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ASR Nederland eyes potential acquisitions in setting out new strategy

Dutch insurer ASR Nederland NV said it aims to maintain an operational return on equity of above 12% as part of a new strategy for the 2019-2021 period.

It also said it would emphasize "value over volume" but would also pursue "profitable growth in selective areas," including through acquisitions. It noted that it would specifically look at opportunities in property and casualty, disability, asset management, defined contribution pensions and consolidating life portfolios.

"If there are no opportunities for profitable deployment of capital, we will consider returning capital to shareholders under certain defined conditions," it said.

ASR had confirmed in late August that it would consider bidding for fellow Dutch insurer VIVAT NV if Chinese parent Anbang Insurance Group Co. Ltd. were to put it up for sale. CEO Jos Baeten cited the acquisition in February of Generali Nederland as an example of the company's ability "to successfully execute our bolt-on acquisition strategy."

The insurer also said it designated unit ASR Bank NV as a noncore activity of the group since it was not a strategic fit in the business. It did not specify whether it would seek to sell the lender.

The company's medium-term strategy also includes offering a stable-to-growing dividend per share over the medium term, while maintaining the dividend payout ratio at between 45% and 55% of net operating result. Moreover, it is eyeing minimum organic capital creation of €430 million by 2021, while maintaining its Solvency II ratio above 160%.

The group plans to grow its nonlife gross written premiums, excluding health, in a range between 3% and 5% annually. The operating results of its life insurance business are to remain stable against the 2017 figure of €633 million, the insurer said. The combined operating result from asset management and distribution and services is expected to rise to €40 million during the medium-term plan period and thereafter at a 5% annual rate.

The group also aims to increase assets under management in impact investments to €1.2 billion by 2021, and to measure the carbon footprint of a minimum 95% of its entire investment portfolio. ASR Nederland said it could also allocate more capital to market risk, provided it was less than 50% of total risk.

ASR Nederland comprises the previously nationalized Dutch insurance operations of the former Fortis group, which collapsed during the 2008 financial crisis. It carried out an IPO in June 2016, and the Dutch state sold its final shares in the company in September 2017.

ASR Nederland shares closed down 3.8% in Oct. 10 trading, although they have been at or close to 52-week highs in recent weeks.