Annual Report 2022
Financial performance

Operating result

The operating result increased by 30 million to 1,039 million (2021: 1,009 million). All business segments performed strongly and apart from Distribution and Services posted higher operating results.

Operating result per segment

The operating result of the Non-life segment remained relatively stable at 325 million (2021: 322 million). The performance was strong, with healthy underwriting results in both P&C and Disability, offsetting negative developments in Health due to a decrease in the portfolio and its impact on unfavourable claims development.

The Life operating result increased by 2% (15 million) to 768 million, reflecting an improved technical result including result on costs (23 million), which more than offset the slight decrease in the investment margin (8 million).

The operating result of the Asset Management segment increased by 7.6% (3 million) to 39 million, mainly driven by Real estate, offsetting higher operating expenses.

The operating result of Distribution and Services decreased by 2 million to 25 million, reflecting higher operating expenses which are partly offset by higher contribution of acquisitions and organic business growth.

The Holding & Other operating result increased by 11 million to -119 million, mainly due to the release of an employee-related provision.

Gross written premiums

Gross written premiums (GWP) increased by 3.1% to 6,041 million. The GWP in the Non-life segment increased by 3.7% to 4,276 million, driven by strong organic growth at P&C and Disability (9.1%). Health GWP decreased by 9.0%, due in part to the exceptionally strong increase in the number of customers in 2021, which has since been reversed partly by a less competitive price proposition in 2022. The GWP in the Life segment increased by 3.1% to 1,952 million (2021: € 1,893 million), driven mainly by the ongoing commercial success of the DC pension product ‘Werknemers Pensioen’ (Employee Pension).

Operating expenses

Operating expenses associated by ordinary activities increased by 41 million to 703 million, reflecting organic business growth, especially in the Non-life and Asset Management segments and in the additional (running) costs of several new growth initiatives. The increase also reflects the one-off payments to staff to compensate for higher energy costs and the inclusion of acquisitions (total impact 5 million) in the fee-based segments (Asset Management and Distribution & Services) and the acquisition of Brand New Day IORP as of 1 April 2021 in the Life segment.

The cost ratio of P&C and Disability improved by 0.2%-points to 7.8%, mainly due to organic business growth.

In the Life segment, the cost ratio increased slightly to 48 bps (2021: 45 bps), reflecting higher operating expenses and a lower average basic Life provision, mainly due to negative revaluations of the unit-linked reserves. This is in line with the target range of 40-50 bps for 2022-2024.

Result before tax

The result before tax decreased by 280 million to 929 million (2021: 1,209 million), mainly due to a lower contribution from indirect investment income and a more negative impact from incidental items, partly offset by a higher operating result. The result of other incidentals also includes the strengthening of Disability provisions related to the 10% increase of the legal minimum wage as of 1 January 2023 (91 million) and the positive impact (46 million) for the reclassification of inflation-linked value changes of bonds to non-operating as of 2022.

With an effective tax rate of 21.9% (2021: 22.4%), the IFRS net result amounted to 733 million (2021: 942 million), absorbing the tariff adjustment from 25% to 25.8% as from this year.

Operating return on equity

The operating return on equity decreased by 3.3%-points to 12.8% (2021: 16.1%) and remains within the target range of 12-14%, primarily reflecting a higher adjusted IFRS equity, including the impact from 0.6 billion equity issuance to finance the business combination of a.s.r. and Aegon Nederland. Excluding the 0.6 billion equity issuance, the operating return on equity would have been 13.5%.

Solvency II ratio and organic capital creation

The Solvency II ratio, using the standard formula, increased by 26%-points to 222% (31 December 2021: 196%). This includes a 12%-point deduction for capital distributions, consisting of the interim dividend (131 million), the share buyback executed in the first half of 2022 (75 million) and the proposed final dividend (254 million). It also includes the proceeds of the 0.6 billion share issue (16%-points). Market and operational developments led to a higher solvency ratio, reflecting a positive impact from higher volatility adjustment (VA), higher interest rates and equity and real estate developments, which more than offset negative impacts from higher inflation, spread movements, non-economic assumptions and the lowering of the Ultimate Forward Rate (UFR).

Organic capital creation increased by 59 million to 653 million (2021: 594 million). Negative impact due to increased capital strain from higher new business production was offset by a stronger underlying business performance and lower UFR drag due to higher interest rates.

Dividend and capital distribution

In line with the dividend policy, a.s.r. will propose a dividend for 2022 of 2.70 per share, an increase of 11.6% compared to the dividend for 2021, driven by confidence in the Aegon Nederland transaction. Taking into account an interim dividend of 0.98 per share paid in September 2022, the final dividend amounts to 1.72 per share.

On 27 October 2022, as part of the announcement relating to the business combination with Aegon Nederland, a.s.r. upgraded its progressive dividend guidance to an ambition for mid- to high-single digit dividend growth per annum until 2025.

In the first half of 2022, a share buyback programme of 75 million was executed according to plan. The current share buyback programme of at least 100 million per annum was halted due to the Aegon Nederland transaction.