We exceeded our target to have 30% women in senior management positions by 2020. Going forward, we will continue to strengthen our efforts in this area.
Human and Intellectual capital • 15,194 employees • Values-driven culture • Responsible business standards
EUR 19m • Diversity (% women in senior management positions) 36%
The results of the assessment were presented to the Management Board for discussion and approval. The Supervisory Board approved the materiality matrix as part of the Annual Review approval process.
Product suitability is essential to our relationship with customers and creating longer-term value for stakeholders. NN’s Product Policy covers product risk-related requirements, including specific requirements on customer suitability. Our NN Code of Conduct makes clear to each employee what we expect of them in terms of behaviour, and we expect our external business partners to meet the same requirements. Throughout the company, a product approval and review process (PARP) and product risk committees are in place to oversee product design, client suitability, sound underwriting and claims management, and adequate pricing of all existing and new products.
The Chief Information Officer function ensures business continuity management, cyber-risk management and business information security via standardised, internationally accepted frameworks, norms and technical guidelines as the basis for managing IT, cyber and cloud risk within NN Group.
How is Non-life showing progress? In Non-life, we have taken structural measures to make the company healthier, both on the expense and claims side, with favourable results. In terms of completing the Delta Lloyd integration programme, we delivered a large part of the expense savings and completed the legal mergers by 1 January 2019. The next phase is the migration of policies to the target platforms, followed by decommissioning of the legacy IT platforms.
• Bank: mortgages, consumer lending, savings, investments, mortgage origination & servicing for NN Group companies
How did you contribute to the pension reforms debate? In Romania, we engaged with the insurance association and government on the capital requirements for the Pillar 2 pension system, which led to a viable solution.
What initiatives have you launched to increase customer focus? We initiated ‘scaled agile’ in several markets; we launched our ‘Oxygen’ cloud-based insurance product platform and set our NN Data Science Hub in motion, all aimed at helping us to respond faster to customer needs and tailor our value propositions.
Value of new business (VNB) 146 214 22 NN Group N.V. 2019 Annual Review
To support these capabilities and our investment professionals, we have established a central innovation and responsible investing platform. This simple yet powerful tool allows us to share and store information in one place, facilitating continuous learning.
• Improving the services we offer clients. For example, through the integrated, secure and personal client experience offered by our client portal and by launching new funds such as our short-duration green bond fund. This fund contributes to the UN’s SDGs and, with a duration of two years, is uniquely positioned in the market.
• Be seen as a ‘You matter’ company: a people-oriented service provider in the long-term financial planning industry
− Customer recognition of NN as a ‘You matter’ company rose in two of our ten International Insurance markets¹
− Increased awareness of customer need for value-added products and services 1 Reliability interval of 4% on brand awareness and 5 points on NPS.
Supporting all runners NN Group aims to connect with people on topics that matter to them, such as family, work, art, music and sports. Sponsorships are an important part of our marketing activities, and an opportunity to increase the number of contact moments with our audience.
We also measure the transactional NPS at a local level for specific events to measure how a recent interaction affects customer satisfaction. Such insights help us improve the customer journey.
• The Make IT Work programme, run in collaboration with the Hogeschool of Amsterdam, which helps employees retrain as software engineers
NN Group announced an update of its dividend policy on 13 February 2020. Going forward, NN Group intends to pay a progressive ordinary dividend per share and intends to execute a recurring annual share buyback of at least EUR 250 million. Additional excess capital is to be returned to shareholders unless it can be used for value creating opportunities.
On 25 June 2019, NN Group issued 4,807,859 ordinary shares as stock dividend for payment of the 2018 final dividend, representing an aggregate value of EUR 169 million. For payment of the 2019 interim dividend, 3,539,191 ordinary shares were issued as stock dividend on 11 September 2019, reflecting an aggregate value of EUR 106 million.
NN Group has decided to cancel 23,289,558 treasury shares representing shares repurchased as part of the share buyback programmes. This cancellation is subject to a two-month creditor opposition period which will end on 11 May 2020. Assuming no opposition is made the cancellation of shares will take effect on 12 May 2020.
Supporting ESG integration Our RI Framework policy includes normsbased criteria reflecting our investment beliefs and values, relevant laws, and internationally recognised norms and standards. These criteria guide the investment process across NN Group and NN Investment Partners (NN IP).
We want to create a positive impact on society, by investing our assets responsibly, being a fair taxpayer, managing our direct environmental footprint, and through our activities in the communities where we operate.
Responsible tax strategy We believe that a responsible approach to tax is an essential part of good citizenship. We manage our tax position in line with our business operations, and our position reflects our corporate strategy and takes into account relevant international guidelines, such as the OECD Guidelines for Multinational Enterprises. Being a responsible taxpayer also means that our tax planning takes long-term considerations into account and carefully weighs all stakeholder interests. We have a set of tax principles to which we adhere and communicate publicly on our website through our Tax Strategy and Principles and the NN Group Tax Charter.
Financial tax disclosures The financial disclosures on corporate income taxes paid by NN Group can be found in the 2019 Financial Report. The same information is included in the 2019 TTC Report, but this report provides more detailed explanations to help understand the disclosures. In addition, the TTC Report provides information on the other taxes collected and paid by NN Group as outcome of its operations.
#Yoursustainableworkspace To contribute to a sustainable and circular office environment, we formulated the #Yoursustainableworkspace ambition for 2020. It relates to different parts of the office experience, including refurbishments, energy use, catering, waste, plastic and being an inclusive employer. We work together with social entrepreneurs to raise awareness among employees and suppliers.
• Integrating ESG factors in investment process for 68% of our total AuM
Engage To raise awareness of the values and engage our employees, we organise Values week across 12 countries, hosted by local business units. This year’s internal activities centred around the theme: ‘Let’s talk’. Employees had the chance to jointly reflect on and discuss our values in sessions, such as a dilemma workshop by Compliance, our approach to innovation, and how we work together.
Setting an example The leadership profile of all managers requires them to act as role models in terms of living our values. In 2019, the profile was updated to better reflect the leadership skills needed to seek new solutions to the challenges the company faces. These capabilities are still strongly founded on our company’s values.
Throughout the year several consultations took place with senior management, the Living our Values project group, our Supervisory Board and the Central Works Council. During these sessions, the existing culture, and whether it is desirable to implement any changes, was also discussed. Improved cooperation internally as well as externally was mentioned repeatedly as a topic for improvement. This assumption was also supported by the continued low engagement survey score on the question ‘In NN Group, departments cooperate effectively to get the job done’ (2019: 6.4; 2018: 6.2).
Read more about our Management Board on pages 21-37 of the Financial Report.
Early 2020, we conducted a review of our human rights policies and processes. The findings enable us to further strengthen our approach across the organisation in the coming year.
NN distinguishes (a) physical and (b) transition risks from climate change, as described below. The materiality and time horizons over which these risks impact our business activities relate to specific types of business, asset portfolios, geography and a range of other differentiating factors as illustrated in the three cases below: • Our property & casualty (P&C) business is predominantly a one-year renewal business, and consideration of these risks in the underwriting and pricing processes is therefore on a relatively short time horizon (one to three years)
Transition risks Transition risk concerns the transition to low-carbon economies. This may adversely affect individual businesses, sectors and/ or the broader economy, impacting our investment portfolios and thus the asset side of our balance sheet. Overall, NN anticipates that the global pricing of financial assets will increasingly be influenced by factors such as public policy, technological developments and changing consumer preferences. Such trends and changes are likely to materialise over the medium term. However, our investments are also exposed to specific short-term risks, such as sudden possible adjustments to market sentiment around climate risks impacting segments and investments in our portfolio.
• We decided to align our thermal coal policy for insurance underwriting with the investment side. This means that we will stop providing (non-life) insurance services to companies that derive more than 30% of their revenues from thermal coal mining or use at least 30% thermal coal for power generation. These thresholds will phase down to 5% by 2030. These measures will additionally support in mitigating the climate related transition risks.
Ratio of CEO compensation to the average employee compensation8 27:1 33:1 29:1 3 For 2019 the scope is global. For previous years, the scope was Netherlands only; this counts for 60% of the total organisation. 4 In 2018 we introduced a new metric for measuring engagement. The previous measurement for 2017 was 66%; with the new metric this is 7.0. 5 The 2019 and 2018 numbers cover data from our global organisation (where in 2017 it accounted for the Netherlands only). It does not include the complaints received in relation to the integration process of
Our conclusion We have reviewed the Non-Financial Information in the Annual Review 2019 (‘the Non-Financial Information’) of NN Group N.V. (‘NN Group’) based in Amsterdam and headquartered in The Hague. A review is aimed at obtaining a limited level of assurance. Based on our procedures performed, nothing has come to our attention that causes us to believe that the information relating to material non-financial topics (for selection of topics, see page 10) is not prepared, in all material respects, in accordance with the reporting criteria as described in ‘Our approach to reporting’ (page 57). The Non-Financial Information comprises a representation of the policy of NN Group with regard to corporate responsibility, and the thereto related business operations, events and achievements during the year.
Peakon survey A questionnaire measuring how a company’s brand and values are experienced by its employees, how its leaders live up to the standards the company sets, and how the company fulfils its employee value proposition as an organisation.