efficiency rating C). Improvements were made in 2015 with the renovation of a residential complex in Rosmalen (from F to B) and the addition of a large number of new residences with energy efficiency rating A. In addition, the Futura apartment complex in Zoetermeer is the first residential building in the Netherlands that has been awarded the BREEAM ‘Very Good’ rating.
Investments in rural real estate continued to grow in 2015 thanks to a portfolio expansion by 920 hectares to a total of 34,000 hectares and value appreciation. The value of the assets is € 1.117 billion, i.e. 40% of the investment property managed by a.s.r. REIM. Over the past 125 years, a.s.r. has built up a portfolio of more than 34,000 hectares, making it the largest private owner of agricultural land in the Netherlands. Rural real estate is a sound investment for a.s.r. REIM and the quality of the portfolio is reflected in stable returns, positive developments in value and low risk.
In control a.s.r. REIM’s risk management is based on two key principles. The Risk Management function has been created and is carried out in accordance with the AIFMD authorization. The AFM granted a.s.r. REIM AIFMD authorization early in 2015. a.s.r. also attaches great value to the Dutch Code of Conduct for Insurers, which was implemented in January 2011. This code sets out the conditions to be satisfied by risk management, including control by Audit (third line of defence) based on the three lines-ofdefence model.
• Tenant satisfaction rating of at least 7 (out of 10) a.s.r. REIM periodically conducts a satisfaction survey among tenants and lessees to measure how they feel about a.s.r.’s service provision, the properties themselves and the living and working environment. The outcomes of the survey are discussed internally and with any external stakeholders and translated into an action plan. In doing so, the focus lies on aspects where there is room for improvement. The status of these measures is monitored periodically. The most recent surveys show that the customer satisfaction ratings are as follows: residential tenants: 7.1; office tenants: 7.2; retail tenants: 7.3; (land) lessees: 7.5.
In 2015, the ASR Dutch Core Residential Fund (DCRF) was awarded the Green Star, the highest ranking in this benchmark. The ASR Dutch Prime Retail Fund (DPRF) and the ASR Property Fund (ASR PF) were promoted from Green Starter to Green Talker. The ambition is to achieve and retain Green Star status for all three funds.
Society a.s.r. REIM is involved in the districts and neighbourhoods where its property is located, for instance by reserving a budget for investments in areas surrounding the properties acquired in 2015, e.g. in playgrounds. Neighbourhoods are actively involved in how this budget is used. In addition, many of a.s.r. REIM’s country estates and nature conservation areas have been opened up to the public for sport and recreation purposes.
2015 annual report Sustainability 7.5 Planet a.s.r. seeks to minimize its impact on nature and the environment. One aspect of this is the efficient use of resources, energy and water. Furthermore, a.s.r. is actively getting to grips with waste management, mobility, energy reduction and carbon emissions, and for this purpose has developed a specialpurpose environmental management system.
See chapter 7.4.7 for the specific environmental and sustainability initiatives undertaken by the real estate business.
Environmental performance 1 March 2016: The emission factors have been aligned to the most recent scientific insights. The carbon footprint for 2015 and the footprint for previous years have been redefined based on recent insights.
(mainly relating to business travel) due chiefly to lower fuel consumption by cars, which produced fewer carbon emissions as a result.
The offices of Europeesche Verzekeringen at Hoogoorddreef 56A (Amsterdam) will close in April 2016. The operations will be moved to Utrecht.
To conserve energy in the Utrecht head office, a.s.r. uses LongTerm Energy Storage (Dutch acronym: LTEO). The advantages of this system are that it is energy-efficient, comes with low energy costs, is extremely environmentally friendly, has a long service life and is reliable (because of a small number of moving parts).
It is being explored whether geothermal energy/electricity can be used to heat or cool the office buildings and to make them virtually carbon-neutral in the process. In 2014, a.s.r. started to investigate this in collaboration with Utrecht University; this investigation continued on into 2015. After this investigation has been completed, the final decision will be fleshed out. Based on the provisional outcomes, a.s.r. decided in 2015 to develop a business case. It will be decided in 2016 whether or not to continue with this project.
Recycling • All the thousands of desk chairs were given a second lease of life, with the seats and fabric covering being replaced in a factory working entirely according to the cradle-to-cradle principle. The old foam from the seats was used in insulation panels, while the fabric was donated to a manufacturer of horse blankets and to schools.
• The building has 42,000 square metres of carpeting, some of which is made from recycled materials and is 100% recyclable. The old carpet was recycled as well: the pile was reused, while the backing was used as a raw material in road construction and roofing.
Green areas • The office garden borders on the Ecological Network of the province of Utrecht and provides a habitat for several species of fauna, including bats, hedgehogs, salamanders, insects, storks and grass snakes.
• a.s.r. has deliberately chosen to create a habitat for bees in its garden. The bee-keepers engage in organic bee-keeping and the garden has bee-friendly plants.
• Part of the outer wall on the first floor will be covered in greenery. The plants will capture small dust particles and carbon dioxide, purifying the air in the process.
• Nesting boxes will be incorporated into this green wall section for swifts and sparrows.
• The climate facade measures a total of 17,000 square metres.
• Natural gas: consumption in 2015 was 357,930 m³ versus 604,256 m³ in 2014, a reduction of around 40.8%¹.
One of a.s.r.’s priorities is to reduce and recycle waste volumes as much as possible. a.s.r. achieved a 20.5% reduction in carbon emissions in 2015 against 2014. a.s.r.’s waste is processed by Sita, a waste-processing company. Sita has calculated that a.s.r. recycles 37% of its waste. Total volume of waste in 2015: 371,600 kg. For a breakdown of waste flows, see page 291.
Recycling a.s.r. uses more than 3.5 million coffee cups per year. At yearend 2015, a.s.r. replaced its plastic coffee cups by moving to the more sustainable cup2paper concept. These cardboard cups are easier to reuse than plastic cups because they allow a person’s name and ‘order’ to be written on the cup. These cups are also fully recyclable and 100% carbon-neutral. The concept also encompasses the collection and recycling process after use. In addition to being environmentally friendly, the use and reuse of 1 The fall in energy and natural gas consumption was also caused by the shut-down of part of the building because of the renovation, but includes consumption during the building works of 6,666 m³ of natural gas and 312,272 kWh of electricity.
7.5.4 Mobility policy a.s.r. has in place an active mobility policy that aims to improve the accessibility of buildings and reduce carbon emissions. In many areas, a.s.r. is making efforts to improve the sustainability of the commuter and business travel of its employees.
When a.s.r. invites tenders, it evaluates whether potential suppliers have subscribed to sustainability initiatives. If they have not, they are expected to register with FIRA once they have been selected. 89 suppliers of the top 250 of suppliers have now registered with FIRA. a.s.r. engaged 703 new suppliers in 2015. Of these, 69 suppliers have been screened (10%).
a.s.r. started to encourage its key suppliers to pursue verification in 2014. About one-third of its suppliers have now registered with FIRA. a.s.r. motivates these suppliers to aspire to the ‘Bronze’ level and to increase their impact on society even more. a.s.r. is still in dialogue with a number of other suppliers. Six others have said that they do not want to be registered in the FIRA database. They will be notified that this will be an issue during the next contract negotiations.
Together with Rabobank Nederland, ABN AMRO and a number of other large players, a.s.r. has launched an initiative to join hands to be able to increase its influence on suppliers that are unwilling to register in the FIRA database. As part of this, a.s.r. has posted a FIRA statement on its website.
All new suppliers that were selected by Procurement have agreed to register with FIRA. Alternatively, they should be able to demonstrate that they have in place a sound environmental policy, for instance by having been awarded a quality mark for sustainable crash repairs. The suppliers have verified their policy and they must have achieved Bronze level within one year of having registered. In June 2015, FIRA awarded a.s.r. the ‘Silver’ level.
Supplier code of conduct a.s.r. is committed to respecting human rights. Within its sphere of influence, a.s.r. seeks to support the protection of internationally recognized human rights. a.s.r. also attempts to ascertain that it does not become an accessory to any infringements of these rights. a.s.r. demands from its (potential) suppliers that they proactively care for the environment and that they endorse a.s.r.’s position on the environment, human rights and human dignity. With this in mind, any (potential) supplier will notify a.s.r. immediately of any signs that their organization or their (potential) suppliers do not observe the a.s.r. supplier code of conduct.
The ambition of a.s.r. RED is to be at the vanguard of sustainability, which is why it is represented in the Sustainability Committee of NEPROM, the association of Dutch property developers, and is a co-founder of/participant in the Dutch Green Building Council (DGBC).
Sustainability is essential given that a.s.r. RED’s developments are meant to last for many generations. All developments are awarded a sustainability label in principle, which can be GPR (a municipal practice guideline) or BREEAM, depending on the development.
a.s.r. RED has embraced BREEAM, the internationally recognized sustainability standard. The BREEAM certificate considers the level of energy savings and focuses on elements such as use of materials, health issues and location, particularly for commercial real estate. A number of a.s.r. REIM employees were trained as BREEAM-NL experts and assessors, so that a.s.r. RED now has Licensed Assessor Company status. Various developments in progress and completed developments were awarded the BREEAM certificate in 2015.
In addition to sustainable business practices, to a.s.r., social responsibility also involves investing in a broad range of community initiatives, by giving a financial impulse, by encouraging employees to volunteer and by way of various foundations and funds. One way in which a.s.r. gives practical application to its motto ‘helping by taking action’ is through the a.s.r. Foundation.
• Money Week As a member of the Dutch Association of Insurers and the Dutch Banking Association, a.s.r. actively partakes in Money Week with the goal of teaching primary school children to become financially literate. In 2015, during the fifth annual Money Week, 63 a.s.r. employees from all walks of the organization, including members of the Executive Board and senior management, taught guest classes to various ages of primary school children. Within the context of Money Week, separate classes were also taught in 2015 to the Feyenoord Street League. The goal for 2016 is to have at least 75 colleagues teach classes during Money Week.
• Financial Volunteer at Home In 2015, the Financial Volunteer at Home project was kicked off in combination with local home or accounting assistance initiatives. In this context, a.s.r. employees help low-income earners in financial difficulties to organize their finances and accounts until they have found their financial bearings. In total, 15 colleagues, including Chris Figee, Executive Board member, have taken on the role of Financial Volunteer at Home. Two colleagues provide other home accounting services within the scope of local projects. The goal for 2016 is to recruit colleagues for 12 new Financial Volunteer at Home projects.
In 2015, 1,004 employees contributed to one of the activities undertaken by the a.s.r. Foundation. This is about the same number as in 2015. The Stimulansplan incentive plan was used by 41 employees. This plan allows employees to request a financial contribution for any volunteer work they do outside a.s.r. Within this context, support was given to Stichting de Tussenvoorziening, a support network for the underprivileged, and language-teaching foundation Taal doet meer, among other causes.
• Stichting Kunst & Historisch Bezit The objective of Stichting Kunst & Historisch Bezit, a foundation for art and historical artefacts, is two-fold: to conserve a.s.r.’s rich corporate history and to provide access to the art collection for employees so as to create an inspiring work environment.
• Zorgmee The Ditzo Zorgmee (Care Too) campaign, which was started in the health insurance switching season of 2014, supported nine healthcare initiatives in 2015, contributing a total amount of € 410,000. Through this campaign, Ditzo wants to make a structural contribution to improving healthcare in the Netherlands. Everyone was invited to contribute to the campaign, both customers and non-customers. Besides starting a debate on healthcare in the Netherlands, Ditzo wants to raise funds for concrete healthcare initiatives. The overarching idea was that we should not only take care of ourselves, but also look after others. Ditzo doubled every donation made.
The campaign was continued throughout 2015. This year, Ditzo showed how the money was spent and how the projects contributed to the Dutch healthcare system. Ditzo wants to keep the debate on healthcare alive, even outside the health insurance switching season. For the results of the Zorgmee campaign, please visit: www.ditzo.nl/zorgmee.
• UN Global Compact (UNGC) a.s.r. signed the United Nations Global Compact in 2011.
By signing the UNGC, a.s.r. has undertaken to embrace, support and implement within its sphere of influence these principles relating to human rights, labour standards, the environment and the fight against corruption. For a status report on 2015, please visit www.asrnl.com and www.unglobalcompact.org.
• Multi-Year Energy Efficiency Agreement (MYA3) In 2008, a.s.r. signed the government’s third multi-year energy efficiency agreement (MYA3), in which it was agreed that organizations would commit to the ambition to reduce their energy consumption by 2% every year, ultimately culminating in a 30% improvement by 2020 from benchmark year 2005.
Deal since November 2013. The essence of circular procurement is that a procurement officer ascertains that a producer (or another processing party) manages to reuse products or materials in a new cycle when they have reached the end of their useful life.
• FIRA sustainability platform a.s.r. has been a member of the FIRA Platform since 2013.
FIRA connects organizations with sustainable business practices to potential sustainable suppliers. Suppliers post their sustainability performance on the platform, allowing procurement officers to choose the most suitable supplier.
Financial Markets is ISAE 3402-certified. An independent auditor performed an audit of the processes of this department and issued an ISAE 3402 type II assurance certificate. This quality mark is a key indicator that a.s.r. has full and adequate insight into the processes involved in investments, including execution and controls. The Financial Markets department has been awarded ISAE 3402 type II certification every year since 2010. a.s.r. REIM has been awarded ISAE 3000 Type II certification for its three funds, i.e. the ASR DPRF (retail fund), the ASR DCRF (residential fund) and the ASR Property Fund.
a.s.r. has been a member of the Dutch Association of Investors for Sustainable Development since 2009. This Association promotes awareness among investors of their contribution to sustainability, for instance by conducting different types of benchmark surveys. a.s.r. is included in the benchmark for responsible investments by insurance companies in the Netherlands.
• European Association for Investors in Non-Listed Real Estate Vehicles (INREV)
MVO Nederland wants to inspire, connect and accelerate organizations on their way towards climate-neutral, circular and inclusive business models with robust and stable earnings to contribute to a sustainable and fair world. It does so by bringing together governments, institutes of knowledge, NGOs and trade unions, focusing on issues such as the climate, energy, commodities, materials, waste, the working population and empowerment.
International, the Dutch Society for the Protection of Animals, the FNV trade union, Friends of the Earth Netherlands, Oxfam Novib and PAX. The surveys are carried out by the research and advisory agency Profundo. Each year, a benchmark survey is published in which insurers are assessed for their insurance and sustainability policies.
• Transparency Benchmark (TB) The Transparency Benchmark of the Dutch Ministry of
Economic Affairs gives an overview of the overall scores achieved by organizations. a.s.r. has been included in the Ministry of Economic Affairs’ transparency benchmark.
The online version of the annual report 2015 contains a number of links between the sustainability report and the other chapters of the annual report. It also has links to sources posted on the corporate website. For more information on ASR Nederland N.V., a.s.r. refers to other sections of this annual report and to www.asrnl.com.
This annual report has been prepared in accordance with local and international financial reporting requirements. The reporting framework and indicators are in accordance with the GRI G4 guidelines of the Global Reporting Initiative (GRI) and the Core option of GRI G4. a.s.r. believes that the GRI G4 Guidelines provide an effective framework for its sustainability reporting.
The GRI G4 Content Index outlines the indicators on which a.s.r. reports and shows where these disclosures can be found in the sustainability report, the report of the Executive Board or the financial statements. The table also includes additional information that has not been included in the annual report itself.
Relevant topics for this report were selected based on a materiality survey among internal and external stakeholders using a list of GRI G4 indicators, in which the degree of importance of themes is weighed against the importance that stakeholders attach to them. For details on the analysis and the outcome, see Appendix F.
The information contained in the report by the Executive Board and the sustainability report was based on extensive reports by our product lines and interviews with directors of the product lines and corporate departments, and using the outcomes of qualitative and quantitative questionnaires. The interviews addressed the material topics and the questionnaires were in line with the GRI G4 Guidelines. All disclosures were assessed by the business lines and corporate departments such as Group Accounting Reporting & Control, Risk Management, Human Resources, Business Support, Group Procurement & Contract Management, Legal, Audit, Compliance and Security. Publication of the report is subject to the approval of the Executive Board and Supervisory Board.
Reporting requirements are continuing to develop and a.s.r. expects to implement further improvements in its reporting procedures and the quality of its reporting in the future, including a drive towards integrated reporting with a higher level of auditability of disclosures.
274a.s.r. 2015 annual report Sustainability 7.9 Assurance report of the independant auditor
Our assurance engagement is aimed to provide limited assurance that nothing has come to our attention that causes us to conclude that the KPIs in scope are not correctly presented in accordance with the reporting polices and criteria developed by a.s.r. as disclosed on page 272 of the Report.
Our main procedures for the KPIs in scope included the following: • evaluating the acceptability of the reporting policies and criteria as developed by a.s.r. and their consistent application; • assessing the information contained in the KPIs on the basis of the reporting criteria as included in the reporting policy of a.s.r.; • obtaining an understanding of the design and implementation of the systems and methods used to collect and process the KPIs, including the consolidation process as relevant for the KPIs in scope; • identifying inherent risks relating to the reliability of the KPIs and obtain an understanding of the extent to which these risks are limited by internal controls; • interviewing management (or relevant staff) at corporate (and division) level responsible for the sustainability strategy and policies; • performing based on a risk analysis further review procedures related to the KPIs, by a combination of: • interviews with relevant staff responsible for a) providing the data of and information related to the KPIs, b) carrying out internal control procedures on these data and information and c) the consolidation of the data and information related to the KPIs in the Report; • analytical review of the KPIs and the underlying data and trend explanations submitted for consolidation at group level; • in addition to interviews, reconciliations with underlying environmental and social data systems and where relevant on a test basis with internal and external documentation that are the basis for the (calculation of the) KPIs.
Glossary Amortized cost The amount at which the financial asset or the financial liability is measured on initial recognition minus principal repayments, plus or minus accumulated amortization using the effective interest method or any difference between that initial amount and the amount at maturity, and minus any reduction for impairments or uncollectibility.
Carbon footprint An organization’s carbon footprint is determined by converting its consumption of natural gas, electricity and fossil fuels into carbon emissions. The carbon footprint gives the organization an idea of the greenhouse gas emissions caused by its operations and products. All relevant organizational processes affecting the climate are included in the carbon footprint.
Combined ratio The sum of the claims, commission and expense ratios.
Embedded derivative A component of a hybrid instrument that also includes a nonderivative host. The host contract may be a bond or share, a lease, an insurance contract or a contract of purchase and sale.
FIRA FIRA is a Dutch sustainability platform that verifies the corporate social responsibility disclosures of businesses and modifies them so as to allow benchmarking based on reliable information.
Global Reporting Initiative (GRI) The Global Reporting Initiative (GRI) is an international organization that defines standards for sustainability reporting.
IFRS Acronym of International Financial Reporting Standards (previously International Accounting Standards, IAS). As of 1 January 2005, these standards have been the generally accepted international accounting policies that apply to all listed companies in the European Union. They make annual results easier to compare and offer a better understanding of a company’s financial position and performance.
Impairment The amount by which the carrying amount of an asset or a cashgenerating unit exceeds its recoverable amount. The asset’s carrying amount is reduced to its fair value and recognized through profit and loss.
279a.s.r. 2015 annual report Glossary they can at times be regarded as industrial accidents if vehicles owned by a.s.r. are involved.
ISAE 3000 ISAE 3000 is the standard for assurance on non-financial information. ISAE 3000 has been issued by the International Federation of Accountants (IFAC). The standard lays down guidelines for the ethics, quality management and performance of an ISAE 3000 engagement. Generally speaking, ISAE 3000 is applied to audits of internal control, sustainability and regulatory compliance.
Market capitalization Market capitalization is the total market value of the outstanding shares of a publicly traded company and is equal to the share price times the number of outstanding shares.
Option A financial instrument that conveys the right to buy (call option) or sell (put option) a security at a reference price during a specified time frame.
Principles for Responsible Investment (PRI) The United Nations Principles for Responsible Investment are a framework for institutional investors. The principles, which were launched in April 2006, pertain to the integration of environmental, social and governance aspects into investment policies. For more information, please visit www.unpri.org.
Principles for Sustainable Insurance (PSI) The United Nations Principles for Sustainable Insurance are a set of standards designed to serve as a global framework for the insurance industry to address environmental, social, transparency, customer focus and governance aspects.
Seasonal Thermal Energy Storage (STES) Method for underground storage of heat or cold. The technology is used to heat and/or cool buildings.
Sustainable investment Sustainable investment is a form of investment by which an investor weighs the implications for people and planet in their investment decisions.
Test margin The test margin for the regulatory solvency available is the excess of the liability arising from the insurance contract and the outcome of the DNB liability adequacy test (DNB LAT).
List of acronyms AFM Netherlands Authority for the Financial Markets AIFMD Alternative Investment Fund Managers Directive ALM Asset Liability Management APF General Pension Fund a.s.r. GAM a.s.r. Group Asset Management a.s.r. REIM a.s.r. Real Estate Investment Management ASRH ASR Hypotheken B.V. ASR DCRF ASR Dutch Core Residential Fund ASR DPRF ASR Dutch Prime Retail Fund a.s.r. RED a.s.r. Real Estate Development AuM Assets under Management BeZaVa Liability for temporary employees BPO Business Process Outsourcing BREEAM Building Research Establishment Environmental
Assessment Methodology CAGR Compound Annual Growth Rate CCR Counterparty Credit rating (Standards and Poor’s) CDO Collateralized Debt Obligation CDS Credit Default Swap CRSA Control Risk Self-Assessment CoC Cost of Capital CoE Cost of Equity COSO Committee of Sponsoring Organizations of the
Treadway Commission CSA Credit Support Annex DAC Deferred Acquisition Costs DBO Defined Benefit Obligation DNB Dutch Central Bank (De Nederlandsche Bank) DNB LAT Dutch DNB (regulatory) Liability Adequacy Test DPF Discretionary Participation Features ECAP Economic Capital EPA Energy Performance Advisory Eonia Euro over night index average ERM Enterprise Risk Management ESG Environmental, Social and Governance EUR Euro Euribor Euro interbank offered rate FIG Fair Insurance Guide FIRM Financial Institutions Risk Assessment Method FTE Full-time equivalent GDP Gross Domestic Product GRESB Global Real Estate Survey Benchmark GRI Global Reporting Initiative IAS International Accounting Standards
Male Female Male Female Male Female Male Female Male Female Male Female
An industrial accident is an accident that happens in the course or as a result of work performed for a.s.r., causing injury to an employee and resulting in absenteeism, a permanent disability or death. Accidents happening during an employee’s travel to or from work do not qualify as industrial accidents.
The absenteeism rate is calculated by dividing the number of absenteeism days by the number of workdays in a year.
A sick employee can be offered a short or long recovery counselling programme depending on the nature of the sick leave. HR will inform the line manager of when to enter status reports on the rehabilitation process in the system, e.g. an action plan and a first-year evaluation. HR can also arrange for an absenteeism specialist to assist in the counselling process. The absenteeism specialist monitors all absenteeism reports and will contact the line manager within a few weeks of the employee having called in sick where necessary to discuss any follow-up actions. The absenteeism specialist and the company doctor will also review, before week 22 after the first day of an employee’s sick leave, whether the employee’s recovery could be accelerated by conducting an occupational health assessment at an early stage. The company doctor will contact the employee every four to six weeks.
Breakdown of employees by contracts of definite and indefinite duration at 31 December
Dutch Association of Insurers • Member of the Board – Jos Baeten, CEO Policy Committee of the Funeral Expenses Insurance Platform • Member – Guido Horst, Managing Director Ardanta Unit-Linked Insurance Administrative Consultative Committee • Member – Philippe Wits, Managing Director life business Administrative Consultative Committee of the Dutch Association of Authorised Agents (NVGA) • Member – Frank Romijn, Managing Director of occupational disability business Administrative Consultative Committee of Oval, a sector association of occupational health & safety services and rehabilitation companies • Member – Frank Romijn, Managing Director of occupational disability business Centre for Insurance Statistics • Member – Frank Romijn, Managing Director of occupational disability business Insurance Fraud Prevention Committee • Member – Gerard ten Brincke, Managing Director of
Europeesche Verzekeringen Sector Board, Health • Member of the Board – Frank Romijn, Managing Director of occupational disability business Sector Board, Life • Member of the Board – Fleur Rieter, Managing Director of pension business Sector Board, Non-life • Member of the Board – Robert van der Schaaf, Managing
Advisory Council for Financial Services Management, HU University of Applied Sciences, Utrecht Education & Professional Development Committee • Member – Frank Romijn, Managing Director of occupational disability business Dutch Association of Health Insurers • Member of the Board – Petra van Holst, Managing Director of health insurance business Dutch Association of Institutional Property Investors (IVBN) • Chair – Dick Gort, Managing Director of real estate business Dutch Reinsurance Company for Terrorism Losses (NHT) • Member of the Supervisory Board – Frank Romijn, Managing
Director of occupational disability business European Travel Insurance Group (ETIG) • Member of the Board – Gerard ten Brincke, Managing
Director of Europeesche Verzekeringen Foundation for Sustainable (Micro) Pensions in Developing Countries (SDMO) • Member – Fleur Rieter, Managing Director of pension business Keerpunt Hilversum, a rehabilitation company • Member of the Supervisory Board – Frank Romijn, Managing
Director of real estate business The Personal Injury Council • Chair – Robert van der Schaaf, Managing Director of non-life business (until 1 August 2015) VNO-NCW • Member of the General Administrative Board - Jos Baeten,
Other environmental information a.s.r. seeks to be a leader in sustainable business practices in the financial sector. It aims to realize this ambition in its investment policy as well as in its own business practices, from operating energy-efficiently to pursuing a sustainable procurement policy.
The charts below break down total carbon emissions by scope and by emission category.
Number of energy-efficient lease cars a.s.r.’s carbon emissions are lower because it operates more energy-efficiently. a.s.r. is committed to achieving the energy efficiency targets set in the MYA3 energy covenant, which are assessed by the government. In 2014, a.s.r. consumed 30% less energy than in 2005, the benchmark year.
Paper and cardboard All collected cardboard and archives were recycled in the paper industry. The archives were collected as confidential paper and confidentially destroyed. After destruction, this paper was used as a high-grade base material in the paper industry.
Swill/organic waste In 2015, a.s.r. separated substantial amounts of swill and organic waste from its residual waste. All of this waste was converted into biogas, making this waste flow entirely green.
Glass All glass was collected and recycled into new glass. Recycling one tonne of glass saves 1.4 tonnes in base materials.
Wood All wood that is collected is sorted. The highest-quality wood is used as a base material in the fibreboard industry. Lower-quality wood not suitable for the fibreboard industry is used as an energy carrier for energy generation.
House sparrow Over the past 20 years, the number of breeding pairs of the house sparrow, which belong to the order Passeriformes, has fallen significantly (over 50%). In the Netherlands, the house sparrow is on the red list of threatened species. The house sparrow is known to be primarily dependent on nesting opportunities in buildings.
Swift Similar to the house sparrow, the number of breeding pairs of the swift (order Hirundinidae) in the Netherlands has fallen dramatically as well, although the swift has not yet made it onto the red list of threatened species in the Netherlands. Swifts are known to be primarily dependent on nesting opportunities in buildings too.
a.s.r. is committed to conserving this species; to help do so, it has fitted 20 nesting boxes for swifts on the facade of its headquarters. All nesting boxes were installed in 2015.
Bats Bats, belonging to the order Chiroptera, are protected in the Netherlands. It is known that the grounds of a.s.r. headquarters are foraging territory for bats. In 2013, 23 shelters were fitted. At the end of 2014, a.s.r.’s Ecology Coordinator established that various shelters were being used by bats. The front of the new building is not suitable for bat nests, which is why a.s.r. installed a number of maternity units in the courtyard of the building in 2015.
Bees a.s.r. has deliberately chosen to create a habitat for bees in its garden. The bee-keepers engage in organic bee-keeping and the garden has bee-friendly plants.
In addition, a.s.r. tries to promote biodiversity through vigorous maintenance of its gardens so that native plans have a greater chance of survival. Also, when designing the garden, a muddy layer of soil was added to increase the number of amphibians. Finally, a number of willow trees (Salix) were planted. Compost heaps are made using the branches of this fast-growing tree. By doing so, a.s.r. hopes to improve the habitat of the grass snake (Natrix natrix), a rare species that is on the red list of threatened species.
Employees • Employees • Team managers • Senior management • Executive Board • Works Council
• Neighbours and residents’ representative bodies in view of renovation and inconvenience
(Kifid) • National Ombudsman • Stichting Verliespolis • Stichting Woekerpolis Claim • Dutch Association of Insurers • Vereniging Consument & Geldzaken • Dutch Shareholders’ Association (VEB) • Dutch Home Owners’ Association (VEH) • Dutch Association of Investors for
1 This does not include loss adjusters, crash repair companies and benefits paid by a.s.r. product lines such as occupational disability, P&C and pensions.
Second, the list was used to identify 20 relevant aspects. The third step involved a quantitative survey of 200 internal and external stakeholders. The materiality analysis was finalised based on the outcomes of the survey (71 respondents). The key stakeholder group for each aspect has been specified in the table breaking down stakeholder interests based on identified material aspects (see below and next page). The overall results have been visualized in the materiality matrix (page 21), in which the interests for stakeholders and for a.s.r. have been combined. The aspects in the top right-hand corner have been defined as material; qualitative notes on these aspects have been included in this report. All identified material aspects have been broken down in the table of identified material aspects (see below).
All information relating to policy, strategy and related indicators concern a.s.r.’s own organization unless indicated otherwise in the report. a.s.r. and its brands and activities cannot however be considered separately from their environment and their impact on third parties.
The sustainability steering group bears final responsibility for the further implementation of the material aspects. Many of these aspects are already part and parcel of a.s.r.’s day-to-day business practices. The business lines and corporate support departments involved have a good idea of the relevant duties and responsibilities, and of the time and resources assigned.
A number of material aspects still come without relevant measured performance indicators and targets.
Social – Product Responsibility – Product and Service Labelling: G4-PR5 2 Transparent product and service descriptions
Social – Product Responsibility – Product and Service Labelling: G4-PR3 4 Customer privacy Customers Chapter 1.5.5 Materiality matrix
Social – Society – Anti-corruption: G4-SO3, SO4, SO5 7 Compliance Employees, customers
Reference in annual report GRI aspect and indicator 9 Sustainable chain Public organizations Chapter 7.5.5 Procurement
Social – Human Rights – Investment: G4-HR1 15 Child labour Customers Chapter 7.4 Investor Chapter 7.5 Environment
Social – Human Rights – Forced or Compulsory Labour: G4-HR6 18 Activity human rights assessment
Environmental – Energy: G4-EN3 to EN7 20 Products and services Customers Chapter 7.1.2 Areas for attention
Customers Fair treatment and financial security Sustainable financial products (1, 3, 6, 12, 15, 20) Financial continuity/Security in uncertain times (1)
Financial market players a.s.r. as a going concern Sustainable financial products (2) Sustainable investment policy (16) Compliance with rules and regulations (5, 10) TCF (1) Respect (1)
Public organizations Sustainable contribution to society Sustainable financial products (19) Respect (1)
Investor Relations ir@asr.nl Up-to-date information for investors can be found on www.asrnl.com