Titel-slide
Achmea Investor Presentation “The leading Dutch insurance company with strong brands, multi-channel distribution strategy, well-diversified product range and conservative investment profile” 11/12 October 2016 100% tekst
Contents
Key investment Introduction considerations Recent results Wrap-up Appendices
Achmea overview
2 Tekst & Grafiek (25%/75%)
Achmea overview Gross written premiums by segment
Strong brands, diversified products, 31/12/2015 – Total: €19.9 billion focus on insurance . A strong and solid insurance group with mutual roots . Clear market leader in Dutch insurance: Property & Casualty #1, Income Protection #3, Health #1, Pension #5 and Life #3 Turkey 29% Pension & Life 10% Greece 28% . 16% Interpolis, Centraal Beheer and Zilveren Kruis Non-life Slovakia 28% are among the most recognised brands in the International 6% Health 68% Ireland 14% Netherlands Other 1% . Distribution mainly through direct & banking channels, well positioned for future market developments . Advanced digital capabilities . Strong Solvency II position of 204%¹ . ‘A’ rating on the core insurance subsidiaries and conservative leverage position (25.6%)
¹ Based on approved PIM (internal model for Non-Life risk). 3 100% tekst
Ownership structure - Stability through two major cooperative shareholders
Achmea Association¹ Rabobank Netherlands¹ Other¹ Preference shareholders 65.3% 29.2% 5.5% 100%
Ordinary shares² Achmea subholding² 94.5% 5.5%
The mission of Achmea Association is to support the continuity of Achmea and to look after the collective interests of customers
¹ Owners of Capital rights ² Owner of voting rights 4 Tekst & Grafiek (25%/75%)
Strong commercial % Rabobank customers New insurance sales through Rabobank (% Interpolis) alliance with Rabobank . Our insurance products are distributed through the banking channel under our 1% 1% Interpolis label 23% . Preferential distribution of Interpolis products through Rabobank branches; approximately 75% 98% of retail insurance products sold through 99% 99% Rabobank are Achmea insurance products 77% . Currently, only 1 out of every 4 customers of Rabobank is insured through Interpolis; both Achmea and Rabobank aim to increase this 25% Retail Small enterprises* Wholesale
Retail
* Definition of small enterprises: 5 employees or less
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Contents
Key investment Introduction considerations Recent results Wrap-up Appendices
Dominant player with strong brands and well developed digital capabilities
Our strategic agenda
Robust capital and solvency position
Conservative investment profile
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Achmea has four competitive advantages
Strong brands with leading positions in customer satisfaction ratings Best in class distribution mainly via direct and bancassurance channel
7%
14% 70%
3% 6% 79%
Direct (total) Bancassurance Broker Direct Health
Leading position in mobile and online services A solid customer base with leading positions in our core markets Achmea serves approximately 10 million customers
Dutch market Market positon
Health # 1
Evelien – Online assistant Speech analytics Independer Property & Casualty # 1 Individual Life # 3
Income protection # 3
Doctor- APP Inshared Agro Damage Asset Management # 5
7 Tekst & Beeld (75%/25%)
Strong brands with leading positions in customer satisfaction ratings¹
P&C Retail Ø 7.7 P&C Wholesale Ø 7.3 Health Ø 7.0 Pensions Ø 6.3
Interpolis 7.9 Centraal Beheer 7.5 De Friesland 8,3 Centraal Beheer 6.7 FBTO 7.9 Pro Life 7.7 Generali 7.5 Centraal Beheer 7.7 OZF Achmea 7.4 Aegon 6.4 Generali 7.7 Interpolis 7.4 Interpolis 7.2
Allianz 7.6 Avéro 7.4 CZ 7.2 Generali 6.3 ASR 7.6 Zilveren Kruis 6.8 Aegon 7.2 Aegon 7.5 VGZ 6.8 ASR 6.0 NN Group 7.3 ASR 7.0 Menzis 6.8
Direct brand Centraal Beheer voted “Most customer orientated insurer”² Direct brand FBTO voted “Most customer friendly insurance company” over 2015 and 2016³ Achmea brands Centraal Beheer, Interpolis and Avero score MoneyView 5 star productrating on several Non-Life products meaning a TOP-3 ‘best buy’ position in the market⁴
¹ Source: the Dutch Association of Insurers customer satisfaction research. Health: Research by Zorgkiezer.nl 2015 ² 5-th Customer Centric DNA Award survey (april 2016) ³ 9th SAMR and Beeckestijn Business School survey (april 2016) ⁴ Source: www.specialitem.nl 8 100% tekst
A solid customer base with leading positions in our core markets
Property & Casualty¹ #1 Health² #1 Income Protection¹ #3 Individual Life³ #3 Asset Management⁴ #5
Achmea 21% ASR NN Group Achmea 31% APG ASR VivatVivat Delta Lloyd NN Group PGGM NN Group VGZ Achmea 15% Achmea 19% Allianz Blackrock NL Goudse Delta Lloyd Delta Lloyd CZ Group Aegon DeltaMN Lloyd Aegon Other ASR Menzis Achmea 6% Other Other Other Other
Our ‘closed book’ pension holds a 5th position (11% market share)³ in the Dutch market.
¹ Publication of DNB (2015 figures), ² Based on own analyses, figures 2015, ³ Publication of DNB (2014 figures) ⁴ Dutchinvestor Total Institutional Managed Assets 2014. 9 100% tekst
Contents
Key investment Introduction considerations Recent results Wrap-up Appendices
Dominant player with strong brands and well developed digital capabilities
Our strategic agenda
Robust capital and solvency position
Conservative investment profile
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We have made significant progress in recent years
Our transition to a true digital insurer Focus our business portfolio
We made tremendous progress Significant progress in reshaping our Process standardisation in reshaping our process, business portfolio: Integrated products and IT-landscape: insurer 1. Divesting operations in Cyprus, Digital 1. IT-complexity reduction Belgium, France, Romania, Bulgaria and Insurer 2. Integration of back offices by Russia, as well as occupational health migration of IT- applications services provider Achmea Vitale and
House in 3. Transition to the digital Achmea Health Centers Process integration Process order insurer that uses big data 2. Recently we announced the sale of the and offers high quality digital Staalbankiers private banking activities customer service
Staff and expense reduction Implementation of integrated Retirement Services strategy
21,332 3,664 Centraal Beheer financial 1. Well known Centraal Beheer brand, with high customer 18,424 services satisfaction. Large customer base 2,879 2. Excellent asset gathering experience with long lasting roots 15,412 2,633 Achmea Investment in pension market with Achmea Investment management Management 3. Well positioned savings and mortgages propositions by FTE¹ Expenses Achmea Bank Achmea Bank 4. Experienced Pension fund (administrative) services provider Syntrus Pension Services 5. We moved to a closed book Life in 2013. (Cost efficient operations and high customer satisfaction.) Closed book Pension & 2008 2013 2015 2008 2013 2015 6. We decided on a closed book pensions, after receipt Life permit to establish General Pension Fund (18 July 2016) ¹ Internal FTE development of total group activities 11 Tekst & Beeld (75%/25%) RGB-KLEUREN AFBEELDING INVOEGEN
Financial red R 210 , G 159, B 165 1 Fuchsia R 193 , G 086, B 131 Acceleration & Innovation since 2014: accelerated customer focus Klik op het icoontje om een Yellow R 209 , G 147, B 002 Background nieuwe afbeelding in te voegen. Purple R 082 , G 083, B 135 ▪ Acceleration in customer focus and cost savings Blue R 065 , G 127, B 162 ▪ Innovation of processes and online services Light Green R 134 , G 135, B 034 ▪ These changes are in response to customers’ fast- changing wishes Dark Green R 074 , G 121, B 076 2 Orange R 229 , G 123, B 003 Customer-driven Ambitions with Acceleration & Innovation Zoek en selecteer de Gold R 179 , G 143, B 075 gewenste afbeelding. ▪ Providing new solutions to our customers Klik op ´Invoegen´ Medewerkers TEXT LEVELS ▪ Maintaining high level of customer satisfaction Invoegen
Level vooruit ▪ Maintaining long-term financial health Employees Level terug Objectives Responsible Competitive ▪ €450 million cost reduction implying a FTE reduction 1 Typ-tekst (18 pt.) returns costs of approximately 4,000 jobs. 2 . Bullet (18 pt.)
3 . Sub-bullet (18 pt.)
4 Tussenkopje (Blue, 20 pt.) 12 100% tekst
Our Acceleration & Innovation program delivered good results:
. Achmea has become a more digital and customer focused organization . We strengthened our earnings model and we divested less profitable businesses . Our employees have become better equipped for digital work environment . In 2016 we continue our initiatives to remain a leading digital insurer, streamlining our organization and further reducing IT-operating costs . We invest in our strategic initiatives preparing ourselves to current and future market challenges: . Implement advanced Bancassurance with Rabobank . Grow international business . Offer clear added value in Health . Improve and innovate Non-life business . Introduce ‘Integrated retirement services’ together with establishment of General Pension Fund . Operating expenses reduced by €355 million as result of the Acceleration & Innovation program started in 2014 . As initiatives get finalised in 2016, the goals of Acceleration and Innovation will be visible in our 2017 results
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We have a clear strategy: Stay on course:
• Further strengthening of our core competencies in Non-life and Health Stay on Course • Combined with a strong position in pensions and internationally • Invest in further innovative solutions for our customers • Continuation of strong financial position, now and in the long-term
Complete: Complete • Achieving the cost and FTE reduction targets of Acceleration & Innovation • Migration to Digital Customer Services and Digital Business Case of IT.
Accelerate:
Accelerate • Additional measures implemented to create financial scope for innovation • New strategic initiatives to respond to continued changes in market conditions
14 Our strategy will lead to a solid financial profile
Solvency II ratio (PIM) Fixed Charge Coverage S&P Capital Target Debt leverage¹ (in %) (in x) (in %)
204 4.1 4x AA Level 35% 26
Available capital Target capital 1H 2016 2015 1H 2016
Achmea has a stable capital Our solvency II position Achmea continuously pursues Debt leverage well below our position with a S&P capital is strong a fixed charge coverage of > 4x maximum (35%) surplus at AA-level
¹Definition Debt leverage: (External Debt + Hybrid capital ) / (Equity - Goodwill + External Debt + Hybrid capital) 15 100% tekst
Contents
Key investment Introduction considerations Recent results Wrap-up Appendices
Dominant player with strong brands and well developed digital capabilities
Our strategic agenda
Robust capital and solvency position
Conservative investment profile
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High quality of capital and low leverage
Solvency II ratio Tiering of Capital In € million In € million
4% 14% 9,801 Unrestricted Tier 1 9,151 Total EOF 9% Restricted Tier 1 204%¹ 199% 9,801 Tier 2 H1 2016 Tier 3 73%
4,816 4,589
676 884
Avialable headroom² 1,341 349 911 EOF SCR EOF SCR 366 H1 2016 2015 RT1 Tier 2 Tier 3
¹ Percentage based on an estimate with a range of -10% / +5% ² RT1 capacity: (UT1 / 80%) – UT1 – Outstanding RT1; Tier 2 capacity: (Consolidated SCR * 50%) - Outstanding Tier 2 – current Tier 3; Tier 3 capacity: (Consolidated SCR * 15%) – Current Tier 3 17 100% tabel TABEL INVOEGEN
Capital allocation: Commitment predominantly to underwriting risk in line with our risk 1 appetite Verwijder de bestaande tabel. Klik op het Solvency Capital Requirements (PIM) H1 2016 (in € million) icoontje om een nieuwe tabel in te voegen. Non life Underwriting
60% 33% 6% 1% -35% Health Underwriting Life Underwriting
38 455
2,657 2 2,494 51 4,876 605 702 4,816 4,546 14 Kies het aantal gewenste 761 rijen en kolommen en klik op ´OK´ 1,860 OK
1,925
Underwriting Market CDR Intangible Diversification BSCR Operational SCR non-insur. LAC DT & EP Other SCR Asset
18 Beeld & Tekst (75%/25%) RGB-KLEUREN AFBEELDING INVOEGEN
Financial red R 210 , G 159, B 165 Resilient capital base under several scenarios, 1 Fuchsia R 193 , G 086, B 131 but strong impact credit spread increase due to conservative profile investment portfolio Klik op het icoontje om een Yellow R 209 , G 147, B 002 Interest rate sensitivity nieuwe afbeelding in te Solvency II PIM sensitivities voegen. Purple R 082 , G 083, B 135 . Currently we do not hedge the UFR nor the risk (FY2015, in € million) margin, which exposes us to changes in the Blue R 065 , G 127, B 162 Eligible own SII PIM Δ SII PIM interest rates Scenario funds SCR (in %) (in %-pt) Light Green R 134 , G 135, B 034 Credit spread sensitivity BASE 9,151 4,589 199 --- . We make use of the volatility adjustment Dark Green R 074 , G 121, B 076 2 -50bps 4,719 210 + 11 Interest 9,929 . Our fixed income portfolio differs from the EIOPA
Orange R 229 , G 123, B 003 rate +100bps 8,118 4,486 181 - 18 reference portfolio, as we have less exposure to Zoek en selecteer de corporates, French government bonds and gewenste afbeelding. Gold R 179 , G 143, B 075 Credit +100bps 9,327 4,494 208 + 8¹ peripheral sovereigns (e.g. Italy & Spain), but Klik op ´Invoegen´ Spread more exposure to core sovereigns (e.g. Germany TEXT LEVELS -20% 8,735 4,514 193 - 6 and The Netherlands) Invoegen Equity Level vooruit -40% 8,319 4,441 187 - 12 Equity sensitivity . We do not make use of equity derivatives to Property -20% 8,916 4,549 196 -3 reduce the impact of developments in equity Level terug prices. The impact of the shock is therefore linear 3.7% 8,909 4,617 193 - 6 UFR UFR sensitivity 1 Typ-tekst (18 pt.) 3.2% 8,656 4,646 186 - 13 . Limited due to the business mix 2 . Bullet (18 pt.)
3 . Sub-bullet (18 pt.) ¹Credit spread sensitivity amended based on further internal analysis
4 Tussenkopje (Blue, 20 pt.) 19 Beeld & Tekst (75%/25%) RGB-KLEUREN AFBEELDING INVOEGEN
Financial red R 210 , G 159, B 165 1 Fuchsia R 193 , G 086, B 131 Introduction to our approach on Solvency II Klik op het icoontje om een Yellow R 209 , G 147, B 002 Focus of approved partial internal model (PIM) nieuwe afbeelding in te voegen. Purple R 082 , G 083, B 135 SCR Approved Blue R 065 , G 127, B 162 Adjustment (LAC DT & TP) BSCR Operational . Non-life risk: PIM is calibrated on Achmea’s historical experience reflecting the specifics of our Non-life Light Green R 134 , G 135, B 034 Market Risk Default Risk Health Risk Intangible Risk Life Risk Non-life Risk business geared towards retail Dark Green R 074 , G 121, B 076 2 SLT Cat Risk NSLT . Health risk SLT: Dominant risks are incident and Orange R 229 , G 123, B 003 recovery risk which are not adequately reflected in Premium & Premium & Zoek en selecteer de Equity Mortality Reserve Mortality reserve the SF Gold R 179 , G 143, B 075 gewenste afbeelding. Interest rate Longevity Lapse Longevity Lapse . 10% of total BSCR (pre-diversification) is currently Klik op ´Invoegen´ Disability & Disability under internal model. With the addition of market TEXT LEVELS Property morbidity & Morbidity Cat risk, this increases to approximately 40% Invoegen Spread Lapse Lapse Level vooruit Under development Currency Expense Expense . Market Risk: pre-application 2016 Level terug Concentration Revision Revision . Health risk NSLT: Used for internal purposes only. For Legend Cat now we have no ambition to apply for approval, as we 1 PIM Under Typ-tekst (18 pt.) (Since dec 2015) Development Standard Formula need more historical data with respect to lump sums 2 . Bullet (18 pt.) and contract ceilings
3 . Sub-bullet (18 pt.)
4 Tussenkopje (Blue, 20 pt.) 20 Beeld & Tekst (75%/25%) RGB-KLEUREN AFBEELDING INVOEGEN
Financial red R 210 , G 159, B 165 1 Fuchsia R 193 , G 086, B 131 Solvency II dividend policy threshold Klik op het icoontje om een Yellow R 209 , G 147, B 002 . SII capital adequacy framework is nieuwe afbeelding in te Purple R 082 , G 083, B 135 based on the approved PIM voegen.
Blue R 065 , G 127, B 162 Group . The Solvency II zones at legal entity level are based on both the probability Light Green R 134 , G 135, B 034 Legal entity of default and the probability of Green zone “comfortable” Dark Green R 074 , G 121, B 076 reaching capital levels below SCR level 2 Green zone “comfortable” Orange R 229 , G 123, B 003 . Our formal risk appetite is set at 100% Zoek en selecteer de of SCR for the legal entities which gewenste afbeelding. Gold R 179 , G 143, B 075 Yellow zone “caution” translates into a SII ratio of 130% at Klik op ´Invoegen´ Yellow zone “caution” 130% group level TEXT LEVELS Invoegen 100% Level vooruit Red zone “no dividend” Red zone “no dividend” Level terug
1 Typ-tekst (18 pt.)
2 . Bullet (18 pt.)
3 . Sub-bullet (18 pt.)
4 Tussenkopje (Blue, 20 pt.) 21 Tekst & Grafiek (25%/75%)
Achmea (A) Explanatory remarks: Standard & Poor’s rating on solid level Stable outlook . Current rating for our insurance entities is Anchor A- Business Risk Profile Strong • Dutch health and life markets: intermediate risk ‘A’ / stable outlook. The group rating is • Non-life in the Netherlands carries a low risk ICCRA Intermediate overall ‘BBB+’ / stable outlook. • Leading market shares in health and non-life offers competitive strengths . Standard & Poor’s confirms Competitive position Strong • Multi-brand, multi-distribution approach is supportive to distinguishing features of Achmea: profile Financial Risk Profile Strong • AA-level capital . Market leader in P/C and Health • Pressured level of earnings in past 3 years, followed by Capital and Earnings Very Strong impact extreme weather conditions and increasing . Multi-brand and multi-distribution strategy medical costs in 2016
. Diversified portfolio Risk Position Intermediate • Investment leverage and diversification at conservative levels . Financial Flexibility Less than Adequate Strong capital position on an AA-level • FCCR is constraining factor . ERM enhances the rating • Stable financial leverage at around 26%-27% . Strong financial risk profile, but pressured Modifiers +1 ERM & Management +1 earnings • ERM Strong Positive risk culture, risk management and risk controls . • Strategic positioning is clear, financial management is Rating outlook is ‘stable’ conservative and organizational effectiveness is good
Mgt & Governance Satisfactory Liquidity Exceptional • No refinancing concerns
¹ Standard & Poor’s rating services August 15, 2016 22
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Contents
Key investment Introduction considerations Recent results Wrap-up Appendices
Dominant player with strong brands and well developed digital capabilities
Our strategic agenda
Robust capital and solvency position
Conservative investment profile
23 100% grafiek
Quality of own risk investment portfolio remains high
Investments by type - 30/06/2016 (€, billion) Fixed Income investments by rating - 30/06/2016
Other Real Estate Equities Mortgages Fixed Income¹ 47 44 56 53 40 36 50 46 127 113 0% 3% 3% 3% 3% 1% 2% 2% 2% 4% 1% 4% 6% 5% 7% 7% 2% 3% 5% 6% 5% 5% 5% 7% 1% 2% 1% 2% 6% 16% 14% 6% 8% 15% 11% 10% 9% 14% 25% 20% 25% 28% 25% 22% 19% 20% 17% 12% 13% 18% 20% 18% 20% 46% 47% 11% 15% 15% 13% 26% 25% 17% 16% 15% 15% 29% 33% 27% 82% 83% 75% 71% 21% 17% 71% 67% 70% 70% 46% 45% 44% 42% 43% 45% 34% 29% 30% 32% 26% published Not Achmea Aegon NL ASR Delta Lloyd NN Group Achmea Aegon NL² ASR Delta Lloyd NN Group H1 16 FY15 H1 16 FY15 H1 16 FY15 H1 16 FY15 H1 16 FY15 H1 16 FY15 H1 16 FY15 H1 16 FY15 H1 16 FY15 H1 16 FY15 Source: Interim reports H1 2016, Press Releases H1 2016 and Press Presentations H1 2016 . Large exposure to fixed income securities with a high rating profile (84% or more invested in investment grade securities) . Mortgages portfolio increased further per HY 2016 to €4.8 billion and is expected to reach €6 billion by the end of the year ¹ Including net position derivatives ² Excludes rating of sovereign bonds 24 100% tekst Contents Key investment Introduction considerations Recent results Wrap-up Appendices Group results Solvency II results Segment results 25 Strong financial position of group: solvency ratio 204% Solvency ratio (SII) Operational result Operational result affected by: (in € million) (in %) . Severe weather conditions caused total damages of €267 million for our customers 204 285 199 . Impact on result of €137 million after reinsurance . Higher healthcare expenses than estimated due to: -38 . Higher expenditures new medicines H1 2016 2015 H1 2016 H1 2015 . Changed portfolio composition . Gross written premiums increased at Property Operating expenses Gross written premiums & Casualty, Health and International (in € million) (in € million) 1,367 . In 2016, operating expenses decreased further 1,310 16,940 16,902 by 4% due to the decline in the number of employees and continued digitisation of processes . Solid financial position with a solvency level of 204%¹ H1 2016 H1 2015 H1 2016 H1 2015 ¹ Percentage based on an estimate with a range of -10% / +5% 26 Results affected by one-offs Non-Life Former H1 2016 H1 2015 Segment results (in € million) structure . Operational result affected by severe weather conditions Non-Life -121 75 109 . In 2015 realisations on investments due to change in portfolio mix Health - Severe weather conditions -130 - . Result basic health insurance negative due to: Health 2 172 188 . Higher than expected healthcare expenditures for medicines Pension and Life 187 110 125 . Changed portfolio composition Banking activities -18 Pension and Life . Higher investment results and lower operating expenses Retirement services -13 -5 - Retirement services International activities 8 28 34 . Result affected by investments in retirement services strategy Other activities -101 -95 -153 International activities . Underlying result has improved 27 100% tekst Contents Key investment Introduction considerations Recent results Wrap-up Appendices Group results Solvency II results Segment results 28 Solvency II ratio primarily influenced by declining interest rates Solvency II (approved model) Solvency (in € million) . Solvency II ratio as of Q2 2016 increased to 204% . The solvency ratio is an estimate. Due to uncertainties (including LACDT) a H1 2016 FY 2015 range of -10%/+5% around the estimate is applied. 9,801 9,151 Available capital . Increase of available capital as result of interest rate developments (including UFR-effect) . Own funds impacted by severe weather conditions, lower health results and 4,816 4,589 capital flows (e.g. coupon payments and dividend) Required capital . Higher increased capital mainly due to higher life and market risk as result of interest rate developments Available Required Available Required capital capital capital capital 204%¹ 199% ¹ Percentage based on an estimate with a range of -10% / +5% 29 100% tekst Contents Key investment Introduction considerations Recent results Wrap-up Appendices Group results Solvency II results Segment results 30 Non-Life: High impact of severe weather conditions, underlying result improved Property & Casualty . Due to reinsurance cover the impact on the operational result of the Operational result Operational result severe weather conditions is €130 million (gross claims: €267 million) Property & Casualty Income Protection . Underlying result improved because of return improvement measures (in € million) (in € million) within the retail customer and commercial portfolio 64 11 Income Protection Sickness insurance . Higher duration of absence due to sickness . Trend towards own risk 3 Individual disability insurance (AOV) . Portfolio decline in line with the market -124 . Effect of accelerated reintegration smaller H1 2016 H1 2015 H1 2016 H1 2015 Group disability insurance (WIA) . Higher inflow combined with accelerated reintegration 31 Non-Life: Portfolio growth within Property & Casualty Gross written premiums Operating expenses Property & Casualty (in € million) (in € million) . Gross written premiums increased due to higher inflow in the retail customer . Property & Casualty . Income Protection portfolio and price effects in retail and commercial customer portfolio 2,007 1,982 448 440 502 512 . Structurally lower claims ratio . Impact of severe weather conditions 10.4%-pt 1,505 1,470 . Commission expenses increase in proxy channel Income Protection H1 2016 H1 2015 H1 2016 H1 2015 . Portfolio decreases in line with the market for individual disability and sickness Combined ratio at Non-Life Combined ratio Income insurance. Gross written premiums of group disability insurance portfolio (in %) (in %) grows due to return improvement measures . Claims ratio . Expense ratio Severe weather . Claims ratio . Expense ratio conditions 109.4% . Operating expenses decline due to realised cost efficiency measures 99.4% 100.5% 94.0% 29.3% 25.0% 28.2% 24.4% . Combined ratio increases due to lower premiums 10.4% . Claims ratio higher because of increased duration of absence due to 69.7% 71.2% 75.5% 69.6% sickness and a rising number of customers disabled for work . Result from previous year lower for our individual disability portfolio due to H1 2016 H1 2015 H1 2016 H1 2015 lower impact of initiatives of accelerated rehabilitation and reintegration 32 Health: Negative result basic health insurance mainly due to increased expenditures on new medicines Structural result Incidental result Basic health Insurance basic health insurance basis health insurance . Structural result lower: Current underwriting year (in € million) Previous underwriting years (in € million) 158 . Higher healthcare expenses due to higher than expected expenditures on new medicines -11 . Equalisation system does not fully compensate for the change in our 65 portfolio -83 . Allocation of €481 million to the results in 2015 is still insufficient H1 2016 H1 2015 H1 2016 H1 2015 . Less incidental result from previous years: . In 2016, lower than expected expenditures on geriatrics and care received Operational result Health Operational result Health abroad Supplemental (in € million) Basic + supplemental (in € million) 172 . In 2015, increased outpatient care and different development in fixed/variable healthcare expenses than expected 25 . Declining operating expenses contribute to the result 20 2 Supplemental health insurance . Customers with supplemental health insurance take a more conscious decision for choosing their coverage H1 2016 H1 2015 H1 2016 H1 2015 . Penetration level of supplemental health insurance on basic health insurance remains stable 33 Health: Higher gross written premiums and lower operating expenses Gross written premiums Operating expenses Basic health Insurance (in € million) (in € million) . Basic . Supplemental . Higher gross written premiums due to higher contribution equalisation 282 13,106 12,977 260 fund 1,318 1,327 . Administrative costs declined due to more efficient processes 11,788 11,650 . Claims ratio up due to higher healthcare expenditures . Expense ratio down due to initiatives relating to Acceleration & Innovation H1 2016 H1 2015 H1 2016 H1 2015 Combined ratio Combined ratio Basic (in %) Supplemental (in %) Supplemental insurance . Claims ratio . Expense ratio . Claims ratio . Expense ratio 96.2% . Gross written premiums for supplemental insurance declined due to a 100.7% 95.4% 98.2% 2.9% 8.4% 9.4% lower number of insured customers 3.2% . Claims ratio has increased due to lower premium revenue and growth in 97.8% 95.0% 87.8% 86.0% more selective choice of package for supplemental cover H1 2016 H1 2015 H1 2016 H1 2015 34 Pension & Life: higher investment results and lower operating expenses Operational result Operating expenses Pension & Life (in € million) (in € million) . Operational result increased 187 . 139 Higher investment results due to recovery real estate market, higher commodity prices and widening of swap spread 110 130 . Lower amortisation on value of business acquired (VOBA) . Lower operating expenses . Result of complexity reduction visible H1 2016 H1 2015 H1 2016 H1 2015 . Decrease in number of employees in line with premium lapses Gross written premiums Gross written premiums Immediate annuities and term life insurance Pension & Life closed book Annuities and term life insurance . Ongoing pension and life insurance activities increased by 51% (in € million) (in € million) 924 Pension & Life closed-book 844 148 . Licence for Centraal Beheer General Pension Fund obtained on 18 July 98 2016. Sale of pension insurance products ceased with creation of General Pension Fund (APF) . Gross written premiums decreased by 9%, mainly due to regular premium lapses and a large single premium contract in 2015 H1 2016 H1 2015 H1 2016 H1 2015 . Closed-book yields cost benefits 35 Retirement services: Achmea invests in the future Operational result Operating expenses Retirement services (in € million) (in € million) . Underlying operational result €2 million 140 . Investment of €15 million (total: €35 million) in implementing the Retirement Services strategy -5 124 Achmea Investment Management . Assets under Management increased due to higher prices on financial markets -13 H1 2016 H1 2015 H1 2016 H1 2015 . Management fees increased due to higher Assets under Management Achmea Bank Assets under Management AIM Interest margin Achmea Bank (in € mrd) (in bps) . Higher interest margin due to lower financing expenses 106 95 . Quality of mortgage portfolio remains solid with an addition to loan 102 provisions of approximately 5bps 81 . Core Tier 1 Ratio increased to 18.0% (H1 2015: 16.8%) Syntrus Achmea Pension Management . Preparations well under way for General Pension Fund with investments in a new administrative platform H1 2016 2015 H1 2016 H1 2015 . Administration fees decreased slightly to €44 million (H1 2015: €53 million) 36 International: Underlying result improved due to premium growth International activities . Total increase in premiums of 4%: Gross written premiums Operational result . Strong growth in gross written premiums in Turkey (9%), (in € million) (in € million) higher in local currency (24%) 28 . Growing market share in Greece in a shrinking market. 603 579 No. 1 position achieved in Greece’s retail customer market . Growth in Ireland due to further improving economy . Successful online initiatives by Onlia (Slovakia) and Anytime (Greece) 8 . Adjusted for one-offs the operational result increased by €2 million H1 2016 H1 2015 H1 2016 H1 2015 . Increase in operating expenses less strong than growth in premiums 37 100% tekst Other activities Achmea Reinsurance . Positive contribution of €6 million (H1 2015: €26 million) to the group result from Achmea Reinsurance despite June severe weather conditions and restructuring of reinsurance contracts Life. The restructuring also caused a decrease in gross written premiums Achmea Real Estate & Finance . Assets under Management of Syntrus Achmea Real Estate & Finance increased to €16.7 billion, driven by growth in mortgage portfolio and positive revaluation of real estate . Management fees stable at €33 million with lower fees on real estate due to growth in mortgage portfolio Staalbankiers . Achmea sells private banking activities Staalbankiers to Van Lanschot in line with the strategy 38 Investment results affected by lower interest rates and lower realisations Analysis of Change investment results for own risk Achmea Group Investment results (in € million) . Investments results for own risk decreased with €98 million due to lower interest rates (direct results) and lower realisations (indirect -98 results) 726 . Increase in dividends and rental income more than offset by decline in interest rate 61 . Positive revaluation of housing portfolio ensures stable indirect investment result 665 . Running yield (annualized) at 2.3% 42 . 628 Realised and unrealised results in fixed income securities in Pension & 1 4 Life do not form part of the profit and loss account but run through the FFA (Fund for Future Appropriation) . The amount of the FFA in H1 2016 is €9.5 billion (2015: €6.2 billion) Results Impact Result own Direct results Indirect Other results Result own own risk portfolio risk H1 2015 results risk H1 2016 change (corrected) Non-Life 39 100% tekst Contents Key investment Introduction considerations Recent results Wrap-up Appendices Key highlights 40 Tekst & Beeld (75%/25%) Key highlights Dominant player in major insurance market . Largest Dutch insurer: high market shares in all segments Well positioned with strong brands . Strong brands, high customer satisfaction . Well diversified portfolio. . Distribution primarily through direct and bank distribution . Advanced digital capabilities Robust capital and solvency position . High quality of capital and low leverage . Robust solvency level (1H 2016: 204%¹) Conservative investment profile . Majority (74%) is invested in fixed-income . Low asset risk compared to peers 41 100% tekst Contents Key investment Introduction considerations Recent results Wrap-up Appendices 42 100% tekst Ownership structure - Stability through two major cooperative shareholders Achmea Association¹ Rabobank Netherlands¹ Other¹ Pref. shareholders 65.3% 29.2% 5.5% 100% Ordinary shares² Achmea subholding² 94.5% 5.5% • Senior unsecured • Subordinated Insurance & other Achmea Bank N.V. entities Issuing entities • No issuance • Senior Unsecured • Covered Bond • Securitisation • Secured EMTN ¹ Owners of Capital rights ² Owner of voting rights 43 Tekst & Tabel (25%/75%) The economy in our home market is doing well GDP development (% - LY same period) Unemployment (%) 2,3 Average EU per Q1 2016 Dutch economy performs above EU 2,0 8,7 1,9 6,9 6,8 average, Macro- economic figures 1,7 1,7 6,6 6,6 6,2 6,2 6,2 show signs of further growth 1,4 1,5 Average EU per Q1 2016 . Dutch economy is growing. Dutch Central 0,5 Statistical Office expects 1.7% growth in 2016 and 2017 Q2-2015 Q3-2015 Q4-2015 Q1-2016 Q2-2016 2016E 2017E Q2-2015 Q3-2015 Q4-2015 Q1-2016 Q2-2016 2016E 2017E . Leading indicators show improvement: Housing prices index (% - LY same period) Production Dutch mortgages (#, x1000) 284.2 . 6.0 259.1 Lowering unemployment 222.7 4.4 4.5 4.1 170.0 . Rising housing values and higher 3.5 2.9 mortgage production 2.5 Q2-2015 Q3-2015 Q4-2015 Q1-2016 Q2-2016 2016E 2017E 2013 2014 2015 2016E¹ Source: Dutch Central Statistical Office (CBS). Figures 2016 . Mortgages: Dutch land register. Forecast: MinFin, Rabobank ¹ Based on a 4 quarter rolling average 44 100% tabel TABEL INVOEGEN 1 Operational Free Capital Generation at approximately €260 million Verwijder de bestaande tabel. Klik op het Description Free Capital Generation Key drivers (in € m, approximate) icoontje om een nieuwe tabel in te voegen. . Structural operational results of other legal entities (e.g. Non-Life, Health, . Competition 160 Asset Management, Bank) . Cost initiatives Operational results . Cost overrun Pensions & Life -60 . Credit spreads . Asset allocation Investment margin . Excess return on investments 155 . Risk premiums . Leverage Unwind UFR . Amortisation of UFR benefit -55 . Interest rate levels 2 . Operational initiatives . Release of SII risk margin in technical provisions as value in-force runs off 85¹ Unwind of risk margin . ALM initiatives Kies het aantal gewenste Pension &Life Pension . Operational initiatives Unwind SCR . Release of SCR (excl. impact of equity transitional) as value in-force runs off 115 rijen en kolommen en klik Only excl. equity transitional . ALM initiatives op ´OK´ Operational FCG Achmea Group (excluding impact equity transitional) ~400 OK Unwind of SCR . Impact of equity transitional on the unwind of SCR -140 . Equity portfolio changes impact equity transtional Operational FCG Achmea Group (including impact equity transitional) ~260 . Cost initiatives Holding expenses . Holding cost and financing expenses -195 . Financing considerations Net FCG Achmea Group ~65 ¹ Includes Time Value of Options and Guarantees (TVOG) of approximately €5 million 45 Beeld & Tekst (75%/25%) RGB-KLEUREN AFBEELDING INVOEGEN Financial red R 210 , G 159, B 165 1 Fuchsia R 193 , G 086, B 131 Health: Introduction to Dutch healthcare system (1) Klik op het icoontje om een Yellow R 209 , G 147, B 002 Cure nieuwe afbeelding in te Purple R 082 , G 083, B 135 Dutch healthcare system consists of 4 components voegen. Description Premium Size Coverages . Compulsory basic insurance with premium Blue R 065 , G 127, B 162 of €45.9 billion in 2016; the Dutch health Compulsory basic insurance 50% income . Hospital care dependent . Pharmaceuticals insurance is the largest private insurance Light Green R 134 , G 135, B 034 €45.9 . Specialists Public constraints: compulsory, 45% billion . Home care & nursing market with public safeguards in Europe mandatory acceptance & risk nominal . General practitioners Dark Green R 074 , G 121, B 076 equalization 5% taxes 2 Cure . Deductible payments ZVW are €3.2 billion in . Dental care Orange R 229 , G 123, B 003 . 2016 Zoek en selecteer de Insurance marketInsurance Voluntary supplementary insurance 100% €4.0 Supplementary cover . Alternative medicine Option to risk selection nominal billion Gold R 179 , G 143, B 075 . Vitality gewenste afbeelding. Klik op ´Invoegen´ Care TEXT LEVELS . Long-term care Invoegen Compulsory Long Term Care 100% income €19.9 . Care for mentally and (WLZ) dependent billion physically disabled . Annual costs are estimated at €27 billion Level vooruit . Mental care . Social care and support . Home care & nursing was transferred from Social Support act €4.8 . Domestic help Care 100% taxes care to cure (approximately €3.3 billion of Level terug (WMO) billion . Support, focusing on participation and guidance annual premium) as of the 1st of January of people at home Not Not insurancemarket an €1.9 Juvenile 100% taxes 2015. The remaining part of the care market billion . Care for persons <18 years 1 Typ-tekst (18 pt.) (Munic) is currently still non-insurance 2 . Bullet (18 pt.) Private Public 3 . Sub-bullet (18 pt.) 4 Source: Vektis - Verzekerden in beweging 2015 and Ministerie VWS 2016. Tussenkopje (Blue, 20 pt.) 46 Beeld & Tekst (75%/25%) RGB-KLEUREN AFBEELDING INVOEGEN Financial red R 210 , G 159, B 165 1 Fuchsia R 193 , G 086, B 131 Health: Introduction to Dutch healthcare system (2) Klik op het icoontje om een Yellow R 209 , G 147, B 002 . Insurance companies receive 55% of nieuwe afbeelding in te Purple R 082 , G 083, B 135 Multiple cash flows for basic insurance their GWP through the Risk voegen. Equalisation (RE) fund (government) Blue R 065 , G 127, B 162 Income-related premium (50%) Employer/ . Consumers pay annually about €1200- Light Green R 134 , G 135, B 034 Self-employed Risk 55% 1300 (nominal) premium to their equalisation health insurer (45% of the total income Dark Green R 074 , G 121, B 076 Government contribution (5%) fund 2 Government of an insurer) Orange R 229 , G 123, B 003 Zoek en selecteer de . For children (18-) no premium has to gewenste afbeelding. Gold R 179 , G 143, B 075 Insurance be paid company Klik op ´Invoegen´ TEXT LEVELS . In addition, consumers pay a Invoegen contribution for some treatments and Level vooruit they have a legally required deductible Income compensation Income of €385 (Healthcare allowance) (Healthcare Level terug Consumer Healthcare insured provider 1 Typ-tekst (18 pt.) 2 . Bullet (18 pt.) 3 . Sub-bullet (18 pt.) 4 Tussenkopje (Blue, 20 pt.) 47 Beeld & Tekst (75%/25%) RGB-KLEUREN AFBEELDING INVOEGEN Financial red R 210 , G 159, B 165 1 Fuchsia R 193 , G 086, B 131 Health: Introduction to Dutch healthcare system (3) Klik op het icoontje om een Yellow R 209 , G 147, B 002 How it works nieuwe afbeelding in te voegen. Purple R 082 , G 083, B 135 Macrobudget ZVW = €42.8 billion . The (ex-ante) budget from the RE-fund Blue R 065 , G 127, B 162 Fixed costs Variable costs Nursing and care GGZ¹ (18+) LGGZ² (18+) €0.17 bn €35.3 bn €3.5 bn €3.6 bn €0.23 bn 0.4% 82.5% 8.2% 8.4% 0.5% depends on the number of insured and Light Green R 134 , G 135, B 034 Distribution based on normative risk profiles: . Physiotherapy t-1 . Age . Social economic status their risk profile (expected claims Dark Green R 074 , G 121, B 076 Fixed amount per . Nursing & care t-1 . Gender . ZIP code insured based on 2 . . . historical cost Geriatric rehabilitation t-1 Source of income Multiple-year high costs antebudget . Generic somatic morbidity . Pharmaceutical cost group . Single person household Orange R 229 , G 123, B 003 - level). Health status of the insured is result Ex . Medical devices cost group . Diagnostic cost group . (L) GGZ t-1 Zoek en selecteer de gewenste afbeelding. Gross Gross Gold R 179 , G 143, B 075 included in the profile Real costs per insured Klik op ´Invoegen´ Cost TEXT LEVELS result Invoegen Adjustment for number of insured ex-ante budget . RE ex-post is necessary as long as RE Net Net Level vooruit ex-ante still has to be fine tuned. post Safety net Safety net Safety net - (75% reimbursement (75% reimbursement (100% reimbursement Ex Reimbursement 100% outside of bandwith outside of bandwith outside of bandwith Level terug compensation +/- € 15.00) +/- € 17.5) +/- € 5.0) Application depending on budget 25% in safety net 25% in safety net 0% in safety net category (that insurers can influence) 1 0% 100% Typ-tekst (18 pt.) Risk 100% outside 100% outside 100% outside 2 . Bullet (18 pt.) 3 . Sub-bullet (18 pt.) 4 Tussenkopje (Blue, 20 pt.) ¹ GGZ = mental health care, ² LGGZ = long-term mental health care 48 100% tekst Tiering of capital under Solvency II Instrument Tiering onder SII Comments Preference Shares € 311m @ 5,500% Tier 1 (grandfathering) Coupon reset in 2023 Perpetual €600m @ 6,000 % Tier 1 (grandfathering) Perpetual, callable in November each year Perpetual €750m @ 4,250% Tier 2 Perpetual, callable from February 2025 Maturity April 2043, callable from 2023. Fixed Sub debt €500m @ 6,000% Tier 2 interest percentage until April 2023 Senior Unsecured €750m @ 2,500% Debt Maturity November 2020 CHF Senior Unsecured €200m @ 1,500% Debt Maturity June 2019 Credit facility € 750m Debt Maturity 2021 (undrawn) 49 Tekst & Beeld (25%/75%) Contact details For further information, please contact Achmea Investor Relations Steven Vink Manager Investor Relations +31 (0)6 20694939 [email protected] Erwin Lusse Investor Relations Officer +31 (0)6 19298163 [email protected] Email: [email protected] Internet: www.achmea.com 50