The sharp rise in the operating result allows us to pay out a higher dividend. Based on the results for 2017, we are proposing a dividend of € 229.7 million. This is a cash dividend of € 1.63 per share, an increase of more than 28% compared to last year. As of this year, we also start paying out interim dividends, which will be set at 40% of the total dividend of the previous year (€ 0.65). We strive for a stable growing dividend per share in the long-term.
Improving our service and focusing on customers is a top priority which we are working on each day. The Net Promoter Score from customers and intermediaries is a reliable yardstick in this regard. We are therefore delighted that the NPS from customers went up in 2017 from +36 to +40 and from intermediaries from +50 to +56. Their appreciation was also reflected in growth in our sales figures, with an increase of more than 32% in the number of Vernieuwde Voordeel Pakketten (non-life insurance packages) sold and a 48% increase in premiums for the WerknemersPensioen (employee pension). a.s.r.’s brand awareness also rose in 2017, and we are increasingly being recognised as a socially responsible insurer. This shows that profitable growth and serving the public benefit can go hand in hand.
Intro d uctio n 2.2 Value creation model a.s.r. operates in a broader context, developments in the environment and key trends influence the organisation’s policies, products and services and performance. At the same time, a.s.r.’s activities have an impact on stakeholders. This is further illustrated by the value creation model. The International Integrated Reporting Council (IIRC) framework was used to present the value creation model of a.s.r. together with a brief explanation of the input, business model and output & outcome.
Business model: a.s.r. offers a wide range of insurance products and services to both private and corporate customers. a.s.r. uses different labels, each with its own mix of products and distribution channels. It is important that employees are professional and service-oriented. In order to serve customers now and in the future, a.s.r. pays a great deal of attention to the vitality and development of its employees. a.s.r. also invests in innovation to further improve its existing products and services and to develop new business models. The Banking and Asset Management segment focuses on responsible management of financial resources in order to achieve optimal investment results. As an investor, a.s.r. is also active in the management of real estate. a.s.r. also offers asset management services to pension funds, insurance companies, guarantee funds and wealth funds, charities, local governments, health and educational institutions and other parties.
Social role The department a.s.r. foundation initiates projects on awareness and financial self-reliance. By teaching and supporting people in reading and arithmetic, being able to handle money and organising their financial administration, a.s.r. contributes to financial self-reliance (SDG 1). a.s.r. also adheres to and executes the ethics manifesto ‘From Debts to Opportunities’: customers who are behind on payments are approached in a timely and pro-active manner to resolve their payment problems (SDG 8). Read more about the objectives and results regarding financial self-reliance on page 44.
Life expectancy is rising. This is making the existing social welfare system less affordable. In the future, pensions are likely to be designed more individually. This might affect the product portfolios offered by insurers and pension funds. Another consequence of the steady increase in life expectancy, combined with expensive technological innovations, is that health care will become more expensive year on year. This seems to be an ongoing trend which will put pressure on the existing medical insurance system.
a.s.r.’s answers a.s.r. pensions responds to the increasing rate of life expectancy by focusing on capital-light products (DC product with reinvestment, IORP). It also makes the best possible use of current legislation and closely monitors changes in legislation. The expected expansion of individual choices is already visible in legislation. a.s.r. pensions is anticipating this by facilitating communication and extensive digitisation with a personal touch. Within Disability a.s.r. is providing customers (self-employed) with services to remain mentally and physically fit.
a.s.r. aims to manage its environmental footprint effectively by reducing its use of natural resources, seeking green alternatives and offsetting its carbon emissions (see page 46).
The P&C and disability markets have undergone cyclical contraction. Due to a.s.r.’s value-over-volume strategy, a limited fall in the GWP in P&C was noticed in the period 2012-2014, which – after having bottomed out – now has new scope for a limited and healthy increase driven by price and volumes.
Considerations such as corporate versus private customers, new versus existing customers and the nature of products should be taken into account in this context. But also customers with a parent company that is active in a field of controversial activities, changes in the exclusion list (by the changing spirit of the age, for example) and customers arising from acquisitions, make that every case is unique and mean that careful consideration is required of the different interests of the stakeholders involved in relation to a.s.r.’s policy before a decision can be taken on, for example, whether or not to accept customers.
H Integrity Acting in compliance with applicable laws and regulations, ethical standards and the internal standards to which they give rise. Meeting the (justified) expectations of stakeholders and putting the customer’s interests first.
The overall results show that employees characterise a.s.r. as a learning organisation. They also show that they want more clarity about the strategic direction the company is moving in. Translating customer requirements into concrete solutions is also sometimes experienced as difficult. ‘The a.s.r. story’ focuses on several of these issues. The results of the scan differed for each business line. Each MT discussed the results for each business line and devised a follow-up.
‘De Andere Cao’ a.s.r. and the trade unions De Unie, CNV and FNV together established that the sectoral CLA of the Dutch Association of Insurers was no longer sufficiently aligned with the ambition, strategy and ‘the story of a.s.r.’ The parties therefore responded by compiling their own CLA for a.s.r. in 2017: ‘De Andere Cao’. ‘De Andere Cao’ contributes to a sustainable and future-proof a.s.r. A consultation with a.s.r. employees who belonged to one of the aforementioned trade unions showed that all three trade unions were individually supportive of ‘De Andere Cao’. ‘De Andere Cao’ runs for a year and took effect on 1 January 2018.
Learning and improving In 2017, a.s.r. asked customers for their feedback on a.s.r.’s complaints handling. The questionnaire was personalised. For the first time customers can mark their satisfaction with the complaints officer. On a scale of 1:10, the average for 2017 was 7.9.
Direct carbon footprint The direct footprint of a.s.r. head office consists of waste, fuel, heat, electricity, cooling, commuter travel and business travel1. In 2017, a.s.r. sought to reduce its direct footprint by 2% compared to 2016. This target is not achieved; the total footprint increased by 0.2%². When looking at the emissions per FTE, emissions remained more or less the same compared to 2016.
In addition, all repair companies that P&C engages in the event of fire damage have met the Sustainable Repairs quality mark since 2017. These repair companies work in construction, glass repair, reconditioning, electronics, interior restoration, flooring and painting. Repair companies that are entitled to display the quality mark are tested for sustainability and meet strict requirements. P&C is one of the initiators of Sustainable Repairs and fulfils a Chairman role in the Body of Experts.
Product share Disability * a.s.r. also offers products related to Sickness Leave and Group Disability via authorised agents and mandated brokers. Due to the importance of this distribution channel, a.s.r. presents these sales as a part of a separate product category (‘Other’).
Hybrid distribution a.s.r. assists the intermediary channel with e-based underwriting systems and online channels to provide online product offerings. In addition, a.s.r. aims to support the authorised agents in exploring the local SME market, including the introduction of new propositions. a.s.r., moreover, believes it has further strengthened its position in the mandated broker segment.
Cost control In 2017, a start was made with the migration of inactive participants of the old legacy system of De Amersfoortse. After completion, both migration processes will contribute to further reducing costs. The outsourcing of part of the back-office activities to Infosys led to a further improvement of the operational processes in 2017. In order to further develop this success, part of the IT run and change activities is now also part of the outsourcing programme. This ensures sustainable continuity, lower management costs and a further improvement of the management focus.
2. Lower its cost base and shift towards variable costs In order to preserve the value of the individual life in force portfolio, a.s.r. aims to simplify its organisation and shift its cost base from fixed costs towards more variable costs. In order to reduce costs and shift the overall cost mix in the individual life book, a.s.r. is simplifying the individual books of business within the individual life portfolio and migrating them to a SaaS platform. a.s.r. intends to maintain this strategy, analysing books on an individual basis to find the most appropriate and value enhancing solution while minimising operational costs and complexity. The programme is on track. Four books have been successfully migrated (two in 2017). The acquired Generali life customers will be migrated to the same platform.
Developments in assets under management In 2017, the inflow of new assets amounted to € 1.8 billion. This growth is due both to tailor-made mandates and the integrated approach in the pension funds and insurers segment. In addition, the a.s.r. mortgage fund and the a.s.r. ESG INDEX plus corporate bond fund were well received in the institutional market. The internal growth in assets under management is mainly due to marketing of the Employee Pension (WnP). a.s.r. asset management expects this growth to continue in 2018.
SRI policy compliance a.s.r. safeguarded its full compliance with the SRI policy by way of a three-step process in 2017: 1. Internal teams using the SRI policy (Investment departments); 2. Compliance check through a.s.r.’s internal compliance process (Risk); 3. Biennial independent audits by an external party (Forum Ethibel).
The funds and business lines continuously strive to make the properties in their portfolios more sustainable. The focus is on both sustainable acquisition and making standing investments more sustainable with a keen eye for energy efficiency of the buildings, using sustainable materials & methods and greenery.
As at 31 December 2017, Dutch ID acted as an advisor for insurance products and provided mandated brokerage services for some of the products and business lines offered by insurance companies. Based on these associations, Dutch ID provides administration services as a service provider to other advisors in respect of their commercial and back-office operations. It also offers consulting and other services, such as claims management, risk management, prevention, reintegration and leasing. Dutch ID focuses primarily on the agricultural, transport, overhaul and civil construction sectors. Dutch ID has ties with business associations in the agricultural (LTO) and transport (EVO) sectors.
Ardanta Ardanta is a.s.r.’s funeral insurance brand. Most of Ardanta’s funeral insurance policies have historically been sold through the intermediary channel. Ardanta currently applies a multichannel distribution strategy, offering its products through intermediaries, direct sale and online. The Ardanta brand targets retail customers.
The notes to the financial risk appetite statements give a detailed description of the risk management system, the risk profile and quantitative and qualitative information relating to identified risks, including the Own Risk and Solvency Assessment (ORSA) and Risk Management System (see Chapter 5.8 Risk management).
Based on the output of the ORSA, a.s.r. draws conclusions regarding its capital adequacy. Risk-mitigating measures are also identified as part of the ORSA process and are integrated into the relevant risk management cycles. Risk management cycles are embedded in day-to-day business in order to structurally measure, analyse, monitor and evaluate the identified risks at odds with the risk appetite.
In 2017 the Actuarial Function performed its regulatory tasks in assessing the adequacy of the Solvency II technical provisions, giving an opinion on reinsurance and underwriting and contributing to the risk management. The actuarial function report relating to these areas was discussed by the Executive Board, Risk Committee and by the Audit & Risk Committee. See the Financial Statements (Chapter 5.8 Risk management) for further information about a.s.r.’s management of financial risks.
The risk priorities are: 1. Pressure on result and renewal of cash-generating business model; 2. Juridification of society; 3. Continuing low interest rates and volatile markets; 4. Impact of supervision, laws and regulations; 5. Information (cyber) security risk.
The total costs relating to compensation for unit-linked insurance contracts as described above have been fully recognised in the financial statements based on the management’s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognised in the liabilities arising from insurance contracts and legal provisions (see Chapter 5.5.14 Insurance liabilities). Although the financial consequences of the legal developments could be substantial, a.s.r.’s exposures cannot be reliably estimated or quantified at this point. If one or more of these legal proceedings succeed, there is a risk that a ruling, although legally binding only on the parties involved in the proceedings, could be applied to or be relevant for other unit-linked life insurance policies sold by a.s.r. Consequently, the financial consequences of any of the current and/or future legal proceedings brought against a.s.r. could be substantial for a.s.r.’s life insurance business and could have a material adverse effect on a.s.r.’s financial position, business, reputation, revenues, results of operations, solvency, financial condition and/or prospects.
• 3.1.3 Performance on non-financial themes • 3.2 Segment performance (excluding financial information) • Annex A – Notes to the reader • Annex B – Glossary • Annex F – GRI Content Index
Unexamined prospective information The sustainability information includes prospective information such as ambitions, strategy, plans, expectations, estimates and risk assessments. Inherently, the actual future results are uncertain. We do not provide any assurance on the assumptions and achievability of prospective information in the sustainability information.
Remuneration Information on the remuneration policy for members of the Executive Board and their individual remunerations can be found in the Remuneration report, Chapter 4.4.
Articles of Association and rules of procedure The current Articles of Association (dated 9 June 2016) have been posted on a.s.r.’s corporate website: asrnl.com. The Supervisory Board Rules and the Executive Board Rules are also posted on a.s.r.’s corporate website. These rules were amended and adopted in 2017 as a result of the amended Dutch Corporate Governance Code being implemented.
J.P.M. (Jos) Baeten (CEO) Jos Baeten (Dutch, 1958) is the Chairman of the Executive Board and Chief Executive Officer (CEO). His areas of responsibility are Human Resources, Corporate Communications, Strategy, Risk Management of the investment funds managed by ASR Vermogensbeheer, Corporate Social Responsibility, Audit, Integrity and Legal.
Annet Aris (Dutch, 1958) had a 17-year career at McKinsey as a management consultant, including nine years as a partner in the firm. She currently holds supervisory directorships at several Dutch and foreign enterprises and institutions, including ASML N.V. in the Netherlands, ProSiebenSat1 AG and Jungheinrich AG in Germany and Thomas Cook PLC in London. Annet Aris has been proposed as a member of the Supervisory Board of Randstad Holding N.V. as of 27 march 2018. In May 2018, she will resign as a member of the Supervisory Board of ProSiebenSat1 AG. Annet Aris is adjunct professor of digital strategy at INSEAD international business school (Fontainebleau, France). Annet Aris is a Supervisory Board member appointed by the Works Council.
Shareholders Since the IPO, a.s.r. shares have been held by an international and diversified shareholder base. Based on a shareholder survey conducted in October 2017, institutional investors in the US and the UK represent the majority of a.s.r.’s shareholders, owning 61% of the outstanding shares. The remainder is held by investors in the rest of Europe (21%) and the Netherlands (10%). Approximately 1% of the shares is held by retail shareholders.
Shares and share price performance The shares are listed on Euronext Amsterdam (symbol: ASRNL, ISIN: NL0011872643) and have been included in the AMX index (Amsterdam Midcap Index) since 19 September 2016. During 2017 the a.s.r. share delivered a strong performance, both in relative terms as well as in absolute return. Total shareholder return¹ amounted to 58.6% (including dividend reinvestment in a.s.r. shares). a.s.r. shares significantly outperformed the Euronext AEX index as well as the Stoxx Europe 600 Insurance Index, by 39.1% and 44.9%, respectively.
Kick van der Pol 12-2008 06-2018 9 1949 M • • • • •
At year-end, the Supervisory Board, upon the recommendation of the Audit & Risk Committee, approved the 2018-2020 multi-year budget.
Governance | 4.3 Supervisory Board report 106 also greatly appreciates the bilateral dialogues with the Works Council, sometimes together with one or more members of the Executive Board.
The members of the Supervisory Board have great appreciation for the approach taken by the Works Council to major developments impacting a.s.r., such as the privatisation and the acquisition of Generali Nederland. Considering the interests both of a.s.r. as a whole and of its employees, the Works Council makes thorough preparations when addressing the wide range of issues it is presented with, discusses them in a constructive dialogue with the Executive Board, and issues balanced, well-considered opinions and recommendations.
In 2017, the Committee held seven meetings. In accordance with the Audit & Risk Committee Rules, these meetings were also attended by the CFO, the Director of Group Risk Management, the Director of Group Accounting, Reporting & Control, the Director of Finance & Risk, the Director of Compliance, the Director of Audit and the independent external auditor. The standing agenda items included the financial (quarterly) results and the quarterly risk, compliance and audit reports. In addition, the Committee addressed issues specific to the supervised entities, including the impact of changing market conditions and the report related to Solvency II matters. Also, the management letter of the external auditor highlighting key internal control observations was discussed in the fourth quarter.
The Audit & Risk Committee specifically focused on the effectiveness of the audit, compliance, risk and actuarial functions within a.s.r. The Committee discussed and approved the annual plan for 2018 of the Compliance department, Group Risk Management, including Actuarial Function. The updated Compliance Charter, the Charters of the Risk Management Function and the Actuarial Function were adopted in 2017. After positive advise of the Committee the Supervisory Board approved the annual plan and charter of the Audit department. The Committee also approved the independent external auditor’s audit plans for 2017.
To conclude, the Committee was informed about the outline of the new collective labour agreement, which was a process in co-creation with the trade unions.
Introduction a.s.r. was nationalised in 2008 and, from that moment, the Dutch State was the sole owner of all a.s.r. shares. As a state-owned financial institution, considerable constraints were imposed on the remuneration of the Executive Board. In 2011 this was formalised by a special act for state-owned financial institutions which prohibited variable payments as well as increasing fixed payments (Sections 1:128 and 1:129 of the Dutch Financial Supervision Act (Wft) and the corresponding transitional provisions). Effectively, therefore a.s.r.’s remuneration policy was put on hold and the remuneration of the Executive Board was fixated for many years. In 2016, a.s.r. re-listed on the stock exchange and became fully independent from the Dutch State on 14 September 2017. As a result, the fixation of the Executive Board’s remuneration by act no longer applied. In response, the Supervisory Board has decided to re-instate and apply the existing remuneration policy.
A comparison with a peer group is made regularly to determine the competitiveness of the total remuneration. The relevant peer group for the Executive Board consists of a mix of Dutch financial institutions and medium-sized listed Dutch businesses outside the financial sector. The Remuneration Committee checks periodically whether the choice of the peer group is still adequate or should be revised. Once every three years, an independent consultant makes a market comparison (remuneration benchmark). The remuneration policy starts from the principle that the average level of total remuneration should be competitive but somewhat below the peer group’s median.
The performance of each member of the Executive Board is reviewed annually, based on a set of financial and nonfinancial targets that is determined by the Supervisory Board. The targets for 2017 were summarised as follows: Financial: realisation of the multi-year budget within the established risk appetite.
Severance pay The following conditions apply to severance pay for policymakers (including members of the Executive Board). • The maximum severance pay is 100% of the fixed annual remuneration; • Severance pay is not awarded in the event of failure on the part of the company; • Severance pay that can be classified as variable is not awarded to a.s.r.’s policymakers or banks and insurers that are part of the Group.
Board of employees: Members of the Works Council complemented by 1 delegated of each Business Unit committee
Attributable to: - Non-controlling interests 2 -1 - Shareholders of the parent 872 625 - Holders of other equity instruments 45 45 - Tax on interest of other equity instruments -11 -11
Retained share of profit of associates and joint ventures -14 15
Financial statements 2017 | 5.3 Accounting policies 130 5.3 Accounting policies 5.3.1 Changes in comparative figures
Programme a.s.r. is currently assessing the impact of the new requirements. In 2017 a.s.r. concluded the investigation into the classification and measurement of the financial instruments of ASR Bank. In 2017 a.s.r. started the investigation into the classification and measurement of the financial instruments (the SPPI test) related to the insurance activities, as part of the overall IFRS 17 and IFRS 9 programme. The implementation of IFRS 9 may have a significant impact on Shareholders’ equity, Net result and/or Other comprehensive income and on the consolidated financial statements of a.s.r.
Liabilities arising from non-life insurance contracts These liabilities comprise a provision for claims, a provision for current risks, and a provision for unearned premiums. The provision for claims is based on estimates of claims payable. Claims payable relate to unpaid claims and claims handling costs, as well as claims incurred but not reported.
Where the Property & Casualty (motor, fire and liability) and Health liabilities business is concerned, the LAT is performed using statistical analyses. Any identified losses are used as a basis for estimating future claims arising from an insurance contract from the portfolio on the balance sheet date. This is the best estimate. An appropriate risk margin is added. The risk margin is determined for each homogeneous risk group using the Cost of Capital (CoC) method that is also used for Life. With effect from 2016 the Non-life CoC rate of 6% is used for all Non-life business, including Disability. The total of best estimate and risk margin is compared to the technical provision recorded in the balance sheet.
The financing cost related to employee benefits is recognised in interest expense. The current service costs are included in operating expenses.
Intersegment transactions or transfers are conducted at arm’s length conditions. For detailed information per segment, see Chapter 5.4 (Group structure and segment information).
When the application of the equity method produces information that is not relevant to the investors, a.s.r. may use the exemption of IAS 28 to measure the investments in those associates at fair value through profit or loss in accordance with IAS 39. a.s.r. applies fair value measurement for investments in (real estate) equity funds, over which a.s.r. has significant influence.
• Other incidentals: personnel related items (for example provision for restructuring expenses and a.s.r.’s own pension scheme excluding the current net service cost), costs related to M&A activities and items not related to the core-business or on-going business.
For comparative purposes the 2016 operating result has been adjusted due to reassessment of the incidentals in the category other. This mainly relates to all results of a.s.r.’s own pension scheme, excluding the current net service cost, which is now included in the other incidentals category.
Financial statements 2017 | 5.4 Group structure and segment information 158
Financial statements 2017 | 5.4 Group structure and segment information 159
Financial statements 2017 | 5.5 Notes to the consolidated balance sheet 167
Total investments on behalf of policyholders at fair value through profit or loss 7,684 7,745
Net profit in the table is after tax and non-controlling interests. For additional information related to net profit see Chapter 5.2.2.
Effect of fair value changes related to financial assets 416 262
Included in income statement Current service cost, contributions by employer 48 38
The non-qualifying assets, which are managed by a group company, are not presented as part of the net defined benefit obligation. At year-end 2017, the fair value of these assets amounted to € 2,546 million (2016: € 2,498 million), which includes the separate account to fund future inflation indexation amounting to € 335 million (31 December 2016: € 327 million). As mentioned above, the swaps and swaptions have not been allocated directly to the post-employment benefit obligations; neither are they included as part of the fair value of the non-qualifying assets managed by the group company.
The provisions were created for: • Tax and legal issues; • Staff restructuring expenses; • Retention of disability risk instead of insuring it with UWV (Employed Persons Insurance Administration Agency); and • Other expenses.
The provision for tax and legal issues is based on best estimates available at year-end, making allowance for expert opinions.
At year-end 2017, the fair value of borrowings was € 39 million (2016: € 114 million). See Chapter 5.7.1.2. The average interest rate payable on borrowings was 1.83% (2016: 2.19%).
Level 2: Fair value based on observable market data 14 - 191 205
Changes in value of investments, realised/unrealised gains and losses: - Fair value gains and losses (see Chapter 5.6.4) 127 -3
Investments on behalf of policyholders: Investment property (Chapter 5.5.6) - - 85 85
Real estate equity funds 99 DCF 5,882,793 5.9% 0% -5 - 5
In 2011, three individual trial proceedings were initiated by ConsumentenClaim B.V. on behalf of three policyholders against a.s.r. regarding certain unit-linked life insurance products. Amongst other things, ConsumentenClaim argues that a.s.r. (a) has not provided the policyholders sufficient information about certain elements of the products, such as costs, risk premiums and the leverage capital consumption risk, (b) had a duty of care towards the policyholders, which a.s.r. has breached and (c) that the general terms and conditions regarding costs were unfair. In two of these cases, the court of appeal of ‘s-Hertogenbosch (having the same composition) has issued a ruling on 2 May 2017 respectively 31 October 2017. In the first judgement (2 May 2017), some specific general terms regarding costs were considered to be unfair in light of directive 93/13/EEC on unfair terms in consumer contracts. In the second judgement (31 October 2017), some specific general terms regarding costs were considered to be unlawful in light of general contract law that was applicable at the time the product was sold. In both individual cases, the court of appeal of ‘s-Hertogenbosch ruled that a.s.r. is required to pay back certain costs that were charged in the product to this specific customer. The third individual case is currently still pending before the court of appeal of The Hague. At the moment, the timing and outcome of this pending individual proceeding is uncertain.
The acquisition of GNL further strengthens a.s.r.’s position on the Dutch insurance market and ties in with a.s.r.’s strategy of combining organic growth and growth through targeted acquisitions. Business synergies, diversification benefits and elimination of capital tiering restrictions generate significant synergy potential.
1 These are companies for which a statement of joint and several liability under section 403, Book 2 of the Dutch Civil Code has been issued.
Financial statements 2017 | 5.8 Risk management 216 5.8 Risk management
• Responsible for providing dedicated assurance services and oversees and assesses the functionng and the effectiveness of the first two lines of defence
The level of retention in different reinsurance contracts is aligned with the size and the risk profile of the underlying portfolios. This includes taking account of the cost of reinsurance on the one hand, and the risk that is retained on the other.
• NSLT Health risk - This risk is applicable to the NSLT Health portfolio. The calculation is factor-based. The risk is calculated similarly to the Non-Life insurance risk.
Expense risk A calculation is made of the effect of a permanent increase in costs, which is used for determining the best estimate. The scenario analysis contains an increase in the costs of 10% and an increase in the cost inflation of 1 percentage point per year.
For the SLT Health portfolio, the provision at year-end 2017 can be broken down as follows under Solvency II.
Market risk reports are submitted to the FRC at least once a month. Key reports on market risk include the Solvency II and economic capital report, the interest rate risk report and the report on risk budgets related to the strategic asset mix.
The sensitivity of the solvency ratio to changes in equity prices is monitored on a monthly basis. Sensitivity of regulatory solvency (Solvency II) to changes in equity prices is shown in the following table.
At a strategic level, the major risks are identified and assessed periodically with a strategic risk analysis from the group and control risk self-assessments at business lines. After the analysis a list of risk priorities is established and risk management actions are assigned. The progress of these actions is monitored in the a.s.r. Risk Committee.
Managing For each risk, identified controls are implemented into the processes to keep the level of risk within the agreed risk appetite (level of concern 1 or 2). In general, risks can be accepted, mitigated, avoided or transferred. A large range of options is available to mitigate operational risks, depending on the type. For each control an estimation is made of the net risk, after implementing the control(s).
Since 2016 a.s.r. uses an advanced model for the LAC DT of ASR Levensverzekering N.V. and a ‘basic’ model for the other OTSOs. In the advanced model also future fiscal profits are used to underpin the LAC DT, while in the basic model no future profits are used. Both models are and will be updated in case constrained by additional guidance or legislation provided.
The share of profit / (loss) in subsidiaries is non-taxable as a result of the participation exemption under Dutch tax law.
5.10.3.14 Due to banks In 2017 due to banks contained € 0 million (2016: € 75 million). The debt no longer exist since it is redeemed in 2017.
We are independent of ASR Nederland N.V. in accordance with the EU Regulation on specific requirements regarding statutory audit of public-interest entities, the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics).
N.V., our understanding of developments in the business and our expectations derived from market experience. We audited the main assumptions used for the determinations of the insurance liabilities and LAT calculations. We tested the design and operating effectiveness of the controls used for the determinations of the insurance liabilities and LAT calculations.
• A review of the documentation and enquiries about the unit-linked exposures with management and its internal legal advisor. These procedures took into account ASR Nederland N.V.’s specific developments as well as broader market developments in 2017.
• Obtaining a legal letter from ASR Nederland N.V.’s external legal advisor.
We have exercised professional judgement 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; • Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management; • Concluding on the appropriateness of management’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 a company to cease to continue as a going concern; • Evaluating the overall presentation, structure and content of the financial statements, including the disclosures; • Evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Other information | 6.2 Provisions of the Articles of Association regarding profit appropriation 271
Company’s reserves, irrespective of whether those shares are issued to existing shareholders.
37.3 Without prejudice to Article 35.1, a distribution of profits shall be made only after the adoption of the financial statements showing that such a distribution is permitted.
In this report, a.s.r. provides a transparent overview of its activities and results in 2017. In addition, in this report a.s.r. describes the relationship between its mission, strategy, governance and the social and economic context in which it operates. More information about a.s.r. can be found at asrnl.com.
Solvency II Solvency II is an EU regulatory regime that has been in force in all Member States since 1 January 2016. It has introduced a new, harmonised Europe-wide regime for insurance companies and sets regulatory requirements for solvency and risk governance.
GRI Standard Disclosure Location of disclosure, url(s) and/or information 102-49 Changes in reporting The material themes from 2016 that do not return in the 2017 materiality matrix: • Non discrimination, either internally (shop floor) or externally
100%. All employees with an a.s.r. contract undergo a performance and career development review every year.
How risks are managed. Yes 2.3, 2.4, 3.1.3, 3.2.3, 2.5 & business/investment