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 Levensverzekeringen N.V., a group company. Transaction costs related to the capital optimization amount to € 2 million.
188a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
The Tier 1 and Tier 2 instruments bear discretionary interest and have no maturity date, but can be redeemed at the option of a.s.r. on any coupon due date with effect from: Date
Hybrid Tier 1 instrument 10% fixed interest 26 October 2019 Hybrid Tier 1 instrument 7.25% fixed interest 30 September 2019 Hybrid Tier 2 instrument 5% fixed interest 30 September 2024
189a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
6.16 Insurance liabilities 6.16.1 Liabilities arising from insurance contracts Insurance contracts with retained exposure can be broken down as follows: Gross Of which reinsurance
Changes in provision for claims 1,750 1,923 92 96 Changes in shadow accounting through equity 235 -102 - -
Non-life insurance contracts as at 31 December 4,571 4,240 419 407
190a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
Changes in liabilities arising from Life insurance contracts can be broken down as follows: Acquisition of insurance portfolios - 33 Premiums received 818 898 Regular interest added 628 636 Realized gains and losses 753 619 Amortization of realized gains -98 -86
Technical result -3 -84 Release of cost recovery -140 -158 Changes in shadow accounting through equity 1,172 -518 Changes in shadow accounting through income 2,487 -1,323 Other changes -341 -169
Claim liabilities prior years 392 Other claim liabilities 34 Shadow accounting 326
192a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
At year-end 2014, the liabilities included a guarantee provision for a carrying amount of € 26 million (2013: € 47 million) and a provision related to unit-linked insurance contracts and pension contracts for a carrying amount of € 197 million (2013: € 218 million). These provisions relate to compensation for the cost of these contracts. Other changes primarily includes the effect of the conversion of some insurance contracts amounting to € 318 million (2013: € 128 million) which were previously included in the liabilities arising from insurance contracts.
Changes in 2013 As of 1 January 2014, the accrual rate for old age pensions was changed to 1.9% (2013: 2.25% or 2.0%). As a result of this amendment a past service cost is accounted for in 2014 amounting to € 27 million which has been recognized in the Other income in 2014 (see chapter 6.26).
The pension contributions are paid by a.s.r. and employees also pay an own contribution of 6% of their pensionable salary.
Besides pension benefits, the defined benefits plans include personnel arrangements for financial products (such as mortgages and health insurance), which remain in place after retirement.
Employees account for 25% (2013: 23%) of the DBO and 38% (2013: 41%) of the DBO relates to former employees currently receiving pension benefits.
The discount rate has decreased by 1.9% point to 2.0% at 31 December 2014 (2013: 3.9%), resulting in an € 904 million increase in the DBO.
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: Pension plans Other post-employment benefits
The principal actuarial assumptions and parameters at year end were as follows: Pension plans Other post-employment benefits
Expected return on plan assets - - - Future salary increases (including price inflation and merit) 1.2% 1.5% 1.2% 1.5% Future pension increases (including price inflation) 1.5% 1.8% - -
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; • most recent mortality table ‘AG Prognosetafel 2014’ is used. • The period of indexation is based on the expected duration of the separate account to fund the future inflation indexation.
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 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 2014, the fair value of these assets amounted to € 2,409 million (2013: € 1,915 million), which includes the separate account to fund future inflation indexation amounting to € 292 million (31 December 2013: nil).
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 € 103 million (excluding the positive effect of the investment income) and € 0.2 million respectively.
As 31 December 2014 the duration of the defined benefit obligation was 19 years (2013: 17 years).
Discount rate 0.7% 2.4% Salary increases 1.2% 1.5% Expected remaining service years 8.9 8.7 6.18 Provisions
The table below shows movements in provisions: Additional foreseen amounts 48 45 Reversal of unused amounts -4 Usages in course of year -41 -40 Other changes -1 -
At year-end 2014, the fair value of borrowings was € 117 million (2013: € 98 million). See chapter 6.6.2. The average interest-rate payable on other borrowings was 2.60 % (2013: 3.30%).
These borrowings are used for investment purposes (property, group pension contracts), for balance sheet management, and for short-term cash flow management.
The increase of ‘debts to policyholders, agents and intermediaries’ is related to a pre-payment received in 2014, as a result of the buy-out of Stichting Chevron Pensioenfonds (the Chevron pension fund) amounting to € 370 million. Savings went up as a result of increased deposits in annuity savings accounts at a.s.r. bank.
198a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
The increase in amounts owed to banks € 3,277 million (2013: € 677 million) is primarily the result of cash collateral received under ISDAs concluded with counterparties. There is no significant difference between the carrying amount of € 3,277 million (2013: € 677 million) due to banks and the fair value of these liabilities (see chapter 6.6.2).
Life insurance contracts retained exposure 818 898 Life insurance contracts on behalf of policyholders 610 633 Total life insurance contracts 1,428 1,531
The table below provides an overview of total gross earned non-life insurance premiums. For further details on the individual business lines, see the segment information in chapter 6.5.
Gross premiums written 2,359 2,392 Changes in provisions for unearned premiums -4 1
Non-recurring and regular insurance premiums can be broken down as follows: Premiums life 2014 2013
Retained exposure Group Non-recurring premiums written 62 73 Periodic premiums written 188 250 Group total 250 323
On behalf of policyholders Group Non-recurring premiums written 24 21 Periodic premiums written 253 233 Group total 277 254
Total life insurance contract premiums include the elimination of € 82 million in premiums related to the a.s.r. post-employment benefit plans (2013: € 91 million) and the elimination of investment fees amounting to € 33 million (2013 € 44 million).
Interest income includes € 18 million (2013: € 31 million) in interest received on impaired fixed-income securities.
201a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
Reversal of impairments on fixed-interest securities as a result of disposal amounts to € 32 million (2013: € 68 million).
All changes in fair value presented here are changes to the so-called ‘clean fair value’. This is the fair value net of accrued interest recognized in interest income and expense.
202a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
Fee and commission income consists of the following components: Commission on reinsurance 23 35 Other fee and commission income 12 10
Other income can be broken down as follows: Proceeds from property developments 118 139 Other income 120 66
The other income includes the past service cost related to the amendment to the a.s.r. postemployment benefit plans amounting to € 60 million (2013: € 27 million) (see chapter 6.17).
Claims paid -1,659 -1,705 Change in provision for outstanding claims -92 -217 Amortization of VOBA (chapter 6.7) - -1 Insurance claims and benefits -1,751 -1,923
Claims paid -2,274 -2,848 Changes in liabilities arising from insurance contracts -372 -246 Changes in liabilities arising from insurance contracts on behalf of
Operating expenses can be broken down as follows: Salaries and wages -228 -239 Social security contributions -31 -30 Employee benefit charges -35 -37 Employee discounts -1 -8 Other short-term employee benefits -7 6 Total cost of own staff -302 -308
204a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
The table below is a summary of impairments: Intangible assets -93 -3 Property, plant & equipment (chapter 6.9) 4 -21 Investment property (chapter 6.10) -18 -52 Associates and joint ventures (chapter 6.11) - -5 Investments available for sale (chapter 6.12.1) 7 32 Loans and receivables (chapter 6.12.3) -18 -42
Costs associated with sale of development property -118 -195 Operation and depreciation of investment property -53 -57 Other expenses -43 -27
Included in the costs associated with sale of development property is an amount of € 19 million (2013: € 64 million) related to provisions recognized for possible future loss related to land and property development projects held as other assets.
In 2013, the item other expenses included an amount of € 714 thousand related to the ‘Crisisheffing’ high-income crisis levy of which € 166 thousand relates to the executive directors. As of 2014, this levy is not applicable anymore and therefore no amounts are included in 2014.
The income tax expense can be broken down as follows: Current tax for financial year -209 -252 Current taxes referring to previous periods 19 -79 Total current tax -190 -331
Deferred tax for financial year 92 247 Previously unrecognized tax losses, tax credits and other temporary differences that reduce deferred tax expense 4 Total deferred tax 96 247
206a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
The remuneration of the a.s.r. Executive Board and Supervisory Board are described in chapter 6.35 (Remuneration of the a.s.r. Executive Board and Supervisory Board).
Provisions for impairment amounting to € 1 million (2013: € 5 million) have been recognized on the loans and receivables.
6.35.1 Remuneration of supervisory directors The annual remuneration for members of the a.s.r. Supervisory Board has been calculated as follows: Amounts in Euros x 1,000 2014 2013
The long-term variable remuneration adjusted for the customer satisfaction in accordance with the 2010 variable remuneration policy, as disclosed in the 2010 annual report, for three former executive directors amounts to € 16,536. The amount does not concern any of the persons mentioned in the tables above. The only remaining executive director falling under the 2010 variable remuneration policy, J.P.M. Baeten, refrained from any disbursement of long-term variable remuneration.
1 In 2014 the fixed employee benefits increased in line with the annual CAO-index. The fixed employee benefits of ordinary board members are basically similar. Variations also arise as a result of differences in fiscal treatment of lease cars.
3 Part of the 2010 variable remuneration is deferred and adjusted for the customer satisfaction (NPS score) in accordance with the 2010 variable remuneration policy for the 2010 executive directors. The absolute increase in the NPS score between the grant date and the reference date amounts to 17% and translates into an increase in the long-term variable remuneration of 8,5%. The long-term variable remuneration was disbursed to R.T.
* Term of service ended on 31 August 2014. The termination benefit has been determined in 2014 in accordance with the Dutch Corporate Governance Code (article II.2.8) and contractual obligations and amounts to 8.5 months’ salary.
6.37 Contingent liabilities and assets 6.37.1 Claims and disputes The group is a respondent in a number of claims, disputes and legal proceedings arising from the normal conduct of business.
Dutch insurers see an increase in insurance policies complaints/claims based on grounds other than the cost compensation. Current and possible future legal proceedings could have a substantial financial and reputational impact. However it is not possible at this time to make reliable estimates of the number of expected proceedings, possible future precedents and the financial impact of current and possible future proceedings. Currently there are no indications that such a provision would be necessary for a.s.r.
6.37.2 Investment obligations and guarantees Where property developments are concerned, ASR Vastgoed Vermogensbeheer has assumed investment obligations for an amount of € 87 million (2013: € 261 million) and has issued guarantees to third parties for a total amount of € 330 million (2013: € 330 million).
6.37.3 Lease commitments The table below breaks down the commitments for non-cancellable operating leases as at 31 December: Lease commitments 2014 2013
210a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
Other commitments have been entered into primarily for facility and ICT contract related to an amount of € 62 million (2013: € 41 million).
ASR Nederland N.V., is a public limited company under Dutch law having its registered office located at Archimedeslaan 10, 3584 BA in Utrecht, the Netherlands.
211a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
Administratie- en Adviesbureau voor Belegging en Krediet (A.B.K.) B.V.¹ 100,00 100,00 Amersfoort Non-life ASR Aanvullende Ziektekostenverzekeringen N.V.¹,² 100,00 100,00 Amersfoort Non-life ASR Basis Ziektekostenverzekeringen N.V.¹,² 100,00 100,00 Amersfoort Non-life ASR Schadeverzekering N.V.¹,² 100,00 100,00 Utrecht Non-life ASR Ziektekostenverzekeringen N.V.¹ 100,00 100,00 Amersfoort Non-life Europeesche Verzekering Maatschappij N.V.² 100,00 100,00 Amsterdam Non-life N.V. Amersfoortse Algemene Verzekering Maatschappij¹,² 100,00 100,00 Amersfoort Non-life ASR Nederland Vastgoed Maatschappij N.V.¹ 100,00 100,00 Utrecht Life / Non-life ASR Levensverzekering N.V.¹,² 100,00 100,00 Utrecht Life Deltafort Beleggingen I B.V. 50,00 50,00 Amsterdam Life Sycamore 5 B.V.¹ 100,00 100,00 Utrecht Life Sycamore 6 B.V.¹ 100,00 100,00 Utrecht Life ArboNed Holding B.V. 41,00 41,00 Utrecht Other ASAM N.V.¹ 100,00 100,00 Utrecht Other ASR Bank N.V.³ 100,00 100,00 Utrecht Other ASR Betalingscentrum B.V.¹ 100,00 100,00 Utrecht Other ASR Deelnemingen N.V.¹ 100,00 100,00 Rotterdam Other ASR Hypotheken B.V.¹ 100,00 100,00 Utrecht Other ASR Nederland Beleggingsbeheer N.V.³ 100,00 100,00 Utrecht Other ASR Nederland N.V. 100,00 100,00 Utrecht Other ASR Pension Fund Services N.V.¹ 100,00 100,00 Utrecht Other ASR Service Maatschappij N.V.¹ 100,00 100,00 Rotterdam Other ASR Vastgoed Ontwikkeling N.V. 100,00 100,00 Utrecht Other ASR Vastgoed Vermogensbeheer B.V.¹,³ 100,00 100,00 Utrecht Other Brand New Day Premiepensioeninstelling N.V.³ 50,00 50,00 Amsterdam Other B.V. Nederlandse Hulpverleningsorganisatie-SOS International 100,00 100,00 Amsterdam Other PoliService B.V.³ 100,00 100,00 Zeist Other
Other equity instruments 6.40.3.8 701 515 Equity attributable to holders of equity instruments 3,047 3,033
Share of profit/(loss) of group companies 410 296 Other income and expenses after tax -29 -15
6.40.3 Notes to the company financial statements 6.40.3.1 Accounting policies The consolidated financial statements of a.s.r. for 2014 have been prepared in accordance with IFRS – including the International Accounting Standards (IAS) and Interpretations – as accepted within the European Union. In accordance with Section 362(8), Book 2 of the Netherlands Civil Code, the ASR Nederland N.V. Executive Board has decided to apply the same accounting policies to the consolidated financial statements as to the company financial statements. This has been the practice since 2005.
The loans to group companies consist primarily of deposits with group companies of € 29 million (2013: € 47 million) repayable within one year, no loans with a maturity term within 3 years (2013: € 29 million, average interest-rate of 4.5%) and loans of € 46 million (2013: € 46 million) with a maturity term longer than 3 years and an average interest-rate of 5.6% (2013: 5.6%).
214a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
6.40.3.7 Cash and cash equivalents Cash and cash equivalents are stated at face value. They are fully and freely available to the company.
A ct ua ri al g ai ns an d lo ss es
E q ui ty at tr ib ut ab le t o sh ar eh o ld er s
Result carried over from previous financial year - - - - 182 -182 - - Change in reserves required by law - - - - - - - - Profit carried over from previous financial year - - - - - - - - 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 - - - - - - - - Tax relating to interest on other equity instruments - - - - 27 - 27 - 27
Other equity instruments The other equity instruments relate to three (2013: four) different hybrid Tier 1 instruments classified as equity (see chapter 6.15.3). The payments of all amounts due in respect of the other equity instruments is guaranteed on a subordinated basis by ASR Levensverzekering N.V., a group company.
6.40.3.9 Employee benefits Employee benefits can be broken down as follows (see chapter 6.17 for further details): Post-employment benefits pensions 3,087 2,405 Post-employment benefits other than pensions 29 15 Other long-term employee benefits 7 6
Other liabilities 49 49 Short-term employee benefits 10 10 Trade payables 17 12 Tax payables 255 354
A breakdown of these fees is provided below: Amounts in Euro's 1,000 2014 2013
Examining and auditing the financial statements under the articles of association and other group company audits under the articles of association 2,087 1,863 Other audit services 515 681 Other non-audit services - 98
Investment obligations and guarantees ASR Nederland N.V. has issued guarantees to third parties for a total amount of € 333 million (2013: € 323 million) for real estate development projects and the acquisition of property.
Lease commitments For the table with the breakdown of the commitments for non-cancellable operating leases, see chapter 6.37.
218a.s.r. 2014 annual report 2014 consolidated financial statements ASR Nederland N.V.
ASR Nederland N.V. as at 31 December 2014 and of its results and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Netherlands Civil Code.
• The company financial statements give a true and fair view of the financial position of ASR Nederland N.V. as at 31 December 2014 and of its results for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code.
The company financial statements comprise: • the company balance sheet as at 31 December 2014; • the company income statement for the year then ended; and • the notes comprising a summary of the significant accounting policies and other explanatory information.
Materiality Misstatements can arise from fraud or error and will be considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.
221a.s.r. 2014 annual report Other information liabilities and the related solvency requirements we consider total equity the most important metric for the financial position of the Company. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the financial statements for qualitative reasons.
Because we are ultimately responsibility for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities. We included almost all insurance and bank entities in the audit scope for consolidation purposes, resulting in a coverage of 99% of total assets, 93% of gross premiums written and 94% of net result. We performed for the remaining entities, amongst others, analytical procedures to corroborate our assessment that there are no significant risks of material misstatement. All entities in scope for group reporting are audited by KPMG Accountants N.V.
By implementing 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 consolidated financial statements and the company financial statements.
The assumptions require significant Executive Board’s judgment. The Company has comprehensive procedures and internal controls in place to determine the value of the liabilities arising from insurance contracts and the related VOBA. As disclosed in note 6.7, in 2014 the Executive Board identified an impairment trigger regarding the VOBA, based on structural market developments regarding unitlinked insurance policies. The Executive Board performed an impairment test on the VOBA at the level of the unit-linked portfolio, and as a consequence the Executive Board recorded an impairment loss.
222a.s.r. 2014 annual report Other information observable data and actuarial analysis of the technical results during the year compared with the expected outcome based on the used assumptions. We discussed the outcome of the internally prepared analysis with the internal actuaries and the external (certifying) actuaries and we compared the assumptions used with market observable data, making use of our own actuarial experts. We furthermore focused on the adequacy of disclosure of the provisions and the related risks and assumptions in notes 6.2.2.D, 6.2.2.J, 6.3.6 and 6.16 of the financial statements.
Application of shadow accounting has a significant impact on the financial statements The Company applies shadow accounting in its financial reporting as disclosed in note 6.2.2.J. As a result (un)realized results on fixed income investments and interest derivatives, held for hedging the interest risk in the technical provisions, are not recognized in equity or income but are added to or deducted from the insurance liabilities. Shadow accounting is only applied for interest rate effects. Shadow accounting is complex, requires significant Executive Boards judgment regarding results that apply for shadow accounting and has a significant impact on the technical provisions.
As part of our audit procedures we tested the valuation of the fixed income investments and interest derivatives, held for hedging the interest risk in the technical provisions. Furthermore we tested the internal controls regarding the accounting of the (un)realized results and relating shadow accounting adjustments and the appropriate elimination of impairment results on the fixed income investments that do not apply for shadow accounting.
We found that shadow accounting is consistently and appropriately applied by the company and that the shadow accounting methodology contributes to the cautious provisioning for the liabilities arising from insurance contracts.
The Executive Board is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and 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 it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing 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 frameworks 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.
We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included e.g.: • Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
• Concluding on the appropriateness of the Executive Board’s use of the going concern basis of accounting, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and
• Evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Report on the Report of the Executive Board and the other information Pursuant to legal requirements under Part 9 of Book 2 of the Netherlands Civil Code (concerning our obligation to report about the Report of the Executive Board and other data), we declare that: • We have no deficiencies to report as a result of our examination whether the Report of the
• Further we report that the Report of the Executive Board, to the extent we can assess, is consistent with the financial statements.
2014 annual report Other information 7.2 Events after the balance sheet date Voluntary change in accounting policy as of 1 January 2015.
In 2015, a further tranche in ASR Dutch Prime Retail Fund (DPRF) and a first and second tranche of ASR Dutch Core Residential Fund (DCRF) were transferred by a.s.r. to institutional investors. Thereby further reducing a.s.r.’s investment property exposure from 56% to 41% for DPRF and from 100% to 93% for DCRF. As a result of these transactions, a.s.r. will recognize a net profit after tax of € 60 million in 2015 as a result of the realized gain on investment property.
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.
7.4 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.
2. The Executive Board’s proposals for the Company’s reservation and dividend policies shall be subject to the approval of the Supervisory Board. These policies shall subsequently be adjusted and amended, if appropriate, by the Annual General Meeting of Shareholders (AGM). If the Executive Board does not make any proposals, the AGM shall have the right to adopt the reservation and dividend policies at its own discretion. The adoption and any subsequent amendments of the reservation and dividend policies shall be addressed and recorded as a separate agenda item in the AGM, in which process any departures from these proposals shall be explained stating the reasons.
9. The claim of the shareholder for payment shall be barred after five years have elapsed.
7.5 Profit appropriation The Executive Board will propose to the Annual General Meeting of Shareholders to distribute € 138,9 million in dividend on ordinary shares for 2014.
7.6 Glossary Amortized cost The amount at which the financial asset or the financial liability is measured at initial recognition minus principal repayments, plus or minus the accumulated amortization using the effective interest method of any difference between that initial amount and the maturity amount, and minus any reduction for impairment or uncollectibility.
Clean fair value The fair value of an asset or liability (see below), exclusive of the unrealized part of accrued interest.
Hedge accounting Hedge accounting recognizes the offsetting on profit or loss of changes in the fair value of the hedging instrument and the hedged item.
Market capitalization Market capitalization is a measurement of size of an enterprise equal to the share price times the number of outstanding shares.
Non-participating life insurance contracts In non-participating life insurance contracts all values related to the policy (death benefits, cash surrender values, premiums) are usually determined at policy issue, for the life of the contract, and usually cannot be altered after issue.
Shadow accounting Shadow accounting allows a recognized but unrealized gain or loss on an asset to be transferred to insurance liabilities.
Value in use Value in use is the present value of the future cash flows expected to be derived from an asset or cashgenerating unit.
Value Of Business Acquired (VOBA) The present value of future profits embedded in acquired insurance contracts. VOBA is recognized as an intangible asset and amortized over the effective life of the acquired contracts.
2014 annual report Other information 7.7 List of acronyms ALM Asset Liability Management 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) COSO The Committee of Sponsoring Organizations of the Treadway Commission CSA Credit Support Annex DAC Deferred acquisition costs DBO Defined Benefit Obligation DNB The Dutch Central Bank (De Nederlandsche Bank) DNB LAT Dutch DNB (regulatory) liability adequacy test (Toereikendheidstoets) DPF Discretionary Participation Features ECAP Economic Capital Eonia Euro Over Night Index Average ERM Enterprise Risk Management EUR Euro Euribor Euro Interbank Offered Rate FIRM Financial Institutions Risk Analysis Method FTE Full-time equivalent IAS International Accounting Standards IBNR Incurred But Not Reported IFRIC International Financial Reporting Interpretations Committee IFRS International Financial Reporting Standards IFSR Insurer Financial Strength rating (Standards and Poor’s) ISDA International Swaps and Derivatives Association LAT Liability Adequacy Test LTGA Long Term Guarantee Assessment OIS Overnight Index Swap ORSA Own Risk and Solvency Assessment OTC Over The Counter QIS Quantitative Impact Studies (Solvency II) RICS Royal Institution of Chartered Surveyors Saas Software as a service SCR Solvency Capital Requirement TVOG Time Value of Financial Options and Guarantees UFR Ultimate Forward rate USD United States Dollar VOBA Value of Business Acquired VPL Early retirement and life cycle ‘VUT (Vervroegd UitTreden), Prepensioen en Levensloop’ WFT The Dutch Act on Financial Supervision which regulates the supervision of financial institutions in the Netherlands (Wet op het financieel toezicht).
1. Compliance with the Code 1.1 Application a.s.r. applies all the principles of the Code. Compliance with the principles is carefully monitored and, where possible, improved, taking account of the continually changing needs of stakeholders. Any comparable legal and regulatory requirements that go beyond the principles set down in the Code are observed.
a.s.r. applies the Code to the following insurance companies: • ASR Schadeverzekering N.V.
• ASR Levensverzekering N.V. • ASR Basis Ziektekostenverzekering N.V. • ASR Aanvullende Ziektekostenverzekering N.V. • N.V. Amersfoortse Algemene Verzekering Maatschappij • Europeesche Verzekering Maatschappij N.V.
2014 annual report Other information 2. Supervisory Board 2.1 Composition and expertise 2.1.1 The Supervisory Board shall be composed in such a way as to enable the proper performance of its duties. Complementarity, joint management, independence and diversity are key to the proper performance of the Supervisory Board’s duties.
The Supervisory Board is diverse in terms of the gender and professional background of its members. The diversity of the members of the Supervisory Board guarantees its complementary profile. Supervisory Board members satisfy the independence criteria set down in the Dutch Corporate Governance Code. The members perform their duties collectively and with joint responsibility.
The Supervisory Board may request any information it deems necessary for the performance of its duties and consult external experts. The Supervisory Board performs a self-assessment at least once a year, which includes the composition of the Supervisory Board as well as other matters.
The Supervisory Board’s regulations require the Supervisory Board to take into consideration the interests of all stakeholders of a.s.r. and all its regulated entities, including any relevant corporate social responsibility aspects of the various business lines.
2.1.4 Each Supervisory Board member shall be capable of assessing the main aspects of the
233a.s.r. 2014 annual report Other information insurer’s overall strategy in order to form a considered and independent opinion of the basic risk exposures. Each member shall also have the specific expertise required to perform his or her role within the Supervisory Board. To this end, an individual profile – in line with the general profile for the Supervisory Board – shall be compiled whenever a vacancy arises.
The regulations stipulate that each Supervisory Board member must be able to assess the main aspects of a.s.r.’s overall strategy. All members must have plenty of experience in highly responsible positions and a proven track record of well-considered business decisions. The composition of the Supervisory Board enables members to be critical of each other, the Executive Board or any subsidiary interest.
When the incumbent chair of the Supervisory Board steps down, the Supervisory Board will draft an individual profile in line with the general profile for the entire Supervisory Board that also covers the requirements concerning financial sector experience and expertise, and knowledge of the socioeconomic and political culture and the social environment of the main markets in which the insurer operates.
The chair and members of the Supervisory Board pledged on their appointment, and have managed in practice, to make themselves sufficiently available and accessible to enable the proper performance of their duties as Supervisory Board members and Supervisory Board Committee members.
a.s.r. has a restrained remuneration policy, which is exercised with due care. The members of a.s.r.’s Supervisory Board are paid a fee proportionate to the time required to perform their duties. The level of their fee is adopted by the Annual General Meeting of Shareholders (AGM) and is not linked to a.s.r.’s results.
2.1.8 The chair of the Supervisory Board shall ensure that a programme of continuing education is in place for the members of the Supervisory Board, aimed at maintaining and, where necessary, enhancing members’ skills and expertise. This programme shall at least cover relevant developments regarding the insurer and the financial sector, corporate governance in general and that of the
234a.s.r. 2014 annual report Other information financial sector in particular, the duty of care to customers, integrity, risk management, financial reporting and audits. All members shall take part in the programme and satisfy the continuing education requirements.
In 2014, in accordance with the relevant provisions of its regulations, the Supervisory Board adopted the Executive Board’s proposal concerning the risk appetite. The Supervisory Board was advised on this matter by the Audit & Risk Committee. The Supervisory Board also discussed and adopted the proposals for applying the risk appetite of ASR Nederland N.V. to licensees of ASR Nederland N.V. The regulations of the Audit & Risk Committee have been published on www.asrnl.com as an annex to the Supervisory Board’s regulations (in Dutch).
The Audit & Risk Committee consists of two members, appointed by the Supervisory Board.
The regular meetings of the Audit & Risk Committee, held no fewer than five times a year, are to be attended, at least, by the CFO and the heads of the Audit, Risk Management and Integrity departments (the latter being responsible for Compliance). An overview of the members of the Audit & Risk Committee and their CVs is given on pages 85 and 87 of this Annual Report. The CVs of the members show that this principle is being met.
The Executive Board has four members. The composition of the Board is characterized by complementarity and diversity of gender and age, as evidenced by the abbreviated CVs posted on the corporate website (www.asrnl.com) and included on page 85 of this report.
The Executive Board’s regulations and the a.s.r. reliability and suitability policy guarantee that Executive Board members follow a programme of continuing education (CE). The CE programme comprises both individual and group modules on developments in the financial sector, corporate governance in general and that of the financial sector in particular, the duty of care towards customers, integrity, risk management, financial reporting, auditing and consistent, well-balanced decisionmaking.
3.1.4 All Executive Board members shall take part in the programme referred to under 3.1.3 and satisfy
237a.s.r. 2014 annual report Other information the permanent education requirements. This is a prerequisite for being able to perform adequately as an Executive Board member. The Supervisory Board shall ascertain whether the members of the Executive Board possess the required expertise.
The Executive Board bears collective responsibility for the management of the company and hence for its general risk management policy. It is the responsibility of the CFO to prepare the decision-making on risk management, and this responsibility has been included in the CFO’s job profile. In 2014, the CFO prepared all decision-making concerning risk management and the risk appetite. The CFO was involved, in a timely manner, in the preparation of decisions that are material to a.s.r.’s risk profile. In the performance of the risk management function, the focus was also on the importance of financial stability and the possible impact of systemic risks on a.s.r.’s risk profile. The Head of Risk Management reports to the CFO and has a direct line to the Audit & Risk Committee.
The CFO has further areas of responsibility besides Risk Management; these are Finance, Accounting, Reporting & Control (ARC) and Financial Markets. The CFO’s duties pertaining to these areas of responsibility – and any (financial) results gained from them – do not involve any customer-driven, commercial activities.
3.2.2 Putting customers’ interests first is a precondition for the insurer’s continuity. Without prejudice to principle 3.2.1, it is the responsibility of the Executive Board to ensure that the insurer treats its customers fairly at all times. The Executive Board must ensure that the duty of care to the customer is embedded in the insurer’s culture.
The PARP is an assured part of the entire product development and testing process. Multidisciplinary development teams, the Product Teams and the PARP Board (see 4.5) work in accordance with the PARP. The PARP Board tests the quality of new products and assesses whether customer information is understandable, balanced and complete. a.s.r. also conducts a risk assessment of its existing product line to verify whether products still satisfy today’s requirements.
a.s.r. works according to the Continuous Improvement approach and customer needs, complaints and contacts identified through closed-loop customer feedback. The a.s.r.-wide implementation of the closed-loop customer feedback was completed in 2014. This system enables employees to obtain feedback from customers on a continuous basis, translate these into ideas for improvement and implement targeted improvements. For customer feedback to be truly valuable, it needs to be integrated into day-to-day processes and behaviour. In the Health Insurance business, for instance, 26 suggestions for improvement were implemented, resulting in a marked increase in its NPS score.
The Executive Board’s regulations stipulate that the members of the Executive Board shall fulfil their duties expertly, with due care and with integrity, while complying with all applicable laws, rules, regulations and codes of conduct.
Under the Dutch Oath or Affirmation (Financial Sector) Regulation, which took effect on 1 January 2013, Chris Figee took the oath/affirmation as soon as he was appointed CFO.
3.2.4 It is the duty of the Executive Board to ensure that the declaration referred to under principle 3.2.3 is transposed into principles guiding the actions of all the insurer’s employees. On appointment, all new employees shall be explicitly informed of the meaning of these principles by means of a reference in their employment contract with the insurer, and they are expected to abide by them.
All aspects of the moral and ethical declaration are addressed in the codes of conduct and integrity, and employment contracts specifically refer to these codes. a.s.r. provides information and support to employees on questions of how their own conduct and attitude may help to gain and maintain the trust of customers and other stakeholders. A key requirement in this respect is that conduct and attitude should be based on a.s.r.’s core values. Special attention is also given to this topic in the recruitment and selection process and the induction programme for new staff. For information about the core values, see www.asrnl.com.
The Executive Board reports on financial and non-financial risk management on a three-monthly basis. Each year, the Executive Board determines the risk appetite and submits it to the Supervisory Board for approval. This principle is enshrined in the regulations for the Executive Board, the Supervisory Board and the Audit & Risk Committee, and forms a regular part of the management cycle.
4.4 The Executive Board shall ensure that the risk management function is set up in such a way that the Board is informed, in a timely manner, of material risks to the insurer, so that these can be managed. Decisions that are material to the risk profile, capital allocation or liquidity requirement shall be taken by the Executive Board.
a.s.r. has chosen to be a different insurer, one that, based on its core values of being personal, accountable, and authentic, really makes a difference for its customers. To that end, a.s.r. follows the Proposition Approval & Review Process (PARP). This process was approved by the Executive Board and delegates the Executive Board’s power of final approval before a product is introduced to the PARP Board.
Every business line is responsible for the meticulous completion of the entire process. The PARP Board is chaired by the Marketing Director. People with the knowledge and skills required in a product development process have been given specific responsibility for the various sub-steps.
All new a.s.r. product propositions go through this process, which ensures that they are developed in such a way as to meet the needs of customers and treat customers fairly in a number of different scenarios. An important element is making sure that a proposition is geared to the target group. The duty of care and the duty to inform are also part of the process. A similar, but different process is in place for existing products, which are evaluated on the basis of a risk assessment. Even products no longer being offered are evaluated using today’s set of standards.
In 2014, ten new propositions and 20 product adjustments were submitted to the PARP Board for approval. The review of six existing products was also submitted to the PARP Board for approval.
a.s.r. is structured on the basis of the three lines of defence model. The first line of defence, i.e. management and staff who engage in the day-to-day business, the boards of the supervised entities and the Executive Board, is responsible for identifying and managing risks. The Risk Management & Compliance column, which provides frameworks, and monitors and reports on the level of risk management, forms the second line of defence. The third line of defence is the Internal Audit function, which is covered in Principle 5.3. As formalized in the Audit Charter, the Executive Board has commissioned Audit to systematically audit how the risks associated with a.s.r.’s operations and activities are managed. Audit reports periodically to the Executive Board and the Audit & Risk Committee, in which process the reports prepared by Audit are discussed in great detail.
5.2 The insurer shall have its own internal audit function, which shall occupy an independent position. The head of the internal audit function shall report to the chair of the Executive Board and have a reporting line to the chair of the Audit Committee.
5.3 The internal audit function shall assess the effectiveness of the design, existence and operation of the internal control structure. This assessment shall include a review of the quality and effectiveness of the insurer’s governance, risk management and internal controls. The internal audit function shall report its findings to the Executive Board and the Audit Committee.
The Audit Department provides a professional and independent assessment of the governance, risk management and internal control processes with the aim of aiding management in achieving the company’s objectives. The Audit Department evaluates the effectiveness of governance, risk management and internal control processes, and gives practical advice on process optimization. This statement of duties has been set down in the Audit Charter. The Audit Department reports its findings to the Executive Board and, by means of the quarterly management report, to the Audit & Risk Committee.
The Audit Department engages in periodic consultations with the independent external auditor, and as a rule it attends the meetings of the Audit & Risk Committee. In close consultation with the independent external auditor, Audit prepares an audit plan based on its risk assessment. These plans are approved by the Audit & Risk Committee.
5.5 As part of the overall audit of the financial statements, the independent external auditor shall report its findings on the quality and effectiveness of the insurer’s governance, risk management and internal control processes in its report to the Executive and Supervisory Boards.
5.6 The internal audit function shall take the initiative to meet with the Dutch Central Bank (DNB) and the independent external auditor at least once a year at an early stage in order to discuss each other’s risk assessments, findings and audit plans.
244a.s.r. 2014 annual report Other information 1 Reference is made to the Dutch Regulation on Sound Remuneration Policies 2014, the Dutch Corporate
2 Pursuant to the Dutch Act on the limitation of liability for DNB and AFM and the bonus prohibition for stateaided enterprises, the members of the Executive Board have not received any variable pay since the financial year 2011.
6. Remuneration policy 6.1 Basis 6.1.1 The insurer shall pursue a careful, restrained and sustainable remuneration policy, in line with its strategy, risk appetite, goals and values and taking account of its long-term interests, the relevant international context and public support. The Supervisory and Executive Boards shall adhere to this principle in carrying out their duties in respect of the remuneration policy.
Improving and maintaining the integrity and robustness of a.s.r. is key to the remuneration policy, and the focus is squarely on the long-term interests of all a.s.r.’s stakeholders. The aim of the remuneration policy is to motivate employees to work for the interests of customers and other stakeholders within the parameters of the duty of care. The remuneration policy is based on the following principles: • The remuneration policy is designed to help achieve a.s.r.’s strategy and targets.
• Customer satisfaction indicators as well as financial and risk indicators should be used for assessing the performance of organizational and other targets.
Until 1 July 2014, all employees, except for the members of the Executive Board2, were entitled to fixed and variable pay. With effect from 1 July 2014, variable pay has been eliminated; employees are now entitled to fixed pay only. The only employees still qualifying for a target-related pay component of up to 20% are a small group of 139 sales employees who come under the a.s.r. CBA (collective bargaining agreement) and pay structure for front-office positions. As a result, a.s.r. updated its remuneration policy in 2014. The updated policy was submitted to the Supervisory Board for approval in November 2014. The Supervisory Board approved the updated policy.
6.2 Governance 6.2.1 The Supervisory Board shall be responsible for implementing and evaluating the remuneration policy for the Executive Board once it has been adopted. The Supervisory Board shall also approve the senior management remuneration policy and monitor its implementation by the Executive Board. Finally, the Supervisory Board shall approve the principles of the remuneration policy for the insurer’s
245a.s.r. 2014 annual report Other information other employees. The insurer’s remuneration policy includes the policy on the award of retention, exit and joining packages.
The Supervisory Board is responsible for implementing and evaluating the remuneration policy governing the members of the Executive Board, as adopted by the AGM. The Supervisory Board explicitly monitors the implementation of the remuneration policy for higher management within the control functions. The Supervisory Board approves the remuneration policy for senior management and monitors its implementation by the Executive Board. The Supervisory Board also assesses the principles of the remuneration policy for other employees. The Supervisory Board has a Selection, Appointment & Remuneration Committee (SAR Committee) that is formed from among its members. The SAR Committee advises the Supervisory Board on the aforementioned duties and prepares the Board’s decisions on these matters.
Human Resources reports on an annual basis to the SAR Committee and the Supervisory Board on the following topics: • a.s.r.’s stance on pay and benefits • existing pay and benefits arrangements • compliance with arrangements and procedures as well as possible exceptions 3 As mentioned above, the only employees still qualifying for a target-related pay component of up to 20% are a small group of 139 sales employees who come under the a.s.r. CBA job classification and pay structure for front-office positions.
• the assessment results of the control functions’ senior management • any exit packages that have been awarded • the most notable issues regarding pay and benefits • reasons, if any, to amend components of the remuneration schemes.
6.3 Executive remuneration 6.3.1 An Executive Board member’s remuneration shall be in reasonable proportion to the remuneration policy set by the insurer, and total pay and benefits shall, at the time they are set, be slightly lower than the median of comparable positions in and outside the financial sector, taking account of the relevant international context.
6.3.2 A golden handshake awarded to an Executive Board member shall not exceed the equivalent of one annual salary (the ‘fixed pay’ component). If a member of the Executive Board leaves office during their first term and it is evident that a golden handshake of up to one annual salary would be unreasonable, this member shall be eligible for a golden handshake of up to two times the annual fixed salary.
The maximum severance pay for new and incumbent Executive Board members is one year’s fixed salary.
It should be noted that, in accordance with the Act on the limitation of liability for DNB and AFM, and the bonus prohibition for state-aided enterprises, the members of the Executive Board of a.s.r. are not awarded any variable pay as long as a.s.r. falls under the scope of the Act. What is more, variable pay has been eliminated for all employees at a.s.r. with effect from 1 July 20145.
The targets to be achieved in terms of financial results and customer appreciation are adopted annually by the Executive Board and the Supervisory Board. These targets are discussed with, and explained to, the Works Council before they are adopted. As mentioned earlier, variable pay has been eliminated with effect from 1 July 2014, which is why the above applies to the first half of 2014 only7.
The procedure for setting, evaluating and reviewing the targets for the variable pay of sales and backoffice staff is contained in the a.s.r. collective bargaining agreement, the CBA job classification and pay structure for sales and backoffice positions, the assessment procedure and a manual. The procedures for higher and senior management and the Executive Board have been elaborated in the remuneration policy document. As mentioned earlier, variable pay has been eliminated with effect from 1 July 2014, which is why the above applies to the first half of 2014 only9.
The scores on the agreed performance criteria for variable pay are adjusted to allow for risks and costs. In setting the performance scores, the Supervisory Board is advised by the Selection, Appointment & Remuneration (SAR) Committee, which receives input and advice from Risk Management, Compliance, Audit and Human Resources. The Supervisory Board sets the scores. The procedure for target-setting and risk management (ex ante and ex post) is formalized in the remuneration policy document.
Fully Chapter 2.2.1 2.8 Scale of the reporting organization. Fully Chapter 1.1 Chapter 2.2.1 2.9 Significant changes during the reporting period regarding size, structure, or ownership.
Location of disclosure 3. Report Parameters 3.1 Reporting period (e.g., fiscal/calendar year) for information.
Fully Page 286 3.5 Process for defining report content. Fully Chapter 3.1.6 Regulators, Government and politics, Financial (international) market players and Shareholders.
Fully The quantitative and qualitative information provided concerns a.s.r. as a whole, except where explicitly stated that information applies to one specific business unit or a business line.
3.7 State any specific limitations on the scope or boundary of the report (see completeness principle for explanation of scope).
Fully All reported figures have been calculated on the same bases as last year. The comparative figures have been restated to reflect any changes in accounting policies. Chapter 2.2.1 Chapter 6.2.1 3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report. Explain any decisions not to apply, or to substantially diverge from, the GRI Indicator Protocols.
Fully Page 5 (Introduction) Chapter 3.1.6 Appendix 2, page 250 3.13 Policy and current practice with regard to seeking external assurance for the report.
Fully Chapter 5.1.3 4.2 Indicate whether the Chair of the highest governance body is also an executive officer.
Fully Chapter 5.1.3 4.3 For organizations that have a unitary board structure, state the number and gender of members of the highest governance body that are independent and/or non-executive members.
Fully a.s.r. has a two-tier structure rather than a unitary board structure. Chapter 5.1.4 4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.
Fully Chapter 3.1.2 Chapter 5 www.asrnl.com 4.5 Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization’s performance (including social and environmental performance).
Location of disclosure 4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided.
Fully Chapter 5.1.3 Chapter 5.1.4 www.asrnl.com 4.7 Process for determining the composition, qualifications, and expertise of the members of the highest governance body and its committees, including any consideration of gender and other indicators of diversity.
4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental and social performance and the status of their implementation.
The regulations listed above have been posted on the a.s.r. Infonet (intranet).
4.9 Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles.
4.10 Process for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance.
Fully Page 273 4.13 Memberships in associations (such as industry associations) and/or national/ international advocacy organizations in which the organization: * Has positions in governance bodies; * Participates in projects or committees; * Provides substantive funding beyond routine membership dues; or * Views membership as strategic.
Fully Page 273 4.14 List of stakeholder groups engaged by the organization.
Fully Page 275 4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.
FS1 Policies with specific environmental and social components applied to business lines.
FS2 Procedures for assessing and screening environmental and social risks in business lines.
FS3 Processes for monitoring clients’ implementation of and compliance with environmental and social requirements included in agreements or transactions.
a.s.r. reviews the risk that a client’s income has been earned from illegal trade and industrial activities or from socially unacceptable activities.
Fully a.s.r. is committed to developing and improving its employees’ competency on a continuous basis. This contributes to a better customer service. Employees receive training and coaching, and are given workshops and on-the-job training to improve their competency and skills, and to increase their expertise and customer focus.
Fully Over the past years, a.s.r. has taken various steps to increase the level of sustainability in its business practices and it has sought media attention for its efforts in this regard. Major themes are taken up with customers; potential approaches to such themes are discussed in customer panels. Chapter 3.1.1 Chapter 3.1.3 Chapter 3.1.4
Aspects Economic Performance COMM Fully Chapter 1.1 Chapter 2.2.1 Chapter 2.2.2 Chapter 2.2.3 Chapter 2.2.4 Chapter 6
Fully ASR Nederland N.V. encourages the right of assembly. Our employees are unionized and they are represented by the Works Council, which is made up of 19 members from every product line and business line.
Public Policy Fully a.s.r. is a member of the Dutch Association of Insurers, the Dutch Association of Health Insurers and the Dutch Banking Association. These sector organizations lobby for a.s.r.’s interests in the Netherlands.
FS15 Policies for the fair design and sale of financial products and services.
FS7 Monetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose.
FS8 Monetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose.
Fully Chapter 3.1.3 a.s.r. Audit forms a professional and independent opinion of governance, risk management and internal control processes with the purpose of supporting management in achieving the corporate targets. In this process, Audit evaluates the effectiveness of the governance, risk management and internal control processes, and offers practical advice on how to further streamline these processes.
In 2014, Audit performed the following sustainability audits: Public interest: 1. ASR Nederland N.V. – Dutch Insurance Code 2. a.s.r. bank – Dutch Banking Code (including PARP) 3. a.s.r. bank – assessment of risk management 4. Security – fraud prevention programme 5. Human Resources – sound remuneration policy Treating customers fairly: 1. ASR Nederland N.V. – complaints management 2. Marketing – PARP 3. ASR Nederland N.V. – Customer-Oriented Insurance
4. Pensions – Customer-Oriented Insurance Quality Mark for processes involving transfer of accrued benefits and divorce 5. a.s.r. bank – compliance with modern savings policy 6. Pensions – Pension Insurance Advance Levy Fund 7. Life – forest compensation Sustainability: 1. Facility Services – facility management – management of renovation risks (financial and operational) 2. a.s.r. Real Estate – process of managing tenancy agreements in SAP.
Partially Starting salaries at a.s.r. are above the local minimum wage. Given that the entry-level wage varies greatly because of the broad diversity of roles, no exact range of ratios can be provided.
EC9 Understanding and describing significant direct economic impacts, including the extent of impacts.
EN1 Materials used by weight or volume. Fully 437,631.21 kilos (438 tonnes) of paper Total paper consumption in kg per FTE: 125
EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives.
EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.
EN14 Strategies, current actions, and future plans for managing impacts on biodiversity.
EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.
EN20 NOx, Sox, and other significant air emissions by type and weight.
EN25 Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff.
EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.
The report mentioned above addresses the relevant international standards and provides a breakdown into 11 subdomains. The report lists the criteria of environmental protection, including protection of the atmosphere (2.3), protection of internationally important wetlands (2.4), protection of the quality and supply of freshwater resources (2.5) and protection of waters against pollution caused by nitrates from agricultural sources (2.5).
Fully ASR Nederland N.V., which is based in the Netherlands only, does not have any foreign operations. Chapter 3.1.2 (page 57) Page 203 Page 284
LA2 Total number and rate of new employee hires and employee turnover by age group, gender, and region.
LA3 Benefits provided to full-time employees that are not provided to temporary or parttime employees, by major operations.
Fully 96.2% fall under a collective bargaining agreement. 3.8% do not fall under a collective bargaining agreement (HM, SM and Executive Board).
Fully a.s.r. notifies employees as soon as possible of future developments that might affect their employability; the aim is to create early awareness among employees of such and to allow them to prepare for a change of roles, either within or outside a.s.r. Employees who are ultimately made redundant as a result of a restructuring are offered six months of job coaching. After these six months, their employment contract with a.s.r. is terminated. If an employee’s employment contract is terminated as part of the Redundancy Plan, the employee does not have a notice period. In all other cases, both a.s.r. and the employee have a two-month notice period on the understanding that a.s.r. will at least observe the statutory notice period if the employment contract was signed (more than) five years ago.
LA9 Health and safety topics covered in formal agreements with trade unions.
Fully These agreements are outlined in the occupational health and safety catalogue for the insurance sector (www.gezondverbond.nl, Dutch only) and the obligations resulting from collective bargaining provisions for the insurance sector (Chapter 7, Occupational health and safety) form the parameters for the occupational health and safety policy.
LA10 Average hours of training per year per employee by gender, and by employee category.
LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.
LA12 Percentage of employees receiving regular performance and career development reviews by gender.
LA13 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity.
Fully Men and women with comparable work experience, achievements and potential are equally rewarded. For comparable roles, differences in performance may result in differences in salary levels.
HR5 Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights.
HR6 Operations and significant suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor.
HR11 Number of grievances related to human rights filed, addressed and resolved through formal grievance mechanisms.
SO1 (FSSS) Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting.
SO9 Operations with significant potential or actual negative impacts on local communities.
SO10 Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities.
SO2 Percentage and total number of business units analyzed for risks related to corruption.
SO3 Percentage of employees trained in organization’s anti-corruption policies and procedures.
Partially a.s.r. has certified fraud coordinators who take continuing education courses every year.
SO5 Public policy positions and participation in public policy development and lobbying.
Fully a.s.r. is represented in such bodies as the Dutch Association of Insurers, the Dutch Association of Health Insurers and the Dutch Banking Association.
Dutch pension system: a.s.r. engaged in a dialogue with representatives of political youth parties and trade unions to discuss the pension situation for young people.
SO7 Total number of legal actions for anticompetitive behavior, anti-trust, and monopoly practices and their outcomes.
SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.
PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements.
Fully Besides testing for cost effectiveness, usefulness, safety and reliability, PARP also reviews whether information meets the relevant statutory requirements and selfimposed regulations (voluntary codes).
Fully 1. An independent agency reviews our customer satisfaction annually. A survey by the Dutch Association of Insurers provides information about how to improve our performance on the CustomerOriented Insurance Quality Mark (KKV). The quality mark audit was satisfactory in 2014. a.s.r. was again awarded the quality mark in 2014.
2. The Net Promoter Score (NPS) and Closed-Loop Feedback (CLF) system have been implemented for the customer contact desks of all a.s.r. brands and business lines. Customer service and customer experience will be improved based on the NPS rating.
PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsoring.
Fully a.s.r. received 18 valid complaints about privacy violations in 2014.
Guidelines signed: Dutch Corporate Governance Code Governance Principles for Insurers Dutch Banking Code UN Global Compact UN Principles for Responsible Investment UN Principles for Sustainable Insurance UNEP Finance Initiative Dutch Sustainable Investment Code Call to Action: Anti-Corruption and the Global Development Agenda Circle Economy Dutch Manifest for Socially Responsible Purchasing and Business Practices (MVOI) Dutch Multi-year Energy Agreement (MJA-3) Green Deal Manifest
The additional positions of executives and memberships of ASR Nederland N.V. are listed below.
Dutch Association of Insurers • Member of the Board – Jos Baeten, CEO • Chair of Investment Policy Committee – Jack Julicher, CIO Financial Markets • Member of Insurance Fraud Prevention Committee and member of PKMM (Forum for small and medium sized companies) – Gerard ten Brincke, Managing Director of Europeesche Verzekeringen • 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 Director of nonlife business • Sector Board Health - Member of the Board – Frank Romijn, Managing Director of occupational disability business • Chair/member of various working groups within the Dutch Association of Insurers – Frank Romijn,
Dutch Reinsurance Company for Terrorism Losses (NHT) • Member of the Supervisory Board – Frank Romijn, Managing Director of occupational disability business
SOS International • Member of the Supervisory Board – Gerard ten Brincke - Managing Director of Europeesche
Verzekeringen ETI-Group • Member of the Board – Gerard ten Brincke, Managing Director of Europeesche Verzekeringen Social Fund a.s.r.
• Chairman of Board of – Gerard ten Brincke, Managing Director of Europeesche Verzekeringen
Shareholder (NLFI) Informal contacts Provide information, e.g. about the need and options for privatization and consolidation, including the process involving VIVAT/REAAL and attracting private investors
Throughout the year Continuous contact; where needed, follow-up sessions are scheduled after every meeting
PA counterparts at various stakeholders (financial sector, civil servants, MPs, etc.)
Intermediaries Client lunches Exchange information between individual advisers and the management of Intermediary Distribution/ Product Lines about developments in the market, in the adviser's practice and at a.s.r.
Exchange information between MT members of offices and a.s.r. managers 25 November 2014 Through account management/ specialists
Intermediaries Advisory workshops for employers in 2015 (income protection/ occupational disability)
Provide advisers with an understanding of changes for employers in 2015 in the area of income protection insurance and action to be taken
Intermediaries Routine ‘Income Now’ course, including CE course on income protection (as required under the Dutch Financial Supervision Act), four-day course
In March and April, and in September, October and November 2014
-Explain new procedure for EPU requests to advisers -Solicit ideas and feedback from advisers 30 September 2014, two sessions
Account managers followed up based on a survey completed by trainees
Intermediaries Seminar on liability Impart knowledge, update market developments and identify opportunities
Family Day Involve employees and their families in the renovation 27 September 2014, one-off event
Cooperation Cooperate on a sustainable basis Throughout the year Various forms of feedback were provided
Social enterprises Cooperation Define social uses Throughout the year Various forms of feedback were provided
Strategies, current actions, and future plans for managing impacts on biodiversity.
The graphs below break down total carbon emissions per scope and per emission category.
Residual waste The residual waste collected in 2014 was processed in a waste power plant. This residual waste was converted into (partially green) energy and heat.
Wood All wood that is collected is sorted. The highest-quality wood is used in the fibreboard industry 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.
The figures below (incl. LA2 and LA13) do not include the employees of SOS International, Poliservice and Assuradeurenhuys.
Total number and rate of new employee hires and employee turnover by age group, gender and region.
Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity.
Contact The a.s.r. Annual Report 2014 is published in the English language only. a.s.r. also only publishes the annual report digitally. This reduces the a.s.r. paper consumption, which is one of our sustainability goals. The report can be downloaded as a pdf.