Combining strengths NN Group N.V. 2017 Annual Review You matter The 2017 Annual Report consists 2017 Annual Review 2017 Financial Report of the 2017 Annual Review and the 2017 Financial Report. It provides an integrated review of the performance of our company. The Annual Report is prepared in accordance with applicable Dutch law and the International Financial Reporting Standards (IFRS), which are endorsed by the European Union. It also complies with the Global Reporting Initiative’s The Annual Review covers NN Group’s The Financial Report covers NN Group’s Sustainability Standards and the guidelines operating environment, key trends and financial developments and annual material issues, it describes how we create accounts, the report of the Supervisory of the International Integrated Reporting value, and provides information on our Board and our approach to risk Council. The Annual Report aligns business performance, our strategy, our management, capital management objectives, achievements and dilemmas and corporate governance. The relevant information about our strategy, related to the social, environmental and target audiences for this section are governance systems, performance and governance aspects of our business, and shareholders, rating agencies and future prospects in a way that reflects the the statement of our CEO. It is targeted other stakeholders interested in the at NN Group stakeholders. financials and governance of NN Group. economic, environmental and social contexts in which we operate. Read more about ‘Our approach to reporting’ on page 62 of the Annual Review. Visit our website Further information, including the GRI Index table, can be found online NN Group also publishes a Solvency by visiting our corporate website: www.nn-group.com/annual-report and Financial Condition Report (SFCR), including public quantitative and qualitative disclosures on Solvency II. The SFCR is published on NN Group’s corporate website in the Investors/Annual Report section. About NN Creating and Facts and figures Introduction 01 sharing value Consolidated balance sheet 63 How we create and share value 02 Excellent customer experience 35 Consolidated profit and loss account 64 Our seven reporting segments 04 Attractive returns for investors 39 Key financial and non-financial indicators 65 Our key figures 06 Responsible investment 41 Customer-related indicators 66 CEO statement 08 Engaged employees 45 Responsible investment indicators 66 Delta Lloyd transaction and integration 10 Positively impacting society Our culture 13 and communities 48 Human capital indicators 68 Contribution to the Sustainable Community investment indicators 69 Our operating environment Development Goals 51 Environmental indicators 69 Assurance report of the Trends and developments 17 Governance independent auditor 70 Understanding and addressing Glossary 74 our material topics 19 Governance and compliance 53 Contact and legal information IBC Our Management Board 54 Our strategy Stakeholder engagement and our international commitments 56 Our strategy and priorities 24 Our approach to reporting 62 Core skills that enable our strategy 25 Delivering on our strategy 28 Netherlands 28 International Insurance 30 Asset Management 32 Cover photo: Runners crossing the finish line during City-Pier-City run, The Hague Photographer: Bart Hoogveld Our operating Our Creating and Facts About NN environment strategy sharing value Governance and figures We are a financial services company active in 18 countries, with a strong presence in a number of European countries and Japan. Our roots lie in the Netherlands, with a rich history that stretches back more than 170 years. Life is about living. That is why we do our very best to help our customers achieve their dreams and overcome adversity along the way. Through our retirement services, insurance, investments and banking products, we are committed to helping people secure their financial futures. That is our purpose at NN. Because what matters to you, matters to us. You matter NN Group N.V 2017 Annual Review 01 Our operating Our Creating and Facts About NN environment strategy sharing value Governance and figures How we create and share value Trends and This report aims to provide a balanced developments view of NN Group’s purpose, values, Regulation strategy, business model, operating pages 17-23 environment and performance The relationship between these elements, and how we truly matter in the To lives n: of o create long-term value for our stakeholders, is illustrated itio ur b sta am trategic obj ke in this diagram. The elements form the structure of our ur Our s ective h O s ol de business and this report. More detail on each element rs ciplin can be found throughout the reporting suite, along with Dis ed capital allocation our performance measures and targets. brand prom Our ise Key Premiums and deposits inputs • Around 17 million customers1 • EUR 12.1 billion gross premium income • EUR 246 billion Assets under b Management at NN IP s u t s c i • EUR 227 billion total assets of NN Group u n I n e d s n s o e r s o pages 65-66 c i v p a v a r n d t e d e e s d i o Capital n d d u d a n r u • EUR 22.7 billion shareholders’ equity a e s u t l r • EUR 6,219 million total debt y a • EUR 15,412 million eligible own funds V page 161 of the Financial Report (Note 51) % Talent and experience • About 15,000 employees • 11.8 average years of service pages 45-47 Ag nt ile and cost efficie Relations with stakeholders operating model • Multiple dialogues and memberships pages 48, 56-57 Core skills that enable our strategy Multi-access Advanced distribution underwriting and use of pages 25-27 technology 1 Excluding Asset Management, ING Insurance and ABN AMRO Insurance. NN Group N.V 2017 Annual Review 02 Our operating Our Creating and Facts About NN environment strategy sharing value Governance and figures Value Contributing to created the Sustainable Low interest rates Digitalisation Development Goals pages 35-50 pages 51-52 Customers o truly matter in the l T ive • 94% trust s o n: f o 2 itio ur in our brand b sta am trategic obj ke • Net promoter score +17 ur Our s ective h O s ol de • EUR 15.8 billion claims rs and benefits paid Disciplined capital allocation Investors • 17.3% shareholder nd pr return over 2017 ur bra omise O • EUR 524 million Our values dividend paid in 2017 • Free cash flow to Care the holding of EUR 881 million in 20173 b s u t • Capital allocated to s c i n value accretive Delta u I n e d s n Lloyd acquisition s o e r s o c i v p Our purpose a v Clear a r n d t e d e e s Employees We help people secure d i o n d d u their financial futures d a • EUR 21.4 million n r u a e s spent on training u t l r y a • 32% women in senior V positions Commit • EUR 1,496 million salaries and benefits paid pages 13-16 • 66% employee engagement ‘You matter’ Society and community Ag ent ile and cost effici • EUR 124 million operating model income tax paid to governments • EUR 1 billion paid to pages 24-34 suppliers • EUR 10.9 billion in SRI funds and mandates • EUR 2.4 million in donations to charitable organisations • 37,208 young people reached • 100% carbon neutral (direct operations) Partnerships Talented and Responsible Risk and capital and empowered business management collaboration employees standards capabilities 2 Non-life and Pensions in NL. 3 Including EUR 500 million capital injection into Delta Lloyd Life. NN Group N.V 2017 Annual Review 03 Our operating Our Creating and Facts About NN environment strategy sharing value Governance and figures Our seven reporting segments With around 15,000 employees, we aim to deliver high-quality retirement services, insurance, investments, and banking products to retail, SME, large corporate and institutional customers Our business activities are structured within seven reporting segments. 1. Netherlands Life 2. Netherlands Non-life 3. Insurance Europe 4. Japan Life Well positioned to Leverage strong Accelerate growth Deliver strong capture opportunities footprint and and generate value profitable growth and in the changing Dutch decisive action to diversify distribution pension market improve performance Products and services Products and services Products and services Products and services Group life/pension products Property & casualty Life insurance (all countries) Corporate-owned life Individual life/pension products Motor insurance Non-life insurance (Belgium, insurance (COLI) Pension administration (AZL) Fire insurance Spain, Poland) Protection life insurance Premium Pension Institution Liability insurance Pensions (Bulgaria, Customers Czech Republic, Slovakia, (NN, BeFrank) Owners and employees of Transport insurance Poland, Romania, Turkey) Individual life closed block small- and medium-sized Disability & accident Health insurance (Greece, enterprises (SMEs), where Customers Individual disability Hungary, Romania) the company is both the Small- and medium-sized insurance (Movir) Employee benefits (Spain) policyholder and the enterprises (SMEs) beneficiary of the policy Health insurance (OHRA Zorg) Customers Large corporate clients Group income insurance Financial performance and their employees Retail customers Accident insurance Operating EUR 200 million Retail customers Self-employed result Customers Pension funds Small- and medium-sized New sales life EUR 762 million Small- and medium-sized enterprises (SMEs) insurance (APE) Financial performance enterprises (SMEs) Corporates and their employees Value of new EUR 194 million Operating result EUR 896 million Large