Towards a new balance 2009 Annual Report Profile ASR Nederland is the third largest insurance company in the Netherlands with a gross premium income of € 4.9 billion in 2009. Our close to 4,500 employees are committed to our private and commercial clients in the product markets of group life, individual life, mortgages, non-life, disability and health insurance. We are the largest private real estate owner in the Netherlands. Our history stretches back to 1720. We serve the market with our brands Ardanta, ASR Verzekeringen, ASR Pensioenen, De Amersfoortse, Ditzo and Europeesche Verzekeringen. We use several distribution channels to deliver our products to our clients, for example the intermediary or broker distribution channel, which accounts for about 80% of our product sales, the direct and the banking channels. From 3 October 2008, ASR Nederland is wholly-owned by the Dutch State. Our driving force is to help people and businesses to realize their dreams by assuming their financial risks. In that manner, our clients are in a position to achieve things that really matter in their lives. To ensure assurance for our clients based on our professional ability to manage risks. That is our mission, the foundation of our existence. We provide substance to our mission by being client focused, by being efficient and financially solid. (€ milLION) 2009 2008 % Gross premiums life 2,527 3,491 -28% Gross premiums non-life 2,346 2,286 3% Total gross premiums 4,873 5,777 -16% Total result life before tax 240 -856 ** Total result non-life before tax 92 10 ** Total result other -2 - ** Total result before tax 330 -845 ** Tax -70 212 ** Result after tax 260 -633 ** Minority interest -5 -7 29% Net result 255 -640 ** Operating expenses 589 591 0% Cost premium ratio (net) 14.8% 14.5% (€ Million) 2009 2008 % Gross liabilities arising from life insurance contracts 28,216 26,124 8% Gross liabilities arising from non-life insurance contracts 3,535 3,289 7% Total Gross liabilities arising from insurance contracts 31,751 29,413 8% Total equity (including revaluation of real estate) * 2,975 1,757 65% Total assets 39,291 36,714 7% Solvency ratio (DNB-norm) 232% 170% 83%p Buffer capital ratio 293% 233% 60%p Number of employees (FTE) 4,454 4,540 -2% * The equity presented is a combination of shareholders’ equity and the revaluation of the real estate. As of 31 December 2009, shareholders’ equity amounted to € 1,955 million, and the revaluation of real estate € 1,019 million. This compares to shareholders’ equity at € 529 million and the revaluation of real estate at € 1,228 million at 31 December 2008. PREMIUM DISTRIBUTION FOR 2008 PREMIUM DISTRIBUTION FOR 2009 Non-life 40% Non-life 48% Life 60 % Life 52% GROSS PREMIUM INCOME (€ MILLION) NET PROFIT (€ MILLION) 6.000 1.000 4.800 600 3.600 200 2.400 -200 1.200 -600 -1.000 0 2007 2008 2009 2007 2008 2009 5,217 890 5,777 -640 4,873 255 COST-PREMIUM RATIO * OperatinG costs (€ MILLION) 15,2 640 15,0 620 14,8 600 14,6 580 14,4 560 14,2 540 2007 2008 2009 2007 2008 2009 15.1 % 561 14.5 % 591 14.8 % 589 * The cost-premium ratio is defined as the operatinional costs divided by net premium earnings (non-life) and gross premium income in APE (life) SOLVENCY (€ BILLIONS) Regulatory capital (Dutch central bank - DNB) € 3.5 billion Regulatory capital requirement (DNB) € 1.5 billion BRAND TYPE PRODUCTS DISTRIBUTION Ardanta Specialist Funeral Multi-channel ASR Pensioenen Specialist Group life Group life consultants and Intermediaries ASR Verzekeringen Generalist Individual life, Non-life, Intermediaires Group life and Mortgages De Amersfoortse Specialist Income Intermediaires Ditzo Generalist Non-life Internet Europeesche Verzekeringen Specialist Travel and Leisure Multi-channel FTE 4.650 4.590 4.530 4.470 4.410 4.350 2007 2008 2009 4.626 4.540 4.454 1 2 Towards a new balance 2009 Annual Report 3 THEMES Aspiration 13 Understanding clients is decisive in justifying existence Financial solidity 23 Not only today, but also in the future Efficiency 41 Efficiency not only from the organization’s perspective Client focus 53 Staying on our toes with client experience, that’s what it’s all about Distribution 65 Talking about improvement is great, but make sure you do something tangible Culture 79 Even if the result is not immediately visible 4 TABLE OF CONTENTS PART I STRATEGY 6 1.1 Introduction 6 1.2 Members of the ASR Nederland N.V. Executive Board 8 1.3 Timeline of events in 2009 10 1.4 Our assignment and strategy 17 1.5 Prospects and outlook 19 PART II REPORT OF THE EXECUTIVE BOARD 20 2.1 Results 20 2.2 Organization 30 2.3 Distribution 32 2.4 Product lines 34 Property and Casualty 34 Disability and Health 35 Individual life 37 Group life 38 Banking 39 2.5 Companies 45 Europeesche Verzekeringen 45 Ardanta 46 2.6 ASR Vastgoed 48 2.7 Capital management 50 2.8 Risk management 57 2.9 Human resources 60 2.10 Corporate social responsibility 62 2.11 Statement of compliance 69 PART III GOVERNANCE 70 3.1 Members of the Supervisory Board 70 3.2 Report of the Supervisory Board 71 3.3 Remuneration policy 75 3.4 Corporate Governance 77 PART IV FINANCIAL STATEMENTS 83 Consolidated balance sheet 84 Notes to the balance sheet 130 Notes to the income statement 160 Other notes 169 Company financial statements 173 Auditor’s report 181 OTHER INFORMATION 185 Glossary 185 Abbreviations 187 Contact details 188 Publication 188 5 Introduction ASR Nederland 2009 annual report Part I StrateGY 1.1 Introduction Towards a new balance Independence 2009 will enter the books as the year in which we were confronted The disentanglement from Fortis was completed after one by major changes: social as well as economic. In view of this, year, and we introduced our new name. Corporate staff we had to adapt our existing perceptions to a new reality. departments were formed again for ASR Nederland as an In this new reality, our business also experienced a far-reaching independent company. The whole IT environment is again change. By the intervention of the Dutch State in our former under ASR’s own management. Our subordinated bond loans holding company, Fortis, we continued in 2009 as an were restructured to Tier-1 equity. independent insurance company bearing the name ASR Looking back, we are very pleased with the rapid and, to the Nederland. With a history dating back 290 years, 2009 is the outside world, almost invisible transition. first full reporting year of ASR Nederland N.V. Organizational restructuring Results ASR Nederland has replaced its label-driven organization Looking back to where we started, we are satisfied with the with a market-oriented organization. The product lines were financial result for 2009. This includes an improvement in the disentangled from the distribution organizations ASR result, a strongly improved balance sheet position and a sharp Verzekeringen, De Amersfoortse and Ditzo. The back offices increase in the solvency ratio. of ASR Verzekeringen and De Amersfoortse were combined, and Falcon Leven will be integrated into this. This is countered by the fact that the demand for insurance products across the market was under pressure, which was to a The management structure has been adapted and the large extent due to the slowing down of the economy and the General Management replaced by an Executive Board. The lack of consumer confidence. This led to increased competitive- number of board members was thus reduced from six to four. ness, in turn leading to a decline in premium income. After careful deliberations, Theo Pluijter and Jacqueline These market conditions were reflected in our total premium Rijsdijk are not serving as members of the Executive Board. figures. The decrease in life business (-28%) was primarily Following a year during which everyone put in maximum caused by fewer sales of single-premium policies and the effort in the interest of ASR Nederland, it was particularly stagnating mortgage and group life markets. In addition, difficult to make a decision like this. Even more so because it was only after the implementation of a multi-funding Jacqueline made a very important contribution in the past strategy that we were able to offer a good mortgage proposi- year to the transition of ASR Nederland. In addition, we are tion at the end of 2009. At the same time, the market for happy with Theo’s decision to continue to commit his individual life insurance became competitive after the knowledge and experience in his capacity as director of introduction of tax driven bank savings (Banksparen). Corporate Staff Departments. The ExecutiveB oard would like to express its gratitude to Jacqueline and Theo for their The impact of the recession was also clearly visible in the disability enormous commitment and contribution to the business. and non-life market, and competitiveness also increased. Nevertheless, our total premiums here increased by 3%. 6 ASR Nederland 2009 annual report Introduction Accommodation • Financially solid: We offer clients and investors a healthy During the year under review, the decision was made to long-term return, and do not run risks that could be concentrate all our activities, except Europeesche Verzeke- detrimental to the interests of clients. ringen and Ardanta, in a single location in the Utrecht region • Efficient market player: We are constantly improving our no later than 2015. The decision of whether to renovate the processes, products and services and keep a constant eye current head office in Utrecht or construct a new building in on overheads.