See accounting policy C.

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.

The results of the annual goodwill impairment test are as follows:

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 a slight excess book value over the recoverable value. It was therefore 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 100 years.

• The lower limit solvency target is used to calculate future dividends, which are discounted with a 9.24% discount rate (cost of equity).

The second step of the impairment test 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.

In light of the goodwill impairment last year it was decided to perform a step 2 impairment test 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 0.5%;

• Discount rate (post-tax) 6.9% (2021: 5.1%).

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

Value of Business Acquired (VOBA)

VOBA mainly relates to the acquisition of Amersfoortse Stad Rotterdam (€ 48 million), the acquisition of Loyalis (€ 42 million) and the acquisition of Veherex (€ 6 million).

Other intangible assets

The other intangible assets mainly relate to Real estate, Loyalis, a.s.r. PPI and D&S Holding and concern trade names, distribution relationships and customer relationships. The other intangible assets are amortised on a straight-line basis 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.