7.7.6.1 General claims and disputes

The group is a respondent in a number of claims, disputes and legal proceedings arising from the normal conduct of business.

Provisions are formed for such occurrences if, in management’s opinion and after consultation with its legal advisors, a.s.r. is likely to have to make payments and the payable amount can be estimated with sufficient reliability. The costs of the compensation scheme for unit-linked insurance contracts have been fully recognised in the financial statements based on management’s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognised in the liabilities arising from insurance contracts (see chapter 7.5.13) and legal provisions (see chapter 7.5.16).

Dutch insurers see an increase in insurance policies complaints / claims based on grounds other than the cost compensation. Current and possible future legal proceedings could have a substantial financial and reputational impact. However it is not possible at this time to make reliable estimates of the number of expected proceedings, possible future precedents and the financial impact of current and possible future proceedings. Currently there are no indications that such a provision would be necessary for a.s.r.

Legal claims on the indexation clause are causing uncertainty for the residential rental sector in the Netherlands as a whole. During 2023, one of the a.s.r. real estate funds was litigated against in relation to increasements in rental prices by the lessor as included in all standard residential contracts and in line with ‘Raad voor Onroerende Zaken’ standards. The legal department is working together with external legal advisors in order to mitigate this risk. The outcome of the current litigation is uncertain and could possibly mean that part or all the rental increasements would have to be paid back. In that case, this would not only impact a.s.r. but also the entire residential investment market. Although a.s.r. currently does not expect the pending litigation to have a material impact on a.s.r., there can be no assurances that this matter will not ultimately result in a material adverse effect on a.s.r.’s business, results of operations and financial position.

As for other claims and legal proceedings, against a.s.r. known to management (and for which, in accordance with the defined principles, no provision has been formed), management believes, after having sought expert advice, that these claims have no chance of success, or that a.s.r. can successfully mount a defense against them, or that the outcome of the proceedings is unlikely to result in a significant loss for a.s.r. For further information related to the Unit-Linked Products (beleggingsverzekeringen), see chapter 7.7.6.2.

7.7.6.2 Pending litigation portfolio and product-related issues

Unit-linked products (beleggingsverzekeringen)

Since the end 2006 the unit-linked policies (beleggingsverzekeringen) received negative attention in the media and from political and regulatory sources. The criticism and scrutiny on unit-linked life insurance products led to significant compensation arrangements and product improvement programmes by Dutch insurance companies, including a.s.r. However, individual customers as well as policyholder advocate groups and their representatives continue to focus on the fees and charges included in products, alleged transparency aspects, as well as that consumers did not receive sufficient compensation based on the compensation arrangements. a.s.r. expects this to remain an issue for the industry for the foreseeable future. Exposure and attention will be stimulated by court cases.

Proceedings in which a.s.r. is involved

a.s.r. is currently subject to a number of collective actions:

• Vereniging Woekerpolis.nl

• Consumentenbond

• Stichting Wakkerpolis

The claims have been rejected by a.s.r. and a.s.r. defends itself in these legal proceedings.

Developments in 2023

On 26 September 2023, The Court of Appeal in The Hague stipulated (regarding the class action between Woekerpolis.nl and Aegon life and Aegon spaarkas) that there was no consent for certain costs and the level of cost and risk premium. Given the wide variety of products and product documentation, the ruling cannot be applied to the other cases and/or products from a.s.r. The ruling does not dictate compensation, nor has the Court of Appeal taken into consideration any of the compensation arrangements that customers may have received already in the past. The Court further ruled that there were no unfair terms, that sufficient warning had been given about the risks of these products and that there were no defective products. a.s.r. believes that the lack of consent on certain (level of) costs and risk premium is resolved by adopting levels that are considered fair and reasonable in compensation arrangements given in the past. 

In November 2023, in order to resolve these long-lasting and historical disputes a.s.r. initiated a settlement agreement with five consumer protection organisations. The settlement is not an acknowledgement of too high costs, risk premiums and/or charges. a.s.r. also set up a leniency scheme for customers who are not affiliated with a consumer protection organisation for distressing cases that are assessed on their merits. All existing collective proceedings against a.s.r. and Aegon NL will be withdrawn once the 90% threshold has been achieved. No new (collective) proceeding will be initiated by the foundations nor their individual representatives against a.s.r. and/or Aegon NL. See chapter 7.5.16 for details.

As the settlement agreement will only become final once 90% of the affiliated customers agree to the settlement, it was necessary for Aegon life and Aegon spaarkas to file an appeal in cassation with the Supreme Court on 21 December 2023.

Developments in similar cases against other Dutch insurers currently before regulators, Kifid and courts may also affect a.s.r. These matters will be defended; however, at this time, due to the nature and the type of claims, it is not practicable for a.s.r. to quantify a range or maximum liability or the timing of the financial impact, if any. There can be no assurance that such claims may not have a material adverse effect on a.s.r.’s results of operations or financial position. However, with the November 2023 settlement agreement the remaining risks of a material adverse effect have been limited.

Optas

In 2019 Optas had been merged into Aegon life, based on prior approval and instruction by the DNB. A limited number of policyholders opposed the merger and appealed the permission of DNB at the administrative Court. On 13 February 2023 the administrative Court granted the objections and annulled the permission granted by the DNB. The Court found that DNB should have required that all policyholders should have been individually informed in writing regarding the merger and given the possibility to oppose the merger. The Court also found that DNB should have shared all (including those marked classified and sensitive) documents relating to the permission to the objectors. Based on the Wft the legality of the merger is not affected by an administrative annulment. This has been confirmed by ruling of the civil Court in a case against Aegon life, that is now subject of a pending appeal. Though Aegon life does not expect the pending litigation at the civil Court to have a material impact, if any, there can be no assurances that these matters, will not ultimately result in a material adverse effect on a.s.r.'s business, results of operations and financial position.

Securities leasing products (“aandelenlease”)

Lawsuits have been brought against providers of securities leasing products (‘aandelenlease producten’). Although sales of securities leasing products ended more than a decade ago, litigation relating to these products has resurfaced. In December 2020 Knab reached an agreement in principle on a settlement with Leaseproces B.V. for claims regarding Vliegwiel and Sprintplan customers represented by Leaseproces. On 4 June 2021 Aegon NL and Leaseproces B.V. announced it had finalised its agreement to settle these claims. By the end of the response period, 99.7% of Vliegwiel customers and 94.5% of Sprintplan customers had agreed to the proposed settlement. Full performance of the agreement ended in 2022. There are still some individual claims pending at the courts and Kifid.

7.7.6.3 Obligations and guarantees

Investment obligations for an amount of € 467 million (2022: € 366 million) have been assumed / issued for investment property.

Investment obligations and guarantees for a total amount of € 15 million (2022: € 16 million) have been issued, for real estate development projects and the acquisition of property. Those guarantees were issued by principals for the execution of projects for the benefit of clients.

In October 2017, Aegon NL sold its shares in Unirobe Meeùs Groep (UMG) for € 295 million to Aon Groep Nederland. Under the share purchase agreement between Aegon NL and the buyer, a.s.r. (after the business combination with Aegon NL) indemnifies and holds the buyer and its group (including UMG) harmless for and against any damage suffered or incurred which is the result of the Unit Linked Insurances Claims until 2027 with respect to Unit Linked Policies in the portfolio of UMG prior to 1 January 2017. The aggregate liability for a.s.r. is maximised at an amount equal to the purchase price.

The sale of real estate which relates to properties that are under contract to be sold as per 31 December 2023 amounts to € 87 million (2022: € 190 million). Real estate commitments represent the committed pipeline of investments in real estate projects.

The Dutch guarantee fund for motorised traffic has a latent claim on all insurers offering legal liability products. In line with the advise of the guarantee fund a.s.r.'s contingent liability is € 13 million (2022: € 10 million).

a.s.r. also had irrevocable facilities of € 1.752 million (2022: € 391 million) which mainly relate to mortgage loan offers issued. Mortgage loan commitments represent undrawn mortgage loan facilities provided and outstanding proposals on mortgages. The sale of mortgage loans relates to pre-announced redemptions on mortgage loans and amounts to € 18 million.

The share of contingent liabilities incurred in relation to interests in joint ventures amounts to € 14 million. These contingent liabilities not shown in the statement of financial position relate to investment obligations entered into by a.s.r. (for its share of approximately 50%) for real estate development projects of Amvest.

Furthermore, a.s.r. has entered into private loans agreements (purchases € 96 million; sales € 396 million) and private equity agreements (sales € 100 million). Other commitments mainly consist of future purchases of interests in investment funds and amounts to € 337 million.

7.7.6.4 Expected future lease payments

The following table sets out the expected future lease payments for investment property and plants, showing the undiscounted lease payments to be received after the reporting date.

The investments properties, in retail, residential, offices and rural markets are leased to third parties, consisting of various lease terms in a range between shorter than one year and undetermined period with competitive rents mostly indexed to consumer prices. The plants are leased to third parties with lease terms longer than ten years.

7.7.6.5 Contingent considerations in acquisitions

The consideration paid for Veherex by a.s.r. non-life includes a contingent consideration with a remaining fair value of € 1,4 million to be paid over a remaining period of one year.