ASR Nederland N : a.s.r. combines strong results and higher customer satisfaction in 2020. Impact COVID-19 limited due to diversified activities

Utrecht, 18 February 2021, 07.00am CET

a.s.r. combines strong results and higher customer satisfaction in 2020. Impact COVID-19 limited due to diversified activities

Strong financial performance, diversification neutralises impact of COVID-19 on operating result

• • Operating result increased by 3.2% to € 885 million (FY19: € 858 million).

• • Impact of COVID-19 on aggregate operating result is neutral; a favourable effect on P&C was offset by a negative effect on Disability and to a lesser extent on Life.

• • Non-life operating result increased by 6.5% to € 241 million (FY19: € 226 million). Higher claims in Disability, strengthening of reserves which combined were more than offset by lower claims in P&C.

• • Life operating result grew by 4.9% to € 730 million (FY19: € 696 million), reflecting a higher investment margin despite negative impact from COVID-19 on investment result.

• • Operating return on equity was 15.3%, above the 12-14% target.

• • Efficiency ratios improved in all business segments. The increase in operating expenses of 6.9% to € 701 million (FY19: € 656 million) is mainly driven by the additional costs of acquired activities (€ 21 million) and contribution to own pension plan due to low interest rates (€ 20 million).

• • Combined ratio remained stable at 93.6%1, better than the 94-96% target (COVID-19 impact on COR: -0.6%-point)

• • Net IFRS result decreased by 32.4% to € 657 million (FY19: € 972 million), as higher operating result was offset by lower indirect investment income and impairment of goodwill, both primarily COVID-19 related, while 2019 included the purchase gain on Loyalis in 2019. As a result of the agreed change in the pension scheme in 2020, a past service cost has been recognized.

Robust solvency and solid organic capital creation

• • Solvency II ratio (Standard Formula) as at 31 December 2020 amounts to 199% (FY19: 194%). This is after the proposed FY20 dividend and includes the impact of the € 75 million share buyback executed in 2020.

• • Organic capital creation amounts to € 500 million (FY19: € 501 million). Higher contribution from business operations and investments, as well as higher net capital release were offset by higher write-downs of UFR (drag) due to lower interest rates.

• • Proposed regular dividend for 2020 of € 2.04 per share, in line with the dividend policy. Taking into account a paid regular interim dividend of € 0.76 per share, the final dividend amounts to € 1.28 per share.

• • Share buyback of € 75 million starting on 19 February 2021 and expected to be completed before 19 May 2021. The Solvency II ratio of 199% does not include the impact of the share buyback announced today.

• • Unrestricted Tier 1 capital went up by € 425 million to € 6.2 billion, equal to 75% of the own funds. Ample headroom for hybrid capital.

Higher customer satisfaction and strong commercial results

• • Customer satisfaction score (NPS) rose by 5 points to 49, better than the target of >44 by 2021.

• • Gross written premiums in the Non-life segment rose by 14.1% to € 3,643 million (FY19: € 3,192 million). Organic growth of Disability and P&C premiums was 4.6%, at the higher end of the targeted 3-5% growth.

• • Gross written premiums in the Life segment were up by 11.8% to € 1,810 million (FY19: € 1,619 million). The increase reflects the 43% growth in Pension DC ('WerknemersPensioen') and the contribution of Loyalis which more than compensated the decline in Pension DB. Individual life and Funeral were stable.

• • Mortgage origination rose by 40% to € 4.6 billion.

• • Assets under management for third parties rose to € 25.4 billion (FY19: € 22.0 billion), driven primarily by the growth in the mortgage fund.

1 P&C and Disability.

Chairman of the Executive Board and CEO Jos Baeten: '2020 should have been the year in which a.s.r. celebrated its 300th anniversary. However, with the outbreak of COVID-19 at the beginning of 2020, we realised early on that this would not be a year of festivities but one of considerable challenges instead. The outbreak of COVID-19 and the measures taken to combat the pandemic continue to disrupt our personal lives, business communities and society as a whole. I am therefore especially impressed of a.s.r.'s performance in 2020. The impact of COVID-19 on our customer services, commercial and financial performance was limited and we were able to successfully execute our strategy.

I am genuinely pleased that we were able to further bolster the strong relationship we have, both with our customers and with intermediaries, over the past year. Our service remained at a high level and customer satisfaction increased during the course of the year. The Net Promoter Score rose by 5 points to 49, which is the highest score a.s.r.

has achieved until now, and well above our medium-term target of >44. In the annual IG&H Performance Monitor, a.s.r. managed to maintain the top position on Income (Individual and Group) and in Pensions we are rated #2. Intermediaries also expressed their satisfaction with the help offered by a.s.r. during these challenging times. These achievements were especially remarkable given that all our employees have been working from home since the outbreak.

I am very proud of our employees, who strive to earn our customers' trust, each and every day. Staff morale remained high throughout the year, and the motivation and vitality of our employees, which are measured weekly in our mood monitor, have so far not been undermined by the crisis. During the periods of working from home due to COVID-19, extra attention was paid to the mental and physical health of employees. Also, during the lockdowns, when the schools were closed, employees were allowed to take a few hours off every day for care tasks. Employees can request a virtual workplace check at home and when desired we deliver office equipment such as computer screens and office chairs.

Our operating result was strong and grew to € 885 million. Due to the diversification of our activities, the impact of COVID-19 on the operational result is neutral in 2020. A negative effect on disability insurance in particular, due to higher absenteeism and longer reintegration processes, and on the Life business, is offset by lower claims in P&C. In the Non-life segment, the operating result rose to € 241 million driven by lower claims in P&C, partially offset by higher claims in Disability and the strengthening of provisions. In the Life segment, there was only a limited impact from lower direct investment income from dividends and rental income, while COVID-19 had only a limited impact on our mortality result. The net IFRS result is lower than last year, partially due to the uncertainty and volatility in the financial markets as a result of the COVID-19 crisis. The higher operating result was offset by lower indirect investment income and impairment of goodwill, both primarily COVID-19 related, and as a result of the agreed change in the pension scheme in 2020, a past service cost has been recognized. Also, the net IFRS result of 2019 included the purchase gain on Loyalis.

a.s.r. did well in delivering valuable products and services to its customers. The organic growth of close to 5% in P&C and Disability, the strong growth in our pension DC product and the 40% growth in mortgage production, as well as the inflow of assets managed for third parties all demonstrate both the ongoing momentum in our operations and the commercial appeal of our products and services. We are also pleased with the increase in the number of customers in Health and the a.s.r. Vitality programme. For 2021, our focus is on further growth in Non-life and Asset Management as well as enhancing our digitisation to better serve our customers.

The direct effects of COVID-19 have so far been limited. We remain cautious for the effects in the longer term. The ultimate impact of COVID-19 on our results going forward is still impossible to accurately predict. This depends on the speed with which the pandemic is being contained and therefore the rate at which the current restrictions are lifted, as well as on the impact on society and the economy also after the government support measures have been completed. The effect of the virus itself, but also of the restricting measures that are being taken to control the virus, is noticeable in our Disability business. In this unit we experience an increase in the number of customers who report ill due to stress and other mental complaints. Additionally, we note that customers remain ill for a longer period, up to 15% longer in some cases. The effects of the corona crisis reinforce the already visible trend of more and longerabsenteeism due to psychological problems and this requires appropriate attention when dealing with the crisis and the measures that are being taken. These are developments that we have taken into account with our provisioning.

We continue to focus on the strict execution of our strategy and our aim of creating sustainable value for our stakeholders. Part of our strategy is to grow both organically and through targeted acquisitions. The successful migration of acquired portfolios onto a.s.r.'s platform resulted in a meaningful decline in operating expenses in Life. We will continue to pursue these bolt-on acquisitions.

As an insurer we take our responsibility and make choices to build a sustainable and inclusive Netherlands, into a country with a sustainable economy and a society in which everyone counts and feels the freedom to participate. For example, a.s.r. has signed the Green Recovery Statement and is one of the parties in the working group under DNB Platform for Sustainable Financing that strives to combat the loss of biodiversity. With our asset management activities, we have joined the Net Zero Asset Managers initiative, a new global platform of asset managers committed to decarbonising their investment portfolios and thereby contributing to the goals of the Paris Climate Agreement. a.s.r. is increasingly recognized as a sustainable company. We are pleased that a.s.r. is included in the Dow Jones Sustainability World Index, making us one of the 10% best performing insurers worldwide in terms of sustainability.

Our solvency remained robust with a Solvency II ratio at 199%. We still apply the standard model in our calculations. Driven by these strong results and in line with our dividend policy, we can propose our shareholders an increase in the full-year dividend to € 2.04 per share. Based on our strong solvency position and organically generated capital, we have also decided to initiate a share buyback for a total of € 75 million in 2021.

This year we have to say goodbye to Kick van der Pol, who has successfully served as chairman of our Supervisory Board for twelve years. We are grateful for his unparalled energy and wisdom that he has put at the service of a.s.r. He will be succeeded at the next General Meeting of Shareholders by Joop Wijn, who joined the Supervisory Board last autumn. I have every confidence in the future of a.s.r. with Joop as chairman of the Supervisory Board.

Finally, I would like to express my gratitude to our shareholders, customers and intermediaries for their continued support and the trust they invest in a.s.r.'

Key figures

(in € millions, unless per share or expressed as a percentage)	2020	2019	Delta (%)
Operating result	885	858	3.2%
Operating return on equity	15.3%	15.1%	0.2%-p
Net result (on IFRS basis)	657	972	-32.4%
Return on equity	11.7%	19.1%	-7.3%-p
Gross written premiums	5,276	4,666	13.1%
Operating expenses	-701	-656	6.9%
Combined ratio (P&C and Disability)	93.6%	93.5%	0.1%-p
New business (Life segment (APE))	124	159	-22.1%
2020	2019	Delta (%)
Total equity	6,313	6,093	3.6%
Total equity attributable to shareholders	5,309	5,089	4.3%
Solvency II (standard formula) after dividend	199%	194%	5%-p
Financial leverage	28.3%	29.2%	-0.9%-p
Liquidity position at holding level	502	458	9.6%
Number of FTEs (internal)	4,042	3,906	3.5%
2020	2019	Delta (%)
Operating result per share	4.52	4.22	7.1%
Dividend per share	2.04	1.90	7.4%
Number of shares issued and outstanding at end of period (m)	137.9	140.7	-2.0%
Weighted average number of issued and outstanding shares (m)	138.9	140.9	-1.4%
Further explanation of the table:

• 1. Operating result is calculated by adjusting profit before tax for continuing operations reported in accordance with IFRS, as adjusted for the changes in accounting policies and for the following: i) investment related: investment income of an incidental nature (including capital gains and losses, impairments and fair value changes) on financial instruments for own account, net of applicable shadow accounting and net of additional provisions recognised for realised gains and losses on financial assets backing the insurance liabilities ('compensation of realised capital gains') impact; ii) incidental Items: 1. model- and methodological changes with a substantial impact; 2. results of non-core operations; and 3. other non-recurring or one-off items, which are not directly related to the core business and/or ongoing business of the Group, restructuring costs, regulatory costs not related to business activities, changes in the own pension arrangements and expenses related to M&A activities and start-ups.

• 2. The operating return on equity is calculated by dividing the operating result before tax after deduction of interest on hybrid assets and taxes (tax rate: 25%) by the annual average equity attributable to shareholders after deduction of the reserve for unrealised profits and losses and the equity for real estate development (operating activities in 'run-off').

• 3. Solvency II ratio is exclusive of financial institutions.

• 4. The operating result per share is calculated by dividing the operating result before tax after deduction of interest on hybrid assets and taxes (tax rate: 25%) by the weighted average number of outstanding shares.