2023 was a year a.s.r. took a giant step forward. For the first time, we have published our results including the results of Aegon NL. The combination with Aegon, which was completed in July 2023, forms an important milestone in the history of a.s.r. - a history dating back more than three centuries. The past year was dominated by:
The combination with Aegon NL, enabling us to welcome more than 4,000 new colleagues;
The breakthrough in the unit-linked life insurance file, through an agreement with the five claims organisations concerned;
The introduction of IFRS 17/9, a new accounting standard for the industry;
The further implementation of our strategy.
Colleagues from Aegon NL and a.s.r. are working closely together to make a success of the combination. I am proud that this complex process is proceeding according to plan and that the envisaged results, including the combination itself, are being realised. In the meantime, customers and advisors are still being provided with the best possible service. The results so far confirm the strong strategic and financial benefits of the combination. This is reflected in matters such as an increase in the envisaged cost synergies, as announced during our Investor Update in November 2023, but also in the significant growth opportunities that we see in for example the Pension market.
The unit-linked life insurance file has been one of the most long standing issues in the financial sector. In 2023, a.s.r. took the initiative, and became the first major Dutch insurer to reach a final settlement with the five claims organisations representing customers with unit-linked life insurance. With this initiative, a.s.r. has set the framework for subsequent deals from other insurers. It is good to see that other insurers have now also taken up the challenge and have reached settlements. In this way, our sector has made a joint effort to close this file and to further improve trust of society in insurers
The implementation of our strategy aimed at long-term value creation for all stakeholders continued unabated in 2023. a.s.r. aims to be the best financial service provider for customers and advisors. The Net Promoter Score shows that customer satisfaction is rising. However, this is also the case among competitors, and we must therefore continue to improve in order to remain distinctive in this regard too. Our reputation for sustainability has also improved further. I welcome the appreciation that a.s.r. receives, and in particular, the improved appreciation for a.s.r. among younger people.
The financial results for 2023 were strong. We realised our most important objectives. The organic growth of a.s.r., together with the effects of the combination with Aegon NL, had a positive impact on our results. Both the operating result and the revenue showed a strong improvement in the different segments. The Non-life and DC Pensions segments saw strong organic growth. The operating result rose in both the Life segment and in the fee business. Mortgage production was under pressure, but was nevertheless higher in 2023 than in 2022, due to the combination with Aegon NL. At 93.5%, the combined ratio for the Non-life and Disability product lines is within the target range of 93-95%. The operating return on equity of 12.4%, in line with the target of 12-14%.
I take pride in the fact that during this year, in which a great deal of time was devoted to the combination with Aegon NL, we were also able to further realise the a.s.r. growth strategy. Our solvency, while lower than in the preceding year, remains strong, which is reflected in a Solvency II ratio of 176%. When including the announced sale of Knab to BAWAG Group AG, the ratio will increase to approximately 189%. Our strong level of organic capital generation and the realisation of cost synergies are the most important contributors to our confidence in further growing into the balance sheet.
a.s.r. continues to generate capital in line with its objectives. That provides a sound basis for payment of dividends to shareholders and further strengthening of the balance sheet. We have offered our shareholders a dividend for 2023 which is 7% higher than that for 2022. During our meetings with shareholders, we encounter considerable support for our strategy. In particular, shareholders see the opportunities that the combination with Aegon NL affords for the growth of a.s.r in the longer term.
Our employees have a strong interest in the operational performance and the results of a.s.r. They feel a high degree of commitment to a.s.r., as shown by a score of 89 in the annual Denison survey, well above our target (>85). This score is expected to be lower in 2024, as a result of the combination with Aegon NL. We continually work on developing an inclusive and strong business driven culture for a.s.r. Values that are shared by all employees of a.s.r. and Aegon NL form crucial building blocks for this. These are recorded in ‘the story of a.s.r.’, which plays a fundamental role in realising that single strong culture.
We are aware that the tight labour market and our choices regarding future locations sometimes puts pressure on our operations. We are obviously very alert to this, and are confident that we are well able to cope with this challenge.
In the field of sustainability, we made progress in both asset management and in the different product lines in 2023. In asset management, we have attained our goal of realising a reduction of 65% in our CO2 footprint and in 2023, we introduced the ASR Global Impact Equity Fund (‘ASR Wereldwijd Impact Aandelen Fonds (AWIAF)’), which means that for the first time, a.s.r. now also offers institutional customers an opportunity to invest in companies that pursue a positive impact on people, the environment and society.
a.s.r. also aims for sustainable damage recovery and wishes to offer this to its customers in the most efficient way possible. In addition, we have the ambition to encourage as many home owners as possible to make their homes more sustainable. We support them in doing so by lowering the financial and practical barriers.
With the Doenkracht social programme, we combined the activities of Aegon NL and a.s.r. in 2023 and many colleagues contributed via this programme to society.
While closing the books for 2023 with a feeling of satisfaction, we are also looking ahead to 2024 and beyond. During the Capital Markets Day on 27 June, we will present the strategic growth opportunities of a.s.r. and will discuss the new financial and non-financial objectives, including our capital management policy. In the meantime we are keeping a close watch on a number of developments that could have an impact on our business and on Dutch society. These include pressure on the labour market due to a shrinking workforce and uncertainty in the housing market. Political developments could also lead to delays in important decision-making by the Dutch government, on matters including the climate and biodiversity, and the affordability of health care. It is important for the Netherlands to have a stable and predictable government soon that deals with all challenges society is facing and which are often closely related to a.s.r. businesses.
When I look back at what we all achieved in 2023 thanks to the tremendous commitment, loyalty and dedication of all our colleagues, it makes me incredibly proud. Everything we do is aimed at the further growth of a.s.r. in a sustainable society. We do this with the support of our shareholders, the major efforts of our employees and the trust that our customers and advisors place in us. Together, we maintain a focus on implementing the long-term growth strategy of a.s.r. For that, I am very grateful.
On behalf of the Management Board,
Jos Baeten,
CEO and Chair of the Executive Board
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