NN Group to look at further life back book deals but under no pressure, says CEO

NN Group NV is "actively looking at optimizing our life back books," CEO David Knibbe said, but added: "We are not in a position that we have to do something."

The Dutch insurance group's life business has "a lot of scale, good capabilities" and is running well, Knibbe told journalists on a call for NN Group's second-half 2021 earnings, but added that the company would take a look at opportunities if it saw them.

NN Group announced Feb. 15 that it was acquiring the life insurance subsidiary of ABN AMRO Verzekeringen, a joint venture between NN Group with Dutch bank ABN AMRO Bank NV., which includes run-off business. NN Group's Belgian subsidiary agreed to sell a portfolio of closed life business to Athora Belgium in October 2021.

2022 is expected to be a busy year for life back book deals in Europe and the U.S.

The life back book deals were part of what Knibbe called a "very active year" of acquisitions and divestments for NN Group in 2021. The company is buying MetLife Inc.'s operations in Poland and Greece, and completed the Greek part of the deal on Jan. 31, 2022. Poland is expected to follow later in the first half of the year. The company has also acquired a 70% stake in Dutch insurance broker Heinenoord. NN Group sold its Bulgarian business and agreed to sell its NN Investment Partners asset management business to The Goldman Sachs Group Inc.

"We will continue to assess our portfolio, not only in 2022 but also in the years after that," Knibbe told journalists. The CEO added: "I think overall we have a strong international position that we like and that we are proud of, and that works well together with the Dutch operation that we have."

As with life back book deals, Knibbe said NN Group would look at opportunities for mergers and acquisitions, but that its operating capital generation and growth targets were not dependent on it. "Our base case is organic growth," Knibbe said.

NN Group made a profit of €1.86 billion in the second half of 2021, up 41.5% on the €1.32 billion it made in the same period of 2020. Net profit for the full 2021 year was up 72.2% to €3.28 billion from €1.90 billion.

Operating capital generation was up 78.8% to €804 million in the second half, and up 59.6% to €1.58 billion for the year. NN Group is targeting operating capital generation of €1.5 billion in 2023.

Knibbe said certain factors that affected 2021 operating capital generation would not recur, such as the contribution from NN Investment Partners and benefits in the property and casualty business stemming from lower economic activity during the COVID-19 pandemic. But the CEO added that the company was "clearly on track" to hit its 2023 operating capital generation target and that for 2022 there was "positive momentum" from the underlying performance of the business.