With the business combination with Aegon NL, a.s.r. has strengthened its leading position in the disability insurance market with a focus on organic growth. It has an extensive range of products and services focusing on sustainable employability and on preventing and reducing absenteeism.
The combined ratio improved to 93.5% (2022: 96.7%), reflecting net positive non-recurring impacts and benefit from pricing improvements, especially in Group Disability. The non-recurring items mainly reflect the positive impact of the alignment of all collective provisioning models, partly offset by strengthening of Sickness Leave provisions due to long-term (psychological) absenteeism.
(in %)
Market
Distribution of disability (income) insurance products takes place mainly through insurance advisors. With the a.s.r. label, a.s.r. is well positioned in the distribution channel serving self-employed individuals and SMEs. With the Loyalis label, a.s.r. has a good position in the government and education, transport, healthcare and other (semi) public sectors. a.s.r. is the market leader with a market share of 39.8% in 2022 (2021: 32.7%) in terms of the gross written premium (GWP). The income insurance market grew slightly in size to € 4.36 billion1.
Distribution through mandated agents has increased in recent years, reaching € 753 million2. In 2022 this is 17.2% (2021: 16.7%) of the total market (GWP) for income protection insurance. In 2023, 25.1 % (2022: 24.4%) of a.s.r.'s Disability GWP was realised through mandated agents.
Products
a.s.r.’s income protection insurance business offers various products divided into the following business lines:
Individual disability:
Products for self-employed individuals to protect against loss of income in the event of illness or disability until retirement age.
Products for employees to protect payment of fixed expenses and against loss of income above the maximum daily wage due to illness and disability.
Sickness leave:
Products to protect employers during obligatory continued payment of wages for absent employees up to two years.
Group disability:
Products for employers to protect against the financial impact of self-insurance status.
Products for employees to protect against loss of income in the event of (partial) disability, in accordance with the rules and guidelines of the Work and Income according to Labour Capacity Act (Wet Werk en Inkomen naar Arbeidsvermogen; WIA).
a.s.r. provides a wide range of prevention and reintegration services for customers of both a.s.r. and Loyalis. a.s.r.'s customers face societal developments that lead to high workloads and the need to keep employees employable and vital. With its services, courses, training programmes and a.s.r. Vitality, a.s.r. helps business owners and employers to keep themselves and their staff employable in the long term.
a.s.r. adapts its products and services to changes in the social security system and monitors political developments so that employers can keep their employees employable while meeting government requirements.
Strategy and achievements
a.s.r. aims to keep all its customers employable and insured and strives to serve customers with best-in-class insurance products, prevention and reintegration services and an excellent service. Customers (self-employed individuals and employers) want to stay employable and to retain their employees. And if that is not possible for a while, they want to be assured of an income. Through a.s.r.'s prevention and reintegration services, a.s.r. helps its customers to ensure optimal employability for themselves and their employees. This helps reducing absenteeism among customers and to control the cost of claims, keeping risks affordable and insurable.
a.s.r. focuses on further improving its service by digitalising customer processes, reducing paper flows, offering convenience and personalised customer service. Examples include the introduction of the ‘Services Store’ (Dienstenwinkel) and further development of 'Mijn a.s.r.' and the implementation of links with salary systems for uniform and user-friendly participant administration.
At the end of 2023, a.s.r. contracted a group framework agreement with more than 210 employers who fall under the hospital collective labor agreement for supplementary disability insurance top-up insurance for benefits under the Return to Work (Partially or temporarily Disabled Persons Scheme, WGA) for approximately 220,000 employees in this sector. The insurance premiums for this large contract will contribute to the revenue for 2024.
In 2023, the Appsentiemanager was launched. This is a digital tool for SME employers, enabling them to report employee sickness and recovery simply, using a mobile device. This tool also helps employers to take the right steps in the reintegration process. Besides a.s.r.'s professionalism and the skills of its employees, a.s.r.'s service is characterised by speed, quality and a personal approach. a.s.r. aims to build long-term relationships with its customers and insurance advisors. Customer appreciation is a key performance indicator. This is measured, among other things, through an NPS-c.
The NPS-c measures customers satisfaction during contact moments, please refer to the result in the graph.
Outlook for 2024
Over the recent years political discussions and decisions resulted in significant growth of minimum wages. In January a further increase of 1,2% of the minimum wages was announced to come into place as of July 2024. Also, as a result of negotiations for collective labour agreements, there have been wage indexations in the range of 5-10% in 2023. Although expected at a slower pace and lower level, negotiations for collective labour agreements will be on the calendar in 2024 as well. This has an effect on a.s.r.'s disability portfolio, both on the premiums received side as well as on the cost side. An increasing part of absenteeism due to illness is related to psychological complaints. In 2024 a.s.r. will monitor the further developments.
Furthermore, a.s.r. does not expect any impactful changes in social security that will affect the insurance portfolio in 2024. Uncertain factors are the impact of economic and geopolitical developments on inflation, interest rates, wage development and the economy. a.s.r. continues to focus on the ecosystem of long-term employability with the aim of continued market leadership by leveraging its professionalism, knowledge of the social security market, prevention and reintegration services, whilst offering excellent service to customers and advisors/intermediaries and pursuing further chain integration.
For 2024, the integration of the Aegon NL Disability insurance portfolio with a.s.r.'s back office is scheduled. In this way, a.s.r. expects to provide former Aegon policyholders with excellent service, in depth knowledge of the market for disability, extensive in-house reintegration experience and high quality digitalised customer processes.
- 1Source: Market shares DNB 2022. This does not include foreign providers licensed for the Dutch insurance market. 2023 market shares are not available yet.
- 2Source: Mandated brokers 2022 market report Dutch Association of Insurers and NVGA, published in March 2023.