• Operating Capital Generation: EUR1.9 billion for 2024.
• Free Cash Flow: Increased by 8% to EUR1.5 billion in 2024.
• Group Solvency Ratio: 194% at the end of 2024.
• Value of New Business: Increased by 20% year-over-year.
• Netherlands Life Net Inflow: EUR2.3 billion in defined contribution in 2024.
• Gross Written Premium for Netherlands Non-life: Increased by 4.5%.
• Full Year Dividend: EUR3.44 per share, an 8% increase year-on-year.
• Share Buyback: EUR300 million launched for the year.
• Insurance Europe Volume Growth: 10% in 2024.
• Insurance Europe Margin Growth: 16% in 2024.
• OCG for Netherlands Non-life: EUR406 million.
• Combined Ratio for P&C: 91.9%.
• Assets Under Management for DC: Grew from EUR25 billion in 2020 to EUR39 billion in 2024.
• Netherlands Non-life Gross Written Premium Growth: Approximately 4.5% compared to 2023.
• Cash Capital Position: Increased by EUR300 million to EUR1.3 billion.
• Insurance Europe OCG: EUR461 million, a 9% increase.
• Netherlands Life Remittances: Sustainable at current levels for over a decade.

• Warning! GuruFocus has detected 6 Warning Signs with NNGPF.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• NN Group NV (NNGPF) reported strong operating capital generation for 2024, reaching EUR1.9 billion, aligning with their 2025 target.
• The company achieved an 8% year-over-year increase in free cash flow, amounting to EUR1.5 billion, indicating robust financial health.
• The group solvency ratio stands at 194%, which is at the upper end of their comfort range, showcasing a strong balance sheet.
• NN Group NV (NNGPF) announced a full-year dividend of EUR3.44 per share, marking an 8% increase from the previous year.
• The company has made significant progress in sustainability, reducing emissions in their corporate investment portfolio by 31% compared to 2021.

Negative Points

• Market and regulatory changes posed material headwinds throughout the year, although largely offset by management actions.
• The disability insurance segment showed a high combined ratio, particularly in the second half of the year, indicating potential areas for improvement.
• The Netherlands Life business experienced negative experience variances, impacting overall performance.
• Belgium required a capital injection and did not pay a dividend in 2024 due to strategic agreements and regulatory discussions.
• The ongoing business improvement order in Japan limits new sales, affecting the growth potential in that market.

Q & A Highlights

Q: Can you provide details on the derisking actions and their impact on Operating Capital Generation (OCG)? A: Annemiek Van Melick, CFO, explained that the derisking actions, including reinsurance transactions and strategic asset allocation (SAA) acceleration, resulted in a few tens of millions of adverse OCG effects, estimated to be below EUR50 million. These actions added 5 percentage points to the solvency ratio, enhancing the company's financial position.

Q: What are your views on the disability insurance combined ratio, which was high in the second half of the year? A: David Knibbe, CEO, noted that the IFRS 17 combined ratio for Disability was elevated due to CSM dynamics but is expected to trend down. The overall Non-life business performed well, and the company remains committed to a combined ratio guidance of 91% to 93%.

Q: Could you elaborate on your expectations for pension buyouts in 2025? A: David Knibbe, CEO, stated that while the buyout market is back-end loaded, they expect more deals in 2025 compared to 2024. The company remains disciplined, aiming for above double-digit returns, and is well-positioned with the highest broker score.

Q: How do you view the sustainability of the payout ratios for NN Life and the group? A: Annemiek Van Melick, CFO, confirmed that the payout ratios of 81% for NN Life and 85% for the group are sustainable. The company is confident in maintaining these levels due to strong cash flow and capital management.

Q: Can you provide an update on the business improvement order in Japan and its impact on new business sales? A: David Knibbe, CEO, mentioned that the business improvement order affects short-term Corporate Life sales, but they received regulatory approval to launch a long-term COLI product. The company expects muted sales until the order is lifted, after which they anticipate ramping up sales.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.