Annual Report

Transcription

Annual Report

Annual Report
2012
ACHMEA 2012
ANNUAL REPORT
Executive Board Statement
We look back on a good year, although operating
conditions remained challenging in 2012. Financial
markets remained volatile, especially in the first half of
the year, and we continued to witness a rapidly changing
market environment. Slowing the pace at which healthcare
costs rise is a focal point for politicians, consumers and
the industry, while the challenging economic climate has
impacted the Dutch housing market, reducing mortgage
sales and subsequently the demand for life products. At
the same time, customer interaction is changing, with
many now choosing to interact with us through a variety
of different media in one distribution channel.
Amid this turbulence we continued to successfully
implement our cost and complexity reduction
programmes, while also investing heavily in innovations
and in further strengthening our organisation, for example
through investments in continuing to optimise health care
procurement and developing commercial capabilities.
Financial results
Achmea delivered a robust performance in 2012, posting a
net result of €453 million (2011: -€208 million). Gross written
premiums increased by 4% to €20,455 million (2011: €19,650
million), while total operating expenses remained stable at
€3,024 million (2011: €3,031 million).
Profit before tax was €412 million (2011: -€247 million).
While we recorded continued solid results in our Dutch Nonlife and Health businesses, the profitability of our Pension &
Life Netherlands business increased significantly, positively
affected by higher investment income. Profit before tax
was negatively impacted by an additional provision of €180
million (2011: €171 million) for our long-term disability
product WGA. The divestments of Achmea Vitale and
Eureko Romania had a negative impact of €50 million,
resulting in a profit before tax from regular activities of
€462 million (2011: €51 million). Net profit came in at €453
million (2011: -€208 million). The aggregate tax benefit is the
result of the tax exemption for health insurance activities and
changes in our tax position. The Group’s financial position
remains strong, with a Group solvency of 209% (2011: 208%)
and total equity of €10,374 million at year-end 2012, a €599
million increase year-on-year.
Achmea Annual Report 2012
Customer focus
One of our primary ambitions is to be the most trusted
insurer in the market. To achieve this, we first need to
strengthen our customers’ belief in us, which we will do
by ensuring that their best interests remain central in
everything we do, that they are represented on our clients’
council, and that we offer them socially responsible
products and services at reasonable prices.
By listening to our customers’ wishes, and thinking
from their perspective, we are able to respond quickly to
changing behaviour and trends in the market, enabling
them to reach us whenever and wherever they wish. The
use of aggregators to compare product information and
pricing is becoming more prevalent, and at Achmea the
sale of insurance products through our direct, banking
and broker channels in a cross-media fashion – where
customers interact with us through a variety of different
media in one channel – is increasing. The market is
becoming more competitive, and growing numbers of
customers are now choosing how and when to purchase
products or contact their insurers. The 24/7 marketplace
is upon us, and we are responding by using technology
to help adjust our product propositions and develop our
distribution channels, with the collection, analysis and
interpretation of customer data taking on a key role.
Cooperative background
As an organisation with a cooperative background, social
engagement is part of our identity, which is why we are
establishing a variety of dialogue channels with society.
Following on from the Achlum Convention, in 2012 we
set up ‘Volgens Nederland’ (‘Holland says’), a project that
will use the internet and a series of debates to connect with
society on issues that are relevant for the company, our
customers and society in general.
We view social responsibility as being key to realising our
ambition of being the most trusted insurer. In 2012 we
signed the Principles for Sustainable Insurance (PSI) of the
United Nations. Last year we extended the environmental,
social and governance (ESG) integration of our investment
portfolio. Furthermore, in 2012 we were ranked 11th in the
annual Transparency Benchmarking research, as performed
by the Dutch government, and were ranked first among
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EXECUTIVE BOARD STATEMENT
financial service providers. And despite the increased
demands on accessibility and speed of claims handling, ten
of our brands currently carry the customer oriented quality
mark (Keurmerk Klantgericht Verzekeren).
Good employership remains very important to us, as our
people ultimately make our company and are there to deliver
first-class customer service. We were ranked second in an
annual employers satisfaction survey carried out by Dutch
daily newspaper NRC Handelsblad, while the results of our
annual Employee Engagement Survey hit an all-time high in
2012. We view this as proof that we truly value our people.
Group developments
We continued to strengthen our market position, supported
by health insurer De Friesland Zorgverzekeraar. In the
second half of 2012 we announced the acquisition of
OVO, a Dutch specialist liability and fraud insurer, and the
acquisition of Friesland Bank Assurantiën, one of the 25
largest insurance intermediaries in the Netherlands,
following Rabobank’s acquisition of Friesland Bank. During
the year we also saw the first effects of our collaboration
with Independer.nl. We use the acquired knowledge of
consumer preferences and behaviour to make our insurance
products even more client-focused. In the first half of 2012,
we completed the divestment of Achmea Vitale.
During the course of the year we also decided to separate
our closed life book and create a dedicated organisational
entity. This has been in place since the start of 2013, with the
aim of maintaining value at the lowest possible cost, while
ensuring customers remain well served. This enables us to
look at alternative, efficient ways of using capital.
In the second half of 2012 we closed a new €750 million
senior unsecured revolving credit facility, while in July
Achmea Hypotheekbank successfully refinanced its
mortgage portfolio through the sale of almost €800 million
of residential mortgage-backed securities. In October,
Achmea Hypotheekbank also successfully completed the
first issuance of €500 million of senior unsecured notes.
During the year we redeemed $900 million of the stateguaranteed loan that we took out in the wake of the 2008
financial crisis. So far we have redeemed $1.8 billion of this
loan ahead of schedule.
In 2012, Chairman of the Supervisory Board Mr. Arnold
Walravens and Supervisory Board member Mr. Flip
Buurmeijer stood down. At the beginning of 2013 Mr. Henk
Slijkhuis indicated that he will stand down at the General
Meeting of Shareholders in March. In 2012, Mr. Thomas
van Rijckevorsel stood down from the Executive Board and
Mr. Gerard van Olphen stood down in February 2013. We
thank all for the contributions they have made to the Group.
Ms. Lineke Sneller was appointed to the Supervisory Board
in January, and Achmea extends her a warm welcome.
Looking ahead
The economic climate looks as though it will remain
challenging, as economic growth in the eurozone
continues to slow. Business investment and consumer
confidence remain low, while governments across Europe
are increasing taxes and cutting spending which, in
the short term, will weaken rather than strengthen the
economy, even if long-term effects may be positive.
In the Netherlands, the housing market was further
impacted by the introduction on 1 January 2013 of
regulations that require those taking out a mortgage –
especially starters – to pay off their debt over a 30-year
period if they want to qualify for interest deduction benefits.
Regulatory change remains an ever-present reality. In 2012
it was announced that the introduction of the Solvency II
capital requirements – which are designed to ensure that
insurers in the European Union hold enough capital to
lower their insolvency risk – would be postponed to
1 January 2014, and a further delay is expected.
At the end of what has been another turbulent year for
the financial sector, the Executive Board would like to
thank everyone across the Achmea Group for their hard
work and dedication. We extend the same thanks to our
other stakeholders – business partners, shareholders and,
especially, to our customers. They ensure our cooperative
roots remain vital and alive.
Zeist, 5 March 2013
Willem van Duin
Chairman of the Executive Board
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Contents
who we are
PROFILE
key figures brands
6
9
10
EXECUTIVE BOARD REPORT
strategy
Group performance
segments
Non-life NETHERLANDS
Health NETHERLANDS
PENSION & life NETHERLANDS
INTERNATIONAL
banking NETHERLANDS
OTHER
INVESTMENTS
Capital and liquidity management
RISK MANAGEMENT
Human Resources
Corporate social responsibility
14
21
26
32
38
45
50
54
56
61
65
72
75
Corporate governance
supervisory board report 78
corporate governance 90
Executive BOARD
100
SUPERVISORY BOARD
101
OTHER INFORMATION
abbreviated Consolidated financial statements
104
STATEMENT OF THE EXECUTIVE BOARD OF ACHMEA B.V.
112
independent AUDITOR’S REPORT
113
Five years’ key figures
114
ABBREVIATIONS 116
CONTACT DETAILS 117
5
Profile
Profile
Achmea is the Netherlands largest insurer. In addition,
we have insurance operations in Greece, Turkey, Russia,
Slovakia, Ireland, Bulgaria and Romania, and a greenfield
operation in Australia. In the Netherlands we offer a full
range of insurance and related financial products, while
in most other countries we focus primarily on non-life
and health insurance. In 2012, 94% of our gross written
premiums were generated in the Netherlands, while 6%
came from our operations in other countries.
Achmea’s primary goal is to develop products and
services that give customers peace of mind knowing that
they are well insured. By creating products and services
that meet customers’ needs, we put their interests first.
Our bold ambition is to be the most trusted insurer. In
practice, ‘most trusted’ is closely linked to being robust,
transparent and delivering on promises. Customers need
to trust that their insurer is going to be there for them at
the moment they need them. And being the most trusted
insurer also means being accessible to everyone. We achieve
this by making our insurance available through a wide range
of brands and distribution channels.
Our cooperative history stretches back more than
200 years. We are unlisted and, as an organisation with
a cooperative background, our main drive is long-term
continuity rather than short-term profit. This is supported
by our largest shareholders, Vereniging Achmea and
Rabobank. The objective of Vereniging Achmea is to
protect the continuity of Achmea and to safeguard the
interests of all Achmea customers, ensuring that they are the
organisation’s ultimate owners. As a result, we focus on the
long-term interests of our customers, (business) partners,
employees, shareholders and society. Together, Vereniging
Achmea and Achmea are working to further strengthen
the involvement of our customers in our organisation. Our
role as an insurer is to take care of the financial risks of our
customers, whether that is providing employment insurance,
or providing cover for their house, their car, or their health.
Insurance is based on solidarity – with premiums from
the many used to cover the claims of the few. Because the
risks are shared in this way, the costs for the individual
stay manageable. In order to maintain this solidarity, it is
important to reduce the risk of claims being made, which
is why Achmea invests in prevention. If something does
go wrong, we are there to ensure that the individual, the
company or the organisation affected can take its place in
society again, quickly and with minimal worry. This makes
Achmea a vital part of society.
our customers
500,000
55,000
1,400,000
500,000
250,000
2,500,000
80,000
18,000
1,290,000
INTERNATIONAL
1,930,000
530,000
3,000
3,500,000
Retail customers
170,000
Wholesale customers
Agents
Numbers are indicative as at 31 december 2012.
International policies
6
who we are
Profile
Our Identity
We are a community of committed and involved
people, where the customer is secure in the
knowledge that they are well insured.
Our Group is customer driven, results
oriented and shaped by our
cooperative background
HIGHER GOAL
The most trusted insurer
Why do we exist?
BOLD AMBITION
Where are we
going to?
CORE QUALITIES
What do we
excel at?
CORE VALUES
Being professional
What do we
stand for?
Innovating
Connecting
Delivering
Our Group is customer driven, results oriented and
shaped by our cooperative background. Our focus is
on ensuring our customers are provided peace of mind
through comprehensive insurance cover.
Our long-standing core values guide us in our daily goals
of ‘unburdening’ our customers and ensuring they have
peace of mind, while achieving continuity in our business.
We have defined three core values, which are intended to
help our employees achieve both our higher goal and our
bold ambition of becoming the most trusted insurer. These
core values are empathising, innovating and delivering.
They show how we want to interact with each other and
with our customers, and they apply to all our employees.
Empathising
We listen to our customers and our other stakeholders.
By ensuring that we unburden our customers and satisfy
our stakeholders, we give meaning to what we do.
Empathising
Improving
This can only be achieved by working together, which is
based on mutual trust.
Innovating
We understand what concerns our customers, which
enables us to unburden them by providing ever-better
solutions and products. This is only possible because, as a
company, we encourage and promote innovation, dare to
think differently and act to make it possible.
Delivering
We say what we do and we do what we say: we are results
oriented and deliver on our promises to stakeholders.
We are reliable and work transparently. Customers, as well
as colleagues, shareholders and distribution partners, can
be confident that promises and agreements are met. And
if this is not the case, then they can tell us. Achieving good
results is both energising and fulfilling.
7
who we are
Profile
We can give even greater power to these values by helping
our employees pursue professionalism, and continually
support to develop their skills. Our aim is the ongoing
improvement of our business processes so that customers
feel well served. This is a key component in feeling ‘well
insured’. Connection is at the heart of what we aim to
achieve through a combination of professional skills,
efficient business processes and, above all, customer focus.
We are working harder than ever to exceed our customers’
expectations, and deliver the products and services
that they demand. By reinforcing and sharpening
the commercial focus of our operating units, we will
do everything we can to give our customers the right
products, at the right price, delivered through the right
channels. And to meet the needs of our customers even
quicker – and translate them internally – we continually
work on improving our products, processes and systems.
With concentrated product development capabilities,
which cover the non-life, health and life segments, our
product divisions are part of our drive to position the
customer firmly at the heart of everything we do.
We operate four distribution divisions that are committed
to a specific channel or customer group and empower the
various brands. A solid, efficient organisational platform
supports our front office capabilities, ensuring that we
continue to put our customers’ interests first.
Organisational structure as at 31 december 2012
Achmea
Direct
Non-life
Syntrus Achmea
Banking
Health
De Friesland
Zorgverzekeraar
Broker
Pension & Life
Staalbankiers
Large Corporates
Achmea Bank
Staff departments
Market Strategy
Division
International
Achmea’s Executive Board sets goals and targets for the segments throughout the company. The segments formulate
strategic, commercial and financial policies in compliance with the strategic and performance targets set by the
Executive Board. However, operational steering within the product, distribution and staff divisions is carried out
locally by senior management, with strategic decisions made in consultation with the Executive Board.
Distribution division
Product division
Staff & other
8
Key Figures
financial
UNIT
Balance sheet total
Solvency Group (FCD)
Return on equity
Gross written premiums Non-life
2012
2011
€ million
94,817
92,313
%
207
204
%
4.5
-2.0
€ million
3,764
3,819
Gross written premiums Health
€ million
13,471
12,400
Gross written premiums Pension & Life
€ million
3,210
3,431
Total gross written premiums
€ million
20,445
19,650
Share of responsible investments of the assessed investments for own
account and risk according to Achmea’s definition
%
97
43
Share of responsible investments of the assessed investments for third
parties by Syntrus Achmea according to Achmea’s definition
%
54
51
2012
2011
CUSTOMER
UNIT
Customer satisfaction Non-life Netherlands
average score
7.7
7.7
Customer satisfaction Health Netherlands
average score
7.7
7.7
Customer satisfaction Pension & Life Netherlands
average score
7.2
7.2
per 10,000 policies
18
15
Received complaints with a first substantive reaction within the respons time
mentioned on the label’s website
%
90
85
Number of brands with the customer oriented insurance quality mark
#
11 *
10
2012
2011
Received and processed complaints
SOCIAL
UNIT
FTEs in the Netherlands
#
15,170
15,393
FTEs outside the Netherlands
#
3,735
4,097
#
15,435
16,614
Employees
**
Participation score of employee engagement survey
**
Educational costs **
Sick leave absence **
%
87
82
% of wage
3.3
3.3
%
4.06
4.53
2012
2011
ENVIRONMENT
UNIT
CO2 emissions
Metric ton x 1,000
58.2
65.3
Energy consumption
GJ x 1,000
558.8
627.9
Collected waste
Kg x 1,000
2,129
3,000
Paper consumption
Kg x 1,000
1,736
1,709
* DVZ and ProLife merged and, since 1 January 2013, operate under the name ProLife.
Consequently, in 2013 we have 10 brands with the customer oriented insurance quality mark.
** Achmea Interne Diensten B.V.
9
Brands
Achmea is the Netherlands largest insurer, where we own and operate some of the country’s
most recognisable insurance names. These include Centraal Beheer Achmea, FBTO,
Interpolis, Avéro Achmea, Zilveren Kruis Achmea and Agis, as well as a range of other labels.
Each brand focuses on a specific target market and specialises in particular distribution
channels, which enables us to offer targeted and tailored products to our clients while
benefiting from economies of scale through streamlined administration and back-office
processes. Outside of the Netherlands we are active in seven European countries,
where we serve our customers through a variety of different companies and channels.
Our Dutch Brands
Centraal Beheer Achmea has been one of the Netherlands bestknown insurance brands for more than 25 years, and is famous for its
‘Even Apeldoorn bellen’ advertising slogan. The company provides
non-life, pensions, life insurance and financial services to private
customers, employees and businesses through a range of direct
channels, including the internet, mail and phone. It also provides
administrative services and support aimed at non-life and risk
management, delivering directly to the client. In 2012, customers gave
Centraal Beheer Achmea a 7.6 rating in satisfaction surveys*.
FBTO is an accessible online insurer that targets independently
minded customers. The company provides a broad range of insurance
products, including for vehicles, health and accident, savings and
investment, liability and legal aid, travel and recreation, home,
borrowing and death. Customers can adapt their insurance package to
fit their own circumstances, so that they only pay for what they need.
In 2012, customers gave FBTO a 7.6 rating in satisfaction surveys*.
InShared is an innovative insurer, which operates under the same
principles as Achmea. Its goal is to be transparent, flexible, easy to work
with and always beneficial to its customers. The company operates
exclusively online, which is not only cheaper for the customer, but also
enables them to access their insurance information whenever they want.
Customers can check how much has been paid in premiums, how much
damages have to be paid and how much is left over. Of that, the insurer
uses 20% for operating costs, with the residual amount refunded to
customers who haven’t made any claims during the year.
Interpolis provides consumers and entrepreneurs with simple,
concrete and relevant insurance solutions for the risks they run.
The company focuses on clarity across its product range, its
communications and its dealings with customers. Interpolis products
are available exclusively through the Rabobank branch network, and
are designed to be as accessible and as simple as possible. We call
that: crystal clear. In 2012, customers gave Interpolis a 7.5 rating in
satisfaction surveys*.
10
Who we are
Brands
Avéro Achmea offers a range of insurance and financial solutions
to corporate and private customers, including non-life, income
protection, health insurance, mortgages and banking products. Avéro
Achmea understands the value of good advice, which is why it works
with a select group of independent brokers and advisors. In 2012,
customers gave Avéro Achmea a 7.2 rating in satisfaction surveys*.
In addition to health insurance, Zilveren Kruis Achmea provides
customers with opportunities for a healthier and more vital life
through its health centers and health shops, with the aim of helping
customers feel as good as they can. The company works closely with
a range of partners, including hospitals, and is one of the top service
providers in the areas of care, health and vitality. In 2012, customers
gave Zilveren Kruis Achmea a 7.4 rating in satisfaction surveys*.
Agis is a health insurer that operates throughout the Netherlands,
with Amsterdam, Utrecht/Amersfoort and Apeldoorn as core
regions. As with all Achmea businesses, the customer is the focal
point at Agis, and the company works continuously on finding ways
to improve customer health and care. Quality is a key issue at Agis,
and the company uses validated patient experiences to help care
providers improve their services. In 2012, customers gave Agis a 7.6
rating in satisfaction surveys*.
De Friesland Zorgverzekeraar (DFZ) is a health insurer with a strong
brand, particularly in the northern Dutch province of Friesland. The
company provides a high standard of service, and works closely with
customers to guarantee quality care and a good standard of life today
and in the future. Following its merger with Achmea in 2011, DFZ
retained an independent position within the company as a separate
division, and is responsible for the operational management of FBTO’s
health portfolio. DFZ’s similar background and central position in
society make for a perfect fit with Achmea’s cooperative identity.
Syntrus Achmea provides customers with a broad range of fiduciary
management, asset management and pension administration
services. Our customers, from pension fund directors to CFOs of
large corporates, trust us to understand their own unique situation.
Syntrus Achmea Real Estate is the largest property investor in
the Netherlands, while Syntrus Achmea Asset Management is the
number-three asset manager in the Dutch market.
segment
* All data derived from independent satisfaction surveys carried out by the Dutch Association of Insurers.
Distribution channels
non-life
direct
health
Banking
pension &
life
Intermediary
11
who we are
Brands
Our International Operations
Interamerican is Greece’s second largest insurer providing health,
non-life and life insurance with an extensive infrastructure in health,
medical and road assistance services. The Interamerican brand is
extremely well known in Greece, with 99% awareness, and had an
81% customer satisfaction rating in 2012 surveys. In keeping with
its innovative approach to business, Interamerican launched the
first direct insurance brand ‘Anytime,’ which now has more than
175,000 insured vehicles, a 68% awareness and a very high customer
satisfaction rating of 89%. Interamerican also launched the first
insurer-owned car repair shop.
Eureko Sigorta is the market leader in bankassurance in partnership
with its strategic partner Garanti Bank, Turkey’s second-largest
private bank. The company offers a full range of non-life and health
products, which are also distributed through their agency and broker
network. In 2012 Eureko Sigorta scored a satisfaction level of 85%
among customers who made a claim. The company continues to hold
a top-ten market position in the overall insurance sector.
Oranta is a stable company with a network of offices in 19 key
Russian cities, of which 13 have more than 1 million inhabitants.
Focusing their operations in 13 cities, including Moscow and St.
Petersburg, Oranta offers clients a wide range of non-life and health
insurance products. In 2012 Oranta achieved a local rating increase
from A to A+ from the national rating agency Expert RA.
Union is the market leader in Slovakia’s travel insurance segment
and offers a complete product portfolio of life, non-life and health
products across the country. The company is one of the most
innovative players in the market (e.g. the first insurance company
to use call centers, apps, online and SMS). The brand’s awareness
among the public is over 75%. Union is one of the most trustworthy
partners in the Slovak Republic and it is the first and only Slovak
insurer with activities in the Czech Republic.
Friends First has a long-standing presence in Ireland and provides
a comprehensive range of pensions, investments and protection
products through its network of brokers.
12
who we are
Brands
Interamerican, the first foreign insurance company established in
Bulgaria, is currently a small but ambitious player. The company
offers non-life and life products and services through all distribution
channels.
Eureko Asigurari is one of the few insurers to offer a full range of
life, health and pension products in Romania.
segment
Distribution channels
non-life
direct
health
Banking
pension &
life
Intermediary
13
Strategy
Over the course of 2012, we continued to work towards our bold ambition of being
the most trusted insurer, which in our view involves being robust, transparent
and delivering on our promises. Our focus is on ensuring customers are confident
that we will be there for them when they need us, and that we are accessible to
everyone by making our insurance available through a wide range of brands and
distribution channels. We see it as our duty to act in a responsible and forwardlooking manner, which includes developing sustainable insurance, responsible
investment practices, and always putting customers’ interests first.
Our long-term strategy involves continuing to concentrate
on the non-life and health insurance markets, where we
have truly leading positions, while developing selectively
in pension and life insurance and gradually building our
international presence based on proven capabilities. We
will achieve this by continuing to build on the strengths
we draw from our customer-focused product portfolio,
our distribution capabilities, our prudent risk profile
and of course our employees. Although the ongoing
challenging economic and social circumstances means
we need to up the pace of change, and adapt to shifting
market circumstances as and when required, operationally
we are still very much on track. We are clear about the
direction in which we are headed and we are making
steady progress. Our financial results are solid, our
market position is clear and we have a very strong capital
position. While our bold ambition acts as a strategic
compass and helps guide us towards our longer-term
goals, we also need to react to changing circumstances
in the short term. The non-life, health and life insurance
markets are coming under pressure on number of fronts,
such as shifting customer demands (including cross
media interaction), changing government regulation and
economic insecurity. To thrive in this environment that is
constantly in motion, it is necessary to be both agile and
focused. And it is essential we do this while ensuring that
customers remain our main priority. The time of thinking
in certainties is over: our customers and Achmea need
to be able to deal with uncertainty. In the short term,
our goals are to concentrate on providing customers
with advice on how to deal with uncertainty, developing
innovative products and distribution methods, while
reducing complexity and costs.
Impact of external developments
The macro economic picture across Europe remains
uncertain, as sluggish economic growth in the eurozone,
rising unemployment, declining business investment and
low consumer confidence all take their toll. Government
involvement in the insurance sector is increasing, and the
introduction of new regulations across the sector adds
to organisations’ workload. The picture in our principal
market, the Netherlands, is one of change. A succession
of political, social and technological developments
are reshaping the way insurers and their customers do
business, making it increasingly difficult to predict with
any accuracy what will happen in the medium- to long
term. The Dutch market is mature, saturated and highly
competitive across most segments, with average growth
no higher than inflation. New players offering nonlife products online and the introduction of Premium
Pension Institutions (PPIs) are putting pressure on many
established insurers, many of whom were buffeted by
the financial crisis. These new market entrants, plus
customers who are increasingly focused on price, are
rapidly changing the business model and earning capacity
of insurers. Some of the material developments we see
impacting the market are outlined below.
Economic uncertainty
The financial crisis that started in 2008 continues.
What started initially as a liquidity crisis quickly became
a debt crisis, and then developed into a serious economic
downturn. Economic growth in the eurozone has slowed
considerably, while unemployment is high.
14
executive board report
Strategy
Business investment and consumer confidence remain
low. Governments are increasing taxes and cutting
spending which, in the short term, will weaken rather than
strengthen the economy, even if long-term effects may be
positive. Like all players in the financial sector, Achmea
has been affected. Lower interest rates will impact our
investment returns, while the Dutch housing and mortgage
market has seen a dramatic fall in sales, knocking the
demand for life products. The housing market will be
further impacted, following the introduction on 1 January
2013 of new regulations that require those taking out a
mortgage – particularly starters – to pay off their debt
over a 30 year period if they want to qualify for interest
deduction benefits.
Healthcare costs
Reducing the pace at which healthcare costs rise is high
on many political agendas. In the Netherlands, the
government is looking both at ways to lower the cost of
healthcare and to shift the costs to the consumer and the
private sector. This has resulted in a growing trend among
insurees, who are becoming increasingly sensitive to price
developments in health care, to cut the cost of their healthcare
policy, primarily by reducing supplementary insurance
cover. At the same time, more policyholders are opting for a
voluntary increase in the ‘own risk’ amount. This creates a
more challenging market for insurers, who need to balance
costs with the provision of high quality healthcare and the
ability to adapt to a fluid market environment. An upturn
in life expectancy, as well as a greater focus on better quality
care by consumers, is placing an additional strain on care
providers and insurers. Another issue currently facing the
market is the uncertainty surrounding the future of the
AWBZ (Algemene Wet Bijzondere Ziektekosten, or General
Act on Exceptional Medical Expenses), which currently
makes up over a quarter of total healthcare costs in the
Netherlands. The AWBZ covers long-term exceptional
expenses that are not covered by the basic health insurance,
such as care for the elderly and care for the mentally and
physically handicapped. The new government has announced
a reform of the AWBZ and, although final plans have
not yet been presented, the changes will have profound
implications for insurers.
Regulatory changes
There are a number of regulatory issues that have either
impacted, or could impact, the insurance sector. One key
issue is the increased focus on customer protection, which
occurred following the mis-selling of pensions and unitlinked policies in the Netherlands by banks and insurers in
the past. Aimed at ensuring the quality and transparency
of insurers’ products and services, the commission set
up to review insurers (Stichting Toetsing Verzekeraars)
awards companies that meet certain standards a customer
oriented insurance quality mark (Keurmerk Klantgericht
Verzekeren). This industry self-regulation helps customers
identify those insurers that offer trustworthy, easyto-understand products and good customer service.
Currently, ten brands of Achmea have been awarded the
customer oriented insurance quality mark.
During the course of 2012, the government decided to
raise the retirement age in the Netherlands. It will increase,
in incremental steps, to 67 by 2023. The government also
decided to cap fiscal facilitation of pension savings for
incomes over €100,000 and to cap the annual pension
build-up percentage at 1.75%. These measures will impact
those funds and insurers that offer pension insurance.
On 1 January 2013, insurance companies and banks were
banned from paying commission to brokers who sold their
mortgage, life insurance or funeral insurance policies.
Brokers and intermediaries are now required to charge
consumers directly for their advice, while products sold
through direct channels need to have a clear separation
between the cost of the product and advisory charges.
This split is designed to introduce greater transparency,
which is a customer demand, and a more competitive
market environment. Whilst Achmea applauds this move
to greater transparency, it also recognises that it causes
an increase in administrative costs. On 1 January 2013,
the Dutch government also increased the insurance tax
from 9.7% to 21%. This increase will make most non-life
insurance more expensive for consumers, and may cause
some of them to reduce their insurance cover.
The introduction of the Solvency II capital requirements
– which are designed to ensure that insurers in the
European Union hold enough capital to lower their
insolvency risk – is expected to have a significant impact
on the industry, although in 2012 it was announced that
15
Strategy
SWOT ANALYSIS ACHMEA
Strengths
Weaknesses
• High customer satisfaction
• Cooperative identity
• Large market share in the Netherlands
• Good product diversification
• Strong position in distribution channels, especially in markets
where expected growth is highest
• Very strong capitalisation
• Realising economies of scale
• Conservative investment portfolio
• Achmea’s brands are more trusted than market average
• Dedicated, highly educated employees
• One of the most attractive employers in the Netherlands
• Limited geographic diversification
• Legacy and number of IT systems
• Cost structure
• Position in traditional life
Opportunities
Threats
• Growth of internet as distribution channel
• Privatisation of certain markets
• Regulator clamps down on irresponsible pricing
• Limited trust in insurance sector
• Low interest rates
• Increased life expectancy
• Limited trust in insurance sector
• Highly competitive Dutch market; pressure on margins
• Volatility of financial markets
• Competition from non-insurers
• Political decisions on health/pensions
implementation, initially scheduled for 1 November 2012,
would be postponed to 1 January 2014 and a further delay
is expected. This is not welcome news for Achmea, for a
number of reasons. In addition to the time and resources
we have already invested in Solvency II, our position
under this new regime will be even stronger, further
reinforcing our competitive position. Furthermore, many
of the smaller players could struggle to meet the increased
regulatory burden or raise sufficient capital, which may
lead to increased M&A activity in the industry. This could
provide opportunities for larger players such as Achmea.
one hand and established insurers on the other looking to
install themselves as trusted online players, by providing
better customer service and reducing costs through
operational efficiencies. More and more customers
are now choosing how and when to purchase products
or contact their insurers, and the 24/7 marketplace
is developing. Insurers are responding to customers’
requirements for clearer, more readable correspondence
and product information. Across Achmea, for example,
we now ensure that letters to customers are clear, jargonfree and not unnecessarily long.
Customer interaction
Achmea’s strategy
The way customers interact with insurers and other
companies is changing rapidly. The use of aggregators to
compare product information and pricing is becoming
more prevalent, and at Achmea the sale of insurance
products through our direct, banking and broker channels
in a cross-media fashion – where customers interact with
us through a variety of different media in one channel – is
increasing. The market is becoming more competitive,
with both internet-only start-ups and aggregators on the
Where are we today?
Over the last few decades, Achmea has grown
substantially, and today we are market leader in the
Netherlands. We have top-3 positions in almost all
segments of the Dutch insurance sector, and operate
many of the best-known brands in the market. Our
capital position is very strong and, despite the economic
16
Strategy
headwinds, our financial results at the end of 2012 were
better than we had hoped for. Our cooperative roots make
us who we are today, with empathy, innovation and the
ability to deliver on our promises key company values.
Our employees are focused on serving our customers
to the best of their ability, and our continued, relatively
high scoring in customer satisfaction surveys is an
indication of how we are viewed. We are realistic about
the opportunities and challenges ahead. On the one hand
we are optimistic about the strength of our position, and
we are confident that we will make this a successful decade
for both the organisation and our stakeholders. On the
other hand, we are realistic about the many challenges
that lie ahead, and how long the road is. To achieve our
ambition of being the most trusted insurer, it is necessary
to increase the pace of change and continually adapt
to shifting market circumstances. Changing customer
demands, new government initiatives and volatile
economic conditions create an environment that requires
an agile organisation that develops innovative and
sustainable solutions.
benefit to defined contribution solutions. In individual
life, we will separate and manage our closed book and
focus on simple term-life products. Internationally, we
will continue our focus on Non-life and Health, mainly
through the direct and bancassurance channel. As an
organisation with a cooperative heritage, community
involvement is part of our identity. We will engage with
the public on relevant themes, and continue to give
direction to public debates, such as those surrounding the
health care system or aging. Our bold ambition is to be the
most trusted insurer, and this involves playing a leading
role in society and contributing to cooperative solidarity
in the 21st century. This focus is at the core of our identity,
and shapes our business philosophy that the customers’
interests are always put first, and we serve them according
to their needs and wishes. Financially, we aim to retain our
very strong capital position, with a solvency ratio above
190% compared to Solvency I requirements. At the same
time, we will focus on maintaining the A+ rating for our
core insurance entities from Standard & Poor’s.
How will we get there?
Where are we going?
The insurance market is changing, and we are changing
with it. One of our primary ambitions is to be recognised
as the most trusted insurer that thinks from the customer’s
perspective. We will achieve this by acting in a responsible
and forward-looking manner, maintaining our focus
on developing sustainable insurance and responsible
investment practices. Our long-term strategy involves
continuing to concentrate on the non-life and health
insurance markets through the direct and banking
channel, while developing selectively in pension and
life insurance and gradually building our international
presence based on proven capabilities. Our goal is to
expand our market share in non-life, in part by driving
growth within the (large) corporates market and by
developing innovative distribution capabilities. For
health we will focus on quality of service and business
over growth, and for income protection we will focus
on profitability over growth. For health this means that
in some instances we will target market share growth
in specific regions to give us greater negotiating power
when purchasing health care services. In pensions, we will
continue to work with our customers to shift from defined
Our portfolio
In the challenging period that the financial services sector
currently finds itself in, adaptability and flexibility are
crucial. As we go forward, we will concentrate on four
key areas: product composition; distribution channels;
the position of Achmea in the value chain; and our
geographical focus (nationally and in non-life and health
internationally). Our aim is that our product composition
will be made up of state-of-the-art solutions across
our business lines, which we will adapt to changing
customer needs and market circumstances. Customers are
increasingly demanding higher levels of accountability
and transparency from the products and services that
we deliver, which means that our deliverables need to be
innovative and reflect social and environmental changes.
Technology will play an increasingly important role in
the way we adjust our product propositions and develop
our distribution channels, with the collection, analysis
and interpretation of customer data taking on a key role.
This will help us increase customer satisfaction levels and
develop cross-selling opportunities, by creating tailormade combinations of products based on customers’
17
Strategy
PORTFOLIO CHOICES
BUSINESS LINES
DISTRIBUTION
Bank distribution
Direct distribution
Broker distribution
Coop. with social partners
Property & Casualty
Health
Core proposition: Strengthen
Income Protection
Pension - standardised
Life - standardised (term-life)
Health Services
Develop to core
proposition through
increased scale
Develop to core proposition
In function of core proposition
Pension Services
Bank products
Strengthen partnership
Providing entrance
Complementary to
insurance products
Complementary to
insurance products
Pension - not standardised
Life - not standardised
Seperate and manage internally or externally
specific needs. Technology will also impact the way we
sell our products. Price comparison websites will become
ever more popular, and cross-media communication will
become increasingly relevant across all distribution channels.
Our direct brands are already well placed in the market, and
our online aggregator Independer.nl, which enables customers
to compare products and services easily and objectively, helps
us better understand and react to customers’ demands and
preferences in the Netherlands. Our bancassurance model
in the Netherlands is one of the world’s most successful, and
is built on our long-standing partnership with Rabobank.
The model involves our insurance products being offered to
Rabobank customers through the Interpolis brand, which is
one of the country’s most recognised and trusted financial
brands. Our aim is to expand this bancassurance model
internationally, both with Rabobank and other partners.
In Australia, for example, we are already in the process of
developing a greenfield start up with Rabobank, and expect to
receive an insurance license during the course of 2013.
Our work, our organisation, our world
Achmea is an organisation driven by the goal of putting
customers’ interests first. At the same time, we are equally
committed to serving the needs of our (business) partners,
employees, shareholders and society at large at all times.
The changes we envisage will undoubtedly place greater
pressure on our people. An increased workload, coupled
with ongoing cost efficiencies, will require an increasing
level of commitment from everyone in the company. At the
same time, market developments are forcing us to be more
restrained about compensation levels and job security.
We have already reviewed and adjusted downwards the
remuneration package of our top-400 managers, bringing
them further in line with societal developments. We also
intend to create a long term, sustainable pension plan for
employees across the organisation. Consequently, it is our
responsibility to be clear about the company’s direction
and the future prospects of each business unit. This will
involve professionalising the steering of the business
during the implementation of change and transition,
and ensuring that we have a properly trained workforce,
capable of adapting to market conditions. As the nature
of the business changes we will require fewer back office
functions and workers with a range of different talents,
which will require greater focus, and continued investment,
in our education, training and management development
programmes at all levels of the company.
We will also bring in specialists from outside the company
where we currently don’t have the right capabilities, and
work on further strengthening the culture to reinforce our
core values of empathy, innovation and delivering on our
promises, by saying what we do and doing what we say.
One way we strengthen the organisation is by listening to
our employees, and ensuring that our Works’ Councils are
involved in any major changes within the company.
18
Strategy
Every year in the Netherlands we ask employees to rate
the organisation and, based on the results, we set priorities
that the company needs to meet in the upcoming year.
In 2012, the response rate to the Employee Engagement
Survey was again excellent, given the changes taking place
both internally and externally. Sustainable employability
and flexibility will remain focal points, which will give
employees greater freedom in where and when they work.
‘Vertrouwd Samen Werken’ is our programme to organise
our work with the focus on creating more customer value.
Customers will benefit through service that is both faster
and available out-of-office hours, while employees will
be able to take advantage of flexible hours, giving them
greater control over where and when they work.
As an insurer with a cooperative heritage, we feel a
responsibility towards society’s needs, which is why we
are an active member of the United Nations Environment
Programme (UNEP). The signing of the Principles for
Sustainable Insurance (PSI) in 2012 and the Principles on
Responsible Investment (PRI) are proof of our commitment
to sustainable development. We depend on the trust people
place in our industry in general, and Achmea in particular.
Through risk prevention, risk reduction and the spreading of
risk over the many, the insurance industry plays a vital role in
developing the economy and society. As the world continues
to face social and environmental challenges, including aging
populations, rising healthcare costs and climate change,
the PSI will help address this changing risk landscape. The
integration of the PSI aims to strengthen the foundation
of our business and help us provide customers across our
markets with the best possible insurance solutions in the long
run. For example, one of the principles involves embedding
environmental, social and governance (ESG) issues relevant
to the insurance industry in our decision-making process.
By doing this, not only will we be better able to respond to
clients quickly, fairly, sensitively and transparently, and make
sure claims processes are clearly explained and understood,
we will also be able to integrate ESG issues into investment
decision-making and ownership practices. Last year, for
example, we extended the ESG integration of our investment
portfolio, and we tightened our investment policy through the
exclusion of the tobacco industry and the nuclear weapons
industry. As well as our individual customer contact, we
have also opened a communication channel on issues that
are relevant for us, our customers and society at large.
Through ‘Volgens Nederland’ (‘Holland says’), we aim to
establish a cooperative community using modern tools in
the Netherlands. Volgens Nederland is a project that will use
the internet and debates to collect opinions, wishes, ideas
and solutions related to employment, health care, pensions,
mobility and safety.
Our customers
One of our primary ambitions is to be the most trusted
insurer that thinks from the customer’s perspective.
To achieve this we first need to strengthen our customers’
trust, which we will do by ensuring that their best interests
remain central in everything we do, that they are represented
in our clients council, and that we offer them socially
responsible products and services at reasonable prices.
By listening to customers’ wishes and thinking from their
perspective, we will be able to respond quickly to changing
behaviour and trends in the market, enabling them to reach
us whenever and wherever they wish. By reducing costs and
introducing greater flexibility today, we lay the foundation
for the development of innovative propositions that meet
customers’ future needs. And because risk and uncertainty
remain central customer issues, entering into a risk dialogue
will be a key element in the relationship we have with them.
In addition to strengthening the trust of our customers, we
will continue to connect with society in general. At the same
time, we will continue to work extensively with partners
to provide the best and most efficient customer service. In
addition to sharing expertise and customer information, we
will create partnerships to develop new distribution methods
and to offer a new generation of services, such as locationbased services. In the Netherlands, we will focus on doing
business with partners who share our values and our vision
for customer development. Our prudent risk appetite will
remain unchanged. While we recognise that uncertainty is a
fact-of-life and that it’s impossible to eliminate all risk, we
invest our own capital in line with our prudent risk appetite.
By becoming a leaner and more agile organisation, with
reduced complexity and lower costs, we want to be better
able to serve our customers. By implementing efficiencyoriented back-office and improved claims management
systems, we will reduce operating costs and help develop
innovative forms of customer interaction. These cost
savings will also free up capital, enabling us to invest in
new technologies and processes, with the goal of making
the transition to being the most trusted insurer.
19
Strategy
Achmea’s strategy by business line
BUSINESS LINE
TREND
FOCUS
GROUP
• Retreating government role leading to
• Customer focus
transfer of risk to individuals/insurers
• Find solutions for loss-making businesses
• Customers demanding more transparency
• Cost discipline
and lower costs
PROPERTY & CASUALTY
• Improve efficiency
• Greater regulatory requirements
• Complexity reduction
• Emerging signs of hardening market in retail
• State of the art claims handling
lines, commercial lines still soft
HEALTH
• Strengthen commercial capabilities
• New entrants with low cost base
• White labeling
• Changing distribution landscape
• Moving forward in the value chain
• Price competition
• Maintain pricing discipline
• Expected growth of health care costs
• Health Procurement
approximately 3% per year
• Prevention
• Pressure on reducing costs
• More privatisation
• More risk shifted to insurers and consumers
INCOME PROTECTION
• Growth through privatisation of social
security system
• Profitable growth
• Broker channel
• Increasing claims ratios
PENSIONS
• Increasing pension awareness
• Developing new innovative products
• Uncertainty on new pension system
• Standardised products, resolving legacy
• Gradual shift to defined contribution
• PPI
INDIVIDUAL LIFE
• Most of market asset accumulation
• Term insurance
products shifting to banks
• Declining market except for term insurance
INTERNATIONAL
• Macro-economic situation challenging
(Greece, Ireland)
• Increasing regulatory pressure for
transparency
• More consumer appetite for technology
(Internet, Direct)
• Accelerating competence-based growth –
transfer of best practice and investments,
e.g. Direct
• Strengthening results of current positions
• Organic growth and improving profitability
• Strategic reorientation for non-core
businesses
• Exploring international opportunities with
shareholder Rabobank
BANKING
• More competition in savings market as a
• Less dependent on wholesale funding
result of changing regulation
20
Group Performance
NEt profit
Solvency ratio insurance entities (IGD)
€453 million
209%
Highlights
Gross written premiums
February: Launch of the LSP Health Economics Fund
February: Signing of the Principles for Sustainable
Insurance (PSI)
€20.4 billion
March: Sale of shares in F&C Asset Management
Equity
July: Sale of Achmea Vitale closed
€10.4 billion
July: Successful placement of almost €800 million of
residential mortgage-backed securities Achmea
Hypotheekbank
October: Close of € 750 million new senior
unsecured multicurrency revolving credit facility
October: Successful first issuance of €500 million
of senior unsecured notes Achmea Hypotheekbank
November: Acquisition of OVO announced
November: Highest ranked financial service provider
in annual Transparency Benchmark
capital allocation to segments
Pension & Life
Netherlands 35%
Non-life Netherlands 23%
Health Netherlands 21%
International 11%
Banking Netherlands 7%
Other 3%
December: Acquisition of Friesland Bank Assurantiën
21
Group Performance
results
(€ MILLION)
2012
2011
20,445
19,650
4%
1,688
2,024
-17%
442
465
-5%
Other income
2,682
1,059
153%
Total income
25,257
23,198
9%
Claims and movements in
insurance liabilities
20,910
19,255
9%
Investment income
Fee and commission income
3,024
3,031
0%
Other expenses
Operating expenses
911
1,159
-21%
Total expenses
24,845
23,445
6%
412
-247
n.m.
Profit before tax
Net profit
453
-208
n.m.
Non-life and Health businesses, the profitability of our
Pension & Life Netherlands business increased significantly,
positively affected by higher investment income. Profit
before tax was negatively impacted by an additional
provision of €180 million (2011: €171 million) for our longterm disability product WGA. The divestments of Achmea
Vitale and Eureko Romania had a negative impact of
-€50 million, resulting in a profit before tax from regular
activities of €462 million (2011: -€51 million). Net profit
came in at €453 million (2011: -€208 million). The aggregate
tax benefit is the result of the tax exemption for health
insurance activities and changes in our tax position.
profit before tax
Profit before tax
Mergers and divestments
n.m.: Not meaningful.
Group results
Achmea delivered a robust performance in 2012, posting
a net profit of €453 million (2011: -€208 million) despite
continually shifting market and economic circumstances.
Operating conditions remained challenging. Financial
markets were volatile, especially in the first half of the year,
and we continued to witness a rapidly changing market
environment. Slowing the pace at which healthcare costs rise
is a focal point for politicians, consumers and the industry,
while the challenging economic climate has impacted
the Dutch housing market, reducing mortgage sales and
subsequently the demand for life products. At the same time,
customer interaction is changing, with many now choosing to
interact with us through a variety of different media.
Amid this turbulence we continued to successfully
implement our cost and complexity reduction programmes,
while also investing heavily in innovation and in further
strengthening our organisation, for example through
investments in continuing to optimise health care
procurement, developing commercial capabilities and
separating our closed life book.
Profit before tax was €412 million (2011: -€247 million).
While we recorded continued solid results in our Dutch
(€ MILLION)
2012
2011
412
-247
50
-95
Goodwill impairment on
Pension & Life activities
279
Impairment on Greek
Government Bonds
114
Profit before tax from regular
activities
462
51
659
411
Results per segment
Profit before tax at our Non-life Netherlands business
decreased by 37% to €207 million (2011: €329 million).
Results were negatively impacted by investments in new
IT architecture for Property & Casualty, higher claims in
both Property & Casualty and Income Protection and the
sale of Achmea Vitale in the first half of the year.
Profit before tax was also heavily impacted by the additional
provision of €180 million for our long-term disability product
WGA (2011: €171 million). Operationally, our Non-life
Netherlands business performed reasonably well. The
combined ratio of our Dutch Non-life business is a very
sound 94.0% (2011: 90.6%) if corrected for the additional
provision for WGA. The unadjusted combined ratio is
99.6% (2011: 96.1%).
Profit before tax at our Health Netherlands business
decreased by 5% to €286 million (2011: €301 million).
This result includes €53 million from the first-time
consolidation of De Friesland Zorgverzekeraar (DFZ).
22
Group Performance
The decrease was due to the one-off allocation of expenses
related to holding services rendered in previous years. Our
Basic Health operation in the Netherlands is a stable, lowmargin business where scale remains the key driver of our
success. Operationally, our Dutch Health business also
performed satisfactorily with a combined ratio of 98.0%
(2011: 98.9%) at Basic Health and 95.1% (2011: 94.7%) at
Supplementary Health.
Profit before tax at our Pension & Life Netherlands business
increased significantly to €381 million (2011: -€181 million).
The 2011 results were negatively impacted by the €279
million goodwill write-down related to the life and pension
business). Profit before tax was positively affected by higher
investment income, mainly due to lower credit spreads. It
was positively affected by a switch in the discount rate used
for measuring the liabilities related to certain insurance
portfolios. The application of the ultimate forward rate
(UFR) in determination of the discount rate is in anticipation
of the discount rate to be used for Solvency II.
Profit before tax at our International business decreased
by 19% to - €83 million (2011: -€70 million), mainly due
to a number of one-offs, including restructuring costs,
provisions and write-offs connected to our Romanian
operations. Corrected for one-offs and divestments, profit
before tax was -€14 million (2011: €8 million, corrected
for the sale of Avéro Belgium, the impairment on Greek
government bonds and extra reserve releases).
Gross written premiums increased by 4% to €20,445 million
(2011: €19,650 million). The main reason for this increase
was the addition of €1,212 million in gross written premiums
following the consolidation of DFZ. Corrected for this,
gross written premiums decreased by 2% to €19,233
million, mainly due to lower contributions from the risk
equalisation fund at our Dutch Basic Health business. At
Non-life Netherlands, premiums were almost stable, with an
increase in Property & Casualty premiums compensating
for a decrease in Income Protection premiums related to
disability and absenteeism products. At Pension & Life
Netherlands, premiums were lower, mainly due to the
challenging Dutch housing and mortgage market and
competition from bank savings products. Premiums at our
market position in the Netherlands *
PROPERTY &
CASUALTY
HEALTH
INCOME
PROTECTION
INDIVIDUAL
LIFE
PENSION
INSURANCE
0%
Achmea
(19%)
ING
ASR
Achmea
(33%)
ING
Allianz
Achmea
(14%)
Achmea
(19%)
Coöperatie
VGZ
(former
UVIT)
10%
20%
Delta Lloyd
ASR
Aegon
30%
Delta Lloyd
40%
SNS Reaal
ING
50%
ASR
ING
CZ Group
incl. Delta
Lloyd &
OHRA
Delta Lloyd
60%
Delta Lloyd
Goudse
Zwitserleven
other
70%
80%
Menzis
other
other
Achmea
(12%)
90%
other
other
100%
* Sources: DNB figures, Achmea analysis.
International business decreased as a result of our aim to
only write profitable contracts, local market contractions
and negative currency effects.
In 2012 we maintained market-leading positions in
our core markets, property & casualty and health, and
retained the number two position in income protection.
In the competitive individual life market, any changes had
little impact on our position.
Expenses
Over the course of 2012 we continued to successfully
implement our cost and complexity reduction
programmes, while continuing to invest in innovations
and the further strengthening of our organisation.
23
Group Performance
We invested heavily in continuing to optimise health
care procurement, in developing dynamic pricing and
commercial capabilities and in ongoing improvement of
our IT infrastructure. Continuing efficiency improvements,
driven by accelerated cost reduction goals, remain high on
our agenda going forward. For the coming period we have
set a target for a €200 million reduction of gross operating
expenses to be achieved by the end of 2015.
Over the reporting year, gross operating expenses
decreased by 2% to €2,694 million (2011: €2,736 million)
if corrected for M&A activity, restructuring programmes,
provisions for vacant buildings and other non-recurring
items. Total operating expenses (gross operating expenses
corrected for acquisition costs and allocation to claim
handling) were stable at €3,024 million (2011: €3,031
million), wit higher acquisition Costs offset by lower
management costs. Corrected for M&A activity, total
operating expenses decreased by 1% to €2,936 million
(2011: €2,974 million).
We saw a 3% reduction in the number of internal FTEs
in 2012, from 19,490 at year-end 2011 to 18,905 at yearend 2012. This resulted in reduced personnel expenses.
Corrected for M&A activity, the reduction in the number
of internal FTEs in 2012 would have been approximately
the same 3%.
Capital management
At the end of 2012, total equity was €10,374 million, a
€599 million increase compared to year-end 2011. This
was primarily due to the net profit of €453 million and the
increase of the revaluation reserve of €205 million.
We benefitted from lower interest rates, which had a
positive impact on the valuation of the fixed income
portfolio. The unrealised investments results that cover
obligations towards our policyholders are set-aside in
a fund for future appropriation, which is part of the
insurance liabilities. In 2012, this reserve, held for the
good of our policyholders, increased by €711 million to
around €3.3 billion. Dividend payments on preference
shares and coupon payments on hybrid capital amounted
to €106 million.
development of total equity
Total equity 31-12-2011
Net profit
Dividends and coupon payments to holders of equity
instruments
Revaluation of equity and fixed income portfolio
(€ MILLION)
9,775
453
-106
205
FX reserves
26
Other
21
Total equity 31-12-2012
10,374
At year-end 2012, Group solvency was higher at 207%
(year-end 2011: 204%). Available capital increased
by €609 million €9,046 million, while required capital
increased by €251 million to €4,380 million. The increase
in available capital is partly explained by the change in
the assumptions regarding the risk-free discount rate and
changes in parameters in performing the liability adequacy
test. To increase the comparability of the regulatory
solvency in the market, we decided to change the discount
rate at which liabilities of our Dutch business are discounted
for purposes of the regulatory liability adequacy test. We
switched from the Euro swap curve to the ECB AAA
curve in the first half of the year. On 2 July 2012, the Dutch
Central Bank (DNB) announced that, effective 30 June
2012, insurers should adjust the method for extrapolating
the interest rate curve using an Ultimate Forward Rate
(UFR), which is set at 4.2%, to be reached in 40 years from
the point of 20 years. Available capital also increased due
to the net profit over 2012, while it was negatively impacted
by goodwill related to business combinations. Required
capital increased primarily because of the DNB’s increased
solvency requirements from 9% to 11% for the Dutch basic
health insurance.
Our solvency position based on the Insurance Group
Directive (i.e. excluding banking operations) increased to
209% at year-end 2012 (year-end 2011: 208%). Available
capital increased by €650 million to €8,323 million, while
required capital increased by €289 million to €3,985
million. The core Tier 1 ratios of Achmea Bank Holding
and Staalbankiers improved to 14.2% (year-end 2011:
12.4%) and 14.0% (2011: 13.1%) respectively.
24
Group Performance
Solvency ratios
SOLVENCY
Regulatory solvency ratio
Group (FCD)
Regulatory solvency ratio
insurance entities (IGD)
31-12-2012 31-12-2011
207%
204%
3%-pts
209%
208%
1%-pts
Group key performance indicators
We have defined a number of key performance indicators
that reflect our overall objectives. Performance in 2012
was satisfactory, with the combined ratio at our Non-life
business – which was impacted by a higher number of claims
compared to 2011 and the additional provision for our
long-term disability product WGA – the only exception.
Corrected for the additional provision, the combined ratio
was 94.0%. Performance at our Basic Health operations in
the Netherlands was satisfactory, with a combined ratio of
98.0%. Employee engagement and customer satisfaction
both outperformed our targets, with a score of 72% and 7.6
out of 10 respectively. In 2012, we also managed to maintain
market share in our core property & casualty and health
markets, where we retained our number one position, and
number two in income protection. The 209% solvency ratio
of our insurance entities (IGD) was also on target.
Group Key Performance Indicators
INDICATOR
OBJECTIVE
2012 STATUS
Combined ratio Non-life
< 97%
99.6%
Combined ratio Basic Health
< 100%
98.0%
Customer satisfaction
Satisfaction of at least 7.5
Average customer satisfaction for all Dutch
Achmea insurance labels 7.6
Employee engagement
> 71%
72%
Market share
Retain market share in core activities:
Non-life, Health and Income Protection
Leading market position maintained
Solvency
> 190% regulatory solvency ratio insurance
entities (IGD)
209%
25
Non-life Netherlands
Non-life insurance is one of our core businesses, and we
remain focused on developing our Non-life operations in the
Netherlands through direct and banking channels. Across the
Group, almost a fifth of our total gross written premiums are
generated from our range of non-life products, while in the
Netherlands we remain market leader in Property & Casualty
and number two in Income Protection.
Profit before tax
Solvency
€207 million
280%
Combined ratio
€3,151 million
99.6%
Goals 2013 and beyond
gross written premiums
•maintain strong market share
• reduce expense ratio
•achieve combined ratio <97%
Property & Casualty
Property
28%
Motor other
19%
Motor liability
16%
General liability
7%
Legal assistance 6%
Transport/aviation 1%
Other
0%
Income protection
Accident
23%
26
Segment | Non-life Netherlands
results
Investment income
(€ MILLION)
2012
2011
3,151
3,176
-1%
247
204
21%
Other income
-28
44
-164%
Total income
3,370
3,424
-2%
2,228
2,142
4%
Operating expenses
864
917
-6%
Other expenses
71
36
97%
Total expenses
3,163
3,095
2%
207
329
-37%
Profit before tax
Results
The non-life insurance market in the Netherlands is saturated
and highly competitive, with price often the decisive factor
in customers’ decision making. In 2012, our gross written
premiums were €3,151 million (2011: €3,176 million). Higher
premiums in Property & Casualty (P&C) due to an increase
in fire and general liability insurance were offset by lower
premiums in our Income Protection business.
Profit before tax decreased to €207 million (2011: €329
million). This was mainly due to higher claims and lower
releases of provisions in Property & Casualty compared to
2011, and an additional provision of €180 million (2011:
€171 million) on our long-term disability product within
Income Protection. Profit before tax was also affected by
costs of €33 million related to the sale of Achmea Vitale.
Operating expenses decreased by 6% to €864 million (2011:
€917 million). Investments in the new IT architecture and
higher marketing expenses in Property & Casualty were
more than offset by ongoing cost reductions and the sale
of Achmea Vitale.
The claims ratio increased to 72.9% (2011: 69.7%). This
was mainly due to higher regular claims and lower releases
of provisions within Property & Casualty compared to
2011. The expense ratio increased slightly to 26.7% (2011:
26.4%). On balance, the combined ratio of Non-life
Netherlands came in below 100% at 99.6% (2011: 96.1%).
Without the additional provision in Income Protection,
the claims ratio would have been 67.3% (2011: 64.2%), the
expense ratio 26.7% (2011: 26.4%) and the combined ratio
94.0% (2011: 90.6%).
Solvency increased to 280% (2011: 245%) due to higher
investment revaluations and the profit over the year.
Property & Casualty
Market developments
The Property & Casualty market in the Netherlands is
characterised by slow growth, with increasingly fierce
competition on internet-related sales. The long-term trend
points to brokers losing market share to sales through
direct channels, as consumers switch in growing numbers
to online price comparison sites and aggregators in
search of the best deal. Although internet-only start-up
companies tend to concentrate on offering the lowest price
point, it will become increasingly important to understand
changing customer demands and behaviour, and design
products accordingly.
How we are responding
We remained the Property & Casualty market leader in
2012, and aim to grow in a modest and responsible way.
Our focus was on improving customer service, and we
continued to invest in developing more efficient and
effective front- and back-office operations. During the
course of the year we migrated our entire suite of nonlife back-office systems into one product division, which
enables us to modify products faster, and integrate systems
and processes across our labels so that we can concentrate
on doing what we do best: providing protection and
handling claims. We expanded the promotion of our
individual brands – which include Interpolis, Centraal
Beheer Achmea, FBTO, Avéro Achmea and InShared
– giving us greater overall exposure to the market. In
addition to developing our online offerings through
InShared, we also liaised with Rabobank on their digital
strategy. Rabobank has traditionally sold insurance
through their retail branches, but this tendency is
increasingly moving to the internet.
27
SWOT ANALYSIS PROPERTY & CASUALTY
Strengths
Weaknesses
• Market leader
• Large range of trusted brands in direct writing and bank
distribution
• Unique position and large market share in employer
distribution
• Distribution partnership with Rabobank
• Size is competitive advantage, also on procurement
• Straight Through Processing IT system
• Good claims handling & management
• High customer satisfaction
• Integration of legacy IT systems still in progress
• Complexity not yet removed
Opportunities
Threats
• New distribution channels
• Solvency II may put pressure on some single-proposition
insurers
• Regulator clamps down on irresponsible pricing; some players
obliged to raise their prices
• Increase in switch behaviour based on quality/service
• Price increasingly decisive factor but prices stabilising
• Increase in switch behaviour based on prices
• Price increasingly decisive factor
• Weak underlying property market
• Lack of economic growth
• Insurance tax increase
We are working closely with the bank, our largest
distribution channel, to develop the best strategy for
Interpolis going forward.
Achmea was the first Dutch insurer to introduce a direct
channel, and in 2011 we maintained our first-mover
position by taking a majority stake in online aggregator
Independer.nl. Aggregators enable customers to compare
products and services easily and independently, and
we saw in 2012 that our stake in Independer.nl helps us
better understand and react to the demands of customers,
thereby building a more sustainable relationship with
them. Importantly, the objectivity of both the comparison
process and the outcome of results is guaranteed by a
Supervisory Board and a statute of independence.
The partnership developed by our direct writer InShared
with major retail chain HEMA – which involves HEMA
marketing standardised products under its own label
with Achmea underwriting the risk and handling the
administration and claims – progressed very well.
We continue to scan the market for similar opportunities,
and are currently investigating a number of other options.
On a product level, our focus is on the retail and SME
market, which make up the majority of our Property
& Casualty business. We witnessed heavy competition
within the motor segment, with a corresponding dip in
our market share, although we remained market leader.
However, this decline was offset by growth in other areas,
including the more profitable property segment.
Customer loyalty is based on trust, and is developed by
focusing on customer satisfaction. Brand awareness is
an important factor in developing customer trust, and
both Interpolis and Centraal Beheer Achmea scored
highly on loyalty and brand awareness in the Dutch
Property & Casualty market. Interpolis is brand leader in
Dutch Property & Casualty. In an independent customer
satisfaction survey carried out by the Dutch Association
of Insurers in 2012, Achmea achieved a score of 7.7 on a
scale of 10. This was equal to the market average of 7.7.
Outlook
Price pressure will continue to be an overriding issue
within the Property & Casualty market, as distribution
changes within existing channels increase switching
behaviour. We will concentrate on developing innovative
28
distribution capabilities and dynamic pricing capabilities,
while driving growth within the (large) corporates
market. Insurers will need to look for new ways to
create additional customer value and customer loyalty
will become increasingly valuable. At the beginning of
2013 the insurance premium tax rate rose from 9.7% to
21%, which could cause prices to rise across the Dutch
market, further impacting the consumer. We will look
at strengthening strategic positions in specific segments
as and when opportunities arise, while pursuing valuebased marketing through direct distribution and using
information that is provided by Independer.nl. As part
of our ongoing cost cutting measures, we will continue
to focus on IT rationalisation where relevant. Our longterm goals are to grow our strong market share, sustain a
strong combined ratio and continue to develop even better
customer service through improved websites, straightthrough processing and improved claims handling service.
Results
Gross written premiums increased slightly to €2,522 million
(2011: €2,511 million), mainly due to an increase in fire
and general liability insurance, partly offset by a decrease
in motor insurance.
Profit before tax decreased by 12% to €401 million (2011:
€455 million), due to a higher number of claims within the
agricultural sector in 2012, a higher number of fire and
storm claims in the first quarter of 2012 and lower releases
of provisions compared to 2011.
The expense ratio increased to 26.8% (2011: 26.4%),
primarily due to investments in IT and higher marketing
expenses. The claims ratio increased to 62.7% (2011:
59.5%) and the combined ratio was 89.5% (2011: 85.9%).
Income Protection
Market developments
Companies and the self-employed take out income
protection to cover the risk of their employees or
themselves becoming incapacitated and unable to work. In
the Netherlands there are three main products offered by
insurers: disability coverage for the self-employed (AOV);
employee absence coverage, primarily targeted at the SME
market (Verzuim); and coverage of employees who are
partially or temporarily incapacitated (WGA).
SWOT ANALYSIS INCOME PROTECTION
Strengths
Weaknesses
• Overall number 2 in the market; market leader in some
segments
• Dominant in bank distribution
• Extensive knowledge base of complex products
• Well positioned to anticipate and influence policy
developments
• Strong labels, multi-distribution and channelling
• Integrated chains
• Integrated offering of health/income protection
• Relatively low market share in broker channel
Opportunities
Threats
• Increased demand for combined services/products
• Ban on commissions and increased transparency
• Further privatisation of social security
• Growing switch behaviour from public to private sector
• Growing regulatory scrutiny of transparency/compliance
• Growth perspectives in broker channel
• Product complexity, as few insurers have capability to operate
in this market
• Market declining in size/profitability still under some
pressure from adverse economic climate and fierce
competition
• Little confidence in sector and customers more critical
• Economic cycle
29
In recent years, the Dutch income protection market has
been marked by three key issues. Firstly, an increase in
competition, which pushed down premiums and impacted
profits. Secondly, the continuation of the economic
downturn, which has cut growth among SMEs and the
self-employed, and increased business bankruptcy levels.
Together this has resulted in fewer income protection
policies being taken out, with employers accepting higher
risks in order to lower costs. And lastly, the number of
employees partially (or permanently) incapacitated has
risen faster than initially predicted by insurers and the
Institute for Employee Insurance (UWV), the government
agency responsible for the medical (re-) examinations
of the occupationally disabled. Although we prudently
made additional provisions on our long-term disability
insurance this year, the impact this issue will have on the
market as a whole remains uncertain.
In 2012 we followed a cautious commercial strategy, which
involved developing premiums that will enable us to
execute a sustainable, long-term business model. This was
partly driven by the WGA trends we witnessed towards
the end of 2011, where we saw a higher inflow of new
disability claims and claimants remaining in the WGA
for a longer period. Extrapolating these trends led us to
take a €180 million additional provision on our long-term
WGA insurance to cover the increased number of claims
and longer claim period we expect in the future. One
of the reasons this occurred was because of the relative
newness of the WGA product, following the privatisation
of the market in 2007. With no historical data available,
predictions were based on knowledge of the market
pre-privatisation. Additionally, the continuing troubled
labour market conditions have pushed up both claim
frequency and claim duration. In addition to increasing
our premiums, we also altered our policy terms and
conditions. This should provide employers and Achmea
with additional tools to intervene as employees move into
the disability stream.
Income protection products are long tail products, so
declining long-term interest rates have become even
more important. As a result of low interest rates, we
are offsetting declining investment returns from other
sources. In addition to focusing more on our pricing
model, this year we also looked closely at claims handling.
We developed and implemented a claims handling
management system using know-how from other parts
of the business, which will reduce costs and improve
customer satisfaction.
Outlook
One of our key aims in 2013 will be recovering
profitability. We will also continue to improve our claims
handling processes, and will work hard to capitalise on
our market position and regain the confidence of our
customers and stakeholders. We started operating in
income protection to help companies maximise employees’
employability, so that if employees became incapacitated
they can focus on reintegration and a return to partial or
full employment. In addition to taking over the financial
risk, we also help develop rehabilitation programs
(physical or psychological), and will continue to work on
helping those who step into the WGA, step back out.
The broker channel has traditionally dominated the income
protection market, but with the introduction of new
transparency measures they will have to separate their charges
from the cost of the product. We are working on introducing
an execution-only product through the direct channel, which
we expect to open up new opportunities for us in the market.
We believe that a separation of the product price and the
brokerage fee will benefit customers and Achmea.
Looking ahead, we see the possibility for income protection
moving towards income certainty. This will involve the
employee deciding how much income protection insurance
they want to take out, based on their own risk profile.
Results
Gross written premiums decreased by 5% to €629 million
(2011: €665 million), mainly due to a decrease in premiums
in disability and absenteeism, respectively impacted by
lower pricing and a stricter renewal policy.
The loss before tax worsened in 2012 to -€194 million
(2011: -€126 million), primarily due to costs of €33 million
related to the sale of Achmea Vitale and higher claims.
30
Profit before tax was also affected by the additional
provision of €180 million (2011: €171 million) for our
long-term disability insurance (WGA). This addition
was made in expectation of a higher inflow and a longer
duration of insured persons in the WGA, partly as a result
of the continuing troubled labour market conditions,
where both claim frequency and claim duration increased
above our own (and market) expectations. To better
position ourselves in the market and counter the increase
in claim costs, we have taken various steps. These involve
adjusting our proposition to customers and further
improving our claims handling. We will also better align
with the UWV. For 2013, we do not foresee any further
major additions to the provision due to the arrears from
the UWV that have been eliminated.
The claims ratio increased to 113.1% (2011: 109.4%) due
to higher claims, mainly in disability and WGA. The claims
ratio in 2012 was, as in 2011, also affected by the additional
provision of €180 million on our long-term disability
product. The expense ratio decreased to 26.4% (2011:
26.5%), which was due to more effective claims handling.
This resulted in a combined ratio of 139.5% (2011: 135.9%).
Without the additional provisions, the claims ratio in
Income Protection would have been 85.5% (2011: 82.6%),
and the combined ratio 111.9% (2011: 109.1%).
31
Health Netherlands
Health insurance is a core business and a core competence
at Achmea. We are the Netherlands largest health insurer
with a market share of 33%, where we offer a range of health
services and provide basic and supplementary health insurance
to 5.5 million people. Following our merger with De Friesland
Zorgverzekeraar in 2011, we are incorporating their results
into ours for the first time in 2012.
Profit before tax
solvency
€286 million
153%
Combined ratio basic health
€13.1 BILLION
98.0%
goals 2013 and beyond
• improve customer and partner trust
• maintain market share and value
•stabilise and further improve the expense ratio
•reduce growth of health care costs in the
Netherlands
•further develop and improve health procurement
capacity
AchmeaAnnual
AnnualReport
Report2012
2012
Achmea
Basic health - risk
equalisation fund 49%
Basic health - private
individuals 39%
Supplementary
Health 12%
32
Segment | Health Netherlands
results
Investment income
(€ MILLION)
2012
2011
13,120
12,055
9%
93
60
55%
Other income
-40
-137
71%
Total income
13,173
11,978
10%
12,114
11,134
Operating expenses
639
516
24%
Other expenses
134
27
396%
Total expenses
12,887
11,677
10%
286
301
-5%
Profit before tax
9%
previous years. The expense ratio increased to 4.4% (2011:
4.0%) due to the one-off business and IT integration
expenses and higher brokers commissions. The combined
ratio of Health Netherlands improved to 97.9% (2011:
98.8%).
Solvency decreased to 153% (2011: 192%), which was
mainly due to the Dutch Central Bank’s increased
solvency requirements for Basic Health insurance
from 9% to 11%. The solvency level remains relatively
strong and well above the minimum legal and internal
requirements.
Healthcare in the Netherlands
Results
The Dutch Healthcare System
In 2012, gross written premiums at our Dutch Health
operations grew by 9% to €13,120 million (2011: €12,055
million), mainly due to the merger with De Friesland
Zorgverzekeraar (DFZ). Corrected for the premiums of
DFZ (€1,212 million), gross written premiums decreased
by 1% to €11,908 million (2011: €12,055 million). This
decrease is mainly due to lower contributions from the
risk equalisation fund.
Profit before tax decreased by 5% to €286 million (2011:
€301 million), which includes the contribution from DFZ.
This decrease was due to the one-off allocation of expenses
related to holding services rendered in previous years
(these expenses are also presented as part of expenses in the
Other chapter). Excluding DFZ’s contribution (€53 million),
profit before tax was €233 million.
Operating expenses were €639 million (2011: €516 million).
Excluding DFZ, operating expenses were €578 million.
The increase in operating expenses was due to an
impairment of assets at Achmea Health Centers, oneoff expenses for the integration of the Achmea Health
and Agis divisions into a single health division and the
reduction in IT systems, and higher brokers commissions
following an increase in customer numbers.
The claims ratio improved to 93.5% (2011: 94.8%), mainly
as a result of favourable claims development related to
In 2006, the Netherlands introduced the country’s most
radical healthcare reform for a generation. With the
introduction of the Health Insurance Act, healthcare
moved from being a supply-side controlled model to
a demand-driven model. This model aims to create a
workable balance between a social foundation and freemarket dynamics. The government set a public framework
condition that care must be affordable for all, including
people on low incomes or with high care costs. Everyone
is required by law to take a basic insurance package, while
insurers are not allowed to reject anyone. This prevents
discrimination on the basis of risk. To make this workable,
and avoid competition among insurers to attract healthy
customers, a risk equalisation scheme was set up.
Managed by a government agency, the risk equalisation
fund compensates insurers up front for higher-risk
customers in their fund. The scheme is funded through
employer contributions for their workforce calculated as
a percentage of salary, and government contributions for
those who are under 18. Insured parties younger than 18
years of age pay no premium, while those on low incomes
can apply for a care allowance. Everyone pays according
to their ability to pay. This safety net underlines that
solidarity between income groups is a fundamental aspect
of the health care cost system. The framework also gives
the insured greater freedom of choice, providing access
to a number of ‘own selection’ elements. For example,
insurees can choose to take out supplementary insurance
33
for care that is not included in the basic health insurance
package, or define their ‘own risk’ level. In 2013, it is
obligatory for everyone to have an ‘own risk’ level of
€350. They can then choose to increase this in increments
of €100, to a maximum level of €850.
Market developments
The Dutch health insurance market is the largest private
insurance market in Europe, with a size of €40 billion in
2012. The market grew over the course of the year, with a
decrease in the number of uninsured persons leading to an
overall rise in the number of policyholders.
The issue of healthcare once again played a central role in
Dutch society, garnering attention partially because of its
importance in the build up to the general election, which
was held in September. One of the primary discussion
topics is rising healthcare costs, which are increasing faster
than economic growth. These rising costs are the reason
why an agreement was made between the Dutch Health
Ministry, hospitals and Dutch health insurers in 2011 to
limit the increase of healthcare and hospital spending
to a maximum of 2.5% per year. To achieve this, and to
further improve the quality and efficiency of healthcare,
more financial risk and responsibility has shifted to
health insurers and to the insured. In addition, contract
negotiations with healthcare providers increasingly include
making quality more transparent, with negotiations
focusing on the price/quality ratio. The concentration
of complex hospital healthcare, the reshaping of the
healthcare infrastructure and the shift towards the front
line and self-management are also high on the agenda.
We are starting to see the system changes envisaged
in 2006 taking place. The earlier signs that the rise of
healthcare costs seems to be slowing were re-affirmed in
the second half of 2012, although it is still to early to draw
any definitive conclusions. In 2012, the agreement laid
out by the new Dutch coalition government re-affirmed
the role of the insurer within the current framework.
At the same time, the market is progressively becoming
a commodity market. Price-sensitivity and consumer
mobility are increasing, from 6.0% in 2012 to around 7.5%
in 2013. This increased mobility is in part due to increased
consumer price sensitivity and greater transparency, driven
by the popularity of comparison websites.
There is a growing trend among insurees towards dispensing
with supplementary or dental insurance or reducing
supplementary insurance cover, while more policyholders
are opting for a voluntary ‘own risk’ amount.
Another issue currently facing the market is the
uncertainty surrounding the future of the AWBZ
(Algemene Wet Bijzondere Ziektekosten, or General
Act on Exceptional Medical Expenses), which currently
makes up over a quarter of total healthcare costs in the
Netherlands. The AWBZ covers long-term exceptional
expenses that are not covered by basic health insurance,
such as care of the elderly and care of the mentally and
physically handicapped. In early 2012 it looked as though
there would be a change to this system, with individual
insurers being be required to take over the administration
of their AWBZ customers, which is currently carried out
by the region’s largest insurer through ‘zorgkantoren’.
This change did not take place, however. Following the
elections in September the new government proposed
reforming the AWBZ system from 2015. Under the new
proposals, only people who require long-term care (such
as the elderly and physically handicapped) will remain
covered by the AWBZ. The costs of certain types of
medical care, such as of the mentally handicapped, will
become the responsibility of insurance companies, while
local authorities will be responsible for administering care
in the community.
Our health products are developed and sold through
seven main health brands – Zilveren Kruis Achmea, Agis,
Interpolis, Avéro Achmea, FBTO, ProLife, and DFZ –
using direct, bank and broker distribution channels. This
broad distribution mix provides us with stability and we
are very well positioned within the market. In 2012 we
provided health cover to 5.5 million people across the
Netherlands, with around 80% insured through group
contracts. As well as providing health cover, we also
contract health care, and work in close cooperation with
care providers (such as hospitals) to ensure our customers
are provided with the highest levels of service and quality
at a reasonable price. Our main strategic ambition within
healthcare is to lower costs while providing higher levels
of care by focusing on quality.
34
Investing in high quality,
affordable healthcare
We want our customers to be able to rely on high
quality care at the lowest possible cost, which is
why we stimulate the development of innovative,
next-generation healthcare solutions by investing
in companies that are working on improving lives
sustainably. One example is our recent investment
through Achmea Participations in I-Cane, which
provides independent mobility for the blind and
visually impaired using GPS guidance and tactile
communication. Another example is Medimate, a
company that has developed a product that allows
people to take blood measurements at home,
reducing their need for hospital visits. In 2012,
we partnered with Life Science Partners (LSP) to
establish the international LSP Health Economic
Fund. The fund has already invested in the
development of a surgical technique to treat bone
fractures, which uses a balloon system to fill the
inside of the bone with resin. This increases healing
time and significantly reduces costs.
This matches with the demands of consumers, who want
access to the best medication and the latest medical
techniques, with minimal problems and maximum
transparency. To accomplish this, we are concentrating on
three key areas: maintaining volume and value; helping
customers make wise health decisions; and managing the
supply (quality) of healthcare providers.
Maintaining volume and value
With seven well-known brands on the market, our goal is
to continue to differentiate each brand based on its own
unique characteristics, such as distribution channel and
target market. At the same time we aim to introduce new
product propositions based on health and care developments,
giving the customer more flexibility and freedom in selecting
the services that suit them. As market leader, we will
concentrate on volume maintenance rather than volume
growth, although in some instances we will target market
share growth in specific regions to give us greater negotiating
power when purchasing health care services.
Helping customers make health decisions
We want to ‘activate the customer’. In other words, we
want customers to be able to make their own choices when
selecting healthcare providers. To realise this goal we aim
to provide customers, either actively or passively, with
information on the quality of care providers. We believe
this has two benefits. Firstly, empowering customers will
lead to a greater focus on healthcare quality, reducing
wastage and therefore cutting costs. Secondly, by
activating the customer we expect to stimulate a greater
interest in health issues, thus activating the desire to
exercise or explore other forms of preventative measures.
Managing the supply
We believe that focusing on quality is essential
to controlling healthcare costs. High quality care
administered to patients quickly and correctly leads to a
decrease in the number of treatments required, benefitting
the patient and reducing costs. However, customers
can only make appropriate decisions on the quality
of healthcare providers if we make care transparent,
understandable and public. When contracting healthcare
providers, Achmea makes choices based on quality
norms and volumes. In this way we can accelerate the
concentration and spread of care; better match care
supply with demand; and improve the care infrastructure.
To accomplish this, we work with care partners who have
similar goals and we focus our negotiations with hospitals
on signing two-year contracts.
Each year the Dutch Association of Insurers surveys
customers on how satisfied they are with their health
insurer. In 2012, Achmea achieved a rating of 7.7 out of
10 (2011: 7.7). Customer satisfaction levels for our brands
was 7.7 (2011: 7.7). Improving customer satisfaction
remains a core aim across Achmea, and within our Health
business we listen to customer feedback through our
customer service lines, online channels and via surveys.
This helps us improve services and design products
according to customer demands.
35
Outlook
Healthcare costs remain central to the discussion
surrounding the current healthcare system in the
Netherlands, and this will continue. While overall costs
are expected to continue rising nationwide, we believe
measures such as quality of care, cooperation within the
healthcare chain and control of healthcare quality should
mitigate the effect of this increase. Within Achmea, we
will concentrate on reducing costs and searching for
ways to improve the quality of healthcare. In 2013 we
will continue with the cost reduction programme already
underway, introducing process improvements and
making operational management more efficient. Based
on changing customer behaviour, where we see less faceto-face interaction and more contact over the internet or
phone, we will close down 50 service points across the
country. At the same time, we will invest in our contact
centers and focus on multichannel customer interaction.
Basic health
Results
contribution, gross written premiums for Basic Health
decreased by 2% year-on-year, while premiums from
customers increased by 3% to €4,637 million (2011: €4,493
million). Contributions from the risk equalisation fund
decreased by 6% to €5,858 million (2011: €6,222 million)
due to lower claims estimates. Of DFZ’s gross written
premiums, €497 million were from customers and €578
million were contributions from the risk equalisation fund.
Profit before tax at Basic Health increased by 63% to
€260 million (2011: €159 million), mainly as a result of
favourable claims development related to previous years.
The DFZ integration contributed €45 million to the result.
The claims ratio improved to 94.7% (2011: 96.1%),
partially as a result of favourable claims development
related to previous years. The expense ratio increased
to 3.3% (2011: 2.8%), mainly as a result of the oneoff expenses for the integration of the Achmea Health
and Agis divisions into a single health division and the
reduction in IT systems. Higher brokers commissions,
following an increase in customer numbers, also impacted
the expense ratio. The combined ratio improved to 98.0%
(2011: 98.9%).
In 2012, gross written premiums at Basic Health increased
by 8% to €11,571 million (2011: €10,715 million). Of
this, €1,075 million came from DFZ. Excluding DFZ’s
SWOT ANALYSIS BASIC & SUPPLEMENTARY HEALTH
Strengths
Weaknesses
• Scale
• Multi-label, multi-production and multi-distribution
• Quality of service
• Health care innovation
• Solvency
• IT legacy reduced in 2012, complex health insurance system
•Cross selling is not on the level we would like it to be
Opportunities
Threats
• Transparency of healthcare; output, costs and especially
quality
• Shift to quality-driven competition
• More demand driven, differentiated and selective
procurement
• Integrated propositions health and occupational health
• Political decisions on health insurance
• Not enough transparency in quality of care
• Price competition and entrance of new price-fighter players
• Better quality without cost containment caused by lack of
measures concerning the infrastructure and capacity of
health care
• Loss of solidarity
• Higher financial risks
•System change to AWBZ
36
Supplementary Health
Results
In 2012, gross written premiums at Supplementary Health
increased by 16% to €1,534 million (2011: €1,322 million).
Excluding the contribution of DFZ (€135 million), the
increase was 6%. This increase was the result of premium
adjustments.
Profit before tax was €82 million (2011: €79 million),
which includes a €6 million contribution from DFZ.
This profit decrease was caused by fewer policyholders
selecting additional healthcare insurance, downgrading
among existing policyholders and policyholders using
their supplementary health package more efficiently.
The claims ratio improved to 84.6% (2011: 85.2%), while
the expense ratio increased to 10.5% (2011: 9.5%). This
resulted in a higher combined ratio of 95.1% (2011: 94.7%).
37
Pension & Life Netherlands
Achmea’s Pension & Life business in the Netherlands is composed
of Pension insurance and Individual life insurance. In Pension
insurance, where we have a market share of 10%, our focus is
on the delivery of defined-contribution products. In Individual
life, where we have a market share of 14%, our focus is
predominantly on term life products.
Profit before tax
Solvency
€381 MILLION
234%
VALUE NEW BUSINESS MARGIN
€2,944 MILLION
-18.5%
Goals 2013 and beyond
• maintain a top-three position in Term insurance
• retain and improve our Value New Business
margin in the Netherlands
•improve customer trust in financial services
products
• terminate all pension products that do not meet
internally set returns and/or risk appetite
Individual Life
traditional products 26%
Individual Life
unit- linked products 28%
Pension unit-linked
products
19%
Achmea Reinsurance
Company 18%
Pension traditional
products 10%
38
Segment | Pension & Life Netherlands
results
(€ MILLION)
2012
2011
2,944
3,120
-6%
Investment income
1,155
1,832
-37%
Other income
2,179
959
127%
Total income
6,278
5,911
6%
5,472
5,387
2%
Operating expenses
340
324
5%
Other expenses
85
381
-78%
Total expenses
5,897
6,092
-3%
381
-181
n.m.
Profit before tax
Results
In 2012, gross written premiums decreased by 6% to
€2,944 million (2011: €3,120 million). The decline is the
effect of the challenging Dutch life insurance market.
Falling house sales and the introduction of bank savings
products with fiscal advantages similar to life insurance
products have put pressure on the sale of new life
products. Both single – especially in the second half of
the year – and annual premiums are lower compared to
2011. New sales are lower than 2011 due to our focus on
profitability over growth. Annual premium equivalents
(APE) increased to €141 million (2011: €101 million
under EEV principles) following our decision to report
under Market Consistent (MCEV) principles rather than
European Embedded Value (EEV) principles. Under
MCEV principles renewals are taken into account.
Despite continued challenging market conditions,
profitability developed favourably. Profit before tax
increased significantly to €381 million (2011: -€181
million. The 2011 results were negatively impacted by the
€279 million goodwill write-down related to the life and
pension business). The 2012 result was positively affected
by higher investment income, mainly due to lower credit
spreads and rising equity markets, which had a positive
effect on specific investments (such as convertibles). Profit
before tax was also positively affected by a switch in the
discount rate used for measuring the liabilities related to
certain insurance contracts, which guarantee a minimum
value at maturity of the contract, and a portfolio of
insurance contracts whose cash flows are discounted using
market based interest rates. Since 2012, Achmea has used
the Euro swap curve, including an illiquidity premium,
dependent on the specific features of the insurance
contract, which is extrapolated by means of an ultimate
forward rate (UFR). With the application of a UFR to
determine the discount rate, we anticipate the discount
rate that will be used for Solvency II. This became clear
when the Dutch Central Bank changed its method for
determining the discount rate for regulatory purposes on
30 June 2012, making use of the UFR method.
Operating expenses increased by 5% to €340 million
(2011: €324 million). Corrected for a one-off benefit
of repayments of commissions in 2011 and for lower
reinsurance commissions in 2012, operating expenses were
lower compared to 2011.
The solvency level improved significantly to 234% from
209% at year-end 2011. This increase is attributable to the
positive result and the switch from the Euro swap curve to
the ECB AAA curve with UFR methodology.
Embedded value
The following information offers a high-level overview of
how Embedded Value developed in 2012. We also publish
a separate Embedded Value report which can also be
found on our website, www.achmea.com.
The Embedded Value of Achmea’s Dutch Life business at
year-end 2012 was €3,715 million, consisting of a net asset
value of €3,513 million and value of in-force business of
€201 million. The required capital is the part of the net
asset value that isn’t freely available for shareholders. It’s
the capital needed to protect the insurance liabilities in
case of unexpected losses. The value of in-force business is
the present value of the projected stream of future profits
available to shareholders from the in-force business after
deduction of taxes, expenses, costs of risks and costs of
holding required capital.
Embedded Value decreased by 3%, which was mainly
caused by the revaluation of market value liabilities due
to a drop in the valuation rate (the main driver of the
39
EMBEDDED VALUE (MCEV) SUMMARY
Embedded Value and MCEV principles
What is embedded value?
Embedded value is the economic value of a life
insurance business at a certain moment, such as
year-end. It is calculated by adding together the
company’s net asset value (which is its assets
minus its liabilities) and the value of all future
profits that a company expects to make from
current life policies. It does not take into account
the value of any business that may be generated in
the future.
Why is it important?
Embedded value supports shareholders’
understanding of the value of their interests in the
company. It enables them to assess the company’s
financial performance over time.
Why are we reporting under MCEV principles
in 2012?
In accordance with our decision in 2011, we moved
from reporting the value of our company based
on European Embedded Value (EEV) principles to
Market Consistent (MCEV) principles in 2012. MCEV
principles can be seen as the natural development
of EEV principles. They increase companies’ ability
to take into account risks and to improve the
consistency and transparency of calculating and
reporting embedded value. Due to this change in
methodology, at the end of 2011, Embedded Value
decreased by €457 million from €4,296 million to
€3,839 million.
31 DECEMBER 2012
Free surplus
1,332
Required capital
2,181
Net asset value
3,513
Value of In-force business
Embedded Value
202
3,715
renewal of group contracts. New business margins are
calculated as the ratio of VNB to the present value of new
business premiums.
In 2012, the VNB decreased to -€19 million (2011: -€7
million). The volume of new business remained at the same
level. Consequently, the new business margin decreased to
-1.8% (2011: minus 0.7%). The negative value is primarily
a result of sales being too low to cover expenses.
EMBEDDED VALUE (MCEV) ANALYSIS OF CHANGE
(€ MILLION)
2012
Embedded Value at start of year
Operating MCEV earnings
3,839
398
Non-operating MCEV earnings
-522
Embedded Value at end of year
3,715
VALUE OF NEW BUSINESS (MCVNB)
(€ MILLION)
2012
Value of new business pension insurance
Value of new business individual life
non-operating earnings). The profit from operating the life
business was €398 million. Cost reduction programs are
reflected in the expected future earnings, with an effect of
€344 million. Part of the operating earnings is the Value of
New Business (VNB), which was -€19 million in 2012.
(€ MILLION)
-28
9
Value of new business
-19
New business APE (Annual premiums + 10% of
Single Premiums)
141
Value added by new business as a % of APE
-13.1%
Present value of new business premiums
1,025
New business margin
-1.8%
The VNB is the value of current and future profits from
new business that was written in the relevant year. New
business arises from the sale of new contracts and the
40
Pension insurance
Market developments
The pension insurance market in the Netherlands is large,
worth around €8.8 billion annually. It is currently in a
transitionary phase, with employers and insurers facing
a number of issues driven by regulatory changes, the
economic crisis and pricing pressure.
The country’s pension system is made up of three pillars:
the state pension; company-based collective pensions;
and private pensions taken out by individuals. Achmea is
active in the second pillar, providing services to around
8,000 companies, giving us a market share of 10%. Within
this pillar, two distinct types of pension have traditionally
been available. The first is defined benefit (DB), which
provides employees with a guaranteed final pension based
on the number of years worked and the employee’s salary.
The second is called defined contribution (DC). Pensions
provided by DC schemes are dependent on the amount
of contributions paid during the pension’s lifespan and
the investment returns. Since the onset of the economic
crisis, increasing numbers of employers and insurers have
chosen to switch from DB schemes to DC schemes, as
low interest rates and longevity risks make traditional
DB plans unaffordable for employers and unsustainable
for insurers. At the same time, some parties – including
labour unions and works councils – continue to support
DB schemes. On the regulation front, the introduction of
a revised IAS19 accounting rule at the beginning of 2013
will add to the unsustainability of DB plans for employers,
and is likely to further encourage the shift towards DC.
The premium shift from DB to DC schemes is a market
development. In 2006, 53% of the total second pillar
insurance market was made up of DC pensions. By 2011,
this had grown to 61% of the market. We expect this trend
to continue, with employers increasingly looking to shift
risks to employees.
The entrance of Premium Pension Institutions (PPIs) from
non-insurers has led to competitive pressure, although
they also provide opportunities for insurers such as
Achmea. For some clients we provide the risk insurance
part of the PPI. Additionally, we can also act as ‘experts’
on the product’s insurance component.
SWOT ANALYSIS ANALYSIS PENSION INSURANCE
Strengths
Weaknesses
•Relatively high customer satisfaction and retention
• Cooperative background distinguishes Achmea, as we are
focused on more than only profit
• We can use our ‘customer boards’ for customer research on
our new product range, integrating them into the product
development process from the beginning
• Innovative defined-contribution pension products
• Our uniform platform for defined contribution
• Wide offering, from insurance with services package to asset
management and
• pension-fund services
•Legacy IT systems, resulting in relatively high cost base
• Relatively low market share in broker distribution
Opportunities
Threats
•Ongoing shift in customer needs towards more definedcontribution products with
• specific guaranteed components
• Increasing demand for transparency in cost and risk
• Growing pension awareness among customers
• Government/employers retreating from pension market
• Pension system adjustments
•Increased life expectancy
• Uncertain economic situation slows premium growth
• Increased competition from PPIs and non-insurers
• Lack of customer trust in the industry
• Structurally lower profitability in the industry because of
(temporary) low coverage level
• Temporary pause in the pension fund switch market
to insurance solutions
41
Outlook
Our focus in 2012 was on developing and rolling out
our DC product range, including a new mutual fund
range with a transparent and low cost structure, while
continuing to cut costs and look for efficiencies across our
operations. We remain cautious of DB products, which
we view as unsustainable for both employers and insurers,
and continued to withdraw from guaranteed products
where customers were not prepared to pay the increased
market consistent costs of guarantees. For those customers
currently in DB schemes, we worked with them to change
to DC and limited our renewals from five years to one year.
Our goal in 2013 is to continue to concentrate on carrying
out commercial conversions from DB to DC, as and when
our customers are ready. We will invest in our lifecycle
funds and work on completing our DC product range,
while looking at innovative ways to offer guarantees
and communication tooling as a digital insurer (such as
through apps). This will help us actively sell and dealmake using the Achmea model, which involves splitting
the product and distribution divisions. At the same time,
we aim to develop best-in-class solutions to deal with
existing DB obligations. We will continue to reduce costs,
by concentrating on simplicity and innovation, as well as
streamlining and simplifying processes. This will include
the rationalisation of IT systems and products.
Customers are increasingly demanding transparent
products with clear final outcomes, as well as online access
to policy information. In 2012, 85% of existing customers
affected received compensation for too high cost-loading
in the past. During the course of the year we rolled out a
portal for employers and a portal for employees, developed
in cooperation with our customers, which provide access to
investment information and pension performance.
Both were very well received by the supervisory authorities.
We also launched our new ‘marktrente’ product, which
provides customers with a guaranteed return linked to
the market interest rate, rather than a fixed percentage
guarantee. We completed a 5-year transformation program
to migrate our Centraal Beheer Achmea and Avéro brands
to a single platform for DB administration. This resulted
in improved efficiency and cost reductions across our
traditional product operations. We have started a similar
transformation program for our DB products at Interpolis.
Customer satisfaction is a priority at Achmea, and we
work hard to implement customer feedback to improve the
organisation. In 2012, our Centraal Beheer Achmea label
came in first and our Interpolis brand came in second in a
pension advisors satisfaction survey. A survey carried out
by consulting bureau IG&H ranked us third nationally
in terms of how well our customers are serviced. We also
retained our customer oriented insurance quality mark
(Keurmerk Klantgericht Verzekeren), which recognises our
focus on customer service and satisfaction.
Results
Gross written premiums of our Pension insurance
business decreased by 4% to €1,177 million (2011: €1,224
million). Annual gross written premiums remained stable,
but single premiums were lower compared to 2011.
The negative economic environment resulted in less
indexation of single premiums.
Individual life
Market developments
The individual life market in the Netherlands has faced
challenging circumstances in recent years, and this is likely
to continue going forward. Declining house sales have
pressured term life insurance, while the introduction of
savings products with similar fiscal advantages has shifted
the market towards the major banking players. Sales of
asset accumulation products are almost exclusively through
banks, although risk insurance remains the domain of
insurers. Although forecasts suggest that the housing market
will remain troubled, the introduction of new legislation
at the beginning of 2013 will make bank savings a less
interesting option for lenders. In line with other sectors,
consumers are demanding simpler, more transparent
products and services and greater cost visibility. There is
also growing competition among life insurers, leading to
cost reductions and business rationalisation.
42
Our strategic focus continued to be on providing
innovative, low-cost and simple term life products,
where we see growth potential. The majority of our sales
were through the distribution partnership we operate
with Rabobank, which offers a ‘Best Buy’ guarantee
via Interpolis. We are also focusing on increasing sales
through direct channels. We saw a sharp decrease in VNB
in 2012, due primarily to reduced volumes and margins
as competition pressure grew. After a further decline,
we expect VNB to increase steadily from 2013 onwards.
During the course of the year we decided to separate
our closed life book business and create a dedicated
organisational entity. This has been in place since the start
of 2013, with the aim of maintaining value at the lowest
possible cost, while ensuring customers are well served.
This enables us to look at alternative, efficient ways of
using capital. We view this as a ‘no regret’ move.
We ensured that during the year, 100% of affected
customers were informed as to how much compensation
they will receive for too high cost-loading in the past.
While we have chosen to add any compensation directly
and fully to the policy, both for the past and the future, we
have always believed that financial compensation alone is
not enough. As a result, we have also launched alternative
bank products and new lifecycle-based investment funds
that have no initial costs, with customers offered the
possibility to adjust their current product or switch to an
alternative product.
The annual survey of customers by the Dutch Association
of Insurers showed that customer satisfaction remained
stable at 7.1 out of 10. On average, our customers scored
Achmea at 7.2, as they did in 2011. Our Centraal Beheer
Achmea brand scored 7.4, which is markedly up from
7.2 in 2011. Customer satisfaction with Interpolis also
increased to 7.4 from 7.3 in 2011.
Results
In 2012, gross written premiums decreased by 10%
to €1,256 million (2011: €1,389 million). The decrease
is attributable to annual premiums as well as single
premiums, mainly due lo lower immediate annuities.
The decrease of annual premiums is caused by lower
premiums from asset accumulation products due to
competition from bank savings and lower term insurance
due to the depressed housing market.
SWOT ANALYSIS INDIVIDUAL LIFE
Strengths
Weaknesses
•Relatively high customer satisfaction and retention
• Cooperative background distinguishes Achmea, as we are
focused on more than simply profit
• Strong solvency, especially when compared to market
competitors
• Our distribution power
• Innovative, low-cost and simple term life product
•Legacy IT systems, resulting in relatively high cost base
• Relatively low market share in broker distribution
• Dependence of mortgage market
Opportunities
Threats
•Increasing demand for transparency in cost and risk
• Shifting customer needs
• Growth in term life market
• Banking sales decreasing, benefitting direct and broker
channels
• Legislation in 2013 requiring mandatory redemption of the
mortgage means bank savings will no longer be more
interesting than life insurance
•Increased life expectancy
• Fierce price competition and competition from non-insurers
• Individual life market is shrinking
• Uncertain economic situation slows premium growth
43
Outlook
We except the housing market and connected life
insurance products to remain under pressure, with fewer
transactions and smaller mortgages. In addition to
mortgage-related term life products, we will introduce
stand-alone term life coupled with other products through
bank and direct distribution, with the aim of achieving a
30% market share by 2015. We will also concentrate on
reducing costs within our closed book operation, while
continuing to operate an efficient term life business.
44
International
Achmea’s international operations are made up of all
activities outside the Netherlands. We currently operate in
seven countries: Greece, Turkey, Russia, Slovakia, Ireland,
Bulgaria and Romania. We are in the process of developing
a greenfield start up with Rabobank in Australia, and aim
to take this further in 2013.
Profit before tax
Solvency
€-83 MILLION
259%
employees
€1,230 MILLION
3,735 fte
gwp per country
• continue with focus on operational efficiency
• continue with building competitive advantage in
Non-life and Health growth business
• further develop partnership-based distribution
models
Greece Turkey
Russia Other 32%
24%
5%
39%
45
Segment | International
results
Investment income
(€ MIILION)
2012
2011
1,230
1,299
-5%
261
23
1,035%
Other income
4
-302
n.m.
Total income
1,495
1,020
47%
Net claims and movements in
insurance and investment liabilities
1,084
601
80%
395
416
-5%
Operating expenses
Other expenses
99
73
36%
Total expenses
1,578
1,090
45%
-83
-70
-19%
Profit before tax
results
Over the last few years, our International strategy has
been to concentrate on growth in the Non-life and Health
businesses, with a particular focus on the bancassurance and
direct channels, while targeting efficiencies throughout the
business. We have witnessed a global trend among customers
to source information and purchase insurance products
online. Although each country is developing at a different
pace, we expect this trend to accelerate, with direct channels
becoming more popular and the chosen method of accessing
personal insurance products. Our goal is to further develop
partnership-based distribution models based on changing
market trends in those areas where we identify potential.
In 2012, gross written premiums decreased by 5% to €1,230
million (2011: €1,299 million). This was caused by a number
of issues, including our focus on writing only profitable
contracts, currency effects and local market contractions.
Profit before tax was - €83 million (2011: -€70 million),
mainly due to an addition to the loan loss provision of our
Irish Finance company (which is in run-off) and a number
of one-offs, including restructuring costs and write-offs
connected to our Romanian operations.
Corrected for one-offs and divestments, profit before tax
was -€14 million (2011: €8 million, corrected for the sale
of Avéro Belgium, the impairment on Greek government
bonds and extra reserve releases). This loss was driven by
higher lapses and higher claims in Turkey (including lower
recoveries) and Ireland, and was impacted by the negative
effects of the development of discount curve evolution.
All other operating companies performed ahead of 2011,
due to a continued focus on profitability, cost savings and
improved operational performance.
Eurapco
Eurapco is an alliance of independent European
financial services companies, composed of seven
partner companies with operations in 17 European
countries. These partners are Caser (Spain), Covéa
(France), Gothaer (Germany), Länsförsäkringar
(Sweden), Swiss Mobiliar (Switzerland), Tapiola
(Finland) and Achmea. Each partner is a leading
player in its domestic market, and together they
form one of the strongest insurance groups in
Europe. Collectively, they have a premium volume
of more than €30 billion and serve approximately
30 million clients. Eurapco activities support the
partners’ main insurance lines – life and non-life
– and their support functions. Its resources are
dedicated to developing the alliance, specifically
by creating and exploiting opportunities for
synergy. Eurapco facilitates around 60 partnerdriven activities, including knowledge exchange
through networking with other business groups,
forums, workshops, peer seminars, symposiums
and benchmarking exercises. Eurapco also
develops new projects to help promote common
commercial activities, and contributes to training
and management development programmes for
partners’ senior and high-potential managers.
Through unity and cooperation, the partners aim
to strengthen their positions in their respective
local markets. They also benefit from their
involvement on the international stage. Our
shareholders LF Liv Forsakringsab, LF SAK
Forsakringsab, Gothaer Allgemeine Versicherung,
Gothaer Finanz Holding and Swiss Mobiliar all
are members of the Eurapco Alliance. For more
information, visit: www.eurapco.com.
46
Operating expenses decreased by 5% to €395 million
(2011: €416 million), due to the effectiveness of the overall
profitability plan, a 10% reduction in FTEs and lower
commissions. Solvency improved to 259% at year-end
2012, from 247% at year-end 2011.
Countries
Greece
Interamerican Greece (IAG) operates in the non-life,
health and life markets. The country faced an extremely
challenging economic situation in 2012, which impacted
growth and continued to make it difficult to predict
market developments. We chose to further de-risk
our exposure to the country where possible, and will
continue to monitor the situation carefully. As one of the
strongest and best-managed insurers in the country, IAG
is also acknowledged as the most trusted, accessible and
recognisable insurance company operating in the Greek
market. We trust we will continue to play this role going
forward. In 2012, gross written premiums decreased to
€396 million, from €430 million in 2011.
Due to the ongoing economic crisis, we saw an increasing
number of lapses and surrenders in the Greek market. In
this worsening market, IAG performed better than other
insurers, aided by our direct channel Anytime. In the nonlife market, for example, our sales dropped by only 4%,
compared to a 12% market contraction in November. We
closed a large number of new motor insurance policies in
what were difficult market circumstances. Gross written
premiums decreased by 4% to €224 million (2011: €233
million), which was significantly better than market
average. Going forward, our focus will remain on growing
the business through Anytime, while retaining our
network portfolio. We will continue to work on growing
our market share, while standardising our product range,
implementing a dynamic pricing model and adopting
claims management best practices. In the health market,
our goal in 2012 was to continue to strengthen our
market position, while providing clients with sustainable,
affordable and easy access to high quality health care.
We achieved this in difficult circumstances. The private
health insurance market was negatively affected by lapses
as a consequence of the crisis, and our gross written
premiums decreased to €97 million from €108 million in
2011. Despite the loss of business we have managed to
secure our profit in this business line through improved
claims management and healthcare procurement. Our
focus remains on further developing the multi distribution
strategy (such as Anytime), simplifying and de-risking
the product portfolio, capitalising on existing managed
care infrastructure, enhancing claims management and
continuing operational improvements. IAG remains a
significant player in the Greek life and pensions market.
In 2012, our gross written premiums for life decreased by
16% to €75 million (2011: €89 million), as the economic
crisis caused the number of cancellations and surrenders to
increase. Group New Business Annual Premiums equivalent
dropped by 54% to €4 million (2011: €8 million) as a
result of the market stagnation (lower demand for pension
products). Going forward, we will focus on a number of
objectives, including optimising and gradually de-risking the
portfolio and concentrating on retention.
Turkey
Eureko Sigorta operates in Turkey’s non-life and health
markets, which are core competences for Achmea. Eureko
Sigorta is faced with a challenging insurance market.
Customer awareness of, and trust in, the insurance sector is
low. Bancassurance sales remain a vital part of the business,
which are carried out in close cooperation with our strategic
partner Garanti Bank. In 2012 we continued to focus our
efforts on driving sales through this channel. Gross written
premiums in 2012 dereased by 2% to €297 million (2011:
€304 million), due to lower sales in some product lines in
non-life, partly offset by the positive influence of foreign
exchange differences (€3 million). It was decided in the first
half of the year not to exercise our call option on Garanti
Emeklilik, the Life business of Garanti Bank.
Russia
Oranta operates in the non-life and health markets in
Russia. Our focus in 2012 was on introducing greater
efficiency to the organisation, and streamlining our
portfolio. This was embedded into a detailed action plan,
which we executed in 2012. We made good progress on
increasing profitability and introducing better business
47
practices. We streamlined our staff operations, centralised
part of our back-office activities (mainly claims handling)
into a shared service centre in Ryazan and migrated
part of our processes to one IT system. Legacy systems
will be closed down in 2013. Moreover, we restructured
our agency network, both in Moscow and the regions.
Portfolio changes involved cutting a number of lossmaking contracts, which had an obvious impact on topline sales. Although sales dropped slightly, we improved
our profitability by 10% and even outperformed our
initial targets. Costs were reduced by 12%. Overall the
efficiency drive has improved bottom line performance.
Gross written premiums in 2012 were 13% lower at
€65 million (2011: €75 million). The outlook for the
Russian market is positive and it remains one of our
most important markets. Our target in the coming period
is to accelerate profitable growth. This will involve
developing new channels and value propositions for
clients and intermediaries, which will support the core
values of Achmea. A second growth area will be online
distribution channels, for which we will develop a more
detailed strategy in the coming years. At the same time, we
will focus on retention and customer centricity to ensure
sustainable portfolio growth.
Slovakia
Union operates in the health, non-life and life markets in
Slovakia. The business performed strongly in 2012, both
commercially and operationally, and Union is currently
the market’s fifth-largest player. Union is making solid
progress in premium volume growth, with 85% of gross
written premiums in 2012 coming from health, 4% from
life, 3% from non-life motor and 8% from other non-life
areas. Union has shifted to being a multi-distribution
company, with the direct channel becoming increasingly
important. This channel will be further explored and
developed. We expect to see the motor market continue to
grow, in both the retail and the SME environment, which
will lead to a more balanced non-life portfolio.
Our Life business is complementary and provides cost and
distribution synergies for both our Non-life and Health
businesses. Health grew strongly in 2012, making Union
the only market participant to return net customer growth.
We took steps to further stabilise our Life business
through a cost reduction programme. This process will
continue in 2013. Non-life results, which were influenced
by a good claims ratio, were also very positive.
The ongoing uncertainty surrounding the Slovakian
government’s decision to return to a single, state-run
health insurance system continued throughout the
year, with the government indicating that it intends to
nationalise the country’s two private insurers, one of
which is Union. The issue remains a top priority for
Achmea, and we monitor proposed legislative changes
in health insurance very closely. In addition to actively
commenting on the regulatory environment through
participation in public debates and various forums,
in 2012 we ran an ad campaign entitled ‘I am not a
sheep’, which was aimed at attracting new customers.
In December 2012, Achmea won an arbitration case
against the Slovakian government, in which we claimed
the country breached investment treaties when it forbade
health insurers from making a profit. An international
arbitration tribunal awarded us approximately €25 million
in compensation for damages incurred by Union because
of the profit ban. Given the Slovak government’s public
announcement that it disagrees with the decision of the
tribunal, we don’t yet consider the receivable amount to
be sufficiently certain to recognise it as an asset.
Ireland (life company)
Friends First Life in Ireland is active in the life market.
The life market in Ireland has seen new sales volumes
fall dramatically since 2007 and we don’t expect any
improvements in the short term. Our focus in 2012 was on
retaining the in-force portfolio, preserving customers and
managing the lapse risks. Although this approach may
reduce sales, it will result in better persistency rates and
provide greater customer value for money. We continued
to distribute our products through the broker channel,
although we aim to expand our broker base and focus on
product-based selling, which will remove our exposure to
‘high lapse’ brokers and non-standard deals. This will also
enable us to develop and promote clear long-term product
propositions, creating more transparency for customers
and brokers. In 2012, gross written premiums decreased
11% to €172 million compared with €194 million in 2011.
48
The contribution of investment contracts decreased by
16% to €258 million compared to €307 million in 2011.
Bulgaria
Interamerican Bulgaria (IAB) is active in the non-life
and life markets. In 2012, IAB’s market share in the nonlife market was 2%, slightly down on 2011 due to the
removal of unprofitable areas of the motor business and
shrinkage across the insurance market. Our Life business
increased its share of the market to 0.7%, from 0.6% in
2011. In Non-life, the long-term goal is to move towards
profitability through more cost-effective distribution.
Our sales efforts will concentrate on agent restructuring
alongside the development of ‘group-direct’ business,
while continuing the shift to higher sales in profitable
lines of business. Gross written premiums decreased to
€14 million compared with €18 million in 2011, driven
mainly by motor, in line with our plan to decrease
unprofitable sales. Going forward, we will target growth
in quantity and quality of our life agents’ network, banks
and risk products.
Romania
Eureko Romania operates in the health insurance market.
At the beginning of 2013, we sold our Romanian life
insurance and pension operations. We booked €17 million
in additional costs in 2012, resulting from asset write-offs,
redundancies and goodwill impairment. The other parts of
the company will go into run off.
Australia
We aim to offer non-life insurance to Rabobank’s
customers in the agricultural sector (for example, for
livestock and crops) as an integrated part of Rabobank’s
retail proposition in Australia, based on the model we
operate in the Netherlands. We are in the process of
applying for a license to start a greenfield operation
and hope to be active in the market, in partnership with
Rabobank, during the course of 2013.
Discontinued activities
Ireland (finance company)
Our Irish finance company went into run-off in 2009,
following the implosion of the Irish economy. The
company is successfully bringing down its outstanding
loan portfolio and lowered the exposure of its finance
portfolio significantly in 2012. Despite this, additional
loan loss provisions of €39 million (2011: €18 million)
were required.
49
Banking Netherlands
Achmea offers three distinct banking services in the Dutch
consumer market, which complement our full range of
insurance products. Achmea Bank provides mortgages through
Achmea Hypotheekbank and retail savings options through
Achmea Retail Bank. Staalbankiers delivers private banking
services to individuals and institutions.
Profit before tax
Core tier 1 ratio achmea bank
€8 million
14.2%
Credit portfolio
Net interest margin
€13.8 billion
€65 million
credit portfolio
• further streamline organisation at Achmea
Hypotheekbank and Achmea Retailbank
• increase savings/wholesale funding ratio to 40%
at Achmea Bank to finance mortgage activities by
2014
• achieve assets under management of at least
€1.9 billion at Staalbankiers in 2013
Achmea
Hypotheekbank 87%
Staalbankiers 12%
Achmea Retail Bank 1%
50
Segment | Banking Netherlands
results
(€ MILLION)
2012
2011
Net interest margin
65
81
-20%
Net commission income
13
11
18%
Realised and unrealised gains
and losses
56
-24
n.m.
Total income
134
68
97%
Operating expenses
109
94
16%
1
1
0%
16
3
n.m.
126
98
29%
8
-30
n.m.
Other expenses
Additions to loan loss provisions
Total expenses
Profit before tax
charges and incidental expenses. Despite the depressed
housing market, the bank stabilised the mortgage portfolio
at €11.9 billion (2011: €12.2 billion). Additions to the loan
loss provision were slightly higher than in 2011, reflecting a
conservative approach to valuing the impact of the current
state of the Dutch mortgage and housing market, and a
decrease in collateral value because of lower house prices.
In basis points of the total portfolio, the additions to the loan
loss provision amounted to 10 basis points, reflecting the
high quality of our mortgage portfolio. Part of our strategy
is to reduce reliance on the capital markets and increase the
relative percentage in savings. Savings at Achmea Retail Bank
increased to €3.7 billion (2011: €3.0 billion), a rise of almost
€0.7 billion compared to year-end 2011. The core Tier 1 ratio
improved to 14.2% from 12.4% at year-end 2011.
Results
In 2012, our banking activities realised a profit before
tax of €8 million (2011: -€30 million). The year-on-year
increase was due to the higher fair value results of €56 million
(2011: -€24 million), which increased mainly because of a
significant improvement in the EUR/USD basis spread.
Operating expenses increased to €109 million against
€94 million in 2011, due to higher front office costs and
project expenses. Additions to the loan loss provisions
increased by €5 million, if corrected for the one-off €8
million release in 2011. Consequently, the efficiency ratio
improved from 138% to 81%.
Achmea Bank
Achmea Bank is a strategically important and complementary
activity to our core insurance business. Customers are our
most important consideration and our products and services
are structured to reflect their needs and demands.
In 2012, profit before tax at Achmea Bank, which consists
of Achmea Hypotheekbank and Achmea Retail Bank, was
€29 million compared to a loss of €1 million in 2011. This
increase was largely attributable to an accounting fair value
profit. The fair value results were higher mainly as a result
of the improved EUR/USD basis spread. The net interest
margin came under pressure due to the negative cost of
carry of additional liquidity balances, one-off restructuring
Achmea Hypotheekbank
Achmea Hypotheekbank provides residential mortgages to
customers in the Netherlands through Achmea’s direct writers
and the broker channel. Our direct writers are Centraal
Beheer Achmea and FBTO. We service the broker channel
through Woonfonds, a trusted brand that we revitalised
in 2012. Our goal is not to further increase the size of our
mortgage book but rather focus on customer retention.
The mortgage market continued to stagnate last year, with
potential buyers’ concerns about employment, mortgage
interest relief and the economic decline in general impacting
sales. The trend in the market is towards more transparency
and stronger client services and interaction. As a niche
player, we concentrate on offering good quality products at
a fair price and can rely on the trust consumers have in our
direct writers. In 2012 we re-launched the annuity mortgage
through Woonfonds, in line with GHF (Code of conduct
mortgage financing) rules and in anticipation of the new tax
requirements. We also introduced a free service for Centraal
Beheer Achmea customers who were struggling to meet
their mortgage repayments, called the Budget Coach. This
service provides customers with advice on how to solve their
financial issues, thereby lowering the risk of default and
helping customers to obtain a more stable financial position.
The current mortgage portfolio at Achmea Hypotheekbank
stands at €11.9 billion (year-end 2011: €12.2 billion) and we
aim to maintain it at roughly this level going forward.
51
The funding market remains volatile, with high liquidity
spreads. Our strategy is to reduce our reliance on capital
market funding, reflected through an increase in retail
funding as savings deposits at Achmea Retail Bank grew to
€ 3.7 billion (2011: € 3.0 billion). In 2012, we continued our
DMPL programme, with a €784 million securitisation issue
in July, while in October we completed our first issuance
of €500 million in senior unsecured notes. We are on track
to achieve our goal of securing approximately 40% of our
funding by 2014 through consumer savings. During the year
we redeemed $900 million of our state-guaranteed loan, which
we took out in the wake of the 2008 financial crisis. So far we
have redeemed $1.8 billion of this loan ahead of schedule.
Achmea Retail Bank
Achmea Retail Bank develops and offers consumer
savings products through two direct channels – Centraal
Beheer Achmea and FBTO. The Dutch savings market
continued to grow during 2012, driven by consumer
uncertainty linked to the economic crisis. In response to
the market’s demand for secure, longer term and more
transparent savings solutions, we launched a fixed-period
savings account through Centraal Beheer Achmea, called
RenteVast Rekening. We expect the account to be a stable
source of funding due to the longer deposit period.
Although we continued to offer competitive interest rates
on our saving products in 2012, we believe that the rates
offered in the current economic climate are unsustainable.
In 2013 we will focus on attracting money to our longerterm offerings, such as banking annuities and term-deposits.
We will continue to develop product offerings that help
consumers build up savings, based on their own economic
situation and needs. We will also take advantage of
changes in the distribution landscape that offer new
opportunities in advisory services.
Outlook
Customers remain our priority, and we will work with them
to develop the right products and solutions. We aim to
maintain our margin and profitability through operational
cost control, follow a diversified funding strategy and
keep our mortgage book at a stable level. With consumers
continuing to look for the most attractive savings options,
our goal is to match mortgage lending with savings products
in what remains a volatile market environment.
SWOT ANALYSIS ACHMEA BANK
Strengths
Weaknesses
• Strong capitalisation and strong liquidity
• Very strong asset base and diversified geographic portfolio
spread across the Netherlands
• Achmea brands provide a strong base for strategic product
development and growth in bank savings products
• Untapped opportunities for cross sell between bank and
insurance products
• Relatively high reliance on external wholesale funding but the
funding mix is improving
• Mono-product character of the bank and limited cross
subsidisation across the various bank products
Opportunities
Threats
• Demand for (fiscally) facilitated bank savings products
benefits retail banks
• Growth in internet-based retail banking savings/investment
products
• Changes in the distribution landscape offer new opportunities
in advisory services
• Customers like transparent and simple mortgage products
• Slow economic recovery and euro uncertainties, resulting in
lower volumes in the mortgage market
• Rising cost of funding
• House prices and volume of new mortgages remain low and
will continue to decline in the coming period
• Large share of Dutch savings locked into pension plans,
resulting in a potential funding gap for banks
• Due to Basel III requirements, competition to access retail
savings is intense, resulting in higher interest rates
52
52
Staalbankiers
Staalbankiers is a private bank that provides private
banking customers and institutional investors with a range
of products and services, including savings solutions,
investment funds, discretionary management and advice.
The bank’s commercial structure is based on client intimacy,
high-quality advice and offering the right product mix.
The market situation deteriorated further in 2012,
with interest rates paid on savings accounts remaining
relatively high given the interest income on the loan
portfolio. Ongoing uncertainty in the broader economy
has created a challenging market environment for private
banking, so in 2012 we embarked on a programme to
make the organisation more efficient. By bringing in a
new management team, centralising a number of work
streams and streamlining the workforce, we concentrated
on reducing costs and making the investment strategy
available to all customers in a cost-efficient manner. These
changes will reduce annual costs by around €10 million.
At the beginning of 2013 an agreement was reached with
GE Artesia Bank whereby their private banking customers
will be introduced to us. We look forward to welcoming
many new GE Artesia Bank customers to Staalbankiers.
In 2012, we saw a net inflow of Assets under Management
(AuM) of €200 million to €1.9 billion, driven by new
customers and the inflow of additional funds from
existing customers. Operational expenses were €45 million
(2011: €46 million) due to the restructuring programme,
including investments in IT infrastructure. Our core Tier
1 ratio was 14,0% (2011: 13,1%), with a sound liquidity
position and a modest risk profile.
Outlook
In the medium to long term our focus is on AuM growth.
By focusing on our three pillars – client intimacy, good
advice and products – we will be able to build on the
high degree of trust our customers already have in
Staalbankiers. Although the private banking market will
remain challenging as long as there are no clear signs of
economic recovery, our focus on efficiency, top-down
investing and making our investment strategy available
to all customers, places us in a strong position to seize
opportunities as and when they arise.
SWOT ANALYSIS STAALBANKIERS
Strengths
Weaknesses
•Client proposal (client intimacy, good advice and good
products) and a high degree of client satisfaction
•Distinctive and well-performing asset under management
policy
•Strategy is based on trust of our clients
•We are a solid private bank, with sound capitalisation and
ratios
•Highly dedicated personnel, focused on client satisfaction
•Transparent organisation
•Apart from private banking customers, strong position in
market for non-profits/institutions
•A private bank has no direct access to capital and wholesale
markets
•IT & Operations
•Lack of economies of scale
Opportunities
Threats
•Distinctive and well-performing asset under management
policy
•Growing demand for independent (investment) advice
•Client dissatisfaction with private-banking competitors
•Provide financial security to customers in turbulent times
•Continuously changing regulatory environment
•Slow economic recovery and euro uncertainties
•Low interest rates
53
Other
This segment covers our Pension Services (which was included under the Life chapter
in 2011), Shared Service Centers, Strategic Shareholdings and Holding activities.
Our pension services company, Syntrus Achmea, provides customers with a range
of fiduciary management, asset management and pension administration services,
through Syntrus Achmea Asset Management, the number-three asset manager in the
Dutch market and Syntrus Achmea Real Estate, the largest property investor in the
Netherlands.
results
(€ MILLION)
2012
2011
-8
-29
72%
Other income
283
271
4%
Total income
275
242
14%
Operating expenses
679
746
-9%
79
81
-2%
Investment income
Interest and similar expenses
Other expenses
-96
11
n.m.
Total expenses
662
838
-21%
-387
-596
35%
Profit before tax
Results
In 2012, profit before tax was -€387 million (2011: -€596
million), an improvement of €209 million on 2011. Income
increased by 14% to €275 million (2011: €242 million), where
2011 was negatively impacted by impairments on our position
in MilleniumBCP and F&C Asset Management. In addition,
operating expenses decreased by 9% to €679 million (2011:
€746 million). This decrease was primarily due to the decision
to charge investments in certain projects directly to our
business units. Furthermore, a decrease in project expenses
has contributed to lower operating expenses. In 2012, oneoff expenses related to holding services rendered in previous
years were charged to our Health Netherlands business.
In 2012, we sold our entire interest of 9.6% in F&C Asset
Management. This sale fits with our policy of focusing on
core competences and activities, and contributes to our
de-risking policy, in particular of concentration risk. The
transaction and settlement led to a small profit of €1 million.
In 2012 we began to consolidate the results of Independer.
nl in our figures. During the year we saw the first effects of
the resulting insight in consumer preferences and behaviour.
The knowledge will be used to make our insurance
products even more client focused.
Pension Services
Market developments
Pensions funds and administrators are dealing with a
fast-changing environment, with falling coverage ratio’s
and the introduction of additional regulations creating
ongoing challenges. Pension providers are focusing on
greater transparency for consumers, more stringent risk
requirements and demands for more cost efficiency. In
the Netherlands, a fundamental shift is the move from
defined benefit (DB) to defined contribution (DC) pension
plans, as traditional DB plans become unsustainable for
insurers and unaffordable for employers, due to economic
developments such as low interest rates and longevity
risks. At the same time, increased risk aversion and the
need for greater transparency is causing many pension
funds to either outsource their fund’s administration to
third parties – such as Syntrus Achmea – or search for
partnerships with other funds. Both situations offer strong
opportunities for Achmea.
How are we responding
We continued to make good progress with our cost
reduction and efficiency programme, which we began
in 2010. While investing in more robust systems and
54
Segment | Other
responding to regulatory changes, we achieved savings
through higher levels of automation, straight through
processing within our administrative units and reducing
our staff requirements. During the course of the year we
took on a larger role in managing the assets of Achmea,
when compared to 2011. We agreed on two mandates,
the first of which involves Syntrus Achmea selecting and
monitoring the asset managers for almost €1 billion of
alternative investments. In the second mandate, Syntrus
Achmea will take over the part of Achmea’s derivatives
portfolio used to hedge its balance sheet risk. The
underlying value of this portfolio is €20 billion.
Our fiduciary management services are strongly
positioned in the market. In 2012 we strengthened our
operations through the introduction of a more robust
risk management system, invested in our IT operations
and hired additional specialist staff. By focusing on risk
management and transparency, we enable our customers
to study our processes and understand what goes on
within the organisation.
Results
In 2012, Syntrus Achmea strengthened its position in the
pension funds market. Although fee and commission income
decreased by 9% to €249 million (2011: €273 million), due
to earlier contract terminations, client retention in 2012
was close to 100% and customer satisfaction improved
considerably. Additionally, fixed operating expenses were
reduced significantly, despite the fact that substantial
investments were made to support and execute future
pension solutions. Assets under Management (AuM)
increased by 12% to €63.7 billion (2011: €57.1 billion).
This was due to both the inflow of funds and overall market
developments. The real-estate component of Syntrus
Achmea’s AuM decreased by 4% to €13.8 billion (2011:
€14.4 billion), caused primarily by portfolio adjustments by
customers and impairments on property.
Although the real estate sector in the Netherlands doesn’t
currently fully represent the opportunities available in
the market, we see a great deal of potential in the private
housing market. In 2012 we invested strongly in this
market, constructing around 2,000 houses, and we will
continue to invest in this market in the coming years.
Syntrus Achmea takes it role as one of the market leaders
seriously, and is active in the redevelopment of real estate,
such as healthcare property.
55
Investments
Achmea is a major institutional investor, with a total investment portfolio of €68.1
billion. As an insurer, it is our task to invest the premiums paid by customers in the
most effective way possible. To achieve this, we have to continuously find a balance
between risk and return. Our investment policy reflects this awareness. We strive
for optimal and stable investment returns, without losing sight of the risks involved
and within a matching framework.
At year-end 2012, total investments at Achmea amounted
to €68.1 billion. Achmea bears the investment risk of €43.2
billion, or 63%, of the total portfolio (on some products
we guarantee a specific return), while customers bear the
risk on a separate g part of the investment portfolio. The
related investments backing linked liabilities – the risk
held by policyholders – amounts to €25.0 billion, or 37%,
of our total investments. In addition, we have a negligible
amount invested in associates (€92 million). Management
of the investment portfolio is largely outsourced to
asset managers F&C Asset Management, Robeco and
Syntrus Achmea, and a range of managers for alternative
investments based on a clearly defined investment
philosophy and policy. This chapter relates primarily to
those investments on which Achmea bears the risk.
and social unrest. The crisis was also reflected in a large
number of downgrades by rating agencies. Although the
downgrade of France from the AAA core group to AA
level was expected, it was still significant. The adverse
developments in Spain, the fourth largest economy in the
European Union (EU), led to new concerns in Europe.
The collapse in the country’s property prices seems to
have taken Spain’s public finances into a negative spiral,
with bailouts of insolvent banks and falling tax income
acting as key drivers.
Market developments
The IMF and the EU continued to discuss and work on
political measures and bailout programmes in an effort to
fight the European sovereign debt crisis. Despite a number
of controversies between countries, it seems that Europe is
slowly building a more solid eurozone foundation. Central
European bank supervision is seen as key to creating a
stable foundation.
Euro crisis
Greece
The European banking and sovereign debt crisis continued
in 2012. In particular, peripheral eurozone countries
continued to struggle with high public and private debt,
slowing economic growth, resistance towards austerity
Financial and political instability fed discussions about
Greece leaving the monetary union, a so-called Grexit.
Efforts to reduce the country’s debt burden resulted in
two debt-restructuring operations in 2012.
sovereign exposure GIIPS countries
31-12-2012
in % of fixed
income portfolio
Greece
11
0.0%
27
Ireland
511
1.5%
481
Italy
50
0.2%
49
Portugal
48
0.1%
Spain
48
Total
668
(MILLION)
in % of fixed
income portfolio
Nominal value
31
0.1%
145
411
1.3%
480
57
0.2%
60
48
33
0.1%
47
0.1%
48
48
0.1%
48
2.0%
653
580
1.8%
780
Nominal value
31-12-2011
56
Investments
In February 2012 a debt-restructuring agreement with the
private holders of Greek government bonds was struck to
‘voluntarily’ accept a bond swap – partly in short-term
European Financial Stability Facility (EFSF) notes and
partly in new Greek bonds – and in a ‘GDP-linked security’
involving a 53.5% nominal and effective (approximately)
75% debt write-off. Achmea participated with all eligible
bonds with a nominal value of €145 million, which were
entirely held by our Greek operation Interamerican Greece.
In December 2012, a buy back operation was organised
in which, in a so called reverse Dutch auction, holders
of new Greek bonds were invited to exchange their
bonds for short term EFSF notes. Our Greek operation
Interamerican Greece participated in this process with
40% of its eligible Greek bonds. Effectively this means
that Achmea’s holding of Greek government bonds
decreased to €27 million at year-end 2012.
return on the investment portfolio based on a welldefined risk budget and matching policy. In setting the
market risk budget, we take into account risk appetite
principles, including rating, liquidity and earnings risk.
The investment team works closely with both Capital
& Value Management and Risk & Compliance. The
focus of our policy is mainly long term and we employ
a high level of prudence, in line with our cooperative
background. This has resulted in a relatively conservative
investment portfolio, which is more crisis-resistant.
Additionally, the financial crisis has highlighted the
importance of managing counterparty risk. Hence, we
have a strict counterparty risk policy that is a key part
of our risk policy and risk monitoring. We maintain a
stringent approach to risk whereby we distinguish between
government and other parties, also taking rating and
credit default swap (CDS) spreads into account.
Our investment portfolios
Monetary stimulus and search for yield
Central banks continue to support financial markets with
their low interest rate policy and asset financing programs
– such as long-term refinancing operations (LTRO) and
quantitative easing (QE). The record-low risk-free interest
rates force investors to move gradually out along the risk
curve to achieve reasonable returns. This search for yield
resulted in credits and stocks performing strongly over
2012, relative to assumed risk-free government bonds. This
strong performance is also related to the improvement in
the financial health of the underlying issuers, as seen in
the rising earnings and strengthening balance sheets of
corporations. Another effect of the increasingly aggressive
central bank support is the reduction in the systemic risks
– from euro area dissolution, to a China hard landing and
a financial system collapse – that have dominated markets
over the past few years.
Our investment policy
Our investment policy
Achmea has a clear investment policy and, following the
financial crisis, this policy has been sharpened further.
To ensure continuity to customers, we aim to maximise
Achmea differentiates between two types of investment
portfolios – the so-called replicating portfolio and the
return portfolio. A key component in our investment
policy is, when possible, to match or hedge (with overlay
management) market risk (mostly interest rate risk)
related to liabilities. We do this with our replicating
(matching) portfolio. This portfolio consists of bonds,
loans, derivatives (for hedging purposes) and cash. In
principle, the return portfolio does not match liabilities.
Investments in this portfolio also include equity, property,
private equity, commodities, allocated through periodic
asset allocation. Targeted return on investment for both
the return and replicating portfolios is set through clear
mandates, including outperformance of targets for the
various asset managers.
Responsible investment
Achmea supports the Principles for Responsible
Investment (PRI) of the United Nations. The PRI
promotes the integration of environmental, social and
governance criteria (ESG) in the investment process and
the exercise of responsible ownership through the equity
portfolio. Achmea tests its responsible investment policy
against the Global Compact of the United Nations and
uses its principles to guide the conduct of engagement.
57
Investments
In 2012, our Health business made no investments in
the tobacco industry, while we decided to implement
a company-wide ban on all investments in the nuclear
weapons industry.
In short, our Responsible Investment Policy consists of
five important steps.
1.Working with engagement manager Robeco, we pursue
so-called (enhanced) engagement on investments as part
of our Corporate Social Responsibility. Subsequently,
we enter into dialogue with the companies we invest in
and (in the case of enhanced engagement) exclude those
where the dialogue is not successful after a three-year
period. In 2012, we reviewed two corporate investees.
All had met our criteria.
2.In addition to enhanced engagement, we also exercise
our shareholder voting rights.
3.Almost all of our external asset managers have
implemented environmental, sustainability and
governance (ESG) criteria in their mainstream
investment process.
4.Controversial countries and manufacturers of
controversial products (cluster bombs, landmines,
nuclear weapons and tobacco) are excluded from our
investment universe, as are serious violators of the ten
United Nations Global Compact Principles.
5.Impact investments are included in our responsible
investment policy. We invest in funds aimed at clean
technology, sustainable energy, micro-credit providers
and health innovation.
Performance and composition in 2012
The relative position of fixed-income securities, including
loans and mortgages, decreased to 78% (2011: 76%) of
our own investment portfolio. Our deposits with credit
institutions and reinsurers decreased by €0.7 billion to
€2.8 billion, which is around 7% (2011: 8%) of our own
investment portfolio. Only 5% of our investment portfolio
is invested in equities and alternative investments, reflecting
our prudent investment policy. Total impairments on our
own-risk investment portfolio amounted to €37 million in
2012, compared to €243 million in 2011.
Financial markets were positive in 2012, despite negative
economic developments and the ongoing sovereign debt
crisis in Southern Europe. Equity markets rose more than
15% in Europe, America and Asia, countering a bad
equity year in 2011. Bond markets also rose in 2012, in
conjunction with lower government yields in Northern
Europe and lower credit spreads and swap spreads.
Achmea is dominated by its Dutch activities (91% of our
risk-bearing portfolio). Total (asset-only) performance of
these Dutch activities was €2.2 billion, or 8%, in 2012.
TOTAL INVESTMENT PORTFOLIO, YEAR-END 2012
(€43.2 BILLION)
Fixed income
Deposits Derivatives
Equities Alternatives Real estate Other
78%
7%
6%
3%
2%
4%
0%
Total investment portfolio
Our own-risk investment portfolio increased by 2%
to €43.2 billion (2011: €42.4 billion). This is excluding
investments in strategic shareholdings but including
investment property. The increase is due mainly to our
fixed-income positions (78% of the total portfolio) as a
result of lower interest rates and narrowing spreads. Our
derivative position, which makes up 6% of our portfolio
decreased by €247 million to €2.7 billion, also as a result
of lower interest rates. This exposure is fully collateralised,
so the risk attached to this position is negligible.
Fixed income portfolio
In 2012, our fixed-income portfolio increased by 5% to
€33.9 billion (year-end 2011: €32.2 billion). The majority
of the investments (64% or €21.8 billion at year-end
2012 against 72% or €23.1 billion at year-end 2011) were
invested in government bonds, government related bonds
or government guaranteed bonds. These government
bonds are predominantly Dutch, German and French.
In 2012 we shifted around 10% or €2.0 billion of our
Dutch, German and French government bonds to low-risk
58
Investments
corporate bonds. These low-risk corporate bonds are issued
by investment-grade companies with low levels of leverage
and low probability of default. By selecting bonds with
relatively short maturities and relatively high seniorities, we
aim to limit mark-to-market volatility (volatility resulting
from fair value accounting) substantially. The position
in loans and mortgages (9%) consists mainly of savings
accounts related to mortgages and pension products with
Rabobank. A modest part of our fixed-income portfolio
consists of corporate bonds without guarantees (27% or €9
billion against 18% or €5.7 billion at year-end 2011).
Fixed income portfolio by rating
31-12-2012
31-12-2011
AAA
62%
73%
AA
16%
11%
A
11%
7%
BBB
9%
7%
< BBB
1%
1%
Not rated
2%
1%
100%
100%
Total
Of our corporate bonds, approximately 25% is invested in
covered bonds and asset backed securities and only a very
small amount is invested in high-yield bonds. Our fixedincome portfolio is fairly conservative. Of the fixed income
portfolio, 61% has a AAA rating. This is a decrease
compared to 2011 (73%), and is almost entirely due to the
ratings downgrade of France. Only 1% of our portfolio
is non-investment grade, while 2% is not rated. For our
Dutch activities, (asset-only) performance on fixed income,
including derivatives, was 7.8%, or about € 2.2 billion.
Interest rates fell in 2012 due to both lower government
bond yields and lower credit and swap spreads. The match
between matching portfolio and liabilities was reasonably
effective, moving within a very narrow policy range.
At the end of 2012, our sovereign exposure to GIIPS countries
(Greece, Ireland, Italy, Portugal and Spain) amounted to €668
million (year-end 2011: €580 million) or only 2.0% (year-end
2011: 1.8%) of our fixed income portfolio.
Move to conservative credits
As part of our pursuit of yield, in 2012 we
replaced around €2 billion of our Dutch, German
and French government bonds with credits that
have a lower risk profile. These low-risk credits
are issued by investment-grade companies with
low levels of leverage and probability of default.
By selecting bonds with relatively short maturities
and relatively high seniorities, we aim to limit
mark-to-market volatility (volatility resulting from
fair value accounting) substantially.
For 2013, we expect to further expand our
investment grade credit exposure at the expense
of our government bond exposure to diversify
exposure and to enhance our risk/return profile.
This is because we believe interest rates in most
developed markets will stay low because of
structural demand for ‘safe’ assets, low economic
growth, fiscal austerity and central bank support.
Despite the tightening credit spreads we saw last
year; credits added relatively good returns to our
investment results against reasonable risks.
RELATIVE POSITION Of FIXED-INCOME INVESTMENTS BY
NATURE, YEAR-END 2012 (€33.6 BILLION)
Goverment bonds 53%
Goverment related/
guaranteed 11%
Loans and morgages 9%
Asset backed
securities 2%
Covered bonds 6%
Corporate bonds
19%
Convertible bonds
1%
59
Investments
Top 5 sovereign exposure
(€ MILLION)
31-12-2012
31-12-2011
RATING
10,592
10,512
AAA
Germany
4,398
4,936
AAA
France
1,792
2,561
AA
Finland
532
570
AAA
Ireland
511
411
BBB
Netherlands
Our exposure to Greece (€11 million) and Ireland (€511
million) relates exclusively to our business activities there.
The increase in our position was the result of positive
market developments.
Equities and alternative investments portfolio
At year-end, our equity portfolio was higher at €948
million (year-end 2011: €763 million) or 2.2% of our own
investment portfolio. The increase is attributable to higher
equity markets and investments in conservative equity and
emerging markets. Of our equity portfolio, 92% is invested
in developed markets. This includes an 8% position in
participations (>5%), which benefit favourably from Dutch
(fiscal) participation exemption. At year-end 2012, 8% was
invested in emerging markets.
In addition to the equity portfolio, we also manage a
portfolio of alternative products such as private equity,
hedge funds, infrastructure and commodities. This portfolio
was higher at €1.0 billion (year-end 2011: €0.9 billion) or
2.0% of the total investment portfolio. The equities and
alternative investments portfolio is, in addition to foreign
exchange risk, not hedged.
Real estate portfolio
At year-end, our real estate portfolio amounted to
€1.6 billion (year-end 2011: €1.7 billion) or 4% of our
investment portfolio. The portfolio consists of €0.4 billion
of indirect real estate and €1.2 billion of direct real estate.
The direct real estate portfolio consists of 36% residential,
30% offices, 28% retail and 6% other real estate.
The real estate market in the Netherlands is sluggish, and
this is especially the case for the office market. We have a
prudent approach to valuing our real estate portfolio. On a
quarterly basis we perform a full valuation of 25% of our
portfolio and a review of the remaining 75%. This means
that over the course of a year we value our entire real estate
portfolio. This is a market-leading approach. In 2012,
we took revaluations of €76 million (2011: €77 million)
mainly on the office market. We have a prudent approach
to valuing our real estate portfolio, which offers us a very
clear indication of the current value of our portfolio in
these adverse market conditions.
For our Dutch activities, (asset-only) performance on
equities, including foreign-exchange hedges, was +17%
as a result of rising stock markets. The (asset-only)
performance of alternative investments was +5%, mainly
thanks to commodities (+5%) and infrastructure (+6%).
(Asset-only) performance of private equity and hedge
funds was almost zero in 2012.
60
Capital and Liquidity Management
Continuing and reinforced strong capital and liquidity management remain
prerequisites to ensure continuity for our customers, our stakeholders and the
organisation. At the end of 2012, we maintained our insurance entities’ solvency
position (IGD) at 209% (2011: 208%). We highly value our solid capital position,
which is one of the cornerstones of our organisation.
CAPITAL MANAGEMENT
Capital adequacy policy and solvency targets
Since the beginning of 2012, a new capital adequacy
policy has been applied for capital management at
Achmea. This is to ensure adequate capital levels, even
under severe stress scenarios, and to ensure the consistent
operation of capital management policy and practice, in
accordance with our risk appetite. A number of metrics
have been defined for the legal entities and Achmea Group.
Requirements are still based on the current Solvency I
regime, although these have been recalibrated, taking
into account the outcomes of Solvency II and S&P
calculations. We have defined measures that will be taken
if capital levels go below pre-defined levels.
Risk appetite statements on capital
• Available capital is at least equal to the economic
capital calculated at a 99.95% confidence level at Group
level.
• Minimum capital levels should at least be sufficient for
an S&P A rating. Achmea monitors capital based on the
S&P requirements in accordance with a AA rating of
capital.
• Minimum capital levels should be sufficient to meet
capital requirements of the regulator.
• Minimum capital levels should at least be 100% of
the solvency capital requirement (SCR) according to
Solvency II plus a buffer per legal entity.
Capital and solvency position as at 31 December 2012
Throughout 2012, Achmea’s capital position remained
well above S&P requirements in accordance with a AA
rating of capital. Total equity increased to €10,374 million
(2011: €9,775 million). This was primarily due to the net
result of €453 million and the increase of the revaluation
reserve of €205 million. Dividend payments on preference
shares and coupon payments on hybrid capital amounted
to €106 million. Hybrid capital (included in total equity)
remained stable at €1,325 million.
At year-end 2012, Group solvency (FCD) was higher at
207% (2011: 204%). Available capital increased by €609
million, while required capital increased by €251 million.
The surplus in the liability adequacy test is part of available
capital. The increase in available capital is partly explained
by the change in the assumptions regarding the risk free
discount rate and changes in parameters in performing
the liability adequacy test. To increase the comparability
of the regulatory solvency in the market, we decided to
change the discount rate at which liabilities of our Dutch
business are discounted for purposes of the regulatory
liability adequacy test. We switched from the Euro swap
curve to the ECB AAA curve in the first half of 2012. On
2 July 2012, the Dutch Central Bank (DNB) announced
that, effective 30 June 2012, insurers should adjust the
method for extrapolating the interest rate curve using
an Ultimate Forward Rate (UFR) which is set at 4.2%,
anticipating requirements under Solvency II. Available
capital also increased due to the net profit over 2012, while
it was negatively impacted by goodwill related to business
combinations. Required capital increased primarily
because of the DNB’s increased solvency requirements
from 9% to 11% for the Dutch basic health insurance.
Achmea’s insurance entities’ solvency position (IGD)
increased to 209% at year-end 2012 (year-end 2011: 208%).
Available capital increased by €650 million to €8,323
million, while required capital increased by €289 million
to €3,985 million. The core Tier 1 ratios of Achmea Bank
Holding and Staalbankiers improved to 14.2% (year-end
2011: 12.4%) and 14.0% (2011: 13.1%) respectively.
61
INTERNAL SOLVENCY I TARGETS
TARGET LEVEL
ACTUAL
31-12-2012
n/a
207%
190%
209%
Non-life
185%
254%
Basic Health insurance
135%
182%
Supplementary Health insurance
160%
489%
Life insurance
175%
233%
Achmea Reinsurance Company
200%
365%
Friends First
165%
161%
Other operating companies
130%
205%
ENTITY
GROUP LEVEL
Achmea Group (FCD)
Achmea insurance entities (IGD)
For more information on developments relating to the
implementation of Solvency II, please refer to the Risk
Management chapter in this annual report.
FUNDING
SUB LEVEL
Solvency II capital position as at 31 December 2011
In 2012, Achmea performed the ‘parallel run’ on Solvency
II, an exercise mandated by the DNB that was obligatory for
all Dutch insurers. This involved the calculation of capital
requirements using the standard formula and figures as at
31 December 2011. We also calculated the capital
requirements for our non-Dutch legal entities and Achmea
Group. The results show that Achmea is very well capitalised,
including under Solvency II rules. Solvency levels are 221%
as calculated using the consolidation method.
Funding strategy
Our strategy on funding is based on safeguarding access
to international capital and credit markets at low cost,
underpinned by credit ratings in line with our peers.
This is especially important at times when developments
on financial markets make access more difficult. Actual
funding activities are centralised and are coordinated at
Holding level, even though, in principle, each operating
subsidiary is responsible for financing its own business.
Achmea can participate in financing the operations
of certain subsidiaries, usually through subordinated
debt funding and other forms of capital and loans. As
a holding company, Achmea relies for its funding needs
principally on distributions of internal dividends and
short-term excess liquidity from operating subsidiaries
and associated companies. Such distributions and internal
funding are usually subject to regulatory restrictions
and, in the case of associated companies, by the dividend
policies as determined by those companies.
SOLVENCY II POSITION as at 31 december 2011,
consolidated approach, standard formula
(€ billion)
OWN FUNDS
SII 10.6
AVAILABLE
CAPITAL 10.6
Tier 1 10.6
Free surplus 3.4
≤
Scr level 4.8
≤
Ladder
of
intervention
Mcr level 2.4
Financial flexibility
In combination with sound access to capital markets,
the Group’s financial flexibility is considered strong. The
table on the next page gives a comprehensive, high-level
overview of the Group’s sources of capital and capital
allocation as a complement to the cash flow statement in
the financial statements.
The Group’s capital is made up of common equity,
preference shares (€311 million), perpetual hybrid
instruments (€1,325 million) and senior debt (€750 million).
External borrowings not allocated to the banking and
finance operations remained stable at €821 million at
year-end 2012 (year-end 2011: €822 million). At year-end
2012, Achmea had three outstanding hybrid instruments
totalling €1,325 million, two for the retail market and
62
CAPITAL ALLOCATION AND STRUCTURE
ALLOCATION
Netherlands
FUNDING
Shareholders’
9.6
Equity
(€ BILLION)
8.7
• Non-life
1.9 Preference shares
0.3
• Health
2.2 Hybrid capital
1.3
0.8
• Pension & Life
3.9 Long-term debt
• Banking
0.7
• Achmea
reinsurance
0.4
• Other
0.4
International
1.2
Holding investments
0.1
Net internal cash
0.2
Total investments
11.1 Total funding
79%
1.6
ENTITY
TYPE
S&P
Achmea B.V.
CCR
A-
CCR/IFSR
A+
Achmea Schadeverzekeringen N.V.
CCR/IFSR
A+
Achmea
Zorgverzekeringen N.V.
CCR/IFSR
A+
Achmea
Hypotheekbank N.V.
CCR long term
CCR short term
Secured debt
programme
A
A-1
A
Achmea
Hypotheekbank N.V.
Covered bond
programme
FITCH MOODY’S
3%
12%
7%
INSURANCE ENTITIES
Achmea Pensioen &
Levensverzekeringen N.V.
BANK ENTITIES
11.1
100%
one for the institutional market. As a consequence, debt
leverage (measured as non-banking debt and perpetuals as
a percentage of the sum of total equity, non-banking debt,
perpetuals and minus goodwill) decreased slightly to 21.4%
(year-end 2011: 22.5%). The double leverage ratio amounted
to 104.4% at year-end 2012 (year-end 2011: 107.3%).
Achmea has not made use of the first optional redemption
date of its 6.0% hybrid instruments as at 1 November 2012.
Dividend policy
In the context of the capital increase, executed in April
2009, it was agreed with shareholders that dividend
payments will be 45% of net profit attributable to
ordinary shareholders. All proposed dividends are
subject to approval by the Annual General Meeting of
Shareholders.
Ratings
S&P ratings of Achmea Group and Achmea insurance
entities remained unchanged in 2012. Current Group
rating is A- with a stable outlook, while the current rating
on our core insurance entities is A+ with a stable outlook.
The S&P rating of Achmea Hypotheekbank has been
revised from stable to negative. This is linked to S&P’s
view that Dutch banks are exposed to increased risks
as a result of a (potentially) more protracted economic
downturn in the Netherlands and across the eurozone.
RATINGS
AF2
AAA
Aa2
CCR: Counterparty Credit Rating
IFSR: Insurer Financial Strength rating
LIQUIDITY MANAGEMENT
Liquidity policy
According to our risk appetite, the Group liquidity
position must be adequate and allow for financial
flexibility. The liquidity policy describes how Achmea and
its Non-life, Health, Life and Bank businesses manage
liquidity risk. Metrics have been developed that provide
a forward-looking view of our liquidity position and
liquidity exposure for various time horizons under normal
conditions, and for a range of moderate and extreme stress
events. Combined with limits, they help us satisfy our
risk appetite as defined by the Finance & Risk Committee
and provide early warning signals when we run the risk of
insufficient liquidity to meet our liabilities. Furthermore,
they enable us to provide quantitative information on
our liquidity position at different levels to supervisors
and market participants. For extreme scenarios, various
contingency actions are defined to generate liquidity.
Risk appetite statements on liquidity
• Achmea maintains sufficient liquidity in moderate stress
scenarios at both Holding and business unit level to
always meet its liquidity requirement.
• Maintaining sufficient liquidity/flexibility in our risk
63
funding, and with the first issuance of €0.5 billion of senior
unsecured notes. This first issuance of its Medium Term Note
programme enables the bank to further diversify its funding
profile. In addition, we aim to utilise more unsecured funding
through savings, and a successful campaign in 2012 generated
€0.8 billion. In 2012, we also bought back state-guaranteed
bonds via a tender process. Of the original USD 3.25 billion in
bonds at the end of 2010, we successfully purchased USD
0.9 billion in 2011 and USD 0.9 billion in 2012.
profile to be able to reduce our market/counterparty risk by
being able to make €1 billion liquid within three months.
• Maintaining sufficient liquidity/flexibility in our risk to
be able to reduce the economic capital requirement at
99.95% confidence level by at least €350 million within
three months.
Liquidity – Holding
For liquidity purposes, at Holding level Achmea
maintains committed and uncommitted credit facilities
with a variety of international banks for Achmea B.V. At
year-end 2012, the committed credit lines (€750 million)
were undrawn. The facilities do not contain financial ratio
covenants or banking covenants with the obligation to
redeem in case of a rating downgrade. They were renewed
in 2012 and will expire in 2017. Lower rating levels could
result in slightly higher interest rates.
overview of cashflow and
reallocation of capital
(€ Million)
2012
CASH REMITTED BY BUSINESS
70
Health Netherlands
400
0
Other
4
Proceeds from divestments
45
Liquidity – insurance entities
FINANCING/CORPORATE ACTIVITIES
The liquidity position of our insurance entities is
more than sound, as we maintain a high level of liquid
investments in the investment portfolio, including
short-term deposits, liquid government bonds and listed
equities. Liquid assets – those assets that can be made
readily available – represent 69% of the investment
portfolio (2011: 65%).
Net interest paid
-48
Dividend and coupons on capital securities paid
Net change in borrowings
-106
140
Tax settlements
38
Corporate activities
-412
INVESTMENTS IN BUSINESS AND ASSOCIATES
Liquidity – banking
-57
Health Netherlands
The liquidity position of our banking entities is sound and
they were able to maintain their liquidity position well above
regulatory requirements. Achmea Hypotheekbank went
to the market twice in 2012, with a Residential MortgageBacked Security issue, generating €0.8 billion in additional
-2
International
-46
Other
-166
Net change in cash
-140
OVERVIEW OUTSTANDING DEBT
TYPE
Tier 1
AMOUNT (MILLION)
PERCENT
CALL DATE
RETAIL/INSTITUTIONAL
225
8.375
May 2013
Retail
600
6.0
November 2012
Retail
Not called, next call
date November 2013
Step up 100 bps
500
5.125
June 2015
Institutional
Senior debt
750
7.375
June 2014
Institutional
Preference shares
311
7.15
January 2014
Institutional
OTHER INFORMATION
Reset coupons per
1 January 2014
64
Risk Management
As an insurer, risk management is an integral part of our business. We are responsible
for maintaining the continuity of our customers, our stakeholders and the organisation.
To achieve this, we focus on identifying, assessing, mitigating and controlling risks,
while ensuring that we create value by identifying the right balance between risk and
return. By following a sound risk management strategy, we can secure our continuity
and our solvency.
Main developments
Risk management is about identifying and dealing with
risk, especially when that risk changes rapidly. Our risk
management processes are designed to identify and
respond to shifting risk patterns, ensuring that we can
maintain our business and strategic goals.
During 2012, the financial crisis that started in 2008
progressed and – in a general point of view – had a
negative effect on the creditworthiness of sovereign states
and financial institutions. We continuously monitored
developments in a number of countries, including France
and GIIPS (Greece, Ireland, Italy, Portugal and Spain)
countries. Based on risk of losses, over the past few
years we have gradually lowered our exposure to GIIPS
countries, and only a limited exposure remained in 2012.
In Greece and Ireland our exposure relates exclusively to
our activities there. The developments in GIIPS countries
are an important and recurring point of attention in
Finance and Risk Committee (FRC) meetings. Starting in
the first quarter of 2012, we shifted a part of our Dutch,
German and French government bonds to low-risk credits
issued by investment grade companies with low leverage
and a low probability of default. This shift originated
from the notion that government bond investments
cannot be considered risk free, either from the perspective
of a potential default or from the perspective of mark-tomarket risk (in other words, the value of the investments
does not always precisely follow the value of the insurance
liabilities). The low-risk credit portfolio provides an
additional return potential which is needed to match
the liabilities and sustain a strong solvency position.
Consequently, we have managed our overall exposure
profile to acceptable levels, to compensate for these
increased risks. However, forthcoming risk reductions
from regulations could lead to higher capital and liquidity
requirements, leading to more capital and liquidity being
held in the financial system. The further negative effect
on availability of capital and liquidity could potentially
result in further increased counterparty risks for financial
institutions from households, corporations and sovereign
states. We remained alert for counterparty risk throughout
2012, and will continue to do so in 2013.
At the end of 2011 it became clear that the Werkhervatting
Gedeeltelijk Arbeidsgeschikten (WGA) insurance – an
income protection product for long-term disability for
companies that exited public insurance coverage – was
developing unfavourably, and measures were taken
to mitigate any losses. Liabilities were increased and
premium rates were adjusted. In 2012, the portfolio was
closely monitored as new public information became
available. This led to additional measures being taken
during the year. For more information, please refer to the
Non-life chapter.
Further developments include the uncertainty surrounding
the future of the AWBZ (Algemene Wet Bijzondere
Ziektekosten, or General Act on Exceptional Medical
Expenses), which the new government may reform, our
Solvency II application, which is on track, and our ongoing
focus on the impact low interest rates will have on our
investment portfolio. In 2012, ongoing low interest rates
led to higher premiums and increasing insurance liabilities
for interest guarantees. A great deal of attention was
paid to managing this risk by matching instruments. Our
interest-rate risk management continues to prove effective.
65
Risk Management
Risk Governance Framework
Three Lines of Defence
Achmea operates a governance structure that is based on
the ‘Three Lines of Defence’ model, which utilises three
distinct defence lines for controlling risks. These are:
1. The first line of defence is our line organisation, which
is primarily responsible for risk management across the
company. This defence line includes the Executive Board, line
management of the business units, Group Finance, and the
executive risk committees at Group and business unit level.
2. Our second line of defence involves risk management,
actuarial, and compliance functions that challenge our
line management in a proactive manner, to help them
achieve their business objectives and enable them to
make a thorough and objective analysis of the risks, costs
and benefits of measures to manage risk. This is done
by providing guidance, facilitating risk management
processes and by acting as a sparring partner on effective
risk management.
3. Our third line of defence is the internal audit function.
This is an independent function that provides extra
security to the Executive Board and the Supervisory
Board/Audit & Risk Committee on the quality of the
internal management and the establishment and operation
of the risk management system. This role is performed by
Achmea’s Internal Audit department.
We have two specific risk committees at Group level: the
Audit & Risk Committee of the Supervisory Board and
the Finance & Risk Committee (FRC). The Supervisory
Board supervises the Executive Board on the effectuated
policy and associated risks. Therefore, the Supervisory
Board discusses the risk profile of Achmea and assesses
at a strategic level whether the allocation of capital and
liquidity requirements are in line with the approved
risk appetite. The Audit & Risk Committee advises the
Supervisory Board on financial, administrative and
organisational compliance matters, as well as the risk
profile and risk management.
The FRC is the platform for the Executive Board and
management of the (financial and risk) staff departments
and financial directors of several business units to
discuss and decide on the issues related to finance and
risk management at Group level. Each meeting begins
with a review of the market environment so that risk can
be evaluated internally and externally. The Committee
prepares advice on risk appetite and the Group risk budget
for evaluation by the Executive Board. Periodically, risk
policies, including limit setting on specific risk areas,
risk models and the Group’s risk profile are monitored,
evaluated and approved.
Integrated Approach
Our Integrated Risk Management Framework (IRMF)
describes our risk management system. The risk management
system is designed and maintained on the basis of this
structure. The IRMF ensures consistency with respect to
the risk management function, the compliance function, the
actuarial function and internal control, thereby ensuring an
efficient and unambiguous risk approach.
The IRMF consists of seven components: organisational
structure, risk classification, risk appetite, policies and
procedures, tools and techniques, systems and data, and
people, culture and awareness.
The IRMF encompasses Group-wide policies that ensure
that for each risk type, risk management throughout the
organisation is consistently implemented. In addition,
they provide consistency and completeness in the analysis
and management of all risk types, enabling an aggregated
risk profile to be reported for the company.
Risk appetite
Risk appetite is an important component in the IRMF.
Within Achmea, risk appetite is defined as the maximum
risk that we are willing to accept while performing our
business strategy. Our risk appetite has been defined in
a series of risk appetite statements, which are translated
through Key Risk Indicators (KRIs), risk tolerances and
risk limits. Risk tolerances are parameters that give a clear
direction to the management of the risk levels Achmea
is willing to be exposed to. Risk limits are used in daily
66
Risk Management
business practices to indicate how much risk we are willing
to take. Periodic risk monitoring and reporting, which for
example is discussed in the Finance & Risk Committee,
ensures that Achmea’s risk profile is within our predefined
risk appetite and action is taken when necessary.
Our risk appetite statements ensure:
• Continuity through a robust and stable balance
sheet: statements are made on capital position, risk
management, liquidity and capital allocation.
• Above average performance adjusted for risk:
statements are made on responsible profit and earnings
volatility.
• Customer-centric product proposition: statements are
made on product quality.
• In reference to our market: statements are made on
compliance.
With regard to our capital position, the risk appetite
statements specify that:
• Available capital is at least equal to the economic
capital calculated at a 99.95% confidence level at Group
level.
• Minimum capital levels should at least be sufficient for
an S&P A rating. Achmea monitors capital based on the
S&P requirements in accordance with a AA rating.
• Minimum capital levels should be sufficient to meet
capital requirements of the regulator.
• Minimum capital levels should be at least 100% of
the solvency capital requirement (SCR) according to
Solvency II, plus a buffer per legal entity.
The amount of capital is calculated based on models,
and we have identified risk mitigation measures to avoid
model risks.
With regard to our liquidity position, the risk appetite
• We maintain sufficient liquidity in moderate stress
scenarios at both holding and business unit level to
always meet our liquidity requirement.
• Maintaining sufficient liquidity/flexibility in our risk profile
to be able to reduce our market/counterparty risk by being
able to make €1 billion liquid within three months.
• Maintaining sufficient liquidity/flexibility in our risk to
be able to reduce the economic capital requirement at
99.95% confidence level by at least €350 million within
three months.
Our risk management framework ensures that a prudent
risk policy is developed, implemented and monitored.
With regard to responsible profit, our risk appetite
• We will not accept risk that does not generate structural profit.
• Profit is not the only goal. Profit is necessary to ensure
the continuity of our cooperative goals.
• We strive for a structural targeted return that matches
our risk profile, our cooperative background and the
dividend requirements of shareholders.
• Compared to the market and due to high volume and
efficiency, our products and services have a low cost
structure and an adequate quality level.
• In terms of operational return (Value New Business,
combined ratio), we aim to outperform the market.
From a capital requirements perspective, we maintain
two internal guidelines for solvency – one for minimal
legal (regulatory) capital requirements and one for
target solvency levels (both including foreign operating
companies). More information on the minimal
requirements we aim to achieve can be found in the
Capital and Liquidity Management chapter.
The Group risk appetite statements provide clear
guidance to every part of the business. They have been
used directly in the business planning for investment
plans and for setting reinsurance cover. Given the risk
appetite statements, our Asset & Liability Management
department determines the risk budget for our
investments. An optimal asset allocation is determined,
which takes into account the impact on all risk areas we
are exposed to. Subsequently, an optimisation of this risk
budget results in the final investment plan.
Compliance
Compliance focuses on overseeing the management of
the compliance risk and contributes to our mission of
becoming the most trusted insurer – which places the
customer centrally. From 1 January 2012, the Compliance
department became part of the central Risk & Compliance
67
Risk Management
department. This changes the organisational embedding
of the compliance departments, which are now part of
the finance and risk column in the division. They retain a
direct reporting line to the division chairman. Integration
with Operational Risk has also been shaped through
the integration of Operational Risk and Compliance
Monitoring Reports.
Dutch and European regulations are increasingly
influencing our processes and products. In order to
better monitor the developments in legislation and
regulations within Achmea, and to influence legislation in
development in a timely fashion, a Group-wide Act and
Regulations commission was established.
In 2012, the self-assessments for the standard framework
for propositions, where existing and new products
were tested by focusing on customers’ interests, were
completed for the main products, and any existing gaps
were identified. In the same year the project standard
framework for propositions was brought back into the
line organisation, which integrates the principles of the
standard framework for propositions in the business plans
and daily operational and product improvements.
We see the customer oriented insurance quality mark
(Keurmerk Klantgericht Verzekeren) as an important tool
in our efforts to become the most trusted insurer. During
2012, different labels within Achmea were in possession
of the quality standard as issued by the Dutch Association
of Insurers. These were: Agis, Avéro Achmea, Centraal
Beheer Achmea, DVZ, FBTO, InShared, Interpolis, OZF,
ProLife, TakeCareNow! and Zilveren Kruis Achmea. In
2012, a major effort was made to comply with the standard’s
requirements, both to demonstrate compliance and to show
that the requirements are embedded in our processes.
In 2012, our Compliance department took the initiative to
start two pilot projects on culture, attitude and conduct.
These pilot projects will be analysed to see how much the
actual behaviour of employees and our business units is in
line with the desired culture. Compliance will discuss their
findings with the business units.
Solvency II
Solvency II preparations
As the successor to the European Union’s existing
solvency regime for insurers, Solvency II (SII) is a
fundamental review of capital adequacy requirements.
It applies to all European insurers and has wide reaching
implications for the industry. The implementation of SII is
on track. The governance framework is becoming increasingly
consistent. Policies are (re)written according to a commonly
applied cycle of phases. Achmea has joined a pilot scheme of
the Dutch Central Bank (DNB) regarding ORSA reporting,
in which emphasis was put on the process of development of
the report and the cooperation of our management. A great
deal of effort has been given to the development of a partial
internal model. We participate in the pre-application process
on internal models with the DNB, and the aim is to use
these (partial) internal models when SII becomes applicable.
However, in 2012 it was announced that SII implementation,
initially scheduled for 1 November 2012, would be postponed
to 1 January 2014 and a further delay is expected. This is
not welcome news for Achmea, for a number of reasons. In
addition to the time and resources already invested in SII, our
position under this new regime will be even stronger, further
reinforcing our competitive position. In the business planning
process 2013-2015 we introduced stress tests on foreseen
SII ratios, which once again proved that we are very well
capitalised. Therefore, given how far we are in implementing
SII across the organisation, and because the implementation
of the new regime opens up a number of opportunities for
us, we have chosen to follow our original implementation
planning. We are convinced that SII will drive consolidation
in the market, and will provide a much clearer reflection of
the real risks involved.
Pre-application models
As mentioned, we are already participating in the preapplication of internal models, and our goal is to have a
fully operational internal model for our Dutch activities.
Our primary focus will be on the internal models for
insurance risk within our Non-Life and Health divisions,
market risk for the Netherlands and insurance risk for our
Non-life operations in Greece. The economic capital models
we currently use will be made Solvency II compliant, while
68
Risk Management
internal models will be developed gradually. The Dutch
supervisory authority has offered us the opportunity to
participate in a ‘trial application’ phase for internal models,
in which the models will be reviewed by the Dutch Central
Bank according to the foreseen criteria and timelines for
Solvency II. We aim to start this trial application in 2014.
Economic Capital
Our internal economic capital model allows us to quantify
our risks per risk category, product group, division, legal
entity, and for the Group as a whole using comparable
measures of risk. The results are used as input for business
decisions, for example on our investment and reinsurance
strategies and pricing, and also as input for Market
Consistent Embedded Value and Economic Result analyses.
In 2012, we switched our economic capital models towards a
partial internal model in anticipation of future requirements
under Solvency II. Non-life insurance risk, disability
risk, health risk and market risk are calculated according
to internal models. For the calculation of the capital
requirements for the other risks, the Solvency II standard
formula is used. Total economic capital after diversification
at Group level amounted to €4.3 billion. All calculations
were performed using year-end 2012 data. Comparative
figures for 2011 are not available, due to the switch in the
economic capital model used.
Economic capital by segment
Economic capital is highest in the Pension & Life
Netherlands and Health Netherlands segments. Most of the
life and market risks are concentrated In the Pension & Life
Netherlands segment. In the Health Netherlands segment
we see an increase in health risk, due to a shift of risk from
ex-post to ex-ante mitigation, which results in more risk for
the insurer and a large counterparty default risk due to the
high premium volume and the exposures to hospitals.
ECONOMIC CAPITAL by segment (at 99.5%)
(€ BIILION)
2012
0.9
Health Netherlands
1.8
1.9
International
0.6
Banking Netherlands
0.4
Other
0.6
Total segments before diversification
6.2
Diversification between segments
-1.9
Achmea Group
4.3
Economic capital by risk type
Market risk and life risk dominate economic capital.
Market risk reflects the net exposure to the capital
markets, and includes equity risk, property risk, spread
risk and interest-rate risk. Life insurance risk relates
mainly to longevity risk. Non-life insurance risk appears to
be relatively small, because we have arranged reinsurance
for most natural disasters.
ECONOMIC CAPITAL BY RISK TYPE (AT 99.5%)
Market Risk
(€ BIILION)
2012
% of total
2.3
29%
Life Risk
1.9
23%
Health Risk
1.2
15%
Counterparty Risk
1.1
13%
Non-life Risk
0.7
9%
Operational Risk
0.7
8%
Disability Risk
0.3
4%
Total risks before diversification
and other effects
8.2
100%
Diversification between risks
and other effects
Achmea Group
-3.9
4.3
69
Risk Management
Insurance risk
Insurance risk is defined as the risk
MAIN DRIVERS
of a change in value of portfolio due
• Longevity risk: the risk of a change in value of portfolio caused by the actual mortality rate being lower than expected.
to a deviation of the actual claims
• Mortality risk: the risk of a change in value of portfolio caused by the actual mortality rate being higher than expected.
payments from the expected
• Lapse risk: the risk of a change in value of portfolio caused by deviations in the actual rate of policy lapses from their
expected rates.
claims payments and encompasses
life risk, Non-life risk, disability risk
and health risk. Catastrophe risk
and concentration risk, if present,
are included separately in the risk
types mentioned.
• Premium risk: the risk of a change in portfolio caused by ultimate costs to fulfil contractual obligations from unexpired
contracts (claims without administration costs) varying from those assumed when these obligations were estimated.
• Reserve risk: the risk of a change in value of portfolio caused by ultimate costs to fulfil contractual obligations from
contracts (claims without administration costs) varying from those assumed when these obligations were estimated.
• Incidence risk: the risk of a change in value of portfolio caused by incidence rates for disability insurance deviating from
the ones expected.
• Recovery risk: the risk of a change in value of portfolio caused by recovery rates for disability insurance deviating from
the ones expected.
• Catastrophe risk: the risk that a single event, or series of events, of major magnitude, usually over a short period (often
72 hours),leads to a significant deviation in actual claims from the total expected claims.
• Expense risk: the risk of a change in value of portfolio caused by the fact that the timing and/or the amount of expense
incurred differs from those expected, e.g. assumed for pricing basis.
RISK CONTROL AND MITIGATION
• A new product approval policy for insurance products has been implemented with specific/explicit attention for
customer/policyholder interest.
• Underwriting procedures are in place which are reviewed regularly based on statistical analyses. Insurance risks are
balanced across the portfolio because of the range of different products we offer.
• To diversify the mortality risk, part of the life portfolio is reinsured through quota share contracts on a reciprocal basis.
• Catastrophe risks and large individual risks are covered in reinsurance treaties.
• The insurance liabilities are tested for adequacy at least quarterly (and more often if considered necessary). For life
(individual and group) the liability adequacy test (LAT) is monitored on a monthly basis based on the actual yield curve.
Operational risk
Operational risk is defined as the
MAIN DRIVERS
risk of loss arising from inadequate
• Internal fraud: the risk of deliberate action by one or more persons from management, the governance bodies and/or
staff (including temporary staff and external hires), whether or not in collaboration with a third party, with the intention
to benefit and/or enrich him/herself or other(s).
or failed internal processes,
personnel or systems, or from
external events.
• External fraud: the risk of fraud or threat by (potential) customers and fraud or threat by other third parties, such as
suppliers and service providers with no involvement of employees.
• Execution, delivery and process management: risk of losses from failed transaction processing or process management,
from relations with trade counter parties and vendors. These risk events are not intentional and are generally related to
back-office activities.
• Clients, products and business practices: risk of losses arising from an unintentional or negligent failure to meet a
business practice professional obligation to specific clients (including fiduciary and suitability requirements), or
resulting from the nature or design of a product.
• Business disruption and system failure: risk of losses arising from disruption of business or system failures.
• Damage to physical assets: risk of losses arising from loss of (or damage to) physical assets from natural disaster or
other events.
• Employment practices and workplace safety: risk of losses arising from acts inconsistent with employment, health or
safety laws or agreements, from payment of personal claims, or from diversity / discrimination events.
• Risk assessment takes place structurally, using Operational Risk Appetite, Risk Self Assessments and Operational
Risk Scenarios.
• An internal control statement (ICS) is compiled providing a fair view of Achmea’s risk exposure and level of control.
• Risk sensitive capital steering is being developed based on internal and external loss data, operational risk scenarios
and key risk indicators.
• Special policies are in place for specific risks, such as for business disruption and system failure, which are
evaluatedand tested during the year.
70
Risk Management
Market risk
Market risk is the risk of loss, in
MAIN DRIVERS
other words the decrease in the
• Changes in investments, intangible assets and embedded options in insurance products due to unexpected changes in
the financial markets.
market value of the net assets
(assets minus liabilities), due
to unexpected changes in the
• Unexpected changes can be caused by changes in among others equity prices, interest rate levels, credit spreads, real
estate prices and exchange rates.
financial markets. It encompasses
interest rate risk, equity risk,
• Assets and Liability Management Framework which consists of setting the strategic investment mix and policy setting
and periodic monitoring.
property risk, spread risk and
currency risk.
• Interest rate risk of the insurance entities is managed on an economic basis using different scenarios for shifts in the
interest rate curves.
• Interest rate risk of banking products is measured and controlled by Value at Risk and income and risk measures.
• The currency risk of the investment portfolio in general is fully hedged, with a few exceptions in specific investment
mandates. In general, Achmea does not hedge the net investment in, or the income streams from, its non-euro
operations.
Liquidity risk
Liquidity risk is the risk that actual
MAIN DRIVERS
and potential payments and
• Market liquidity: the risk that the organisation cannot easily offset or eliminate a position at the market price because of
inadequate market depth or market disruption.
collateral obligations cannot be met
when due. Achmea distinguishes
between funding liquidity risk and
• Funding liquidity: the risk that the organisation will not be able to meet efficiently both expected and unexpected
current and future cash flows and collateral needs without affecting either daily operations or the financial condition
the organisation.
market liquidity risk.
• Liquidity planning at both subsidiary and Holding level is part of our business planning.
• Liquidity risk metrics are calculated for each of the legal entities as well as for Holding, providing a forward-looking
view of the liquidity position and liquidity risk exposure for various time horizons under normal conditions, as well as for
a range of moderate and extreme stress events.
• The liquidity contingency plan, part of the liquidity risk policy, describes possible actions and sources of funds to use
when these extreme scenarios become reality.
• The funding strategy is based on assuring access to international capital and credit markets at low cost levels. Each
division, operating company or service entity is responsible for funding its own activities. Access to capital and credit
markets is arranged at Holding level.
Counterparty risk
Counterparty risk is the risk of
MAIN DRIVERS
economic loss due to unexpected
• Counterparty default risk: the risk a counterparty will fail on a contractual obligation, which results in an economic loss.
Typical ‘credit events’ are ‘more than 90 days overdue’, ‘judicial settlement’, ‘restructuring’ or ‘bankruptcy’.
default, or deterioration in
the credit standing of the
counterparties and debtors of
Achmea entities. Achmea is
exposed to counterparty risk in
the area of investments, treasury,
banking, reinsurance, healthcare
providers, intermediaries, and
policyholders.
• Rating migration: the risk that the credit quality of a counterparty will decrease with consequent decrease in value of
corresponding assets.
• Systemic risk: the risk of systemic events that increase the likelihood of simultaneous adverse events for
counterparties.
• Settlement risk: the risk of principle exchange failure. This settlement failure can be caused by default, liquidity
constraints or operational problems.
• Group level counterparty policy consisting of a rating-based system of exposure limits per counterparty.
• Diversification of portfolios and collateralisation is used for mitigating the risk.
• Recovery process and capital surplus in case of negative credit-events.
71
Human Resources
Employees are our most valuable resource, and we know that only by placing our
trust in our workforce can we ask our customers to place their trust in us. At
Achmea we offer customers a good product at a fair price. Our employees believe in
our philosophy, and we work hard to attract and retain the best people, which means
excelling as an employer. By creating a strong, stimulating, and innovative working
environment in which employees can fully develop their potential and skills, we
strengthen our company and provide our customers with the best possible service.
Innovative employer
Sustainable Employability
We make commitments to our customers, and we
recognise that we can only be credible if we make those
same commitments to our employees. Addressing
the many social developments – such as increasing
individualisation, issues surrounding work-life balance
and mobility challenges – enables us to implement a
contemporary and innovative approach to our role as
an employer. An example of innovative employership
is the development of the Achmea Work Concept,
which facilitates flexible working. Vertrouwd Samen
Werken (VSW) is the program within Achmea that aims
to increase customer value. VSW focuses on serving
customers in a flexible way. One example is providing
help to customers outside regular office hours. VSW
also gives employees greater control over their working
hours, providing a better work-life balance, resulting in
greater employee value. This also benefits the company
financially, as the cost of office space and travel decline,
and is more sustainable. In 2012 the number of employees
using teleworking grew, and we introduced a number of
pilot schemes that experimented with self-scheduling,
enabling employees to organise together the staffing
requirements in their department. Another example is that
each year employees can opt to work more or less hours
and to take more or less holidays, giving them greater
flexibility in the way they structure their professional
and personal lives. In 2012, 4,144 staff chose to change
the number of hours they work, while 2,659 chose to
change the amount of annual leave they take. And to help
employees refocus on their work-life balance, we set up
the Energy Challenge program. This enables staff to set
up teams to work on personal health goals. In 2010-2012,
114 teams with a total over 1,510 (of which 485 in 2012)
employees participated.
Over the last few years we have been working on
improving our operational processes and reducing
complexity. This improvement involves a major shift in
the way we work, which places the customer firmly in the
centre of our activities. Our employees worked together
to continuously streamline processes, so that there are
noticeable improvements from our customers’ perspective.
This delivered annual cost savings and reduced our
headcount. Where possible, the reduction in staff involved
not renewing external or temporary contracts and not
filling vacancies. For redeployment candidates we operate
the Achmea Transfer Centre (ATC). This helps employees
look for a fresh challenge, such as new positions inside and
outside the company, or provides additional training. In
2012, 375 employees made use of the ATC, while 60% of
employees who attended were successfully relocated (74%
in 2011). The percentage of external placements in 2012
was 16.7% (2011: 20.5%). During the implementation of
the complexity reduction programme, we established an
innovative project called Silver Pool, which helps retain
the knowledge and experience of employees aged 57.5
years and older, who had been impacted by redundancy.
As Achmea’s workforce shrinks, the ATC increasingly
places employees outside the company.
Experienced employees
Silver Pool identifies experienced professionals who no
longer have a fixed contract within the company, and
employs them as flexible workers on temporary projects.
When employed, staff in this project receive 100% of
their salary, and when there is no work they make use of
a safety net that provides them with 75% of their salary.
Silver Pool employees have priority for temporary, third
72
Human Resources
party or contractor positions. By retaining people with
knowledge and experience, we save out-of-pocket costs for
external consultants and temporary workers. On average,
64% of employees from the Silver Pool were in work in
2012 (2011: 66%). At year-end 2012, 73 employees were
registered with the Silver Pool project, with 53 working
within Achmea and six outside Achmea. Silver Pool looks
for individual solutions on an individual basis.
Employee consultation
Achmea has Works’ Councils at all levels of the
organisation, including at business line, operating
company and brand level. There is also a Central Works
Council (COR), which is made up of representatives
from across the organisation. The COR plays a key
role in safeguarding the continuity of Achmea. It has
nomination powers for the Group’s Supervisory Board
and provides advice on important topics that affect the
Group and its employees. Achmea is proud of how well
the COR functions. Informal meetings between COR, the
chairman of the Executive Board and the director of HR
take place weekly. In 2012, the COR received 23 requests
for advice and six requests for approval. The number of
requests for advice decreased compared to 2011, due to the
restructuring of the organisation in 2011. An agreement
between the COR and the HR director ensures that the
COR is involved in any major changes within the company
at the planning stage, and are able to secure the rights of
employees. This is achieved through general requests for
advice (‘kopadviesaanvragen’) at a stage when staffing
implications are not yet clear. More detailed requests
follow this general request once staffing implications
become clear. All requests for advice and approval are
published on the Group’s intranet so that employees can
follow developments, and the intranet also has a forum
option that allows employees to discuss issues.
Education and training
One of the central themes in Achmea’s employment
practices is the professional and personal growth and
development of employees. We encourage and facilitate
staff in their individual development process, adding
value to both themselves and the company, and helping
them remain agile and resilient. We believe this is a
crucial part of our role as an employer. In 2012, 3.3% of
the payroll was spent on training costs (3.3% in 2011).
The target for 2013 remains at least 2.0% of the payroll.
Achmea has a number of resources to facilitate employee
development, including a Management Development
program, Specialist Development program and the
Achmea Academy, which develops in-house programs for
the company’s specific business lines. The Academy also
works with academic partners from around the world and
with Eurapco partners. It arranges workshops, meetings
and seminars. In 2012, the Academy Achmea ran 40,000
courses. More information and a list of the courses can be
found at: www.achmea-academy.com.
Employee engagement
Every year in the Netherlands we test how well we’re
doing as an employer by asking employees to rate the
organisation. Based on the outcome, priorities are set
that need to be met by the organisation in the upcoming
year. One of the key indicators is the size of the response.
In 2012, the response rate to the Employee Engagement
Survey (EES) was again excellent, especially at a time
of ongoing change and reorganisation. It increased to
87% compared to 82% in 2011. The majority of ratings
on the key performance indicators were up or equal
to 2011, while overall employee satisfaction increased
by 2%-points to 85%. In December, Achmea in the
Netherlands was rated the number two employer in a
survey carried out by SatisAction and NRC, one of the
countries leading daily newspapers (in 2011 we were
ranked 4th). The NRC Best Employers Survey is a
scientifically based survey that studies good employment
among 33 companies.
A diverse workplace
Our company is a large, diverse and rich community
of people working under the Achmea umbrella. We
celebrate and nurture this variety through our Life Stage
Diversity Policy, which focuses on identifying, recognising
and developing the individual talents of all employees.
This includes respecting each culture, faith, life choice,
background or sexual orientation that is represented
within the company. For Achmea diversity is also a
business case.
73
Human Resources
There are different internal networks within the company
for woman, for young people and for lesbians, gay
men, bi-sexuals and transgender employees (LGBT).
At the beginning of 2012, we signed the Declaration of
Amsterdam, which focuses on workplace improvements
for LGBT employees. Because people with disabilities were
under-represented within Achmea, in 2012 we focused on
them. Each year, in addition to regularly hiring people
with disabilities, Achmea makes an additional number of
positions available to employees who may find it difficult
to gain access to the labour market. We offered 15 educated
people with a physical disability or a chronic illness a oneyear contract to gain work experience. The programme
participants are then in a position to look for employment
either inside or outside Achmea.
74
Corporate Social Responsibility
Corporate Social Responsibility (CSR) is in our genes. We view social responsibility as
being the key to realising our ambition of being the most trusted insurer. As an
insurer with a cooperative heritage, we feel a responsibility towards the needs of our
(business) partners, employees, shareholders and society at large.
Our CSR Policy encompasses the three roles Achmea has
in society:
• Our work: Through our insurance and investment
products and activities, we can demonstrate how we are
putting CSR into practice.
• Our organisation: We facilitate flexible working, so
employees can better manage their work-life balance,
which helps us reduce CO2 emissions.
• Our world: We use our knowledge and experience in
providing financial security to develop solutions to
social and economic problems.
Our goal is for our CSR policy to be recognised by key
stakeholders in the fields of finance, insurance, investment
and sustainability. We are therefore proud to share the
external assessments of our sustainability performance,
which can be found at: www.achmea.com/csr/csr-policy.
In addition to our CSR policies and practices, we also
publish a comprehensive CSR report. This is issued at the
same time as our annual report. The CSR report follows
the guidelines of the Global Reporting Initiative (GRI),
guideline 3.1, and is compliant with level A+, the highest
level of transparency possible. This means that Achmea
reports on all core indicators of the GRI, the indicators as
stated in the sector supplement Financial Services, and that
the report is externally verified. The CSR Report and GRI
table can be found at: www.achmea.com/csr/csr-reports.
Our Work
Our core activities involve providing customers with
products and services in the non-life, health, income
protection and life insurance markets, and investing the
premiums in a responsible manner. Our customers are central
to everything we do, and we aim to keep their costs as low as
International principles for sustainable
insurance
On the eve of the 20th UN Conference on
Sustainable Development (Rio +20) on 19
June 2012, the Principles for Sustainable
Insurance (PSI) were launched in Rio de
Janeiro. The PSI are an initiative of a large
number of leading insurers and the United
Nations (UNEP FI). In recent years, Achmea
has contributed to the formulation of these
principles, and almost thirty insurers –
including five from the Netherlands – have
now signed the principles. The financial
institutions promised to exert their influence
when it comes to environmental, social and
governance issues. More information on the
PSI can be found at: www.unepfi.org/psi.
possible while working continually to help them implement
preventative measures. We view our insurance and investment
products and activities as the best demonstration of how
we put CSR into practice, and believe we make our greatest
social impact through our day-to-day work.
Sustainable insurance
Our CSR policy aims to ensure all products and services
meet a social need and are based on solidarity principles.
In principle we accept all customers, and actively resist
situations that threaten to exclude specific social groups.
However, in some cases customers are excluded if they
take risks that we view as unacceptable. The primary aim
in developing products is to ensure customers receive
sustainable value. We believe that profit, although
necessary for continuity, is not the only driver.
75
Responsible investment
As an insurance and pension fund manager, Achmea is a
large investor. We bear the investment risk on the funds we
receive from our insurance activities, including premium
funds. Additionally, we invest the assets that customers
entrust to us. These include pension funds for which we
carry out the management or assets of the investment
accounts of our customers. As an institutional investor,
we can influence the behaviour of companies in which we
invest through our responsible investment policy. This can
be seen as responsible supply chain management. More
details on our responsible investment activities can be
found in the Investments chapter.
Putting customers’ interests first
The financial crisis has had a major impact on society’s
confidence in banks and insurers. As a consequence,
the government, the financial sector and individual
institutions have introduced a large number of initiatives
in an attempt to re-connect with customers’ needs and
wishes, with a central focus on safeguarding customers’
long-term interests. The process we started in 2010 to
further embed our clients’ interests into our culture, and
the products and services we offer, continued in 2012.
Clients’ interests are integrated into our personnel and
organisation policy, ensuring current and prospective
employees are informed about the way we expect them
to behave towards customers through job descriptions,
during recruitment and selection procedures, and in
training and evaluations, when the focus on clients’
interests acts as a criterion for variable remuneration.
At the same time, the implementation of the normative
framework for propositions within the organisation
continues, and in 2012 there was ongoing participation
by a number of Achmea brands in the customer-oriented
quality mark. The acquisition of comparison website
Independer.nl fits into this strategy, with the large amount
of relevant data it produces providing valuable insights
into customers’ needs and wishes. This information is vital
for us to continue putting customers’ interests first.
Our Organisation
By enabling our employees to work flexible hours and
at different locations, we help them better manage their
work-life balance and contribute to the reduction of
CO2 emissions, by reducing peak-time traffic. Achmea
has been one of the most attractive employers for many
years. This is partly because we pursue a proactive
policy on diversity, reintegration of employees who have
been ill, and we provide informal care and a sustainable
working environment. In this respect, we focus on energy
management, sustainable construction, responsible
procurement, waste management and mobility. Since 2011
we have been climate neutral, when we began offsetting
our CO2 emissions.
Achmea as an innovative employer
Achmea is only trustworthy if it treats its employees in
the way its customers would expect to be treated. There
are various developments in society that impact Achmea:
increasing individualisation, issues surrounding the
work-life balance, and bottlenecks in mobility. Achmea’s
solution is to be a contemporary, innovative employer.
This helps us attract, retain and develop talented and
ambitious employees. For more on this, please refer to the
Human Resources chapter.
CO2 neutral operations
Achmea has been CO2 neutral since 2011. Any
uncompensated emissions are offset through VCS certified
credits. In 2012, we implemented an energy management
system that will enable us to calculate our energy use
and savings with more accuracy. This also allows us to
calculate and report on our CO2 footprint more rapidly.
Sustainable procurement
For Achmea, taking responsibility in the chain means
dealing responsibly with insurance and the assets
entrusted to us. However, we also operate a number of
large offices, and purchase a wide range of products
and services. In addition to looking at the price, quality
and functionality of these products and services, we are
76
increasingly looking at their sustainability criteria. We do
this in two ways: firstly, by only working with suppliers
that endorse our sustainability ambitions and who sign
the Sustainability Statement for Suppliers. Secondly,
by procuring products and services that comply with
additional (sustainability) criteria. The Sustainability
Statement for Suppliers can be found at: www.achmea.
com/csr/our-organisation.
Our World
The knowledge and experience we have in organising
financial security can be used to find solutions to
social and economic problems. We see this as part of
our commitment to society – in both the Netherlands
and abroad. It allows us to put greater emphasis on the
solidarity principle that our traditions as an insurer are
based. Achmea’s employees carry out this policy by offering
their knowhow and services as volunteers. For example, they
support micro-insurance projects in developing countries,
as well as taking on countless initiatives in the Netherlands
and other countries where we are active. We also fund two
foundations: the Achmea Foundation and the Achmea
Foundation for Victims and Society.
Cooperative-based micro insurance
Achmea is an insurance group whose origins lie in
solidarity and social involvement. More than 200 years
after we were established, we still cherish our cooperative
roots. Solidarity is a very important concept for us.
This is demonstrated in a number of ways, one of which
is the establishment and support of micro insurance
projects in developing countries. In the Netherlands,
it is normal to take out insurance in case of disaster or
financial problems. In many developing countries that
is not the case. The micro insurance projects we support
are focussed on improving the economic and physical
resilience of the people living in developing countries.
By establishing and supporting different micro insurance
projects, self-reliance becomes accessible to millions of
people. Our employees are the bearers of these projects by
voluntarily offering their knowledge of financial security.
Achmea Reinsurance also supports various micro
insurance cooperatives as a reinsurer. This support means
that the insurance risks of the various micro insurance
projects are largely assigned to Achmea. This provides the
cooperatives with greater insurance capacity, and protects
them from bankruptcy as a result of a catastrophe or high
incidence of claims. Finally, some projects are supported
through donations from the Achmea Foundation.
This financial support is aimed at professionalising the
cooperatives that offer micro insurance. Participants
pay their own contributions. More on the various microinsurance projects can be found at: www.achmea.com/csr/
our-world/micro-insurance-projects.
Funded foundations
Within Achmea, there are a number of foundations
that carry out philanthropic work independently of our
business activities. The Achmea Foundation and the
Achmea Foundation for Victims and Society both focus
on improving the resilience of vulnerable groups and
members of society. The Achmea Foundation donates to
projects worldwide to improve the economic and/or social
situations of the poor and needy. The Achmea Foundation
for Victims and Society primarily supports academic
research projects aimed at improving the position of
victims. In addition, there are three other independent
foundations that concentrate on the effectiveness
and efficiency of Dutch healthcare: the Spaarneland
Healthcare Fund Foundation, the Theia Foundation and
the Achmea Healthcare Foundation.
77
Supervisory Board Report
The current strategy, the progress on further positioning the customer at the heart
of the business, cost and complexity reduction and the continuing troubled economic
circumstances were important topics on the agenda of the Supervisory Board in
2012. The committees of the Supervisory Board also discussed a wide range of
subjects including quarterly results, risk management, corporate governance,
succession planning, the remuneration policy and the composition of the Executive
Board and Supervisory Board.
Report of the Supervisory Board
Main developments in 2012
Eight Supervisory Board meetings were held during 2012,
made up of six regular meetings and two extraordinary
meetings. All meetings were attended by almost all
members, with negligible absence. The venue for four
of the meetings was Achmea’s head office in Zeist.
The two other meetings were hosted by the Health
division / Zilveren Kruis Achmea in Leiden and Banking
Distribution division / Interpolis in Tilburg respectively.
The relationship with the Executive Board remained
very strong in 2012. The Supervisory Board compliments
the Executive Board on its vision, its transparency and
open approach towards the Supervisory Board members
individually and as a corporate body as a whole. The
reports and other information provided to the Supervisory
Board were of a good standard, and when applicable and
necessary were well balanced with respect to the interests
of all four stakeholders of the company. The Supervisory
Board, however, has requested the Executive Board to
pay attention to the readability of (especially) highly
technical financial and actuarial reports. The chairman of
the Supervisory Board also visited all Dutch divisions and
foreign subsidiaries to further familiarise himself with the
business in addition to all other information provided to
the Supervisory Board.
SUPERVISORY BOARD MEMBERS
NAME
E.A.J. van de Merwe
SUPERVISORY BOARD
AUDIT & RISK COMMITTEE REMUNERATION COMMITTEE
SELECTION &
APPOINTMENT COMMITTEE
Chair, present 8/8
present 14/16
present 7/7
Chair, present 6/6
M. Minderhoud
present 7/8
present 15/16
present 7/7
present 6/6
S.T. van Lonkhuijzen
present 8/8
present 15/16
M. Lückerath
present 8/8
present 7/7
present 6/6
P.F.M. Overmars
present 8/8
H.J. Slijkhuis
present 8/8
Chair, present 7/7
present 6/6
present 7/7
present 6/6
A.C.W. Sneller *
A.W. Veenman
present 8/8
A.J.A.M. Vermeer
present 7/8
B.J. van der Weg
present 8/8
Chair, present 16/16
present 14/16
* Appointed 1 January 2013.
78
Corporate Governance
SUPERVISORY BOARD TOPICS
REGULAR TOPICS
OTHER TOPICS
STRATEGY / BUSINESS PLANNING
Corporate social responsibility
Putting customers’ interests first
Strategy, business planning and budgeting
Closed book life business
(Potential) acquisitions/divestments
Review of long-term strategy Achmea
Developments in the insurance industry
Governance of regulated entities
FINANCIAL / REPORTING
Financial and commercial performance
Income protection (WGA) developments
Financial reporting, including (semi) annual results, annual reports,
financial statements, dividend
Discussion on yield curve
Dividend proposals, press releases
Setting health premiums 2013
Financial peer analysis
Internal sale Agis Zorgverzekeringen N.V. to
Achmea Zorgverzekeringen N.V.
Achmea valuation
Renewal of revolving credit facility
Funding and liquidity plan
Tax position and tax planning
RISK MANAGEMENT
Risk management, including risk appetite and risk policies
Euro break-up scenario
Solvency II
Risk Analysis DNB
Internal Control Statement
AUDIT & COMPLIANCE
Reports of external auditor, including management letter
Implementation and compliance Remuneration Policy
Reports of internal auditor, including audit memorandum
Pension fund governance
Compliance, a.o. Insurers’ Code and Banking Code
Regulatory reviews DNB/AFM, a.o. Board Room effectiveness
GOVERNANCE AND OTHER
Evaluation Supervisory Board
Search and selection Supervisory Board member
Results employee satisfaction surveys
Search and selection Executive Board members
Selection of new chairman of the Supervisory Board
Amendment Articles of Association Achmea
Succession planning
79
Significant time was spent by the Supervisory Board on
succession planning for both the Executive Board and the
Supervisory Board. In 2012, Mr. Thomas van Rijckevorsel
stepped down from the Executive Board. Early in 2013,
Mr. Gerard van Olphen also stepped down from the
Executive Board to become CEO of SNS Reaal. In 2012,
the chairman of the Supervisory Board Mr. Arnold
Walravens and Mr. Flip Buurmeijer stepped down from
the Supervisory Board in accordance with the board’s
retirement rota. On 1 January 2013, Mrs. Lineke Sneller
took up her position as a new Supervisory Board member.
The Supervisory Board extends her a warm welcome.
More detailed information on changes in the composition
of the Executive Board and Supervisory Board during
2012 can be found in the report of the Selection &
Appointment Committee in this chapter.
In 2012, all Supervisory Board members were subject to
the suitability test conducted by the Dutch Central Bank
(DNB) and Dutch Financial Markets Authority (AFM)
on all major banks and insurers. The DNB and AFM
came to a positive judgment on the Supervisory Board of
Achmea as a group. A point of attention is to strengthen
the technical knowledge of some of the Supervisory
Board members at the level of the regulated entities. This
attention point will be addressed through the permanent
education sessions in 2013, through individual training
and through some amendments in the composition of the
Supervisory Boards of the regulated entities.
Strategy
Monitoring the implementation of Achmea’s strategy
is an ongoing activity for the Supervisory Board.
During the course of 2012, Achmea continued to make
good progress with the continuing drive for efficiency
and improving business processes – such as reducing
organisational complexity and complexity in IT systems
– and ensuring the customer-oriented approach to
managing the business remains on track. Despite this
progress, the continuing troubled economic circumstances
means Achmea needs to remain especially vigilant to
changing market circumstances. During the course of
the year the Supervisory Board and the Executive Board
had comprehensive discussions on Achmea’s long-term
strategy, of which corporate social responsibility forms an
integral part. In June the Supervisory Board reviewed the
current strategy in detail and tested its viability, concluding
that it remains relevant to the business and customers in
today’s changing economic circumstances, whereas the
Supervisory Board suggested to further intensify the profile
of Achmea as a socially involved insurer in all business
lines, and especially in health insurance.
In December, specific choices were made directly deriving
from this review of the corporate strategy. With the
Executive Board we concluded that Achmea needs to
sharpen and accelerate the transformation programme,
while ensuring that our cooperative identity remains an
integral part of future plans. In addition, the Supervisory
Board urged the Executive Board to keep going on the
path of transforming the back office and investing in front
office capabilities. The Supervisory Board fully supports
the strategic choices in non-life and health, as well as the
separation of the closed life book.
As of 1 January 2012, Achmea changed its organisational
structure. Three expertise-based product divisions became
operational. With concentrated product development
capabilities, and covering the health, non-life and life
segments, these product divisions are part of the drive to
position the customer firmly at the heart of everything
Achmea does. Four distribution divisions are operational
that are committed to a specific channel or customer
group and empower the various brands. A solid, efficient
organisational platform supports the front office
capabilities, ensuring that we continue to put our customers’
interests first. The Supervisory Board has been kept
up-to-date in both the preparatory phase in 2011 and the
implementation phase in 2012 and has noted that the first
positive results are visible. At the same time the Supervisory
Board has emphasised that management information, such
as the quarterly reports, also has to be adjusted to the new
organisational structure and that increasing bureaucracy be
avoided; focus has to lie with customers’ interests.
On putting customers’ interests first, the Supervisory Board
has noticed that Achmea has done a lot to position the
customer further at the heart of its business. However, there
is more required on putting the customers’ interest first to
become the most trusted insurer and to meet the standards
as set out by the AFM. The Supervisory Board has therefore
80
challenged the Executive Board to make more progress on
this important topic in order to be able to realise our bold
ambition to become the most trusted insurer.
Finance and risk
The Supervisory Board had extensive discussions on the
financial status of Achmea in 2012 on the basis of the firsthalf and quarterly figures, in addition to the discussion
and approval of the 2011 annual report and financial
statements. The Supervisory Board, as well as the Audit
& Risk Committee, had discussions with the Executive
Board on the slight slowdown in the cost reduction
programme. The Supervisory Board has emphasised that
the right balance has to be sought between further cost
reduction and financial ambitions versus investments for
the direct benefit of our customers, manageability of the
Group and compliance with continuously changing laws,
regulations and market demands. Where the decrease
in costs slowed down in 2012, the Executive Board
committed to a stronger descent in 2013.
Risks and their impact on Achmea remained a key
topic for the Supervisory Board in 2012. As the banking
and sovereign debt crisis continued, and the market
environment remained turbulent and unpredictable, the
Supervisory Board and the Audit & Risk Committee
remained deeply involved in discussions on the
appropriate risk appetite for the company.
The Supervisory Board takes the view that a clear risk
appetite is essential to effectively manage risk and enable
the company to make the required (socially responsible)
investment returns. While the proposal by the Executive
Board to maintain risk appetite at the current prudent
levels was fully endorsed by the Supervisory Board,
Achmea chose to further embed risk appetite in the
organisation and the business planning, for example
through the introduction of specific risk dashboards.
This is supported by the Supervisory Board. While this
strategy will have consequences for future profitability,
in the current market circumstances a prudent approach
prevails over higher profitability, whereby this strategy
still offers enough flexibility to enable the company to
make changes if required in shifting market circumstances.
Portfolio management
A number of investments/divestments were reviewed by
the Supervisory Board in 2012. The Supervisory Board
provided feedback and input, in addition to approval
where appropriate, to the Executive Board. In 2012,
the finalisation of the merger between Vereniging De
Friesland, the shareholder of the De Friesland Group
(DFZ), and Vereniging Achmea and the successive transfer
of the activities of DFZ to Achmea, and the divestment of
Achmea Vitale, were monitored closely. Both transactions
were fully supported by the Supervisory Board, as they
were logical extensions of Achmea’s strategy.
In addition, the Supervisory Board was kept informed of
the acquisitions of Friesland Bank Assurantiën (FBA),
with effect from 31 December 2012, and of Onderlinge
Verzekeringen Overheid (OVO), with effect from 1
January 2013. Given their materiality, the Supervisory
Board was not involved in the decision making. However,
they fully support the transactions. In addition, in light
of the consolidation in the Dutch insurance market, other
potential acquisitions were reviewed, but these potential
acquisitions did not meet our financial and strategic
criteria. Past acquisitions and potential divestments were
also reviewed.
Regulatory compliance and audit
The Supervisory Board noted that compliance
requirements of national, international and industry
bodies are continually increasing. The Supervisory
Board’s role in monitoring adherence to these changes, and
the Executive Board’s role in carrying them out, are clearly
also increasing. While the Supervisory Board welcomes
clarity and transparency on regulatory requirements,
the amount of time they require for both the Executive
Board and the organisation is very high. In addition to
the Executive Board’s frequent contact, the Supervisory
Board, especially the chairman and the chairman of the
Audit & Risk Committee, maintain regular contact and a
good relationship with the Dutch regulators.
The Supervisory Board and its committees discussed,
amongst other things, the impact of new regulations
on ‘sound remuneration’, the suitability screening of
Supervisory Board members and the Act on simpler and
more flexible laws of private companies with limited
81
liability. The Supervisory Board further monitored the
compliance of Achmea with the Insurers’ Code. The
Supervisory Board is pleased to note that Achmea is
largely in compliance with the Insurers’ Code.
After thorough preparatory work in the Audit &
Risk Committee, the Supervisory Board had in-depth
discussions with the external auditor and Internal Audit
on the findings as reported in the Management Letter
and the Audit Memorandum. Specifically, the topics IT
transformation, putting customers’ interests first and the
new organisational structure were addressed. Based on
the remarks in the Audit Memorandum, the Management
Letter and further information from the Executive Board,
the Supervisory Board discussed the IT transformation
programme. The Supervisory Board concluded that
progress has been made, but also that several challenges,
including reducing costs and operational risk in relation to
IT, still lie ahead.
Governance of regulated entities
As set out in the Corporate Governance chapter, in 2010
and 2011 the DNB carried out governance reviews of all
Dutch financial institutions, including Achmea. The DNB
made a number of recommendations, including on the
governance of Dutch legal insurance entities. As a final
step in the implementation of these recommendations,
and following the new organisational structure, on 1
July 2012, Supervisory Boards were installed at Achmea
Schadeverzekeringen N.V. and Achmea Pensioen- &
Levensverzekeringen N.V. A Supervisory Board had
already been installed at Achmea Zorgverzekeringen N.V.
from 25 May 2011. These Supervisory Boards consist
of members of the Supervisory Board of Achmea B.V.
The Supervisory Boards of these entities have only been
active for a short while and it is therefore too early to
draw conclusions. The Supervisory Board recognises that
further improvement is possible, for example in further
standardisation of reporting to the several supervisory
boards and the sector-specific skills of the members of
the boards. In 2013, attention will be paid to the further
education of the Supervisory Board members on the
respective sectors the entities are active in.
Remuneration
Achmea operates a responsible remuneration policy,
which adheres to the majority of the remuneration policy
principles of the DNB, the AFM and the Insurers’ and
Banking Codes (see also the Corporate Governance
chapter for details on the exceptions). In early 2010, a
number of adjustments were made to Achmea’s variable
remuneration policies for board members and senior
management. For example, stock options were abolished.
In late 2010, it was announced by the regulatory
authorities that a Responsible Remuneration Policy
would become effective in 2011 based on the European
CEBS-guidelines, which also encapsulate the Insurers’
Code principles. Achmea and the regulators agreed on
the establishment of a variable remuneration scheme that
meets the tightened regulatory requirements. In 2012,
Achmea agreed with the Executive Board on adjusting the
remuneration package of the Executive Board downward.
This decision was taken in light of the challenging
market conditions in the financial sector and the social
environment. All these developments and measures have
been extensively discussed with and approved by the
Supervisory Board. For more information on Achmea’s
remuneration, see the report of the Remuneration
Committee in this chapter and the Remuneration Report,
which can be found on the website from April 2013.
Permanent education
During 2012, four permanent education sessions were
arranged for the Supervisory Board and Executive Board
members. The meetings were fully attended. In one of
the sessions the Supervisory Board discussed the AFM’s
requirements on putting customers’ interests first – and
Achmea’s performance both individually and relative
to the market – and it observed that the focus must not
only be on individual customer’s interests but also on
the collective interests of customers. The Supervisory
Board also discussed the monitoring by the AFM and the
requirement to meet the standards of the sector, as well as
the importance of putting customers’ interests first based
on our own cooperative identity. In another session on
IT the Supervisory Board was informed of developments
in the area of big data and the consequences such
developments will have for insurers. One of the findings
was that IT developments bring both opportunities and
82
new risks on information security. The Supervisory Board
therefore concluded that they need to place more attention
on IT issues in their meetings. In yet another meeting,
hosted by the Banking Distribution division / Interpolis in
Tilburg, the Supervisory Board discussed market strategy
and stressed the need to improve the central marketing
and sales coordination, including market analytics, and
confirmed the progress made by the Executive Board.
During regular meetings of the Supervisory Board,
attention was also paid to relevant developments in the
insurance and financial sector, corporate governance,
compliance, risk management, financial reporting and
audit. For Mrs. Lineke Sneller, who joined the Supervisory
Board on 1 January 2013, a customised introductory
programme has been prepared, which will familiarise her
with the most important aspects of the Group and bring
her up to speed on the topics discussed as part of the
permanent education programme. Permanent education
is well embedded in the organisation, and the Supervisory
Board is of the opinion that permanent education adds real
value to the functioning of the Supervisory Board and the
Executive Board. Permanent education will be continued
and intensified in 2013.
Evaluation Supervisory Board
The Supervisory Board conducts an annual comprehensive
evaluation of its own performance using feedback forms,
the outcome of which is discussed in a specially convened
meeting. In 2012, the preparation and analysis of the input
on the feedback forms took place under independent,
external guidance. A large number of subjects were
evaluated, including the functioning of the Supervisory
Board in general, the functioning of the various committees,
the ability to function at the corresponding responsibility
level, and the independence of the Supervisory Board. The
relationship of the Supervisory Board with the Executive
Board, the Central Works Council (in Dutch: COR) and
other relevant relationships within the company, the level
of disclosure, the relationship with shareholders, and other
aspects of the functioning of the Supervisory Board, such
as education, remuneration of the Supervisory Board, time
spent, and informal contacts were also discussed.
Conclusions from the latest evaluation are that the
Supervisory Board generally functions well, that
cooperation within and between committees is very good,
that the Board functions independently and is well prepared
for its work. The good preparatory work of the committees
increases the efficiency of Supervisory Board meetings.
Increased diversity due to the appointment of female and
younger members is seen as very positive. Increased pressure
from regulators makes the playing field for the Supervisory
Board smaller. Some suggestions for improvement were
made. These include making more time available for
discussion in the Supervisory Board, to meet at more diverse
locations (not always in Zeist, but outside Zeist at least
twice a year), to increase the frequency of meetings between
December and March, and to involve the second echelon in
meetings more often (more contact with top management
outside the Executive Board). Rotation between the various
committees is seen as a point of attention.
Relation with shareholders
With the exception of the General Meetings of Shareholders,
the Supervisory Board as corporate body has limited
contact with shareholders, as the chairman of the
Executive Board is the primary contact for shareholders.
The chairman of the Supervisory Board, however, has
regular discussions with shareholders on topics such as the
appointments of members of both the Supervisory Board
and Executive Board.
Relation with external auditor
PricewaterhouseCoopers Accountants N.V. (PwC) is the
Group’s external auditor. The Supervisory Board and
the Audit & Risk Committee are clear that cooperation
with PwC is resoundingly positive. PwC add value to
the improvement of financial reporting processes, and
constructively and positively challenge the company. The
Supervisory Board, together with the external auditor,
concluded that the control level of the financial reporting
risks and the managerial control within Achmea are
adequate. The chairman of the Supervisory Board has an
annual meeting with the leading partner of the external
auditor, and additional meetings or calls when necessary.
The Supervisory Board discusses the functioning of the
external auditor on an annual basis, outside the presence
of the external auditor.
83
Relation with Internal Audit
The Supervisory Board has a positive view on the Internal
Audit department. The quality of reports they produce is
high, and the department highlights important issues quickly
and diligently. Where appropriate, Internal Audit takes a
proactive approach in dealing with the business to monitor
processes, without losing its third line responsibility. The
Supervisory Board is satisfied with the good relationship
between the Audit & Risk Committee and the Internal
Audit director, who now also attends discussions on internal
audit reports in Supervisory Board meetings. The chairman
of the Supervisory Board and the chairman of the Audit
& Risk Committee have regular meetings with the director
of Internal Audit. The Supervisory Board discusses the
functioning of Internal Audit on an annual basis, without
the internal auditor present.
Relation with Central Works Council
In 2012, all members of the Supervisory Board individually
attended a meeting of the COR. The Supervisory Board
appreciates the good working relationship and the
ongoing constructive, transparent and open dialogue
between the Executive Board and the COR. In general, the
relationship between the Supervisory Board and the COR
is good.
Conflicts of interest
In accordance with the Dutch Corporate Governance
Code, transactions with members of the Supervisory
Board in which there are significant conflicts of interest
are to be disclosed in the annual report. During 2012,
there were no such conflicts of interest. Conflicts of
interest are considered to be absent and are not reported
if a member of the Supervisory Board obtains insurance
or other products and/or services which are provided by
Achmea Group subsidiaries in the course of their business
as an ordinary, private individual.
Report of the Supervisory Board committees
The Supervisory Board’s three dedicated committees
carry out extensive preparatory and detailed work before
making recommendations and giving advice to the full
Supervisory Board.
Report of the audit & risk committee
Regular meetings of the Audit & Risk Committee were
often dedicated specifically to monitoring results during
the reporting period, reviewing quarterly figures for
delivery to shareholders for consolidation purposes and
discussing related audit reports. Meetings are always
attended by the chairman of the Executive Board, Chief
Financial & Risk Officer, directors of Finance, Internal
Audit, Risk & Compliance and the external auditor.
Experts on specific topics are also invited to participate
when necessary.
During the meetings regarding the 2011 annual figures, a
great deal of attention was given to goodwill impairment
testing and the resulting impairment of the goodwill related
to the Life & Pension business. During the year special
attention was also given to the switch in the discount rate
(yield curve), for measuring liabilities related to certain life
insurance contracts in anticipation of the discount rate that
will be used for Solvency II. The Committee challenged the
Executive Board in its decision taking on this matter. The
Executive Board put forward viable arguments, so after
carefully considering the pros and cons, the Committee
approved the switch in the discount rate.
The Committee also discussed the ongoing financial
turmoil in Europe, the possible euro break-up scenarios
and the situation in Greece where Achmea has an
operating company. Over the year, the Committee was
kept fully briefed on possible impairments on Achmea’s
exposure, in line with European proposals to write off
some of Greece’s debt. The committee further followed
developments in the income protection market, where an
additional provision on our long-term disability insurance
(WGA) was made in expectation of a higher inflow and a
longer duration of insured persons in the WGA, partly as a
result of the continuing troubled labour market conditions,
where both claim frequency and claim duration increased
above our own and market expectations.
84
AUDIT AND RISK COMMITTEE topics
REGULAR TOPICS
OTHER TOPICS
STRATEGY / BUSINESS PLANNING
Strategy, business planning and budgeting
Closed book life business
(Potential) acquisitions/divestments
FINANCIAL / REPORTING
Financial and commercial performance
Income protection (WGA) developments
Financial reporting, including (semi) annual results, annual reports,
financial statements, dividend proposals, press releases
Internal sale Agis Zorgverzekeringen N.V. to
Achmea Zorgverzekeringen N.V.
Funding and liquidity plan
Renewal of revolving credit facility
Financial peer analysis
Goodwill impairment Pension & Life business
Tax position and tax planning
Discussion on yield curve
Achmea valuation
Normative result target (normrendement)
Investment Plan
Impact IAS 19R
RISK MANAGEMENT
Risk management, including risk appetite and risk policies
Euro break-up scenario
Solvency II
Value of New Business
Risk Dashboard
AUDIT & COMPLIANCE
Reports of internal auditor, including audit memorandum
AFM report on Putting customers’ interests first
Reports of external auditor, including management letter
Audit on Income Protection (WGA) developments
Risk Analysis DNB and supervisory reviews
Charter Internal Audit
Pension fund governance
Reports on Audit Committees foreign subsidiaries
Compliance, a.o. Insurers’ Code and Banking Code
85
The Committee discussed the necessary measures
extensively with the Executive Board and was kept fully
informed of the developments that occurred during the
year. The Committee, in consultation with the Executive
Board, also decided to start an independent investigation
of the developments in the income protection market over
the past few years and the reasons for Achmea’s current
financial position in that market. The Committee had
multiple discussions with the Executive Board on the
various options that were investigated as possibilities for
the closed life books in our Life business.
The Committee and PwC discussed the Management
Letter, which clearly describes the quality and effectiveness
of the governance, risk management and processes at
Achmea, specifically to the extent required by PwC for its
judgement on the financial statements of Achmea. Topics
addressed and discussed were the good quality of the Audit
Memorandum of Internal Audit, which clearly describes
existing audit issues and points of attention, turbulent
market circumstances, and customers’ interest first.
Achmea’s improvements in risk management and the ‘three
lines of defense’, the existing IT controls, and the fact that
the envisaged IT transformation is necessary to be fully in
control were also discussed. PwC made some suggestions
regarding the financial reporting process. The Committee
challenged both PwC and the Executive Board on the
findings set out in the Management Letter and concluded to
its satisfaction that all topics addressed therein are in scope
with the Executive Board and that the suggestions made are
being taken seriously by the Executive Board.
Risk management and the company’s risk appetite are key
topics for the Supervisory Board, especially in light of the
current financial environment. The Committee advised the
Supervisory Board on discussions relating to risk appetite
and Achmea’s policy on socially responsible returns.
These were again established with some minor changes
compared to 2011. The Internal Control Statement was
discussed with the Executive Board. Following a thorough
assessment of risks and how Achmea manages them, the
Executive Board identified key risk topics for specific
planning and monitoring. The Committee discussed these
measures thoroughly with the Executive Board and Risk
& Compliance, and shares the analysis of the Executive
Board on these respective matters. Additionally,
the Committee was involved in preparatory work for 2013
and beyond. The committee also discussed a number of
issues extensively with the Executive Board, including
the Management Letter from PwC, the annual audit
plan 2013, the capital, liquidity and funding plan, the
investment plan and related steering/monitoring.
Other financial topics that were discussed during
meetings held in 2012 included the internal sale of Agis
Zorgverzekeringen N.V. to Achmea Zorgverzekeringen
N.V., the dividend policy, regular discussions of Achmea’s
tax position and semi-annual discussions of Achmea’s
competitive position versus the financial performance of
peers.
Report of the Remuneration Committee
Performance evaluation
During the year, the Remuneration Committee evaluated
Executive Board performance against pre-set targets,
which at Achmea must also represent a four-stakeholder
– customers, employees, shareholders and distribution
partners – approach. The pre-set targets include profit;
customer interest and customer satisfaction; cooperation
with distribution partners, such as Rabobank and brokers;
measures relating to compliance and risk management;
employee satisfaction; and measures relating to corporate
social responsibility.
The Committee subsequently makes proposals for long-term
variable income components. The COR receives a report on
the remuneration of the Group, the Executive Board and the
Supervisory Board annually.
The Remuneration Committee thoroughly evaluated the
realisation by the Executive Board of Achmea’s 2011 business
targets. Given the negative results in 2011, no variable
remuneration was paid to the Executive Board. More
information can be found in the Remuneration Report.
Responsible remuneration
As mentioned earlier in the chapter, responsible
remuneration is an important topic for Achmea
86
(see the Remuneration section for more information).
Following the introduction in 2011 of a Responsible
Remuneration Policy, which encapsulates the Insurers’
Code principles, we agreed with regulators on the
establishment of a variable remuneration scheme that
meets the tightened regulatory requirements. Adherence
to and compliance with this new policy became a regular
topic for the Remuneration Committee throughout the
year. In 2012, Achmea agreed with the Executive Board
on adjusting the remuneration package of the Executive
Board downward with direct effect. Achmea also adjusted
the remuneration package of top management, directors
and senior managers downward as per 1 January 2013.
The Remuneration Committee discussed the changes
extensively before they were approved by the Supervisory
Board. The adjustment includes a reduction in the variable
income, of which a limited portion is offset in fixed income,
and a downward adjustment of the pension scheme and
the car-leasing scheme. Although Achmea’s remuneration
system already met current regulatory requirements, the
decision to alter the remuneration package was taken in
light of the challenging market conditions in the financial
sector and the social environment.
Remuneration report 2012
In light of the explanation under the Insurers’ Code on
the severance pay for members of the Executive Board,
as set out in the Corporate Governance chapter, the
Remuneration Committee agreed with the respective
Executive Board members to freeze their entitlements as
per 2012. The Remuneration Committee is pleased that
the Executive Board members accepted these adjustments
in their remuneration package.
For more information on remuneration, see the
Remuneration Report, which can be found on the website
from April 2013.
In the table below the average remuneration of members of
the Executive Board is presented. The average remuneration
is calculated based on regular remunerations, excluding
other short-term and non-current employee benefits. In
2012, average remuneration for members of the Executive
Board decreased to €1 million (2011: €1.42 million).
The granting of awards of variable remuneration, part
of short- and long-term employee benefits, are subject
to a recommendation of the Remuneration Committee
in the year after the performance. Awards of variable
remuneration in any specific year therefore apply to
performance in the previous year. No short-term employee
benefits were awarded related to the performance in 2012
and 2011. The short-term employee benefits relate to the
performance in 2010. Part of the variable remuneration is
subject to claw back and is payable more than 12 month
after the bonus is granted. These bonuses are included as
part of the long-term employee benefits. The long-term
employee benefits relate to 2010 and a portion of these
benefits, €1.2 million, is reserved and will be paid out in
later years with a claw-back clause and 3% interest.
AVERAGE REGULAR REMUNERATION OF AN ACTIVE EXECUTIVE BOARD MEMBER
(EXCLUDING other short-term and non-current employee benefits)
Fixed remuneration
(million)
2012
2011
0.76
0.64 *
Short-term employee benefits paid in 2011 related to 2010 rewards
0.24
Long-term employee benefits (provided for with claw-back) related to 2010 rewards
0.24
Post-employment benefits
0.24
0.30
Total
1.00
1.42
* Adjusted for comparison reasons.
87
REMUNERATION COMMITTEE topics
REGULAR TOPICS
OTHER TOPICS
Achmea remuneration policy
Recalibrations / adjustments in Executive Board remuneration
Reviewing performance targets 2011 and variable remuneration 2011
Recalibrations / adjustments in top management remuneration
Setting performance targets 2012
DNB research on remuneration policies
AFM requirements on remuneration policies
Report of the Selection & Appointment
Committee
The Selection & Appointment Committee’s task is
to monitor the composition and profile of both the
Supervisory Board and Executive Board. It searches for
and makes recommendations on potential candidates, in
some cases in consultation with shareholders or the COR.
Mutations and vacancies
The selection and appointment of a new Supervisory
Board chairman to succeed Mr. Arnold Walravens on his
retirement in 2012 was a priority. Following advice from
the Committee, the then chairman of the Audit & Risk
Committee and Supervisory Board member, Mr. Erik van
de Merwe, was appointed as of 5 April 2012. Mr. van de
Merwe was succeeded as chairman of Achmea’s Audit
& Risk Committee by Mr. Aad Veenman. Mr. Erik van
de Merwe was also a member of the board of Vereniging
Achmea and he stepped down from that position. Mr.
Erik van de Merwe was appointed through the legal
framework of the specific rights attributed to the A share.
Following the retirement of the chairman of the Supervisory
Board, Mr. Arnold Walravens, and Supervisory Board
member Mr. Flip Buurmeijer in accordance with the
retirement rota, two vacancies were created within the
Supervisory Board. As Mr. Arnold Walravens was a joint
nomination from Vereniging Achmea and the COR, the COR
nominated Mrs. Lineke Sneller as a new Supervisory Board
member based upon both the general profile for members
of the Supervisory Board and the specific profile for this
vacancy requiring amongst others ICT-knowledge and
experience, as well as a greater diversity in gender and age.
The Selection & Appointment Committee and the
Supervisory Board were positive about this nomination.
The appointment of Mrs. Lineke Sneller was made during
the General Meeting of Shareholders in June 2012, subject
to approval by the DNB. This approval was obtained in
December 2012, with Mrs. Lineke Sneller taking up her
position on the Supervisory Board on 1 January 2013. The
vacancy resulting from Mr. Flip Buurmeijers’ retirement will
be filled as soon as possible in 2013, based on a nomination
by Vereniging Achmea and both the general and a specific
profile requiring experience in the insurance industry,
commerce, and marketing and/or retail experience.
Succession planning
The Selection & Appointment Committee regularly
discussed succession planning for the Executive Board and
the first management echelon below the Executive Board.
This is done to ensure that the Supervisory Board has an
overview of management capacities within the Group.
In filling the vacancies following the resignation of
Mr. Gerard van Olphen and Mr. Thomas van Rijckevorsel,
the profile of new members is determined. In filling these
vacancies, the aim is to preserve the balance of skills on
the Executive Board while ensuring that new appointees
have the requisite insurance and finance & risk experience.
While increasing gender diversity is an objective of the
selection process, and ensuring quality clearly remains
a key driver, more emphasis will be placed on the
preservation and strengthening of the right mix of skills.
88
SELECTION AND APPOINTMENT COMMITTEE topics
REGULAR TOPICS
OTHER TOPICS
Composition of the Executive Board
Search and selection of new Executive Board member
Evaluation of the Executive Board
Search and selection of new Supervisory Board members
Composition of the Supervisory Board
Selection of new chairman of the Supervisory Board
Evaluation of the Supervisory Board
Composition of Supervisory Board committees
Composition of Supervisory Boards regulated entities
Succession planning top management Achmea
Financial Statements 2012 and dividend
Closing remarks
Our 2012 financial statements were audited by PwC.
They have issued an unqualified opinion. In accordance
with the proposal of the Executive Board and the
recommendation of the Audit & Risk Committee, the
Supervisory Board endorses the adoption by shareholders
of the 2012 Financial Statements. Based on the current
dividend policy, the Executive Board proposes to the
Annual General Meeting that upon adoption of the
Financial Statements, a final dividend of €0.42 (2011: no
dividend on ordinary shares was paid) per ordinary shares
will be paid. With respect to the preference shares, the
Executive Board proposes to the Annual General Meeting
that the full dividend equal to 7.15% of the paid-in
capital on the preference shares will be paid. As well as
adopting the Financial Statements, the General Meeting
of Shareholders is requested to discharge the members
of the Executive Board from all liability in respect of
their management and to discharge the members of the
Supervisory Board from all liability in respect of their
supervision for the year under review, 2012.
We would like to take this opportunity to thank the
Executive Board, the COR, with whom the highly valued
mutual relationship was reinforced even further in 2012, and
all Achmea employees across Europe for all their hard work
and commitment during the reporting year. We especially
thank Mr. Arnold Walravens, Mr. Flip Buurmeijer,
Mr. Gerard van Olphen and Mr. Thomas van Rijckevorsel
for the contributions they have made to our Group.
5 March 2013
The Supervisory Board
E.A.J. (Erik) van de Merwe, Chairman
M. (Marinus) Minderhoud, Vice-Chairman
S.T. (Joke) van Lonkhuijzen - Hoekstra
M. (Mijntje) Lückerath - Rovers
P.F.M. (Paul) Overmars
H.J. (Henk) Slijkhuis
A.C.W. (Lineke) Sneller
A.W. (Aad) Veenman
A.J.A.M. (Antoon) Vermeer
B.J. (Bé) van der Weg
89
Achmea B.V. is a private company with limited liability. Its statutory seat and head
office are in Zeist, the Netherlands. Although in real terms Achmea is governed,
organised and managed in the same way as many listed organisations, its
cooperative origins contribute to the way governance is structured at Supervisory
Board and shareholder level. Achmea adheres to a number of relevant governance
codes: the Dutch Insurers’ Code, the Dutch Banking Code and the Dutch Corporate
Governance Code.
Main developments in 2012
Corporate Governance Codes
Effective January 2012, we changed our organisational
structure. The new structure aims to ensure that we
translate market demands more quickly and effectively
into accessible, understandable and affordable
products, whereby customers’ interests are put first.
The organisation change aims to contribute to our
ambition to become the most trusted insurer. The Profile
chapter explains that by reinforcing and sharpening
the commercial focus of our operating units, we will
do everything we can to give our customers the right
products, at the right price, delivered through the right
channels. We now have product divisions with strong
product capabilities that can more easily translate
customer demands into accessible, understandable and
affordable products. Distribution divisions are committed
to a specific channel or customer group and empower
the various brands. We think and work from one unified
Achmea, between product and distribution divisions on
the one hand, and brands on the other. This is how we
create unity in diversity.
Insurers’ Code
In 2010 and 2011, the Dutch Central Bank carried out
governance reviews of all Dutch financial institutions,
including Achmea. The Dutch Central Bank made a
number of recommendations, including on the governance
of Dutch legal insurance entities. As a final step in the
implementation of these recommendations, and following
the new organisational structure, on 1 July 2012 Supervisory
Boards were installed at Achmea Schadeverzekeringen
N.V. and Achmea Pensioen- & Levensverzekeringen N.V. A
Supervisory Board had already been installed at Achmea
Zorgverzekeringen N.V. from 25 May 2011.
At the end of 2010, the Dutch Association of Insurers
adopted Governance Principles (the Insurers’ Code)
to which all Dutch-licensed insurers must adhere
from 1 January 2011. We have elected to report on the
application of the Insurers’ Code at Group level because
of the structure of its organisation and the Group’s
governance. The Executive Board of Achmea manages the
Group based on uniformity in management, policy and
supervision. The Supervisory Board monitors the whole
Group in order to safeguard that management and policy
are synchronised across the organisation. With the current
governance of the insurance entities and current policies
that apply across the Achmea Group, the Executive Board
feels that the principles of the Insurers’ Code are also
implemented sufficiently at insurance entity level.
N.V. Interpolis Kredietverzekeringen and De Friesland
Zorgverzekeraar N.V., together with the other insurance
entities that are part of the De Friesland Group (DFZ),
form exceptions to the consolidated reporting of the
Insurers’ Code. N.V. Interpolis Kredietverzekeringen is
a joint enterprise with Euler Hermes Kredietverzekering
N.V. The DFZ insurance entities have only been part of
the Achmea Group since 31 December 2011 and have
a contractually agreed independent position in relation
to the Group until 31 December 2016. In light of their
independent position towards the Achmea Group,
these entities are responsible for their own application,
adherence to and reporting on the application of the
Code and are not covered in this publication. The report
of DFZ is published on the website www.defriesland.nl.
90
corporate governance
Furthermore, our banking activities (Achmea Bank and
Staalbankiers) report separately on their adherence to the
Dutch Banking Code. These reports are published on their
respective websites www.achmeahypotheekbank.nl and
www.staalbankiers.nl and also on www.achmea.com.
updated policy, which includes the Normative Framework
for Propositions. Although an audit carried out in
mid-2012 showed that progress within the Normative
Framework for Propositions has been made, it also
indicated that in some areas better assurance is possible.
We are largely in compliance with the Insurers’ Code.
Although the Executive Board and Supervisory Board
are pleased to note that two exceptions from 2011 – the
translation of the Executive Board’s moral and ethical
conduct declaration into principles that form guidelines for
personnel (principle 3.2.4.) and measuring performance
corrected for risk (principle 6.4.4)– have been solved, in 2012
we had not yet fully applied the following three principles
from the Code.
The deviation on severance pay of three Executive Board
members, including the two members that stepped down
in 2012 and 2013, is related to commitments made before
the Insurers’ Code became effective and will disappear
with future appointments. Currently, the deviation on
severance applies to one Executive Board member, and
this member agreed an transitional agreement with the
Supervisory Board to freeze his entitlements as of yearend 2012. The agreements with the two Executive Board
members that were appointed to the Executive Board after
1 June 2008 are in line with the Insurers’ Code. This is
explained in the Remuneration Report 2012, which can be
found on our website from April 2013.
1. Putting customers’ interests first (Klantbelang Centraal)
(principle 3.2.2)
2. Assuring the product approval process (principle 4.5)
3. Executive Board severance pay (principle 6.3.2)
On putting customers’ interests first, we have already
taken numerous measures to comply with the Insurers’
Code. Putting customers’ interests first was introduced
into our identity in 2010. Our identity is the starting point
to further embed ‘customers first’ into the culture, products
and services of the company. We have incorporated the
principle of putting customers’ interests first into our
personnel and organisation policy by outlining the desired
behaviour in job descriptions, recruitment material and
during in-house training. In 2012, we also continued to
implement our Normative Framework for Propositions,
which contains the quality requirements for both current
and future products and services, and the requirements
our brands need to fulfil to live up to our ambition to be
the most trusted insurer. In 2012, several Achmea labels
continued their participation in the customer oriented
insurance quality mark (Keurmerk Klantgericht Verzekeren).
Although important steps have been taken to ensure full
compliance with the principle of putting customers’ interests
first, the Executive Board finds that more is required to be
able to become the most trusted insurer.
The product approval process was defined in the 1 January
2012 update of the Dutch Insurance Product Approval
Policy. In January 2012, we began implementing this
The Dutch Insurers’ Code and an itemised review of our
compliance can be found on our website, www.achmea.com.
Banking Code
As part of our service to customers, we also operate banking
activities through Achmea Bank and Staalbankiers. Both
banks are largely compliant with the Banking Code.
In 2012, Achmea Bank and Staalbankiers had not yet fully
applied the principle from the Banking Code on putting
customers’ interests first (Klantbelang Centraal) (principle
3.2.2.).
In line with the Group’s insurance activities, both Achmea
Bank and Staalbankiers took important steps in putting
customers’ interests first in 2012. Although important steps
to ensure full compliance with the principle of putting
customers’ interests first have been taken at Achmea
Bank and Staalbankiers, their boards believe that more is
required to be able to state that customers’ interests are
always put first.
The Dutch Banking Code and a review of the compliance
of Achmea Bank and Staalbankiers can be found at
www.achmeahypotheekbank.nl and www.staalbankiers.nl.
91
Corporate Governance Code
From 2004, the Dutch Corporate Governance Code became
applicable for all listed companies in the Netherlands. The
Code sets out clear governance principles on a ‘comply
or explain’ basis. Although we are not a listed company,
we have voluntarily adopted and embedded the majority
of the Code’s principles in our governance structure.
Where applicable, we are largely in compliance with the
principles and best practices.
In 2012, we were not yet fully in compliance with three
principles of the Corporate Governance Code:
1.The duration of the appointment of members of the
Executive Board (principle II.1.1.)
2.Executive Board severance pay (principle II.2.8)
3.Independence of members of the Supervisory Board
(principle III.2.2.)
On the duration of the appointment of members of the
Executive Board the Code advises four-year periods.
Given that Achmea Executive Board members are
recruited primarily from within the organisation and
given the Group’s long-term horizon, a formal four-year
appointment is not considered appropriate. Furthermore,
we take the view that the appointment of an Executive
Board member for a period of four years could stimulate
short-term behaviour whereas a long-term view prevails
within the company.
For deviation of Executive Board severance pay, please see
the Insurers’ Code section earlier in this chapter.
Although all members of Achmea’s Supervisory Board are
independent in ‘mind’ and ‘appearance’, in ‘state’ four
members of Achmea’s Supervisory Board do not comply
with sub f of principle II.2.13 as being board members
or Supervisory Board members of a holder of more than
10% of the shares in Achmea. Members of Achmea’s
Supervisory Board are nominated by our shareholders (i)
Vereniging Achmea; (ii) Rabobank; (iii) Länsförsäkringar
Liv Försäkringsaktiebolag, Länsförsäkringar Sak
Försäkringsaktiebolag, Gothaer Allgemeine Versicherung,
Gothaer Finanz Holding and Schweizerische Mobiliar
Holding jointly; and by the Central Works Council (in
Dutch: COR).
Mr. Paul Overmars and Mr. Bé van der Weg are also
members of the Board of Directors of Vereniging Achmea,
which is composed of customers’ representatives.
Mr. Erik van de Merwe, Mr. Marinus Minderhoud and
Mr. Antoon Vermeer are also Supervisory Board members
of Rabobank. This is considered highly appropriate
for Achmea due to its cooperative identity and the
relationship with shareholders whose focus is more on
client interest and the continuity of Achmea. In addition,
no single group of Supervisory Board members nominated
by the same shareholder or COR has the majority in
the Supervisory Board. Although Supervisory Board
members are nominated by individual shareholders and/
or the COR, they are appointed by the General Meeting of
Shareholders based on their expertise and independence
and participate in meetings with no reference to or
consultation with the parties that nominated them.
The way in which we have adopted and embedded the
Corporate Governance Code has been discussed with and
approved by the Supervisory Board. The General Meeting
of Shareholders concurs with our current corporate
governance structure.
Executive Board
Accountabilities and governance role
The Executive Board is responsible for managing Achmea
B.V.’s business. It is responsible and has decision-making
power for managing the day-to-day business of
Achmea in accordance with the principles set out in
the Articles of Association. The Executive Board has a
comprehensive charter that covers the duties, activities
and allocation of tasks to individual members, as well
as the decision-making process within the Executive
Board. The Executive Board is obliged to notify the
Supervisory Board in case of any fundamental differences
of opinion between the Executive Board and boards of
Achmea companies or entities. In 2012, there were no
fundamental differences. The Executive Board reports
directly to the Supervisory Board. Each member has
direct responsibility for specific Achmea activities (see
‘Executive Board biographies’), with clear reporting lines
from divisional and staff directors. The full Executive
92
Board is involved in risk management – risk is Achmea’s
business. This involvement is shown by the commitment
from two Executive Board members in the Finance & Risk
Committee and regular extensive discussions on risk in the
Executive Board meetings.
The Executive Board, its members acting independently
therein, ensures a balanced consideration of all interests
of the involved parties, such as customers, shareholders
and employees. It takes into account the continuity of
Achmea, the social environment in which we operate
and the applicable regulations and codes. Achmea
has long since adopted the ‘four-stakeholder model’,
whereby overall management and decisions are in line
with the interests of customers, employees, shareholders
and distribution partners. This is all anchored in the
strategy map and the identity of the Group as set out
in the Profile chapter and successively in the leadership
program, the Business Plans and the remuneration policy
and it is also part of the considerations in every decision
taken by the Executive Board. The target setting for the
Executive Board and senior management is based on the
‘Stakeholder Value Management’ model. From 2012 on,
annual targets are arranged along the six perspectives:
customer, employee, partner, society, financial, and
process. All members of the Executive Board were present
at most board meetings.
Composition and diversity
Members of the Executive Board are appointed by the
Supervisory Board at the non-binding nomination of the
A-shareholder. Executive Board members are selected
based on their proven experience and competence in the
financial services industry. The members of the Executive
Board provide a good mix of specific insurance experience
(health, non-life, life & pensions) and experience with the
public/private market (care, pensions) and the various
distribution channels (direct, broker, bancassurance)
and disciplines, such as Finance, IT and HR. All current
Achmea Executive Board members match the general
profile for members of the Executive Board and have been
assessed positively by the Dutch supervisory authorities.
The Executive Board currently has three members. Due to
the resignation of Mr. Gerard van Olphen as of 1 February
2013 to become CEO of SNS Reaal, and the resignation in
2012 of Mr. Thomas van Rijckevorsel, there are currently
two vacancies in the Executive Board. Currently, the
Executive Board consists of only men, which is not yet
in line with the legal requirement for gender diversity
in the Executive Board. Achmea, however, is well aware
of this legal requirement but, also because of the strict
requirements by the Dutch Regulator on suitability of
board members, has not yet been able to comply with
this requirement. In filling the current vacancies in the
Executive Board, besides the aim to preserve the balance
of skills on the Executive Board while ensuring that new
COMPOSITION of the EXECUTIVE BOARD per 31 december 2012
NAME
NATIONALITY
GENDER
EDUCATION
FUNCTION
W.A.J. van Duin
(1960)
Dutch
Male
Law
Since February 2009
April 2004
Chairman of the Board
APPOINTED
G. van Olphen *
(1962)
Dutch
Male
Economics
Since October 2008
September 2002
Vice-Chairman of the
Board and Chief
Financial & Risk Officer
J.A.S. van Breda
Vriesman
(1967)
Dutch
Male
Law
Board member
October 2008
D. van der Eijk
(1958)
Dutch
Male
Insurance
Board member
October 2008
* Stepped down 1 February 2013
93
appointees have the requisite insurance and finance & risk
experience also increasing gender diversity is an objective
of the selection process. In succession planning for the
Executive Board and the first echelon below the Executive
Board for both the current vacancies and future vacancies
attention is paid to promoting women at the top.
However, while Achmea acknowledges that increasing
gender diversity and ensuring quality are important, the
preservation and strengthening of the right mix of skills
remain key drivers in this selection process.
Permanent education
At the beginning of each year, the themes for the continuing
education program for the Executive Board are established
in consultation with the chairman of the Executive Board
and the chairman of the Supervisory Board. This program
is aimed at maintaining and broadening the expertise of
the members of the Executive Board. In addition to these
dedicated sessions, often held together with the Supervisory
Board, during regular meetings attention is also paid to
relevant developments through presentations from internal
and/or external specialists.
Supervisory Board
Accountabilities and governance role
The Supervisory Board plays an important role in
Achmea’s governance. The Supervisory Board is responsible
for supervising, advising and approving the Executive
Board’s conduct and general management of the business.
Supervisory Board approval is required primarily for
important business-related decisions, such as appointment
and dismissal of members of the Executive Board, strategic
decisions, transfer of a significant part of the business,
entering into or terminating a long-term cooperation,
large participations and investments, and termination of
the employment of a considerable number of employees
or significant changes in the employment conditions of a
significant number of employees. This applies irrespective of
the fact that fundamental and large-scale strategic changes
or investments must have the approval of 80% of the votes
in the General Meeting of Shareholders.
The Supervisory Board and its individual members have a
responsibility to obtain all relevant information needed to
perform their duties. These needs are made known to the
chairman of the Supervisory Board. Information sources
are usually the Executive Board, the Company Secretary
and the external auditor. However, if deemed appropriate
by the Supervisory Board, information can be obtained
from corporate officers and external advisors who can be
invited to attend Supervisory Board meetings.
The Supervisory Board consists of members who, although
they are nominated by shareholders or the COR, in the
performance of their duties act in the interests of the
company as a whole. All members of the Supervisory
Board participate in meetings with no reference to or
consultation with the parties that nominated them.
All members of the Supervisory Board were present at
most Supervisory Board meetings, and the respective
committees of which they are a member.
Composition and diversity
The composition of the Supervisory Board and
nominations for vacancies reflect the cooperative
shareholder structure and employee participation through
Achmea’s COR. Vereniging Achmea has nominated
candidates for five seats in the Supervisory Board, of
which one member has been appointed on the basis of a
nomination by DFZ and one member has been appointed
in joint consultation between Vereniging Achmea and
the COR. With the merger between the shareholder of
DFZ, Vereniging De Friesland Zorgverzekeraar, and
Vereniging Achmea and the successive transfer of the
activities of DFZ to Achmea, the nomination right of
DFZ has ceased to exist. Vereniging Achmea – as the
indirect holder of the A-share – is also entitled to appoint
the chairman of the Supervisory Board. Rabobank may
nominate candidates for three seats and Länsförsäkringar
Liv Försäkringsaktiebolag, Länsförsäkringar Sak
Försäkringsaktiebolag, Gothaer Allgemeine Versicherung,
Gothaer Finanz Holding and Swiss Mobiliar jointly
are entitled to nominate one candidate. At present,
two members of the Supervisory Board are a direct
nomination by the COR, further to the appointment in
joint consultation between Vereniging Achmea and the
COR. This is within the legal framework of the COR’s
94
COMPOSITION of the SUPERVISORY BOARD per 31 december 2012
(RE)APPOINTED /
EXPIRATION OF
CURRENT TERM
NAME
NATIONALITY
GENDER
FUNCTION
TERM
(MAX 3 TERMS)
E.A.J. van de Merwe
Dutch
Male
Chairman
Second
2010 / 2014
Third
2012 / 2016
(1950) 1
of the Board
M. Minderhoud
Dutch
Male
(1946) 2
Vice-chairman
of the Board
Dutch
Female
Board member
First
2011 / 2015
Dutch
Female
Board member
First
2011 / 2015
Dutch
Male
Board member
Second
2009 / 2013
Dutch
Male
Board member
Third
2012 / 2016
Dutch
Female
Board member
First
2013 / 2017
Dutch
Male
Board member
First
2009 / 2013
Dutch
Male
Board member
Second
2010 / 2014
Dutch
Male
Board member
Third
2010 / 2014
(1960) 1
M. Lückerath
(1968) 3
P.F.M. Overmars
(1945) 1
H.J. Slijkhuis *
(1946) 1
A.C.W. Sneller **
(1965) 3
A.W. Veenman
(1947) 2
A.J.A.M. Vermeer
(1949) 2
B.J. van der Weg
(1943) 1
3
* Steps down 28 March 2013.
** Appointed 1 January 2013.
1
Nominated by VA.
2
Nominated by Rabobank.
3
Nominated by COR.
enforced recommendation right; eventually, the COR will
be entitled to nominate three members directly, based on
a total number of 11 Supervisory Board members. This,
however, will be implemented gradually. In their turn,
Supervisory Board members individually participate in
a meeting of the COR at least once a year. Any proposed
changes to the composition of the Supervisory Board are
submitted to the General Meeting of Shareholders for
appointment and discussed with the COR.
In filling these vacancies, the aim is to preserve the
balance of skills on the Executive Board while ensuring
that new appointees have the requisite insurance and
finance & risk experience.
The Supervisory Board currently has ten members. The
vacancy resulting from Mr. Flip Buurmeijers retirement
will be filled as soon as possible in 2013, on the basis of a
nomination by Vereniging Achmea and both the general
profile and a specific profile requiring expertise in the
insurance industry, commerce, and marketing and/or retail
experience. Supervisory Board members are selected and
appointed based on a profile consisting of the required
professional background, education, (international)
experience, skills, diversity and independence. The current
composition of the Supervisory Board is such that the
mix of experience and expertise enables the members of
the Supervisory Board to fulfil their obligations in an
appropriate manner. As of 1 January 2013, the Supervisory
Board consisted of seven men and three women, of which
one male member will resign as per 28 March 2013. In
addition to diversity in knowledge, expertise and age,
diversity in gender has also been realised.
95
NAME
EDUCATION
MANAGEMENT
GOVERNANCE
INSURANCE
BANKING
FINANCE /
RISK / AUDIT
HR /
REMUNERATION
LAW /
COMPLIANCE
COMMERCE /
CUSTOMERS’
INTERESTS
IT
Areas of professional expertise
E.A.J. van de Merwe
Economics
•
•
•
•
•
•
•
•
•
M. Minderhoud
Chemistry
•
•
•
•
•
•
•
•
•
Business
administration
•
M. Lückerath
Economics
•
•
•
•
P.F.M. Overmars
Law
•
H.J. Slijkhuis *
Agriculture
•
A.C.W. Sneller **
Econometrics
•
A.W. Veenman
Technical
sciences
•
•
A.J.A.M. Vermeer
Agriculture
•
•
•
•
B.J. van der Weg
Human resources
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
* Steps down 28 March 2013.
** Appointed 1 January 2013.
Achmea therewith complies with the legal requirement for
gender diversity in the Supervisory Board. Furthermore,
with the exception of one member, all Supervisory Board
members comply with the new bill on management
and supervision that puts limitations on the number
of supervisory positions that a managing director or a
supervisory director of an N.V., a B.V. or a foundation
(stichting) that qualifies as a ‘large company’ may hold.
The one member currently exceeding the new limitations
will resign from some of his positions in 2013 in order to
comply with the new requirements.
permanent education program for the Supervisory Board
are established in consultation with the chairman of the
Supervisory Board. This program is aimed at maintaining
and broadening the expertise of the members of the
Supervisory Board. In addition to these dedicated sessions,
often held together with the Executive Board, in regular
meetings attention is also paid to relevant developments
through presentations from internal and/or external
specialists. Furthermore, new members of the Supervisory
Board participate in a tailor-made introductory programme.
Supervisory Board committees
Permanent education
At the beginning of each year, the themes for the
The Supervisory Board has three dedicated committees
that advise the full Supervisory Board: the Audit &
96
Risk Committee, the Remuneration Committee, and the
Selection & Appointment Committee. All Supervisory
Board members receive the minutes of the individual
committee meetings and, at their request, also the agenda
and any accompanying documents.
Financial, audit, risk and compliance issues are discussed
in the Audit & Risk Committee. Audit & Risk Committee
meetings are always attended by the CFRO, the chairman
of the Executive Board, the directors of Internal Audit,
Finance and Risk & Compliance and the external auditor.
Meetings between the Audit & Risk Committee and
the external auditor, without the presence of members
of the Executive Board, take place at least once a year.
For further information, see also the Supervisory Board
Report section.
The Remuneration Committee’s primary task is to
advise the Supervisory Board on remuneration policy
for the entire Achmea Group (including foreign
operating companies). In addition, the Remuneration
Committee is responsible for setting guidelines and
monitoring the execution of and adherence to the
Achmea remuneration policy for the entire Achmea
Group. This includes advising the Supervisory Board
on performance management (for example, ensuring a
balance between short- and long-term interests and focus
on customer interest) of the members of the Executive
Board. A regular review of remuneration is carried
out to ensure that reward levels are appropriate to the
duties and responsibilities of the role. This includes
adequate preparation of necessary policy revisions
or adjustments to comply with new regulations or
legislation. The chairman of the Executive Board attends
all Remuneration Committee meetings but excuses
himself during agenda items where his own remuneration
is discussed or in other cases when requested by the
Committee Chairman.
The Selection & Appointment Committee’s task is
to monitor the composition and profile of both the
Supervisory and Executive Boards. It searches for and
makes recommendations on potential candidates, in some
cases in consultation with the COR. The chairman of the
Executive Board attends all Selection & Appointment
Committee meetings but excuses himself during agenda
items where his own functioning is discussed or in other
cases when requested by the Committee Chairman.
Shares, shareholders and shareholders’
meetings
Shareholders
Our largest shareholders, Vereniging Achmea and
Rabobank, are cooperative organisations. Others
are primarily unlisted European organisations with
cooperative roots.
Dutch customers are represented through Achmea’s
largest shareholder, Vereniging Achmea, directly and
through the Stichting Administratiekantoor Achmea
(STAK Achmea). STAK Achmea is a shareholder that
has, in its turn, issued depository receipts to Vereniging
Achmea. STAK Achmea is managed by a Board consisting
of the chairman and the two vice-chairmen of Vereniging
Achmea. Important STAK Achmea decisions require
prior approval from the Board of Vereniging Achmea and
in some cases also the Members’ Council of Vereniging
Achmea. At year-end 2012, Vereniging Achmea held a total
of 65.3% of the capital rights in Achmea and 61.6% of the
voting rights in the General Meeting of Shareholders.
Rabobank, the largest bank on the Dutch market, is
Achmea’s second largest shareholder; it is also a cooperative
association. At year-end 2012, Rabobank held a total of
29.2% of the capital rights in Achmea and 27.6% of the
voting rights in the General Meeting of Shareholders.
Other shareholders, jointly representing 5.5% of the
capital rights and 5.2% of the voting rights in the
General Meeting of Shareholders, are BCP Pension
Fund, Länsförsäkringar Liv Försäkringsaktiebolag,
Länsförsäkringar Sak Försäkringsaktiebolag, Gothaer
Allgemeine Versicherung, Gothaer Finanz Holding and
Schweizerische Mobiliar Holding. With the exception
of BCP Pension Fund, all are members of the Eurapco
Alliance of independent European financial services
providers (for more information, see www.eurapco.com).
Besides ordinary shares, 5.6% of Achmea’s entire issued
share capital is in preference shares held by Achmea
Tussenholding B.V. (managed by the Executive Board
97
of Achmea). All shares in Achmea Tussenholding B.V.
are held by Stichting Administratiekantoor Achmea
Tussenholding that, in turn, has issued share certificates
to investors. The investors are therefore the recipients of
dividends paid on the preference shares; they do not have
voting rights in the General Meeting of Shareholders of
Achmea. These lie with Achmea Tussenholding B.V.
Shareholders per 31 December 2012 *
voting
rights
capital
rights
Vereniging Achmea (directly and via STAK)
61.6%
65.3%
Rabobank
27.6%
29.2%
BCP Group
2.6%
2.8%
Länsförsäkringar Liv Försäkringsaktiebolag
0.4%
0.5%
Länsförsäkringar Sak Försäkringsaktiebolag
0.4%
0.5%
Gothaer Allgemeine Versicherung A.G.
0.5%
0.5%
Gothaer Finanz Holding A.G.
0.6%
0.6%
Schweizerische Mobiliar Holding A.G
0.7%
0.7%
Achmea Tussenholding B.V.
5.6%
**
Total
100%
100%
* As a result of rounding, numbers might not add up to 100%.
** Preference shares.
Shareholders’ meetings
In addition to the annual General Meeting of Shareholders,
extraordinary meetings can be called based on legislation,
Articles of Association and corporate documentation
if deemed necessary and can also be convened by a
shareholder with more than 10% of the voting rights.
Due to the legal structure regime that applies to Achmea,
the power of the General Meeting of Shareholders
is constrained; based on legislation and corporate
agreements certain responsibilities are allocated to the
Supervisory Board. Nevertheless, shareholder approval
is required for primarily corporate decisions, such as
amendment of the Articles of Association; adoption of
the Financial Statements, including profit allocation and
dividend; decisions on share issues or on the granting
of rights to subscribe for shares (or to designate the
Executive Board to resolve such issues or grants);
reduction of the share capital of Achmea; appointment
and dismissal of members of the Supervisory Board
and decisions to dissolve, merge or divide Achmea.
Fundamental and large-scale strategic changes or
investments require the approval of 80% of the votes
in the General Meeting of Shareholders. Besides the
annual General Meeting of Shareholders held on April
2012 – in which further to the regular decisions on the
Annual Report and Financial Statements 2011, dividend
policy, dividend distribution and the discharge of the
members of the Executive Board and Supervisory Board,
decisions were taken on the re/appointment of members
of the Supervisory Board and the final settlement of
the purchase price of DFZ in Achmea shares – one
extraordinary meeting was convened in 2012 on the
proposed appointment of Mrs. Lineke Sneller.
Voting rights
Specific rights are attributed to the A-share, indirectly
held by Vereniging Achmea, including the right to make
non-binding nominations to the Supervisory Board for
the appointment of members of the Executive Board,
the appointment of the chairman of the Supervisory
Board, the approval of a decision on dissolution, merger
and division of Achmea, and the issuance and transfer
of shares in Achmea. The holders of depository receipts
issued on the A-share and the ordinary shares are entitled
to attend the General Meeting of Shareholders but they do
not have any voting rights. This provision, however, does
not apply to holders of a right of usufruct and holders
of a right of pledge with voting rights. Shareholders and
holders of depository receipts can be represented by
written proxy. Members of both the Executive Board
and Supervisory Board are authorised to attend General
Meeting of Shareholders. They have an advisory and
informative role at these meetings.
Dividend policy
The distribution of profits is laid down in Achmea’s
Articles of Association. Dividends are due and payable
four weeks after the General Meeting of Shareholders has
declared them (unless any other date is determined). The
Executive Board can propose that the General Meeting of
Shareholders resolves that distributions shall be made in
whole or in part in a form other than cash.
98
The General Meeting of Shareholders may resolve to
distribute all or part of the net result. Interim distribution
can be effected if the General Meeting of Shareholders
so decides, following a proposal by the Executive Board.
Achmea’s dividend policy is described more fully and in more
detail in the Capital and Liquidity Management chapter.
99
Executive Board
Willem A.J. van Duin (1960)
Chairman of the Executive Board
Mr. van Duin joined Achmea in 1987. He held various positions at Holding level and in the
Health, Broker and Direct distribution divisions before being appointed to the Executive
Board in 2004. He was appointed Vice-Chairman of the Executive Board on 1 October 2008,
and Chairman on 10 February 2009. In addition to his overall responsibility for Achmea,
his core responsibilities include Internal Audit, Corporate Office, Communication & CSR
and the Central Works Council. In addition to supervisory directorships of a number of
Achmea entities, he is member of the board of the European Alliance Partners Eurapco.
Furthermore, he is a member of the board of the Dutch Association of Insurers (Verbond
van Verzekeraars), member of the boards of VNO-NCW and Nationale Cooperatieve
Raad. Internationally, he is member of the IFHP Council (International Federation of
Health Plans) and of the strategic board of Insurance Europe, the European insurance and
reinsurance federation. Mr. van Duin is also a board member of a number of charitable
foundations in the Netherlands.
Jeroen A.S. van Breda Vriesman (1967)
Mr. van Breda Vriesman studied law at the University of Utrecht and began his career at
ING Group, where he held a number of management positions at Nationale Nederlanden. In
2004 he joined Achmea as Chairman of the Occupational Health division. From 2006 until
the end of September 2008 he was Chairman of the Health division, when he was appointed
member of the Executive Board of Achmea. His core responsibilities include the Health
and the Life and Pensions product division, the banking distribution division and Group IT.
Mr. van Breda Vriesman holds supervisory directorships of a number of Achmea entities.
In 2011 he became a member of the Supervisory Board of the African Research & Resource
Forum, Kenya, member of the Supervisory Council of the Eye Hospital in Rotterdam and
a member of the Supervisory Board of Netspar, the Network on Studies on Pensions, Aging
and Retirement.
Danny van der Eijk (1958)
After obtaining his professional insurance qualifications, Mr. van der Eijk completed
an MBA at Henley (UK). He worked in a variety of positions at R&SA Benelux from
1984-2002, the last two years as CEO. Within Achmea he was a director of Avéro
Achmea, managing director of Achmea Commercial lines and subsequently of the direct
distribution division. He became a member of the Executive Board in October 2008. His
core responsibilities include the Direct, Broker and Corporate Clients distribution divisions
and the Non-life product division, Market Strategy, Reinsurance and Group HR. Mr. van
der Eijk is a supervisory director of a number of Achmea entities. He is chairman of the
statistics committee and vice-chairman of the non life sector board of the Dutch Association
of Insurers. From 1 January 2011, he is also member of the advisory board for NIBE SVV,
the knowledge institute for the Dutch financial, insurance and investment sectors. In 2011 he
became a member of the board of the International Insurance Society.
100
Supervisory Board
Erik A.J. van de Merwe (1950)
Chairman of the Supervisory Board
Mr. van de Merwe is Chairman of the Supervisory Board. In addition, he is Chairman
of the Supervisory Board and Audit & Risk Committee of Achmea Bank Holding N.V.
and Staalbankiers N.V. Away from Achmea, Mr. Van de Merwe holds a number of other
supervisory board positions. He is a member of the Supervisory Board and Audit, Compliance
& Risk Committee of Rabobank Nederland, the non-executive Chairman of GWK Travelex,
and is Chairman of the Advisory Board and member of the Audit Committee of the Dutch
Burns Foundation as well as Chairman of the Euro Tissue Bank (part of the Dutch Burns
Foundation). Mr. Van de Merwe is also Chairman of the ‘Curatorium Corporate Compliance
& Integrity’ of the Vrije Universiteit, a member of the Advisory Board of the Institute of
Internal Auditors and a jury member of the Henri Sijthoff Award.
Marinus Minderhoud (1946)
Vice-Chairman of the Supervisory Board
Mr. Minderhoud is Vice-Chairman of the Supervisory Board. In addition, he is a member
of the Supervisory Board and Chairman of the Audit & Risk Committee of De Friesland
Zorgverzekeraar N.V. He is also a member of the Supervisory Board of Rabobank Nederland
and Chairman of the Board of Vodafone International Holdings and Vodafone Europe.
Joke S.T. van Lonkhuijzen – Hoekstra (1960)
Ms. Van Lonkhuijzen – Hoekstra is a member of the Supervisory Board. In addition, she is
a member of the Supervisory Board of Achmea Zorgverzekeringen N.V. Until the merger
between Vereniging De Friesland, the shareholder of the De Friesland Zorgverzekeraar, and
Vereniging Achmea and the successive transfer of the activities of the De Friesland Groep
to Achmea, she was a member of the Supervisory Board and Audit & Risk Committee of
De Friesland Zorgverzekeraar N.V. She has a broad background in the Dutch health sector,
beginning her career as a nurse. Until 2012 she was chairman and CEO of several psychiatric
institutions in Amsterdam (GGZ inGeest). She is a member of the Supervisory Council of
Trimbos Institute, a member of the board of NVZD and also Chairman of the Curatorium
postdoctoral education change management at the VU University Amsterdam.
101
Supervisory Board
Mijntje Lückerath – Rovers (1968)
Ms. Lückerath-Rovers is a member of the Supervisory Board. In addition, she is a member
of the Supervisory Board of Achmea Pensioen- & Levensverzekeringen N.V. She holds the
chair of Corporate Governance at Nyenrode Business Universiteit in the Netherlands. She
is a member of the Supervisory Board of ASN Investmentfunds and the Greenfund of the
ASN Bank. In 2011 she became a member of the Board of Betaalvereniging Nederland. She
is (co-)editor of a number of academic journals, including Good Governance, the Journal of
Supervision and the Corporate Governance Year Book.
Paul F.M. Overmars (1945)
Mr. Overmars is a member of the Supervisory Board. In addition, he is Chairman of the
Achmea Foundation, Chairman of the Supervisory Board of Achmea Zorgverzekeringen
N.V. and a member of the Board of SCEA (Stichting Continuïteit Eureko/Achmea).
Prior to his retirement in 2004, Mr Overmars was CEO of Achmea and Vice-Chairman
of the Executive Board of Eureko. As from 31 March 2010, he was appointed Chairman
of Vereniging Achmea. Until 17 June 2010 he was a member of the Supervisory Board
of Rabobank Nederland. Until mid-2005, he was Chairman of the Board of the Dutch
Association of Insurers and a member of the Management Board of VNO-NCW.
Henk J. Slijkhuis (1946)
Mr. Slijkhuis is a member of the Supervisory Board. In addition, he is a member of the
Supervisory Board of Achmea Zorgverzekeringen N.V. and of the Board of Directors of
Vereniging Achmea. He is an independent farmer. Until July 2011 he was Chairman of the
Supervisory Board of Countus Accountants- en Belastingadviseurs. Mr. Slijkhuis will step
down from the Supervisory Board as of 28 March 2013.
Lineke C.W. Sneller (1965)
Ms. Sneller is member of the Supervisory Board. In addition, she is member of the
Supervisory Board of Achmea Pensioen- en Levensverzekeringen N.V. Since 2011, she is
CIO at Vodafone Nederland and professor in Accounting Information Systems at Nyenrode
Business University. She started her career at Ortec Consultants in 1988. Ms. Sneller is a
member of the Advisory Board of VRC (Vereniging van Registercontrollers), and a member
of the Review Board Informatievoorziening Nationale Politie Dutch ministry of Justice. She
is also a member of the Advisory Board CIOnet.
102
Supervisory Board
Aad W. Veenman (1947)
Mr. Veenman is a member of the Supervisory Board. In addition, he is a member of the
Supervisory Board of Achmea Schadeverzekeringen N.V. From 2002 until 2009 he was
Chairman and CEO of Dutch national railways, NS. Before joining the NS, he had a long
career with the Dutch industrial enterprise Stork, where he was a member of the Board
of Management from 1990, and CEO from 1998 through 2002. Until 17 June 2010 he was
a member of the Supervisory Board of Rabobank Nederland. Currently, Mr. Veenman is
Chairman of the Supervisory Board of Tennet Holding and a member of the Supervisory
Board of Draka Holding.
Antoon J.A.M. Vermeer (1949)
Mr. Vermeer is a member of the Supervisory Board. In addition, he is Chairman of the
Supervisory Board of Achmea Schadeverzekeringen N.V. He is co-owner of a dairy farm,
and is Vice-Chairman of the Supervisory Board of Rabobank Nederland. He is also a
member of the curatorium of the ZLTO Chair Food, Farming and Agribusiness, Tilburg
University and Chairman of the HAS Supervisory Board.
Bé J. van der Weg (1943)
Mr. van der Weg is a member of the Supervisory Board. In addition, he is Chairman of the
Supervisory Board of Achmea Pensioen- en Levensverzekeringen N.V. and a member of the
Board of Directors of Vereniging Achmea. He is also Chairman of the Board of Stichting
Administratie Kantoor IMK.
103
Abbreviated Consolidated
Financial Statements
Consolidated statement of financial position
105
Consolidated income statement
106
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
107
Consolidated Statement of Changes in Total equity
108
CONSOLIDATED STATEMENT OF CASH FLOWS
110
104
Abbreviated consolidated Financial statements
Consolidated statement of financial position (before appropriation of profit)
(€ million)
31 december
2012
31 december
2011
1,639
1,573
92
87
Assets
Intangible assets
Associates
Property for own use and equipment
619
648
1,172
1,243
42,001
41,113
Investments backing linked liabilities
24,972
23,314
Banking credit portfolio
16,436
16,932
Deferred tax assets
385
398
Deferred acquisition costs
185
226
Investment property
Investments
Income tax receivable
968
855
Receivables and accruals
Amounts ceded to reinsurers
5,232
4,589
Cash and cash equivalents
1,078
1,325
94,779
92,303
38
10
94,817
92,313
10,354
9,769
Assets classified as ’held for sale’
Total assets
Equity
Equity attributable to holders of equity instruments of the Company
Non-controlling interest
20
6
10,374
9,775
Insurance liabilities
38,908
37,520
Insurance liabilities where policyholders bear investment risks
22,259
20,771
2,123
2,193
Post-employment benefits
893
1,024
Other provisions
282
273
Banking customer accounts
5,351
5,001
Loans and borrowings
9,625
11,086
Derivatives
1,779
1,586
18
16
Total equity
Liabilities
Investment contracts
Deferred tax liabilities
Income tax payable
Other liabilities
Liabilities classified as ‘held for sale’
Total equity and liabilities
83
99
3,084
2,942
84,405
82,511
38
27
94,817
92,313
105
Consolidated income statement
(€ million)
2012
2011
3,764
3,819
13,471
12,400
3,210
3,431
20,445
19,650
-686
-849
15
1
19,774
18,802
4
1
1,115
1,254
569
769
2,533
979
Banking income
751
720
Fee and commission income, and income from service contracts
442
465
Income
Gross written premiums Non-life
Gross written premiums Health
Gross written premiums Life
Reinsurance premiums
Change in provision for unearned premiums (net of reinsurance)
Net earned premiums
Income from associates
Investment income
Realised and unrealised gains and losses
Income from investments backing linked liabilities
Other income
69
208
Total income
25,257
23,198
19,271
18,668
-513
-540
745
804
Expenses
Claims and movements in insurance liabilities
Claims and movements in insurance liabilities ceded to reinsurers
Profit sharing and bonuses
Movements in insurance liabilities where policyholders bear investment risks
Fair value changes and benefits credited to investment contracts
Operating expenses
Banking expenses
Interest and similar expenses
1,280
473
127
-150
3,024
3,031
607
601
85
78
Other expenses
219
480
Total expenses
24,845
23,445
Profit before tax
412
-247
Income tax expenses
-41
-39
Net profit
453
-208
452
-209
1
1
0.92
-0.69
Net profit attributable to:
Holders of equity instruments of the Company
Earnings per share from continuing operations (euros)
and diluted earnings per share from continuing operations (euros)
106
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Net profit
Currency translation differences on subsidiaries, intangible assets and associates
Unrealised gains and losses of property for own use
Unrealised gains and losses on available for sale instruments
Share in other comprehensive income of associates
(€ million)
2012
2011
453
-208
28
-85
-16
-18
1,061
451
-2
Transfer from/to provision for profit sharing and bonuses
-711
-561
Gains and losses on available for sale instruments reclassified to the Income Statement on disposal
-160
-109
Impairment charges on available for sale instruments reclassified to the Income Statement
Comprehensive income
31
207
684
-323
683
-324
1
1
Comprehensive income attributable to:
Holders of equity instruments of the Company
Except for the currency translation differences on subsidiaries, intangible assets and associates, which is included in the Exchange
difference reserve, other comprehensive income is included in the Revaluation reserve.
107
OWN SHARES
legal
reserves
revaluation
reserve
exchange
difference
Reserve
hedging
reserve
retained
earnings
profit for
the year
other equity
instruments
equity attributable to holders of
equity instruments
of the company
non- controlling
interest
total equity
Balance at 1 January
SHARE
CAPITAL
2012
(€ million)
11,367
-245
586
498
-178
-7
-3,368
-209
1,325
9,769
6
9,775
Currency translation differences
on subsidiaries, intangible
assets and associates
28
Revaluation property for own
use
Unrealised gains and losses on
available for sale instruments
28
28
-16
-16
-16
1,061
1,061
1,061
−2
−2
Share in other comprehensive
income of associates
−2
Transfer from/to provision for
profit sharing and bonuses
−711
−711
−711
Gains and losses on available for
sale instruments reclassified to
the Income Statement on
disposal
−160
−160
−160
Impairment charges on available
for sale instruments reclassified
to the Income Statement
31
31
31
231
231
Net other comprehensive
income
205
26
Net profit
205
Appropriations to reserves
92
26
-10
-291
Dividends and coupon
payments
Issue, repurchase and sale of
equity instruments
-10
-3
11,357
452
1
453
452
683
1
684
209
-106
-106
11
8
-106
10
Other movements
Balance at 31 December
452
-235
678
690
-152
-7
-3,754
452
1,325 10,354
13
21
20 10,374
Share capital includes €10,923 million share premium (2011 €10,933 million). Due to the loss in 2011 no dividends were distributed
during the financial year 2012 to holders of ordinary shares (2011: €0.10 per share).
108
hedging
reserve
retained
earnings
profit for
the year
548
-101
-6
-4,242
1,220
Currency translation differences
on subsidiaries, intangible
assets and associates
total equity
exchange
difference
Reserve
272
non- controlling
interest
revaluation
reserve
-45
equity attributable to holders of
equity instruments
of the company
legal
reserves
11,381
other equity
instruments
OWN SHARES
Balance at 1 January
SHARE
CAPITAL
2011
(€ million)
1,325 10,352
5 10,357
-85
-85
-85
Revaluation property for own
use
-18
-18
-18
Unrealised gains and losses on
available for sale instruments
451
451
451
Transfer from/to provision for
profit sharing and bonuses
-561
−561
−561
Gains and losses on available for
sale instruments reclassified to
the Income Statement on
disposal
-109
-109
-109
Impairment charges on available
for sale instruments reclassified
to the Income Statement
207
207
207
Net other comprehensive
income
-30
-115
-115
-85
Net profit
-30
Appropriations to reserves
Dividends and coupon
payments
Issue, repurchase and sale of
equity instruments
314
-22
928
-56
42
11,367
-209
1
-208
-209
-324
1
-323
-1,220
-80
-200
Other movements
Balance at 31 December
-85
-209
-245
586
2
8
-1
26
498
-178
-7
-3,368
-209
1,325
-136
-136
-158
-158
35
35
9,769
6
9,775
109
CONSOLIDATED STATEMENT OF CASH FLOWS
(€ million)
2012
2011
412
-247
-1,796
-1,340
Cash flow from operating activities
Profit before tax
Adjustments of non-cash items and reclassifications:
Unrealised results on investments
Foreign exchange results
Amortisation and impairment charges on intangible assets, property for own use and equipment
Amortisation of deferred acquisition costs
Interest paid
32
-91
237
482
58
49
544
580
−513
−567
Changes in operating assets and liabilities:
Purchase of Investment property
−16
−7
Purchase of Investments
-40,285
−36,701
Purchase of Investments backing linked liabilities
−14,606
−13,342
Divestments of Investment propery
22
126
Divestments of Investments
40,578
38,042
Divestments of Investments backing linked liabilities
15,237
13,523
Capitalised deferred acquisition costs
−19
−3
Changes in receivables and accruals and other liabilities
−398
−35
Changes in insurance liabilities net of reinsurance
1,801
1,230
Changes in banking credit portfolio
617
214
Changes in banking customer accounts and loans and borrowings related to banking activities
350
342
Interest received
−340
−315
Income taxes paid
−28
36
−238
−57
Changes in income tax
Other changes
Total cash flow from operating activities
20
−619
2,695
2,434
2,182
1,867
Cash flow from investing activities
Investments, acquisitions and direct return on investments:
Subsidiaries and Associates (net of cash acquired)
Total cash flow from investing activities
−93
-54
−112
−225
−205
−279
-194
-156
11
123
11
123
Divestments and disposals:
110
CONSOLIDATED STATEMENT OF CASH FLOWS(continued)
(€ million)
2012
2011
Cash flow from financing activities
Issue, repurchase and sale of equity instruments
Dividends and coupon payments
Interest paid
-200
-106
-136
-473
-594
Other credit facilities
-1,656
-1,395
Total cash flow from financing activities
-2,235
-2,325
-247
-614
Net cash flow
Cash and cash equivalents at 1 January
1,325
1,939
Cash and cash equivalents at 31 December
1,078
1,325
Cash and bank balances
788
1,172
Call deposits
290
153
1,078
1,325
Cash and cash equivalents include the following items:
Cash and cash equivalents at 31 December
111
Other information
BASIS OF PREPARATION
The Achmea Abbreviated Financial Statements, including
the 2011 comparative figures, comprising of Consolidated
Statement of Financial position, Consolidated Income
Statement, Consolidated Statement of Comprehensive
Income, Consolidated Statement of Changes in Total
equity and the Consolidated Statement of Cash Flows,
have been derived from the Consolidated Financial
Statements of Achmea B.V. for the year ended 31
December 2012. These Consolidated Financial Statements
have been prepared in accordance with International
Financial Reporting Standards, including International
Accounting Standards (IAS) and Interpretations, as
adopted by the European Union (hereafter EU-IFRS).
Furthermore, the Achmea Consolidated Financial
Statements comply with the requirements of Article 362
(9) Book 2, part 9 of the Dutch Civil Code.
For the notes comprising the significant accounting
policies and other explanatory information as required
by EU-IFRS we refer to the Achmea Consolidated
Financial Statements. Reading the Abbreviated Financial
Statements is not a substitute for reading the Achmea
Consolidated Financial Statements. The Abbreviated
Financial Statements should be read in conjunction with
the Consolidated Financial Statements from which the
Abbreviated Financial Statements were derived. The
Achmea Consolidated Financial Statements are available
at www.achmea.com.
Statement of the Executive Board of Achmea B.V.
The Executive Board of Achmea B.V. is responsible for
the preparation of the Annual Report 2012, including
the Consolidated Financial Statements 2012. The
Consolidated Financial Statements 2012 are prepared
in accordance with International Financial Reporting
Standards as adopted by the European Union. The
Company Financial Statements 2012 and Executive
Board Report 2012 are prepared in accordance with
Book 2, Part 9 of the Dutch Civil Code, and the Financial
Supervision Act part 5.1A. The Executive board reviewed
the Achmea B.V. Consolidated and Company Financial
Statements on 18 February 2013 and authorized them for
submission to the Supervisory Board.
significantly the scope of any statements made.
The Executive Board of Achmea B.V. also declares that
the Executive board Report 2012 gives a true and fair view
of the situation on 31 December 2012, the development
and performance during 2012 and describes the principal
risks of the business of the Group.
The Achmea B.V. 2012 Consolidated Financial
Statements and 2012 Company Financial Statements
will be submitted to the Annual General Meetings of
Shareholders for approval on 28 March 2013.
Zeist, 5 March 2013
The Executive Board of Achmea B.V. declares that, to
the best of its knowledge, the Achmea B.V. Consolidated
and Company Financial Statements 2012 give a true and
fair view of the assets, liabilities, financial position and
profit or loss of Achmea B.V. and that the information
contained herein has no omissions likely to modify
The Executive Board
W.A.J. (Willem) van Duin, Chairman
J.A.S. (Jeroen) van Breda Vriesman
D. (Danny) van der Eijk
112
Independent auditor’s report
TO: THE GENERAL MEETING OF SHAREHOLDERS AND SUPERVISORY
THE EXECUTIVE BOARD’S RESPONSIBILITY
BOARD OF ACHMEA B.V.
The Executive Board is responsible for the preparation of
the abbreviated consolidated financial statements derived
from the consolidated financial statements on the basis
described in the notes to the abbreviated consolidated
financial statements.
The accompanying abbreviated consolidated financial
statements of Achmea B.V., Zeist as set out on pages 105
to 111, which comprise the consolidated statement of
financial position as at 31 December 2012, the consolidated
income statement, the consolidated statement of
comprehensive income, the consolidated statement of
changes in total equity and consolidated statement of
cash flows for the year then ended, and related notes, are
derived from the audited consolidated financial statements
of Achmea B.V. for the year 2012. We expressed an
unqualified audit opinion on those consolidated financial
statements in our report dated 5 March 2013. Those
consolidated financial statements, and the abbreviated
consolidated financial statements, do not reflect the
effects of events that occurred subsequent to the date of
our report on those financial statements. The abbreviated
consolidated financial statements do not contain all the
disclosures required by International Financial Reporting
Standards as adopted by the European Union and with
Part 9 of Book 2 of the Dutch Civil Code. Reading the
abbreviated consolidated financial statements, therefore,
is not a substitute for reading the audited financial
statements of Achmea B.V.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on the
abbreviated consolidated financial statements and the
related notes based on our procedures, which we
conducted in accordance with Dutch Law, including
the Dutch Standard 810 “Engagements to report on
abbreviated financial statements”.
OPINION
In our opinion, the abbreviated consolidated financial
statements derived from the audited consolidated
financial statements of Achmea B.V. for the year 2012 are
consistent, in all material respects, with those consolidated
financial statements, on the basis described in the notes to
the abbreviated consolidated financial statements.
Amsterdam, 5 March 2013
PricewaterhouseCoopers Accountants N.V.
Original signed by G.J. Heuvelink RA
113
Five Years’ Key Figures
key figures
RESULTS
(€ MILLION)
2012
2011
2010
2009
2008
20,445
19,650
19,852
19,645
19,306
Contribution investment contracts
313
350
372
353
307
Profit before tax
412
-247
1,226
1,507
-2,620
Net profit
453
-208
1,220
1,381
-2,118
INSURANCE GROSS WRITTEN PREMIUMS
Non-Life
Health
Life
3,764
3,819
3,992
4,030
3,816
13,471
12,400
12,289
10,617
11,259
3,210
3,431
3,571
4,998
4,231
65
91
151
185
191
94,817
BANKING
Net interest margin
STATEMENT OF FINANCIAL POSITION
Total assets
Total investments (excluding unit-linked)
*
43,265
92,313
93,138
93,189
92,453
*
42,443
40,991
40,657
38,768
Banking credit portfolio
16,436
16,932
16,828
19,302
18,921
Total equity
10,374
9,775
10,357
10,127
7,451
Embedded value Pension & Life business
4,112
4,969
4,910
4,123
**
4,231
**
* Includes Investments in associates, Investment property and Investments.
** Based on Market Consistent (MCEV) principles.
114
five years’ key figures
key RATIOS
2012
2011
2010
(%)
2009
2008
GROUP
Solvency FCD
207
204
220
216
150
Solvency insurance entities (IGD)
209
208
222
251
197
Return on equity
4.5
-2.0
11.7
15.8
-23.4
Return on adjusted equity
5.1
-2.8
12.9
20.0
-38.6
21.4
22.4
22.0
22.7
36.4
Combined ratio Non-life Netherlands *
99.6
96.1
95.7
95.9
95.6
Combined ratio Health Netherlands
97.6
98.8
98.5
98.4
100.1
Cost/income ratio
81.0
133.3
61.6
61.9
61.9
Core Tier 1 ratio
14.2
12.7
12.8
11.3
11.1
Net profit
0.92
-0.69
2.75
3.36
-6.65
(Proposed) dividend on ordinary shares
0.42
-
1.25
1.43
-
18,905
19,490
20,185
21,209
21,256
n.a.
21,356
22,013
23,151
22,710
4.1%
4.5%
4.3%
4.2%
4.3%
85%
83%
81%
78%
76%
Centraal Beheer Achmea B.V.
7.6
7.5
7.6
7.8
7.5
Interpolis
7.5
7.6
7.6
7.5
7.3
Debt leverage
INSURANCE
*
BANKING
**
FIGURES PER ORDINARY SHARE (€)
EMPLOYEES
Full-time equivalents (FTEs)
Number of employees
Absenteeism
**
Employee satisfaction **
CUSTOMER SATISFACTION ***
Zilveren Kruis Achmea
7.4
7.5
7.4
7.3
7.1
Agis
7.6
7.6
7.6
7.4
7.4
RATING ****
Rating Achmea B.V.
A-
A-
A-
A-
A-
Rating insurance entities
A+
A+
A+
A+
A+
Rating Achmea Hypotheekbank
A
A-
A-
A-
A-
* Since 2011 ordered per segment.
** Dutch activities.
*** In 2010, 2011 and 2012 outcomes are based on independent satisfaction surveys carried out by the Dutch Association of Insurers.
**** Standard & Poor’s.
115
Abbreviations
Afm
Dutch Financial Markets Authority
Hr
Human Resources
Alm
Asset and Liability Management
Iab
Interamerican Bulgaria
Aov
Arbeidsongeschiktheidsverzekering / diability coverage
for the self-employed
Iag
Interamerican Greece
Ape
Annual Premium Equivalents
Ias
International Accounting Standard
Arc
Audit and Risk Committee
Ics
Atc
Achmea Transfer Centre
Igd
Insurance Group Directive
AuM
Assets under Management
Imf
International Monetary Fund
Kri
Key Risk Indicator
Awbz
Algemene Wet Bijzondere Ziektekosten/
General Act on Medical Expenses
Lat
Liability Adequacy Test
Cba
Centraal Beheer Achmea
Lgbt
Lesbian, Gay, Bisexual, Transgender
Lsp
Life Science Partners
Ltro
Long-term Refinancing Operation
Mcev
Market Consistent Embedded Value
M&a
Merger & Acquisitions
Orsa
Own Risk and Solvency Assessment
Ovo
Onderlinge Verzekeringen Overheid / Dutch specialist
liability and fraud insurer
Pbt
Profit before tax
Ppi
Pension Premium Institutions
Pri
Principles for Responsible Insurance
Psi
Principles for Sustainanle Insurance
PwC
PricewaterhouseCoopers
Qe
Quantitative Easing
Sii
Solvency II
S&p
Standard & Poor’s
Sme
Small and Medium Enterprises
Stak
Stichting Administratiekantoor Achmea
Ufr
Ultimate Forward Rate
Un
United Nations
Unep
United Nations Environment Programme
Unep fi
The United Nations Environment Programme
Finance Initiative
Uwv
Institute for Employee Insurance
Vnb
Value of New Business
Wga
Regeling Werkhervatting Gedeeltijk Arbeidsgeschikten /
Return to work scheme for partialy disabled
Zka
Zilveren Kruis Achmea
Cds
Credit Default Swap
Cebs
Committee of European Banking Supervisors
Cor
Central Works Council
Csr
Db
Defined Benefit pension contract
Dc
Defined Contribution pension contract
Dfz
De Friesland Zorgverzekeraar
Dmpl
Dutch Mortgage Portfolio Loans
Dnb
Dutch Central Bank
Ecb
European Central Bank
Ees
Employee Engagement Survey
Eev
European Embedded Value
Efsf
European Financial Stability Facility
Esg
Environmental, social and governance
Eu
European Union
Fba
Friesland Bank Assurantiën
Fcd
Financial Conglomerate Directive
F&c
F&c asset management
Frc
Finance and Risk Committee
Fte
Full-time Equivalent
Fx
Foreign Exchange
Gdp
Gross Domestic Product
Ghf
Gedragscode Hypothecaire Financieringen / Code of
conduct mortgage financing
Giips
Greece, Ireland, Italy, Portugal and Spain
Gri
Global Reporting Initiative
Gwp
Gross written Premium
116
Contact Details
Eureko Sigorta
Interamerican Bulgaria
P.O. Box 90106
5000 LA Tilburg
The Netherlands
T+31 13 462 38 22
Ord. Prof. Fahrettin Kerim
Gökay Caddesi No:20,
34662 Üsküdar, Istanbul
Turkey
T: +90 216 400 10 00
55 Alexander
Stambolyiski Blvd
Sofia 1301, Bulgaria
T+359 2 801 3700
www.eureko-re.com
www.eurekosigorta.com.tr
Oranta Insurance
Company Russia
Friends First Ireland
Achmea
Mailing address
Eureko Re
Mailing address
P.O.Box 866
3700 AW Zeist
The Netherlands
Office address
Handelsweg 2
3707 NH Zeist
The Netherlands
T+31 30 693 70 00
www.achmea.com
www.achmea.nl
www.interamerican.bg
Lyusinovskaya 36/2
115093 Moscow, Russia
T+7 4957558565
Cherrywood Business Park
Loughlinstown
Dublin 18, Ireland
T+353 1 661 06 00
www.oranta-sk.ru
www.friendsfirst.ie
Eureko Romania
25-29 Decebal Blvd 030964
Bucharest 3
Romania
T+40 21 202 6700
www.interamerican.ro
Interamerican Greece
350 Sygrou Avenue
17680 Kallithea, Athens
Greece
T+30 210 946 1111
Union Slovakia
Bajkalská 29/A
813 60 Bratislava 1
Slovakia
T+421 2 2081 5414
www.union.sk
www.interamerican.gr
117
Masthead
CONTENT, TEXT AND PRODUCTION
Achmea Investor Relations
VISUAL CONCEPT AND DESIGN
Koeweiden Postma, Amsterdam
LAYOUT
Sensum, Almere
PHOTOGRAPHY
Patrick van der Sande

Annual Report

Transcription

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