Dutch insurer NN Group has said that it is anticipating a €100 million impact to its 2020 operating result due to the COVID-19 pandemic.
The company stated ahead of its investor day that the impact of the pandemic on claims has been limited so far, due to its limited exposure to business interruption, travel and health insurance lines.
However, its sales in Europe and Japan are expected to be affected, leading to lower premiums, and market volatility will likely result in lower fee income in asset management business.
This will offset mitigating actions taken by NN Group over the last few months, which include focusing on opportunities to accelerate the shift to higher yielding assets at Netherlands Life.
But the company continues to be well capitalised with an estimated Solvency II ratio of approximately 227%, including the impact of the longevity transactions announced on 19 May 2020.
NN Group CEO David Knibbe also announced that the company would target operating capital generation of €1.5 billion in 2023.
“We will continue to build on the solid foundations of the company, while becoming a more customer-centric and data-driven company, accelerating management actions to increase operating capital generation and driving growth in attractive markets,” Knibbe said.
“The targets for our segments drive efficiency of our businesses and underpin our commitment to long-term capital generation with sustainable and attractive capital returns to our shareholders. Our approach to capital deployment will be disciplined. We assess all individual businesses on their ability to generate attractive returns, and thus actively manage our portfolio going forward.”
The statement from NN Group comes shortly after investor Elliott Advisors (UK) Limited criticised the company’s market valuation and called on management to reset its trajectory.
Elliott argued that NN Group’s underlying value has “been obscured” and is not properly reflected in its current share price, adding that “NN Group itself is the greatest impediment to unlocking the valuation discount.”
