avatar ASR Nederland N.V. Finance, Insurance, And Real Estate

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    2019 Annual Report


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    Cover Object Facade stone About the object On 14 May 1940, German bombers bombarded the inner city of Rotterdam. The 15-minute bombardment destroyed almost the entire inner city, partly as a result of the fires that flared up. Some 650 to 900 people lost their lives and around 80,000 people became homeless. The office buildings of the Bicker Caarten & Obreen insurance firms and that of M. van Marle – to which Stad Rotterdam belonged at that time – on the Wijnstraat were bombed. Little remains of them apart from the commemorative brick showing the Oude Hoofdpoort; a reference to the place where it all once began. ASR Nederland N.V. Archimedeslaan 10 P.O. Box 2072 3500 HB Utrecht The Netherlands www.asrnl.com


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    2019 Annual Report


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    Icon list Sustainable insurer a.s.r. foundation Shareholders Carbon footprint Sustainable employer Intermediaries Trusted company Foundation 1720 Role in society Head office Climate change and energy transition Net Promoter Score Vitality and (sustainable) employability Sustainable investor Financial self-reliance and inclusiveness Impact investing Annual Report | Icon list 4


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    1 About a.s.r. 2 3 4 5 6 7 8 9 Contents 1 About a.s.r. 7 6 Financial statements 129 1.1 At a glance 9 6.1 Introduction 132 1.2 Message from the CEO 12 6.2 Consolidated financial statements 134 1.3 Value creation model 14 6.3 Accounting policies 141 6.4 Group structure and segment information 163 2 Operating environment 17 6.5 Notes to the consolidated balance sheet 178 2.1 The story of a.s.r. 18 6.6 Notes to the consolidated income statement 207 2.2 SWOT analysis 23 6.7 Other notes 216 2.3 Stakeholders and material topics 24 6.8 Risk management 234 2.4 Strategic targets and results 27 6.9 Capital management 268 2.5 Sustainable Development Goals 30 6.10 Operating result 273 6.11 Company financial statements 275 3 Sustainable value creation 33 3.1 a.s.r’s roles 34 7 Other information 285 3.2 Our role as a sustainable insurer 35 7.1 Report on the audit of the financial statements 3.3 Our role as a sustainable employer 39 2019 included in the annual report 286 3.4 Our role as a sustainable investor 44 7.2 Provisions of the Articles of Association 3.5 Our role as a trusted company 49 regarding profit appropriation 296 3.6 Our role in society 60 8 Report of Stichting Continuïteit 4 Business performance 63 ASR Nederland 299 4.1 Group and segment information 64 4.2 Risk management 84 9 Annexes 303 4.3 Compliance 89 A Facts and figures 313 4.4 a.s.r.’s approach to addressing climate change 90 B About this report 315 4.5 Statements of the Executive Board 96 C Glossary 319 4.6 Assurance report of the independent auditor 97 D Abbreviations 321 E Materiality analysis and stakeholder dialogue 323 5 Governance 101 F GRI Content Index 327 5.1 Corporate Governance 102 G EU Directive: disclosure on non-financial 5.2 Supervisory Board report 112 information and diversity information 329 5.3 Remuneration report 118 5.4 Employee participation 127 Annual Report | Contents 5


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    Langer dan een eeuw inde Oude Hoofdpoort Huisvesting Rotterdam Van Stad te


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    1 About a.s.r. Object The Oude Hoofdpoort About the object The Oude Hoofdpoort in Rotterdam, the first offices of N.V. Maatschappij van Assurantie, Discontering en Beleening der Stad Rotterdam in 1720. In time-honoured fashion, this historic silver image was kept in the offices of the company’s Executive Board chairmen.


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    1 About a.s.r. 2 3 4 5 6 7 8 9 1.1 At a glance ASR Nederland N.V., hereinafter ‘a.s.r.’, is the Dutch insurance company for all types of insurance. a.s.r. offers a broad range of insurance products in the areas of non-life and life insurance for consumers, self-employed people and companies. a.s.r. offers investment products and mortgages and is active as an investor and in offering asset management services to institutional clients. Furthermore, a.s.r. is a full service provider for intermediaries and operates almost exclusively in the Dutch market. a.s.r.’s operating segments Non-life Asset Management • Property & Casualty (P&C) • Mortgages • Disability • Asset Management • Health • Real Estate • Bank (discontinued) ASR Nederland Life N.V. Distribution and Services • Pensions • Van Kampen Groep • Individual life • Dutch ID • Funeral • SuperGarant • Corins • ANAC • Loyalis Kennis & Consult Holding and Other • Poliservice Our brands Multi-brand and multi-channel distribution; focus on intermediary. Non-financial key figures About a.s.r. | 1.1 At a glance 9


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    Result and return Operating IFRS net result Operating return IFRS Return on result (€ million) (€ million) on equity equity 858 972 15.1% 19.1% 749 669 14.3% 13.7% Solvency, capital and dividend Solvency II Dividend per share Total equity Total equity attributable (standard formula) (€) (€ million) to shareholders (€ million) 194% 1.90 5,479 6,093 4,478 5,089 197% 1.74 Total dividend (€ million) 267 245 2018 2019 2018 2019 Business performance Gross written New business Life Operating expenses Combined ratio premiums (€ million) segment (APE) (€ million) (€ million) (Non-life segment) 4,666 159 -656 -601 93.5% 95.7% 4,459 119 Financial management Cash position Financial Organic capital Interest coverage holding (€ million) leverage creation (€ million) ratio 458 394 29.2% 370 372 12.9x 2019 26.7% 10.9x 2018 About a.s.r. | 1.1 At a glance 10


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    1 About a.s.r. 2 3 4 5 6 7 8 9 Company facts Leading market positions and #3 Founded in 1720, 3,906 overall in Dutch market Head office deeply rooted in employees based on gross written in Dutch society (FTEs) premiums (excl. Health) Utrecht Non-financial performance Net Promoter Score Impact investing Carbon footprint Employee contribution (€ million) % of portfolio for own account to local society 42 44 € 927 12,413 hours € 346 NA 89% 8,733 hours Gender diversity (%) Supervisory Board Executive Board Senior management Non-management F F F F F F F F M M M M M M M M 60 / 40 67 / 33 75 / 25 67 / 33 71 / 29 75 / 25 60 / 40 58 / 42 Recognition in Benchmarks & Ratings Fair insurance VBDO Transparancy Dow Jones (out of 100) guide Benchmark1 Sustainability Index 71 73 1 number 1 number 2 number 1 number 46 number 21 number 2018 2019 FTSE4Good (out of 5) CDP MSCI ISS Oekom 4.9 B B BB BBB C (prime) 3.5 C- 2019 2018 1 The Transparency Benchmark takes place on a bi-annual basis. For that reason the 2017 result is presented. About a.s.r. | 1.1 At a glance 11


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    1.2 Message from the CEO ‘We hereby present you a.s.r.’s 2019 Annual Report. 2019 was an excellent year for us. Before I go into that in a little more detail, I would first like to reflect on what is currently happening in the world in relation to the coronavirus. The developments regarding the coronavirus succeed one another fast and are far-reaching. People are worried and our day-to-day activities are greatly affected, with schools, shops and factories closing and employees working in teams and sometimes entirely from home. The financial markets and share prices are under severe pressure. It reminds me of the crisis of 2008. As a company, we have learned a lot from that crisis. Since then, we have worked unabatedly to create a solid basis in order to be able to cope with such a crisis in the future. a.s.r. is healthy, and our buffers are good. At this point in time it is too early to make a realistic and credible assessment of the impact of the coronavirus on a.s.r.’s business and financial performance. The effect on our financial results will depend on a number of factors, including the extent and duration of the period of disruption and the impact on the global economy. Our prime concern is the personal well-being of our customers and our employees, their partners and their families From the beginning of the crisis, this has been the starting point in all the measures we take. We have therefore decided, among other things, to completely close all of a.s.r.’s buildings. All our staff curently works from home so we are able to continue to provide our services to all of our customers. I am convinced that, with the commitment of all the staff at a.s.r., we will get through this crisis. ‘a.s.r. doet het’ from appraisals. We replaced the appraisal interview We believe that companies that are relevant for society with an ongoing dialogue between employees and have a rationale for the longer term. This ties in closely their managers in which greater emphasis is placed on with the overarching theme of our strategy: long-term development. We recognise that people want to work for sustainable value creation. It applies not only to our us due to our positioning as a socially engaged company. commercial decisions but also to the deployment of our shareholder capital, the service we provide and the way in The high rating given to a.s.r. by its employees was which we seek to contribute to society. In 2019 we made this reflected in the award of the ‘Best employer 2019-2020’ expressly visible in our marketing campaigns and elsewhere quality label. In this largest independent survey of Dutch through the slogan ‘a.s.r. doet het’. This indicates our employers, a.s.r. scored well above the average in the commitment to work towards solutions for the social issues insurance sector, gaining the maximum three stars. There in our focus areas. The success we are having is reflected is however scope for further improvement in the sphere of in, among others, customer surveys which show that a.s.r. is diversity. Diversity ratios for the workforce as a whole are increasingly seen as a sustainable insurer. The high ratings good, but they could be better at management level. This we are given by customers and intermediaries (measured is now being addressed and will be expressly factored into through the Net Promoter Score (NPS)), plus the various our recruitment and appointment procedures. awards accorded to a.s.r. by insurance intermediaries for the quality of its service all show that our added value is being Our core activity is insurance. Here, too, we want to acknowledged externally. concentrate chiefly on creating sustainable value. To this end, we have developed a number of products and services, Sustainable such as the ‘Langer Mee AOV’, the ‘Verduurzamings- a.s.r. wants to contribute to a more sustainable society and hypotheek’ and a.s.r. Vitality, a programme that helps to add value for all its stakeholders – through sustainable customers to live healthier and more vital lives. In the products and services, in its investment policy, business Non-life segment, we are introducing more sustainable operations and as a sustainable employer. Progress was damage repairs, which can make a significant contribution made in all these areas in 2019. a.s.r. is at the top of the to a more circular economy. Approximately 10% of our VBDO and Fair Insurance Guide benchmarks as one of damage repairs are currently sustainable, which means that the most sustainable investors among Dutch insurers. In there is still considerable scope for growth. These 2019, it further improved the sustainability of its business sustainable options are based on our conviction that as an operations by making its head office in Utrecht fully carbon- insurer, we have a duty to do more than simply bear risks and neutral. This involved converting away from gas as a source help people build capital for later. We want to increasingly of energy. Over the coming years, we will be taking further be able to offer additional products and services with which steps to make our operations more sustainable by halving to become even more relevant for our customers. the CO2 emissions of our business travel by 2025. Financial self-reliance As an employer, we made progress with our extensive staff Our employees make a hugely valuable contribution to training programmes and the decoupling of remuneration society by generously committing themselves to social About a.s.r. | 1.2 Message from the CEO 12


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    1 About a.s.r. 2 3 4 5 6 7 8 9 activities aimed mainly at helping people to become more standard formula), given that we aim to maintain a robust financially self-reliant. We believe in the importance of balance sheet. this commitment by our staff. This is therefore one of the non-financial goals we have linked to our strategy. The We will assess the possibility of an additional distribution medium-term target is to achieve an annual increase of 5%, on an annual basis, depending partly on developments in compared with 2018 (8,733), of the hours our employees the market, such as opportunities for larger acquisitions. spend in doing voluntary work. In 2019 this target was At the same time, we remain interested in growth through more than exceeded with an increase of over 40%, which small and medium-sized acquisitions. Our strong capital indicates the impressive level of social engagement of our position provides sufficient scope for this. The new policy employees. We are immensely gratified by this. will be implemented with immediate effect and we announced when presenting our annual results that we M&A will be buying back € 75 million of our own shares. The sale of Vivat by its Chinese parent Anbang attracted considerable attention in the insurance sector in 2019. a.s.r. 300th anniversary a.s.r. carefully considered the possibility of acquiring Vivat, These gratifying results for 2019 are entirely due to on the basis that all acquisitions made by us must meet the confidence placed in us by our customers and strict financial and risk parameters and add value to our intermediaries, the hard work and commitment of our organisation. As is known, a.s.r. made an offer but another employees and the support of our shareholders. We are party was ultimately preferred. We have always taken the optimistic about the outlook for a.s.r. view that an acquisition of such a size could be attractive but is by no means an imperative for us. In addition to We are moving into the future with a new Executive Board organic growth, a.s.r.’s growth strategy is based on small (EB) following the appointment of Ingrid de Swart and and medium-sized acquisitions. This is a strategy in which Annemiek van Melick and the resignation of our CFO Chris the company has been highly successful. This success Figee. I am grateful for Chris’ significant contribution to continued throughout 2019 with the start of integration of a.s.r. over the past five years. With his financial leadership Loyalis and the acquisitions of Veherex and VvAA. and expertise Chris has been key in the successful IPO, a number of successful acquisitions and a.s.r.’s firm position Financial performance in the capital markets. His relentless drive, ambition I am proud of the financial results we have achieved, and and enthusiasm has been inspiring to many within the delighted that all the business lines have contributed to company. All of us at a.s.r. regretted seeing Chris leave and them. The execution of our strategy is running to plan. wish him all the best for the future. I am very pleased with Our performance is in line with and has exceeded our Annemiek as our new CFO and Ingrid as new Executive targets. Our operating result rose by 14.5% to € 858 million Board member and I am delighted to welcome them both. against a slightly lower structural cost base. Turnover rose They are new, exceptional and experienced colleagues by 4.6% to € 4.7 billion, and at 93.5%, the combined ratio with whom I look forward to directing a.s.r. in the years for Non-life and Disability shows that we understand our ahead. Beginning in 2020, business. Pensions also reported a successful 2019, with an a.s.r.’s 300th anniversary increase of over 50% of the gross written premiums (GWP) year. Our company’s history in the ‘WerknemersPensioen’ (WnP). a.s.r. has thus gained encompasses many high a strong position on the Defined Contribution (DC) market points, during which it and this offsets the structural decrease in premiums from has laid the foundations our Individual life portfolio. We are now administering for a strong and healthy Individual life on a single platform, after having transferred future. We are pleased the final tranche of a total of over 800,000 policies in 2019. to commemorate this Our Mortgage fund, which we launched in 2017 for our milestone; after all, institutional asset management customers, reached the a company that fails to € 5 billion milestone. honour its past has no future. At 15%, the operating return on equity was well above Jos Baeten target. The higher operating result means that we can pay our shareholders a higher dividend. We propose a cash CEO and Chairman of dividend of € 1.90 per share for 2019, an increase of more the Executive Board than 9% compared with 2018. In 2019, we reviewed and adjusted our capital policy, mainly to increase the scope for additional capital distribution. Our medium-term intention is to make an annual additional capital distribution of € 75 million in addition to the progressive regular dividend, provided our Solvency II ratio remains above 180% (based on the About a.s.r. | 1.2 Message from the CEO 13


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    1.3 Value creation model a.s.r. is committed to create long-term value for its the economic, social or environmental value created (a.s.r.’s stakeholders. This value may be economic, social or approach, output and impact) as a result of its activities. environmental. This model is based on the framework developed by the International Integrated Reporting Council (IIRC). The value creation model shows the flow of this value from the resources or ‘capitals’ a.s.r. consumes in its business to Products and services around the themes: • Sustainable living • Sustainable employability • Future income • Self-employment and flexible labor markets Input ble value crea taina tion Sus ic principle: Value ov Financial capital ra teg er v olu • € 4,666 million gross written y st m Ke tegic principles e premiums Stra cu stomer ne € 7,828 million Eligible Own eting eds • Me Funds Fin n • € 20.7 billion assets under itio r core values anc management for third parties Ou rans ial Sol self-rel and energy t Our purpose id fin effectiveness Human and intellectual Helping customers to I thin mitigate risks and I’m helpful capital a iance and in ncial framew accumulate wealth. 4,275 employees (headcounts) k ahead • a.s.r. contributes to the • € 6.4 million in training solution of societal change employees issues with the long C o st • Diversity and inclusivity term perspective ork in mind. c • Health and vitality l u ate siven I act decisively m C li ess Social and relationship g capital Ex itin c an ellence d erwr > 1.5 million customers dc un • laim in pricing • 5,000 intermediaries s management • Other business partners • Society at large Vit ality ility and ( pl oya b sustainable) em Key trends • Technological • Environmental and demographic • Economic and financial markets • Political and regulatory About a.s.r. | 1.3 Value creation model 14


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    1 About a.s.r. 2 3 4 5 6 7 8 9 Value created in 2019 a.s.r.’s approach Output Impact Enhance positive impact Reduce negative impact a.s.r. helps customers to mitigate risks and build Sustainable insurer • Improve customer • Improve customer capital for the future. The main goal of a.s.r. is to satisfaction service by complaints offer customers fair value for the premium paid. • Customer satisfaction: NPS 44 • Introduce new analysis and a.s.r. is satisfied only if the customer feels he has • Claims and benefits paid: sustainable products improvement actions been positively helped and if the financial advisor € 4.7 billion and services • Damage and feels that a.s.r. offers the right service and high • Sustainable products and services • Claims prevention claim reduction by quality products and services. • Precautions to prevent damage services prevention • Provide risk management • Disability treatment opportunities for customers and reintegration • > 86,000 new customers in Health services • Introduction of a.s.r. Vitality resulting in 11,000 participants in the first two months Having a diverse, talented, qualified and Sustainable employer • Improve employee • Reduce absenteeism healthy workforce is key for a.s.r. in achieving satisfaction • Reduce employee its business objectives. That is why a.s.r. is • Paid salaries and wages: € 257 million • Improve employability turnover committed to attracting, retaining and inspiring • Number of ompleted job related of a.s.r.’s workforce the best people, offering them extensive scope trainings: 1,912 • Stimulate employees for training and development, and facilitating • Diverse employee population: to fulfil internal a sound work/life balance. Improve the 59% male / 41% female vacancies attractiveness of a.s.r. as an employer on the • Healthy and vital workforce: • Improve the gender external labor market. absenteeism 3.97%; nil absenteeism diversity of the 54%; vitality activities workforce • Internally filled vacancies: 53% of • Equal remuneration 480 vacancies for females and males As an institutional investor, one way in which a.s.r. Sustainable investor • Offer sustainable • Exclude countries takes ownership of social responsibility is through investment and businesses that the use of ethical and sustainability criteria • Impact investing: € 927 million opportunities to do not meet a.s.r.’s in its investment policy. All investments are • Carbon footprint measured of customers SRI criteria. screened on the basis of the Socially Responsible investment and mortgages portfolio • Participate in Investment policy, focusing on aspects such (for own account): 89% engagement projects as social and environmental criteria. Countries • Sustainable investment opportunities for influencing and businesses that do not meet the criteria are • Assets under management for third purposes excluded. parties increased to € 20.7 billion a.s.r. works responsibly to realise its objectives. Trusted company • Smooth business • Minimise the direct The negative impact on the environment (e.g. processes CO2 footprint of CO2 emission) is minimised as much as possible. • Tax paid: € 683 million • Fair tax payment a.s.r.’s own operations The purchase of goods and services takes place • No fines for data leaks in a responsible manner in accordance with • Carbon neutral operations applicable standards and policies. a.s.r. has a transparent tax policy with the aim of delivering its share to society. Dividends and share price developments should Shareholders • Offer a progressive • Offer increasingly offer an attractive total return on shareholders annual dividend per sustainable investment. Shareholders are increasingly • Dividend per share: € 1.90 share investments interested in the social relevance of the • Total shareholder return: 1.8% • At least Standard & companies they invest in. It is in their interest that • Organic capital creation: € 370 million Poor’s single A rating a.s.r. represents the interests of all stakeholders in order to achieve long-term value creation and attractive return on capital. a.s.r. foundation initiates projects on financial Role in society • Support local initiaves • Reduce illiteracy awareness and self-reliance. By teaching and • Improve financial • Reduce financial supporting people in reading and arithmetic, • Employee contribution to awareness vulnerability of being able to handle money and organising their local society: 12,413 hours individuals financial administration. a.s.r.’s sponsorship and • Donations to charitable donation policy fits in with this and is focused organisations: € 193,000 on those starting points. Purely financial support • Voluntary contribution to financial does not or hardly ever occur. It is often a self-reliance support: 4,670 hours combination of material and substantive support. • a.s.r. has signed the ethical manifesto About a.s.r. | 1.3 Value creation model 15


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    2 Operating environment Object Strongbox About the object This strongbox, for keeping securities, among other things, dates from the 1700 – 1800 period. The inside of the lid shows the text ‘I served from 1720, I have gone through a great deal and I am grateful to have also come through the destruction of Rotterdam in 1940 in one piece’.


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    2.1 The story of a.s.r. The history of a.s.r. goes back 300 years. The company is or unwilling to bear themselves, and allowing them to deeply rooted in Dutch society and goes to great lengths accumulate capital for their financial needs later on in life. to understand the needs and wishes of its customers. It is Through its expertise, a.s.r. contributes to the solution committed to delivering services clearly, sustainably and of societal issues related to financial self-reliance and transparently, understanding and fulfilling customers’ inclusiveness, vitality and (sustainable) employability needs, and continuing to innovate and develop new and climate change and energy transition with a view to services. The organisation meets clients’ needs in a sustainability and the long term. Focusing on sustainability service-oriented way based on its expertise. Gaining and as an integral part of its strategy, a.s.r.’s goal is to increase maintaining the trust of its customers is essential to a.s.r. its positive contribution and reduce its potential negative The company values the provision of independent third impact on society and the environment. party advice to customers, as reflected in its strong position in the intermediary channel. 2.1.1 Strategy a.s.r.’s purpose is to help people ensure their financial stability by sharing risks and building capital with The overarching strategy exists of ‘sustainable value sustainability and the long term in mind. It helps them creation’ and ‘value over volume’. do so by mitigating the financial risks (FR) they are unable ble value creat taina ion Sus principle: Value ov gic er ate v y str olu m Ke tegic principles e Stra st o m cu er ne eting e ds Me Fin ion r core values anc Ou nsit ial nge and energy tra Soli self-rel Our purpose d fina effectiveness Helping customers to I thin mitigate risks and I’m helpful iance and inclu ncial framew accumulate wealth. k ahead a.s.r. contributes to the solution of societal issues with the long C o st term perspective e cha ork in mind. sive m at I act decisively nes C li g s Ex itin c an ellence r wr dc un d e laim in pricing s management Vit ality ility and ( ya b sustainable) emplo Core values • ‘I act decisively’. Employees keep a close eye on a.s.r. believes it’s goals can only be achieved with content and process, and come up with solutions. motivated and engaged employees. Having a talented, They coordinate, are persistent and stand by their qualified and healthy workforce is key in enabling to commitments. achieve its business targets. The employees are guided by its core values: a.s.r. is satisfied if : • ‘I’m helpful’. Employees are approachable, listen • Customers receive value for the premiums they pay; attentively, then help with solutions using their • Employees continuously develop their skills; expertise, experience and commitment; • Shareholders obtain attractive returns; • ‘I think ahead’. Employees empathise and think ahead • Sustainability is included in the day-to-day activities to to proactively help customers, intermediaries and create long-term value. colleagues; Operating environment | 2.1 The story of a.s.r. 18


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    1 2 Operating environment 3 4 5 6 7 8 9 Value over volume insight into their financial situation and is involved in In the insurance industry price competition is an effective projects aimed at helping people to make conscious instrument and volume growth can be relatively easily financial decisions. a.s.r. is an insurer for all Dutch achieved by lowering premiums. However, this short-term citizens, including specific (vulnerable) target groups. growth may attract loss-generating business and is • Vitality and (sustainable) employability therefore unattractive to a.s.r. in the long term. At all There is a growing attention for health and vitality, times, growth will have to meet a.s.r.’s minimum return prompted partly by social trends and challenges such as hurdles, whether this is organic growth or growth through a later retirement age and rising health care costs. In its acquisitions. Thus volume growth should always add value products and services, a.s.r. focuses on the prevention of to a.s.r. illness, absenteeism and disability, and on encouraging sustainable employability. It promotes the sustainable Strategic principles employability of its employees by investing in personal • Meeting customer needs development, vitality and facilities that offer flexible a.s.r. serves its customers’ needs. As mentioned in working conditions. chapter 2.2 SWOT analysis, there are important trends • Climate change and energy transition and developments affecting insurers, their business Financial institutions increasingly need to factor in models and customer behaviour. a.s.r. must stay on the risks associated with climate change, such as top of these trends and developments and be flexible extreme weather, technological developments and the and agile to continue to meet its customers’ changing transition to a climate-neutral economy. a.s.r. assists the needs. transition to a low carbon economy through its Socially • Excellence in pricing, underwriting and claims Responsible Investments (SRI) and sustainable products management and services. To remain competitive a.s.r. continues to build on its expertise, which it refers to as ‘craftsmanship’. a.s.r. Based on these three areas, a.s.r. develops and promotes excels in disciplined pricing, underwriting and claims products and services with which to create sustainable management. value for its businesses, stakeholders and society at large. • Cost-effectiveness The company recognises its duty to minimise the negative a.s.r. applies a ‘no waste’ cost principle. impact of its business activities, including its investment Cost-effectiveness is not about announcing large policy. a.s.r. therefore offers the assurance that investments one-off cost reduction processes every couple of years, are made in a socially responsible way while aiming to but something a.s.r. believes should be ever-present and achieve financially attractive returns on the capital invested embedded in day-to-day operations. Cost-effectiveness by its shareholders. is part of the foundation of sustainable and profitable business models. • Solid financial framework 2.1.2 New areas of growth a.s.r. generates capital from its business activities and is a resilient and highly diversified insurer with solid It continues to be part of a.s.r.’s strategy to achieve growth solvency and profitable businesses. Its sound capital organically and through selective acquisitions. In the base allows a.s.r. to fulfill its longterm obligations recent years a.s.r. has been successful with multiple bolt-on and to absorb shocks while also taking advantage of value adding acquisitions. a.s.r. identifies opportunities opportunities to invest in organic growth as well as in for value-added bolt-on acquisitions and focuses on small selective acquisitions. to medium life-related businesses, non-life businesses and possibilities to expand its position in insurance Sustainable value creation distribution as well as selective asset management or other a.s.r. seeks to be a leader in sustainable business practices opportunities. in the financial sector, based on a sustainable future business model. It strives to meet the needs of existing and In addition to inorganic growth, a.s.r. has identified several potential customers while simultaneously adding value for potential business growth areas that are close to its core other stakeholders. a.s.r. feels a responsibility to adopt a competences and where it intends to expand its existing long-term approach as the starting point for its decisions services to become more relevant for customers. and activities. And it believes it can make a positive and sustainable contribution to addressing social challenges. These areas of growth can be developed in conjunction There are three areas in which the organisation believes it with partners and third parties. Not all products and has the most to contribute – and where it can potentially services need to be a.s.r.-owned. It is a.s.r.’s goal to be create the most value for its stakeholders: relevant for its customers by offering third party services • Financial self-reliance and inclusiveness that are of high quality and add value in relation to those As a financial service provider, a.s.r. feels it is important services that a.s.r. can offer itself. for people to have financial continuity in their lives, to be able to take risks responsibly and make well-informed financial decisions. It therefore helps clients to gain Operating environment | 2.1 The story of a.s.r. 19


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    The areas of growth are related to the overall trends and • Self-employment and flexible labor markets developments which will be discussed in chapter 2.2 SWOT Increasing flexibility of labor markets, the growth in the analysis and chapter 3 Sustainable value creation. number of self-employed people and the rise of the gig economy where temporary contracts are the norm. • Sustainable employability These are trends a.s.r. need to respond to. Jobs become a.s.r. identifies several trends that lead to increased projects, freelancers replace employees and digital demand for sustainable employability from employers labor platforms speed up the process by matching and employees. Employees’ work environments are supply and demand for specific labor competences with changing. Technological developments are altering low transaction and processing costs. what is required of employees, labor contracts are shorter, retirement age is rising and labor is becoming a.s.r. supports self-employed people through the ZZP less location dependent. Nederland services platform and through its disability and health insurance business. In this area of growth, Through its disability insurance business, a.s.r. has a a.s.r. is creating cohesive offering containing for strong connection with employers and employees example various (non-life) insurance covers, mortgages and has a wide variety of services to offer that enhance and mortgage advice, support in relation to contracts sustainable employability. Several services can be with employers, educational support, accounting, fiscal seen as building blocks and are already part of a.s.r.’s and pension support. business: disability and health insurance, insurance and service distribution companies, occupational health Some trends lead to less demand for traditional insurance prevention and reintegration services and additional offered by insurers and more demand for additional services such as a.s.r. Vitality. services. These services relate for example to identifying and assessing risks, advice on how to deal with those risks, • Future income prevention services and claims handling services. These This area of expertise focuses on helping people gain services can differentiate a.s.r. from other insurers. The use insight and prepare for their future (financial) demands of data enables a.s.r. to better predict risks and provide (e.g. a planned sabbatical or anticipated birth of a child), better services to individual and corporate customers, but can also be for the longer term (e.g. to finance (early) while ensuring data privacy. Although some trends and retirement or additional pension savings, unexpected developments can be viewed as threats to existing business health care costs or additional health services). A trend models, a.s.r. identifies opportunities to benefit from those impacting demand in this area is the retreat of national trends and developments and generate growth in an government and the reduction in availability of fiscally otherwise saturated and low growth insurance market. attractive facilities. The low interest environment is having a negative impact on the benefits that can be Traditionally, insurance companies have customer contact expected from the pensions that have been built up mostly at moments that can have a negative connotation: collectively in the past. a.s.r. can provide customers payment dates and the handling of a claim when an event with the necessary insights in their financial situation. (accident) occurred. Client expectations are changing. Pure Individual savings and investment solutions can be risk-bearing may no longer be sufficient and additional provided on top of collective pension systems and services may become more relevant to the customer. This financial planning and awareness tools. This area of provides a.s.r. with an opportunity to expand its offering expertise is closely related to the expertise a.s.r. already and become more relevant to customers by increasing has in its pension business. customer proximity and increasing the frequency of (positive) interaction with customers. By advising • Sustainable living customers and enabling them to make better decisions, This area is closely linked to a.s.r.’s P&C and mortgage a.s.r. can positively impact customers’ decisions and business. It focuses on how a.s.r. can help customers to behaviour. One example is the recent introduction of a.s.r. live in a suitable, affordable and sustainable manner. Vitality, through which a.s.r. aims to improve the health of its customers and employees. This includes assistance in weighing up the pros and cons of buying and renting, mortgage advisory services, sustainable housing improvement advice or financial support to make houses more sustainable and reduce the burden on the climate of domestic housing. Housing insurance, burglary prevention services, maintenance support, sustainable damage repair services, can all improve customers’ home experience. The internet of things and development of domotics may enable a.s.r. to better serve its customers and is part of the evolution of this area of expertise. Operating environment | 2.1 The story of a.s.r. 20


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    1 2 Operating environment 3 4 5 6 7 8 9 2.1.3 Portfolio and execution of The basis for creating value and growing profitability in strategy P&C is underpinned by the following capabilities of a.s.r.: • Insurance craftsmanship, which means its underwriting The strategy described earlier is the driver of the value skills – risk selection and pricing, claims management of a.s.r.’s business portfolio. On an ongoing basis, a.s.r. and cost-effective operations; reviews its business portfolio for its contribution to value • Leading position in the intermediary channel and its accretion, as well as its organic and inorganic growth in-house distributors and service providers; outlook. • Know-how in underwriting and claimshandling resulting in a strong combined ratio (COR), while growing Portfolio organically; Given the profit contribution and growth outlook of the • Know-how in integrating and optimising the portfolios businesses, a.s.r. divides its portfolio into four categories: and businesses it has acquired. a.s.r.’s IT systems and I Activities that provide stable cash flows and generate platforms can onboard more business. value with relatively strong growth potential; II Activities that offer business enhancement Within P&C, a.s.r. can continue to grow organically by opportunities, typically capital-light; gaining market share at the targeted COR and, where III Businesses that represent robust and predictable service available, by adding books of business without materially books and contribute to profitability; increasing operational expenses, consequently benefiting IV Non-core activities which will or are eventually be from economies of scale. The distribution partners in the divested. portfolio can facilitate this growth. a.s.r. is well-equipped to benefit from the trends in Business domains Asset disability insurance that are driving demand for services in Non-life with management surrounding sustainable employability. a.s.r. has a growth potential related growth considerable stake in an evolving ecosystem in sustainable businesses employability, which includes: • Insurance intermediaries and access to customer P&C groups serviced by Loyalis; Distribution and Services • Added services to assist employees and a growing Disability Asset Management cohort of self-employed individuals; Health I II Pensions DC • Partnership with Discovery’s Vitality; • Claims prevention services; Robust and Non-core • Disability treatment and reintegration services. predictable businesses service books The sustainable employability opportunity for a.s.r. is to serve customers across all parts of the value chain. a.s.r. is consequently able to improve customer service levels throughout the service chain and create value in every Individual life single part of this value chain and in its underwriting Pensions DB performance. By focusing on sustainable employability and Funeral III IV Bank unlocking prevention services potential, a.s.r. adds value for its customers. Business domains in Non-life with growth Asset management related growth potential businesses Within the non-life domain, a.s.r. focuses on continued The growth of asset management and the DC pension growth of P&C and disability insurance, both organically business continue to be part of a.s.r.’s strategy. a.s.r. has and inorganically. Selected distribution and service been able to expand external assets under management companies have been acquired in recent years to facilitate (AuM) efficiently and profitably. It pursues a ‘buy and build’ this growth and to enable a.s.r. to become an even more strategy to add scale and skills to its asset management services-oriented company. business for external investors. In 2019 a.s.r. strengthened its position in Non-life by The foundation of its operations lies in multiple aspects, acquiring Loyalis N.V. (Disability) and Veherex Schade N.V. given that a.s.r. has gained extensive experience and (Disability). In doing so, a.s.r. continued its strategy of expertise in: bolt-on acquisitions. The acquisition of Veherex was • Niche asset classes such as Dutch mortgages; finalised on January 1st 2020. a.s.r. also increased its stake in • Unique proposition in real estate; HumanTouch Holding B.V. to 45%, to strengthen its position • Environmental, Social and Governance (ESG)-driven in the market for occupational health and safety services. asset management solutions; • Capital light pension solutions; Operating environment | 2.1 The story of a.s.r. 21


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    • Liability-driven investment (LDI) management solutions a.s.r.’s profitability in this segment has its origin in effective based on managing its own insurance liabilities and and simplified processes based on low and variable cost related assets. operations, in the excellent migration and conversion of books of business and in the optimisation of Solvency II Robust and predictable service books capital and investment returns. Life premiums account for less than 40% of total premiums. But the existing life books’ contribution to the operating Growth opportunities within life insurance are: result and capital generation is expected to remain • a.s.r. continues to be a consolidator of funeral books; substantial in the medium- to long-term. The robustly • a.s.r. continues to pursue individual life consolidation capitalised books that a.s.r. manages as service books are as seen in the recent acquisitions of Loyalis and VvAA traditional Defined Benefit (DB) pensions, individual life Leven; and funeral books. These books are not formally closed • Benefits that may be achieved by leveraging a.s.r.’s for new business. However, production has reduced over operational efficiency in the segment. time due to, among other things, the low interest rate environment and a.s.r.’s value over volume key strategic Non-core businesses principle. a.s.r. completed the sale of almost all of its banking activities to Dutch insurance company Achmea in a.s.r. strengthened its position in Life by acquiring December 2019. The remainder of the banking activities Loyalis N.V. (Individual life), VvAA Levensverzekeringen is sold to Van Lanschot Bankiers, a Dutch Bank, and is N.V. (Individual life) together with a partnership with expected to close in the first half of 2020. VvAA Group B.V. The acquisition of VvAA was finalised on January 1st 2020. Operating environment | 2.1 The story of a.s.r. 22


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    1 2 Operating environment 3 4 5 6 7 8 9 2.2 SWOT analysis a.s.r. operates in a changing and highly regulated non-exhaustive list of its current strengths and weaknesses environment and needs to stay on top of trends that and opportunities and threats. The overall trends and impact its business models. It aims to be adaptive so that developments includes technological, environmental, it can benefit from opportunities as well as mitigate risks demographic, economic, financial markets, political and to its business models that originate from those trends. regulatory developments. Within this environment, a.s.r. has compiled the following Strengths Weaknesses • Strong solvency position with high-quality of capital • Declining life book impacting long-term cost • Track record of an attractive return on equity, effectiveness and profitability capital and cash generation • Legacy systems due to developments in • Diversified and resilient Dutch insurer with regulations and technology and past acquisitions leading positions in attractive market segments • Limited use of the direct channel • Excellence in pricing, underwriting and claims handling • Focus on sustainable customer solutions • Proven cost reduction capability and continuous focus on operational efficiency • Profitable LDI Asset Management platform with solid SRI policy • Skilled, experienced management focused on execution and delivery of high performance • Track record of value creating acquisitions and proven integration skills Opportunities Threats • Increasing demand for sustainable, transparent • Prolonged low interest rate environment and/ and straightforward insurance products or financial markets turmoil due to macro • Technological developments, such as big developments data and machine learning, enables improved • Disadvantageous changes in regulations customer services and products • Increasing life expectancy on certain life • Increasing demand for complementing services, insurance service books enhancing relevance to customers • Further reduction of the solidarity principle • Increased number of self-employed people, and increased attention to individual solutions, increased pension age and work-life balance possibly countered by mandatory solutions for changes lead to demand for sustainable ‘uninsurable’ groups employability • Changing consumer behaviour, with declining • With the retreat of government and a shift and changing need for insurance products in pensions, there is potential demand from • Disruption by new entrants and technologies customers to accumulate capital on an individual • Development of the usage-based economy vs basis the ownership-based economy • Consolidation potential in the ‘closed’ books for • Entrance of private equity parties into the individual life and funeral insurance consolidation of life insurance portfolios • Emerging risks due to climate change or cyber- • Long-term financial obligations that provide attacks require insurance solutions certain interest rate sensitivity • Digitisation not yet fully embedded within the • Future legal proceedings regarding unit-linked organisation as a whole, digital developments file insurance policies offer opportunities for a.s.r. • Potential financial impact of climate change Operating environment | 2.2 SWOT analysis 23


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    2.3 Stakeholders and material topics In creating sustainable (long-term) value, it is essential to Intermediaries have an ongoing dialogue with stakeholders concerning As an intermediary insurer, a.s.r. distributes the trends, developments and the strategy and activities majority of its products and services through of a.s.r. The a.s.r. organisation has a diverse set of independent advisors and intermediaries. They have stakeholders with varying interests and expectations. broad knowledge of the insurance marketplace, including a.s.r. identifies customers, investors, employees and products, prices and providers, and an acute sense of the intermediaries as its most important stakeholder groups. needs of insurance purchasers. Their specific knowledge These stakeholder groups significantly influence the and experience with local markets and customers is performance of a.s.r. and are conversely affected by the valuable for a.s.r. and its customers. New products and organisation’s activities, products and services. Other solutions are developed in close cooperation to ensure stakeholders of a.s.r. include business partners, regulators, that these products are competitive and meet the tax authorities, suppliers, trade unions, the media and civil changing needs of a.s.r.’s customers. society organisations. Society Customers Beyond its most prominent stakeholders, Customers expect to obtain value for the a.s.r. has a variety of stakeholders to take into premiums they pay. Customers need to be account when doing business including business partners, confident that their funds are managed skillfully and in regulators, tax authorities, trade unions, suppliers and civil a socially responsible way. Client expectations change society organisations. Depending on the topic and the continuously and a.s.r. will need to be able to adapt to type of relationship, expectations and interests may vary changes to fulfil customer needs, both now and in the from responsible investments, complying with regulations future. a.s.r. is committed to enhance customer service and supporting people with financial self-reliance to in its product offering to sustain successful customer constructive cooperation with business partners in different relationships in the future. contexts. Overall, these diverse stakeholders expect a.s.r. to create sustainable and responsible societal value, now Investors and in the future. Investors rely on a proper execution of a.s.r.’s strategy to create value and are guided by Material topics its financial and non-financial targets. They expect A materiality analysis was carried out in 2018 to identify management to seize the opportunities that arise and the most material topics that drive a.s.r.’s long-term value to continuously monitor risks. Dividends and share creation including megatrends and issues perceived as price developments as well as coupons should offer an being of highest importance to a.s.r. and its stakeholders. attractive total return on investment for shareholders and The outcomes were further analysed by senior bondholders. Investors are also increasingly interested in management and the EB in 2019, to develop an integrated the social relevance of the companies they invest in. It is business strategy focused on creating sustainable important for them that a.s.r. represents the interests of all long-term value for a.s.r. and its stakeholders. Also in 2019 stakeholders in order to create long-term value and return a review was carried out on the material topics which have on capital. been validated by various internal stakeholders, including the EB. This annual report is based on the material topics Employees which are presented on the next pages. Employees want a professional working environment which offers them control over A full description of the materiality analysis can be found in their own career choices and development opportunities Annex E Materiality analysis and stakeholder dialogue, to boost their mobility on the labor market. Furthermore, including the stakeholder dialogues carried out in 2018 stimulating a good work-life balance and attention for and the materiality review during 2019. inclusiveness and diversity are highly valued. They want to be proud of the company they work for. Personal More information about the integrated business strategy development, pride and sustainable employability (within can be found in chapter 2.1 The story of a.s.r. and/or eventually after a.s.r.) translates into employee engagement. These factors contribute positively to the interests of a.s.r. and its stakeholders. Operating environment | 2.3 Stakeholders and material topics 24


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    1 2 Operating environment 3 4 5 6 7 8 9 Impact on Chapter Material topic Strategic principle KPIs & targets Results stakeholders reference Meeting customer needs • Meeting customer • NPS > 44 by 2021 NPS 44 Customers, 2.4, 3.2, Continuously focusing on improving needs intermediaries 4.1 levels of customer satisfaction in terms of quality and availability of services, comprehensible communication and customer focus. Robust financial performance • Solid financial • Solvency II ratio safely above 194% Investors, 2.4, 4.1, 6 A financially reliable and stable framework 160% customers, institution which is strong enough • Operating return on equity 15.1% employees, to meet its financial targets and 12-14% per annum intermediaries, objectives and can fulfil its short- • Dividend pay-out ratio 45-55% 45% society and long-term obligations and • Organic capital creation commitments to all its stakeholders. > € 430 million € 370 million • Financial leverage < 35% 29.2% • Rating Standard & Poor’s Single A (S&P) Single A Compliance, integrity and privacy • Meeting customer No specific KPI’s or targets Investors, 2.4, 3.5, Complying with applicable laws and needs are formulated to monitor this customers, 4.3 regulations, ethical standards and performance. employees, internal a.s.r. codes and standards. Compliance awareness on intermediaries, Protecting customer privacy is a key integrity related subjects society priority. In addition to complying with through: legislation and regulations, additional • Gamification tooling measures are being taken to minimise • Training privacy risks. • Presentation • Ethical dilemma sessions and workshops Solid risk management • Solid financial • Risk appetite: the level and Investors, 4.2, 4.4, Risk management is an integral part framework type of risk a.s.r. is willing customers, 6.8 of a.s.r.’s daily decision making and to bear in order to meet its employees, business operations. a.s.r. adopts strategic objectives. intermediaries, an integral approach to managing society risks, thereby ensuring that strategic objectives are met. Developing and promoting • Climate change • No specific KPI’s or targets Customers, 2.1, 3.2, sustainable products and services and energy are formulated to monitor intermediaries, 3.4 To offer sustainable products and transition this performance, since the society services and encourage customers to • Vitality and exact impact (the nature and positively and actively choose them. sustainable measurability) of products and employability services is still uncertain. • Financial self- reliance and inclusiveness • Meeting customer needs Socially responsible investments • Climate change • € 1.2 billion impact € 927 million Customers, 2.4, 3.4, Investing with due regard for ethical and energy investments investors, 4.4 standards, policies and procedures, transition (for own account) by 2021 100% intermediaries, in line with the interests of a.s.r.’s • Vitality and • 100% compliant with a.s.r. compliant society stakeholders, where the integration sustainable SRI policy of ESG criteria is key. This includes employability respect for fundamental human rights, • Financial self- employment rights, the environment reliance and and adequate corporate governance. inclusiveness a.s.r. aims to have a positive impact with a special focus on the transition towards a low carbon and inclusive society. Operating environment | 2.3 Stakeholders and material topics 25


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    Impact on Chapter Material topic Strategic principle KPIs & targets Results stakeholders reference Contributing to sustainable • Vitality and • Vacancies filled internally: 53% Employees, 3.3 employability sustainable at least 35% intermediaries, Encouraging employees to develop employability customers themselves with the aim of maintaining and/or increasing their opportunities on the internal and external labor market and helping customers reduce the risk of (long-term) disability and encouraging sustainable employability. Supporting vitality • Vitality and • Absenteeism rate: below 3.97% Employees, 3.2, 3.3 Helping employees to improve sustainable 3.40% 54% customers and maintain a healthy lifestyle and employability • Nil absenteeism: up to 57% of providing (self-employed) customers total workforce with services to support mental and physical fitness. Fostering diversity & inclusion • Financial self- • At least 30% of the Supervisory SB 67/33% Employees, 2.4, 3.3, A balanced workforce composition reliance and Board (SB), EB and senior EB 67/33% society 3.6 based on age, gender, cultural or inclusiveness management to be male or Sr. mgt social origin, skills, views and working • Vitality and female 75/25% styles. sustainable • Number of employees through employability the Participation Desk: 70 in 35 2026 Contributing to financial self-reliance • Financial self- • +5% employee contribution to 12,413 hours, Society, 2.4, 3.6 Offering the knowledge and skills to reliance and local society per annum (base +42% customers help people avoid getting into debt inclusiveness year 2018) or getting them out of debt and to help people make conscious financial choices. Mitigating and adapting to the • Climate change • Carbon footprint: 95% of 89% Investors, 2.1, 2.4, consequences of climate change and energy investment and mortgages customers, 3.4, 4.4 Taking into account the impacts of transition portfolio (for own account) employees, climate-related risks and opportunities, measured in 2021 intermediaries, taking measures to mitigate the effects • Science Based Targets (SBT) society of climate change and accelerate the expected to be published in transition to a low carbon economy. 2020 Reducing a.s.r’s operations footprint • Climate change • Direct footprint of a.s.r.: head Society 3.5 a.s.r.’s efforts to reduce its own and energy office is climate-neutral environmental footprint. transition • 50% reduction of CO2 emissions (by mobility) in 2025 (base year 2019) • Energy usage head office is 61 kWh 50 kWh or less per m2 in 2030 Operating environment | 2.3 Stakeholders and material topics 26


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    1 2 Operating environment 3 4 5 6 7 8 9 2.4 Strategic targets and results At the Capital Markets Day (CMD) on 10 October 2018, a.s.r. aimed for OCC to rise to at least € 430 million by a.s.r. introduced its targets for the 2019-2021 period. These 2021. Under the new OCC definition2 this target is raised to targets are divided into group and business targets. € 500 million. Group targets 2019 - 20211 The maximum level of financial leverage has been set at a.s.r. has determined a set of ambitious group financial 35% and is consistent with a.s.r.’s unchanged S&P A rating targets, positioning itself for profitable growth. It will target. The financial leverage stood at 29.2% at year-end continue to run the company with a strong capital 2019 and the S&P rating was confirmed at A. position and a Solvency II ratio safely above 160% (standard formula). This enables a.s.r. to deploy capital a.s.r. has a dividend policy with a pay-out ratio of 45–55% for entrepreneurial purposes. The Solvency II ratio (after of the net operating result attributable to shareholders proposed dividend) decreased by 3% point to 194% (i.e. net of hybrid costs) as well as an ambition to offer a (2018: 197%) and was well above the target of ‘safely progressive dividend per share. Management proposes above 160%’. a total dividend of € 267 million for the full year of 2019. This is a 9.2% increase compared to the cash dividend Given the strong performance in recent years and the of 2018. The proposed annual dividend is in line with the confidence a.s.r. has in its business for the medium term, dividend policy and based on a pay-out ratio of 45% of the a.s.r. has a target for Operating Return On Equity (ROE) in net operating result distributable to shareholders (net of the range of 12-14%. This target was outperformed in 2019 hybrid costs). and the Operating ROE over 2019 was 15.1% (2018: 14.3%). a.s.r. aspires to create sustainable value for its stakeholders At the CMD the Organic capital creation (OCC) target of and has set four non-financial targets as an integral part of € 430 million for 2021 was introduced. This target is based its strategy. on a.s.r.’s position as at that date. The OCC over 2019 full year equals € 370 million (2018: € 372 million) and reduced a.s.r. measures how its customers experience its services via slightly in comparison to previous year. This was mainly the NPS. In 2019 the NPS was 44 points. This is an increase caused by the decrease of the interest rates. For 2020 a of two points compared to 2018 (42). It is a.s.r.’s ambition to new definition of the OCC was introduced. Based on the maintain an NPS score of at least 44 points by 2021. new definition the OCC increases to € 501 million. The main changes in this new definition are: a.s.r. has started to calculate its carbon footprint for • The market developments (e.g. spread movements) will investments for own account. Results are published on be more reflected in the OCC; a quarterly basis on www.asrnl.com. The calculations • The return on equities and real estate is more aligned follow the Platform Carbon Accounting Financials (PCAF) with the long term expectations in our Strategic Asset methodology, where a.s.r. contributes actively to the Allocation (SAA) study; development of metrics for additional asset classes as for • Refinement of new business strain methodology leads indirect investments. The objective is to regularly measure to higher required capital strain; 95% of a.s.r.’s entire investment portfolio for its own • The release of the market risk Solvency Capital account by 2021. At 31 December 2019, 89% of the total Requirement (SCR) of the Life book is taken into investment portfolio was measured. account; • The unwind of Time Value of Financial Options and In the investment process, a.s.r. pays special attention to Guarantees (TVOG) is taken into account. impact investing to make a sustainable contribution to society, for instance, through waste recycling, renewable 1 Targets are based on the assumption of normal market, environmental and economic conditions and no material regulatory changes and on a stand-alone basis. 2 OCC is the sustainable creation of capital from both the change in the Eligible Own Funds (EOF) and the change in the SCR on Solvency II basis. To express the change in SCR in EOF-equivalent terms, the change in SCR is multiplied by the average Solvency II ratio. The OCC consists of three elements: (1) Business Capital Generation, (2) Release of Capital and (3) Technical Movements. In this definition sustainable means: generated by the company on its own account, net of external and one-off effects. This results in a view on the Solvency II figures that is comparable with the definition of the operational result on IFRS basis. Operating environment | 2.4 Strategic targets and results 27


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    energy (solar and wind), social enterprises or health In conclusion, a.s.r. encourages its employees to help local improvements. In 2018, a.s.r. set the target of increasing society and communities by devoting part of their time to impact investments for its own account at € 300 million helping individuals and/or groups with financial issues. per year to € 1.2 billion of impact investments in 2021. a.s.r. provides financial courses for children, helps families By the end of 2019, a.s.r.’s exposure to listed and non-listed to improve their financial planning and assists communities impact investments and mortgages addressing specific in more general terms. a.s.r. aims for an annual growth of environmental or societal needs stood at over € 927 million 5% compared to the base year 2018 by participating in the (2018: € 346 million). activities of the a.s.r. foundation. The total growth of a.s.r.’s contribution to local society compared to the base year 2018 was 42% and amounted to 12,413 hours. Solvency II Operating return on equity Dividend pay-out ratio (Standard formula) (% of net operating result after hybrid expenses¹) 194% 15.1% 45% Safely above 160% 12-14% 45-55% Substancial capital for entrepreneurship Per annum Ambition to offer a stable to growing dividend per share Organic capital creation2 Organic capital creation3 - new Financial leverage definition € 370 mln € 501 mln 29.2% > € 430 mln > € 500 mln < 35% Carbon footprint investment and Rating Net Promoter Score mortgages portfolio (for own account) (S&P) Single A 44 89% Single A > 44 95% At least Employee contribution to local society (in no. of hours) Impact investing (for own account) +42% € 927 mln Result 2019 + 5% per annum € 1.2 bn Target 2021 1 In general, a.s.r. does not expect to pay cash dividends if the Solvency II ratio (calculated in accordance with the standard formula) falls below 140%. 2 a.s.r. as at the CMD and assuming rising forward rates. 3 As from 1 January 2020. Operating environment | 2.4 Strategic targets and results 28


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    1 2 Operating environment 3 4 5 6 7 8 9 Business targets 2019 – 20211 a.s.r. aims to keep its operating result in Life stable In P&C and Disability together, a.s.r. aims to achieve a COR compared to 2017 levels. a.s.r. expects that it will be able to in the range of 94-96%. This range reflects a.s.r.’s leadership maintain its operating result at least at the level of 2017 for to manage these businesses profitably while remaining the next three years. In addition, a.s.r. aims to decrease the competitive. The range also allows a.s.r. to absorb Life operating expenses from 57 basis points (bps) on its calamities, such as major fires and heavy storms. a.s.r. basic life provision in 2017 to within the range of expects that in a year with a normal level of storms and 45-55 bps. The operating result for the Life segment large claims, it can deliver a COR of < 96%. a.s.r. decided amounted to € 696 million in 2019 and the expenses in to exclude Health from the target as the pricing and relation to the basic life provision amounted to 53 bps profitability of this product line is more prone to political in 2019. scrutiny. At 99%, the target for Health stand-alone remains stable. The COR for P&C and Disability amounted to 93.5% a.s.r.’s fee-generating businesses are growing in terms of at FY 2019 and outperformed the target range of 94 - 96% absolute and relative contributions to operating results. for 2019. a.s.r. aims to achieve more than € 40 million of operating result for the two segments of Distribution and Services Importantly, the COR target is connected with a.s.r.’s and Asset Management, combined and expects to Non-life GWP growth target. a.s.r. aims to grow organically increase its operating results by 5% per annum thereafter. by 3-5% per annum while remaining within the stated COR The operating result of the fee-based businesses range. In pursuit of profitable growth, a.s.r. will not forfeit amounted to € 48 million in 2019 (2018: € 43 million). This is its core discipline of value over volume. The GWP growth an increase of 10.9% compared to 2018. for Non-life (P&C and Disability), including the negative impact from sanitising the former Generali Nederland amounted to 4.0% over 2019. Combined ratio Life operating result GWP growth (organic) per annum 93.5% € 696 mln 4.0% 94-96% Stable 3-5% Non-life (P&C and Disability) Compared to € 633 million in 2017 Non-life (P&C and Disability) Life operating expenses Fee based businesses, operating result2 53 bps € 48 mln Result 2019 45-55 bps € 40 mln Target 2021 On basic life provision 5% growth per annum thereafter 1 Targets are based on the assumption of normal market, environmental and economic conditions and no material regulatory changes and on a stand-alone basis. 2 Asset Management and Distribution and Services. Operating environment | 2.4 Strategic targets and results 29


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    2.5 Sustainable Development Goals The United Nations launched the Sustainable and socially engaged business partner. SDGs 1, 3, 7, 8 Development Goals (SDGs) in 2015. a.s.r. has identified and 13 are closely connected to the three pillars of a.s.r.’s five sustainable development goals in connection with sustainable value creation strategy. The table below shows its integrated business strategy, to which it has most to how a.s.r. contributes to the SDGs and their underlying contribute as a sustainable insurer, investor, employer targets, and how it tracks progress. Financial self-reliance and inclusiveness a.s.r. uses its financial knowledge and skills to help prevent and solve payment problems in society. Economic growth Target Contribution must be inclusive to • +5% employee contribution to local • a.s.r. foundation supports the financial education of provide sustainable society per annum. children and young people (reading and teaching) jobs and promote and households with (a risk of) problematic debts. equality. Promote inclusive Target Contribution and sustainable • Number of employees employable • a.s.r. complies with the 10 principles of the Ethical economic growth, via the Participation Desk: 70 in 2026 Manifesto to ensure that customers are financially employment and self-sufficient and are able to gain access to insurance decent work for all. services in case payment arrears and problems arise. • a.s.r. is committed to fostering an inclusive culture in which difference is recognised, valued and used to the fullest. The principles of a.s.r.’s policy on diversity include ‘Participation of people with limited labor market potential’ and ‘Equal development opportunities for all employees’. Vitality and (sustainable) employment a.s.r. aims to be a valuable partner in the field of sustainable employment, focusing on health care and vitality for entrepeneurs, employers and (own) employees. Ensure healthy Target Contribution lives and promote • Impact investments including • a.s.r. offers insurance to cover (the costs of) health care, well-being for all investments contributing to health available at one price (per label) for anyone who is at all ages. improvements (for own account) eligible for this type of insurance under Dutch law. by 2021. • a.s.r. plays an active social role in helping people to recognise health risks, advising on possible interventions and increasing awareness of the importance of health. • In november 2019 a.s.r. introduced a.s.r. Vitality to stimulate its customers and employees to get moving and live healthier lives in a positive way. Promote inclusive Targets Contribution and sustainable • At least 30% of the SB, EB and senior • a.s.r. is committed to fostering an inclusive culture economic growth, management to be male or female. in which difference is recognised, valued and used employment and • Number of employees employable to the fullest. The principles of a.s.r.’s policy on decent work for all. via the Participation Desk: 70 in 2026 diversity include ‘Participation of people with limited labor market potential’ and ‘Equal development opportunities for all employees’. Operating environment | 2.5 Sustainable Development Goals 30


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    1 2 Operating environment 3 4 5 6 7 8 9 Climate change and energy transition a.s.r. takes the risks associated with climate change into account for its business and its stakeholders. Furthermore, a.s.r. would like to play a role as driver of the necessary energy transition. Ensure access to Targets Contribution affordable, • € 1.2 billion impact investments • a.s.r. has integrated climate change and energy reliable, sustainable (for own account) by 2021. transition as an explicit theme/driver within its strategy. and modern energy. • Direct footprint of a.s.r. head office is • a.s.r. has the ambition to reduce its own direct climate-neutral. emissions annually by 10% and to remain ‘climate neutral’ in terms of the direct footprint of its head office. Take urgent action Targets Contribution to combat climate • Carbon footprint: 95% of investment • a.s.r. extends the insurance for buildings and their change and its and mortgages portfolio (for own inventory to include flood cover. As a result, customers impacts. account) measured in 2021. are better insured for damage caused by flooding from • € 1.2 billion impact investments 2020. (for own account) by 2021. • a.s.r. develops climate maps, improves risk and claims • 50% reduction of CO2 emissions by assessments and helps intermediaries and customers mobility of its head office in 2025. with information to prevent claims from climate risks. Operating environment | 2.5 Sustainable Development Goals 31


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    Bureau Central: Chaussee de Leyde. UTRECHT. DIRECTION rouw La BELGIQUE. Boulevard du Nord, BRUXELLES. | Agence Générale pour le NORD oe La FRANCE, Place Richebe 5. LILLE. Agence Générale pour la SCANDINAVIE, COPENHAGUE, Ved Stranden 2.


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    3 Sustainable value creation Object The advertising posters About the object In the 19th century, insurance companies primarily relied on word-of-mouth advertising by messengers and agents. The first advertising expressions appeared at the end of the 19th century in the form of posters and calendars. The images were often overloaded with symbolic images from ancient history and Christianity. Around 1900, symbolic images with protective angels were most commonly used. Public spirits were often confronted with gloomy messages, but we also see some more cheerful expressions with flowers.


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    3.1 a.s.r.’s roles Based on its mission, as described in chapter 2.1 The story of a.s.r., a.s.r. defines five roles in which it strives to create sustainable value for its stakeholders. Our role as a sustainable insurer Customers need to be able to rely on a.s.r. being value. a.s.r. offers solutions that align with the able to meeting its financial liabilities, now and in needs of its customers. Furthermore, a.s.r. supports the future. a.s.r. strives to continuously improve its clients and insurance brokers by actively sharing processes in order to provide its customers with relevant content and practical guidance for damage an even better service and to be able to develop prevention. See chapter 3.2 Our role as a sustainable sustainable products and services with long-term insurer. Our role as a sustainable employer Having a competent, agile, diverse and vital offering them extensive scope for training and workforce is key for a.s.r. in achieving its business development, and facilitating a sound work/life targets. That is why a.s.r. is committed to attracting, balance. See chapter 3.3 Our role as a sustainable retaining and inspiring the most suitable employees, employer. Our role as a sustainable investor As an institutional investor, one way in which a.s.r. on the basis of the SRI policy, focusing on aspects takes ownership of social responsibility is through such as social and environmental criteria. See the use of ethical decision and sustainability criteria chapter 3.4 Our role as a sustainable investor. in its investment policy. All investments are screened Our role as a trusted company As a financial service provider, it is for a.s.r. of great protection, integrity, paying fair taxes, human rights importance to gain and maintain the confidence of and reducing a.s.r.’s environmental impact play a its stakeholders. In addition to the roles mentioned major part in being a trusted company. above other aspects such as data and privacy See chapter 3.5 Our role as a trusted company. Our role in society a.s.r. foundation initiates projects on financial and organising their financial administration. awareness and self-reliance. By teaching and In addition a.s.r.’s sponsorship and donation policy supporting people in reading and arithmetics, is in line with this. See chapter 3.6 Our role in society. a.s.r. supports them being able to handle money Sustainable value creation | 3.1 a.s.r.’s roles 34


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    1 2 3 Sustainable value creation 4 5 6 7 8 9 3.2 Our role as a sustainable insurer a.s.r. helps customers in sharing risks and accumulating environment and society in the longer term by meeting assets for later. a.s.r. serves its over 1.5 million customers strict requirements. both directly via the online channel and mainly indirectly via a network of about 5,000 intermediaries. These The repair companies within the network are constantly intermediaries are independent financial advisers who being tested. Consider for example the use of advise their clients in the field of insurance and pensions. environmentally friendly means, less energy consumption, Their specific knowledge of the local market and customers the correct processing of waste, the reuse of materials, care is especially valuable for a.s.r. and its customers. New for sustainable employability of employees, recycling and products and solutions are developed in close cooperation products that are not harmful to the employee or to you. to ensure that these products are competitive and meet the changing needs of customers. a.s.r. Vitality Vitality is a behavioural science based health programme Based on its core values, craftsmanship, positive attitude that encourages customers to exercise and live healthier and social commitment, a.s.r. strives to ensure that lives in a positive way. The programme has been customers experience good service. To achieve this developed by the South African insurer Discovery and is goal, a.s.r. invests in improving and further digitising the now successfully implemented in 22 countries with almost services it provides. a.s.r. strives to work as sustainably and 10 million members. efficiently as possible. Since 4 November 2019, a.s.r. also offers this programme a.s.r. is satisfied only if the customer feels he has been in the Netherlands to customers with a disability or health positively helped and if the financial advisor feels that a.s.r. insurance. As an insurer, a.s.r. not only wants to help its offers the right and high quality service. customers if they have an illness or disability, but also to help prevent this from happening. By encouraging people to make healthy choices and become more active. 3.2.1 Sustainable products and a.s.r. Vitality is positively received with an inflow of 11,000 services participants in the first two months. In a changing world, there is a growing need for Customers can opt to take out a membership with a.s.r. sustainable and socially responsible products and services Vitality and to start exercising. With the a.s.r. Vitality app, which increase positive and reduce negative impacts. which can be linked to an activity tracker such as Fitbit Developing and marketing these products is part of or Apple Watch, customers will first of all obtain insight a.s.r.’s business strategy. In addition to the sustainable into their own health. Based on this, exercise targets are products a.s.r. has introduced a.s.r. Vitality in 2019. In case set and then they can get moving. If they achieve these of damage repair a.s.r. stimulates customers to make use of targets weekly, monthly and annually, they got awarded. sustainable repair services. The annual reward consist of a reimbursement on their insurance premium paid. Sustainable repair a.s.r. considers it important to have damage repaired When you participate in a.s.r. Vitality a.s.r. processes with a view to the environment. That is why a.s.r. works healthcare data, e.g.how much you exercise or your food together with repair companies that share this view. habits, in the app. With the introduction of a.s.r. Vitality These companies have been tested for their sustainable various parties have expressed their concerns about the business operations and have the Sustainable Repairs privacy protection of their data. To guarantee that these certificate. These can be construction companies, cleaning healthcare data are only processed within a.s.r. Vitality and companies, glaziers, companies that repair electronics, not shared with a.s.r. insurance departments, a.s.r. set up a or companies that help repair interiors (e.g. the floor or separate legal entity: a.s.r. Vitality B.V. the sofa). External recognition In case of damage, there is the choice to have this repaired a.s.r. is proud to receive acknowledgement for its socially by a sustainable repair company with a Sustainable Repairs responsible products and services. quality mark. Of course the damage will be repaired as quickly as possible. But such a company also helps the Sustainable value creation | 3.2 Our role as a sustainable insurer 35


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    Flood insurance a.s.r. is the first insurer in the Netherlands to offer flood cover for buildings and contents, part of its response to climate change. ‘Doorgaan’ Doorgaan-insurance is a single policy offering both insurance occupational disability/loss of earnings insurance and group medical cover. It includes extended cover, psychological support and advice from the personal Doorgaan experts. Insurance ‘Langer mee AOV’ a.s.r. offers a solution for the social challenge of the rising age of retirement. Working with a.s.r. on lifelong employability enables customers to remain at work in good health for longer. ‘MKB At the ‘MKB verzuimontzorgverzekering’ there is a Verzuimontzorg- permanent ‘ontzorgmanager’ who ís point of contact by verzekering’ absence during reintegration and has knowledge of all relevant legislation and regulations. The Employee is in control of his or her own reintegration. a.s.r. ESG funds All investments managed by a.s.r. asset management are screened on their social and environmental aspects and Investments governance criteria, based on a.s.r.’s SRI policy. ‘Verduurzamings a.s.r.’s ‘Verduurzamingshypotheek’ is designed to hypotheek’ encourage its clients to install energy conservation measures in their homes. This helps to cut CO2 emissions Mortgages while increasing comfort in the home and saves costs. ‘WelThuis Starters The ‘WelThuis Starters hypotheek’ is designed for first-time hypotheek’ buyers and offers reduction in montly costs, flexibility and certainty. The longer term ensures a lower monthly amount, which means that the mortgage can be managed financially. MoneyView, a leading Dutch research agency in the a.s.r. won the Golden Lotus Award for best home insurer in financial services industry, awarded a.s.r. the following in digital accessibility, fast and professional claims handling, several categories: good product terms and conditions and good price-quality • 5 star MoneyView award for the Welthuis hypotheek for ratio. The Golden Lotus Awards Mortgage Market is an product rating and price; initiative of the trade journal InFinance and the Mortgage • 5 star MoneyView award for third party liability insurance Business Club. for product rating and terms and conditions; • 5 star MoneyView award for the short-term travel a.s.r. received the Lipper Group Awards for its high insurance of Europeesche Verzekeringen for product performance in the categories Overall Small, Bonds and rating and conditions. Mixed Assets. The Lipper Awards for investment funds are awarded annually by the independent American research Sustainable value creation | 3.2 Our role as a sustainable insurer 36


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    1 2 3 Sustainable value creation 4 5 6 7 8 9 institute Refinitiv. Investment funds and fund houses that experience a.s.r.’s service. a.s.r. wants its customers to feel consistently outperform comparable funds in the Lipper that it is continually improving its service and strives for and fund house fund data are eligible for an award. an increase of its NPS. In 2019, the NPS customer contact moment for customers increased by two points during the year, from 42 (2018) to 44 (2019). a.s.r. measures the NPS in 3.2.2 Product Approval & Review all business lines. The NPS per business line is presented in Process chapter 4.1 Group and segment performance and Annex A Facts and figures. The Product Approval & Review Process (PARP) is one of the internal processes for assessing the relevance of products NPS and services. The focus is on customers and their interests. The PARP is followed for new products and on a regular basis for reviews of existing products. It drives continuous improvement for example based on comments from 44 Target: 42 40 42 customers and consultants and changes in legislation and regulations. The PARP is applicable to products that are actively offered, as well as inactive products and services which are also reviewed on a regular basis. In accordance with the Dutch Authority for the Financial Markets (AFM) NA 44 assessment framework and in line with legislation and 2017 2018 2019 regulations a.s.r. has set up the PARP tests, which covers among other things, cost efficiency, usefulness, safety and Complaints management comprehensibility. a.s.r. assumes handling complaints is a subject that requires specific knowledge and expertise. Therefore, The PARP assesses the usefulness of a product and/or complaint handlers keep their profession up to date service for the customer: to what extent is the product a through permanent education. This means points must be response to an actual need of the target group and does earned periodically with training or courses. For example, it have sufficient added value? The comprehensibility test by following the course Dealing with Aggression and examines whether the target group can properly assess Emotion. Customers reward a.s.r.’s complaint handlers with the usefulness of a product based on the information a score of 8 (on a scale of 10). the customer receives from a.s.r. This includes tests for comparability, completeness of the information provided The Complaints Management Team monitors the and whether product characteristics are clearly defined. implementation of a.s.r.’s complaints policy and manages In 2019, the PARP Committee approved 5 new the complaints scheme. The complaints handling itself is propositions, 21 product adjustments and 28 reviews of decentralised within the organisation. Key principles and existing products. Examples of the PARP Committee’s objectives of complaints management are: approval include: Direct Ingaand Pensioen, a.s.r. Vitality • a.s.r. is open to complaints, making it easy for customers and Verduurzamingshypotheek. to lodge a complaint; • a.s.r. communicates its views and the solution to the complaint in an understandable manner; 3.2.3 Customer satisfaction • a.s.r. wants to learn from its complaints. Net Promoter Score The figures on the next page show the number of a.s.r. continuously measures the NPS1 for a.s.r. and its complaints settled and the percentage of complaints business lines (the overall NPS score is based on the handled which have been fully settled, partly settled or unweighted average of the business lines). The NPS not fully settled and unclear to the complainant. Most reflects the customer satisfaction of an organisation’s complaints relate to adjustments of the insurance and to clients. In the questions put to the customer, emphasis is claims. Most complaints arise from movements of a diverse placed on the interaction with the a.s.r. employee. ‘How nature (53%) and the payment of claims (22%). likely are you to recommend a.s.r. to your family, friends and colleagues based on your experience with the a.s.r. employee?’ a.s.r. uses the NPS as the most important key performance indicator (KPI) to monitor the level of its service. Customers indicate on an ongoing basis how they 1 The NPS is calculated after customers had been in contact with one of the agents. Calculation of the NPS: With a score of 9 or 10, the customer is seen as a promoter (recommendation). With a score of 7 or 8, the customer gets the predicate passive. He or she will neither recommend nor discourage the brand. With a score of 0 to 6, the customer will discourage the brand. The NPS term for this is detractor (criticaster). The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. The NPS scores presented reflect the year-end scores. Sustainable value creation | 3.2 Our role as a sustainable insurer 37


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    Complaints settled a.s.r.’s businesses have put the ten rules of the Ethical Manifesto into effect. An a.s.r.-wide working group shares relevant market information and exchanges business 3,213 successes. This allows customer processes to be more 2,924 2,935 effectively coordinated and allows a.s.r. to be of greater 2,103 2,092 2,163 service to its customer. a.s.r.’s customers can find information on www.asr.nl about the options available if they are unable to meet their payment obligations. This information was visited over 6,000 2017 2018 2019 times during 2019. Upheld Rejected Health continued to improve customer solutions. For example, Health strives to ensure that customers are no Complaints handled longer charged unnecessary collection costs and no longer need to be registered with the Central Administration Office One of the questions is whether the complaint has been settled in the customer’s opinion (CAK). The actions that Health has carried out: • Call actions have led to 60% more payments; 77% 77% • Customers who are registered with the CAK and have a 74% small outstanding debt will be approached for a payment arrangement so that they can be deregistered as a defaulter. Since the start in March 2019, Health has been able to deregister 60 customers with the CAK; 19% • Health is investigating the possibilities of a tailored 16% 17% 7% 7% 6% customer approach, including the use of data from payment profiles. 2017 2018 2019 Life focused on payment arrangements for customers: Yes, fully No, not fully No, not fully and • Following the results of a survey, a pilot was started to but the follow-up the follow-up is extend the term of a payment arrangement. The aim is to is clear to me unclear to me offer customers more suitable payment arrangements. • Process improvement in various customer teams were In 2019 Stichting Toetsing Verzekeraars conducted a realised to ensure more equal and appropriate treatment survey by order of the AFM on Complaints and Feedback of customers when agreeing on a payment arrangement. Management. a.s.r. scored 4.5 out of 5. In the benchmark comparison with the five largest insurers, a.s.r. stood out a.s.r. acts in line with its purpose by supporting her favourably with the highest average score. mortgagees. Especially when they are at risk of falling behind on installments due to (personal) financial circumstances is an active part of a.s.r.’s social responsibility. An important a.s.r. 3.2.4 Contributing to prevent principle, is to focus on enabling mortgagees to continue payment problems for customers living in their house. In order to accomplish that, a number of measures are proactively offered when relevant, such a.s.r. makes a significant effort to ensure that customers are as jobcoaching, budgetcoaching, home visits and interest financially self-reliant. This ties in with its core values. installment-breaks. a.s.r. strives to reduce the number of customer cancellations a.s.r. focuses on prevention of payment arrears, and as a caused by payment arrears and problems. It also strives to result mortgagees that are not yet behind on installments reduce situations in which customers are confronted with but are reasonably expected to be at risk of falling behind, cost-increasing measures. In all cases, a.s.r. strives to avoid qualify for pre-emptive support. non-payment. Sale of a property will only be used as a last resort. During In October 2016, a.s.r. joined a group of companies the year 2019 in total 6 properties have been sold by proxy, committed to assist customers with late payments to and 1 property has been sold in an auction. a.s.r. is proud proactively find a solution. These companies have united to report that in 9 cases, the sale of properties have been in a coalition which has laid down ten rules of conduct in prevented as a direct result of effective intervention from an Ethical Manifesto which a.s.r. has signed. Through this the arrears team. coalition, a.s.r. remains in sync with market developments and the public debate surrounding the subject. Please find more detailed information about customers in Annex A Facts and figures. Sustainable value creation | 3.2 Our role as a sustainable insurer 38


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    1 2 3 Sustainable value creation 4 5 6 7 8 9 3.3 Our role as a sustainable employer Employees are an important factor in successfully on several dimensions, e.g. engagement. The results are executing a.s.r.’s strategy and creating long-term value. As compared to a global benchmark of large organisations described in chapter 2.1 The story of a.s.r., customers and that use the Denison Survey. wider society benefit from the service, expertise, positive attitude and social commitment of its employees. 74% of staff completed the survey (2018: 70%). The high scores of 2018 were maintained with improved scores in The a.s.r. culture several dimensions. The strategic direction and vision are Everyone at a.s.r. abides by the organisation’s core values, well recognised by the employees. The scores also show which set out the basic approach and are used as a that the employees are highly motivated to innovate and behavioural compass. These core values are: to pay heed to the wishes expressed by the market. At • ‘I’m helpful’. Employees are approachable, listen corporate level customer focus stabilised in 2019. a.s.r. attentively, then help with solutions using their strives to improve its customer focus. Results are analysed expertise, experience and commitment; by means of in-depth qualitative group sessions with • ‘I think ahead’. Employees empathise and think ahead employees and management in which action points for the to proactively help customers, intermediaries and customer theme are determined jointly and implemented colleagues; in 2020. A follow-up on the attention points including • ‘I act decisively’. Employees keep a close eye on customer focus will be conducted by the individual content and process, and come up with solutions. business lines. They coordinate, are persistent and stand by their commitments. As part of the Denison survey employee involvement is measured on three themes: empowerment, team Organisational success and employee orientation and knowledge development. In 2019 a.s.r. engagement was able to maintain the positive score of 84%. This figure a.s.r. conducted the yearly Denison Organisational Success is a relative score compared to the global benchmark of Survey, which measures the success of an organisation participants in the Denison survey. Relative score employee engagement in Denison scan compared to the benchmark Name 2019 2018 2017 a.s.r. 84% 84% 79% 3.3.1 HR policy a.s.r.’s development programmes and why the employee review plotting is also based on the agility of employees. a.s.r. needs competent, agile, diverse and vital employees During the annual employee review, the performance and with an entrepreneurial and versatile attitude in order to potential of all a.s.r. employees is discussed. The results of realise ‘the strategy of a.s.r.’. Employees who can and dare the employee review are discussed individually with each to take control of their day-to-day work, including their employee and are used for strategic employee planning, own careers, but also employees who can handle change, succession planning, mobility and recruitment, as well within a.s.r. as well as in the market in which it operates. as the targeted implementation of the development That is why a.s.r.’s HR policy focuses on personal leadership programmes. and personal agility, on supporting employees in their professional development and on enhancing their vitality (Personal) Leadership and employability. In order to realise its targets, a.s.r. needs employees who take responsibility for their work and careers and who show Agility initiative. This is stimulated via agreements laid down in The environment in which a.s.r. operates, is continuously the Collective Labor Agreement (CLA) with regard to the changing. Consider, for example, the changing working relationship, employment conditions (time- and competitive conditions and developments such as place- independent work, no annual appraisal cycle) and robotisation, digitisation and artificial intelligence (AI). development range. That is why agility is one of the most important themes in Sustainable value creation | 3.3 Our role as a sustainable employer 39


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    Development and sustainable employability Employees receive support to work on their sustainable Every year, a.s.r. employees can make use of an extensive employability through amongst others career coaching, range of training programmes and courses to keep up with workshops, retraining, work placements and with starting their professional knowledge and to improve their skills. up their own business. Employee development training 2019 2018 2017 Employees have completed job-related training 1,912 1,512 1,729 Employees took part in one of the development programmes 534 719 819 Employees followed a workshop sustainable employability 343 792 589 Employees have completed an individual coaching programme 487 486 266 Employees were given guidance in the context of redundancy 157 154 182 Development programmes, employee Vacancies filled internally review and succession planning In order to ensure the continuity of the business operations and to prevent talent from leaving, a.s.r. invests in development programmes for employees who have been 53 53 identified as (future) top talent or professional talent. In Target: 35% order to identify these talents, an annual employee review 41 is carried out for the total employee population, in which performance, agility and potential are determined for each employee. The employee review is the basis for succession planning and strategic personnel planning. 53% 2017 2018 2019 Strategic personnel planning In order to ensure that the workforce is sufficiently Trainee programme equipped to adapt to the organisation’s course and a.s.r. has its own trainee programme in which young developments in a rapidly changing world, HR is moving talented people carry out three to four different from an operations-driven to a strategy-driven personnel assignments over an 18-month period. Trainees also follow planning. During 2019, the HR organisation was adapted to a customised development programme which includes this: a team has been set up within the department that is training courses and various projects. In 2019, 11 new dedicated to finding the best solution for a total workforce trainees joined a.s.r. The trainee programme is intended management issue. Multidisciplinary HR teams (advice, to attract young talent who can be prepared for higher vitality, recruitment, development) ensure an optimal positions within a.s.r. As of 2014, 57 trainees joined a.s.r. service provision to the business units. 43 of them are still employed. The majority of this group moved on to a higher position, 14 trainees have left a.s.r. Data analyses are crucial for strategic personnel planning. That is why, since 2018, HR has been drawing up an Employer branding extensive monthly dashboard with all the relevant HR As the labor market is picking up: it is becoming key indicators, target figures and associated analyses. increasingly important to distinguish yourself as an Since 2019, this dashboard has also been included in the employer. That is why a.s.r. invests in employer branding, Performance Management Reporting of the business lines for example, via the website www.werkenbijasr.nl and and large staff departments. In addition, each business the use of social media channels. For this purpose, line receives a customised dashboard on a monthly basis. specific content is created that meets the needs of the The next step is predictive analyses based on the collected most important recruitment target groups. a.s.r. likes data. to make use of the network of employees for employer branding and recruitment and sees them as ambassadors. a.s.r. strives to fill at least 35% of all vacancies internally. Employees who ‘bring in’ a colleague may be eligible for a In this way, knowledge of the company is retained and referral bonus of € 750. Through partnerships with student employees are given the opportunity to develop further associations, colleges and universities, a.s.r. is working on within the organisation. In 2019, 256 vacancies of the total its image among students. of 480 were filled internally, which means that 53% of all vacancies were filled by internal candidates. Flexibility in employment conditions and in the working relationship Because the standard employee does not exist and employees have different needs at different stages of their lives, a.s.r. offers flexible working conditions through its CLA. Examples of this are time- and place-independent Sustainable value creation | 3.3 Our role as a sustainable employer 40


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    1 2 3 Sustainable value creation 4 5 6 7 8 9 work and a five weeks maternity/paternity leave for Nil absenteeism2 partners. In 2019, a.s.r. continued to cooperate with the trade unions in working groups to develop a possible life-stage policy. Integration of the hybrid professional into the a.s.r. organisation will also be considered. A hybrid 56 54 professional is someone who works as an employee for 50 Target: 57% a.s.r. and also works as a self-employed person or has his own company or someone who is employed by a.s.r. combined with employment with another employer. Vitality NA 54% a.s.r. invests in the vitality of its employees, including 2017 2018 2019 through its a.s.r. Vitality programme which is offered free of charge to all a.s.r. employees. Other means used by a.s.r. to Diversity and inclusivity promote vitality include periodic medical examinations, help a.s.r. is committed to achieving an inclusive culture in which with setting up workstations, internal sports facilities, vitality differences are recognised, valued and used to the full. workshops, vitality software, a healthy offer in the company a.s.r. believes in the positive effect of a diverse workforce restaurants, and fresh fruit supplied free of charge. on its success and innovation – be it through differences in gender, ethnicity, age, religious beliefs, education, sexual HR’s vitality specialists support the management of the orientation, disability or nationality. business units in developing the vitality and absenteeism policy and provide guidance on absenteeism case dossiers. a.s.r. promotes diversity and inclusion by empowering employees and allowing people to develop based on Absenteeism individual performance and demonstrated potential. The absenteeism rate for 2019 was 3.97% (2018: 3.83%). This slight increase can be explained by an increase in The fundamental principles of a.s.r.’s diversity policy are: long-term absenteeism. a.s.r. has taken action on various • A balanced workforce composition based on age, points to reduce the rate of absenteeism. The sickness gender, cultural or ethnic origin, physical and mental absence regulations have been amended, whereby the capacity, beliefs and working styles; emphasis is placed on what the employee can do himself • Promotion of a balanced composition of management to prevent sickness. ‘In Motion with a.s.r.’ is an umbrella through a policy of gender and cultural diversity; initiative aimed at being and staying healthy at work. There • Equal development opportunities for all employees; is extensive attention for vitality and absenteeism, a.s.r. will • Participation of people with limited labor market continue to work on reducing the absenteeism rate. potential. Absenteeism rates1 At least 30% of the SB, EB and senior management are to be male or female. In 2019, the SB had four male (67%) (%) and two female members (33%), the EB had two male 5.49 members (67%) and one female member (33%). 5.30 5.37 Target: 3.40% On 31 December 2019, senior management consisted 3.95 3.83 3.97 of 20 members, five of whom were women (25%) and 3.19 3.17 2.87 15 men (75%). In order to achieve the 30% target, 3.97% application of the diversity policy has been explicitly included in the recruitment of SB and EB members. Diversity policy is part of the recruitment process and the 2017 2018 2019 employee review, in which succession planning, among other things, is discussed. Male Female Total The short absence (and therefore also the reporting frequency) has decreased compared to 2018. a.s.r. will maintain its efforts aimed at improving the health and vitality of its employees in 2020. In 2019, 54% of all employees have not been absent due to illness during the year (2018: 56%). 1 Excluding maternity leave. 2 Nil absenteeism is the percentage of employees who have not reported sick during the reporting period. Sustainable value creation | 3.3 Our role as a sustainable employer 41


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    Breakdown gender diversity 2019 2018 2017 Male/female Supervisory Board 67 / 33 60/40 75/25 Male/female Executive Board 67 / 33 75/25 75/25 Male/female Senior management 75 / 25 71/29 73/27 Male/female Management 79 / 21 81/19 82/18 Male/female Non-management 58 / 42 60/40 60/40 To reduce the step to the labor market for candidates a.s.r. is committed to employing at least 70 people through with a work disability, a.s.r. has founded ‘The Participation the Participation Desk by 2026. At the end of 2019, 35 Desk’. This desk uses people with a Work and Employment employees with a work disability were working via the Support for Disabled Young Persons benefit (Wajong) for Participation Desk. Currently 14 employees with a work various assignments. They are given a maximum of 2 years disability fulfil a permanent position. to gain work experience and develop employee skills. They receive intensive guidance and a tailor-made development programme. The aim is to prepare them for a permanent position, preferably within a.s.r. Participation Desk Target 2026 2019 2018 2017 Number of employees through the Participation Desk 70 35 29 31 In 2019 a.s.r. has reached the first performance level on Pension scheme the Performance Ladder for Social Business (PSO). This The a.s.r. pension scheme expired at the end of 2017 but measurement instrument and quality mark from TNO was ‘frozen’ with the introduction of ‘De Andere Cao’. reflects the degree of social entrepreneurship achieved. Negotiations with the trade unions on the pension scheme Organisations are placed higher on the ladder (there are started in 2018 and were continued in 2019. The aim is to four performance levels) the more people they employ with introduce a new pension scheme on 1 January 2021. a vulnerable employment status and through working with other PSO-certified organisations. In concrete terms, this ‘Het Andere Plan’ means that a.s.r. structurally makes its own contribution to ‘Het Andere Plan’ is a.s.r.’s social plan. This plan centres the employment of employees who have a distance to the on guidance from work to work with an emphasis on the labor market, but that it also takes this into account when development and sustainable employability of employees. purchasing and tendering from suppliers. The training and development budgets and the financial safety net employees receive when they have to leave the At the end of 2019, a multidisciplinary working group was company due to reorganisations remained unchanged started, charged with the task of tightening, renewing compared to 2018. After 2019, the financial safety net and expanding a.s.r.’s diversity policy. This group will also will decrease and the personal budget for sustainable look at how diversity can be given more attention and how employability will go up. The agreements are in force up to barriers can be removed in order to make further progress and including 2021. on this subject. In 2019, 157 employees made use of the facilities of ‘Het Andere Plan’ (2018: 154) and 97 employees left a.s.r. 3.2.2 Working conditions with this social plan (2018: 83). ‘De Andere Cao’ Remuneration ‘De Andere Cao’ is a.s.r.’s own CLA, which took effect on Every three years, an independent consultant is hired 1 January 2018. Starting points of De Andere Cao are: to perform a market comparison based remuneration self-management, a mature working relationship and benchmark. The a.s.r. remuneration policy starts from the increased job market value of staff. Freedom of choice is principle that the average level of total remuneration should possible, but not obligatory, and the CLA starts from trust, be the median of the peer group. The relevant peer group not control. for a.s.r. employees (excluding the EB of ASR Nederland N.V. and a.s.r. asset management) is the general market. In February 2019, a.s.r. and the trade unions reached an The relevant peer group for a.s.r. asset management is the agreement on the continuation of ‘De Andere Cao’ which asset management market. In line with the remuneration includes a structural salary rise of 3% at 1 March 2019 and policy, the remuneration of a.s.r. employees consists solely 1 March 2020 and a continuing dialogue about a future-proof of a fixed payment. The peer group of the EB is described in employment conditions package for the employees of a.s.r. chapter 5.3 Remuneration report. Sustainable value creation | 3.3 Our role as a sustainable employer 42


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    1 2 3 Sustainable value creation 4 5 6 7 8 9 Business targets are set annually by the EB. These are bonus and a buy-out, which occur only occasionally and are based on a.s.r.’s business strategy including financial as awarded in line with legislation and regulations. The same well as non-financial targets. All targets are cascaded to applies to severance pay. In 2019, 2 employees received management to focus all contributions on achieving the such a special form of remuneration. defined business goals. The progress of the targets is discussed in the regular meetings between management At a.s.r., jobs are weighted regardless of gender. Men and and employees. a.s.r. does not use variable remunerations, women with comparable work experience, achievements there are no financial bonuses linked to the targets. and potential are given equal pay. In 2019, a.s.r. had one type of variable remuneration: The differences in hourly wages between men and women the ‘Boter-bij-de-vis’ (incidental bonus), a variable shown in the table below are caused by the on average remuneration scheme with a small remuneration linked to higher number of years of service of men. Because men specific, additional performances. This reward cannot be have served for an average of 3.7 years more than women, agreed in advance but is awarded after delivering an extra they have reached on average a relatively higher position ordinairy, specific performance. In 2019, 153 employees on the salary scale for a given job. received a Boter-bij-de-vis reward. For the complete a.s.r. remuneration policy and the a.s.r. also has a few other special forms of variable Remuneration Disclosure, see: www.asrnl.com. remuneration, such as retention allowances, a welcome Gross average wages split by gender (gross hourly wages) 31 December 2019 31 December 2018 31 December 2017 In € Male Female Male Female Male Female Executive Board 288 269 223 191 172 148 Senior management 101 101 98 91 93 87 Management 59 55 56 54 55 54 Other employees 28 24 27 23 25 22 Note: The numbers of the EB are including CEO’s The table below shows the difference in years of service compensation. Excluding CEO’s compensation, male between men and women. This difference has remained average hourly wage of the EB would be € 261. virtually constant over the past 3 years and varies between 3 and 3.7 years. Average years of service 2019 2018 2017 Male 16.4 16.6 16.5 Female 12.7 13.1 13.5 Difference 3.7 3.5 3.0 Employee share purchase plan a post-vesting transfer restriction of five years. Otherwise, In 2019 a.s.r. issued an employee share purchase there are no specific restrictions to the share (i.e. voting plan (ESPP). Employees of a.s.r. are thereby given the power, dividend restrictions). opportunity to acquire a.s.r. shares at a discount. a.s.r. can suspend or withdraw the plan at any time. There is The employees purchase the shares at a discount of no option under the plan for either a.s.r. or the employee 18.5%. The fair value of the a.s.r. share with a lock-up of five to settle in cash or other assets. Therefore the plan is an years at the grant date equals the purchased price by the equity-settled share-based payments plan. employee. The members of the EB are required to participate in The ESPP has an impact on equity through the adjustment the plan by investing a predetermined part of their in the treasury shares and retained earnings. Refer to remuneration in a.s.r. shares. Other employees participate chapter 6.5.12.4 Treasury shares for more information. voluntarily. The number of shares purchased during the reporting Under the terms of the plan the granting and vesting is period were 100,546, for an amount of € 2,7 million predefined. The grant date of the plan is the moment the (2018: not applicable, no ESPP in force). employee registers to participate in the plan. The shares vest immediately on the transaction date when cash is Please find more detailed information about employees in received of the employee, unconditionally, subject only to Annex A Facts and figures. Sustainable value creation | 3.3 Our role as a sustainable employer 43


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    3.4 Our role as a sustainable investor As an institutional investor, one way in which a.s.r. takes (see www.asrnl.com) by Vigeo Eiris, focusing on aspects such ownership of social responsibility is through the use of as governance, social and environmental criteria. Countries ethical and sustainability criteria in its investment policy. and businesses that do not meet the criteria are excluded. a.s.r. also assesses businesses on their level of compliance 3.4.1 a.s.r. asset management with international conventions such as the Organisation for economic Co-operation and Development (OECD) Already since 2007 a.s.r. has a formally approved guidelines, the UN Guiding Principles and United Nations investment policy which is being applied to all its Global Compact (UNGC). investments, both for own account as well as for third party clients. With the years a.s.r. expanded the efforts from 100% compliance with own SRI policy the original exclusionary criteria to focus on achieving a a.s.r. safeguarded the full compliance of its SRI policy positive contribution to a more sustainable world. using a three-step process: internal teams implementation A regular update can be found on our quarterly ESG (investment departments), compliance process (Risk) and reports, see www.asrnl.com. an independent external assurance (by Forum Ethibel). In 2019 a.s.r. took the necessary steps to align its recently All investments managed by a.s.r. asset management acquired investment portfolio from Loyalis and make it fully (AVB) are screened against the SRI policy compliant with a.s.r.’s SRI policy. SRI policy compliance Target 2017 2018 2019 100% compliance with own SRI policy Sustainable and responsible investing For sovereign bonds, a.s.r. applies a best-in-class a.s.r. understands the importance of, and the responsibility selection of countries based on their SDG performance, expected from, its role as an investor, both as asset owner in line with the SDG country ranking published by and as asset manager. Sustainability is therefore an the SDG Index: the weighted average score of the essential part of a.s.r.’s investment beliefs. The integration a.s.r. sovereign portfolio is ranked in the first quartile of ESG factors in the management of investments (best-in-class) of the SDG Index. contributes directly to the reduction of risks (both financial and reputational risks) and has a positive effect • Exclusion criteria for countries and companies on its long-term performance. The SRI policy has been a.s.r. pursues a strict exclusion policy for controversial integrated into internal investment practice through: activities which it applies to all internally managed portfolios, both for its own account and for third parties. • ESG integration for best-in-class investments In 2019 this policy was expanded by tightening the Best-in-class investing is part of a.s.r.’s selection policy on fossil fuels: the threshold for companies process for companies based on ESG best practices deriving revenues from coal mining and tar sands and and products. a.s.r. favours companies that achieve oil shale was lowered from 30% to 20%. Companies an above-average performance in ESG policy and deriving more than 50% of their revenue from coal-fired implementation. Based on Vigeo Eiris research, which electricity production were also excluded. a.s.r. has is ISO 9001-certified, companies are classified as divested the companies in its portfolios that meet these pioneering, best-in-class and sustainable companies new criteria. using a relative, sector-based ranking for six domains of analysis: human resources, environment, market ethics, With regard to investments in sovereign debt, a.s.r. has good governance, social impact and human rights. excluded 82 countries that are poor performers in the A detailed description of these criteria is published on annual Freedom in the World report or which score a low www.asrnl.com. In 2019, a.s.r. expanded its ESG research ranking on the Corruption Perceptions Index or on the capabilities by entering into partnership with MSCI ESG. Environmental SDGs. Sustainable value creation | 3.4 Our role as a sustainable investor 44


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    1 2 3 Sustainable value creation 4 5 6 7 8 9 Exclusion of companies 2019 2018 2017 Human rights violations 7 6 3 Labor rights violations 3 2 3 Environmental violations 7 13 6 Armaments 153 100 107 Tobacco 16 15 17 Gambling 49 44 39 Coal mining 10 47 63 Tar sands and shale oil 5 4 10 Coal fired electricity generation 13 NA NA Nuclear energy-related activities 8 9 5 Engagement to actively encourage a further ESG integration for their In 2019, a.s.r. increased its engagement efforts to actively role in the investment chain. promote higher sustainability practices. The list of engaged companies is published on the a.s.r. website www.asrnl.com, III. Public engagement: In 2019, a.s.r. continued to actively including the reason and status of the engagement. participate in the implementation of the International Corporate Social Responsibility (ICSR) sector covenant, Active engagement dialogues: at least seven together with peers, the public sector and various engagement projects per calendar year non-governmental organisations (NGOs). a.s.r. played a.s.r. actively engaged with a total of 22 companies. an active role in three working groups (general assembly, a.s.r. engages with companies that either have shown development of specific guidelines for a climate policy controversial behavior (i.e. Global Compact violations) or and the extra yearly ‘Do-Good’ working group for the are controversial in another way, for example as a result of sector). The first ICSR assessment was published in societal discussions. November 2019 with a positive evaluation. At the PCAF, a.s.r. made an active contribution to four working groups a.s.r. defines three types of engagement: for general PCAF management and for developing a carbon accounting methodology for real estate, I. Engagement for the purpose of influencing: this type of mortgages and indirect investments, and also road engagement is used to move companies towards better tested different methodologies for setting Science sustainable practices. In 2019, the issues addressed Based Targets (SBT’s). included the following: • Global Compact breaches through a.s.r.’s partnership In August 2019, a.s.r. committed itself to a collaborative with Robeco: the updated list of companies under engagement with the Access to Medicine Index to engagement and their status can be found on promote access to medicines (SDG3) among the 19 www.asrnl.com; companies from the Index. In 2019, a.s.r. was involved • Living wages through the Platform Living Wage in the start of a new Biodiversity Working Group under Financials (PLFW) which is a collaborative partnership the Sustainable Finance Platform of the Dutch Central between 13 financial institutions to engage listed Bank (SDG 14+15). It also joined the FAIRR initiative, companies in the garment, agri-food and retail sector which addresses ESG issues in animal protein supply to address living wage issues in their supply chain. In chains (SDG 12). a.s.r. took part in a number of UN PRI 2019, a.s.r. actively contributed to the engagement of initiatives: the signing of the United Nations Principles 8 of the companies and finalised the development of for Responsible Investmen (UN PRI) coordinated the methodology for the agri-food and retail sectors; response to the Vale Dam failure, the UN PRI Investor • Fur and exotic leather through collaborative statement on deforestation and forest fires in Brazil engagement: the use of real fur and exotic leather is (SDG 15) and the UN PRI Investor statement to Support attracting growing criticism and major luxury brands the UN Women’s Empowerment Principles (SDG 5). have declared their intention to step out of the fur business. Together with two peer investors, a.s.r. has Voting policy successfully closed the engagement with 5 luxury A shareholders’ right to vote is essential for a proper brands on taking steps towards phasing out fur in functioning of a corporate governance system. a.s.r. 2019. exercises this right whenever relevant. a.s.r.’s voting policy (www.asrnl.com) has been developed in accordance II. Engagement for the purpose of monitoring: with the Dutch Corporate Governance Code and its sustainability is a standard topic on a.s.r.’s agenda at own SRI policy. This policy is applicable to all internally meetings with companies from its investment portfolio. managed listed equities. In 2019 a.s.r. developed further a.s.r. has also been in dialogue with other players in the specifications with its proxy voting provider to flag investment landscape, such as fund and index providers, ESG related issues. In 2019, a.s.r. voted at nearly 97% Sustainable value creation | 3.4 Our role as a sustainable investor 45


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    of the shareholder meetings held. Of the 1,052 a.s.r. is involved in the development of a robust shareholder’s meetings, 408 had at least one vote Against, methodology for financial institutions to set greenhouse Withheld or Abstained. 60 of these 408 meetings had one gas (GHG) reduction targets and manage the scope 3 or more votes against remuneration with regard to the EB downstream emissions of their investments (the so-called or SB and 174 meetings had one or more votes against Category 15 under the GHG Protocol). This is being appointments. The voting accountability report provides a led by the SBTi (Science Based Targets initiative) – in quarterly review of how a.s.r. exercised its voting rights at collaboration with over 40 global financial institutions and shareholder meetings. The full report for 2019 is available various knowledge partners such as PCAF, Navigant and on a.s.r.’s website www.asrnl.com. the 2° Investing Initiative – and is meant to align investment (and lending) portfolios with decarbonisation pathways Votes against management in 2019 (%) that fit with the ambition of the Paris Agreement. a.s.r. expects a globally coordinated and agreed methodology to become available early 2020 which will allow a.s.r. to 1 Anti-takeover deliver on its commitments under the ‘Klimaatakkoord’ as 6 Appointments articulated in this report. Audit Capitalisation External recognition 26 39 Directors Related In 2019, a.s.r.’s ESG investing policy was recognised by a ESG - Environment number of external parties. ESG - Governance • a.s.r. was awarded the number 1 position in the Dutch 3 ESG - Social Insurers Benchmark by the Dutch Association of 4 Other Investors for Sustainable Development (VBDO); 7 Remuneration • VBDO: a.s.r. was cited as having the best practice in the 8 1 Shareholders rights report ‘Dutch institutional investors and climate change’; 2 3 • a.s.r. was recognised in 3 different ways by UN PRI: - UNPRI qualified a.s.r. as the 2019 Group Leader. The Externally managed assets title was awarded for the first time this year to the top The external providers’ SRI policy is a key criterion in the 10% members of UN PRI for their efforts in selecting selection of external managers. a.s.r. seeks to appoint external asset managers for listed and private equity; managers who apply a SRI policy that is as close as possible - The PLWF, in which a.s.r. is a partner, won the to its own and, as a minimum condition, a.s.r. requires UN PRI prize for best initiative in the field of SRI and exclusion of controversial weapons as per the Sustainable active shareholding; Investing Code of the Dutch Insurance Association and - a.s.r.’s sustainable investing strategy was awarded the best possible effort to be a signatory to the UN PRI the highest score by UN PRI assessment, scoring the and UN Global Compact principles. a.s.r. also engages same or better than the sector average in all areas, with its external managers to enhance their SRI policy, with the highest possible score A+ given for its implementation and transparency. In 2019, a.s.r. actively strategy and governance and the ESG management engaged with new and existing managers, such as of its equity investment. BlackRock, to develop ESG products. A new ESG tracker • The peace organisation PAX included a.s.r. in its Hall of fund for High Yield was launched to the market with a.s.r. Fame for the 5th time in recognition of its policy against as seed investor. a.s.r. receives frequent sustainability nuclear weapons; reporting from its external managers and, where possible, • In a new practice study by the Fair Insurance Guide on requests impact metrics in addition to the SDG reporting. investments by insurers in the pharmaceutical industry, a.s.r. was identified as one of the top 3 insurers taking Climate change and energy transition into account affordable medicines and whether the a.s.r. has integrated climate change and energy transition pharmaceutical companies pay taxes in a fair manner. into its SAA as an explicit theme/driver since 2016, and has Later in 2019, a.s.r. was ranked as one of two insurers also taken measures to implement its commitment across with a very low exposure to shale gas companies. the investment portfolio. a.s.r. has analysed and identified risks for the investment portfolio both bottom-up − taking into account stranded assets and changing business 3.4.2 a.s.r. real estate models in the mining and energy sectors – and top-down, in its SAA. In 2019, a.s.r. acquired new data from Ortec As a real estate investment manager focusing on Finance to incorporate climate scenarios into the SAA. long-term value creation, a.s.r. prioritises the need to These scenarios served as input for the reporting on make real estate more environmentally sustainable. a.s.r. climate risks and opportunities according to the Task Force believes in maintaining long-term relationships with its on Climate-related Financial Disclosures (TCFD) stakeholders, with whom it wants to reduce its carbon see chapter 4.4 a.s.r.’s approach to addressing climate footprint. However, ESG goes further than simply pursuing change. the sustainable management of real estate. a.s.r. strives to contribute to both the environment and society by Sustainable value creation | 3.4 Our role as a sustainable investor 46


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    1 2 3 Sustainable value creation 4 5 6 7 8 9 investing in neighbourhoods, among other things. The Green Building Certificate funds and business lines are continuously striving to make In addition to the portfolio’s energy label certification, the properties in their portfolios more sustainable. Their the a.s.r. real estate funds aim to further improve the focus is both on sustainable acquisitions and on making sustainability of their portfolios by focusing on acquiring standing investments more environmentally sustainable Green Building Certificates (GBC) including BREEAM-NL, with a keen eye on the energy efficiency of the buildings, Dutch Green Building Council (DGBC) Woonmerk and and the use of sustainable materials and methods and Well for their buildings and complexes. This certification greenery. a.s.r. continuously investigates and implements means that the properties, their surroundings and the new developments and applications, such as solar parks, development process as a whole are assessed on a broad transforming vacant spaces and/or buildings, energy- range of environmentally sustainability criteria. neutral dwellings, charging points for electric cars and green rooftops. The ASR Dutch Core Residential Fund’s (DCRF) objective for the period up to 2019 was to obtain these certifications Rural real estate portfolio asbestos-safe for at least 20% of its portfolio. In 2019, 23% of ASR DCRF’s a.s.r. seeks to minimise the presence of asbestos in its portfolio was certified. existing Dutch real estate investments. To achieve this, the entire portfolio of retail, office and residential properties The ASR Dutch Prime Retail Fund’s (DPRF) objective has been made asbestos-safe. Some buildings in the rural is to obtain BREEAM-NL In-Use certification for all real estate portfolio may still contain asbestos. a.s.r. has wholly-owned shopping centres. The objective for 2019 the ambition to make its rural real estate portfolio fully was to certify at least one wholly-owned district shopping asbestos-safe by 2020. The goal for 2019 was that 75% of centre. In 2019, five shopping centres, Castellum in the rural portfolio would be declared as asbestos safe. In Houten, FIoriande in Hoofddorp, Vathorst in Amersfoort 2019, 84% of the portfolio was declared asbestos-safe. and Vleuterweide in Utrecht obtained a BREEAM-NL In-Use Good certification. Shopping centre Terwijde Rural portfolio asbestos-safe in Utrecht obtained a BREEAM-NL In-Use Very Good certification. (% of the holdings in the portfolio that were declared asbestos-safe) The goal for the ASR Dutch Mobility Office Fund (DMOF) portfolio was to increase the BREEAM-NL certification 84 Target: 75% grade from 6.5% in 2018 to at least 30% by the end of 2019. 58 58% Following the award of BREEAM-NL certification for the 45 Eempolis office building in Amersfoort in 2019, 31% of the 84% portfolio is now certified. 2017 2018 2019 ASR DCRF / ASR DPRF / ASR DMOF / residential fund retail fund office fund Target: 20% Target: 1 Green Building Target: 1 Green Building Certification shopping Certification centre Result 2019 Result 2019 Result 2019 23% 4 certificates BREEAM-NL In-Use Good certification and 1 Breeam-NL in-Use BREEAM-NL-In-use 1 Good / Very Good Very Good certification Sustainable value creation | 3.4 Our role as a sustainable investor 47


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    Tenant satisfaction Tenant satisfaction Real estate is not only an investment, a.s.r. also aims for aware, involved and satisfied tenants. In this context, a.s.r. conducts periodical tenant satisfaction surveys amongst 7.1 7.1 7.0 tenants of residential, retail, office and rural real estate. The Target: 7.0 feedback shows how they rate the services, properties and their living and working environments. The outcomes are processed by Asset Management and, where applicable, discussed with internal or external property managers. a.s.r. aims to achieve an average tenant satisfaction rating 7.0 of at least 7 (out of 10). 2017 2018 2019 Sustainable investing – GRESB benchmark By participating annually in Global Real Estate Sustainability Benchmark (GRESB) Assesment, an independent benchmark that assesses the sustainability of real estate investment funds around the world, a.s.r. improves its transparency and awareness of sustainability. In 2019, all three funds participating in GRESB improved their scores. ASR Dutch Core Residential Fund ASR Dutch Prime Retail Fund ASR Dutch Mobility Office Fund 84 (100) 76 (100) 77 (100) 80 (100) 72 (100) 70 (100) 72 (100) 66 (100) +5% +6% +10% NA 2017 2018 2019 2019 2017 2018 2019 2019 2017 2018 2019 2019 Open Soil Index single language is created regarding the ‘soil wellness’. In addition to buildings, a.s.r. also invests in agricultural The OSI assesses the soil on three aspects: structure, land. With reference to the investment framework ‘climate biology and chemistry. It gives the farmer insight into his smart agriculture’ a.s.r.’s aim is that it’s farmers earn a current soil condition and provides him with an inspiration sustainable income and produce in a sustainable way. list of measures to improve his soil. This unique tool will a.s.r. is convinced that farmers can make a significant enable stakeholders to not only monitor the farmer’s contribution to the various ecological services such as sustainable achievements but also reward him for his water quality, water retention, biodiversity etc. Sustainable efforts. a.s.r. is convinced that the cumulation of rewards soil management is key in this process, and acknowledged will motivate farmers to further improve their sustainable by every farmer. However due to financial constraints soil management job. sustainable soil management is not implemented in full by every farmer. a.s.r. therefore developed in close Please find more detailed information about responsible cooperation with its charter coalition partners Rabobank investments in Annex A Facts and figures. and Vitens the Open (source) Soil Index (OSI). With OSI a Sustainable value creation | 3.4 Our role as a sustainable investor 48


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    1 2 3 Sustainable value creation 4 5 6 7 8 9 3.5 Our role as a trusted company It is of great importance for a.s.r. to gain and maintain the • a.s.r. optimises its tax position, thus limiting the tax confidence of its stakeholders. a.s.r. informs them about burden. This takes place within the given framework of how the organisation defines and achieves its goals by a.s.r.’s wish to make a sustainable contribution to society reporting openly and transparently on issues such as tax, as a whole; human rights, dilemmas, integrity, political engagement, • a.s.r. takes care of the timely payment of tax debts; privacy and environmental impact. • a.s.r. presents relevant (tax) positions adopted or to be adopted as soon as possible to the tax authorities and provides the tax authorities with an active insight into all 3.5.1 Socially responsible taxpayer relevant facts, circumstances, positions, and its view of the associated legal consequences; In line with its mission and Corporate Social Responsibility • a.s.r. actively manages its tax risks. In view of its open (CSR) policy, a.s.r. strives to be a socially responsible and transparent relationship with the tax authorities, taxpayer. a.s.r. proactively coordinates the tax consequences of various transactions in advance with the tax authorities. a.s.r.’s tax policy contributes to the ambition to be a financially reliable and stable organisation to ensure that Tax control a.s.r.’s short-term as well as its long-term commitments Group Tax is part of the Finance, Risk & Performance towards customers and stakeholders can be met, thus Management (FRPM) department. creating long-term value. In addition, the outcome of its tax policy is that a.s.r., as a member of society, contributes Group Tax has a central role in the tax function of a.s.r. its fair share to enable and maintain the very society of and therefore has an important role in embedding the tax which it is part. strategy in the day-to-day operations of the organisation. Group Tax is responsible for the establishment, Tax strategy maintenance and testing of the Tax Control Framework a.s.r. aims to be a socially responsible taxpayer based on that is part of the Management In Control process. professionally executed tax compliance. a.s.r. does not apply any tax-aggressive positions. In optimising its tax Group Tax is the ‘single point of contact’ with the tax planning, business considerations are always leading. authorities and has periodically and ad hoc consultation with the tax authorities. External tax advisors will only be The tax strategy was approved and endorsed by the EB on consulted after involvement and/or approval by Group Tax. 21 January 2014. The Audit and Risk Committee (A&RC) supervises the tax policies pursued in line with the Dutch In the case of important agreements such as product Corporate Governance Code. The tax policy and the tax development, acquisitions, internal reorganisations, Group risks are discussed annually in the A&RC. Tax is consulted. This ‘sign off’ is used to safeguard the compliance of the tax strategy. In addition, tax issues are Tax is a topic in the stakeholders’ dialogue (see Annex E regularly discussed with the CFO. Materiality analysis and stakeholder dialogue). a.s.r. is actively implementing technological solutions to In view of the tax strategy, a.s.r. has the following control tax risks, for example by means of data analysis. objectives: a.s.r. has also completed the implementation of a new • a.s.r. only supports transactions or products with a well- financial system in 2019, in which financial consolidation documented business objective; and reporting, tax accounting and the corporate income • The starting point is that a.s.r. acts in accordance with tax return have been integrated. the spirit and letter of the tax legislation and regulations in the countries in which a.s.r. operates. a.s.r. does not a.s.r. strives for an open and honest culture and considers use any structures aimed at tax avoidance. a.s.r. will it important for employees and third parties to be able not allocate profits to jurisdictions with low tax rates or to report in a careful and safe way, in accordance with the make use of tax havens and does not use tax structures House for Whistleblowers Act, any (suspicions of) abuses intended for tax avoidance; within a.s.r., see www.asrnl.com. a.s.r.’s whistleblowers’ • a.s.r. has no products that facilitate customers in scheme also applies to abuses in the field of tax. avoiding or evading taxes; Sustainable value creation | 3.5 Our role as a trusted company 49


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    Relationship with the Dutch Tax Authority authorities at an early stage ensures that the tax position in In January 2013, a.s.r.’s EB and the Dutch tax authorities the financial statements contains fewer uncertainties, which signed the Horizontal Monitoring covenant. This covenant contributes to the confidence that stakeholders can derive sets out how a.s.r. and the tax authorities engage with one from a.s.r.’s tax position. Because a.s.r. operates almost another: with mutual trust and in an open, transparent exclusively in the Netherlands, there are no international manner. By signing this covenant, a.s.r. undertakes to tax rulings. develop and maintain a system of internal management, together with internal and external controls with regard to Tax burden and tax payments tax (Tax Control Framework). The Horizontal Monitoring In countries in which a.s.r. is active, a.s.r. pays taxes will be further developed by the tax authorities into an on profits realised by the economic activities in those Individual Monitoring Plan (IMP) and the IMP will replace countries, in accordance with the OECD guidelines for the covenant in 2020. multinational enterprises. Tax rulings a.s.r. operates almost exclusively in the Netherlands, which In some cases, it is desirable for a.s.r. to obtain certainty means that nearly all tax payments are made to the Dutch from the tax authorities in advance about the application tax authorities, with the exception of: of (often complex) tax legislation and regulations. If that • Payments relating to insurance tax for, in particular, non- is the case, a.s.r. will ask the tax authorities for a prior tax life insurance in respect of which the tax jurisdiction is in ruling on a tax position adopted by a.s.r. Any such rulings other countries; and other arrangements with the tax authorities are always • Withholding taxes deducted from foreign investment in line with a.s.r.’s tax strategy. Consulting with the tax income. Tax payments (in € million) 2019 2018 2017 Profit before taxes 1,210 904 1,126 Corporate income tax in p&l 240 1961 2091 Nominal tax burden 25.0% 25.0% 25.0% Effective tax burden2 19.8% 21.7%1 18.6%1 The Netherlands Corporate income tax and withholding taxes 42 47 226 Domestic and foreign taxes levied at source, offset against Dutch corporate income tax 6 7 5 Dividend tax 40 50 29 Payroll taxes benefits 269 259 247 Employee payroll taxes 132 132 124 Insurance tax 150 142 134 Turnover tax - Turnover tax not offset 42 34 37 - Turnover tax paid 2 3 1 Total of tax payments in the Netherlands 683 675 804 Abroad Foreign insurance tax 1 1 1 Total of tax payments abroad 1 1 1 Deferred tax asset Deferred tax asset as at year-end3 197 275 226 Number of employees Number of employees in FTEs, all of them employed in the Netherlands 3,906 3,683 3,493 1 Restated for International Accounting Standards (IAS) 12 amendment. 2 The effective tax burden differs from the (nominal) statutory tax rate. This is caused, 9 in particular by applying the participation exemption. There is also an effect of the change in corporate income tax rate in 2021. The tax rate then becomes 21.7%. For a reconciliation of the nominal tax burden to the effective tax rate, reference is made to chapter 6.6.12 Income tax of the financial statements. 3 The corporate income tax rate for 2020 is 25%. The 2021 rate is 21.7%. The rate reduction was taken into account when valuing the amount of the deferred (net) tax claim at year-end 2019. Sustainable value creation | 3.5 Our role as a trusted company 50

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