NN Group reports 4Q17 and 2017 results

• 4Q17 operating result of the ongoing business of EUR 345 million, up 22.3% from 4Q16, driven by the contribution of the Delta Lloyd businesses
• Full-year 2017 operating result of the ongoing business increased to EUR 1,586 million, up 29.3% from 2016, mainly driven by the contribution of the Delta Lloyd businesses and improved results at most segments, partly offset by lower results at Netherlands Non-life
• Net result increased to EUR 700 million from EUR 148 million in 4Q16, mainly driven by higher capital gains and revaluations and the higher operating result. Full-year 2017 net result up 77.5% to EUR 2,110 million
• Administrative expense base of the business units in the scope of the cost reduction target decreased by EUR 133 million versus the full-year 2016 base of EUR 2,024 million
• Robust commercial momentum: APE at the insurance businesses up 35.1% at constant currencies compared with 4Q16. Full-year 2017 VNB of EUR 345 million, up 60.7% from 2016
• Solvency II ratio of 199% at the end of 4Q17, reflects the deduction of the proposed final 2017 dividend
• Holding company cash capital lower at EUR 1,434 million, reflecting the repayment of senior notes and the repurchase of own shares, partly offset by dividends received mainly from the Dutch units
• Final 2017 dividend proposal of EUR 1.04 per ordinary share, or approximately EUR 348 million in total, bringing the full-year 2017 dividend to EUR 1.66 per ordinary share

Statement of Lard Friese, CEO

'2017 was a memorable year for NN Group in which we successfully completed the acquisition of Delta Lloyd. We have started the integration in the Netherlands and Belgium creating a leading insurance and pension company, with attractive propositions in asset management and banking. We are making good progress. On 1 January 2018, the first legal mergers of business units were completed, with Delta Lloyd Bank merging into NN Bank, and Delta Lloyd Asset Management merging into NN Investment Partners. Most head-office departments have been integrated, we have started rationalising systems and portfolios, and products are being rebranded from Delta Lloyd to NN.

At our Capital Markets Day on 30 November 2017, we outlined the strategy and new targets for the combined company. One of our top priorities going forward is to deliver on the Delta Lloyd transaction and extract the synergies. In this respect we continue to increase efficiency and have lowered the cost base of the units in scope of the integration by EUR 133 million in 2017 towards our target of EUR 350 million by 2020.

The operating result for 2017 reflects a strong contribution of Delta Lloyd and improved operational performance in businesses such as Netherlands Life, Insurance Europe, Japan Life and the bank. We continue to see volatility in the results of the Non-life business, where an improvement in the P&C business was offset by a deterioration in D&A performance. We are implementing a range of measures to sustainably improve the Non-life performance.

Commercial momentum continues, with new sales up 33.9% at constant currencies and value of new business up 60.7% compared with 2016. NN Investment Partners attracted EUR 5.1 billion of third-party assets in 2017 offset by outflows of affiliated assets, and the mortgage portfolio of the banking business grew to EUR 17.6 billion. Over the last 12 months our client satisfaction again increased in almost all countries where we are active. With our strengthened market positions, we are well placed to capture growth opportunities.

Our Solvency II ratio and cash capital position remain robust, at 199% and EUR 1,434 million respectively, in line with our disciplined approach to managing our capital. We will propose a final 2017 dividend of EUR 1.04 per ordinary share at our Annual General Meeting of Shareholders on 31 May 2018. Together with the interim dividend paid in September 2017, this represents a pay-out ratio of around 45% of the 2017 full-year net operating result of the ongoing business.

Looking ahead, we will maintain our efforts to improve our overall performance, deliver excellent customer service, and further accelerate the transformation of our business through innovation.'

NN Group key figures

Note: All footnotes are included on page 27

Quarterly Business Update

The strong foundation of our purpose, brand, values and ambition, combined with a focus on our strategic priorities, enables us to create long-term value for our company and our stakeholders: customers, shareholders, employees, business partners and society at large.

Transparent products and services

ABN AMRO Verzekeringen, the joint venture of NN Group (51%) and ABN AMRO Bank (49%), was ranked best insurer by Dutch magazine Management Team and achieved a top three position in all three categories: customer focus, product leadership and excellent implementation.

In December 2017, NN Life Japan launched 'Emergency Plus', an innovative sudden-death insurance which offers protection to small and medium-sized enterprise (SME) owners. The product accounted for 48% of the total protection product sales in December and is expected to help further expand the COLI protection business of NN Life Japan in line with its strategy.

Capturing growth

New sales (APE) at Japan Life increased to EUR 171 million, up 33.8% from the fourth quarter of 2016, excluding currency effects, mainly due to higher sales of COLI products launched in 2017 and sales through the Sumitomo partnership. Sumitomo Life, which started offering NN Life Japan's COLI products in April 2017, contributed more than 10% of Japan Life's total sales in the fourth quarter. In addition to this, higher bank activation and the expansion of the bank distribution network to 76 partners at the end of December 2017, compared with 61 partners a year earlier, also led to a strong increase in bancassurance COLI sales.

NN Bank in the Netherlands launched an online campaign for discretionary asset management 'Beheerd Beleggen'. The campaign focused on the dreams and goals people have in life and how the investment advisors of NN Bank can help to achieve these goals financially. The campaign was very successful in terms of positive interactions, and led to a 30% growth in the 'Beheerd Beleggen' new customer base.

Multi-access distribution

In the fourth quarter of 2017, our businesses continued to expand its bancassurance partnerships. In Slovakia a partnership was set up with Slovenska sporitelna, one of the leading banks, and NN's pension products are now being sold through part of its network. NN Hayat ve Emeklilik in Turkey put in place a five-year distribution agreement with Burgan Bank to distribute its life insurance and pension products.

Nationale-Nederlanden in Poland launched a partnership with Play, the largest telecom provider in the country, providing dedicated health products (heart and cancer insurance) through Play's newly launched insurance market platform, 'Play Insurance'. Play customers will be able to buy the health insurance through the Play smartphone application, making NN products available to over 14 million Play customers.

Nationale-Nederlanden in Spain launched a Direct Channel, an online platform that uses facial recognition technology, which replaces the client's signature in the online purchase process and enables the company to issue paperless contracts. Nationale-Nederlanden Spain is the first insurance company in the country to use this technology to issue paperless contracts.

Effective and efficient operations

NN Group is committed to continuously making its processes more efficient and effective. The Non-life business and service provider Voogd & Voogd have signed a letter of intent for a mandated broker partnership in the field of Retail non-life insurance.

The Life business in the Netherlands migrated 90,000 policies from its legacy system to the modern target system. The policy details are now available to customers in the 'MijnNN' customer portal and in the NN app.

Innovation

NN Bank in the Netherlands developed and piloted the 360 degrees video service, a virtual reality tool to support customers in selling their house. NN facilitates customers to present their property online, and provide a personal tour, which allows buyers to digitally move through the house. NN distributes these videos to a selection of potential buyers via social media.

NN's businesses in the Czech Republic and Slovakia launched a digital sales platform in November 2017, which will significantly improve the customer experience of buying a life or savings product, both in terms of time taken and convenience. The process of managing new leads/business opportunities and follow-up is already fully digitalised, while digitalisation of contract origination including electronic signature is in the pilot phase.

In addition to continuously innovating its own product portfolio, NN looks for partnerships or investment opportunities with fintech companies to accelerate its innovation and transformation efforts. For example, NN recently invested in RightIndem, which offers digital, customer-driven claims management solutions. Another example is Dopay, a company that simplifies payroll management and disbursement in developing countries and enables employees without a bank account to be paid electronically.

Other events

Customer satisfaction has continued to increase in almost all countries where NN is active over the past 12 months. The business continues to focus on customer centricity and on innovating and improving customers' experience. This is reflected in higher and above-average customer loyalty and increasing Net Promotor Scores (NPS) as customers recommend NN's products to their relatives and friends. These results show that our employees remain committed to delivering an excellent customer service while integrating NN and Delta Lloyd.

Delta Lloyd and BeFrank were ranked number one in terms of advisor satisfaction in the Dutch pension market for the sixth year in a row as measured by independent agency IG&H, giving additional momentum to our pension plan proposition in the Dutch market.

The bank savings products of NN Bank and Delta Lloyd Bank were awarded in the categories policies and price by MoneyView, an independent research institute that collects information about financial products. The international insurance business received many awards, for example the businesses in Spain, Poland and Turkey were recognised as Top Employer, and NN in Greece was named best life insurance company by World Finance Magazine for the fourth time in a row.

NN Bank in the Netherlands received a silver award, 'Zilveren Spreekbuis Hypotheekverstrekkers 2017', for mortgage providers. This award is a recognition from customers and intermediaries of NN Bank's innovations.

FitVermogen.nl, the online platform for investment funds of NN Investment Partners (NN IP), gives customers insight into future study costs of their children and grandchildren and advises on how to finance them. FitVermogen.nl made it possible for 'Startpunt Geldzaken', a partnership of several organisations that focus on raising financial awareness for consumers in the Netherlands, to launch a free online money planner 'Geldplan Studie (klein) kinderen' in November 2017.

To enhance long-term investor value and instigate positive change in terms of sustainability, NN IP has been actively engaging on climate risk with companies in the utilities sector since 2016. In December 2017, NN IP expanded its engagement to the chemicals sector by joining the global Climate Action 100+ initiative, a new initiative to engage with the world's largest corporate greenhouse gas emitters to curb emissions, strengthen climate-related financial disclosures and improve governance on climate change.

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 4Q17 results at 10.30 am CET on Thursday 15 February 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 4Q17 results, which will be held at 07.45 am CET on Thursday 15 February 2018. Journalists can join the press call at +31 20 531 5863 (NL).

Lard Friese and David Knibbe will host a lunch for journalists, which will be held at 12.30 pm CET on Thursday 15 February 2018.

Financial calendar

Contact information

Additional information on www.nn-group.com

• NN Group 4Q17 Financial Supplement, NN Group 4Q17 Analyst Presentation
• 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 2017 NN Group N.V. condensed consolidated interim financial information for the period ended 30 September 2017. The Annual Accounts for 2017 are in progress and may be subject to adjustments from subsequent events.

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.