NN Group, the Dutch insurance and asset-management group, has announced an increase in its operating result for the first half of 2023. The company remains on track to meet its financial targets for 2025.
NN Group's operating result, a significant metric for the industry, rose to €1.40 billion ($1.52 billion) for the six months ending June 30. This is compared to €1.12 billion for the same period last year.
Operating capital generation also saw an improvement, reaching €997 million compared to €899 million the previous year. This exceeded the company's own estimate of €875 million. The increase was driven by higher contributions from Netherlands Non-Life, Insurance Europe, and Banking. However, operating capital generation at Netherlands Life was negatively impacted by adverse financial markets.
Favorable Claims Experience
The combined ratio at Netherlands Non-Life improved to 90.1% for the period, compared to 93.5% the previous year. This was attributed to favorable claims experience due to benign weather conditions and higher interest rates. As a result of these positive developments, NN Group has revised its 2025 guidance for the metric to a range of 91% to 93%.
Net Profit Decline
Despite the strong operating performance, net profit for the period decreased to €586 million from €1.74 billion in the same period last year. The decline was mainly due to a significant gain from the sale of NN Investment Partners in the prior year.
Solid Financial Stability
NN Group reported a solvency II ratio of 201% at the end of the period, compared to 197% six months earlier. This demonstrates the company's financial stability. The consensus estimate was 192%.
Dividend and Capital Return Policy
The board of NN Group has declared an interim dividend of €1.12 per share, in line with expectations. The company also reiterated its capital return policy, which includes a progressive dividend and a share buyback program of at least €250 million per year.
NN Group is confident in its ability to generate €1.8 billion in operating capital by 2025.