Creating and sharing value Excellent customer experience 35 Attractive returns for investors 39 Responsible investment 41 Engaged employees 45 Positively impacting society and communities 48 Contribution to the Sustainable Development Goals 51
Visit our website Further information, including the GRI Index table, can be found online by visiting our corporate website: www.nn-group.com/annual-report
Society and community • EUR 124 million income tax paid to governments
Let me share a few examples. Following the successful launch of our innovation lab, Sparklab in the Netherlands in 2016, another five labs went live in different markets in 2017. They introduced a number of value propositions, such as ‘Gappie’, an on-demand car insurance product for the Dutch market, or an application tailored to support people with diabetes in Hungary. In Slovakia a partnership was set up with Slovenska sporitelna, one of the leading banks, and NN Hayat ve Emeklilik in Turkey entered into astrategic partnership with Hesapkurdu.com, the country’s leading online loan aggregator platform for mortgage and consumer loans.
2016 marked the start of the implementation of the new Solvency II regime. In December 2015, we received approval from the Dutch regulator, the Dutch Central Bank (DNB), to use our Partial Internal Model under Solvency II for NN Group and our subsidiaries in the Netherlands. Following the new capital requirements, we continued to be a strongly capitalised company, with a year-end 2016 Solvency II ratio of 241%. This provided us with a solid foundation for growth, ready to take a next step.
Overarching job framework This redesigned job framework contributes to a fair integration process, and ensures that employees from both companies start with equal opportunities when the Requests for Advice (RfAs) for the integration of their department or unit are submitted to the company’s works councils. The framework includes 52 ‘job families’, with each family consisting of three to six levels. Each level provides clear descriptions of what is expected from an employee in his or her job. In close collaboration with NN Group’s HR department, the businesses and the trade unions, a specialised external consultant supported the developments of the framework based on their methodology.
To deliver the brand transformation programme and manage the rebranding, a branding workstream has been set up within the Integration Management Office. Its main goals are to build awareness and understanding of the NN brand among Delta Lloyd stakeholders, to meet synergy objectives and to measure the progress of the Delta Lloyd brand transformation.
The monitoring instruments that measure employee and consumer perceptions about our company include questions on how NN is living our values. Through their scores, our businesses are able to generate insight into their values-related behaviour.
Values week in the Netherlands In the Netherlands, 47 different workshops were organised for Values week at all Delta Lloyd and NN locations. 336 employees participated in one or more sessions on topics such as mental health, family caregiving and climate change.
I feel encouraged by my manager to meet our high standards of integrity
As in every year, we checked the list of trends and topics through an analysis of recent laws and regulations, external research, reporting guidelines, benchmarks and peer reports. Instead of an extensive survey amongst internal and external stakeholders, we took a different approach in 2017.
Since March 2017, we have been a key partner in the Dutch Blockchain Coalition, a public‑private consortium aimed at applying blockchain technology in Dutch society.
The EU General Data Protection Regulation (GDPR) Ensuring proper information security and data privacy is an important element of the GDPR. The GDPR will become applicable in the European Union on 25 May 2018. It aims to give citizens more control over their personal data and will for the first time unify all data protection legislation across Europe.
How this helps to create value By using technology and data analytics to identify our customers’ needs and demands, we improve our product designs. This allows us to move to a more datadriven business model, decreasing costs and increasing customer satisfaction.
What we do We approach our partnerships as a means to create strategic, mutually beneficial opportunities and connections. We generate economic activity by purchasing products and services from local suppliers, in addition to regional and global suppliers. Also in our community investment activities, we work closely with charitable partners to maximise our impact. Our relationships with partners and suppliers are based on our NN values.
In our role as investor, for example, we responsibly manage our own assets, as well as those our customers entrust to us. By integrating environmental, social and governance (ESG) aspects in our investment process, we optimise the risk/ return profile of our portfolios. Beyond this economic rationale, NN Group believes that the consideration of these issues is also a matter of good corporate citizenship. This means that not only the values and interests of our beneficiaries should be taken into account, but also those of the broader society.
How this helps to create value NN Group is in the business of taking and pooling risks for the benefit of our customers. We operate in a systematic and disciplined way, based on agreed risk management principles. Specific risk oversight is also provided by risk management teams that have the objective of protecting NN Group’s financial and capital value, and preventing the risk of businesses falling short on our customer promises and long-term business objectives.
Integrating two large companies like NN and Delta Lloyd is by nature a complex task that comes with risks. A dedicated Integration Management Office helps to ensure a timely and well-controlled integration process.
Read more on pages 129-158 of the Financial Report (Note 50).
Read more about how we are supporting employees who are directly affected by organisational changes as a result of the integration process on pages 45-47 of this Annual Review.
• Recognised by general public as the ‘You matter’ company: improved in most countries compared to 2016
In Spain, we launched the ‘Real news for real people’ campaign, in which we explained financial concepts. Between June and December, we provided easy-to-understand information on financial topics and economic concepts and their potential impact on people’s personal financial situations. The blog ‘Seguros de tú a tú’ also aims to contribute to this increased understanding.
Based on a customer’s personal situation, we can, for example, provide a job coach or a budget coach, or restructure the mortgage contract. We helped 4,400 mortgage customers in 2017, of whom 4,113 have been restored through an adequate payment scheme. About 280 customers made use of job coaching, budget coaching or restructuring of their mortgage contract.
The Delta Lloyd transaction On 2 February 2017, NN Group announced a recommended public cash offer to all holders of issued and outstanding ordinary shares in the capital of Delta Lloyd to acquire their shares for EUR 5.40 (cum dividend) in cash for each share, representing a total consideration of EUR 2.5 billion. On 7 April 2017, the offer was declared unconditional.
We strive to manage our own assets, as well as those our customers entrust to us, in an environmentally and socially responsible way.
After additional internal alignment, these focus areas were validated by our Management Board and Supervisory Board in November 2017. Although we will focus on the SDGs mentioned above, we will link to more SDGs through our activites and performance. These can relate to our supply chain, our own operations, our business activities and/or our community investment activities.
More information about the Supervisory Board is available in the Report of the Supervisory Board, pages 10-17 of the Financial Report.
In June 2017, the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) issued its final recommendations on climate-related financial disclosures. NN Group endorsed these recommendations. This section provides our response and is structured along the four pillars of the TCFD framework: governance, strategy, risk management, and metrics and targets
Within our asset management business, we are seeing increased client demand for investment strategies that offer positive societal impact in addition to financial return. Over the past two years, NN IP expanded its range of products with a specific sustainable focus. For more detail, refer to page 43.
The Business Continuity Management policy defines the procedures to determine and assess risks, including the requirement to perform a risk/threat assessment every year, and manage the consequences of those risks. These procedures mitigate financial, non-financial and reputation damage caused by long-term disruption of critical business activities after a disaster, natural or otherwise.
The online versions of the Annual Review and the Financial Report contain a number of links. Links to sources on the NN Group website are also included.
We sourced the Human Resources (HR) data directly from the HR data analytics department. The financial data reported in this review has been fully sourced and aligned with NN Group’s 2017 Financial Report.
– designated as at fair value through profit or loss 934 873
Commercial real estate debt – portfolio average (vs. peer average) 68 (55) – –
Total donations to charitable organisations (x EUR 1,000)1 2,400 1,500 1,500
3 Decrease in 2016 mainly caused by a reduction of office space in the Netherlands.
Based on our procedures performed, nothing has come to our attention that causes us to believe that the Non-Financial Information is not prepared, in all material respects, in accordance with the GRI Standards and the applied supplemental reporting criteria as described in ‘Our approach to reporting’ on page 62.
Key review matters are those matters that, in our professional judgement, were of most significance in our review of the Non-Financial Information. We have communicated the key review matters to the Supervisory Board. The key review matters are not a comprehensive reflection of all matters discussed.
Responsibilities of the Executive Board and Supervisory Board for the Non-Financial Information
We apply the ‘Nadere Voorschriften Kwaliteitssystemen’ (Regulations on quality management systems) and accordingly maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
Fintech A line of business based on using software to provide financial services. Financial technology companies are generally providers of new solutions which demonstrate an incremental or radical innovation development of applications, processes, products or business models in the financial services industry.
Information barriers The ethical barriers between different divisions of a financial (or other) institution to avoid conflict of interest. Also historically known as ‘Chinese Walls’.