See accounting policy C.

The increase in goodwill and other intangible assets mainly relates to the acquisition of Brand New Day IORP, see chapter 6.4.5.

Goodwill

For the purpose of impairment testing, goodwill is allocated to the CGU's of the relevant operating segment.

Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment.

For the CGU's within the Non-life, Life and Asset Management segments, the results of these tests, using updated multiples and discount rates, show excess recoverable values over the book values and no goodwill impairment is recognised. A deterioration within reasonable limits on one of the assumptions in isolation would not lead to an impairment. The buffer is also capable of absorbing a combination of negative factors. However, should circumstances on multiple factors deteriorate significantly, it could lead to a negative outcome for the buffer (the difference between the recoverable value and the book value).

Segment Non-life

The result of the goodwill impairment test, using updated multiples and discount rates, shows an excess recoverable value over the book value. As a result, a second step was not necessary and there is no significant exposure of goodwill impairment for sensitivities in the underlying assumptions. No goodwill impairment was recognised.

Segment Life

The outcome of the goodwill impairment test step 1, using updated price to book trading multiples of various international peers and discount rates, shows an excess recoverable value over the book value. In light of the goodwill impairment last year was decided to perform a step 2 impairment test using a dividend discount model). The main assumptions used in this internal value-in-use model are:

• The future cash flows are based on the specific portfolio characteristics and expected market developments for the life insurance market in which the CGU operates;

• To reflect the long-term character of the life insurance business, the expected decrease of the SCR and own funds projections are used to extrapolate cash flow projections up to 40 years;

• The lower limit solvency target is used to calculate future dividends, which are discounted with a 8.77% discount rate (cost of equity).

The second step of the impairment test also showed an excess recoverable amount over the book value of the CGU and subsequently no goodwill impairment was recognised.

Segment Asset Management

The result of the goodwill impairment test, using the multiples methodology, shows an excess recoverable value over the book value. As a result, a second step was not necessary and there is no significant exposure of goodwill impairment for sensitivities in the underlying assumptions. No goodwill impairment was recognised.

Segment Distribution and Services

The goodwill impairment test was conducted at the CGU’s within the segment Distribution and Services segment. The outcomes of the goodwill tests on step 1 showed that the differences between the recoverable amounts and the carrying values is sufficient to support the amounts of goodwill allocated to the CGU’s for nearly all CGU's. These CGU’s still have a sufficient positive headroom and management believes that any reasonable possible change in the key assumptions on which all CGU’s recoverable amounts are based would not cause the carrying amounts to exceed their recoverable amounts.

In light of last year's impairment, for one CGU an in depth analysis in step 2 was performed s in order to determine a recoverable amount in a manner that better addresses the specific characteristics of this CGU. The CGU’s operating activities concern those of a distribution partner and service provider. In step 2, future cash flows are based on expected market developments and past experience and on the long-term characteristics of the markets in which the CGU operates. The main assumptions used in this internal value-in-use model are:

• Annual organic future growth of portfolio without impact of potential acquisitions;

• Growth rate used to extrapolate cash flow projections beyond the most recent forecast projections leading to a terminal value of 0% - 0.5%;

• Stable development of operating expenses;

• Discount rate (post tax) 5.1% (2021: 4.7%).

The resulting value in use is not sufficient to support the amount of goodwill allocated to that CGU. The increased competitiveness in the market and lower organic growth results in a lower recoverable value. The consequence for this CGU is an impairment loss on the goodwill charged to the income statement amounting to € 9 million.

Value of Business Acquired (VOBA)

VOBA mainly relates to the acquisition of Loyalis (€ 55 million), the acquisition of Amersfoortse Stad Rotterdam (€ 56 million) and the acquisition of Veherex (€ 7 million). At year-end 2021, VOBA will be amortised based on the remaining useful lifes of respectively 5, 9 and 6 years. The amortisation for the next year will be € 23 million.

Other intangible assets

The other intangible assets mainly relate to Dutch ID, SuperGarant, Loyalis and Brand New Day IORP. The other intangible assets relate to trade name, distribution relationships and customer relationships. The other intangible assets are amortised straight-line over their useful life, which is determined individually (between 5 and 20 years). The amortisation charges on other intangible assets are recorded in the operating expenses (see chapter 6.6.8).