NN Group reports 1Q18 results

Solvency II ratio at 213%, integration progressing well

• Operating result of the ongoing business decreased to EUR 313 million from EUR 406 million in 1Q17, mainly due to a EUR 89 million total impact of the storm in January
• Net result of EUR 399 million, down 8.4% from 1Q17, reflecting the lower operating result and higher special items, partly compensated by higher non-operating items
• Further cost reductions of EUR 42 million in 1Q18; total cost reductions achieved to date of EUR 175 million; cost reduction guidance raised to EUR 400 million by 2020 of which at least half by the end of 2018
• Total new sales (APE) of EUR 547 million, down 7.8% from 1Q17 at constant currencies
• Solvency II ratio of 213% up from 199% at the end of 4Q17, driven by a combination of positive market impacts and operating capital generation
• Holding company cash capital at EUR 1,631 million, reflecting dividends received mainly from the Dutch units

Statement of Lard Friese, CEO

'In the first quarter of 2018, we have made further progress in integrating Delta Lloyd, with the completion of the legal mergers of the banking activities, asset management companies, and the life businesses in Belgium. The rebranding of products and services is well on its way and we expect this process to be largely finalised by the end of the year. Building on our strong track record of cost discipline, we further improved efficiency with EUR 42 million of cost savings this quarter in the business units in the scope of the integration. We have now achieved total cost reductions of EUR 175 million compared with the full-year 2016 administrative expense base representing half of our targeted cost reduction of EUR 350 million by 2020, well ahead of the earlier envisaged schedule. Given the strong progress so far, we announce today that we are raising the cost reduction guidance to EUR 400 million by the end of 2020. We expect to achieve at least half of these savings by the end of this year.

The current quarter operating result decreased from last year mainly due to the impact of the severe storm in January. As it is our aim to support our customers in times of need, we were able to settle most of the thousands of storm claims within one month. We want to provide relevant products for our customers, while writing profitable new business, focusing on value rather than volume. New sales at Netherlands Life were down in the first quarter of 2018 compared with a year ago, reflecting a lower volume of group pension contracts that were up for renewal, while new sales in Japan remained broadly stable - despite increased local competition.

Our balance sheet remains strong, in line with our disciplined capital management approach. The Solvency II ratio increased to 213% and the cash capital position to EUR 1,631 million at the end of the first quarter.

Our businesses are committed to drive value and achieve their medium-term targets by further improving performance. Following the acquisition of Delta Lloyd last year, we continue to deliver on the transaction by successfully extracting the envisaged synergies and combining the strengths of our businesses and cultures. Throughout this process we will continue to be focused on further improving our services through innovative customer solutions and value added products.'

NN Group key figures

Strategy and priorities

Our businesses are built on a strong foundation of purpose, brand, values and ambition which, combined with a focus on our strategic priorities, enables us to consistently create long-term value. This is how we deliver on our ambition to be a respected company that truly matters in the lives of our stakeholders.

Netherlands

The integration of NN and Delta Lloyd is well on track. Throughout the integration process, the business continues to focus on improving the customer experience, resulting in increased Net Promoter Scores (NPS) and broker scores in the first quarter compared with a year ago. Nationale-Nederlanden's advisors satisfaction level improved in the first quarter, whilst Delta Lloyd's and BeFrank's advisor satisfaction level remained at a high level. The combined market share in Life Pensions increased slightly in the quarter, mainly due to new business in the DC market.

NN Group continues to make its processes more efficient and effective. For example, the Non-life business and Voogd & Voogd have entered into a partnership for non-life insurance products for retail customers which will be effective as of 1 July 2018. The partnership will support further cost savings and customer service improvements.

NN is transitioning to an agile way of working to be able to respond faster and better to the rapidly changing customers' needs and expectations. NN and OHRA are recognised for their effective online customer journey and prompt handling of complaints. OHRA scores highest among all insurers on the Complaints Management and Fraud Management themes for the period 2015-2018, according to certifying organisation 'Keurmerk Klantgericht Verzekeren'. OHRA also received an Integral Online Service Award from customer journey and business specialist WUA.

International Insurance

International Insurance continues to grow its businesses, by expanding sales of protection products through diverse distribution channels. In February Nationale-Nederlanden in Poland launched its first travel insurance product. In Hungary, a product for families with children was launched. This product is a regular premium unit-linked insurance, while also offering protection cover for children.

The integration of Delta Lloyd and NN Belgium is progressing well. The legal merger and the rebranding were completed on 30 March 2018, and a commercial TV and online campaign to promote the NN brand has been launched. Customer experience improvements continue with the introduction of a new online medical acceptance tool. The first steps to integrate the teams and systems have been initiated in order to prepare for the move to one building that will be completed by the end of October 2018.

NN Life Japan announced a partnership with Freee, a leading cloud accounting software company, to provide users of the software with personalised and innovative insurance products, including protection and financial solutions.

Sparklabs are our out-of-office environments used to foster innovative ideas and help infuse more innovative thinking into NN. The most recent Sparklab was launched in Spain. The partner of the NN Hayat ve Emeklilik Sparklab in Turkey, Hesapkurdu, introduced an online straight-through loan process with one of the biggest banks in Turkey, Is Bankasi, in April 2018. This is the first full integration between an aggregator and a bank in the Turkish market, making NN's Life insurance propositions more widely available. Sparklab in Poland became the official partner of the #Warsaw booster'18 programme, dedicated to fintech and insuretech startups. This partnership provides an opportunity for technology startups to accelerate their business and cooperate with experienced mentors and business partners.

The international businesses are also introducing the agile way of working to be able to respond faster and better to the rapidly changing customer needs.

For the second year in a row, NN Czech Republic's life insurance products were ranked as top-of-the-market by the renowned independent financial online portal Finparada.cz. In the same ranking, NN Pensions took third place in the category supplementary pension savings. NN Czech Republic was awarded the Czech Superbrands title for the third time in a row; the award is based on the opinion of both experts and customers.

Asset Management

NN Investment Partners (NN IP) recently won its first export credit agency (ECA) loan mandate in Germany. In addition, NN IP launched the NN (L) Emerging Markets Debt Short Duration Hard Currency Fund. Building on NN IP's long and extensive experience in investing in emerging markets debt (EMD), the fund is designed to offer investors stable, long-term income with low credit risk.

The legal merger of Delta Lloyd Asset Management (DLAM) and NN IP was completed in January 2018, and the integration of the various teams and operational activities in the Netherlands is ahead of schedule.

Other events

NN Group has taken a next step in its responsible investment policy by taking the decision to exclude tobacco from all its investments. Currently tobacco is already excluded from the sustainable and impact products which NN IP manages on behalf of its clients. The decision takes into account concerns regarding public health, as well as the related economic and societal impact.

In March, NN Group participated in Money Week, an initiative of the Dutch Money Wise platform. By giving guest lectures about insurance and banking at primary schools in the Netherlands, we aim to teach children about money and risks at a young age, and in a fun and interactive way. This initiative reached a total of around 7,500 children this year. NN Czech Republic joined Global Money Week for the first time with a presentation at the GMW conference sponsored by the Czech government and the Czech National Bank. The presentation focused on the importance of financial education and economic empowerment of young people for the wellbeing of society. These initiatives are part of NN Future Matters, our community investment programme, which aims to empower people to grow their (financial) skills and increase their future opportunities in the markets where NN operates.

NN Group Profile

NN Group is an international insurance and asset management company, active in 18 countries, with a strong presence in a number of European countries and Japan. With all our employees the Group offers retirement services, pensions, insurance, investments and banking to approximately 17 million customers. NN Group's main brands are Nationale-Nederlanden, NN, Delta Lloyd, NN Investment Partners, ABN AMRO Insurance, Movir, AZL, BeFrank and OHRA. NN Group is listed on Euronext Amsterdam (NN).

Analyst call

Lard Friese and Delfin Rueda will host an analyst and investor conference call to discuss the 1Q18 results at 10.30 am CET on Thursday 17 May 2018. Members of the investment community can join the conference call at +31 20 531 5865    (NL), +44 203 365 3210    (UK), +1 866 349 6093    (US) or follow the webcast on www.nn-group.com.

Press

Lard Friese and Delfin Rueda will host a press call to discuss the 1Q18 results, which will be held at 07.45 am CET on Thursday 17 May 2018. Journalists can join the press call at +31 20 531 5863    (NL).

Contact information

Additional information on www.nn-group.com

• NN Group 1Q18 Financial Supplement, NN Group 1Q18 Analyst Presentation
• NN Group 31 March 2018 Condensed consolidated interim accounts
• Photos of NN Group executives, buildings and events are available for download at Flickr

Important legal information

Elements of this press release contain or may contain information about NN Group N.V. within the meaning of Article 7(1) to (4) of EU Regulation No 596/ 2014 (Market Abuse Regulation).

NN Group's Consolidated Annual Accounts are prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS-EU") and with Part 9 of Book 2 on the Dutch Civil Code. In preparing the financial information in this document, the same accounting principles are applied as in the NN Group N.V. condensed consolidated interim accounts for the period ended 31 March 2018.

All figures in this document are unaudited. Small differences are possible in the tables due to rounding. Certain of the statements contained herein are not historical facts, including, without limitation, certain statements made of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation: (1) changes in general economic conditions, in particular economic conditions in NN Group's core markets, (2) changes in performance of financial markets, including developing markets, (3) consequences of a potential (partial) break-up of the euro or European Union countries leaving the European Union, (4) changes in the availability of, and costs associated with, sources of liquidity as well as conditions in the credit markets generally, (5) the frequency and severity of insured loss events, (6) changes affecting mortality and morbidity levels and trends, (7) changes affecting persistency levels, (8) changes affecting interest rate levels, (9) changes affecting currency exchange rates, (10) changes in investor, customer and policyholder behaviour, (11) changes in general competitive factors, (12) changes in laws and regulations and the interpretation and application thereof, (13) changes in the policies and actions of governments and/or regulatory authorities, (14) conclusions with regard to accounting assumptions and methodologies, (15) changes in ownership that could affect the future availability to NN Group of net operating loss, net capital and built-in loss carry forwards, (16) changes in credit and financial strength ratings, (17) NN Group's ability to achieve projected operational synergies, (18) catastrophes and terrorist-related events, (19) adverse developments in legal and other proceedings and (20) the other risks and uncertainties contained in recent public disclosures made by NN Group.

Any forward-looking statements made by or on behalf of NN Group speak only as of the date they are made, and, NN Group assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for any other reason.
This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities.