The SB has three committees that discuss specific issues and prepare items on which the full SB takes decisions. The chair of each committee reports on the main points of discussion and the resulting recommendations are discussed at the subsequent SB meeting. The minutes of the committee meetings are available to the members of the SB.
the Audit & Risk Committee (A&RC)
the Remuneration Committee (RC)
the Nomination & ESG Committee (N&ESGC)
Sonja Barendregt (chair)
Gerard van Olphen
The committee advises the SB and prepares decision-making on matters such as supervision of the integrity and quality of financial reporting and effectiveness of internal risk management and control systems. This explicitly also includes the application of information and communication technology, including cyber security risks.
The composition of the committee is such as to represent the specific business know-how, financial, accounting and actuarial expertise relating to the activities of a.s.r.
The committee held six regular meetings in 2021. In accordance with the A&RC Rules of Procedure, committee meetings are also attended by the CFO, the Director of Group Risk Management, the Director of Finance, Risk and Performance Management, the Manager of Compliance, the Director of Audit and the independent external auditor. Outside the regular meetings, the committee met on two occasions with the Audit, Compliance, Risk Management and Actuarial Function (AF) in their roles as countervailing powers.
After each financial quarter, the committee discussed the financial results based on detailed financial, risk, compliance and internal and external audit reports and analyses. Progress on the recommendations of the internal and external auditor as well as of the AF was monitored. The full 2021 reporting year was discussed in the first quarter of 2022, based on the (quarterly) internal finance report, the press release, the Annual Report, the financial statements, the Board report and the actuarial report. The discussion of the actuarial report was also attended by the AF.
The committee issued positive opinions on the Annual Report and on the financial statements to the SB. It discussed and adopted the external auditor’s letter of engagement and the audit plan for 2021. The external auditors’ independence and additional fees were reviewed each quarter. The management letter of the external auditor highlighting key internal control observations was discussed. The audit results report of the external auditor was also discussed and special attention was given to the reported key audit matters. The A&RC approved the updated charters and annual plans for 2022 of the Actuarial and Risk Management Function and the Compliance Function. It advised the SB to approve the updated charter and the audit plan 2022 of the internal Audit Function; this advice was followed.
Specific topics discussed in the committee included (i) impact of COVID-19 on the financial performance and prospects of a.s.r., (ii) continuing low interest rates, inflation and impact on solvency through the balance sheet plan 2021 and projection updates, (iii) cyber risks and IT security, (iv) fraud issues (both from external clients - e.g. inappropriate claims behaviour – and from employees) and measures taken, and (v) compliancy with rules and regulations, including CDD. Medium-term target-setting was also discussed by the committee; these targets were announced by a.s.r. at the Investor Update of 7 December 2021. Furthermore the progress of the implementation of IFRS 17 / 9 was discussed.
a.s.r.’s solvency position was reviewed and discussed each quarter. Specific attention was paid to the Ultimate Forward Rate (UFR) effect within the Solvency II framework, continuing low interest rates, inflation and a.s.r.’s view on a more economic UFR scenario. The A&RC discussed the risk scenarios and the outcomes of the ORSA, plus the balance sheet plan and the related projection updates. In all the ORSA risk scenarios, the solvency ratio remains within the boundaries set by a.s.r., demonstrating the robustness of a.s.r.’s solvency and the effectiveness of certain management actions. Future solvency ratio projections include the gradual decrease of the UFR as prescribed by the European Insurance and Occupational Pensions Authority (EIOPA).
a.s.r.’s risk appetite is based on a prudent approach to risk management, which is translated into qualitative business guidelines for NFR matters and requirements for solvency, liquidity and returns for the FR matters; solvency takes priority over profit and profit takes priority over premium income. a.s.r.’s updated capital and dividend policy was also discussed, after which the SB approved the updated policy.
The A&RC regularly monitored the status of the risk appetite during the year through a.s.r.’s Integrated Risk Dashboard and the status report on the management of risk priorities, and at the end of the year, the A&RC was informed of the outlines of the reinsurance programme for 2022.
Gisella van Vollenhoven (chair)
The RC advises the SB on matters including the remuneration policy for the EB and SB and the terms and conditions of employment of the EB, and reviews the remuneration of senior management.
The RC met five times in 2021. Its meetings were also attended by the CEO (except when issues relating to the EB were discussed) and the Director of Human Resources. The committee solicits support and advice from departments such as Group Risk Management, Compliance, Audit and Human Resources. Where needed, it consults independent legal and pay & benefit experts.
In line with the policy, the committee advised the SB on target-setting and performance appraisals; and the yearly Remuneration Disclosure was also prepared.
In accordance with the remuneration policy of a.s.r., approved by the AGM in 2019, the RC performed two separate benchmarks for both the EB and the SB, in order to follow trends (including the effects of COVID-19). The 2020 Remuneration Report was submitted to the AGM for an advisory vote. 90% of the votes cast were for the report and 10% were against. The RC has further examined the voting results and concluded that there is increasing support for the current remuneration policy of a.s.r. However, a number of shareholders will (continue to) vote negatively on the remuneration policy due to the absence of a variable remuneration scheme.
At the end of 2021, the a.s.r. remuneration policy was updated in line with new regulations and the results of the internal audit report on the application of a.s.r.’s remuneration policy were discussed.
Joop Wijn (chair)
Gisella van Vollenhoven
Gerard van Olphen
The N&ESGC advises the SB on its duties and prepares the SB’s decision-making in this respect. The Committee advises the SB on ESG-topics, selection and appointment procedures and the composition of the EB and SB; it also prepares the (re)appointment of members. The N&ESGC met six times in 2021. Its meetings were also attended by the CEO (except when issues relating to the EB were discussed) and the Director of Human Resources.
In 2020 a suitable successor was found for Kick van der Pol, chair of the SB, in the person of Joop Wijn. Joop Wijn succeeded Kick van der Pol as chair of the SB at the end of the AGM in May 2021.
Due to the resignation of Annemiek van Melick as CFO and member of the EB, the N&ESGC began a search for a suitable successor. This process led to the nomination of Ewout Hollegien as CFO and member of the EB. Following the EGM on 30 November 2021, the SB appointed Ewout Hollegien as CFO and member of the EB as from 1 December 2021.
Other topics discussed by the N&ESGC were the revised Diversity, equality and inclusion policy and the strategic personnel plan for the organisation, in which a.s.r. anticipated the developments in the (labour) market. The committee also discussed the annual appraisals of senior management. A nine-box grid was used to evaluate senior managers and to discuss their individual development and possible successors. The committee was also informed of the results of the Denison scan, a tool used to measure the success of the organisation.
With regard to ESG, the N&ESGC discussed the various developments in this field and related legislation and what this means for a.s.r. as a sustainable insurer, such as progress on the targets of the various themes, with a focus on the strategic pillars from the strategic framework for sustainability (described in chapter 2.2) and internal and external developments in this area such as sustainability, climate change and biodiversity. In addition, progress on the non-financial targets was discussed and advice was given on new medium-term targets in that area.
The EB prepared the 2021 Annual Report and discussed it with the SB in the presence of the external auditor. The 2021 financial statements will be submitted for adoption by the AGM on 25 May 2022. a.s.r. will propose a dividend of € 2.42 per ordinary share, or € 329 million in total, including the interim dividend paid.
The SB wishes to express its gratitude to all the employees of a.s.r., both permanent and external employees, for their dedication to a.s.r. in 2021, and in particular for their efforts while working from home , occasionally under difficult circumstances. All employees worked collectively to achieve a.s.r.’s mission by helping customers share
risks and build capital for the future, and in particular by helping those who were in need during the pandemic. Together, we are building an insurance company that is both valuable and sustainable. The SB also wishes to express its gratitude to the members of the EB and the senior management for their impressive remote leadership during these difficult times and for achieving a good operational result and increased customer satisfaction. The SB greatly appreciates the ongoing and constructive open dialogue and cooperation with the EB.
Utrecht, The Netherlands, 22 March 2022
Gisella van Vollenhoven