NN Group reports 3Q18 results

• Operating result ongoing business EUR 463 million, up 7.4% from 3Q17, reflecting an improved underwriting performance at Netherlands Non-life, higher dividends at Netherlands Life, as well as lower expenses
• Net result of EUR 788 million, up 7.3% from 3Q17, reflecting the higher operating result and an additional divestment result related to ING Life Korea
• Further cost reductions of EUR 33 million in 3Q18, bringing total cost reductions achieved to date to EUR 269 million
• Solvency II ratio increased to 239% from 226% at 2Q18, reflecting operating capital generation and positive market impacts
• Holding company cash capital increased to EUR 1,899 million, including EUR 338 million dividends received from subsidiaries

Statement of Lard Friese, CEO

'We look back on a quarter in which our business performed well, and we again delivered a solid set of results. The 7% increase in the operating result was supported by an improved underwriting performance in both the D&A and P&C portfolios of Netherlands Non-life and higher dividends at Netherlands Life, as well as lower expenses. The Non-life results have shown gradual improvement over the past few quarters, and in the third quarter benefited from favourable claims experience. However claims experience is volatile by nature, and we will continue to implement measures in order to structurally improve the combined ratio. New sales in the third quarter were down on last year at Netherlands Life as well as Japan Life, which continues to see intensifying competition in the COLI market. Additionally, new sales at Insurance Europe were impacted by currency effects and adverse economic conditions in Turkey.

Our continued focus on the successful integration of Delta Lloyd and on increasing efficiency is reflected in further cost savings of EUR 33 million at the units in scope of the integration, bringing total cost reductions to EUR 269 million compared with the 2016 full-year administrative expense base.

Our balance sheet remained strong with a Solvency II ratio of 239%, and a cash capital position of EUR 1.9 billion at the end of the third quarter.

As an international financial services company, we aim to create long-term value, and we want to contribute to society by further integrating environmental, social and governance (ESG) criteria into our decision making. To this end, we recently strengthened our responsible investment approach and restricted investments in companies involved in oil sands production and controversial pipelines, given the related concerns around human rights and environmental pollution. NN Group was again included in the Dow Jones Sustainability Indices (DJSI), both in the World and Europe index.

This quarter's performance confirms that we are progressing well in executing our strategy, which focuses on successfully integrating Delta Lloyd, further improving performance, accelerating the transformation of the business model and continuing to allocate capital rationally. This will ensure a sustainable business for tomorrow, helping people secure their financial futures.'

NN Group key figures

Note: All footnotes are included on page 26

Strategy and priorities

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

Netherlands

In line with NN's strategic focus to be more digital, personal and relevant in interactions with its customers, several new products, services, and initiatives were introduced during the quarter. For example, NN Bank launched the Senior Citizens' Residence mortgage, allowing people of 57 years and older to finance a new, smaller home, as well as the Expat Mortgage, with a tailored acceptance policy for expats wanting to settle in the Netherlands.

BeFrank introduced a Sustainable Impact Dashboard which allows employees of pension schemes to monitor the impact of their contributions on waste production, water consumption and CO2 emission, when opting for the sustainable investment mix. BeFrank is the first pension provider to offer this option to contribute to a better environment.

On 8 November, health insurance premiums for 2019 were announced. Following the rebranding of Delta Lloyd health insurance, the first NN health insurance campaign was launched aimed at attracting new customers for NN's health insurance product. NN health insurance offers a free choice of healthcare providers, access to the best medical specialists, and waiting list mediation.

OHRA introduced a solution specifically designed for self-employed workers to provide insurance cover of their business risks, for example legal assistance, liability insurance, and insurance for theft and damage of laptops and tablets.

On 18 September, Nationale-Nederlanden and ABN AMRO Verzekeringen were awarded the highest rating for their legal assistance insurance, and Nationale-Nederlanden and OHRA received the highest rating for their individual liability insurance. These ratings were awarded by MoneyView, an independent research institute that collects information about financial products.

International Insurance

In January 2018, Sparklab Turkey successfully launched a pilot project in response to the Pillar II pension regulation, introduced at the beginning of the year. The Project 'NN Ekstra' is a digital-lead generation and distribution platform that incentivises partners to act on behalf of NN. The platform directly forwards its users to NN's digital platform, helps to create master contracts, and facilitates the process to on-board employees of pension clients. Since the beginning of this year, NN Ekstra digitally on-boarded 275 new companies and more than 7,000 new employees.

Nationale-Nederlanden in Poland launched an accidental health insurance for children. This new product, which is sold online, includes care assistance covering doctors' visits, prescriptions, and private lessons during long absences from school, as well as medical assistance providing help in arranging doctors' visits.

The Non-life business in Belgium introduced the service 'My Advisor@Home' in April. When a customer's property suffers heavy damages, an advisor visits within 24 hours, and helps to take care of all necessary arrangements and repairs throughout the claims handling process. This concept is offered through ING, and fits perfectly with NN's brand promise 'You matter'. This service has been very well received by NN's customers, as reflected in high customer satisfaction scores.

NN Life Japan continues to develop new COLI products, and expand and diversify its distribution within the increasingly competitive COLI market, with a focus on value over volume. COLI sales through Sumitomo Life accounted for 11% of NN Life Japan's total sales in the third quarter of 2018. Sumitomo Life agents started offering NN Life Japan's Accelerated Living Disability Benefit and Increasing Term products from the beginning of April 2017, and Critical Illness insurance from April 2018. In addition, Protection sales increased by 77% compared with the same quarter last year, on the back of product repricing and higher sales of the Emergency Plus product.

In September, NN Life Japan started providing a new online sales tool to Sumitomo Life, enabling its tied agents to easily advise potential customers about NN Life Japan's products and the details of insurance applications at any time.

The international business continues to roll out digital tools to support NN's distribution partners, for example, NN's businesses in the Czech Republic and Slovakia launched a user-friendly digital sales platform, 'NN Stela', in order to improve customer experience.

Asset Management

NN Investment Partners (NN IP) in Poland became the country's first asset manager to launch a risk-profiling tool with a robo-matching module, which helps customers decide in which funds to invest. As mutual funds are a complex product to offer through online channels, this solution makes it easier for potential clients to start investing online.

In July, NN IP Japan and Rakuten Securities announced the launch of a new investment service called 'Target Year Wrap'. With this new service, Rakuten Securities provides retail investors with a customised investment solution.

NN IP's Dutch Residential Mortgage Fund surpassed the EUR 2 billion mark. Since its inception in November 2015, the fund has grown steadily, as institutional investors are increasingly keen to invest in Dutch mortgages in the current low-yield environment. More and more foreign investors have also shown interest, and the fund has been passported to amongst others Belgium, Germany, France, the UK and Spain.

The Principles for Responsible Investment (PRI) again awarded NN IP the top A+ score for its Strategy & Governance approach to responsible investing and ESG integration. NN IP has been a signatory of the United Nations-supported PRI since 2008, and has been active in responsible investing since 1999.

Other events

NN's branding strategy is geared towards building long-term relationships with the communities we operate in. Our running sponsorship fits well with our company's values and our aim to contribute to people's well-being. In 2017, NN and its partners launched the first professional running team in the world. Since then, the team's athletes have achieved 82 victories. In September 2018, Eliud Kipchoge, member of the running team, made international headlines when he broke the existing world record at the 2018 BMW Berlin marathon.

NN Bulgaria received a special award in recognition of its work to inspire the country's students to be entrepreneurial and improve their financial literacy. As part of its efforts, NN Bulgaria launched the textbook, 'Personal Finance: Introduction', for students in non-economic specialties. This textbook aims to help young people understand, plan, and manage their personal finances. The long-term goal of the project is to introduce a 'Personal Finance' course at higher education institutions.

NN Group Profile

NN Group is an international financial services company, active in 18 countries, with a strong presence in a number of European countries and Japan. With all its employees, the Group provides retirement services, pensions, insurance, investments and banking to approximately 17 million customers. NN Group includes 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 3Q18 results at 10.30 am CET on Thursday 15 November 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 3Q18 results, which will be held at 07.45 am CET on Thursday 15 November 2018. Journalists can join the press call at +31 20 531 5863    (NL).

Financial calendar

Contact information

Additional information on www.nn-group.com

• NN Group 3Q18 Financial Supplement, NN Group 3Q18 Analyst Presentation
• NN Group 30 September 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 30 September 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.